Franklin Strategic Series N-CSRS Certified semi-annual shareholder report (management investment company)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM N-CSRS

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-06243

Franklin Strategic Series

(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: 4/30

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

.

SEMIANNUAL

REPORT

AND

SHAREHOLDER

LETTER

Franklin

Strategic

Series

October

31,

2021

Sign

up

for

electronic

delivery

at

franklintempleton.com/edelivery

Franklin

Growth

Opportunities

Fund

Franklin

Small

Cap

Growth

Fund

Franklin

Small-Mid

Cap

Growth

Fund

Not

FDIC

Insured

May

Lose

Value

No

Bank

Guarantee

franklintempleton.com

Semiannual

Report

1

SHAREHOLDER

LETTER

Dear

Shareholder:

During

the

six

months

ended

October

31,

2021,

the

U.S.

economy

continued

to

recover

from

the

COVID-19

pandemic,

benefiting

equities.

Growth

accelerated

in

2021’s

first

half

as

the

reopening

of

businesses,

widespread

COVID-19

vaccinations

and

federal

assistance

programs

continued

to

boost

consumer

spending.

Inflation

increased

in

April

and

rose

further

during

the

reporting

period

due

to

increased

demand

for

goods

amid

supply-chain

bottlenecks.

During

the

summer,

investors

became

concerned

the

swiftly

spreading

Delta

variant

of

COVID-19

could

hinder

the

economic

recovery,

and

growth

slowed

in

2021’s

third

quarter.

During

the

reporting

period,

the

U.S.

Federal

Reserve

(Fed),

in

its

efforts

to

support

U.S.

economic

activity,

held

the

federal

funds

rate

unchanged

at

0.25%,

and

it

continued

broad

quantitative

easing

measures

to

bolster

credit

markets.

The

Fed

also

adjusted

its

economic

growth

and

inflation

projections

higher

and

expected

to

begin

decreasing

its

asset

purchases

later

this

year,

while

delaying

any

interest

rate

increases

until

reaching

its

goal

of

maximum

U.S.

employment.

In

this

environment,

U.S.

stocks,

as

measured

by

the

Standard

&

Poor’s

®

500

Index,

posted

a

+10.91%

total

return

for

the

six-month

period.

1

We

are

committed

to

our

long-term

perspective

and

disciplined

investment

approach

as

we

conduct

a

rigorous,

fundamental

analysis

of

securities

with

a

regular

emphasis

on

investment

risk

management.

We

believe

active,

professional

investment

management

serves

investors

well.

We

also

recognize

the

important

role

of

financial

professionals

in

today’s

markets

and

encourage

investors

to

continue

to

seek

their

advice.

Amid

changing

markets

and

economic

conditions,

we

are

confident

investors

with

a

well-diversified

portfolio

and

a

patient,

long-term

outlook

should

be

well-positioned

for

the

years

ahead.

In

addition,

Franklin

Strategic

Series’

semiannual

report

includes

more

detail

about

prevailing

conditions

and

a

discussion

about

investment

decisions

during

the

period.

All

securities

markets

fluctuate,

as

do

mutual

fund

share

prices.

We

thank

you

for

investing

with

Franklin

Templeton,

welcome

your

questions

and

comments,

and

look

forward

to

serving

your

future

investment

needs.

Sincerely,

Edward

Perks,

CFA

President

and

Chief

Executive

Officer

–

Investment

Management

Franklin

Strategic

Series

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.

1.

Source:

Morningstar.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

franklintempleton.com

Semiannual

Report

2

Contents

Semiannual

Report

Economic

and

Market

Overview

3

Franklin

Growth

Opportunities

Fund

4

Franklin

Small

Cap

Growth

Fund

9

Franklin

Small-Mid

Cap

Growth

Fund

14

Financial

Highlights

and

Statements

of

Investments

19

Financial

Statements

51

Notes

to

Financial

Statements

56

Shareholder

Information

82

Visit

franklintempleton.com

for

fund

updates,

to

access

your

account,

or

to

find

helpful

financial

planning

tools.

3

franklintempleton.com

Semiannual

Report

SEMIANNUAL

REPORT

Economic

and

Market

Overview

U.S.

equities,

as

measured

by

the

Standard

&

Poor’s

500

Index

(S&P

500

®

),

posted

a

+10.91%

total

return

for

the

six

months

ended

October

31,

2021.

1

Stocks

benefited

from

the

continued

economic

recovery,

the

ongoing

implementation

of

COVID-19

vaccination

programs

and

easing

pandemic

restrictions.

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

six-month

period.

The

U.S.

economy

continued

to

recover

amid

declining

unemployment,

solid

wage

growth

and

high

business

confidence.

Gross

domestic

product

continued

to

grow

as

strong

consumer

spending

supported

the

economy.

The

ongoing

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

six-month

period

amid

increased

demand

and

supply-chain

bottlenecks.

U.S.

consumer

spending

on

goods

remained

strong,

adding

to

pressure

on

the

prices

of

many

products.

A

global

semiconductor

shortage

weighed

on

production

of

automobiles,

leading

to

higher

prices

for

both

new

and

used

vehicles.

Energy

prices

also

rose

amid

higher

fuel

demand

and

supply

constraints,

exacerbated

by

hurricanes

that

hampered

production

in

the

Gulf

Coast

region.

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

6.1%

in

April

2021

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

and

mortgage

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

Semiannual

Report

Franklin

Growth

Opportunities

Fund

This

semiannual

report

for

Franklin

Growth

Opportunities

Fund

covers

the

period

ended

October

31,

2021.

Your

Fund’s

Goal

and

Main

Investments

The

Fund

seeks

capital

appreciation.

Under

normal

conditions,

the

Fund

invests

predominantly

in

equity

securities

of

companies

demonstrating

accelerating

growth,

increasing

profitability,

or

above-average

growth

or

growth

potential

as

compared

with

the

overall

economy.

Performance

Overview

The

Fund’s

Class

A

shares

posted

a

+15.24%

cumulative

total

return

for

the

six

months

under

review.

In

comparison,

the

Fund’s

narrow

benchmark,

the

Russell

3000

®

Growth

Index,

which

measures

the

performance

of

those

Russell

3000

®

Index

companies

with

relatively

higher

price-to-book

ratios

and

higher

forecasted

growth

rates,

posted

a

+14.17%

cumulative

total

return.

1

The

Fund’s

broad

benchmark,

the

Standard

&

Poor’s

500

Index

(S&P

500),

which

tracks

the

broad

U.S.

stock

market,

posted

a

+10.91%

cumulative

total

return.

1

You

can

find

the

Fund’s

long-term

performance

data

in

the

Performance

Summary

beginning

on

page

6

.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

For

most

recent

month-end

performance,

go

to

franklintempleton.com

or

call

(800)

342-5236.

Investment

Strategy

We

use

fundamental,

bottom-up

research

to

seek

companies

meeting

our

criteria

of

growth

potential,

quality

and

valuation.

In

seeking

sustainable

growth

characteristics,

we

look

for

companies

we

believe

can

produce

sustainable

earnings

and

cash

flow

growth,

evaluating

the

long-term

market

opportunity

and

competitive

structure

of

an

industry

to

target

leaders

and

emerging

leaders.

We

define

quality

companies

as

those

with

strong

and

improving

competitive

positions

in

attractive

markets.

We

also

believe

important

attributes

of

quality

are

experienced

and

talented

management

teams

as

well

as

financial

strength

reflected

in

the

capital

structure,

gross

and

operating

margins,

free

cash

flow

generation

and

returns

on

capital

employed.

Our

valuation

analysis

includes

a

range

of

potential

outcomes

based

on

an

assessment

of

multiple

scenarios.

In

assessing

value,

we

consider

whether

security

prices

fully

reflect

the

balance

of

the

sustainable

growth

opportunities

relative

to

business

and

financial

risks.

*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

During

the

six

months

under

review,

overall

stock

selection

contributed

to

the

Fund’s

positive

performance

relative

to

the

Russell

3000

®

Growth

Index.

At

the

sector

level,

stock

selection

in

the

consumer

discretionary

and

information

technology

(IT)

sectors

meaningfully

contributed

to

relative

results,

while

stock

selection

and

an

overweighting

in

the

industrials

sector

and

stock

selection

in

the

consumer

staples

sector

were

leading

detractors

from

relative

returns.

Top

contributors

in

the

consumer

discretionary

sector

included

Figs

and

Lucid

Group

(not

part

of

the

index).

Figs,

which

launched

its

initial

public

offering

in

May

2021,

is

a

vertically

integrated

e-commerce

health

care

apparel

company

that

has

done

a

good

job

at

establishing

itself

as

a

lifestyle

brand

for

professional

uniforms

and

taking

market

Portfolio

Composition

10/31/21

%

of

Total

Net

Assets

Software

24.4%

IT

Services

12.2%

Health

Care

Equipment

&

Supplies

8.7%

Internet

&

Direct

Marketing

Retail

7.2%

Semiconductors

&

Semiconductor

Equipment

5.7%

Interactive

Media

&

Services

4.4%

Capital

Markets

4.2%

Technology

Hardware,

Storage

&

Peripherals

3.8%

Professional

Services

3.1%

Health

Care

Providers

&

Services

2.5%

Automobiles

2.4%

Equity

Real

Estate

Investment

Trusts

(REITs)

2.1%

Health

Care

Technology

1.8%

Hotels,

Restaurants

&

Leisure

1.4%

Other*

15.7%

Short-Term

Investments

&

Other

Net

Assets

0.4%

1.

Source:

Morningstar.

Frank

Russell

Company

is

the

source

and

owner

of

the

trademarks,

service

marks

and

copyrights

related

to

the

Russell

Indexes.

Russell

®

is

a

trademark

of

Frank

Russell

Company.

The

indexes

are

unmanaged

and

include

reinvestment

of

any

income

or

distributions.

They

do

not

reflect

any

fees,

expenses

or

sales

charges.

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

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

24

.

Franklin

Growth

Opportunities

Fund

5

franklintempleton.com

Semiannual

Report

share

in

the

medical

scrubs

category.

In

July

2021,

electric

carmaker

Lucid

Group

went

public.

Over

the

reporting

period,

Lucid’s

stock

price

rallied

as

the

company

announced

the

start

of

production

and

the

timing

of

the

first

deliveries

of

its

luxury

sedan

that

will

directly

compete

with

Tesla.

Conversely,

our

underweighting

in

the

rising

shares

of

Tesla

was

a

drag

on

relative

performance

as

the

electric

vehicle

company

continues

to

attract

buyers

and

grow

revenue.

The

IT

sector

had

three

of

the

Fund’s

top

five

relative

contributors

over

the

period—Bill.com

Holdings,

Confluent

(not

part

of

the

index)

and

Marqeta

(not

part

of

the

index).

Bill.com

is

a

cloud-based

back-office

payments

specialist.

The

company

has

seen

increased

adoption

of

its

virtual

card

and

cross-border

offerings,

and

new

customer

growth

has

been

well

above

expectations.

The

big

news

over

the

period

was

its

acquisition

of

a

spend

management

software

company

that

can

help

position

Bill.com

as

an

all-inclusive

financial

operating

system

for

small-

and

medium-sized

businesses,

which

we

view

as

a

positive

long-term

opportunity.

Confluent

is

a

cloud-data

platform

that

enables

digital

transformation

in

companies.

The

company

went

public

in

June

2021

and

investors

have

been

rewarded

with

better-than-expected

second-quarter

financial

results

from

strong

sales

growth

and

a

tripling

of

its

cloud

business.

Marqeta

also

launched

its

initial

public

offering

in

June

as

the

world’s

first

modern

card-issuing

platform

and

the

company

has

already

partnered

with

many

big-name

companies

to

create

payment

card

solutions.

In

contrast,

an

underweighting

in

Microsoft,

which

saw

its

stock

price

appreciate

over

the

period,

dampened

relative

performance.

To

a

lesser

extent,

payment

processor

Mastercard

and

cloud-communication

platform

company

Twilio

delivered

lackluster

performance

and

hurt

relative

returns.

In

the

industrials

sector,

Proterra

(not

part

of

the

index)

struggled

over

the

period.

In

our

view,

the

commercial

electric

vehicle

(EV)

company

is

well-positioned

to

benefit

from

the

electrification

of

commercial

vehicles

by

leveraging

its

position

as

a

leading

manufacturer

of

EV

transit

buses.

Furthermore,

the

Biden

administration’s

infrastructure

spending

program

is

set

to

include

a

portion

focused

on

green

energy,

which

may

incentivize

companies

to

turn

to

more

alternative

and

renewable

sources

of

energy,

potentially

creating

a

sustainable

business

model

for

Proterra.

Thank

you

for

your

continued

participation

in

Franklin

Growth

Opportunities

Fund.

We

look

forward

to

serving

your

future

investment

needs.

Grant

Bowers

Lead

Portfolio

Manager

Sara

Araghi,

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

%

of

Total

Net

Assets

a

a

Amazon.com,

Inc.

7.2%

Internet

&

Direct

Marketing

Retail

Microsoft

Corp.

4.4%

Software

Apple,

Inc.

3.8%

Technology

Hardware,

Storage

&

Peripherals

Mastercard

,

Inc.

3.3%

IT

Services

Alphabet,

Inc.

3.0%

Interactive

Media

&

Services

NVIDIA

Corp.

3.0%

Semiconductors

&

Semiconductor

Equipment

ServiceNow

,

Inc.

2.9%

Software

Bill.com

Holdings,

Inc.

2.6%

Software

Visa,

Inc.

2.2%

IT

Services

SBA

Communications

Corp.

2.1%

Equity

Real

Estate

Investment

Trusts

(REITs)

Performance

Summary

as

of

October

31,

2021

Franklin

Growth

Opportunities

Fund

6

franklintempleton.com

Semiannual

Report

The

performance

table

does

not

reflect

any

taxes

that

a

shareholder

would

pay

on

Fund

dividends,

capital

gain

distributions,

if

any,

or

any

realized

gains

on

the

sale

of

Fund

shares.

Total

return

reflects

reinvestment

of

the

Fund’s

dividends

and

capital

gain

distributions,

if

any,

and

any

unrealized

gains

or

losses.

Your

dividend

income

will

vary

depending

on

dividends

or

interest

paid

by

securities

in

the

Fund’s

portfolio,

adjusted

for

operating

expenses

of

each

class.

Capital

gain

distributions

are

net

profits

realized

from

the

sale

of

portfolio

securities.

Performance

as

of

10/

31

/21

Cumulative

total

return

excludes

sales

charges.

Average

annual

total

return

includes

maximum

sales

charges.

Sales

charges

will

vary

depending

on

the

size

of

the

investment

and

the

class

of

share

purchased.

The

maximum

is

5.50%

and

the

minimum

is

0%.

Class

A:

5.50%

maximum

initial

sales

charge;

Advisor

Class:

no

sales

charges.

For

other

share

classes,

visit

franklintempleton.com.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

For

most

recent

month-end

performance,

go

to

franklintempleton.com

or

call

(800)

342-5236.

Share

Class

Cumulative

Total

Return

1

Average

Annual

Total

Return

2

–

A

3

6-Month

+15.24%

+8.90%

1-Year

+39.12%

+31.45%

5-Year

+198.29%

+23.03%

10-Year

+397.58%

+16.74%

Advisor

6-Month

+15.38%

+15.38%

1-Year

+39.49%

+39.49%

5-Year

+202.08%

+24.75%

10-Year

+411.17%

+17.72%

See

page

7

for

Performance

Summary

footnotes.

Franklin

Growth

Opportunities

Fund

Performance

Summary

7

franklintempleton.com

Semiannual

Report

Each

class

of

shares

is

available

to

certain

eligible

investors

and

has

different

annual

fees

and

expenses,

as

described

in

the

prospectus.

All

investments

involve

risks,

including

possible

loss

of

principal.

Growth

stock

prices

reflect

projections

of

future

earnings

or

revenues,

and

can,

therefore,

fall

dramatically

if

the

company

fails

to

meet

those

projections.

To

the

extent

the

Fund

focuses

on

particular

countries,

regions,

industries,

sectors

or

types

of

investment

from

time

to

time,

it

may

be

subject

to

greater

risks

of

adverse

developments

in

such

areas

of

focus

than

a

fund

that

invests

in

a

wider

variety

of

countries,

regions,

industries,

sectors

or

investments.

Smaller,

midsized

and

relatively

new

or

unseasoned

companies

can

be

particularly

sensitive

to

changing

economic

conditions,

and

their

prospects

for

growth

are

less

certain

than

those

of

larger,

more

established

companies.

Historically,

these

securities

have

experienced

more

price

volatility

than

larger-company

stocks,

especially

over

the

short

term.

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.

Cumulative

total

return

represents

the

change

in

value

of

an

investment

over

the

periods

indicated.

2.

Average

annual

total

return

represents

the

average

annual

change

in

value

of

an

investment

over

the

periods

indicated.

Return

for

less

than

one

year,

if

any,

has

not

been

annualized.

3.

Prior

to

9/10/18,

these

shares

were

offered

at

a

higher

initial

sales

charge

of

5.75%,

thus

actual

returns

(with

sales

charges)

would

have

differed.

Average

annual

total

returns

(with

sales

charges)

have

been

restated

to

reflect

the

current

maximum

initial

sales

charge

of

5.50%.

4.

Figures

are

as

stated

in

the

Fund’s

current

prospectus

and

may

differ

from

the

expense

ratios

disclosed

in

the

Your

Fund’s

Expenses

and

Financial

Highlights

sections

in

this

report.

In

periods

of

market

volatility,

assets

may

decline

significantly,

causing

total

annual

Fund

operating

expenses

to

become

higher

than

the

figures

shown.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

Total

Annual

Operating

Expenses

4

Share

Class

A

0.91%

Advisor

0.66%

Your

Fund’s

Expenses

Franklin

Growth

Opportunities

Fund

8

franklintempleton.com

Semiannual

Report

As

a

Fund

shareholder,

you

can

incur

two

types

of

costs:

(1)

transaction

costs,

including

sales

charges

(loads)

on

Fund

purchases

and

redemptions;

and

(2)

ongoing

Fund

costs,

including

management

fees,

distribution

and

service

(12b-1)

fees,

and

other

Fund

expenses.

All

mutual

funds

have

ongoing

costs,

sometimes

referred

to

as

operating

expenses.

The

table

below

shows

ongoing

costs

of

investing

in

the

Fund

and

can

help

you

understand

these

costs

and

compare

them

with

those

of

other

mutual

funds.

The

table

assumes

a

$1,000

investment

held

for

the

six

months

indicated.

Actual

Fund

Expenses

The

table

below

provides

information

about

actual

account

values

and

actual

expenses

in

the

columns

under

the

heading

“Actual.”

In

these

columns

the

Fund’s

actual

return,

which

includes

the

effect

of

Fund

expenses,

is

used

to

calculate

the

“Ending

Account

Value”

for

each

class

of

shares.

You

can

estimate

the

expenses

you

paid

during

the

period

by

following

these

steps

(

of

course,

your

account

value

and

expenses

will

differ

from

those

in

this

illustration

):

Divide

your

account

value

by

$1,000

(

if

your

account

had

an

$8,600

value,

then

$8,600

÷

$1,000

=

8.6

).

Then

multiply

the

result

by

the

number

in

the

row

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

1,2

Expenses

Paid

During

Period

5/1/21–10/31/21

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

$1,152.40

$4.87

$1,020.68

$4.57

0.90%

C

$1,000

$1,148.20

$8.93

$1,016.89

$8.38

1.65%

R

$1,000

$1,150.90

$6.22

$1,019.42

$5.84

1.15%

R6

$1,000

$1,154.30

$3.09

$1,022.34

$2.90

0.57%

Advisor

$1,000

$1,153.80

$3.52

$1,021.94

$3.30

0.65%

9

franklintempleton.com

Semiannual

Report

Franklin

Small

Cap

Growth

Fund

This

semiannual

report

for

Franklin

Small

Cap

Growth

Fund

covers

the

period

ended

October

31,

2021.

Your

Fund’s

Goal

and

Main

Investments

The

Fund

seeks

long-term

capital

growth.

Under

normal

market

conditions,

the

Fund

invests

at

least

80%

of

its

net

assets

in

the

equity

securities

of

small-cap

companies.

For

this

Fund,

small-cap

companies

are

those

with

market

capitalizations

not

exceeding

$1.5

billion

or

the

highest

market

capitalization

in

the

Russell

2000

®

Index,

whichever

is

greater,

at

the

time

of

purchase.

1

Performance

Overview

The

Fund’s

Class

A

shares

posted

a

-1.43%

cumulative

total

return

for

the

six

months

under

review.

In

comparison,

the

Russell

2000

®

Growth

Index,

which

measures

the

performance

of

small-cap

companies

with

relatively

higher

price-to-book

ratios

and

higher

forecasted

growth

rates,

posted

a

+0.44%

cumulative

total

return.

2

The

Standard

&

Poor’s

500

Index

(S&P

500),

which

tracks

the

broad

U.S.

stock

market,

posted

a

+10.91%

cumulative

total

return.

2

You

can

find

the

Fund’s

long-term

performance

data

in

the

Performance

Summary

beginning

on

page

11

.

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

use

fundamental,

bottom-up

research

to

seek

companies

meeting

our

criteria

of

growth

potential,

quality

and

valuation.

In

seeking

sustainable

growth

characteristics,

we

look

for

companies

we

believe

can

produce

sustainable

earnings

and

cash

flow

growth,

evaluating

the

long-term

market

opportunity

and

competitive

structure

of

an

industry.

We

define

quality

companies

as

those

with

strong

and

improving

competitive

positions

in

attractive

markets.

We

also

believe

important

attributes

of

quality

are

experienced

and

talented

management

teams

as

well

as

financial

strength

reflected

in

the

capital

structure,

gross

and

operating

margins,

free

cash

flow

generation

and

returns

on

capital

employed.

Our

valuation

analysis

includes

a

range

of

potential

outcomes

based

on

an

assessment

of

multiple

scenarios.

In

assessing

value,

we

consider

whether

security

prices

fully

reflect

the

balance

of

the

sustainable

growth

opportunities

relative

to

business

and

financial

risks.

*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

six

months

under

review,

the

Fund’s

negative

performance

relative

to

the

Russell

2000

®

Growth

Index

was

driven

mainly

by

stock

selection

in

the

industrials

and

consumer

staples

sectors

and

a

lack

of

exposure

to

the

energy

sector,

which

received

a

boost

from

rising

oil

prices.

In

contrast,

stock

selection

and

an

overweighting

in

the

information

technology

(IT)

sector

contributed

notably

to

positive

relative

returns.

Other

sector

contributors

included

financials

and

communication

services,

the

latter

due

to

lack

of

exposure.

Portfolio

Composition

10/31/21

%

of

Total

Net

Assets

Biotechnology

10.2%

Software

9.2%

Specialty

Retail

8.3%

Semiconductors

&

Semiconductor

Equipment

6.8%

IT

Services

6.7%

Health

Care

Equipment

&

Supplies

4.6%

Health

Care

Technology

4.1%

Hotels,

Restaurants

&

Leisure

3.9%

Capital

Markets

3.8%

Machinery

3.4%

Food

Products

3.1%

Health

Care

Providers

&

Services

2.8%

Banks

2.8%

Trading

Companies

&

Distributors

2.8%

Other*

25.5%

Short-Term

Investments

&

Other

Net

Assets

2.0%

1.

The

Russell

2000

Index

is

market

capitalization

weighted

and

measures

performance

of

the

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

indexes

are

unmanaged

and

include

reinvestment

of

any

income

or

distributions.

They

do

not

reflect

any

fees,

expenses

or

sales

charges.

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

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

34

.

Franklin

Small

Cap

Growth

Fund

10

franklintempleton.com

Semiannual

Report

The

industrials

sector

was

pressured

by

holdings

in

Proterra

(not

part

of

the

index)

and

Allegiant

Travel.

Proterra,

a

commercial

electric

vehicle

(EV)

company,

struggled

over

the

period

after

coming

public

in

July

2021.

Despite

recent

lackluster

stock

performance,

we

believe

Proterra

is

well-

positioned

to

benefit

from

the

electrification

of

commercial

vehicles

by

leveraging

its

position

as

a

leading

manufacturer

of

EV

transit

buses.

Furthermore,

the

Biden

administration’s

infrastructure

spending

program

is

set

to

include

a

portion

focused

on

green

energy,

which

may

incentivize

transit

authorities

to

turn

to

more

alternative

and

renewable

sources

of

energy,

potentially

creating

opportunities

for

increased

future

orders

for

Proterra.

While

Allegiant

Travel

continues

to

show

healthy

growth,

the

leisure

travel

company

has

faced

a

rising

fuel-cost

environment,

which

dampened

its

stock.

Contributing

to

relative

results

in

the

sector

was

online

legal

platform

LegalZoom.com

(not

part

of

the

index),

whose

shares

jumped

in

value

following

the

company’s

public

market

debut

in

June

2021.

The

company

offers

online

legal

solutions

for

small

businesses

and

consumers

and

has

a

mission

of

making

legal

help

accessible

to

all.

Discount

grocery

chain

Grocery

Outlet

Holding

(not

part

of

the

index;

not

held

at

period-end)

detracted

from

relative

returns

in

the

consumer

staples

sector

as

higher

food

inflation

and

shipping

costs

weighed

on

the

stock.

From

the

consumer

discretionary

sector,

American

Eagle

Outfitters

(AEO)

is

a

clothing

retailer

that

faced

headwinds

on

concerns

of

supply

chain

impacts

on

the

retailing

sector

and

reported

disappointing

revenue

growth

during

the

period,

as

online

sales

began

to

shift

to

store

traffic

in

the

wake

of

improving

COVID-19

metrics.

AEO

is

focused

on

supply

chain

and

logistics,

making

sure

it

has

everything

in

place

for

back-to-school,

the

holidays

and

other

shopping

seasons.

Conversely,

a

position

in

casino

operator

Red

Rock

Resorts,

whose

shares

rose

as

the

economy

reopened,

offset

the

relative

underperformance

experienced

by

AEO.

Elsewhere,

1Life

Healthcare,

which

operates

member-

based

primary

health

care

clinics

under

the

name

One

Medical,

saw

expenses

rise

over

the

period

as

the

company

continued

to

invest

in

sales

and

marketing,

technology,

and

support

functions.

The

company

also

acquired

Iora

Health

(not

a

Fund

holding),

which

treats

Medicare

patients,

and

the

acquisition

led

to

a

further

decline

in

stock

price.

Turning

to

contributors,

SiTime

and

Marqeta

(not

part

of

the

index)

were

among

the

best

performers

in

the

IT

sector.

SiTime

manufactures

timing

solutions

used

in

various

industries

including

aerospace,

automobiles

and

communications.

The

company

has

demonstrated

operating

leverage

well

ahead

of

market

expectations

in

both

magnitude

and

timing.

As

a

result,

shares

rallied

over

the

period.

Marqeta

launched

its

initial

public

offering

in

June

2021

as

the

world’s

first

modern

card-issuing

platform.

The

company

has

already

partnered

with

many

big-name

companies

to

create

payment

card

solutions.

Elsewhere,

investment

bank

Houlihan

Lokey

saw

record

revenue

growth

in

its

merger-and-acquisition

business,

which

lifted

its

stock.

Thank

you

for

your

continued

participation

in

Franklin

Small

Cap

Growth

Fund.

We

look

forward

to

serving

your

future

investment

needs.

Michael

P.

McCarthy,

CFA

Lead

Portfolio

Manager

Bradley

T.

Carris,

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

%

of

Total

Net

Assets

a

aa

Inspire

Medical

Systems,

Inc.

1.8%

Health

Care

Technology

Red

Rock

Resorts,

Inc.

1.5%

Hotels,

Restaurants

&

Leisure

SiTime

Corp.

1.5%

Semiconductors

&

Semiconductor

Equipment

Western

Alliance

Bancorp

1.5%

Banks

Beacon

Roofing

Supply,

Inc.

1.5%

Trading

Companies

&

Distributors

Houlihan

Lokey

,

Inc.

1.4%

Capital

Markets

Rexford

Industrial

Realty,

Inc.

1.4%

Equity

Real

Estate

Investment

Trusts

(REITs)

Phreesia

,

Inc.

1.4%

Health

Care

Technology

Allegiant

Travel

Co.

1.4%

Airlines

Semtech

Corp.

1.4%

Semiconductors

&

Semiconductor

Equipment

Performance

Summary

as

of

October

31,

2021

Franklin

Small

Cap

Growth

Fund

11

franklintempleton.com

Semiannual

Report

The

performance

table

does

not

reflect

any

taxes

that

a

shareholder

would

pay

on

Fund

dividends,

capital

gain

distributions,

if

any,

or

any

realized

gains

on

the

sale

of

Fund

shares.

Total

return

reflects

reinvestment

of

the

Fund’s

dividends

and

capital

gain

distributions,

if

any,

and

any

unrealized

gains

or

losses.

Your

dividend

income

will

vary

depending

on

dividends

or

interest

paid

by

securities

in

the

Fund’s

portfolio,

adjusted

for

operating

expenses

of

each

class.

Capital

gain

distributions

are

net

profits

realized

from

the

sale

of

portfolio

securities.

Performance

as

of

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

6-Month

-1.43%

-6.85%

1-Year

+31.12%

+23.89%

5-Year

+154.42%

+19.17%

10-Year

+341.16%

+15.34%

Advisor

6-Month

-1.32%

-1.32%

1-Year

+31.47%

+31.47%

5-Year

+157.40%

+20.82%

10-Year

+352.74%

+16.30%

See

page

12

for

Performance

Summary

footnotes.

Franklin

Small

Cap

Growth

Fund

Performance

Summary

12

franklintempleton.com

Semiannual

Report

Each

class

of

shares

is

available

to

certain

eligible

investors

and

has

different

annual

fees

and

expenses,

as

described

in

the

prospectus.

All

investments

involve

risks,

including

possible

loss

of

principal.

Smaller,

midsized

and

relatively

new

or

unseasoned

companies

can

be

particularly

sensitive

to

changing

economic

conditions,

and

their

prospects

for

growth

are

less

certain

than

those

of

larger,

more

established

companies.

Historically,

these

securities

have

experienced

more

price

volatility

than

larger-company

stocks,

especially

over

the

short

term.

Growth

stock

prices

reflect

projections

of

future

earnings

or

revenues,

and

can,

therefore,

fall

dramatically

if

the

company

fails

to

meet

those

projections.

To

the

extent

the

Fund

focuses

on

particular

countries,

regions,

industries,

sectors

or

types

of

investment

from

time

to

time,

it

may

be

subject

to

greater

risks

of

adverse

developments

in

such

areas

of

focus

than

a

fund

that

invests

in

a

wider

variety

of

countries,

regions,

industries,

sectors

or

investments.

From

time

to

time,

the

trading

market

for

a

particular

security

or

type

of

secu-

rity

in

which

the

Fund

invests

may

become

less

liquid

or

even

illiquid.

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

8/31/22.

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.

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.

Total

Annual

Operating

Expenses

5

Share

Class

With

Fee

Waiver

Without

Fee

Waiver

A

1.03%

1.04%

Advisor

0.78%

0.79%

Your

Fund’s

Expenses

Franklin

Small

Cap

Growth

Fund

13

franklintempleton.com

Semiannual

Report

As

a

Fund

shareholder,

you

can

incur

two

types

of

costs:

(1)

transaction

costs,

including

sales

charges

(loads)

on

Fund

purchases

and

redemptions;

and

(2)

ongoing

Fund

costs,

including

management

fees,

distribution

and

service

(12b-1)

fees,

and

other

Fund

expenses.

All

mutual

funds

have

ongoing

costs,

sometimes

referred

to

as

operating

expenses.

The

table

below

shows

ongoing

costs

of

investing

in

the

Fund

and

can

help

you

understand

these

costs

and

compare

them

with

those

of

other

mutual

funds.

The

table

assumes

a

$1,000

investment

held

for

the

six

months

indicated.

Actual

Fund

Expenses

The

table

below

provides

information

about

actual

account

values

and

actual

expenses

in

the

columns

under

the

heading

“Actual.”

In

these

columns

the

Fund’s

actual

return,

which

includes

the

effect

of

Fund

expenses,

is

used

to

calculate

the

“Ending

Account

Value”

for

each

class

of

shares.

You

can

estimate

the

expenses

you

paid

during

the

period

by

following

these

steps

(

of

course,

your

account

value

and

expenses

will

differ

from

those

in

this

illustration

):

Divide

your

account

value

by

$1,000

(

if

your

account

had

an

$8,600

value,

then

$8,600

÷

$1,000

=

8.6

).

Then

multiply

the

result

by

the

number

in

the

row

for

your

class

of

shares

under

the

headings

“Actual”

and

“Expenses

Paid

During

Period”

(

if

Actual

Expenses

Paid

During

Period

were

$7.50,

then

8.6

x

$7.50

=

$64.50

).

In

this

illustration,

the

actual

expenses

paid

this

period

are

$64.50.

Hypothetical

Example

for

Comparison

with

Other

Funds

Under

the

heading

“Hypothetical”

in

the

table,

information

is

provided

about

hypothetical

account

values

and

hypothetical

expenses

based

on

the

Fund’s

actual

expense

ratio

and

an

assumed

rate

of

return

of

5%

per

year

before

expenses,

which

is

not

the

Fund’s

actual

return.

This

information

may

not

be

used

to

estimate

the

actual

ending

account

balance

or

expenses

you

paid

for

the

period,

but

it

can

help

you

compare

ongoing

costs

of

investing

in

the

Fund

with

those

of

other

funds.

To

do

so,

compare

this

5%

hypothetical

example

for

the

class

of

shares

you

hold

with

the

5%

hypothetical

examples

that

appear

in

the

shareholder

reports

of

other

funds.

Please

note

that

expenses

shown

in

the

table

are

meant

to

highlight

ongoing

costs

and

do

not

reflect

any

transactional

costs.

Therefore,

information

under

the

heading

“Hypothetical”

is

useful

in

comparing

ongoing

costs

only,

and

will

not

help

you

compare

total

costs

of

owning

different

funds.

In

addition,

if

transactional

costs

were

included,

your

total

costs

would

have

been

higher.

1.

Expenses

are

equal

to

the

annualized

expense

ratio

for

the

six-month

period

as

indicated

above—in

the

far

right

column—multiplied

by

the

simple

average

account

value

over

the

period

indicated,

and

then

multiplied

by

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

$985.70

$5.14

$1,020.03

$5.23

1.03%

C

$1,000

$981.80

$8.88

$1,016.24

$9.04

1.78%

R

$1,000

$984.50

$6.39

$1,018.77

$6.50

1.28%

R6

$1,000

$987.70

$3.16

$1,022.03

$3.21

0.63%

Advisor

$1,000

$986.80

$3.89

$1,021.29

$3.96

0.78%

14

franklintempleton.com

Semiannual

Report

Franklin

Small-Mid

Cap

Growth

Fund

This

semiannual

report

for

Franklin

Small-Mid

Cap

Growth

Fund

covers

the

period

ended

October

31,

2021.

Your

Fund’s

Goal

and

Main

Investments

The

Fund

seeks

long-term

capital

growth.

Under

normal

market

conditions,

the

Fund

invests

at

least

80%

of

its

net

assets

in

the

equity

securities

of

small-capitalization

(small-

cap)

and

mid-capitalization

(mid-cap)

companies.

For

this

Fund,

small-cap

companies

are

companies

within

the

market

capitalization

range

of

companies

in

the

Russell

2500

™

Index

at

the

time

of

purchase,

and

mid-cap

companies

are

companies

within

the

market

capitalization

range

of

companies

in

the

Russell

Midcap

®

Index

at

the

time

of

purchase.

1

Performance

Overview

The

Fund’s

Class

A

shares

posted

a

+10.45%

cumulative

total

return

for

the

six

months

under

review.

In

comparison,

the

Russell

Midcap

®

Growth

Index,

which

measures

the

performance

of

those

Russell

Midcap

®

Index

companies

with

relatively

higher

price-to-book

ratios

and

higher

forecasted

growth

rates,

posted

a

+11.68%

cumulative

total

return.

2

Also

in

comparison,

the

Standard

&

Poor’s

500

Index

(S&P

500),

which

tracks

the

broad

U.S.

stock

market,

posted

a

+10.91%

cumulative

total

return.

2

You

can

find

the

Fund’s

long-term

performance

data

in

the

Performance

Summary

beginning

on

page

16

.

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

use

fundamental,

bottom-up

research

to

seek

companies

meeting

our

criteria

of

growth

potential,

quality

and

valuation.

In

seeking

sustainable

growth

characteristics,

we

look

for

companies

we

believe

can

produce

sustainable

earnings

and

cash

flow

growth,

evaluating

the

long-term

market

opportunity

and

competitive

structure

of

an

industry

to

target

leaders

and

emerging

leaders.

We

define

quality

companies

as

those

with

strong

and

improving

competitive

positions

in

attractive

markets.

We

also

believe

important

attributes

of

quality

are

experienced

and

talented

management

teams

as

well

as

financial

strength

reflected

in

the

capital

structure,

gross

and

operating

margins,

free

cash

flow

generation

and

returns

on

capital

employed.

Our

valuation

analysis

includes

a

range

of

potential

outcomes

based

on

an

assessment

of

multiple

scenarios.

In

assessing

value,

we

consider

whether

security

prices

fully

reflect

the

balance

of

the

sustainable

growth

opportunities

relative

to

business

and

financial

risks.

*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

six

months

under

review,

the

Fund’s

underperformance

relative

to

the

Russell

Midcap

®

Growth

Index

was

driven

mainly

by

stock

selection

in

the

health

care

and

industrials

sectors.

In

contrast,

stock

selection

in

the

information

technology

(IT)

sector

was

a

leading

contributor

to

relative

returns.

Other

sector

contributors

included

materials,

financials

and

consumer

discretionary.

Portfolio

Composition

10/31/21

%

of

Total

Net

Assets

Software

19.4%

IT

Services

7.3%

Health

Care

Equipment

&

Supplies

7.0%

Semiconductors

&

Semiconductor

Equipment

6.3%

Specialty

Retail

4.9%

Hotels,

Restaurants

&

Leisure

4.7%

Life

Sciences

Tools

&

Services

4.5%

Capital

Markets

4.3%

Professional

Services

4.2%

Biotechnology

2.8%

Textiles,

Apparel

&

Luxury

Goods

2.8%

Health

Care

Technology

2.4%

Interactive

Media

&

Services

2.3%

Equity

Real

Estate

Investment

Trusts

(REITs)

2.1%

Other*

22.2%

Short-Term

Investments

&

Other

Net

Assets

2.8%

1.

The

Russell

2500

Index

is

market

capitalization

weighted

and

measures

performance

of

the

2,500

smallest

companies

in

the

Russell

3000

Index,

which

represent

a

modest

amount

of

the

Russell

3000

Index’s

total

market

capitalization.

The

Russell

Midcap

Index

is

market

capitalization

weighted

and

measures

performance

of

the

smallest

companies

in

the

Russell

1000

Index,

which

represent

a

modest

amount

of

the

Russell

1000

Index’s

total

market

capitalization.

2.

Source:

Morningstar.

The

indexes

are

unmanaged

and

include

reinvestment

of

any

income

or

distributions.

They

do

not

reflect

any

fees,

expenses

or

sales

charges.

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

The

dollar

value,

number

of

shares

or

principal

amount,

and

names

of

all

portfolio

holdings

are

listed

in

the

Fund’s

Statement

of

Investments

(SOI).

The

SOI

begins

on

page

45

.

Franklin

Small-Mid

Cap

Growth

Fund

15

franklintempleton.com

Semiannual

Report

Health

care

sector

exposure

was

hurt

by

Teleflex,

a

provider

of

surgical

medical

devices.

The

company

faced

revenue

headwinds

due

to

the

negative

impact

of

COVID-19

postponements

of

non-emergency

surgical

procedures.

In

the

industrials

sector,

disappointing

full-year

2022

guidance

weighed

on

the

shares

of

defense

electronics

company

Mercury

Systems.

Elsewhere,

discount

grocery

chain

Grocery

Outlet

Holding

(not

held

at

period-end)

detracted

from

returns

in

the

consumer

staples

sector

as

higher

food

inflation

and

shipping

costs

dampened

the

stock.

Conversely,

the

IT

sector

delivered

the

biggest

absolute

and

relative

returns

over

the

period.

The

sector

held

the

Fund’s

top

five

relative

contributors:

SiTime

(not

part

of

the

index),

Paylocity

Holding,

MongoDB,

Marqeta

(not

part

of

the

index)

and

Cloudflare.

SiTime

manufactures

timing

solutions

used

in

various

industries

including

aerospace,

automobiles

and

communications.

The

company

has

demonstrated

operating

leverage

well

ahead

of

market

expectations

in

both

magnitude

and

timing.

As

a

result,

SiTime

shares

rallied

over

the

period.

Despite

a

challenging

environment

driven

by

COVID-19-

related

restrictions,

execution

on

new

sales

and

product

upselling

were

strong

for

payroll

software

provider

Paylocity

Holding.

The

company

has

seen

good

traction

with

new

products

such

as

surveys,

premium

video

and

learning

management,

which

should

contribute

to

revenue

growth,

in

our

view.

MongoDB

raised

its

full-year

fiscal

2022

outlook,

which

rallied

the

shares

of

the

database

systems

specialist.

Atlas,

a

multi-cloud

database

platform

business,

has

been

a

long-term

growth

driver

for

the

company.

Company

management

noted

that

more

large

enterprises

are

adopting

Atlas,

moving

mission

critical

workloads

to

the

cloud

and

embracing

a

multi-cloud

model.

Marqeta

launched

its

initial

public

offering

in

June

2021

as

the

world’s

first

modern

card-

issuing

platform.

The

company

has

already

partnered

with

many

big-name

companies

to

create

payment

card

solutions.

Lastly,

Cloudflare,

a

provider

of

website

security,

benefited

from

the

return

of

many

employees

to

remote

work

due

to

the

emergence

of

the

Delta

variant.

In

contrast,

Zynga

and

Zendesk

dampened

relative

performance

in

the

IT

sector.

Mobile

videogame-maker

Zynga

lowered

full-year

2021

sales

guidance,

which

weighed

on

its

stock.

Company

management

called

out

two

headwinds

that

were

compounded

by

recent

mobile-

app

privacy

changes

from

Apple

(not

a

Fund

holding).

First,

new

2021

player

cohorts

did

not

monetize

as

well

as

prior

cohorts.

Second,

growth

of

the

company’s

merge

games

stalled

as

competition

grew

in

that

category.

We

believe

these

are

transient

headwinds

as

the

company

reiterated

its

outlook

for

double-digit

percentage

organic

growth

in

2022

and

continued

profit

margin

expansion.

The

announcement

by

Zendesk

of

an

all-stock

buyout

of

Momentive

Global

(not

a

Fund

holding),

parent

company

of

SurveyMonkey,

troubled

many

investors

and

drove

the

shares

of

the

customer

support

software

specialist

lower.

Thank

you

for

your

continued

participation

in

Franklin

Small-

Mid

Cap

Growth

Fund.

We

look

forward

to

serving

your

future

investment

needs.

John

P.

Scandalios,

CFA

Lead

Portfolio

Manager

Michael

P.

McCarthy,

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

%

of

Total

Net

Assets

a

aa

Synopsys,

Inc.

2.5%

Software

IDEXX

Laboratories,

Inc.

2.2%

Health

Care

Equipment

&

Supplies

SiTime

Corp.

2.0%

Semiconductors

&

Semiconductor

Equipment

DocuSign,

Inc.

1.9%

Software

Paylocity

Holding

Corp.

1.9%

Software

MSCI,

Inc.

1.9%

Capital

Markets

CoStar

Group,

Inc.

1.7%

Professional

Services

Veeva

Systems,

Inc.

1.6%

Health

Care

Technology

Cloudflare

,

Inc.

1.6%

IT

Services

Chipotle

Mexican

Grill,

Inc.

1.6%

Hotels,

Restaurants

&

Leisure

Performance

Summary

as

of

October

31,

2021

Franklin

Small-Mid

Cap

Growth

Fund

16

franklintempleton.com

Semiannual

Report

The

performance

table

does

not

reflect

any

taxes

that

a

shareholder

would

pay

on

Fund

dividends,

capital

gain

distributions,

if

any,

or

any

realized

gains

on

the

sale

of

Fund

shares.

Total

return

reflects

reinvestment

of

the

Fund’s

dividends

and

capital

gain

distributions,

if

any,

and

any

unrealized

gains

or

losses.

Your

dividend

income

will

vary

depending

on

dividends

or

interest

paid

by

securities

in

the

Fund’s

portfolio,

adjusted

for

operating

expenses

of

each

class.

Capital

gain

distributions

are

net

profits

realized

from

the

sale

of

portfolio

securities.

Performance

as

of

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

6-Month

+10.45%

+4.38%

1-Year

+37.38%

+29.83%

5-Year

+186.17%

+22.02%

10-Year

+358.27%

+15.79%

Advisor

6-Month

+10.58%

+10.58%

1-Year

+37.70%

+37.70%

5-Year

+189.76%

+23.71%

10-Year

+369.74%

+16.73%

See

page

17

for

Performance

Summary

footnotes.

Franklin

Small-Mid

Cap

Growth

Fund

Performance

Summary

17

franklintempleton.com

Semiannual

Report

Each

class

of

shares

is

available

to

certain

eligible

investors

and

has

different

annual

fees

and

expenses,

as

described

in

the

prospectus.

All

investments

involve

risks,

including

possible

loss

of

principal.

Growth

stock

prices

reflect

projections

of

future

earnings

or

revenues,

and

can,

therefore,

fall

dramatically

if

the

company

fails

to

meet

those

projections.

Smaller,

midsized

and

relatively

new

or

unseasoned

companies

can

be

particularly

sensitive

to

changing

economic

conditions,

and

their

prospects

for

growth

are

less

certain

than

those

of

larger,

more

established

companies.

Historically,

these

securities

have

experienced

more

price

volatility

than

larger-company

stocks,

especially

over

the

short

term.

To

the

extent

the

Fund

focuses

on

particular

countries,

regions,

industries,

sectors

or

types

of

investment

from

time

to

time,

it

may

be

subject

to

greater

risks

of

adverse

developments

in

such

areas

of

focus

than

a

fund

that

invests

in

a

wider

variety

of

countries,

regions,

industries,

sectors

or

investments.

From

time

to

time,

the

trading

market

for

a

particular

security

or

type

of

security

in

which

the

Fund

invests

may

become

less

liquid

or

even

illiquid.

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

8/31/22.

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.

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.

Total

Annual

Operating

Expenses

5

Share

Class

With

Fee

Waiver

Without

Fee

Waiver

A

0.86%

0.87%

Advisor

0.61%

0.62%

Your

Fund’s

Expenses

Franklin

Small-Mid

Cap

Growth

Fund

18

franklintempleton.com

Semiannual

Report

As

a

Fund

shareholder,

you

can

incur

two

types

of

costs:

(1)

transaction

costs,

including

sales

charges

(loads)

on

Fund

purchases

and

redemptions;

and

(2)

ongoing

Fund

costs,

including

management

fees,

distribution

and

service

(12b-1)

fees,

and

other

Fund

expenses.

All

mutual

funds

have

ongoing

costs,

sometimes

referred

to

as

operating

expenses.

The

table

below

shows

ongoing

costs

of

investing

in

the

Fund

and

can

help

you

understand

these

costs

and

compare

them

with

those

of

other

mutual

funds.

The

table

assumes

a

$1,000

investment

held

for

the

six

months

indicated.

Actual

Fund

Expenses

The

table

below

provides

information

about

actual

account

values

and

actual

expenses

in

the

columns

under

the

heading

“Actual.”

In

these

columns

the

Fund’s

actual

return,

which

includes

the

effect

of

Fund

expenses,

is

used

to

calculate

the

“Ending

Account

Value”

for

each

class

of

shares.

You

can

estimate

the

expenses

you

paid

during

the

period

by

following

these

steps

(

of

course,

your

account

value

and

expenses

will

differ

from

those

in

this

illustration

):

Divide

your

account

value

by

$1,000

(

if

your

account

had

an

$8,600

value,

then

$8,600

÷

$1,000

=

8.6

).

Then

multiply

the

result

by

the

number

in

the

row

for

your

class

of

shares

under

the

headings

“Actual”

and

“Expenses

Paid

During

Period”

(

if

Actual

Expenses

Paid

During

Period

were

$7.50,

then

8.6

x

$7.50

=

$64.50

).

In

this

illustration,

the

actual

expenses

paid

this

period

are

$64.50.

Hypothetical

Example

for

Comparison

with

Other

Funds

Under

the

heading

“Hypothetical”

in

the

table,

information

is

provided

about

hypothetical

account

values

and

hypothetical

expenses

based

on

the

Fund’s

actual

expense

ratio

and

an

assumed

rate

of

return

of

5%

per

year

before

expenses,

which

is

not

the

Fund’s

actual

return.

This

information

may

not

be

used

to

estimate

the

actual

ending

account

balance

or

expenses

you

paid

for

the

period,

but

it

can

help

you

compare

ongoing

costs

of

investing

in

the

Fund

with

those

of

other

funds.

To

do

so,

compare

this

5%

hypothetical

example

for

the

class

of

shares

you

hold

with

the

5%

hypothetical

examples

that

appear

in

the

shareholder

reports

of

other

funds.

Please

note

that

expenses

shown

in

the

table

are

meant

to

highlight

ongoing

costs

and

do

not

reflect

any

transactional

costs.

Therefore,

information

under

the

heading

“Hypothetical”

is

useful

in

comparing

ongoing

costs

only,

and

will

not

help

you

compare

total

costs

of

owning

different

funds.

In

addition,

if

transactional

costs

were

included,

your

total

costs

would

have

been

higher.

1.

Expenses

are

equal

to

the

annualized

expense

ratio

for

the

six-month

period

as

indicated

above—in

the

far

right

column—multiplied

by

the

simple

average

account

value

over

the

period

indicated,

and

then

multiplied

by

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

$1,104.50

$4.47

$1,020.96

$4.29

0.84%

C

$1,000

$1,100.40

$8.44

$1,017.17

$8.10

1.59%

R

$1,000

$1,103.20

$5.80

$1,019.69

$5.57

1.09%

R6

$1,000

$1,106.50

$2.58

$1,022.76

$2.48

0.49%

Advisor

$1,000

$1,105.80

$3.15

$1,022.22

$3.02

0.59%

Franklin

Strategic

Series

Financial

Highlights

Franklin

Growth

Opportunities

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

19

a

Six

Months

Ended

October

31,

2021

(unaudited)

Year

Ended

April

30,

2021

2020

2019

2018

2017

Class

A

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$56.25

$39.60

$39.57

$38.58

$34.81

$30.40

Income

from

investment

operations

a

:

Net

investment

(loss)

b

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

(0.15)

(0.26)

(0.14)

(0.13)

(0.10)

(0.09)

Net

realized

and

unrealized

gains

(losses)

8.72

20.03

3.59

5.29

7.03

5.14

Total

from

investment

operations

........

8.57

19.77

3.45

5.16

6.93

5.05

Less

distributions

from:

Net

realized

gains

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

—

(3.12)

(3.42)

(4.17)

(3.16)

(0.64)

Net

asset

value,

end

of

period

..........

$64.82

$56.25

$39.60

$39.57

$38.58

$34.81

Total

return

c

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

15.24%

50.64%

8.90%

15.91%

20.43%

16.88%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

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

0.90%

0.91%

0.95%

0.94%

1.02%

1.05%

Expenses

net

of

waiver

and

payments

by

affiliates

e

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

0.90%

f

0.91%

f

0.95%

f

0.94%

f

0.99%

0.97%

Net

investment

(loss)

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

(0.48)%

(0.51)%

(0.35)%

(0.32)%

(0.27)%

(0.30)%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$4,618,370

$4,203,693

$2,883,392

$2,819,007

$2,428,175

$2,272,831

Portfolio

turnover

rate

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

7.07%

17.54%

19.47%

24.21%

22.68%

47.75%

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

repurchas-

es

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

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable,

and

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

annualized

for

periods

less

than

one

year.

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

Strategic

Series

Financial

Highlights

Franklin

Growth

Opportunities

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

20

a

Six

Months

Ended

October

31,

2021

(unaudited)

Year

Ended

April

30,

2021

2020

2019

2018

2017

Class

C

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$43.87

$31.61

$32.47

$32.67

$30.12

$26.59

Income

from

investment

operations

a

:

Net

investment

(loss)

b

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

(0.29)

(0.50)

(0.35)

(0.35)

(0.33)

(0.29)

Net

realized

and

unrealized

gains

(losses)

6.79

15.88

2.91

4.32

6.04

4.46

Total

from

investment

operations

........

6.50

15.38

2.56

3.97

5.71

4.17

Less

distributions

from:

Net

realized

gains

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

—

(3.12)

(3.42)

(4.17)

(3.16)

(0.64)

Net

asset

value,

end

of

period

..........

$50.37

$43.87

$31.61

$32.47

$32.67

$30.12

Total

return

c

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

14.82%

49.47%

8.10%

15.10%

19.53%

15.98%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

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

1.65%

1.66%

1.70%

1.69%

1.77%

1.80%

Expenses

net

of

waiver

and

payments

by

affiliates

e

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

1.65%

f

1.66%

f

1.70%

f

1.69%

f

1.74%

1.72%

Net

investment

(loss)

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

(1.22)%

(1.26)%

(1.10)%

(1.07)%

(1.02)%

(1.05)%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$246,730

$278,804

$216,757

$244,574

$400,295

$390,123

Portfolio

turnover

rate

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

7.07%

17.54%

19.47%

24.21%

22.68%

47.75%

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

repurchas-

es

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

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable,

and

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

annualized

for

periods

less

than

one

year.

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

Strategic

Series

Financial

Highlights

Franklin

Growth

Opportunities

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

21

a

Six

Months

Ended

October

31,

2021

(unaudited)

Year

Ended

April

30,

2021

2020

2019

2018

2017

Class

R

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$52.69

$37.32

$37.57

$36.93

$33.52

$29.37

Income

from

investment

operations

a

:

Net

investment

(loss)

b

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

(0.21)

(0.36)

(0.22)

(0.21)

(0.18)

(0.17)

Net

realized

and

unrealized

gains

(losses)

8.16

18.85

3.39

5.02

6.75

4.96

Total

from

investment

operations

........

7.95

18.49

3.17

4.81

6.57

4.79

Less

distributions

from:

Net

realized

gains

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

—

(3.12)

(3.42)

(4.17)

(3.16)

(0.64)

Net

asset

value,

end

of

period

..........

$60.64

$52.69

$37.32

$37.57

$36.93

$33.52

Total

return

c

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

15.09%

50.26%

8.64%

15.66%

20.14%

16.62%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

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

1.15%

1.15%

1.20%

1.19%

1.27%

1.30%

Expenses

net

of

waiver

and

payments

by

affiliates

e

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

1.15%

f

1.15%

f

1.20%

f

1.19%

f

1.24%

1.22%

Net

investment

(loss)

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

(0.73)%

(0.75)%

(0.60)%

(0.57)%

(0.52)%

(0.55)%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$42,207

$40,396

$31,060

$37,105

$36,582

$50,429

Portfolio

turnover

rate

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

7.07%

17.54%

19.47%

24.21%

22.68%

47.75%

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

repurchas-

es

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

Total

return

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

annualized

for

periods

less

than

one

year.

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

Strategic

Series

Financial

Highlights

Franklin

Growth

Opportunities

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

22

In

a

Six

Months

Ended

October

31,

2021

(unaudited)

Year

Ended

April

30,

2021

2020

2019

2018

2017

Class

R6

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$63.06

$43.97

$43.42

$41.78

$37.30

$32.39

Income

from

investment

operations

a

:

Net

investment

income

(loss)

b

........

(0.05)

(0.10)

0.01

0.01

0.07

0.05

Net

realized

and

unrealized

gains

(losses)

9.78

22.31

3.96

5.80

7.57

5.50

Total

from

investment

operations

........

9.73

22.21

3.97

5.81

7.64

5.55

Less

distributions

from:

Net

realized

gains

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

—

(3.12)

(3.42)

(4.17)

(3.16)

(0.64)

Net

asset

value,

end

of

period

..........

$72.79

$63.06

$43.97

$43.42

$41.78

$37.30

Total

return

c

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

15.43%

51.13%

9.34%

16.26%

20.98%

17.42%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

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

0.57%

0.57%

0.59%

0.59%

0.58%

0.59%

Expenses

net

of

waiver

and

payments

by

affiliates

e

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

0.57%

f

0.57%

f

0.59%

f

0.58%

0.55%

0.51%

Net

investment

income

(loss)

..........

(0.15)%

(0.17)%

0.01%

0.04%

0.17%

0.16%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$646,592

$563,918

$383,208

$418,174

$369,688

$291,825

Portfolio

turnover

rate

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

7.07%

17.54%

19.47%

24.21%

22.68%

47.75%

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

repurchas-

es

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

Total

return

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

annualized

for

periods

less

than

one

year.

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

Strategic

Series

Financial

Highlights

Franklin

Growth

Opportunities

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

23

a

Six

Months

Ended

October

31,

2021

(unaudited)

Year

Ended

April

30,

2021

2020

2019

2018

2017

Advisor

Class

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$62.01

$43.31

$42.87

$41.34

$37.02

$32.20

Income

from

investment

operations

a

:

Net

investment

(loss)

b

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

(0.08)

(0.14)

(0.04)

(0.03)

(0.01)

(0.02)

Net

realized

and

unrealized

gains

(losses)

9.62

21.96

3.90

5.73

7.49

5.48

Total

from

investment

operations

........

9.54

21.82

3.86

5.70

7.48

5.46

Less

distributions

from:

Net

realized

gains

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

—

(3.12)

(3.42)

(4.17)

(3.16)

(0.64)

Net

asset

value,

end

of

period

..........

$71.55

$62.01

$43.31

$42.87

$41.34

$37.02

Total

return

c

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

15.38%

51.01%

9.20%

16.16%

20.71%

17.21%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

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

0.65%

0.66%

0.70%

0.69%

0.77%

0.80%

Expenses

net

of

waiver

and

payments

by

affiliates

e

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

0.65%

f

0.66%

f

0.70%

f

0.69%

f

0.74%

0.72%

Net

investment

(loss)

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

(0.24)%

(0.26)%

(0.10)%

(0.07)%

(0.02)%

(0.05)%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$860,770

$643,449

$467,727

$506,964

$583,509

$537,193

Portfolio

turnover

rate

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

7.07%

17.54%

19.47%

24.21%

22.68%

47.75%

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

repurchas-

es

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

Total

return

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

annualized

for

periods

less

than

one

year.

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

Strategic

Series

Statement

of

Investments

(unaudited),

October

31,

2021

Franklin

Growth

Opportunities

Fund

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

24

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

96.7%

Airlines

0.6%

a

Wheels

Up

Experience,

Inc.

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

Singapore

3,500,000

$

24,535,000

a,b,c

Wheels

Up

Experience,

Inc.,

A

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

Singapore

2,315,191

15,338,523

39,873,523

Auto

Components

0.5%

a

Aptiv

plc

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

United

States

193,320

33,423,095

Automobiles

2.4%

a

Lucid

Group,

Inc.

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

United

States

2,167,003

80,157,441

a

Tesla,

Inc.

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

United

States

63,694

70,955,116

151,112,557

Beverages

1.0%

Constellation

Brands,

Inc.,

A

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

United

States

163,151

35,372,768

a

Monster

Beverage

Corp.

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

United

States

331,280

28,158,800

63,531,568

Biotechnology

1.4%

a,d

Ginkgo

Bioworks

Holdings,

Inc.

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

United

States

2,660,400

36,766,728

a

Heron

Therapeutics,

Inc.

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

United

States

2,090,035

23,011,286

a

Novavax,

Inc.

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

United

States

187,616

27,922,889

87,700,903

Capital

Markets

4.2%

Intercontinental

Exchange,

Inc.

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

United

States

249,025

34,480,001

MarketAxess

Holdings,

Inc.

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

United

States

22,363

9,139,087

MSCI,

Inc.

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

United

States

199,360

132,550,477

S&P

Global,

Inc.

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

United

States

188,666

89,457,871

a

TPG

Pace

Beneficial

II

Corp.,

A

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

United

States

662,600

6,519,984

272,147,420

Chemicals

1.1%

Ecolab,

Inc.

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

United

States

98,310

21,846,448

Linde

plc

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

United

Kingdom

156,944

50,096,525

71,942,973

Commercial

Services

&

Supplies

0.4%

a,b,c

Celonis

SE

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

Germany

16,669

6,164,029

Republic

Services,

Inc.

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

United

States

158,671

21,357,117

27,521,146

Consumer

Finance

0.5%

a,d

SoFi

Technologies,

Inc.

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

United

States

1,621,590

32,577,743

Electric

Utilities

0.4%

NextEra

Energy,

Inc.

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

United

States

336,418

28,706,548

Entertainment

1.1%

a

Sea

Ltd.,

ADR

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

Taiwan

109,742

37,704,059

a

Walt

Disney

Co.

(The)

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

United

States

191,533

32,382,484

70,086,543

Equity

Real

Estate

Investment

Trusts

(REITs)

2.1%

SBA

Communications

Corp.

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

United

States

390,093

134,710,816

Food

Products

0.8%

a

Freshpet,

Inc.

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

United

States

207,987

32,427,253

Lamb

Weston

Holdings,

Inc.

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

United

States

359,009

20,266,058

52,693,311

Franklin

Strategic

Series

Statement

of

Investments

(unaudited)

Franklin

Growth

Opportunities

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

25

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Health

Care

Equipment

&

Supplies

8.7%

Danaher

Corp.

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

United

States

305,906

$

95,372,314

a

Edwards

Lifesciences

Corp.

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

United

States

556,359

66,662,935

a,b,c

Figs,

Inc.

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

United

States

1,765,636

58,430,485

a,d

Figs,

Inc.,

A

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

United

States

900,682

30,271,922

a

IDEXX

Laboratories,

Inc.

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

United

States

98,571

65,662,086

a

Intuitive

Surgical,

Inc.

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

United

States

243,540

87,949,600

a

Nevro

Corp.

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

United

States

258,917

29,449,220

West

Pharmaceutical

Services,

Inc.

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

United

States

297,356

127,827,397

561,625,959

Health

Care

Providers

&

Services

2.0%

a

Guardant

Health,

Inc.

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

United

States

170,094

19,865,278

UnitedHealth

Group,

Inc.

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

United

States

235,278

108,338,461

128,203,739

Health

Care

Technology

1.8%

a

Veeva

Systems,

Inc.,

A

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

United

States

366,940

116,323,649

Hotels,

Restaurants

&

Leisure

1.4%

a

Chipotle

Mexican

Grill,

Inc.

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

United

States

42,937

76,386,211

a,d

Dutch

Bros,

Inc.,

A

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

United

States

174,900

13,334,376

89,720,587

Industrial

Conglomerates

1.4%

Honeywell

International,

Inc.

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

United

States

161,234

35,248,977

Roper

Technologies,

Inc.

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

United

States

107,177

52,288,443

87,537,420

Interactive

Media

&

Services

4.4%

a

Alphabet,

Inc.,

C

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

United

States

65,168

193,249,839

a

Meta

Platforms,

Inc.,

A

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

United

States

142,781

46,199,648

a

Snap,

Inc.,

A

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

United

States

404,509

21,269,083

a

ZoomInfo

Technologies,

Inc.,

A

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

United

States

302,278

20,319,127

281,037,697

Internet

&

Direct

Marketing

Retail

7.2%

a

Amazon.com,

Inc.

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

United

States

136,511

460,373,791

IT

Services

11.8%

a

Cloudflare,

Inc.,

A

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

United

States

190,164

37,028,734

a

Dlocal

Ltd.

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

Uruguay

299,049

14,506,867

a,d

Marqeta,

Inc.,

A

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

United

States

218,900

6,698,340

a,b,c

Marqeta,

Inc.,

B

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

United

States

1,396,875

42,004,312

Mastercard,

Inc.,

A

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

United

States

634,990

213,051,845

a

Okta,

Inc.

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

United

States

96,161

23,769,076

a

PayPal

Holdings,

Inc.

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

United

States

439,575

102,240,749

a

Shopify,

Inc.,

A

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

Canada

50,064

73,430,371

a

Snowflake,

Inc.,

A

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

United

States

61,992

21,935,249

a

Twilio,

Inc.,

A

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

United

States

279,542

81,447,357

Visa,

Inc.,

A

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

United

States

658,620

139,475,958

755,588,858

Leisure

Products

0.8%

a,b,c

Fanatics

Holdings,

Inc.

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

United

States

1,029,939

48,788,210

Life

Sciences

Tools

&

Services

1.1%

a

Illumina,

Inc.

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

United

States

69,033

28,652,837

a,e

Wuxi

Biologics

Cayman,

Inc.,

144A,

Reg

S

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

China

2,794,182

42,323,379

70,976,216

Franklin

Strategic

Series

Statement

of

Investments

(unaudited)

Franklin

Growth

Opportunities

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

26

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Machinery

0.7%

a,d

Proterra,

Inc.

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

United

States

579,458

$

6,495,724

a,b,c

Proterra,

Inc.

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

United

States

3,595,580

38,477,147

44,972,871

Pharmaceuticals

1.2%

AstraZeneca

plc,

ADR

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

United

Kingdom

604,858

37,731,042

a

Catalent,

Inc.

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

United

States

271,018

37,362,542

75,093,584

Professional

Services

3.1%

a

CoStar

Group,

Inc.

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

United

States

1,299,948

111,860,525

a,b,c

Legalzoom.com,

Inc.

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

United

States

1,673,284

44,638,957

TransUnion

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

United

States

363,075

41,858,917

198,358,399

Road

&

Rail

0.9%

Union

Pacific

Corp.

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

United

States

231,534

55,892,308

Semiconductors

&

Semiconductor

Equipment

5.7%

Analog

Devices,

Inc.

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

United

States

250,576

43,472,430

ASML

Holding

NV,

NYRS

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

Netherlands

40,727

33,106,164

a

GLOBALFOUNDRIES,

Inc.

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

United

States

191,600

9,338,584

Monolithic

Power

Systems,

Inc.

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

United

States

170,285

89,477,956

NVIDIA

Corp.

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

United

States

741,120

189,482,151

364,877,285

Software

22.9%

a

Adobe,

Inc.

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

United

States

202,780

131,880,001

a,d

Amplitude,

Inc.,

A

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

United

States

162,800

12,094,412

a,d

AppLovin

Corp.,

A

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

United

States

256,004

25,152,393

a

Atlassian

Corp.

plc,

A

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

United

States

80,156

36,721,868

a

Avalara,

Inc.

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

United

States

38,000

6,826,320

a,b,c

AvidXchange

Holdings,

Inc.

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

United

States

1,020,156

21,286,510

a

AvidXchange

Holdings,

Inc.

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

United

States

253,964

5,645,619

a

Bill.com

Holdings,

Inc.

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

United

States

560,964

165,097,315

a

Black

Knight,

Inc.

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

United

States

360,298

25,260,493

a,b,c

Confluent,

Inc.

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

United

States

481,845

31,853,644

a,d

Confluent,

Inc.,

A

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

United

States

282,514

19,196,826

a

Crowdstrike

Holdings,

Inc.,

A

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

United

States

110,731

31,203,996

a

DocuSign,

Inc.

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

United

States

165,414

46,033,062

a,b,c

Gitlab,

Inc.

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

United

States

201,294

21,190,020

a

Gitlab,

Inc.,

A

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

United

States

28,700

3,220,140

Intuit,

Inc.

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

United

States

198,328

124,151,345

Microsoft

Corp.

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

United

States

860,656

285,410,743

a

Paycom

Software,

Inc.

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

United

States

66,255

36,297,802

a,d

Procore

Technologies,

Inc.

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

United

States

162,383

14,849,925

a

PTC,

Inc.

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

United

States

253,539

32,288,192

a

salesforce.com,

Inc.

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

United

States

200,696

60,146,584

a

ServiceNow,

Inc.

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

United

States

268,410

187,285,762

a

Synopsys,

Inc.

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

United

States

171,819

57,246,654

a

Tyler

Technologies,

Inc.

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

United

States

61,931

33,642,158

a

Workday,

Inc.,

A

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

United

States

127,073

36,848,628

a

Zendesk,

Inc.

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

United

States

185,645

18,898,661

1,469,729,073

Specialty

Retail

0.2%

a

Burlington

Stores,

Inc.

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

United

States

51,461

14,218,160

Franklin

Strategic

Series

Statement

of

Investments

(unaudited)

Franklin

Growth

Opportunities

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

27

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Technology

Hardware,

Storage

&

Peripherals

3.8%

Apple,

Inc.

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

United

States

1,619,864

$

242,655,627

Textiles,

Apparel

&

Luxury

Goods

1.1%

NIKE,

Inc.,

B

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

United

States

395,518

66,166,206

a

On

Holding

AG,

A

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

Switzerland

204,600

6,989,136

73,155,342

Total

Common

Stocks

(Cost

$2,011,773,791)

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

6,205,156,921

Convertible

Preferred

Stocks

0.7%

Software

0.7%

a,b,c

Databricks,

Inc.,

G

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

United

States

112,760

28,068,560

a,b,c

OneTrust

LLC,

C

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

United

States

517,056

13,720,916

41,789,476

Total

Convertible

Preferred

Stocks

(Cost

$30,139,628)

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

41,789,476

Preferred

Stocks

2.2%

Commercial

Services

&

Supplies

0.2%

a,b,c,f

Optoro,

Inc.,

E

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

United

States

509,182

10,020,702

a

Food

&

Staples

Retailing

0.3%

a,b,c

Sweetgreen,

Inc.,

H

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

United

States

928,488

15,042,978

a,b,c

Sweetgreen,

Inc.,

I

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

United

States

100,835

1,633,687

a,b,c

Sweetgreen,

Inc.,

J

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

United

States

76,670

1,242,176

17,918,841

Health

Care

Providers

&

Services

0.5%

a,b,c

Tempus

Labs,

Inc.,

F

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

United

States

504,854

23,694,033

a,b,c

Tempus

Labs,

Inc.,

G

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

United

States

126,131

5,968,462

29,662,495

IT

Services

0.4%

a,b,c,f

HashiCorp,

Inc.,

E

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

United

States

415,102

28,420,302

a

Software

0.8%

a,b,c,f

ClearMotion,

Inc.,

C

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

United

States

2,610,594

7,057,172

a,b,c,f

ClearMotion,

Inc.,

D

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

United

States

3,698,772

10,867,769

a,b,c,f

Talkdesk,

Inc.,

C

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

United

States

1,753,060

28,594,801

a,b,c

Tanium,

Inc.,

G

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

United

States

805,800

7,328,710

53,848,452

Total

Preferred

Stocks

(Cost

$85,523,930)

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

139,870,792

Warrants

Warrants

0.0%

†

Biotechnology

0.0%

†

a

Ginkgo

Bioworks

Holdings,

Inc.,

C,

12/31/27

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

United

States

232,080

888,866

Food

&

Staples

Retailing

0.0%

a,b,c

Sweetgreen,

Inc.,

1/20/26

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

United

States

23,001

—

Total

Warrants

(Cost

$—)

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

888,866

Shares

Escrows

and

Litigation

Trusts

0.0%

a,b

Proterra,

Inc.,

Escrow

Account

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

United

States

382,355

—

Franklin

Strategic

Series

Statement

of

Investments

(unaudited)

Franklin

Growth

Opportunities

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

28

See

Abbreviations

on

page

81

.

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Escrows

and

Litigation

Trusts

(continued)

a,b

Wheels

Up

Experience,

Inc.,

Escrow

Account

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

Singapore

102,780

$

—

Total

Escrows

and

Litigation

Trusts

(Cost

$–)

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

—

Total

Long

Term

Investments

(Cost

$2,127,437,349)

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

6,387,706,055

a

Short

Term

Investments

2.0%

a

a

Country

Shares

a

Value

a

Money

Market

Funds

0.5%

g,h

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

29,828,497

29,828,497

Total

Money

Market

Funds

(Cost

$29,828,497)

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

29,828,497

a

a

a

a

a

i

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

1.5%

Money

Market

Funds

1.5%

g,h

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

96,080,575

96,080,575

Total

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

(Cost

$96,080,575)

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

96,080,575

Total

Short

Term

Investments

(Cost

$125,909,072

)

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

125,909,072

a

Total

Investments

(Cost

$2,253,346,421)

101.6%

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

$6,513,615,127

Other

Assets,

less

Liabilities

(1.6)%

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

(98,945,641)

Net

Assets

100.0%

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

$6,414,669,486

†

Rounds

to

less

than

0.1%

of

net

assets.

a

Non-income

producing.

b

Fair

valued

using

significant

unobservable

inputs.

See

Note

11

regarding

fair

value

measurements.

c

See

Note

8

regarding

restricted

securities.

d

A

portion

or

all

of

the

security

is

on

loan

at

October

31,

2021.

See

Note

1(c).

e

Security

was

purchased

pursuant

to

Rule

144A

or

Regulation

S

under

the

Securities

Act

of

1933.

144A

securities

may

be

sold

in

transactions

exempt

from

registration

only

to

qualified

institutional

buyers

or

in

a

public

offering

registered

under

the

Securities

Act

of

1933.

Regulation

S

securities

cannot

be

sold

in

the

United

States

without

either

an

effective

registration

statement

filed

pursuant

to

the

Securities

Act

of

1933,

or

pursuant

to

an

exemption

from

registration.

At

October

31,

2021,

the

aggregate

value

of

these

securities

was

$42,323,379,

representing

0.7%

of

net

assets.

f

See

Note

9

regarding

holdings

of

5%

voting

securities.

g

See

Note

3(f)

regarding

investments

in

affiliated

management

investment

companies.

h

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

i

See

Note

1(c)

regarding

securities

on

loan.

Franklin

Strategic

Series

Financial

Highlights

Franklin

Small

Cap

Growth

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

29

a

Six

Months

Ended

October

31,

2021

(unaudited)

Year

Ended

April

30,

2021

2020

2019

2018

2017

Class

A

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$30.08

$18.85

$21.46

$23.01

$19.60

$16.37

Income

from

investment

operations

a

:

Net

investment

(loss)

b

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

(0.09)

(0.18)

(0.11)

(0.15)

(0.13)

(0.11)

Net

realized

and

unrealized

gains

(losses)

(0.34)

14.24

(1.07)

2.86

3.96

3.34

Total

from

investment

operations

........

(0.43)

14.06

(1.18)

2.71

3.83

3.23

Less

distributions

from:

Net

realized

gains

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

—

(2.83)

(1.43)

(4.26)

(0.42)

—

Net

asset

value,

end

of

period

..........

$29.65

$30.08

$18.85

$21.46

$23.01

$19.60

Total

return

c

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

(1.43)%

76.43%

(6.25)%

16.06%

19.71%

19.73%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

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

1.03%

1.03%

1.07%

1.07%

1.11%

1.10%

Expenses

net

of

waiver

and

payments

by

affiliates

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

1.03%

e

1.02%

f

1.06%

f

1.06%

f

1.10%

f

1.08%

f

Net

investment

(loss)

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

(0.60)%

(0.69)%

(0.51)%

(0.68)%

(0.61)%

(0.61)%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$1,254,534

$1,244,591

$686,791

$713,442

$665,251

$719,752

Portfolio

turnover

rate

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

14.04%

47.80%

35.29%

42.10%

29.82%

29.93%

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

repurchas-

es

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

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable,

and

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Strategic

Series

Financial

Highlights

Franklin

Small

Cap

Growth

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

30

a

Six

Months

Ended

October

31,

2021

(unaudited)

Year

Ended

April

30,

2021

2020

2019

2018

2017

Class

C

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$22.57

$14.69

$17.15

$19.41

$16.71

$14.07

Income

from

investment

operations

a

:

Net

investment

(loss)

b

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

(0.15)

(0.29)

(0.21)

(0.28)

(0.25)

(0.21)

Net

realized

and

unrealized

gains

(losses)

(0.26)

11.00

(0.82)

2.28

3.37

2.85

Total

from

investment

operations

........

(0.41)

10.71

(1.03)

2.00

3.12

2.64

Less

distributions

from:

Net

realized

gains

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

—

(2.83)

(1.43)

(4.26)

(0.42)

—

Net

asset

value,

end

of

period

..........

$22.16

$22.57

$14.69

$17.15

$19.41

$16.71

Total

return

c

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

(1.82)%

75.13%

(6.97)%

15.31%

18.79%

18.76%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

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

1.78%

1.78%

1.82%

1.82%

1.86%

1.85%

Expenses

net

of

waiver

and

payments

by

affiliates

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

1.78%

e

1.77%

f

1.81%

f

1.81%

f

1.85%

f

1.83%

f

Net

investment

(loss)

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

(1.35)%

(1.43)%

(1.26)%

(1.43)%

(1.36)%

(1.36)%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$61,567

$86,394

$66,269

$90,513

$132,116

$142,539

Portfolio

turnover

rate

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

14.04%

47.80%

35.29%

42.10%

29.82%

29.93%

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

repurchas-

es

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

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable,

and

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Strategic

Series

Financial

Highlights

Franklin

Small

Cap

Growth

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

31

a

Six

Months

Ended

October

31,

2021

(unaudited)

Year

Ended

April

30,

2021

2020

2019

2018

2017

Class

R

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$27.76

$17.58

$20.15

$21.93

$18.74

$15.70

Income

from

investment

operations

a

:

Net

investment

(loss)

b

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

(0.13)

(0.23)

(0.15)

(0.20)

(0.17)

(0.15)

Net

realized

and

unrealized

gains

(losses)

(0.30)

13.24

(0.99)

2.68

3.78

3.19

Total

from

investment

operations

........

(0.43)

13.01

(1.14)

2.48

3.61

3.04

Less

distributions

from:

Net

realized

gains

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

—

(2.83)

(1.43)

(4.26)

(0.42)

—

Net

asset

value,

end

of

period

..........

$27.33

$27.76

$17.58

$20.15

$21.93

$18.74

Total

return

c

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

(1.55)%

75.96%

(6.47)%

15.78%

19.37%

19.36%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

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

1.28%

1.28%

1.32%

1.32%

1.36%

1.35%

Expenses

net

of

waiver

and

payments

by

affiliates

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

1.28%

e

1.27%

f

1.31%

f

1.31%

f

1.35%

f

1.33%

f

Net

investment

(loss)

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

(0.95)%

(0.93)%

(0.76)%

(0.93)%

(0.86)%

(0.86)%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$70,776

$79,314

$54,369

$74,634

$71,398

$79,995

Portfolio

turnover

rate

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

14.04%

47.80%

35.29%

42.10%

29.82%

29.93%

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

repurchas-

es

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

Total

return

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Strategic

Series

Financial

Highlights

Franklin

Small

Cap

Growth

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

32

a

Six

Months

Ended

October

31,

2021

(unaudited)

Year

Ended

April

30,

2021

2020

2019

2018

2017

Class

R6

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$34.14

$21.07

$23.73

$24.88

$21.06

$17.52

Income

from

investment

operations

a

:

Net

investment

(loss)

b

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

(0.03)

(0.09)

(0.02)

(0.07)

(0.03)

(0.03)

Net

realized

and

unrealized

gains

(losses)

(0.39)

15.99

(1.21)

3.18

4.27

3.57

Total

from

investment

operations

........

(0.42)

15.90

(1.23)

3.11

4.24

3.54

Less

distributions

from:

Net

realized

gains

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

—

(2.83)

(1.43)

(4.26)

(0.42)

—

Net

asset

value,

end

of

period

..........

$33.72

$34.14

$21.07

$23.73

$24.88

$21.06

Total

return

c

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

(1.23)%

77.13%

(5.86)%

16.50%

20.23%

20.21%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

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

0.64%

0.65%

0.67%

0.67%

0.65%

0.63%

Expenses

net

of

waiver

and

payments

by

affiliates

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

0.63%

0.64%

e

0.64%

e

0.64%

e

0.63%

e

0.61%

e

Net

investment

(loss)

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

(0.21)%

(0.31)%

(0.09)%

(0.26)%

(0.14)%

(0.14)%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$2,159,395

$2,149,795

$1,136,759

$1,084,442

$935,509

$858,972

Portfolio

turnover

rate

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

14.04%

47.80%

35.29%

42.10%

29.82%

29.93%

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

repurchas-

es

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

Total

return

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Strategic

Series

Financial

Highlights

Franklin

Small

Cap

Growth

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

33

a

Six

Months

Ended

October

31,

2021

(unaudited)

Year

Ended

April

30,

2021

2020

2019

2018

2017

Advisor

Class

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$33.43

$20.70

$23.37

$24.61

$20.88

$17.41

Income

from

investment

operations

a

:

Net

investment

(loss)

b

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

(0.06)

(0.13)

(0.06)

(0.10)

(0.08)

(0.07)

Net

realized

and

unrealized

gains

(losses)

(0.38)

15.69

(1.18)

3.12

4.23

3.54

Total

from

investment

operations

........

(0.44)

15.56

(1.24)

3.02

4.15

3.47

Less

distributions

from:

Net

realized

gains

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

—

(2.83)

(1.43)

(4.26)

(0.42)

—

Net

asset

value,

end

of

period

..........

$32.99

$33.43

$20.70

$23.37

$24.61

$20.88

Total

return

c

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

(1.32)%

76.86%

(5.99)%

16.30%

19.97%

19.93%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

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

0.78%

0.78%

0.82%

0.82%

0.86%

0.85%

Expenses

net

of

waiver

and

payments

by

affiliates

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

0.78%

e

0.77%

f

0.81%

f

0.81%

f

0.85%

f

0.83%

f

Net

investment

(loss)

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

(0.35)%

(0.44)%

(0.26)%

(0.43)%

(0.36)%

(0.36)%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$682,513

$739,985

$428,155

$725,622

$713,135

$805,661

Portfolio

turnover

rate

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

14.04%

47.80%

35.29%

42.10%

29.82%

29.93%

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

repurchas-

es

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

Total

return

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Strategic

Series

Statement

of

Investments

(unaudited),

October

31,

2021

Franklin

Small

Cap

Growth

Fund

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

34

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

94.7%

Aerospace

&

Defense

1.8%

a

Axon

Enterprise,

Inc.

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

United

States

82,100

$

14,774,716

BWX

Technologies,

Inc.

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

United

States

800,600

45,426,044

a

Kratos

Defense

&

Security

Solutions,

Inc.

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

United

States

846,164

18,099,448

78,300,208

Airlines

2.0%

a

Allegiant

Travel

Co.

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

United

States

337,748

59,197,092

a

Wheels

Up

Experience,

Inc.

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

Singapore

2,000,000

14,020,000

a,b,c

Wheels

Up

Experience,

Inc.,

A

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

Singapore

1,984,450

13,147,306

86,364,398

Banks

2.8%

Pinnacle

Financial

Partners,

Inc.

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

United

States

576,604

55,682,648

Western

Alliance

Bancorp

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

United

States

543,400

63,083,306

118,765,954

Biotechnology

10.2%

a

Alector,

Inc.

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

United

States

773,200

16,809,368

a

Arcutis

Biotherapeutics,

Inc.

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

United

States

226,300

4,793,034

a

Ascendis

Pharma

A/S,

ADR

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

Denmark

178,900

27,123,029

a

Blueprint

Medicines

Corp.

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

United

States

203,800

22,925,462

a

Centessa

Pharmaceuticals

plc,

ADR

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

United

States

349,300

6,007,960

a,d

Cullinan

Oncology,

Inc.

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

United

States

422,200

9,381,284

a

Cytokinetics,

Inc.

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

United

States

268,300

9,366,353

a,d

Day

One

Biopharmaceuticals,

Inc.

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

United

States

385,922

9,431,934

a

Deciphera

Pharmaceuticals,

Inc.

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

United

States

673,700

22,494,843

a,d

Dyne

Therapeutics,

Inc.

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

United

States

508,100

7,372,531

a

Global

Blood

Therapeutics,

Inc.

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

United

States

551,300

20,133,476

a

Harpoon

Therapeutics,

Inc.

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

United

States

493,300

3,088,058

a

Heron

Therapeutics,

Inc.

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

United

States

1,775,508

19,548,343

a

Insmed,

Inc.

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

United

States

937,300

28,259,595

a

Intellia

Therapeutics,

Inc.

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

United

States

194,500

25,864,610

a

Iovance

Biotherapeutics,

Inc.

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

United

States

1,165,300

28,328,443

a

KalVista

Pharmaceuticals,

Inc.

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

United

States

448,700

8,067,626

a

Karuna

Therapeutics,

Inc.

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

United

States

88,900

12,479,782

a

Kura

Oncology,

Inc.

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

United

States

564,700

9,272,374

a

Mirati

Therapeutics,

Inc.

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

United

States

212,600

40,185,652

a

PTC

Therapeutics,

Inc.

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

United

States

973,400

36,921,062

a

Rocket

Pharmaceuticals,

Inc.

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

United

States

319,000

9,477,490

a

Sutro

Biopharma,

Inc.

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

United

States

956,549

19,284,028

a,d

Taysha

Gene

Therapies,

Inc.

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

United

States

457,800

7,159,992

a

Trillium

Therapeutics,

Inc.

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

Canada

717,900

13,001,169

a

Twist

Bioscience

Corp.

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

United

States

118,362

14,061,405

430,838,903

Building

Products

1.0%

a

Masonite

International

Corp.

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

United

States

344,200

41,307,442

Capital

Markets

3.8%

Artisan

Partners

Asset

Management,

Inc.,

A

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

United

States

266,772

13,215,885

a,e

Bridge

Investment

Group

Holdings,

Inc.,

A

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

United

States

1,501,000

28,443,950

Evercore,

Inc.,

A

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

United

States

301,000

45,703,840

Houlihan

Lokey,

Inc.

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

United

States

545,000

61,083,600

a

TPG

Pace

Solutions

Corp.

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

United

States

1,230,000

12,509,100

160,956,375

Franklin

Strategic

Series

Statement

of

Investments

(unaudited)

Franklin

Small

Cap

Growth

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

35

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Commercial

Services

&

Supplies

0.6%

a

US

Ecology,

Inc.

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

United

States

729,376

$

23,478,613

Communications

Equipment

2.0%

a

Viasat,

Inc.

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

United

States

807,612

48,206,360

a

Viavi

Solutions,

Inc.

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

United

States

2,253,900

34,710,060

82,916,420

Construction

&

Engineering

1.9%

Arcosa,

Inc.

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

United

States

903,800

46,753,574

Granite

Construction,

Inc.

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

United

States

875,643

32,503,868

79,257,442

Diversified

Consumer

Services

1.7%

a

Grand

Canyon

Education,

Inc.

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

United

States

460,600

36,709,820

a,d

Nerdy,

Inc.

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

United

States

4,293,824

36,755,133

73,464,953

Electronic

Equipment,

Instruments

&

Components

0.9%

Vontier

Corp.

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

United

States

1,077,800

36,461,974

Equity

Real

Estate

Investment

Trusts

(REITs)

2.0%

Pebblebrook

Hotel

Trust

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

United

States

1,160,400

26,062,584

Rexford

Industrial

Realty,

Inc.

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

United

States

897,100

60,285,120

86,347,704

Food

&

Staples

Retailing

1.0%

a

Performance

Food

Group

Co.

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

United

States

942,800

42,642,844

Food

Products

3.1%

a

Freshpet,

Inc.

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

United

States

175,100

27,299,841

a

Hostess

Brands,

Inc.

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

United

States

863,774

16,333,966

a

Nomad

Foods

Ltd.

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

United

Kingdom

1,212,000

33,002,760

a

Simply

Good

Foods

Co.

(The)

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

United

States

1,334,300

52,904,995

129,541,562

Health

Care

Equipment

&

Supplies

4.6%

a

CryoPort,

Inc.

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

United

States

217,800

17,759,412

a,d

Figs,

Inc.,

A

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

United

States

1,006,500

33,828,465

a

Haemonetics

Corp.

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

United

States

413,500

28,411,585

a

Inari

Medical,

Inc.

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

United

States

182,400

16,510,848

a

Integer

Holdings

Corp.

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

United

States

521,400

46,936,428

a

Neogen

Corp.

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

United

States

330,932

14,001,733

a

Nevro

Corp.

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

United

States

204,300

23,237,082

a

Pulmonx

Corp.

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

United

States

375,116

14,603,266

195,288,819

Health

Care

Providers

&

Services

2.8%

a

1Life

Healthcare,

Inc.

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

United

States

1,439,300

31,175,238

a

Accolade,

Inc.

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

United

States

650,500

25,883,395

a

HealthEquity,

Inc.

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

United

States

473,016

31,304,199

a,d

Hims

&

Hers

Health,

Inc.

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

United

States

1,826,147

14,243,946

a

Privia

Health

Group,

Inc.

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

United

States

642,300

16,507,110

119,113,888

Health

Care

Technology

4.1%

a

Certara,

Inc.

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

United

States

903,200

37,311,192

a,d

Definitive

Healthcare

Corp.

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

United

States

39,700

1,593,558

a

Inspire

Medical

Systems,

Inc.

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

United

States

278,844

75,170,766

Franklin

Strategic

Series

Statement

of

Investments

(unaudited)

Franklin

Small

Cap

Growth

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

36

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Health

Care

Technology

(continued)

a

Phreesia,

Inc.

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

United

States

846,182

$

59,689,678

173,765,194

Hotels,

Restaurants

&

Leisure

3.9%

a,d

Dutch

Bros,

Inc.,

A

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

United

States

63,000

4,803,120

a

Portillo's,

Inc.,

A

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

United

States

396,100

15,051,800

a

Red

Rock

Resorts,

Inc.,

A

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

United

States

1,193,500

64,938,335

Texas

Roadhouse,

Inc.

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

United

States

428,100

38,019,561

Wingstop,

Inc.

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

United

States

237,529

40,966,627

163,779,443

Household

Durables

2.2%

a

M/I

Homes,

Inc.

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

United

States

927,780

53,124,683

a

Tri

Pointe

Homes,

Inc.

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

United

States

1,670,300

40,404,557

93,529,240

IT

Services

6.7%

a

BigCommerce

Holdings,

Inc.,

1

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

United

States

505,800

23,373,018

a

Cantaloupe,

Inc.

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

United

States

2,469,265

30,865,813

a,d

Flywire

Corp.

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

United

States

453,410

21,509,770

a

LiveRamp

Holdings,

Inc.

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

United

States

1,018,500

54,499,935

a,b,c

Marqeta,

Inc.,

B

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

United

States

1,199,415

36,066,650

a

Paya

Holdings,

Inc.,

A

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

United

States

2,784,700

25,368,617

a,d,e

Paymentus

Holdings,

Inc.,

A

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

United

States

818,400

20,951,040

a

Payoneer

Global,

Inc.

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

United

States

750,000

5,662,500

a

Repay

Holdings

Corp.

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

United

States

1,756,100

36,895,661

a

Shift4

Payments,

Inc.,

A

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

United

States

460,200

29,052,426

284,245,430

Life

Sciences

Tools

&

Services

1.3%

a,d

Codex

DNA,

Inc.

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

United

States

688,300

6,359,892

a

NeoGenomics,

Inc.

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

United

States

1,017,300

46,795,800

53,155,692

Machinery

3.4%

Kennametal,

Inc.

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

United

States

1,256,200

49,933,950

a,d

Proterra,

Inc.

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

United

States

620,876

6,960,020

a,b,c

Proterra,

Inc.

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

United

States

3,243,567

34,710,173

a

RBC

Bearings,

Inc.

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

United

States

223,400

52,259,962

143,864,105

Personal

Products

0.8%

a

BellRing

Brands,

Inc.,

A

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

United

States

1,261,200

33,825,384

Pharmaceuticals

1.1%

a,d

EyePoint

Pharmaceuticals,

Inc.

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

United

States

750,000

8,602,500

a

Reata

Pharmaceuticals,

Inc.,

A

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

United

States

277,674

26,659,481

a

Revance

Therapeutics,

Inc.

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

United

States

971,692

13,360,765

48,622,746

Professional

Services

2.5%

a,b,c

Legalzoom.com,

Inc.

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

United

States

1,431,280

38,182,907

ManTech

International

Corp.,

A

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

United

States

371,219

32,006,502

Science

Applications

International

Corp.

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

United

States

413,000

37,079,140

107,268,549

Franklin

Strategic

Series

Statement

of

Investments

(unaudited)

Franklin

Small

Cap

Growth

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

37

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Semiconductors

&

Semiconductor

Equipment

6.8%

a

Allegro

MicroSystems,

Inc.

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

Japan

913,400

$

30,471,024

a

Lattice

Semiconductor

Corp.

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

United

States

846,400

58,774,016

a

Onto

Innovation,

Inc.

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

United

States

680,709

53,918,960

a

Semtech

Corp.

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

United

States

693,200

58,942,796

a

Silicon

Laboratories,

Inc.

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

United

States

114,700

21,650,772

a

SiTime

Corp.

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

United

States

244,500

64,765,605

288,523,173

Software

7.8%

a

Alkami

Technology,

Inc.

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

United

States

777,150

23,314,500

a

Alteryx,

Inc.,

A

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

United

States

258,200

18,897,658

a

Asana,

Inc.,

A

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

United

States

182,276

24,753,081

a

Avalara,

Inc.

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

United

States

200,546

36,026,083

a,d

AvePoint,

Inc.

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

United

States

1,199,100

11,175,612

a

AvidXchange

Holdings,

Inc.

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

United

States

102,200

2,271,906

a,d

BTRS

Holdings,

Inc.

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

United

States

2,373,100

20,384,929

a,d

Couchbase,

Inc.

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

United

States

186,600

7,523,712

a

CS

Disco,

Inc.

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

United

States

132,100

7,575,935

a,d

Datto

Holding

Corp.

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

United

States

1,459,062

34,871,582

a

Duck

Creek

Technologies,

Inc.

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

United

States

951,518

29,972,817

a

Envestnet,

Inc.

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

United

States

395,922

33,059,487

a

Paycor

HCM,

Inc.

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

United

States

1,407,200

45,649,568

a

Q2

Holdings,

Inc.

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

United

States

274,400

21,529,424

a

Zendesk,

Inc.

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

United

States

119,214

12,135,985

329,142,279

Specialty

Retail

7.8%

d

American

Eagle

Outfitters,

Inc.

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

United

States

2,219,700

52,695,678

a

Boot

Barn

Holdings,

Inc.

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

United

States

422,460

44,142,845

a

Five

Below,

Inc.

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

United

States

277,200

54,691,560

Lithia

Motors,

Inc.,

A

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

United

States

101,226

32,313,364

a,d

MYT

Netherlands

Parent

BV,

ADR

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

Germany

802,500

21,186,000

a,d

Petco

Health

&

Wellness

Co.,

Inc.

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

United

States

1,918,800

47,451,924

a,b,c

Rent

the

Runway,

Inc.

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

United

States

1,105,258

17,804,383

a

Rent

the

Runway,

Inc.,

A

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

United

States

1,118,500

19,294,125

a,d

Torrid

Holdings,

Inc.

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

United

States

1,654,587

24,884,989

a

Urban

Outfitters,

Inc.

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

United

States

532,800

17,012,304

331,477,172

Textiles,

Apparel

&

Luxury

Goods

1.3%

a,d

On

Holding

AG,

A

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

Switzerland

135,000

4,611,600

Steven

Madden

Ltd.

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

United

States

1,082,650

48,827,515

53,439,115

Trading

Companies

&

Distributors

2.8%

a

Beacon

Roofing

Supply,

Inc.

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

United

States

1,163,000

61,487,810

a

Univar

Solutions,

Inc.

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

United

States

2,179,032

55,739,639

117,227,449

Total

Common

Stocks

(Cost

$2,703,191,639)

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

4,006,912,470

Convertible

Preferred

Stocks

2.1%

Diversified

Consumer

Services

0.3%

a,b,c

Newsela,

Inc.,

D

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

United

States

709,046

15,127,408

a

Software

0.9%

a,b,c

Benchling,

Inc.,

F

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

United

States

382,306

12,499,992

Franklin

Strategic

Series

Statement

of

Investments

(unaudited)

Franklin

Small

Cap

Growth

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

38

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Convertible

Preferred

Stocks

(continued)

Software

(continued)

a,b,c

Checkr,

Inc.,

E

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

United

States

462,963

$

25,000,002

37,499,994

Specialty

Retail

0.5%

a,b,c

1661,

Inc.,

F

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

United

States

3,436,485

19,999,999

a

Textiles,

Apparel

&

Luxury

Goods

0.4%

a,b,c

Allbirds,

Inc.,

E

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

United

States

1,297,305

16,048,740

a

Total

Convertible

Preferred

Stocks

(Cost

$87,500,001)

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

88,676,141

Preferred

Stocks

1.2%

Auto

Components

0.3%

a,b,c

Tula

eTechnology,

Inc.

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

United

States

361,111

—

a,b,c

Tula

eTechnology,

Inc.,

E

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

United

States

3,611,111

9,344,877

9,344,877

Commercial

Services

&

Supplies

0.2%

a,b,c,e

Optoro,

Inc.,

E

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

United

States

508,130

9,999,998

a

Food

&

Staples

Retailing

0.2%

a,b,c

Sweetgreen,

Inc.,

H

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

United

States

383,435

6,212,255

a,b,c

Sweetgreen,

Inc.,

I

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

United

States

41,641

674,650

a,b,c

Sweetgreen,

Inc.,

J

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

United

States

113,300

1,835,640

8,722,545

Software

0.5%

a,b,c,e

ClearMotion,

Inc.,

D

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

United

States

3,698,772

10,867,769

a,b,c

Smule,

Inc.,

144A,

G

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

United

States

1,542,673

8,642,603

a,b,c

Smule,

Inc.,

144A,

H

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

United

States

352,675

2,335,680

21,846,052

Total

Preferred

Stocks

(Cost

$48,249,471)

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

49,913,472

Warrants

Warrants

0.0%

Food

&

Staples

Retailing

0.0%

a,b,c

Sweetgreen,

Inc.,

1/20/26

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

United

States

33,990

—

Total

Warrants

(Cost

$—)

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

—

Shares

Escrows

and

Litigation

Trusts

0.0%

a,b

Proterra,

Inc.,

Escrow

Account

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

United

States

344,921

—

a,b

Wheels

Up

Experience,

Inc.,

Escrow

Account

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

Singapore

88,098

—

Total

Escrows

and

Litigation

Trusts

(Cost

$–)

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

—

Total

Long

Term

Investments

(Cost

$2,838,941,111)

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

4,145,502,083

a

Franklin

Strategic

Series

Statement

of

Investments

(unaudited)

Franklin

Small

Cap

Growth

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

39

Short

Term

Investments

6.2%

a

a

Country

Shares

a

Value

a

Money

Market

Funds

1.8%

f,g

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

75,212,701

$

75,212,701

Total

Money

Market

Funds

(Cost

$75,212,701)

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

75,212,701

a

a

a

a

a

h

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

4.4%

Money

Market

Funds

4.4%

f,g

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

185,820,959

185,820,959

Total

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

(Cost

$185,820,959)

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

185,820,959

Total

Short

Term

Investments

(Cost

$261,033,660

)

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

261,033,660

a

Total

Investments

(Cost

$3,099,974,771)

104.2%

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

$4,406,535,743

Other

Assets,

less

Liabilities

(4.2)%

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

(177,750,040)

Net

Assets

100.0%

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

$4,228,785,703

See

Abbreviations

on

page

81

.

a

Non-income

producing.

b

Fair

valued

using

significant

unobservable

inputs.

See

Note

11

regarding

fair

value

measurements.

c

See

Note

8

regarding

restricted

securities.

d

A

portion

or

all

of

the

security

is

on

loan

at

October

31,

2021.

See

Note

1(c).

e

See

Note

9

regarding

holdings

of

5%

voting

securities.

f

See

Note

3(f)

regarding

investments

in

affiliated

management

investment

companies.

g

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

h

See

Note

1(c)

regarding

securities

on

loan.

Franklin

Strategic

Series

Financial

Highlights

Franklin

Small-Mid

Cap

Growth

Fund

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

40

0

a

Six

Months

Ended

October

31,

2021

(unaudited)

Year

Ended

April

30,

2021

2020

2019

2018

2017

Class

A

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$49.66

$32.15

$37.17

$36.07

$34.35

$31.84

Income

from

investment

operations

a

:

Net

investment

(loss)

b

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

(0.13)

(0.24)

(0.07)

(0.09)

(0.15)

(0.11)

Net

realized

and

unrealized

gains

(losses)

5.32

21.89

1.24

5.33

4.97

4.73

Total

from

investment

operations

........

5.19

21.65

1.17

5.24

4.82

4.62

Less

distributions

from:

Net

realized

gains

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

—

(4.14)

(6.19)

(4.14)

(3.10)

(2.11)

Net

asset

value,

end

of

period

..........

$54.85

$49.66

$32.15

$37.17

$36.07

$34.35

Total

return

c

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

10.45%

68.37%

2.97%

17.43%

14.28%

15.01%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

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

0.85%

0.86%

0.88%

0.88%

1.02%

0.95%

Expenses

net

of

waiver

and

payments

by

affiliates

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

0.84%

0.85%

e

0.87%

e

0.87%

e

1.00%

e

0.94%

e

Net

investment

(loss)

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

(0.50)%

(0.54)%

(0.21)%

(0.25)%

(0.41)%

(0.34)%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$4,519,337

$4,217,167

$2,515,801

$2,684,131

$2,262,471

$2,303,113

Portfolio

turnover

rate

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

22.52%

53.69%

52.98%

54.28%

38.35%

35.46%

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchas-

es

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

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable,

and

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Strategic

Series

Financial

Highlights

Franklin

Small-Mid

Cap

Growth

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

41

a

Six

Months

Ended

October

31,

2021

(unaudited)

Year

Ended

April

30,

2021

2020

2019

2018

2017

Class

C

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$27.98

$19.41

$24.98

$25.84

$25.59

$24.40

Income

from

investment

operations

a

:

Net

investment

(loss)

b

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

(0.19)

(0.33)

(0.22)

(0.26)

(0.31)

(0.27)

Net

realized

and

unrealized

gains

(losses)

3.00

13.04

0.84

3.54

3.66

3.57

Total

from

investment

operations

........

2.81

12.71

0.62

3.28

3.35

3.30

Less

distributions

from:

Net

realized

gains

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

—

(4.14)

(6.19)

(4.14)

(3.10)

(2.11)

Net

asset

value,

end

of

period

..........

$30.79

$27.98

$19.41

$24.98

$25.84

$25.59

Total

return

c

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

10.04%

67.11%

2.14%

16.68%

13.39%

14.15%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

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

1.60%

1.61%

1.63%

1.63%

1.77%

1.70%

Expenses

net

of

waiver

and

payments

by

affiliates

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

1.59%

1.60%

e

1.62%

e

1.62%

e

1.75%

e

1.69%

e

Net

investment

(loss)

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

(1.29)%

(1.28)%

(0.96)%

(1.00)%

(1.16)%

(1.09)%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$177,076

$198,713

$138,940

$173,334

$334,769

$371,262

Portfolio

turnover

rate

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

22.52%

53.69%

52.98%

54.28%

38.35%

35.46%

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchas-

es

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

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable,

and

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Strategic

Series

Financial

Highlights

Franklin

Small-Mid

Cap

Growth

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

42

a

Six

Months

Ended

October

31,

2021

(unaudited)

Year

Ended

April

30,

2021

2020

2019

2018

2017

Class

R

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$43.32

$28.45

$33.66

$33.15

$31.87

$29.75

Income

from

investment

operations

a

:

Net

investment

(loss)

b

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

(0.18)

(0.30)

(0.14)

(0.16)

(0.22)

(0.18)

Net

realized

and

unrealized

gains

(losses)

4.65

19.31

1.12

4.81

4.60

4.41

Total

from

investment

operations

........

4.47

19.01

0.98

4.65

4.38

4.23

Less

distributions

from:

Net

realized

gains

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

—

(4.14)

(6.19)

(4.14)

(3.10)

(2.11)

Net

asset

value,

end

of

period

..........

$47.79

$43.32

$28.45

$33.66

$33.15

$31.87

Total

return

c

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

10.32%

67.96%

2.69%

17.17%

14.00%

14.70%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

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

1.10%

1.10%

1.12%

1.12%

1.26%

1.19%

Expenses

net

of

waiver

and

payments

by

affiliates

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

1.09%

1.09%

e

1.11%

e

1.11%

e

1.24%

e

1.18%

e

Net

investment

(loss)

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

(0.81)%

(0.78)%

(0.45)%

(0.49)%

(0.65)%

(0.58)%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$59,236

$60,264

$40,997

$50,721

$70,692

$81,864

Portfolio

turnover

rate

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

22.52%

53.69%

52.98%

54.28%

38.35%

35.46%

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchas-

es

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

Total

return

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Strategic

Series

Financial

Highlights

Franklin

Small-Mid

Cap

Growth

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

43

a

Six

Months

Ended

October

31,

2021

(unaudited)

Year

Ended

April

30,

2021

2020

2019

2018

2017

Class

R6

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$58.24

$37.12

$41.83

$39.91

$37.51

$34.43

Income

from

investment

operations

a

:

Net

investment

income

(loss)

b

........

(0.04)

(0.10)

0.07

0.05

0.05

0.05

Net

realized

and

unrealized

gains

(losses)

6.24

25.36

1.41

6.01

5.45

5.14

Total

from

investment

operations

........

6.20

25.26

1.48

6.06

5.50

5.19

Less

distributions

from:

Net

realized

gains

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

—

(4.14)

(6.19)

(4.14)

(3.10)

(2.11)

Net

asset

value,

end

of

period

..........

$64.44

$58.24

$37.12

$41.83

$39.91

$37.51

Total

return

c

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

10.65%

68.95%

3.40%

17.82%

14.90%

15.51%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

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

0.51%

0.51%

0.52%

0.52%

0.50%

0.48%

Expenses

net

of

waiver

and

payments

by

affiliates

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

0.49%

0.49%

e

0.48%

e

0.49%

e

0.47%

e

0.47%

e

Net

investment

income

(loss)

..........

(0.14)%

(0.19)%

0.18%

0.13%

0.12%

0.13%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$771,744

$648,078

$224,341

$259,053

$275,835

$222,577

Portfolio

turnover

rate

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

22.52%

53.69%

52.98%

54.28%

38.35%

35.46%

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchas-

es

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

Total

return

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Strategic

Series

Financial

Highlights

Franklin

Small-Mid

Cap

Growth

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

44

a

Six

Months

Ended

October

31,

2021

(unaudited)

Year

Ended

April

30,

2021

2020

2019

2018

2017

Advisor

Class

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$56.79

$36.30

$41.09

$39.33

$37.11

$34.15

Income

from

investment

operations

a

:

Net

investment

income

(loss)

b

........

(0.07)

(0.14)

0.02

0.01

(0.06)

(0.03)

Net

realized

and

unrealized

gains

(losses)

6.08

24.77

1.38

5.89

5.38

5.10

Total

from

investment

operations

........

6.01

24.63

1.40

5.90

5.32

5.07

Less

distributions

from:

Net

realized

gains

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

—

(4.14)

(6.19)

(4.14)

(3.10)

(2.11)

Net

asset

value,

end

of

period

..........

$62.80

$56.79

$36.30

$41.09

$39.33

$37.11

Total

return

c

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

10.58%

68.77%

3.26%

17.67%

14.57%

15.28%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

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

0.60%

0.61%

0.63%

0.63%

0.77%

0.70%

Expenses

net

of

waiver

and

payments

by

affili

ates

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

0.59%

0.60%

e

0.62%

e

0.62%

e

0.75%

e

0.69%

e

Net

investment

income

(loss)

..........

(0.24)%

(0.29)%

0.04%

—%

f

(0.16)%

(0.09)%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$753,229

$552,987

$302,329

$355,141

$520,842

$584,840

Portfolio

turnover

rate

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

22.52%

53.69%

52.98%

54.28%

38.35%

35.46%

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchas-

es

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

Total

return

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

f

Rounds

to

less

than

0.01%.

Franklin

Strategic

Series

Statement

of

Investments

(unaudited),

October

31,

2021

Franklin

Small-Mid

Cap

Growth

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

45

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

95.6%

Aerospace

&

Defense

0.9%

a

TransDigm

Group,

Inc.

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

United

States

91,400

$

57,017,148

Airlines

0.5%

a

Southwest

Airlines

Co.

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

United

States

655,800

31,006,224

Automobiles

0.4%

a

Lucid

Group,

Inc.

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

United

States

728,215

26,936,673

Banks

0.6%

a

SVB

Financial

Group

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

United

States

54,500

39,098,300

Biotechnology

2.8%

a

Alnylam

Pharmaceuticals,

Inc.

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

United

States

121,300

19,354,628

a

Horizon

Therapeutics

plc

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

United

States

433,500

51,980,985

a

Iovance

Biotherapeutics

,

Inc.

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

United

States

656,665

15,963,526

a

Mirati

Therapeutics,

Inc.

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

United

States

76,000

14,365,520

a

Novavax

,

Inc.

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

United

States

104,700

15,582,501

a

PTC

Therapeutics,

Inc.

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

United

States

433,000

16,423,690

a

Seagen

,

Inc.

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

United

States

252,600

44,540,958

178,211,808

Building

Products

0.8%

Trane

Technologies

plc

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

United

States

267,500

48,398,775

Capital

Markets

4.3%

Ares

Management

Corp.

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

United

States

803,500

68,088,590

MarketAxess

Holdings,

Inc.

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

United

States

118,700

48,509,129

MSCI,

Inc.

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

United

States

175,800

116,885,904

Tradeweb

Markets,

Inc.,

A

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

United

States

393,200

35,034,120

268,517,743

Commercial

Services

&

Supplies

1.7%

a

Copart

,

Inc.

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

United

States

210,000

32,610,900

Republic

Services,

Inc.

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

United

States

566,000

76,183,600

108,794,500

Communications

Equipment

0.5%

a

Arista

Networks,

Inc.

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

United

States

79,200

32,447,448

Consumer

Finance

0.1%

a

Sunlight

Financial

Holdings,

Inc.

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

United

States

1,222,371

7,224,213

Containers

&

Packaging

1.4%

Avery

Dennison

Corp.

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

United

States

86,800

18,898,096

Ball

Corp.

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

United

States

743,500

68,015,380

86,913,476

Electrical

Equipment

1.4%

a

Generac

Holdings,

Inc.

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

United

States

47,000

23,432,320

Rockwell

Automation,

Inc.

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

United

States

198,000

63,241,200

86,673,520

Electronic

Equipment,

Instruments

&

Components

1.8%

Cognex

Corp.

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

United

States

454,800

39,835,932

a

Keysight

Technologies,

Inc.

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

United

States

404,500

72,818,090

112,654,022

Entertainment

1.8%

a

Roku,

Inc.

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

United

States

276,178

84,206,672

Franklin

Strategic

Series

Statement

of

Investments

(unaudited)

Franklin

Small-Mid

Cap

Growth

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

46

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Entertainment

(continued)

a

Zynga,

Inc.,

A

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

United

States

4,252,000

$

31,379,760

115,586,432

Equity

Real

Estate

Investment

Trusts

(REITs)

2.1%

Equity

LifeStyle

Properties,

Inc.

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

United

States

223,700

18,904,887

SBA

Communications

Corp.

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

United

States

234,600

81,014,418

Terreno

Realty

Corp.

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

United

States

449,800

32,893,874

132,813,179

Food

Products

0.8%

a

Freshpet

,

Inc.

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

United

States

246,800

38,478,588

a,b

Oatly

Group

AB,

ADR

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

United

States

1,173,900

15,131,571

53,610,159

Health

Care

Equipment

&

Supplies

7.0%

a

Dexcom

,

Inc.

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

United

States

115,014

71,677,875

a,b

Figs,

Inc.,

A

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

United

States

528,700

17,769,607

a

IDEXX

Laboratories,

Inc.

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

United

States

202,800

135,093,192

a

Inari

Medical,

Inc.

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

United

States

302,900

27,418,508

a

Insulet

Corp.

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

United

States

204,600

63,430,092

a

Penumbra,

Inc.

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

United

States

85,447

23,630,368

Teleflex,

Inc.

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

United

States

176,600

63,035,604

West

Pharmaceutical

Services,

Inc.

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

United

States

88,800

38,173,344

440,228,590

Health

Care

Providers

&

Services

1.0%

a

Guardant

Health,

Inc.

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

United

States

383,700

44,812,323

a

HealthEquity

,

Inc.

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

United

States

295,000

19,523,100

64,335,423

Health

Care

Technology

2.4%

a

Certara

,

Inc.

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

United

States

385,500

15,925,005

a

Definitive

Healthcare

Corp.

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

United

States

58,700

2,356,218

a

Teladoc

Health,

Inc.

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

United

States

193,841

28,996,675

a

Veeva

Systems,

Inc.,

A

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

United

States

318,700

101,031,087

148,308,985

Hotels,

Restaurants

&

Leisure

4.7%

a

Chipotle

Mexican

Grill,

Inc.

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

United

States

56,300

100,159,389

Darden

Restaurants,

Inc.

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

United

States

235,900

34,002,626

a

DraftKings

,

Inc.,

A

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

United

States

917,355

42,739,569

a

Dutch

Bros,

Inc.,

A

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

United

States

170,700

13,014,168

Vail

Resorts,

Inc.

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

United

States

155,000

53,430,050

a

Wynn

Resorts

Ltd.

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

United

States

593,500

53,296,300

296,642,102

Household

Durables

0.7%

a

NVR,

Inc.

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

United

States

9,400

46,011,120

Interactive

Media

&

Services

2.3%

a

Bumble,

Inc.,

A

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

United

States

432,500

22,714,900

a

Match

Group,

Inc.

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

United

States

509,559

76,831,306

a

Pinterest,

Inc.,

A

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

United

States

942,100

42,055,344

141,601,550

Internet

&

Direct

Marketing

Retail

1.0%

a

Etsy,

Inc.

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

United

States

191,300

47,956,997

Franklin

Strategic

Series

Statement

of

Investments

(unaudited)

Franklin

Small-Mid

Cap

Growth

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

47

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Internet

&

Direct

Marketing

Retail

(continued)

a,b

Wayfair,

Inc.,

A

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

United

States

62,200

$

15,494,020

63,451,017

IT

Services

7.3%

a

BigCommerce

Holdings,

Inc.,

1

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

United

States

601,300

27,786,073

a

Cloudflare

,

Inc.,

A

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

United

States

518,200

100,903,904

a

EPAM

Systems,

Inc.

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

United

States

51,400

34,604,536

a,b

Marqeta

,

Inc.,

A

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

United

States

211,700

6,478,020

a,c,d

Marqeta

,

Inc.,

B

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

United

States

1,070,236

32,182,212

a

MongoDB,

Inc.

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

United

States

187,300

97,637,617

a,e

Nuvei

Corp.,

144A,

Reg

S

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

Canada

170,900

20,579,778

a

Okta

,

Inc.

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

United

States

384,500

95,040,710

a,b

Payoneer

Global,

Inc.

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

United

States

147,000

1,109,850

a

Payoneer

Global,

Inc.

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

United

States

1,017,200

7,679,860

a

Wix.com

Ltd.

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

Israel

170,100

31,631,796

455,634,356

Leisure

Products

0.9%

a,c,d

Fanatics

Holdings,

Inc.

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

United

States

793,714

37,598,232

a

YETI

Holdings,

Inc.

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

United

States

170,300

16,745,599

54,343,831

Life

Sciences

Tools

&

Services

4.5%

a

10X

Genomics,

Inc.,

A

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

United

States

260,000

41,930,200

a

Avantor

,

Inc.

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

United

States

939,400

37,932,972

Bio-

Techne

Corp.

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

United

States

185,700

97,241,805

a

Maravai

LifeSciences

Holdings,

Inc.,

A

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

United

States

549,200

23,225,668

a

Mettler

-Toledo

International,

Inc.

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

United

States

56,100

83,077,368

283,408,013

Machinery

2.0%

Fortive

Corp.

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

United

States

650,500

49,249,355

IDEX

Corp.

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

United

States

136,500

30,380,805

a,b

Proterra

,

Inc.

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

United

States

559,260

6,269,305

a,c,d

Proterra

,

Inc.

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

United

States

1,264,595

13,532,728

Stanley

Black

&

Decker,

Inc.

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

United

States

160,300

28,810,719

128,242,912

Oil,

Gas

&

Consumable

Fuels

0.3%

Coterra

Energy,

Inc.

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

United

States

752,300

16,039,036

Personal

Products

0.6%

a

BellRing

Brands,

Inc.,

A

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

United

States

1,225,100

32,857,182

a

Olaplex

Holdings,

Inc.

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

United

States

100,500

2,804,955

35,662,137

Pharmaceuticals

0.3%

a

Jazz

Pharmaceuticals

plc

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

United

States

128,100

17,042,424

a

Reata

Pharmaceuticals,

Inc.,

A

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

United

States

39,231

3,766,568

20,808,992

Professional

Services

4.2%

a

CoStar

Group,

Inc.

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

United

States

1,247,800

107,373,190

TransUnion

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

United

States

662,900

76,425,741

Verisk

Analytics,

Inc.

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

United

States

387,400

81,458,598

265,257,529

Franklin

Strategic

Series

Statement

of

Investments

(unaudited)

Franklin

Small-Mid

Cap

Growth

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

48

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Road

&

Rail

1.3%

Old

Dominion

Freight

Line,

Inc.

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

United

States

238,050

$

81,258,368

Semiconductors

&

Semiconductor

Equipment

6.1%

a

Allegro

MicroSystems

,

Inc.

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

Japan

671,800

22,411,248

a

Alphawave

IP

Group

plc

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

United

Kingdom

2,381,700

6,499,157

Entegris

,

Inc.

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

United

States

387,600

54,566,328

a

GLOBALFOUNDRIES,

Inc.

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

United

States

183,400

8,938,916

a

Lattice

Semiconductor

Corp.

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

United

States

738,914

51,310,188

Monolithic

Power

Systems,

Inc.

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

United

States

126,100

66,260,506

a

Semtech

Corp.

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

United

States

550,463

46,805,869

a

SiTime

Corp.

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

United

States

467,314

123,786,805

380,579,017

Software

18.4%

a

Alkami

Technology,

Inc.

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

United

States

456,900

13,707,000

a

ANSYS,

Inc.

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

United

States

255,300

96,906,774

a

Arteris

,

Inc.

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

United

States

908,100

20,296,035

a

Avalara,

Inc.

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

United

States

485,100

87,143,364

a

Bill.com

Holdings,

Inc.

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

United

States

256,833

75,588,520

a

Black

Knight,

Inc.

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

United

States

1,007,500

70,635,825

a

BTRS

Holdings,

Inc.

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

United

States

1,549,200

13,307,628

a

Coupa

Software,

Inc.

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

United

States

267,100

60,818,670

a

Crowdstrike

Holdings,

Inc.,

A

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

United

States

121,400

34,210,520

a

DocuSign,

Inc.

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

United

States

439,000

122,169,310

a

Duck

Creek

Technologies,

Inc.

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

United

States

585,016

18,428,004

a

Five9,

Inc.

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

United

States

175,500

27,730,755

a

Freshworks

,

Inc.,

A

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

United

States

128,200

6,442,050

a

Gitlab

,

Inc.,

A

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

United

States

28,100

3,152,820

a

HubSpot

,

Inc.

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

United

States

115,000

93,176,450

a

Lightspeed

Commerce,

Inc.

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

Canada

381,000

37,219,890

a

Paylocity

Holding

Corp.

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

United

States

393,200

119,981,048

a

Q2

Holdings,

Inc.

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

United

States

367,464

28,831,226

a

Synopsys,

Inc.

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

United

States

471,900

157,227,642

a

Zendesk

,

Inc.

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

United

States

506,800

51,592,240

a

Zscaler

,

Inc.

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

United

States

50,900

16,229,974

1,154,795,745

Specialty

Retail

4.9%

a

Burlington

Stores,

Inc.

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

United

States

224,600

62,054,734

a

Five

Below,

Inc.

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

United

States

320,700

63,274,110

a

O'Reilly

Automotive,

Inc.

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

United

States

105,100

65,405,832

a,b

Petco

Health

&

Wellness

Co.,

Inc.

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

United

States

1,264,100

31,261,193

Tractor

Supply

Co.

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

United

States

384,600

83,523,582

305,519,451

Textiles,

Apparel

&

Luxury

Goods

2.6%

Levi

Strauss

&

Co.,

A

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

United

States

839,900

21,988,582

a

Lululemon

Athletica

,

Inc.

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

United

States

178,900

83,369,189

a

On

Holding

AG,

A

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

Switzerland

199,700

6,821,752

VF

Corp.

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

United

States

687,100

50,075,848

162,255,371

Trading

Companies

&

Distributors

1.2%

Fastenal

Co.

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

United

States

1,322,400

75,482,592

Total

Common

Stocks

(Cost

$3,537,298,657)

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

6,005,769,757

Franklin

Strategic

Series

Statement

of

Investments

(unaudited)

Franklin

Small-Mid

Cap

Growth

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

49

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Convertible

Preferred

Stocks

1.4%

Diversified

Consumer

Services

0.2%

a,c,d

Newsela

,

Inc.,

D

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

United

States

423,782

$

9,041,336

a

Semiconductors

&

Semiconductor

Equipment

0.0%

†

a,c,d,f

Phononic

Devices,

Inc.

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

United

States

513,050

2,112,350

a

Software

1.0%

a,c,d

Benchling

,

Inc.,

F

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

United

States

347,106

11,349,082

a,c,d,f

Blaize

,

Inc.,

D

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

United

States

1,294,805

13,521,001

a,c,d

Databricks

,

Inc.,

G

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

United

States

75,943

18,903,961

a,c,d

OneTrust

LLC,

C

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

United

States

767,526

20,367,542

64,141,586

Textiles,

Apparel

&

Luxury

Goods

0.2%

a,c,d

Allbirds

,

Inc.,

E

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

United

States

772,477

9,556,182

a

Total

Convertible

Preferred

Stocks

(Cost

$71,288,309)

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

84,851,454

Preferred

Stocks

0.2%

Semiconductors

&

Semiconductor

Equipment

0.2%

a,c,d,f

Phononic

Devices,

Inc.,

F

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

United

States

2,970,061

10,865,947

a

Total

Preferred

Stocks

(Cost

$7,499,998)

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

10,865,947

Warrants

Warrants

0.0%

Software

0.0%

a,c,d,f

Blaize

,

Inc.

Ltd.,

2/28/24

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

United

Kingdom

64,741

—

Total

Warrants

(Cost

$—)

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

—

Principal

Amount

*

g,h

Senior

Floating

Rate

Interests

0.0%

†

Semiconductors

&

Semiconductor

Equipment

0.0%

†

c,d,f,i

Phononic

,

Inc.

,

Advance

Term

Loan,

B,

12%,

PIK,

(3-month

USD

LIBOR),

7/31/26

United

States

121,407

108,875

Advance

Term

Loan,

D,

12%,

PIK,

(3-month

USD

LIBOR),

12/01/25

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

United

States

289,883

259,179

Term

Loan,

A,

12%,

PIK,

(3-month

USD

LIBOR),

1/17/24

......

United

States

590,340

542,960

Term

Loan,

C,

12%,

PIK,

(3-month

USD

LIBOR),

8/25/24

......

United

States

117,602

105,652

1,016,666

a

a

a

a

a

a

Total

Senior

Floating

Rate

Interests

(Cost

$1,104,637)

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

1,016,666

Shares

Escrows

and

Litigation

Trusts

0.0%

a,c

Proterra

,

Inc.,

Escrow

Account

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

United

States

134,477

—

Total

Escrows

and

Litigation

Trusts

(Cost

$–)

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

—

Total

Long

Term

Investments

(Cost

$3,617,191,601)

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

6,102,503,824

a

Franklin

Strategic

Series

Statement

of

Investments

(unaudited)

Franklin

Small-Mid

Cap

Growth

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

50

See

Abbreviations

on

page

81

.

Short

Term

Investments

4.1%

a

a

Country

Shares

a

Value

a

Money

Market

Funds

3.1%

j,k

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

196,756,963

$

196,756,963

Total

Money

Market

Funds

(Cost

$196,756,963)

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

196,756,963

a

a

a

a

a

l

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

1.0%

Money

Market

Funds

1.0%

j,k

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

58,638,741

58,638,741

Total

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

(Cost

$58,638,741)

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

58,638,741

Total

Short

Term

Investments

(Cost

$255,395,704

)

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

255,395,704

a

Total

Investments

(Cost

$3,872,587,305)

101.3%

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

$6,357,899,528

Other

Assets,

less

Liabilities

(1.3)%

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

(77,277,016)

Net

Assets

100.0%

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

$6,280,622,512

*

The

principal

amount

is

stated

in

U.S.

dollars

unless

otherwise

indicated.

†

Rounds

to

less

than

0.1%

of

net

assets.

a

Non-income

producing.

b

A

portion

or

all

of

the

security

is

on

loan

at

October

31,

2021.

See

Note

1(c).

c

Fair

valued

using

significant

unobservable

inputs.

See

Note

11

regarding

fair

value

measurements.

d

See

Note

8

regarding

restricted

securities.

e

Security

was

purchased

pursuant

to

Rule

144A

or

Regulation

S

under

the

Securities

Act

of

1933.

144A

securities

may

be

sold

in

transactions

exempt

from

registration

only

to

qualified

institutional

buyers

or

in

a

public

offering

registered

under

the

Securities

Act

of

1933.

Regulation

S

securities

cannot

be

sold

in

the

United

States

without

either

an

effective

registration

statement

filed

pursuant

to

the

Securities

Act

of

1933,

or

pursuant

to

an

exemption

from

registration.

At

October

31,

2021,

the

aggregate

value

of

these

securities

was

$20,579,778,

representing

0.3%

of

net

assets.

f

See

Note

9

regarding

holdings

of

5%

voting

securities.

g

See

Note

1(d)

regarding

senior

floating

rate

interests.

h

The

coupon

rate

shown

represents

the

rate

at

period

end.

i

Income

may

be

received

in

additional

securities

and/or

cash.

j

See

Note

3(f)

regarding

investments

in

affiliated

management

investment

companies.

k

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

l

See

Note

1(c)

regarding

securities

on

loan.

Franklin

Strategic

Series

Financial

Statements

Statements

of

Assets

and

Liabilities

October

31,

2021

(unaudited)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

51

Franklin

Growth

Opportunities

Fund

Franklin

Small

Cap

Growth

Fund

Franklin

Small-

Mid

Cap

Growth

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

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

$2,078,393,881

$2,774,025,354

$3,595,065,909

Cost

-

Non-controlled

affiliates

(Note

3

f

and

9

)

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

174,952,540

325,949,417

277,521,396

Value

-

Unaffiliated

issuers

(Includes

securities

loaned

of

$93,944,510,

$183,424,500

and

$56,969,088

respectively)

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

$6,302,745,309

$4,075,239,326

$6,074,987,860

Value

-

Non-controlled

affiliates

(Note

3

f

and

9

)

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

210,869,818

331,296,417

282,911,668

Cash

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

194,131

200,386

152,758

Receivables:

Investment

securities

sold

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

12,253,994

15,313,913

1,696,714

Capital

shares

sold

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

3,193,368

2,248,159

5,634,718

Dividends

and

interest

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

753,275

151,881

899,398

Total

assets

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

6,530,009,895

4,424,450,082

6,366,283,116

Liabilities:

Payables:

Investment

securities

purchased

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

9,433,289

2,000,115

10,571,562

Capital

shares

redeemed

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

5,029,848

4,762,755

11,881,156

Management

fees

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

2,758,413

2,076,211

2,319,950

Distribution

fees

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

1,165,216

342,809

1,098,686

Transfer

agent

fees

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

771,410

608,543

936,082

Trustees'

fees

and

expenses

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

6,255

2,896

3,393

Payable

upon

return

of

securities

loaned

(Note

1d)

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

96,080,575

185,820,959

58,638,741

Accrued

expenses

and

other

liabilities

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

95,403

50,091

211,034

Total

liabilities

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

115,340,409

195,664,379

85,660,604

Net

assets,

at

value

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

$6,414,669,486

$4,228,785,703

$6,280,622,512

Net

assets

consist

of:

Paid-in

capital

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

$1,674,582,147

$2,275,659,646

$2,992,319,168

Total

distributable

earnings

(losses)

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

4,740,087,339

1,953,126,057

3,288,303,344

Net

assets,

at

value

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

$6,414,669,486

$4,228,785,703

$6,280,622,512

Franklin

Strategic

Series

Financial

Statements

Statements

of

Assets

and

Liabilities

(continued)

October

31,

2021

(unaudited)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

52

Franklin

Growth

Opportunities

Fund

Franklin

Small

Cap

Growth

Fund

Franklin

Small-

Mid

Cap

Growth

Fund

Class

A:

Net

assets,

at

value

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

$4,618,370,158

$1,254,534,131

$4,519,337,399

Shares

outstanding

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

71,248,184

42,314,399

82,395,364

Net

asset

value

per

share

a

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

$64.82

$29.65

$54.85

Maximum

offering

price

per

share

(net

asset

value

per

share

÷

94.50%)

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

$68.59

$31.38

$58.04

Class

C:

Net

assets,

at

value

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

$246,729,910

$61,567,232

$177,075,545

Shares

outstanding

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

4,898,756

2,778,729

5,751,050

Net

asset

value

and

maximum

offering

price

per

share

a

...........

$50.37

$22.16

$30.79

Class

R:

Net

assets,

at

value

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

$42,206,914

$70,776,269

$59,236,435

Shares

outstanding

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

696,041

2,590,087

1,239,529

Net

asset

value

and

maximum

offering

price

per

share

...........

$60.64

$27.33

$47.79

Class

R6:

Net

assets,

at

value

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

$646,592,277

$2,159,394,912

$771,744,283

Shares

outstanding

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

8,883,469

64,046,021

11,975,769

Net

asset

value

and

maximum

offering

price

per

share

...........

$72.79

$33.72

$64.44

Advisor

Class:

Net

assets,

at

value

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

$860,770,227

$682,513,159

$753,228,850

Shares

outstanding

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

12,031,017

20,688,494

11,993,739

Net

asset

value

and

maximum

offering

price

per

share

...........

$71.55

$32.99

$62.80

a

Redemption

price

is

equal

to

net

asset

value

less

contingent

deferred

sales

charges,

if

applicable.

Franklin

Strategic

Series

Financial

Statements

Statements

of

Operations

for

the

six

months

ended

October

31,

2021

(unaudited)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

53

Franklin

Growth

Opportunities

Fund

Franklin

Small

Cap

Growth

Fund

Franklin

Small-

Mid

Cap

Growth

Fund

Investment

income:

Dividends:

Unaffiliated

issuers

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

$9,047,288

$8,247,444

$9,540,216

Non-controlled

affiliates

(Note

3

f

and

9

)

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

2,163

6,771

11,551

Interest:

Unaffiliated

issuers

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

—

—

38,456

Non-controlled

affiliates

(Note

3

f

and

9

)

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

—

—

60,558

Income

from

securities

loaned:

Unaffiliated

entities

(net

of

fees

and

rebates)

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

3,645,308

651,851

511,594

Non-controlled

affiliates

(Note

3

f

)

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

4,625

5,940

3,439

Total

investment

income

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

12,699,384

8,912,006

10,165,814

Expenses:

Management

fees

(Note

3

a

)

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

16,099,489

12,491,774

13,436,168

Distribution

fees:

(Note

3c

)

    Class

A

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

5,568,941

1,548,523

5,440,524

    Class

C

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

1,338,771

375,887

940,509

    Class

R

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

103,777

185,356

147,446

Transfer

agent

fees:

(Note

3e

)

    Class

A

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

2,354,384

1,065,204

2,798,356

    Class

C

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

142,191

64,709

121,174

    Class

R

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

21,936

63,749

37,934

    Class

R6

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

76,916

329,638

134,748

    Advisor

Class

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

378,832

607,716

393,900

Custodian

fees

(Note

4

)

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

22,581

29,232

19,279

Reports

to

shareholders

fees

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

123,917

111,661

177,037

Registration

and

filing

fees

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

112,102

73,771

107,329

Professional

fees

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

104,737

70,429

47,107

Trustees'

fees

and

expenses

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

32,163

21,235

28,617

Other

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

102,731

78,332

67,532

Total

expenses

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

26,583,468

17,117,216

23,897,660

Expense

reductions

(Note

4

)

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

(187)

—

—

Expenses

waived/paid

by

affiliates

(Note

3

f

and

3

g

)

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

(46,897)

(156,186)

(171,682)

Net

expenses

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

26,536,384

16,961,030

23,725,978

Net

investment

income

(loss)

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

(13,837,000)

(8,049,024)

(13,560,164)

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

Unaffiliated

issuers

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

240,023,680

213,593,743

263,513,030

Foreign

currency

transactions

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

(12,061)

—

(7,981)

Net

realized

gain

(loss)

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

240,011,619

213,593,743

263,505,049

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

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

627,718,341

(264,600,738)

344,495,272

Non-controlled

affiliates

(Note

3

f

and

9

)

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

5,649,964

1,500,663

577,267

Net

change

in

unrealized

appreciation

(depreciation)

..........

633,368,305

(263,100,075)

345,072,539

Net

realized

and

unrealized

gain

(loss)

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

873,379,924

(49,506,332)

608,577,588

Net

increase

(decrease)

in

net

assets

resulting

from

operations

........

$859,542,924

$(57,555,356)

$595,017,424

Franklin

Strategic

Series

Financial

Statements

Statements

of

Changes

in

Net

Assets

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

54

Franklin

Growth

Opportunities

Fund

Franklin

Small

Cap

Growth

Fund

Six

Months

Ended

October

31,

2021

(unaudited)

Year

Ended

April

30,

2021

Six

Months

Ended

October

31,

2021

(unaudited)

Year

Ended

April

30,

2021

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

(loss)

.......

$(13,837,000)

$(24,853,214)

$(8,049,024)

$(16,528,767)

Net

realized

gain

(loss)

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

240,011,619

562,319,554

213,593,743

795,665,077

Net

change

in

unrealized

appreciation

(depreciation)

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

633,368,305

1,438,216,506

(263,100,075)

1,041,322,646

Net

increase

(decrease)

in

net

assets

resulting

from

operations

.

859,542,924

1,975,682,846

(57,555,356)

1,820,458,956

Distributions

to

shareholders:

Class

A

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

—

(224,148,602)

—

(104,691,979)

Class

C

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

—

(19,547,939)

—

(10,525,678)

Class

R

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

—

(2,400,189)

—

(8,100,192)

Class

R6

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

—

(26,531,757)

—

(155,392,084)

Advisor

Class

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

—

(30,835,998)

—

(58,222,612)

Total

distributions

to

shareholders

.....

—

(303,464,485)

—

(336,932,545)

Capital

share

transactions:

(Note

2

)

Class

A

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

(214,117,768)

101,012,799

27,593,706

134,170,863

Class

C

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

(69,257,378)

(20,254,399)

(22,894,100)

(13,257,685)

Class

R

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

(3,921,656)

(3,158,368)

(7,224,535)

(5,585,640)

Class

R6

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

(3,299,994)

17,769,683

36,029,330

287,293,924

Advisor

Class

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

115,463,525

(19,471,444)

(47,242,726)

41,589,751

Total

capital

share

transactions

.......

(175,133,271)

75,898,271

(13,738,325)

444,211,213

Net

increase

(decrease)

in

net

assets

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

684,409,653

1,748,116,632

(71,293,681)

1,927,737,624

Net

assets:

Beginning

of

period

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

5,730,259,833

3,982,143,201

4,300,079,384

2,372,341,760

End

of

period

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

$6,414,669,486

$5,730,259,833

$4,228,785,703

$4,300,079,384

Franklin

Strategic

Series

Financial

Statements

Statements

of

Changes

in

Net

Assets

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

55

Franklin

Small-Mid

Cap

Growth

Fund

Six

Months

Ended

October

31,

2021

(unaudited)

Year

Ended

April

30,

2021

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

(loss)

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

$(13,560,164)

$(23,956,403)

Net

realized

gain

(loss)

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

263,505,049

979,421,933

Net

change

in

unrealized

appreciation

(depreciation)

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

345,072,539

1,272,155,703

Net

increase

(decrease)

in

net

assets

resulting

from

operations

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

595,017,424

2,227,621,233

Distributions

to

shareholders:

Class

A

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

—

(322,775,473)

Class

C

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

—

(26,786,941)

Class

R

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

—

(5,438,863)

Class

R6

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

—

(33,885,852)

Advisor

Class

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

—

(37,430,317)

Total

distributions

to

shareholders

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

—

(426,317,446)

Capital

share

transactions:

(Note

2

)

Class

A

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

(133,864,219)

312,835,788

Class

C

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

(39,394,875)

(1,290,198)

Class

R

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

(6,826,071)

(1,603,654)

Class

R6

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

50,757,315

275,615,792

Advisor

Class

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

137,723,369

67,940,915

Total

capital

share

transactions

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

8,395,519

653,498,643

Net

increase

(decrease)

in

net

assets

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

603,412,943

2,454,802,430

Net

assets:

Beginning

of

period

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

5,677,209,569

3,222,407,139

End

of

period

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

$6,280,622,512

$5,677,209,569

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

56

franklintempleton.com

Semiannual

Report

1.

Organization

and

Significant

Accounting

Policies

Franklin

Strategic

Series (Trust)

is

registered

under

the

Investment

Company

Act

of

1940

(1940

Act)

as

an

open-

end

management

investment

company,

consisting

of

ten

separate

funds, three

of

which

are

included

in

this

report

(Funds)

and

applies

the

specialized

accounting

and

reporting

guidance

in

U.S.

Generally

Accepted

Accounting

Principles

(U.S.

GAAP).

The

Funds

offer five classes

of

shares: 

Class

A,

Class

C,

Class

R,

Class

R6,

and

Advisor

Class.

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.

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.

Securities

denominated

in

a

foreign

currency

are

converted

into

their

U.S.

dollar

equivalent

at

the

foreign

exchange

rate

in

effect

at

4

p.m.

Eastern

time

on

the

date

that

the

values

of

the

foreign

debt

securities

are

determined.

Investments

in open-end mutual

funds

are

valued

at

the

closing

NAV.

The

Funds

have

procedures

to

determine

the

fair

value

of

financial

instruments

for

which

market

prices

are

not

reliable

or

readily

available.

Under

these

procedures,

the

Funds

primarily

employ

a

market-based

approach

which

may

use

related

or

comparable

assets

or

liabilities,

recent

transactions,

market

multiples,

book

values,

and

other

relevant

information

for

the

investment

to

determine

the

fair

value

of

the

investment.

An

income-based

valuation

approach

may

also

be

used

in

which

the

anticipated

future

cash

flows

of

the

investment

are

discounted

to

calculate

fair

value.

Discounts

may

also

be

applied

due

to

the

nature

or

duration

of

any

restrictions

on

the

disposition

of

the

investments.

Due

to

the

inherent

uncertainty

of

valuations

of

such

investments,

the

fair

values

may

differ

significantly

from

the

values

that

would

have

been

used

had

an

active

market

existed.

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

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

57

franklintempleton.com

Semiannual

Report

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

Funds.

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.

Securities

Lending

Certain

or

all

Funds

participate

in

an

agency

based

securities

lending

program

to

earn

additional

income.

The

Fund

receives

collateral

in

the

form

of

cash

and/or

U.S.

Government

and

Agency

securities

against

the

loaned

securities

in

an

amount

equal

to

at

least

102%

of

the

fair

value

of

the

loaned

securities.

Collateral

is

maintained

over

the

life

of

the

loan

in

an

amount

not

less

than

100%

of

the

fair

value

of

loaned

securities,

as

determined

at

the

close

of

Fund

business

each

day;

any

additional

collateral

required

due

to

changes

in

security

values

is

delivered

to

the

Fund

on

the

next

business

day.

Any

cash

collateral

received

is

deposited

into

a

joint

cash

account

with

other

funds

and

is

used

to

invest

in

a

money

market

fund

managed

by

Franklin

Advisers,

Inc.,

an

affiliate

of

the

Funds. The

Fund

may

receive

income

from

the

investment

of

cash

collateral,

in

addition

to

lending

fees

and

rebates

paid

by

the

borrower.

Income

from

securities

loaned,

net

of

fees

paid

to

the

securities

lending

agent

and/or

third-party

vendor,

is

reported

separately

in

the

Statements

of

Operations.

The

Fund

bears

the

market

risk

with

respect

to any

cash collateral

investment,

securities

loaned,

and

the

risk

that

the

agent

may

default

on

its

obligations

to

the

Fund.

If

the

borrower

defaults

on

its

obligation

to

return

the

securities

loaned,

the

Fund

has

the

right

to

repurchase

the

securities

in

the

open

market

using

the

collateral

received.

The

securities

lending

agent

has

agreed

to

indemnify

the

Fund

in

the

event

of

default

by

a

third

party

borrower.

1.

Organization

and

Significant

Accounting

Policies

(continued)

a.

Financial

Instrument

Valuation 

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

58

franklintempleton.com

Semiannual

Report

d.

Senior

Floating

Rate

Interests

Certain

or

all

Funds

invest

in

senior

secured

corporate

loans

that

pay

interest

at

rates

which

are

periodically

reset

by

reference

to

a

base

lending

rate

plus

a

spread.

These

base

lending

rates

are

generally

the

prime

rate

offered

by

a

designated

U.S.

bank

or

the

London

InterBank

Offered

Rate

(LIBOR).

Senior

secured

corporate

loans

often

require

prepayment

of

principal

from

excess

cash

flows

or

at

the

discretion

of

the

borrower.

As

a

result,

actual

maturity

may

be

substantially

less

than

the

stated

maturity.

Senior

secured

corporate

loans

in

which

the

Funds

invest

are

generally

readily

marketable,

but

may

be

subject

to

certain

restrictions

on

resale.

e.

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.

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.

f.

Security

Transactions,

Investment

Income,

Expenses

and

Distributions

Security

transactions

are

accounted

for

on

trade

date.

Realized

gains

and

losses

on

security

transactions

are

determined

on

a

specific

identification

basis.

Interest

income

and

estimated

expenses

are

accrued

daily.

Dividend

income

is

recorded

on

the

ex-dividend

date

except

for

certain

dividends

from

securities

where

the

dividend

rate

is

not

available.

In

such

cases,

the

dividend

is

recorded

as

soon

as

the

information

is

received

by

the

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.

g.

Accounting

Estimates

The

preparation

of

financial

statements

in

accordance

with

U.S.

GAAP

requires

management

to

make

estimates

and

assumptions

that

affect

the

reported

amounts

of

assets

and

liabilities

at

the

date

of

the

financial

statements

and

the

amounts

of

income

and

expenses

during

the

reporting

period.

Actual

results

could

differ

from

those

estimates.

1.

Organization

and

Significant

Accounting

Policies

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

59

franklintempleton.com

Semiannual

Report

h.

Guarantees

and

Indemnifications

Under

the

Trust's

organizational

documents,

its

officers

and

trustees

are

indemnified

by

the

Trust

against

certain

liabilities

arising

out

of

the

performance

of

their

duties

to

the

Trust.

Additionally,

in

the

normal

course

of

business,

the

Trust,

on

behalf

of

the

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.

2.

Shares

of

Beneficial

Interest

At

October

3

1

,

2021

,

there

were

an

unlimited

number

of

shares

authorized

(without

par

value)

.

Transactions

in

the

Funds'

shares

were

as

follows:

Franklin

Growth

Opportunities

Fund

Franklin

Small

Cap

Growth

Fund

Shares

Amount

Shares

Amount

Class

A

Class

A

Shares:

Six

Months

ended

October

31,

2021

Shares

sold

a

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

3,789,186

$229,574,952

4,602,403

$134,741,684

Shares

redeemed

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

(7,273,507)

(443,692,720)

(3,658,488)

(107,147,978)

Net

increase

(decrease)

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

(3,484,321)

$(214,117,768)

943,915

$27,593,706

Year

ended

April

30,

2021

Shares

sold

a

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

9,852,737

$499,219,179

9,833,490

$259,856,939

Shares

issued

in

reinvestment

of

distributions

..........

4,067,652

210,907,495

3,766,883

100,952,866

Shares

redeemed

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

(12,009,751)

(609,113,875)

(8,666,706)

(226,638,942)

Net

increase

(decrease)

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

1,910,638

$101,012,799

4,933,667

$134,170,863

Class

C

Class

C

Shares:

Six

Months

ended

October

31,

2021

Shares

sold

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

381,540

$17,935,636

194,851

$4,256,760

Shares

redeemed

a

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

(1,837,726)

(87,193,014)

(1,244,465)

(27,150,860)

Net

increase

(decrease)

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

(1,456,186)

$(69,257,378)

(1,049,614)

$(22,894,100)

Year

ended

April

30,

2021

Shares

sold

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

1,472,577

$59,035,199

563,562

$11,698,529

Shares

issued

in

reinvestment

of

distributions

..........

479,347

19,437,795

519,218

10,467,435

Shares

redeemed

a

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

(2,454,585)

(98,727,393)

(1,764,756)

(35,423,649)

Net

increase

(decrease)

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

(502,661)

$(20,254,399)

(681,976)

$(13,257,685)

Class

R

1.

Organization

and

Significant

Accounting

Policies

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

60

franklintempleton.com

Semiannual

Report

Franklin

Growth

Opportunities

Fund

Franklin

Small

Cap

Growth

Fund

Shares

Amount

Shares

Amount

Class

R

Shares:

Six

Months

ended

October

31,

2021

Shares

sold

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

31,218

$1,753,257

184,182

$4,954,209

Shares

redeemed

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

(101,903)

(5,674,913)

(450,883)

(12,178,744)

Net

increase

(decrease)

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

(70,685)

$(3,921,656)

(266,701)

$(7,224,535)

Year

ended

April

30,

2021

Shares

sold

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

171,266

$8,043,810

717,438

$17,477,893

Shares

issued

in

reinvestment

of

distributions

..........

49,285

2,395,755

327,026

8,093,887

Shares

redeemed

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

(286,132)

(13,597,933)

(1,280,988)

(31,157,420)

Net

increase

(decrease)

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

(65,581)

$(3,158,368)

(236,524)

$(5,585,640)

Class

R6

Class

R6

Shares:

Six

Months

ended

October

31,

2021

Shares

sold

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

606,810

$41,072,644

8,312,042

$276,908,705

Shares

redeemed

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

(666,315)

(44,372,638)

(7,228,553)

(240,879,375)

Net

increase

(decrease)

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

(59,505)

$(3,299,994)

1,083,489

$36,029,330

Year

ended

April

30,

2021

Shares

sold

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

1,780,597

$101,176,664

18,333,285

$556,812,453

Shares

issued

in

reinvestment

of

distributions

..........

330,490

19,184,931

4,628,874

140,578,888

Shares

redeemed

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

(1,883,548)

(102,591,912)

(13,948,785)

(410,097,417)

Net

increase

(decrease)

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

227,539

$17,769,683

9,013,374

$287,293,924

Advisor

Class

Advisor

Class

Shares:

Six

Months

ended

October

31,

2021

Shares

sold

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

3,115,143

$215,076,375

1,976,425

$64,191,049

Shares

redeemed

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

(1,460,887)

(99,612,850)

(3,420,984)

(111,433,775)

Net

increase

(decrease)

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

1,654,256

$115,463,525

(1,444,559)

$(47,242,726)

Year

ended

April

30,

2021

Shares

sold

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

1,388,593

$77,802,045

8,029,152

$230,742,875

Shares

issued

in

reinvestment

of

distributions

..........

529,809

30,257,387

1,670,035

49,683,553

Shares

redeemed

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

(2,340,525)

(127,530,876)

(8,252,648)

(238,836,677)

Net

increase

(decrease)

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

(422,123)

$(19,471,444)

1,446,539

$41,589,751

2.

Shares

of

Beneficial

Interest

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

61

franklintempleton.com

Semiannual

Report

Franklin

Small-Mid

Cap

Growth

Fund

Shares

Amount

Class

A

Class

A

Shares:

Six

Months

ended

October

31,

2021

Shares

sold

a

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

5,187,057

$265,615,411

Shares

redeemed

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

(7,711,041)

(399,479,630)

Net

increase

(decrease)

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

(2,523,984)

$(133,864,219)

Year

ended

April

30,

2021

Shares

sold

a

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

13,207,103

$591,860,878

Shares

issued

in

reinvestment

of

distributions

..........

6,654,125

306,156,283

Shares

redeemed

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

(13,188,883)

(585,181,373)

Net

increase

(decrease)

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

6,672,345

$312,835,788

Class

C

Class

C

Shares:

Six

Months

ended

October

31,

2021

Shares

sold

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

473,131

$13,591,812

Shares

redeemed

a

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

(1,823,283)

(52,986,687)

Net

increase

(decrease)

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

(1,350,152)

$(39,394,875)

Year

ended

April

30,

2021

Shares

sold

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

1,554,802

$40,817,005

Shares

issued

in

reinvestment

of

distributions

..........

1,025,860

26,672,329

Shares

redeemed

a

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

(2,636,417)

(68,779,532)

Net

increase

(decrease)

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

(55,755)

$(1,290,198)

Class

R

Class

R

Shares:

Six

Months

ended

October

31,

2021

Shares

sold

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

106,330

$4,693,256

Shares

redeemed

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

(257,831)

(11,519,327)

Net

increase

(decrease)

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

(151,501)

$(6,826,071)

Year

ended

April

30,

2021

Shares

sold

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

395,867

$15,543,080

Shares

issued

in

reinvestment

of

distributions

..........

134,671

5,411,097

Shares

redeemed

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

(580,286)

(22,557,831)

Net

increase

(decrease)

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

(49,748)

$(1,603,654)

Class

R6

Class

R6

Shares:

Six

Months

ended

October

31,

2021

Shares

sold

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

2,489,396

$148,723,212

Shares

redeemed

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

(1,641,100)

(97,965,897)

Net

increase

(decrease)

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

848,296

$50,757,315

Year

ended

April

30,

2021

Shares

sold

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

6,958,014

$373,028,400

Shares

issued

in

reinvestment

of

distributions

..........

574,433

30,956,221

Shares

redeemed

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

(2,449,090)

(128,368,829)

Net

increase

(decrease)

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

5,083,357

$275,615,792

Advisor

Class

2.

Shares

of

Beneficial

Interest

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

62

franklintempleton.com

Semiannual

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

Growth

Opportunities

Fund

pays

an

investment

management

fee

to

Advisers

based

on

the

average

daily

net

assets

of

the

Fund

as

follows:

Franklin

Small-Mid

Cap

Growth

Fund

Shares

Amount

Advisor

Class

Shares:

Six

Months

ended

October

31,

2021

Shares

sold

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

3,329,008

$200,276,812

Shares

redeemed

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

(1,072,634)

(62,553,443)

Net

increase

(decrease)

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

2,256,374

$137,723,369

Year

ended

April

30,

2021

Shares

sold

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

2,877,964

$141,845,420

Shares

issued

in

reinvestment

of

distributions

..........

683,685

35,941,325

Shares

redeemed

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

(2,153,257)

(109,845,830)

Net

increase

(decrease)

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

1,408,392

$67,940,915

a

May

include

a

portion

of

Class

C

shares

that

were

automatically

converted

to

Class

A.

Subsidiary

Affiliation

Franklin

Advisers,

Inc.

(Advisers)

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

0.700%

Up

to

and

including

$500

million

0.600%

Over

$500

million,

up

to

and

including

$1

billion

0.550%

Over

$1

billion,

up

to

and

including

$1.5

billion

0.500%

Over

$1.5

billion,

up

to

and

including

$6.5

billion

0.475%

Over

$6.5

billion,

up

to

and

including

$11.5

billion

0.450%

Over

$11.5

billion,

up

to

and

including

$16.5

billion

0.440%

Over

$16.5

billion,

up

to

and

including

$19

billion

0.430%

Over

$19

billion,

up

to

and

including

$21.5

billion

0.420%

In

excess

of

$21.5

billion

2.

Shares

of

Beneficial

Interest

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

63

franklintempleton.com

Semiannual

Report

Franklin

Small

Cap

Growth

Fund

pays

an

investment

management

fee

to

Advisers

based

on

the

average

daily

net

assets

of

the

Fund

as

follows:

Franklin

Small-Mid

Cap

Growth

Fund

pays

an

investment

management

fee

to

Advisers

based

on

the

average

daily

net

assets

of

the

Fund

as

follows:

For

the

period

ended

October

31,

2021,

each

Fund's

annualized

gross

effective

investment

management

fee

rate

based

on

average

daily

net

assets

was

as

follows:

b.

Administrative

Fees

Under

an

agreement

with

Advisers,

FT

Services

provides

administrative

services

to

the

Funds.

The

fee

is

paid

by

Advisers

based

on

each

of

the

Fund’s

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,

Annualized

Fee

Rate

Net

Assets

0.750%

Up

to

and

including

$500

million

0.650%

Over

$500

million,

up

to

and

including

$1

billion

0.600%

Over

$1

billion,

up

to

and

including

$1.5

billion

0.550%

Over

$1.5

billion,

up

to

and

including

$6.5

billion

0.525%

Over

$6.5

billion,

up

to

and

including

$11.5

billion

0.500%

Over

$11.5

billion,

up

to

and

including

$16.5

billion

0.490%

Over

$16.5

billion,

up

to

and

including

$19

billion

0.480%

Over

$19

billion,

up

to

and

including

$21.5

billion

0.470%

In

excess

of

$21.5

billion

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

Franklin

Growth

Opportunities

Fund

Franklin

Small

Cap

Growth

Fund

Franklin

Small-

Mid

Cap

Growth

Fund

Gross

effective

investment

management

fee

rate

........

0.528%

0.591%

0.454%

3.

Transactions

with

Affiliates

(continued)

a.

Management

Fees

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

64

franklintempleton.com

Semiannual

Report

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

Growth

Opportunities

Fund

and

Franklin

Small

Cap

Growth

Fund,

the

Board

has

set

the

current

rate

at

0.25%

per

year

for

Class

A

shares

until

further

notice

and

approval

by

the

Board.

d.

Sales

Charges/Underwriting

Agreements

Front-end

sales

charges

and

contingent

deferred

sales

charges

(CDSC)

do

not

represent

expenses

of

the

Funds.

These

charges

are

deducted

from

the

proceeds

of

sales

of

fund

shares

prior

to

investment

or

from

redemption

proceeds

prior

to

remittance,

as

applicable.

Distributors

has

advised

the

Funds

of

the

following

commission

transactions

related

to

the

sales

and

redemptions

of

the

Funds'

shares

for

the

period:

e.

Transfer

Agent

Fees

Each

class

of

shares

pays

transfer

agent

fees

to

Investor

Services

for

its

performance

of

shareholder

servicing

obligations.

The

fees

are

based

on

an

annualized

asset

based

fee

of

0.02%

plus

a

transaction

based

fee.

In

addition,

each

class

reimburses

Investor

Services

for

out

of

pocket

expenses

incurred

and,

except

for

Class

R6,

reimburses

shareholder

servicing

fees

paid

to

third

parties.

These

fees

are

allocated

daily

based

upon

their

relative

proportion

of

such

classes'

aggregate

net

assets.

Class

R6

pays

Investor

Services

transfer

agent

fees

specific

to

that

class.

For

the

period

ended

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:

Franklin

Growth

Opportunities

Fund

Franklin

Small

Cap

Growth

Fund

Franklin

Small-

Mid

Cap

Growth

Fund

Reimbursement

Plans:

Class

A

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

0.35%

0.35%

0.25%

Compensation

Plans:

Class

C

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

1.00%

1.00%

1.00%

Class

R

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

0.50%

0.50%

0.50%

Franklin

Growth

Opportunities

Fund

Franklin

Small

Cap

Growth

Fund

Franklin

Small-

Mid

Cap

Growth

Fund

Sales

charges

retained

net

of

commissions

paid

to

unaffiliated

brokers/dealers

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

$226,212

$143,958

$304,218

CDSC

retained

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

$9,390

$6,910

$19,156

Franklin

Growth

Opportunities

Fund

Franklin

Small

Cap

Growth

Fund

Franklin

Small-

Mid

Cap

Growth

Fund

Transfer

agent

fees

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

$1,464,713

$992,741

$1,425,596

3.

Transactions

with

Affiliates

(continued)

c.

Distribution

Fees

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

65

franklintempleton.com

Semiannual

Report

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

period

ended

October

3

1

,

2021,

investments

in

affiliated

management

investment

companies

were

as

follows:

    aa

Value

at

Beginning

of

Period

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Period

Number

of

Shares

Held

at

End

of

Period

Investment

Income

a      

a  

a  

a  

a  

a  

a  

a  

Franklin

Growth

Opportunities

Fund

Non-Controlled

Affiliates

Dividends

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.

$74,672,064

$341,360,009

$(386,203,576)

$—

$—

$29,828,497

29,828,497

$2,163

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.

$50,044,540

$503,445,927

$(457,409,892)

$

—

$

—

$96,080,575

96,080,575

$4,625

Total

Affiliated

Securities

...

$124,716,604

$844,805,936

$(843,613,468)

$—

$—

$125,909,072

$6,788

Franklin

Small

Cap

Growth

Fund

Non-Controlled

Affiliates

Dividends

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.

$205,154,775

$354,220,041

$(484,162,115)

$—

$—

$75,212,701

75,212,701

$6,771

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.

$64,722,231

$619,464,540

$(498,365,812)

—

—

$185,820,959

185,820,959

$5,940

Total

Affiliated

Securities

...

$269,877,006

$973,684,581

$(982,527,927)

$—

$—

$261,033,660

$12,711

Franklin

Small-Mid

Cap

Growth

Fund

Non-Controlled

Affiliates

Dividends

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.

$213,329,128

$497,441,990

$(514,014,155)

$—

$—

$196,756,963

196,756,963

$11,551

3.

Transactions

with

Affiliates

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

66

franklintempleton.com

Semiannual

Report

g.

Waiver

and

Expense

Reimbursements

For

Franklin

Growth

Opportunities

Fund,

Franklin

Small

Cap

Growth

Fund

and

Franklin

Small-Mid

Cap

Growth

Fund,

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

August

31,

2022.

h.

Interfund

Transactions

Certain

or

all

Funds

engaged

in

purchases

and

sales

of

investments

with

funds

or

other

accounts

that

have

common

investment

managers

(or

affiliated

investment

managers),

directors,

trustees

or

officers.

These

purchases

and

sales

for

the

period

ended

October

31,

2021,

were

as

follows:

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

period ended

October

31,

2021,

the

custodian

fees

were

reduced

as

noted

in

the

Statements

of

Operations.

5.

Income

Taxes

At

October

31,

2021,

the

cost

of

investments

and

net

unrealized

appreciation

(depreciation)

for

income

tax

purposes

were

as

follows:

    aa

Value

at

Beginning

of

Period

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Period

Number

of

Shares

Held

at

End

of

Period

Investment

Income

Franklin

Small-Mid

Cap

Growth

Fund

(continued)

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.

$84,881,180

$495,886,779

$(522,129,218)

$

—

$

—

$58,638,741

58,638,741

$3,439

Total

Affiliated

Securities

...

$298,210,308

$993,328,769

$(1,036,143,373)

$—

$—

$255,395,704

$14,990

Franklin

Growth

Opportunities

Fund

Franklin

Small

Cap

Growth

Fund

Franklin

Small-

Mid

Cap

Growth

Fund

Purchases

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

$—

$8,543,064

$—

Sales

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

$2,436,780

$—

$2,264,772

3.

Transactions

with

Affiliates

(continued)

f.

Investments

in

Affiliated

Management

Investment

Companies

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

67

franklintempleton.com

Semiannual

Report

Differences

between

income

and/or

capital

gains

as

determined

on

a

book

basis

and

a

tax

basis

are

primarily

due

to

differing

treatments

of

passive

foreign

investment

company

shares

and

wash

sales.

6.

Investment

Transactions

Purchases

and

sales

of

investments

(excluding

short

term

securities)

for

the

period

ended

October

31,

2021,

were

as

follows:

At

October

31,

2021,

in

connection

with

securities

lending

transactions,

Franklin

Growth

Opportunities

Fund,

Franklin

Small

Cap

Growth

Fund,

and

Franklin

Small-Mid

Cap

Growth

Fund

loaned

equity

investments

and

received

$96,080,575,

$185,820,959

and

$58,638,741

of

cash

collateral,

respectively.

The

gross

amount

of

recognized

liability

for

such

transactions

is

included

in

payable

upon

return

of

securities

loaned

in

the

Statement

of

Assets

and

Liabilities.

The

agreements

can

be

terminated

at

any

time.

7.

Novel

Coronavirus

Pandemic 

The

global

outbreak

of

the

novel

coronavirus

disease,

known

as

COVID-19, has

caused

adverse

effects

on

many

companies,

sectors,

nations,

regions

and

the

markets

in

general, and

may

continue for

an unpredictable duration.

The

effects

of

this

pandemic

may

materially

impact

the

value

and

performance

of

the

Funds, their ability

to

buy

and

sell

fund

investments

at

appropriate

valuations

and their ability

to

achieve their investment

objectives.

8.

Restricted

Securities

Certain

or

all

Funds

invest

in

securities

that

are

restricted

under

the

Securities

Act

of

1933

(1933

Act).

Restricted

securities

are

often

purchased

in

private

placement

transactions,

and

cannot

be

sold

without

prior

registration

unless

the

sale

is

pursuant

to

an

exemption

under

the

1933

Act.

Disposal

of

these

securities

may

require

greater

effort

and

expense,

and

prompt

sale

at

an

acceptable

price

may

be

difficult.

The

Funds

may

have

registration

rights

for

restricted

securities.

The

issuer

generally

incurs

all

registration

costs.

Franklin

Growth

Opportunities

Fund

Franklin

Small

Cap

Growth

Fund

Franklin

Small-

Mid

Cap

Growth

Fund

a

a

a

a

Cost

of

investments

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

$2,263,056,530

$3,104,787,725

$3,874,458,340

Unrealized

appreciation

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

$4,299,673,499

$1,477,261,883

$2,577,315,555

Unrealized

depreciation

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

(49,114,902)

(175,513,865)

(93,874,367)

Net

unrealized

appreciation

(depreciation)

.......

$4,250,558,597

$1,301,748,018

$2,483,441,188

Franklin

Growth

Opportunities

Fund

Franklin

Small

Cap

Growth

Fund

Franklin

Small-

Mid

Cap

Growth

Fund

Purchases

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

$428,353,989

$606,571,974

$1,295,813,734

Sales

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

$654,983,484

$578,680,779

$1,282,661,529

5.

Income

Taxes

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

68

franklintempleton.com

Semiannual

Report

At

October

31,

2021,

investments

in

restricted

securities,

excluding

securities

exempt

from

registration

under

the

1933

Act,

were

as

follows:

Shares

/

Warrants

Issuer

Acquisition

Date

Cost

Value

Franklin

Growth

Opportunities

Fund

1,020,156

a

AvidXchange

Holdings,

Inc.

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

7/30/20

-

10/13/21

$

12,499,972

$

21,286,510

16,669

Celonis

SE

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

6/16/21

6,149,572

6,164,029

2,610,594

ClearMotion

,

Inc.,

C

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

11/06/17

5,499,999

7,057,172

3,698,772

ClearMotion

,

Inc.,

D

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

12/21/18

10,000,000

10,867,769

481,845

b

Confluent,

Inc.

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

4/13/20

7,212,582

31,853,644

112,760

Databricks

,

Inc.,

G

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

2/01/21

20,000,005

28,068,560

1,029,939

Fanatics

Holdings,

Inc.

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

8/13/20

-

3/22/21

19,730,229

48,788,210

1,765,636

c

Figs,

Inc.

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

10/23/20

15,093,043

58,430,485

201,294

d

Gitlab

,

Inc.

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

9/11/19

3,749,986

21,190,020

415,102

HashiCorp

,

Inc.,

E

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

3/06/20

12,004,812

28,420,302

1,673,284

Legalzoom.com,

Inc.

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

7/20/18

16,479,338

44,638,957

1,396,875

e

Marqeta

,

Inc.,

B

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

8/20/20

-

10/21/20

12,799,970

42,004,312

517,056

OneTrust

LLC,

C

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

4/01/21

10,139,623

13,720,916

509,182

Optoro

,

Inc.,

E

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

7/24/18

10,020,702

10,020,702

3,595,580

f

Proterra

,

Inc.

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

9/21/16

-

8/02/19

22,294,006

38,477,147

23,001

Sweetgreen

,

Inc.,

1/20/26

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

1/21/21

—

—

928,488

Sweetgreen

,

Inc.,

H

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

11/09/18

12,107,484

15,042,978

100,835

Sweetgreen

,

Inc.,

I

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

9/16/19

1,724,278

1,633,687

76,670

Sweetgreen

,

Inc.,

J

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

1/21/21

1,311,057

1,242,176

1,753,060

Talkdesk

,

Inc.,

C

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

7/15/20

11,517,955

28,594,801

805,800

Tanium,

Inc.,

G

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

9/14/15

4,000,233

7,328,710

504,854

Tempus

Labs,

Inc.,

F

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

5/29/19

12,499,983

23,694,033

126,131

Tempus

Labs,

Inc.,

G

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

2/06/20

4,837,427

5,968,462

2,315,191

g

Wheels

Up

Experience,

Inc.,

A

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

5/16/19

-

7/28/21

17,499,998

15,338,523

Total

Restricted

Securities

(Value

is

8.0%

of

Net

Assets)

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

$249,172,254

$509,832,105

Shares

/

Warrants

Issuer

Acquisition

Date

Cost

Value

Franklin

Small

Cap

Growth

Fund

3,436,485

1661,

Inc.,

F

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

5/28/21

$

19,999,999

$

19,999,999

1,297,305

Allbirds

,

Inc.,

E

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

9/22/20

14,999,998

16,048,740

382,306

Benchling

,

Inc.,

F

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

10/20/21

12,499,992

12,499,992

462,963

Checkr

,

Inc.,

E

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

8/24/21

25,000,002

25,000,002

3,698,772

ClearMotion

,

Inc.,

D

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

12/21/18

10,000,000

10,867,769

1,431,280

Legalzoom.com,

Inc.

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

7/20/18

14,095,961

38,182,907

1,199,415

Marqeta

,

Inc.

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

8/20/20

10,000,003

36,066,650

709,046

Newsela

,

Inc.,

D

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

1/21/21

15,000,010

15,127,408

508,130

Optoro

,

Inc.,

E

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

7/24/18

9,999,998

9,999,998

3,243,567

h

Proterra

,

Inc.

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

9/21/16

-

5/21/18

19,762,396

34,710,173

8.

Restricted

Securities

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

69

franklintempleton.com

Semiannual

Report

Shares/

Warrants

Issuer

Acquisition

Date

Cost

Value

Franklin

Small

Cap

Growth

Fund

(continued)

1,105,258

i

Rent

the

Runway,

Inc.

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

3/21/19

-

4/30/21

$

20,833,337

$

17,804,383

1,542,673

Smule

,

Inc.,

144A,

G

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

5/31/16

11,099,995

8,642,603

352,675

Smule

,

Inc.,

144A,

H

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

4/27/17

2,999,995

2,335,680

33,990

Sweetgreen

,

Inc.,

1/20/26

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

1/21/21

—

—

383,435

Sweetgreen

,

Inc.,

H

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

11/09/18

4,999,992

6,212,255

41,641

Sweetgreen

,

Inc.,

I

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

9/16/19

712,061

674,650

113,300

Sweetgreen

,

Inc.,

J

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

1/21/21

1,937,430

1,835,640

361,111

Tula

eTechnology

,

Inc.

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

11/01/18

—

—

3,611,111

Tula

eTechnology

,

Inc.,

E

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

9/08/17

6,500,000

9,344,877

1,984,450

j

Wheels

Up

Experience,

Inc.,

A

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

5/16/19

-

7/28/21

14,999,997

13,147,306

Total

Restricted

Securities

(Value

is

6.6%

of

Net

Assets)

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

$215,441,166

$278,501,032

Principal

Amount

*

/

Shares

/

Warrants

Issuer

Acquisition

Date

Cost

Value

Franklin

Small-Mid

Cap

Growth

Fund

772,477

Allbirds

,

Inc.

E

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

9/22/20

$

8,931,712

$

9,556,182

347,106

Benchling

,

Inc.,

F

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

10/20/21

11,349,082

11,349,082

64,741

Blaize

,

Inc.

Ltd.,

2/28/24

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

3/01/21

—

—

1,294,805

Blaize

,

Inc.,

D

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

3/02/21

-

3/22/21

13,521,010

13,521,001

75,943

Databricks

,

Inc.,

G

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

2/01/21

13,469,850

18,903,961

793,714

Fanatics

Holdings,

Inc.

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

8/13/20

-

3/22/21

14,052,061

37,598,232

1,070,236

k

Marqeta

,

Inc.

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

8/20/20

8,922,986

32,182,212

423,782

Newsela

,

Inc.,

D

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

1/21/21

8,965,193

9,041,336

767,526

OneTrust

LLC,

C

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

4/01/21

15,051,415

20,367,542

513,050

Phononic

Devices,

Inc.

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

1/17/20

-

11/03/20

47

2,112,350

2,970,061

Phononic

Devices,

Inc.,

F

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

6/06/19

7,499,998

10,865,947

121,407

Phononic

,

Inc.,

Advance

Term

Loan,

B,

12%,

PIK,

7/31/26

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

8/25/20

-

10/01/21

117,746

108,875

289,883

Phononic

,

Inc.,

Advance

Term

Loan,

D,

12%,

PIK,

12/01/25

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

1/15/21

-

10/01/21

287,488

259,179

590,340

Phononic

,

Inc.,

Term

Loan,

A,

12%,

PIK,

1/17/24

....

1/17/20

-

10/01/21

582,849

542,960

117,602

Phononic

,

Inc.,

Term

Loan,

C,

12%,

PIK,

8/25/24

....

12/03/20-10/01/21

116,554

105,652

1,264,595

l

Proterra

,

Inc.

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

9/21/16

7,135,914

13,532,728

Total

Restricted

Securities

(Value

is

2.9%

of

Net

Assets)

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

$110,003,905

$180,047,239

*

In

U.S.

dollars

unless

otherwise

indicated.

a

The

Fund

also

invests

in

unrestricted

securities

of

the

issuer,

valued

at

$5,645,619

as

of

October

31,

2021.

b

The

Fund

also

invests

in

unrestricted

securities

of

the

issuer,

valued

at

$19,196,826

as

of

October

31,

2021.

c

The

Fund

also

invests

in

unrestricted

securities

of

the

issuer,

valued

at

$30,271,922

as

of

October

31,

2021.

d

The

Fund

also

invests

in

unrestricted

securities

of

the

issuer,

valued

at

$3,220,140

as

of

October

31,

2021.

e

The

Fund

also

invests

in

unrestricted

securities

of

the

issuer,

valued

at

$6,698,340

as

of

October

31,

2021.

f

The

Fund

also

invests

in

unrestricted

securities

of

the

issuer,

valued

at

$6,495,724

as

of

October

31,

2021.

g

The

Fund

also

invests

in

unrestricted

securities

of

the

issuer,

valued

at

$24,535,000

as

of

October

31,

2021.

8.

Restricted

Securities

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

70

franklintempleton.com

Semiannual

Report

9.

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

period

ended

October

31,

2021,

investments

in

“affiliated

companies”

were

as

follows:

h

The

Fund

also

invests

in

unrestricted

securities

of

the

issuer,

valued

at

$6,960,020

as

of

October

31,

2021.

i

The

Fund

also

invests

in

unrestricted

securities

of

the

issuer,

valued

at

$19,294,125

as

of

October

31,

2021.

j

The

Fund

also

invests

in

unrestricted

securities

of

the

issuer,

valued

at

$14,020,000

as

of

October

31,

2021.

k

The

Fund

also

invests

in

unrestricted

securities

of

the

issuer,

valued

at

$6,478,020

as

of

October

31,

2021.

l

The

Fund

also

invests

in

unrestricted

securities

of

the

issuer,

valued

at

$6,269,305

as

of

October

31,

2021.

Value

at

Beginning

of

Period

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Period

Number

of

Shares

/Principal

Amount

Held

at

End

of

Period

Investment

Income

Franklin

Growth

Opportunities

Fund

Non-Controlled

Affiliates

Dividends

Avidxchange

Holdings

,

Inc.

$

13,792,310

$

—

$

—

$

—

$

—

a

$

—

a

—

a

$

—

ClearMotion

,

Inc.,

C

...

7,703,411

—

—

—

(646,239)

7,057,172

2,610,594

—

ClearMotion

,

Inc.,

D

...

11,706,569

—

—

—

(838,800)

10,867,769

3,698,772

—

HashiCorp

,

Inc.,

E

....

19,097,102

—

—

—

9,323,200

28,420,302

415,102

—

Optoro

,

Inc.,

E

.......

12,164,900

—

—

—

(2,144,198)

10,020,702

509,182

—

Talkdesk

,

Inc.,

C

.....

28,638,800

—

—

—

(43,999)

28,594,801

1,753,060

—

Tempus

Labs,

Inc.,

F

..

22,633,975

—

—

—

—

a

—

a

—

a

—

Tempus

Labs,

Inc.,

G

..

5,814,771

—

—

—

—

a

—

a

—

a

—

Wheels

Up

Experience,

Inc.

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

35,000,000

—

—

—

—

a

—

a

—

a

—

Wheels

Up

Experience,

Inc.,

A

...........

22,526,068

—

—

—

—

a

—

a

—

a

—

Total

Affiliated

Securities

(Value

is

1.3%

of

Net

Assets)

..........

$179,077,906

$—

$—

$

—

$

5,649,964

$84,960,746

$—

Value

at

Beginning

of

Period

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Period

Number

of

Shares

Held

at

End

of

Period

Investment

Income

Franklin

Small

Cap

Growth

Fund

Non-Controlled

Affiliates

Dividends

Bridge

Investment

Group

Holdings

Inc

.,

A

....

$

—

$

24,016,000

$

—

$

—

$

4,427,950

$

28,443,950

1,501,000

$

—

ClearMotion

,

Inc.,

D

...

11,706,569

—

—

—

(838,800)

10,867,769

3,698,772

—

Optoro

,

Inc.,

E

.......

12,139,766

—

—

—

(2,139,768)

9,999,998

508,130

—

8.

Restricted

Securities

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

71

franklintempleton.com

Semiannual

Report

Value

at

Beginning

of

Period

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Period

Number

of

Shares

Held

at

End

of

Period

Investment

Income

Franklin

Small

Cap

Growth

Fund

(continued)

Non-Controlled

Affiliates

Paymentus

Holdings

Inc

$

—

$

20,899,759

$

—

$

—

$

51,281

$

20,951,040

818,400

$

—

TPG

Pace

Governance

LLC,

A

..........

25,000,000

—

(25,000,000)

—

—

—

b

—

—

Wheels

Up

Experience,

Inc.

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

20,000,000

—

—

—

—

a

—

a

—

a

—

Wheels

Up

Experience,

Inc.,

A

...........

19,308,057

—

—

—

—

a

—

a

—

a

—

Total

Affiliated

Securities

(Value

is

1.7%

of

Net

Assets)

..........

$88,154,392

$44,915,759

$(25,000,000)

$

—

$

1,500,663

$70,262,757

$—

Value

at

Beginning

of

Period

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Period

Number

of

Shares/Principal

Amount

*

Held

at

End

of

Period

Investment

Income

Franklin

Small-Mid

Cap

Growth

Fund

Non-Controlled

Affiliates

Dividends

Blaize

,

Inc.

Ltd.,

2/28/24

$

—

$

—

$

—

$

—

$

—

$

—

64,741

$

—

Blaize

,

Inc.,

D

.......

13,521,001

—

—

—

—

13,521,001

1,294,805

—

Phononic

Devices,

Inc.

.

2,022,312

—

—

—

90,038

2,112,350

513,050

—

Phononic

Devices,

Inc.,

F

10,389,829

—

—

—

476,118

10,865,947

2,970,061

—

Interest

Phononic

,

Inc.,

Advance

Term

Loan,

B,

12%,

PIK,

7/31/26

..........

101,784

7,490

c

—

—

(399)

108,875

121,407

6,516

Phononic

,

Inc.,

Advance

Term

Loan,

D,

12%,

PIK,

12/01/25

......

242,282

15,186

c

—

—

1,711

259,179

289,883

15,340

Phononic

,

Inc.,

Term

Loan,

A,

12%,

PIK,

1/17/24

.

506,783

27,166

c

—

—

9,011

542,960

590,340

32,449

Phononic

,

Inc.,

Term

Loan,

C,

12%,

PIK,

8/25/24

98,759

6,105

c

—

—

788

105,652

117,602

6,253

Total

Affiliated

Securities

(Value

is

0.4%

†

of

Net

Assets)

..........

$26,882,750

$55,947

$—

$

—

$

577,267

$27,515,964

$60,558

*

In

U.S.

dollars

unless

otherwise

indicated.

a

As

of

October

31,

2021,

no

longer

an

affiliate.

b

As

of

October

31,

2021,

no

longer

held

by

the

fund.

c

May

include

accretion,

amortization,

partnership

adjustments,

and/or

corporate

actions.

9.

Holdings

of

5%

Voting

Securities

of

Portfolio

Companies

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

72

franklintempleton.com

Semiannual

Report

10.

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

period ended

October

31,

2021,

the

Funds

did

not

use

the

Global

Credit

Facility.

11.

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

and

liabilities

carried

at

fair

value,

is

as

follows:

Level

1

Level

2

Level

3

Total

Franklin

Growth

Opportunities

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Airlines

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

$

24,535,000

$

—

$

15,338,523

$

39,873,523

Auto

Components

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

33,423,095

—

—

33,423,095

Automobiles

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

151,112,557

—

—

151,112,557

Beverages

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

63,531,568

—

—

63,531,568

Biotechnology

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

87,700,903

—

—

87,700,903

Capital

Markets

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

272,147,420

—

—

272,147,420

Chemicals

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

71,942,973

—

—

71,942,973

Commercial

Services

&

Supplies

...........

21,357,117

—

6,164,029

27,521,146

Consumer

Finance

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

32,577,743

—

—

32,577,743

Electric

Utilities

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

28,706,548

—

—

28,706,548

Entertainment

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

70,086,543

—

—

70,086,543

Equity

Real

Estate

Investment

Trusts

(REITs)

.

134,710,816

—

—

134,710,816

Food

Products

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

52,693,311

—

—

52,693,311

Health

Care

Equipment

&

Supplies

.........

503,195,474

—

58,430,485

561,625,959

Health

Care

Providers

&

Services

..........

128,203,739

—

—

128,203,739

Health

Care

Technology

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

116,323,649

—

—

116,323,649

Hotels,

Restaurants

&

Leisure

.............

89,720,587

—

—

89,720,587

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

73

franklintempleton.com

Semiannual

Report

Level

1

Level

2

Level

3

Total

Franklin

Growth

Opportunities

Fund

(continued)

Assets:

(continued)

Investments

in

Securities:

Common

Stocks:

Industrial

Conglomerates

................

$

87,537,420

$

—

$

—

$

87,537,420

Interactive

Media

&

Services

..............

281,037,697

—

—

281,037,697

Internet

&

Direct

Marketing

Retail

..........

460,373,791

—

—

460,373,791

IT

Services

...........................

713,584,546

—

42,004,312

755,588,858

Leisure

Products

.......................

—

—

48,788,210

48,788,210

Life

Sciences

Tools

&

Services

............

28,652,837

42,323,379

—

70,976,216

Machinery

............................

6,495,724

—

38,477,147

44,972,871

Pharmaceuticals

.......................

75,093,584

—

—

75,093,584

Professional

Services

...................

153,719,442

—

44,638,957

198,358,399

Road

&

Rail

..........................

55,892,308

—

—

55,892,308

Semiconductors

&

Semiconductor

Equipment

.

364,877,285

—

—

364,877,285

Software

.............................

1,395,398,899

—

74,330,174

1,469,729,073

Specialty

Retail

........................

14,218,160

—

—

14,218,160

Technology

Hardware,

Storage

&

Peripherals

.

242,655,627

—

—

242,655,627

Textiles,

Apparel

&

Luxury

Goods

..........

73,155,342

—

—

73,155,342

Convertible

Preferred

Stocks

...............

—

—

41,789,476

41,789,476

Preferred

Stocks

........................

—

—

139,870,792

139,870,792

Warrants

:

Biotechnology

.........................

888,866

—

—

888,866

Food

&

Staples

Retailing

.................

—

—

—

a

—

Escrows

and

Litigation

Trusts

...............

—

—

—

a

—

Short

Term

Investments

...................

125,909,072

—

—

125,909,072

Total

Investments

in

Securities

...........

$5,961,459,643

$42,323,379

b

$509,832,105

$6,513,615,127

Franklin

Small

Cap

Growth

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Aerospace

&

Defense

...................

78,300,208

—

—

78,300,208

Airlines

..............................

73,217,092

—

13,147,306

86,364,398

Banks

...............................

118,765,954

—

—

118,765,954

Biotechnology

.........................

430,838,903

—

—

430,838,903

Building

Products

......................

41,307,442

—

—

41,307,442

Capital

Markets

........................

160,956,375

—

—

160,956,375

Commercial

Services

&

Supplies

...........

23,478,613

—

—

23,478,613

Communications

Equipment

..............

82,916,420

—

—

82,916,420

Construction

&

Engineering

...............

79,257,442

—

—

79,257,442

Diversified

Consumer

Services

............

73,464,953

—

—

73,464,953

Electronic

Equipment,

Instruments

&

Components

........................

36,461,974

—

—

36,461,974

Equity

Real

Estate

Investment

Trusts

(REITs)

.

86,347,704

—

—

86,347,704

Food

&

Staples

Retailing

.................

42,642,844

—

—

42,642,844

Food

Products

........................

129,541,562

—

—

129,541,562

Health

Care

Equipment

&

Supplies

.........

195,288,819

—

—

195,288,819

Health

Care

Providers

&

Services

..........

119,113,888

—

—

119,113,888

Health

Care

Technology

.................

173,765,194

—

—

173,765,194

Hotels,

Restaurants

&

Leisure

.............

163,779,443

—

—

163,779,443

Household

Durables

....................

93,529,240

—

—

93,529,240

IT

Services

...........................

248,178,780

—

36,066,650

284,245,430

Life

Sciences

Tools

&

Services

............

53,155,692

—

—

53,155,692

Machinery

............................

109,153,932

—

34,710,173

143,864,105

Personal

Products

.....................

33,825,384

—

—

33,825,384

Pharmaceuticals

.......................

48,622,746

—

—

48,622,746

Professional

Services

...................

69,085,642

—

38,182,907

107,268,549

11.

Fair

Value

Measurements

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

74

franklintempleton.com

Semiannual

Report

Level

1

Level

2

Level

3

Total

Franklin

Small

Cap

Growth

Fund

(continued)

Assets:

(continued)

Investments

in

Securities:

Common

Stocks:

Semiconductors

&

Semiconductor

Equipment

.

$

288,523,173

$

—

$

—

$

288,523,173

Software

.............................

329,142,279

—

—

329,142,279

Specialty

Retail

........................

313,672,789

—

17,804,383

331,477,172

Textiles,

Apparel

&

Luxury

Goods

..........

53,439,115

—

—

53,439,115

Trading

Companies

&

Distributors

..........

117,227,449

—

—

117,227,449

Convertible

Preferred

Stocks

...............

—

—

88,676,141

88,676,141

Preferred

Stocks

........................

—

—

49,913,472

a

49,913,472

Warrants

..............................

—

—

—

a

—

Escrows

and

Litigation

Trusts

...............

—

—

—

a

—

Short

Term

Investments

...................

261,033,660

—

—

261,033,660

Total

Investments

in

Securities

...........

$4,128,034,711

$—

$278,501,032

$4,406,535,743

Franklin

Small-Mid

Cap

Growth

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Aerospace

&

Defense

...................

57,017,148

—

—

57,017,148

Airlines

..............................

31,006,224

—

—

31,006,224

Automobiles

..........................

26,936,673

—

—

26,936,673

Banks

...............................

39,098,300

—

—

39,098,300

Biotechnology

.........................

178,211,808

—

—

178,211,808

Building

Products

......................

48,398,775

—

—

48,398,775

Capital

Markets

........................

268,517,743

—

—

268,517,743

Commercial

Services

&

Supplies

...........

108,794,500

—

—

108,794,500

Communications

Equipment

..............

32,447,448

—

—

32,447,448

Consumer

Finance

.....................

7,224,213

—

—

7,224,213

Containers

&

Packaging

.................

86,913,476

—

—

86,913,476

Electrical

Equipment

....................

86,673,520

—

—

86,673,520

Electronic

Equipment,

Instruments

&

Components

........................

112,654,022

—

—

112,654,022

Entertainment

.........................

115,586,432

—

—

115,586,432

Equity

Real

Estate

Investment

Trusts

(REITs)

.

132,813,179

—

—

132,813,179

Food

Products

........................

53,610,159

—

—

53,610,159

Health

Care

Equipment

&

Supplies

.........

440,228,590

—

—

440,228,590

Health

Care

Providers

&

Services

..........

64,335,423

—

—

64,335,423

Health

Care

Technology

.................

148,308,985

—

—

148,308,985

Hotels,

Restaurants

&

Leisure

.............

296,642,102

—

—

296,642,102

Household

Durables

....................

46,011,120

—

—

46,011,120

Interactive

Media

&

Services

..............

141,601,550

—

—

141,601,550

Internet

&

Direct

Marketing

Retail

..........

63,451,017

—

—

63,451,017

IT

Services

...........................

423,452,144

—

32,182,212

455,634,356

Leisure

Products

.......................

16,745,599

—

37,598,232

54,343,831

Life

Sciences

Tools

&

Services

............

283,408,013

—

—

283,408,013

Machinery

............................

114,710,184

—

13,532,728

128,242,912

Oil,

Gas

&

Consumable

Fuels

.............

16,039,036

—

—

16,039,036

Personal

Products

.....................

35,662,137

—

—

35,662,137

Pharmaceuticals

.......................

20,808,992

—

—

20,808,992

Professional

Services

...................

265,257,529

—

—

265,257,529

Road

&

Rail

..........................

81,258,368

—

—

81,258,368

Semiconductors

&

Semiconductor

Equipment

.

380,579,017

—

—

380,579,017

Software

.............................

1,154,795,745

—

—

1,154,795,745

Specialty

Retail

........................

305,519,451

—

—

305,519,451

Textiles,

Apparel

&

Luxury

Goods

..........

162,255,371

—

—

162,255,371

11.

Fair

Value

Measurements

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

75

franklintempleton.com

Semiannual

Report

A

reconciliation

in

which

Level

3

inputs

are

used

in

determining

fair

value

is

presented

when

there

are

significant

Level

3

assets

and/or

liabilities

at

the

beginning

and/or

end

of

the period.

At

October

31,

2021,

the

reconciliation is

as follows:

Level

1

Level

2

Level

3

Total

Franklin

Small-Mid

Cap

Growth

Fund

(continued)

Assets:

(continued)

Investments

in

Securities:

Common

Stocks:

Trading

Companies

&

Distributors

..........

$

75,482,592

$

—

$

—

$

75,482,592

Convertible

Preferred

Stocks

...............

—

—

84,851,454

84,851,454

Preferred

Stocks

........................

—

—

10,865,947

10,865,947

Warrants

..............................

—

—

—

a

—

Senior

Floating

Rate

Interests

...............

—

—

1,016,666

1,016,666

Escrows

and

Litigation

Trusts

...............

—

—

—

a

—

Short

Term

Investments

...................

255,395,704

—

—

255,395,704

Total

Investments

in

Securities

...........

$6,177,852,289

$—

$180,047,239

$6,357,899,528

a

Includes

securities

determined

to

have

no

value

at

October

31,

2021.

b

Includes

foreign

securities

valued

at

$42,323,379,

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.

Balance

at

Beginning

of

Period

Purchases

a

Sales

b

Transfer

Into

Level

3

Transfer

Out

of

Level

3

Net

Accretion

(

Amortiza

-

tion

)

Net

Realized

Gain

(Loss)

Net

Unr

ealized

Appreciatio

n

(

Depreciation

)

Balance

at

End

of

Period

Net

Change

in

Unrealized

Appreciation

(Depreciation)

on

Assets

Held

at

Period

End

a

a

a

a

a

a

a

a

a

a

a

Franklin

Growth

Opportunities

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Airlines

..........

$

35,000,000

$

17,499,998

$

(35,000,000)

$

—

$

—

$

—

$

—

$

(2,161,475)

$

15,338,523

$

(2,161,475)

Capital

Markets

.....

44,235,321

—

(41,447,045)

—

—

—

—

(2,788,276)

—

—

Commercial

Services

&

Supplies

........

—

6,149,572

—

—

—

—

—

14,457

6,164,029

14,457

Health

Care

Equipment

&

Supplies

.......

20,963,721

32,849,564

(35,513,042)

—

—

—

—

40,130,242

58,430,485

(101,942,047)

IT

Services

........

11,524,036

12,799,970

(10,353,395)

—

—

—

—

28,033,701

42,004,312

29,204,342

Leisure

Products

....

—

19,730,229

—

—

—

—

—

29,057,981

48,788,210

29,057,981

Machinery

.........

—

22,294,006

—

—

—

—

—

16,183,141

38,477,147

16,183,141

Professional

Services

.

26,204,625

—

—

—

—

—

—

18,434,332

44,638,957

18,434,332

Software

..........

13,792,310

20,579,344

(9,616,775)

—

—

—

—

49,575,295

74,330,174

49,575,295

Convertible

Preferred

Stocks

:

Leisure

Products

....

27,858,025

—

(19,730,229)

—

—

—

—

(8,127,796)

—

—

Software

..........

31,034,048

—

—

—

—

—

—

10,755,428

41,789,476

10,755,428

Preferred

Stocks

:

Airlines

..........

22,526,068

—

(17,499,998)

—

—

—

—

(5,026,070)

—

—

Automobiles

.......

51,786,112

—

(22,294,007)

—

—

—

—

(29,492,105)

—

—

Commercial

Services

&

Supplies

........

12,164,900

—

—

—

—

—

—

(2,144,198)

10,020,702

(2,144,198)

Food

&

Staples

Retailing

16,925,725

—

—

—

—

—

—

993,116

17,918,841

993,116

Health

Care

Providers

&

Services

........

28,448,746

—

—

—

—

—

—

1,213,749

29,662,495

1,213,749

IT

Services

........

21,029,873

—

(2,446,575)

—

—

—

—

9,837,004

28,420,302

9,323,200

Software

..........

76,397,495

—

(13,366,762)

—

—

—

—

(9,182,281)

53,848,452

(3,406,726)

11.

Fair

Value

Measurements

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

76

franklintempleton.com

Semiannual

Report

Balance

at

Beginning

of

Period

Purchases

a

Sales

b

Transfer

Into

Level

3

Transfer

Out

of

Level

3

Net

Accretion

(Amortiza-

tion)

Net

Realized

Gain

(Loss)

Net

Unrealized

Appreciation

(Depreciation)

Balance

at

End

of

Period

Net

Change

in

Unrealized

Appreciation

(Depreciation)

on

Assets

Held

at

Period

End

a

a

a

a

a

a

a

a

a

a

a

Franklin

Growth

Opportunities

Fund

(continued)

Assets:

Investments

in

Securities:

Warrants

:

Food

&

Staples

Retailing

$

—

c

$

—

$

—

$

—

$

—

$

—

$

—

$

—

$

—

c

$

—

Escrows

and

Litigation

Trusts

...........

—

—

c

—

—

—

—

—

—

—

c

—

Total

Investments

in

Securities

............

$439,891,005

$131,902,683

$(207,267,828)

$—

$—

$—

$—

$145,306,245

$509,832,105

$55,100,595

Franklin

Small

Cap

Growth

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Airlines

..........

20,000,000

14,999,997

(20,000,000)

—

—

—

—

(1,852,691)

13,147,306

(1,852,691)

Capital

Markets

.....

30,328,348

—

(28,364,000)

—

—

—

—

(1,964,348)

—

—

Consumer

Finance

...

7,142,860

—

(7,142,860)

—

—

—

—

—

—

—

IT

Services

........

11,554,574

—

—

—

—

—

—

24,512,076

36,066,650

24,512,076

Machinery

.........

—

19,762,396

—

—

—

—

—

14,947,777

34,710,173

14,947,777

Professional

Services

.

22,414,698

—

—

—

—

—

—

15,768,209

38,182,907

15,768,209

Road

&

Rail

.......

7,500,000

—

(7,500,000)

—

—

—

—

—

—

—

Software

..........

15,494,946

8,525,027

(14,025,027)

—

—

—

—

(9,994,946)

—

—

Specialty

Retail

.....

—

20,833,336

—

—

—

—

—

(3,028,953)

17,804,383

(3,028,953)

Convertible

Preferred

Stocks

:

Diversified

Consumer

Services

........

14,854,244

—

—

—

—

—

—

273,164

15,127,408

273,164

Software

..........

—

37,499,994

—

—

—

—

—

—

37,499,994

—

Specialty

Retail

.....

—

19,999,999

—

—

—

—

—

—

19,999,999

—

Textiles,

Apparel

&

Luxury

Goods

....

15,570,065

—

—

—

—

—

—

478,675

16,048,740

478,675

Preferred

Stocks

:

Airlines

..........

19,308,057

—

(14,999,997)

—

—

—

—

(4,308,060)

—

—

Auto

Components

....

8,082,642

c

—

—

—

—

—

—

1,262,235

9,344,877

c

1,262,235

Automobiles

.......

46,716,172

—

(19,762,395)

—

—

—

—

(26,953,777)

—

—

Commercial

Services

&

Supplies

........

12,139,766

—

—

—

—

—

—

(2,139,768)

9,999,998

(2,139,768)

Food

&

Staples

Retailing

8,380,798

—

—

—

—

—

—

341,747

8,722,545

341,747

Software

..........

24,381,344

—

—

—

—

—

—

(2,535,292)

21,846,052

(2,535,292)

Specialty

Retail

.....

21,926,375

4,500,003

(20,833,337)

—

—

—

—

(5,593,041)

—

—

Warrants

:

Food

&

Staples

Retailing

—

c

—

—

—

—

—

—

—

—

c

—

Escrows

and

Litigation

Trusts

:

 —

 —

c

 —

 —

 —

 —

 —

 —

 —

c

 —

Total

Investments

in

Securities

............

$285,794,889

$126,120,752

$(132,627,616)

$—

$—

$—

$—

$(786,993)

$278,501,032

$48,027,179

Franklin

Small-Mid

Cap

Growth

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Capital

Markets

.....

18,263,167

—

(15,557,225)

—

—

—

—

(2,705,942)

—

—

Consumer

Finance

...

9,633,710

—

(9,633,710)

—

—

—

—

—

—

—

IT

Services

........

10,310,127

—

—

—

—

—

—

21,872,085

32,182,212

21,872,085

11.

Fair

Value

Measurements

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

77

franklintempleton.com

Semiannual

Report

Significant

unobservable

valuation

inputs

for

material

Level

3 assets

and/or

liabilities and

impact

to

fair

value

as

a

result

of

changes

in

unobservable

valuation

inputs

as

of

October

31,

2021,

are

as

follows:

Balance

at

Beginning

of

Period

Purchases

a

Sales

b

Transfer

Into

Level

3

Transfer

Out

of

Level

3

Net

Accretion

(Amortiza-

tion)

Net

Realized

Gain

(Loss)

Net

Unrealized

Appreciation

(Depreciation)

Balance

at

End

of

Period

Net

Change

in

Unrealized

Appreciation

(Depreciation)

on

Assets

Held

at

Period

End

a

a

a

a

a

a

a

a

a

a

a

Franklin

Small-Mid

Cap

Growth

Fund

(continued)

Assets:

Investments

in

Securities:

Common

Stocks:

Leisure

Products

....

$

—

$

14,052,061

$

—

$

—

$

—

$

—

$

—

$

23,546,171

$

37,598,232

$

23,546,171

Machinery

.........

—

7,135,914

—

—

—

—

—

6,396,814

13,532,728

6,396,814

Road

&

Rail

.......

6,752,000

—

(6,752,000)

—

—

—

—

—

—

—

Software

..........

18,260,372

10,046,500

(16,528,101)

—

—

—

—

(11,778,771)

—

—

Convertible

Preferred

Stocks

:

Diversified

Consumer

Services

........

8,878,072

—

—

—

—

—

—

163,264

9,041,336

163,264

Leisure

Products

....

20,938,178

—

(14,052,061)

—

—

—

—

(6,886,117)

—

—

Semiconductors

&

Semiconductor

Equipment

.......

—

47

—

—

—

—

—

2,112,303

2,112,350

2,112,303

Software

..........

42,644,651

11,349,083

—

—

—

—

—

10,147,852

64,141,586

10,147,852

Textiles,

Apparel

&

Luxury

Goods

....

9,271,156

—

—

—

—

—

—

285,026

9,556,182

285,026

Preferred

Stocks

:

Automobiles

.......

18,213,603

—

(7,135,914)

—

—

—

—

(11,077,689)

—

—

Semiconductors

&

Semiconductor

Equipment

.......

10,389,829

—

—

—

—

—

—

476,118

10,865,947

476,118

Warrants

:

Semiconductors

&

Semiconductor

Equipment

.......

2,022,312

—

(47)

—

—

—

—

(2,022,265)

—

—

Software

..........

—

c

—

—

—

—

—

—

—

—

c

—

Senior

Floating

Rate

Interests

:

Semiconductors

&

Semiconductor

Equipment

.......

949,608

59,024

—

—

—

1,053

—

6,981

1,016,666

6,981

Escrows

and

Litigation

Trusts

...........

—

—

c

—

—

—

—

—

—

—

c

—

Total

Investments

in

Securities

............

$176,526,785

$42,642,629

$(69,659,058)

$—

$—

$1,053

$—

$30,535,830

$180,047,239

$65,006,614

a

Purchases

include

all

purchases

of

securities

and

securities

received

in

corporate

actions.

b

Sales

include

all

sales

of

securities,

maturities,

paydowns

and

securities

tendered

in

corporate

actions.

c

Includes

securities

determined

to

have

no

value.

Description

Fair

Value

at

End

of

Period

Valuation

Technique

Unobservable

Inputs

Amount

/

Range

(Weighted

Average)

a

Impact

to

Fair

Value

if

Input

Increases

b

Franklin

Growth

Opportunities

Fund

Assets:

11.

Fair

Value

Measurements

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

78

franklintempleton.com

Semiannual

Report

Description

Fair

Value

at

End

of

Period

Valuation

Technique

Unobservable

Inputs

Amount

/

Range

(Weighted

Average)

a

Impact

to

Fair

Value

if

Input

Increases

b

Investments

in

Securities:

Common

Stock:

Airlines

....................

$15,338,523

Market

comparables

Discount

for

lack

of

marketability

5.5%

Decrease

c

Health

Care

Equipment

&

Supplies.

58,430,485

Market

comparables

Discount

for

lack

of

marketability

1.5%

Decrease

IT

Services.

.

.

.

 42,004,312

Market

comparables

Discount

for

lack

of

marketability

1.7%

Decrease

c

Machinery

.................

38,477,147

Market

comparables

Discount

for

lack

of

marketability

4.5%

Decrease

c

Professional

Services

.........

44,638,957

Market

comparables

Discount

for

lack

of

marketability

4.9%

Decrease

Software

...................

74,330,174

Market

comparables

Discount

for

lack

of

marketability

2.7%

-

6.2%

(4.7%)

Decrease

c

Convertible

Preferred

Stocks:

Software.

.

.

.

41,789,476

Market

comparables

Discount

for

lack

of

marketability

7.9%

–

10.4%

(9.6%)

Decrease

c

EV

/

revenue

multiple

17.3x

–

44.7x

(31.1x)

Increase

c

Preferred

Stocks:

Food

&

Staples

Retailing

.......

15,042,978

Discounted

cash

flow

Discount

for

lack

of

marketability

4.4%

Decrease

Discount

rate

13.8%

Decrease

c

Terminal

value

multiple

32.5x

Increase

c

Market

comparables

EV

/

revenue

multiple

4.8x

Increase

c

Health

Care

Providers

&

Services.

23,694,033

Discounted

cash

flow

Discount

for

lack

of

marketability

4.2%

Decrease

Discount

rate

8.1%

Decrease

d

Long

term

growth

rate

5.0%

Increase

d

Volatility

of

peers

22.6%

Decrease

IT

Services

.................

28,420,302

Market

comparables

Discount

for

lack

of

marketability

7.5%

Decrease

c

EV

/

revenue

multiple

45.0x

Increase

c

Volatility

of

peers

40.5%

Decrease

Software

...................

53,848,452

Discounted

cash

flow

Discount

for

lack

of

marketability

8.2%

-

10.2%

(9.6%)

Decrease

c

Discount

rate

8.9%

-

10.5%

(10.0%)

Decrease

c

Long

term

growth

rate

2.0%

Increase

c

Terminal

value

multiple

34.6x

Increase

c

Volatility

of

peers

34.8x

Decrease

11.

Fair

Value

Measurements

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

79

franklintempleton.com

Semiannual

Report

Description

Fair

Value

at

End

of

Period

Valuation

Technique

Unobservable

Inputs

Amount

/

Range

(Weighted

Average)

a

Impact

to

Fair

Value

if

Input

Increases

b

Market

comparables

Discount

for

lack

of

marketability

10.8%

Decrease

c

EV

/

revenue

multiples

9.1x

Decrease

c

Volatility

of

peers

42.7%

Decrease

All

Other

Investments.

.

.

.

73,817,266

e,f 

Total.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

$509,832,105

Description

Fair

Value

at

End

of

Period

Valuation

Technique

Unobservable

Inputs

Amount

/

Range

(Weighted

Average)

a

Impact

to

Fair

Value

if

Input

Increases

b

Franklin

Small

Cap

Growth

Fund

Assets:

Investments

in

Securities:

Common

Stock:

Airlines

....................

$13,147,306

Market

comparables

Discount

for

lack

of

marketability

5.5%

Decrease

c

IT

Services

.................

36,066,650

Market

comparables

Discount

for

lack

of

marketability

1.7%

Decrease

c

Machinery

.................

34,710,173

Market

comparables

Discount

for

lack

of

marketability

4.5%

Decrease

c

Professional

Services

.........

38,182,907

Market

comparables

Discount

for

lack

of

marketability

4.9%

Decrease

Specialty

Retail

..............

17,804,383

Market

comparables

Discount

for

lack

of

marketability

6.6%

Decrease

c

Convertible

Preferred

Stocks:

Diversified

Consumer

Services

..

15,127,408

Discounted

cash

flow

Discount

for

lack

of

marketability

11.7%

Decrease

c

Discount

rate

14.8%

Decrease

d

Long

term

growth

rate

5.0%

Increase

Textiles,

Apparel

&

Luxury

Goods

16,048,740

Market

comparables

Discount

for

lack

of

marketability

4.8%

Decrease

c

Preferred

Stocks:

Auto

Components

............

9,344,877

Market

comparables

Discount

for

lack

of

marketability

6.2%

Decrease

c

EV

/

EBITDA

multiple

26.8x

Increase

c

Volatility

of

peers

33.4%

Decrease

Food

&

Staples

Retailing

.......

6,212,255

Discounted

cash

flow

Discount

for

lack

of

marketability

4.4%

Decrease

Discount

rate

13.8%

Decrease

c

Terminal

value

multiple

32.5x

Increase

c

Market

comparables

EV

/

revenue

multiple

4.8

Increase

c

11.

Fair

Value

Measurements

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

80

franklintempleton.com

Semiannual

Report

Software

...................

19,510,372

Discounted

cash

flow

Discount

for

lack

of

marketability

10.2%

Decrease

c

Discount

rate

10.5%

Decrease

c

Long

term

growth

rate

2.0%

Increase

Volatility

of

peers

34.8%

Increase

Market

comparable

Discount

for

lack

of

marketability

8.6%

Decrease

c

EV

/

revenue

multiple

2.5x

Increase

c

All

Other

Investments….

72,345,961

e,f 

Total.

.

.

.

.

.

$278,501,032

Description

Fair

Value

at

End

of

Period

Valuation

Technique

Unobservable

Inputs

Amount

/

Range

(Weighted

Average)

a

Impact

to

Fair

Value

if

Input

Increases

b

Franklin

Small-Mid

Cap

Growth

Fund

Assets:

Investments

in

Securities:

Common

Stock:

IT

Services

..................

$32,182,212

Market

comparables

Discount

for

lack

of

marketability

1.7%

Decrease

c

Machinery

...................

13,532,728

Market

comparables

Discount

for

lack

of

marketability

4.5%

Decrease

c

Convertible

Preferred

Stocks:

Diversified

Consumer

Services

..

9,041,336

Discounted

cash

flow

Discount

for

lack

of

marketability

11.7%

Decrease

c

Discount

rate

14.8%

Decrease

d

Long

term

growth

rate

5.0%

Increase

Software.

.

.

.

.

39,271,503

Market

comparables

Discount

for

lack

of

marketability

7.9%

-

10.4%

(8.6%)

Decrease

c

EV

/

revenue

multiple

17.3x

–

44.7x

(26.4x)

Increase

c

Textiles,

Apparel

&

Luxury

Goods

..

9,556,182

Market

comparables

Discount

for

lack

of

marketability

4.8%

Decrease

c

Preferred

Stocks:

Semiconductors

&

Semiconductor

Equipment

..................

10,865,947

Market

comparables

Discount

for

lack

of

marketability

8.4%

Decrease

c

All

Other

Investments.

.

.

.

65,597,331

e,f 

Total.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

$180,047,239

a

Weighted

based

on

the

relative

fair

value

of

the

financial

instruments.

b

Represents

the

directional

change

in

the

fair

value

that

would

result

from

a

significant

and

reasonable

increase

in

the

corresponding

input.

A

significant

and

reasonable

decrease

in

the

input

would

have

the

opposite

effect.

Significant

impacts,

if

any,

to

fair

value

and/or

net

assets

have

been

indicated.

c

Represents

a

significant

impact

to

fair

value

but

not

net

assets.

d

Represents

a

significant

impact

to

fair

value

and

net

assets.

e

Includes

fair

value

of

immaterial

assets

and/or

liabilities

developed

using

various

valuation

techniques

and

unobservable

inputs.

May

also

include

values

derived

using

private

transaction

prices

or

non-public

third

party

pricing

information

which

is

unobservable.

f

Includes

securities

determined

to

have

no

value

at

October

31,

2021.

11.

Fair

Value

Measurements

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

81

franklintempleton.com

Semiannual

Report

12.

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.

13.

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.

Abbreviations

Abbreviations

List

EBITDA

-

Earnings

before

interest,

taxes,

depreciation

and

amortization

EV

-

Enterprise

value

Cu

r

rency

USD

United

States

Dollar

Selected

Portfolio

ADR

American

Depositary

Receipt

LIBOR

London

Inter-Bank

Offered

Rate

NYRS

New

York

Registry

Shares

PIK

Payment-In-Kind

11.

Fair

Value

Measurements

(continued)

Franklin

Strategic

Series

Shareholder

Information

82

franklintempleton.com

Semiannual

Report

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.

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

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remaining

investors’

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the

Fund.

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Trust’s

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Trust

uses

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how

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vote

proxies

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securities.

Shareholders

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Alternatively,

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copies

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Exchange

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at

sec.gov

and

reflect

the

most

recent

12-month

period

ended

June

30.

Franklin

Strategic

Series

Shareholder

Information

83

franklintempleton.com

Semiannual

Report

Quarterly

Statement

of

Investments

The

Trust

files

a

complete

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with

the

U.S.

Securities

and

Exchange

Commission

for

the

first

and

third

quarters

for

each

fiscal

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exhibit

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report

on

Form

N-PORT.

Shareholders

may

view

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filed

Form

N-PORT

by

visiting

the

Commission’s

website

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sec.

gov.

The

filed

form

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12/21

©

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franklintempleton.com

(800)

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SEMIANNUAL

REPORT

AND

SHAREHOLDER

LETTER

Franklin

Strategic

Series

October

31,

2021

Sign

up

for

electronic

delivery

at

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Franklin

Biotechnology

Discovery

Fund

Franklin

Natural

Resources

Fund

Not

FDIC

Insured

May

Lose

Value

No

Bank

Guarantee

franklintempleton.com

Semiannual

Report

1

SHAREHOLDER

LETTER

Dear

Shareholder:

During

the

six

months

ended

October

31,

2021,

the

U.S.

economy

continued

to

recover

from

the

COVID-19

pandemic,

benefiting

equities.

Growth

accelerated

in

2021’s

first

half

as

the

reopening

of

businesses,

widespread

COVID-19

vaccinations

and

federal

assistance

programs

continued

to

boost

consumer

spending.

Inflation

increased

in

April

and

rose

further

during

the

reporting

period

due

to

increased

demand

for

goods

amid

supply-chain

bottlenecks.

During

the

summer,

investors

became

concerned

the

swiftly

spreading

Delta

variant

of

COVID-19

could

hinder

the

economic

recovery,

and

growth

slowed

in

2021’s

third

quarter.

During

the

reporting

period,

the

U.S.

Federal

Reserve

(Fed),

in

its

efforts

to

support

U.S.

economic

activity,

held

the

federal

funds

rate

unchanged

at

0.25%,

and

it

continued

broad

quantitative

easing

measures

to

bolster

credit

markets.

The

Fed

also

adjusted

its

economic

growth

and

inflation

projections

higher

and

expected

to

begin

decreasing

its

asset

purchases

later

this

year,

while

delaying

any

interest

rate

increases

until

reaching

its

goal

of

maximum

U.S.

employment.

In

this

environment,

U.S.

stocks,

as

measured

by

the

Standard

&

Poor’s

®

500

Index,

posted

a

+10.91%

total

return

for

the

six-month

period.

1

We

are

committed

to

our

long-term

perspective

and

disciplined

investment

approach

as

we

conduct

a

rigorous,

fundamental

analysis

of

securities

with

a

regular

emphasis

on

investment

risk

management.

We

believe

active,

professional

investment

management

serves

investors

well.

We

also

recognize

the

important

role

of

financial

professionals

in

today’s

markets

and

encourage

investors

to

continue

to

seek

their

advice.

Amid

changing

markets

and

economic

conditions,

we

are

confident

investors

with

a

well-diversified

portfolio

and

a

patient,

long-term

outlook

should

be

well-positioned

for

the

years

ahead.

In

addition,

Franklin

Strategic

Series’

semiannual

report

includes

more

detail

about

prevailing

conditions

and

a

discussion

about

investment

decisions

during

the

period.

All

securities

markets

fluctuate,

as

do

mutual

fund

share

prices.

We

thank

you

for

investing

with

Franklin

Templeton,

welcome

your

questions

and

comments,

and

look

forward

to

serving

your

future

investment

needs.

Sincerely,

Edward

Perks,

CFA

President

and

Chief

Executive

Officer

–

Investment

Management

Franklin

Strategic

Series

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.

1.

Source:

Morningstar.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

franklintempleton.com

Semiannual

Report

2

Contents

Semiannual

Report

Economic

and

Market

Overview

3

Franklin

Biotechnology

Discovery

Fund

4

Franklin

Natural

Resources

Fund

11

Financial

Highlights

and

Statements

of

Investments

17

Financial

Statements

33

Notes

to

Financial

Statements

37

Shareholder

Information

52

Visit

franklintempleton.com

for

fund

updates,

to

access

your

account,

or

to

find

helpful

financial

planning

tools.

3

franklintempleton.com

Semiannual

Report

SEMI

ANNUAL

REPORT

Economic

and

Market

Overview

U.S.

equities,

as

measured

by

the

Standard

&

Poor’s

500

Index,

posted

a

+10.91%

total

return

for

the

six

months

ended

October

31,

2021.

1

Stocks

benefited

from

the

continued

economic

recovery,

the

ongoing

implementation

of

COVID-19

vaccination

programs

and

easing

pandemic

restrictions.

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

six-month

period.

The

U.S.

economy

continued

to

recover

amid

declining

unemployment,

solid

wage

growth

and

high

business

confidence.

Gross

domestic

product

continued

to

grow

as

strong

consumer

spending

supported

the

economy.

The

ongoing

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

six-month

period

amid

increased

demand

and

supply-chain

bottlenecks.

U.S.

consumer

spending

on

goods

remained

strong,

adding

to

pressure

on

the

prices

of

many

products.

A

global

semiconductor

shortage

weighed

on

production

of

automobiles,

leading

to

higher

prices

for

both

new

and

used

vehicles.

Energy

prices

also

rose

amid

higher

fuel

demand

and

supply

constraints,

exacerbated

by

hurricanes

that

hampered

production

in

the

Gulf

Coast

region.

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

6.1%

in

April

2021

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

and

mortgage

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.

4

franklintempleton.com

Semiannual

Report

Franklin

Biotechnology

Discovery

Fund

This

semiannual

report

for

Franklin

Biotechnology

Discovery

Fund

covers

the

period

ended

October

31,

2021

.

Your

Fund’s

Goal

and

Main

Investments

The

Fund

seeks

capital

appreciation.

Under

normal

market

conditions,

the

Fund

invests

at

least

80%

of

its

net

assets

in

securities

of

biotechnology

companies

and

discovery

research

firms

located

in

the

U.S.

and

other

countries.

Performance

Overview

The

Fund’s

Class

A

shares

posted

a

-6.85%

cumulative

total

return

for

the

six

months

under

review.

In

comparison,

the

NASDAQ

Biotechnology

Index,

®

which

tracks

U.S.

and

international-based

biotechnology

stocks,

posted

a

+2.87%

cumulative

total

return.

1

Also

in

comparison,

the

Standard

&

Poor’s

500

Index,

which

is

a

broad

measure

of

the

U.S.

stock

market,

posted

a

+10.91%

cumulative

total

return.

1

You

can

find

the

Fund’s

long-term

performance

data

in

the

Performance

Summary

beginning

on

page

8

.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

For

most

recent

month-end

performance,

go

to

franklintempleton.com

or

call

(800)

342-5236

.

Investment

Strategy

We

are

research-driven,

fundamental

investors,

pursuing

a

growth

strategy.

As

bottom-up

investors

focusing

primarily

on

individual

securities,

we

choose

companies

that

have

identifiable

drivers

of

future

earnings

growth

and

that

present,

in

our

opinion,

the

best

trade-off

between

potential

earnings

growth,

business

and

financial

risk,

and

valuation.

Also,

in

seeking

sustainable

growth

characteristics,

we

look

for

companies

that

we

believe

can

produce

sustainable

earnings

growth

and

cash

flow

growth

or

the

potential

to

generate

income.

We

rely

on

a

team

of

analysts

to

help

provide

in-depth

industry

expertise

and

use

both

qualitative

and

quantitative

analysis

to

evaluate

companies

for

distinct

and

sustainable

competitive

advantages

likely

to

lead

to

growth

in

earnings

and/or

share

price.

Competitive

advantages,

such

as

a

particular

product

niche,

proven

technology,

sound

financial

position

and

strong

management,

are

all

factors

we

believe

may

contribute

to

strong

growth

potential.

Manager’s

Discussion

The

semiannual

period

under

review

was

challenging

for

biotechnology

firms

as

the

industry’s

overall

equity

market

selloff

through

July

represented

a

sharp

reversal

from

record

highs,

though

the

losses

were

partially

recouped

in

August

and

September

(before

generally

weakening

again

in

October).

As

the

pace

of

COVID-19

vaccinations

picked

up

worldwide,

investors

increasingly

turned

their

focus

to

reopening

and

an

economic

rebound,

with

many

rotating

out

of

biotechnology

and

pharmaceuticals

and

into

cyclicals,

financials,

energy

and

the

pandemic

recovery

trade.

Furthermore,

a

string

of

high-profile

clinical

trial

failures

and

regulatory

disappointments,

as

well

as

a

resurgence

in

drug-pricing

policy

discussions,

continue

to

weigh

on

the

sector.

That

said,

a

surge

in

merger-and-acquisition

activity

during

the

latter

half

of

the

period

helped

improve

sentiment

somewhat.

In

absolute

terms,

the

Fund

had

mixed

but

overall

negative

returns

across

most

industry

allocations.

Biotechnology

stocks

comprised

a

majority

of

the

portfolio

and

were

responsible

for

the

bulk

of

the

Fund’s

overall

decline.

Pharmaceuticals,

making

up

a

smaller

share

of

the

portfolio,

collectively

posted

a

steeper

six-month

loss

than

the

biotechnology

stocks.

These

declines

were

partially

offset

by

a

modest

overall

gain

in

the

life

sciences

tools

and

services

industry,

which

made

up

less

than

10

percent

of

the

Fund’s

assets.

The

majority

of

the

Fund’s

biotechnology

holdings

suffered

double-digit

percentage

declines

including

key

detractors

such

as

Novavax,

Heron

Therapeutics,

Portfolio

Composition

10/31/21

%

of

Total

Net

Assets

Biotechnology

77.9%

Pharmaceuticals

11.1%

Life

Sciences

Tools

&

Services

6.4%

Capital

Markets

1.8%

Other

1.0%

Short-Term

Investments

&

Other

Net

Assets

1.8%

1.

Source:

Morningstar.

The

indexes

are

unmanaged

and

include

reinvestment

of

any

income

or

distributions.

They

do

not

reflect

any

fees,

expenses

or

sales

charges.

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

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

21

.

Franklin

Biotechnology

Discovery

Fund

5

franklintempleton.com

Semiannual

Report

Iovance

Biotherapeutics,

Amgen,

Fate

Therapeutics,

Deciphera

Pharmaceuticals,

Vertex

Pharmaceuticals,

Apellis

Pharmaceuticals

(purchased

during

the

period)

and

Forte

Biosciences

(not

held

at

period-end).

The

value

of

our

investment

in

Novavax,

which

develops

vaccines

to

prevent

a

wide

range

of

infectious

diseases

including

COVID-19,

shed

considerable

equity

value

during

the

general

biotechnology

selloff

after

surging

to

all-time

highs

earlier

in

2021.

Novavax

reported

outstanding

results

from

phase

3

clinical

trials

for

its

protein-based

COVID-19

vaccine

(NVX-CoV2373).

We

believe

this

positioned

NVX-CoV2373

as

a

potential

best-in-class

vaccine

based

on

similar

efficacy

to

the

messenger-RNA

(mRNA)

vaccines,

probably

better

safety

and

tolerability,

and

far

superior

convenience

(as

it

does

not

need

to

be

frozen).

Since

then,

manufacturing

delays

have

been

a

major

culprit

behind

the

stock’s

decline,

as

some

of

the

company’s

manufacturing

partners

struggled

with

purity

issues

with

the

vaccine

as

they

tried

to

scale

up.

Novavax

also

failed

to

file

for

Emergency

Use

Authorization

(EUA)

from

the

U.S.

Food

and

Drug

Administration

(FDA)

in

the

second

and

third

quarters

of

this

year.

With

each

delay,

the

stock

took

another

hit,

though

Novavax

finally

began

filing

for

EUAs

around

the

world

late

in

the

period.

Longer

term,

there

will

likely

be

an

ongoing

need

for

annual

re-vaccination

to

address

the

durability

of

protection

as

well

as

genetic

drift,

opening

up

what

could

be

a

long

tail

of

revenues

for

vaccine

players

such

as

Novavax.

During

the

summer,

Heron

Therapeutics

released

financial

results

that

undershot

the

company’s

guidance

as

a

modified

version

of

newly

approved

non-opioid

painkiller

ZYNRELEF

was

experiencing

clinical

trial

headwinds

with

the

company

seeking

to

expand

beyond

ZYNRELEF’s

currently

narrow

FDA-approved

label.

ZYNRELEF

is

the

only

local

anesthetic

for

postoperative

pain

designated

by

the

FDA

to

be

extended-release

for

up

to

72

hours

after

surgery,

which

may

help

patients

and

healthcare

providers

reduce

overreliance

on

opioids

but

also

mitigate

exposure

to

their

unwanted

side

effects

and

the

potential

for

long-term

safety

risks

like

opioid

misuse,

abuse

or

addiction.

The

company

believed

it

could

secure

a

broader

label

with

additional

studies,

but

the

narrow

label

will

likely

impact

ZYNRELEF’s

growth

trajectory.

Clinical-stage

cellular

therapy

developer

Iovance

had

two

unrelated

setbacks,

and

the

shares

sold

off

sharply

despite

the

firm’s

highly

successful

clinical

trial

results

with

its

personalized

cell-based

approach.

It

previously

submitted

data

to

the

FDA

about

its

potency

assay

for

lifileucel,

designed

to

treat

metastatic

melanoma

(skin

cancer).

Iovance

received

feedback

and

a

second

request

for

additional

information

from

the

FDA,

prompting

it

to

delay

its

planned

filing

for

approval

from

later

this

year

to

the

first

half

of

2022.

Shortly

thereafter,

the

CEO’s

unexplained

departure

created

additional

uncertainty

around

the

company

in

general

as

investors

speculated

about

whether

she

departed

voluntarily

or

was

forced

out

by

a

disappointed

board

of

directors.

The

majority

of

the

Fund’s

pharmaceuticals

industry

stocks

underwent

corrections

including

key

detractors

Jazz

Pharmaceuticals,

Revance

Therapeutics

and

Athira

Pharma.

In

particular,

Jazz

shed

about

one-fifth

of

its

equity

value,

but

we

still

believed

it

held

strong

potential.

The

company’s

quarterly

earnings

results

came

up

short

on

sales

of

some

key

products,

resulting

in

a

steeper-than-

expected

overall

loss

for

2021’s

second

quarter.

However,

Jazz’s

newest

drugs

were

contributing

to

the

bottom

line

while

the

firm

works

to

unlock

more

growth

opportunities.

Jazz

has

continued

to

make

headway

with

its

long-standing

leadership

in

the

sleep

medicine

market,

as

well

as

a

wave

of

new

additions

to

its

product

line-up

including

the

integration

of

its

recent

acquisition

of

cannabinoid-focused

biotechnology

company

GW

Pharmaceuticals

(which

helped

diversify

Jazz’s

cannabis-derived

medicine

pipeline

into

a

range

of

increasingly

popular

seizure-

and

spasticity-related

therapies).

On

the

upside,

the

declines

outlined

above

were

mitigated

by

solid

rallies

for

a

number

of

individual

holdings.

The

leading

contributors

among

biotechnology

companies

were

Regeneron

Pharmaceuticals,

Moderna,

Horizon

Therapeutics,

Trillium

Therapeutics

(not

held

at

period-

end),

Acceleron

Pharma

(not

held

at

period-end)

and

Mirati

Therapeutics.

Regeneron

was

one

of

the

Fund’s

largest

positions

and

it

continued

to

perform

well

on

multiple

fronts.

The

company

became

a

household

name

last

year

when

their

REGN-COV

monoclonal

antibody

therapy

for

COVID-19

gained

prominence;

this

therapy

contributed

to

exceptionally

strong

revenues

as

it

became

more

widely

available

to

the

public.

Earlier

in

2021,

the

company

partnered

with

Intellia

Therapeutics

(also

a

Fund

holding)

to

deliver

the

first-in-

human

data

to

validate

the

CRISPR-based

gene-editing

approach.

Other

readouts

using

the

approach

have

required

editing

genomes

outside

the

body

and

reintroducing

them

through

infusion.

With

a

few

exceptions,

Regeneron

holds

exclusive

rights

to

Intellia’s

technology

for

diseases

of

the

liver.

Another

standout

product

was

Eyelea,

Regeneron’s

therapy

for

wet

age-related

macular

degeneration.

The

drug

was

responsible

for

a

majority

of

the

of

the

company’s

non-REGN-COV

sales

in

the

first

half

of

2021

and

appeared

to

be

a

dominant

contributor

to

its

bottom

line

through

September

as

well.

Additionally,

Dupixent—Regeneron’s

drug

candidate

for

autoimmune

diseases

with

partner

Sanofi

Franklin

Biotechnology

Discovery

Fund

6

franklintempleton.com

Semiannual

Report

(not

a

Fund

holding)—showed

positive

phase

3

results

for

atopic

dermatitis

in

children.

There

were

at

least

a

dozen

additional

diseases

for

which

Dupixent

was

being

studied.

Moderna

and

Trillium

were

standouts

as

their

equity

values

nearly

doubled

during

the

period.

Moderna

rallied

solidly

alongside

the

expanding

distribution

of

its

COVID-19

treatment.

Moderna’s

mRNA-based

COVID-19

vaccine

continued

to

offer

a

popular

competitive

advantage

over

Pfizer’s

(not

a

Fund

holding)

version

due

to

its

easier

refrigerated

storage

profile

and

increasingly

long

shelf

life

as

the

company

was

working

to

devise

new

and

improved

formulations.

Moderna

continued

to

execute

on

its

COVID-19

vaccine

portfolio

into

the

latter

half

of

the

period

as

it

contended

with

resurgent

demand

given

the

highly

contagious

Delta

variant,

and

the

stock

appeared

to

be

pricing

in

a

considerable

amount

of

recurring

revenue

and

pipeline

progress.

The

shares

also

moved

higher

as

second-

quarter

earnings

came

in

well

above

forecast.

Trillium’s

share

price

bounced

as

it

was

targeted

for

acquisition

by

global

pharma

giant

Pfizer.

Pfizer

announced

an

offer

to

acquire

Trillium—a

developmental-stage,

blood

cancer-focused

biotechnology

company—for

a

large

premium

over

Trillium’s

closing

price

ahead

of

the

deal.

We

think

it

is

a

good

fit

for

Pfizer,

as

they

get

a

CD47-focused

pipeline

(CD47

is

an

immunoglobulin

that

is

overexpressed

on

the

surface

of

many

types

of

cancer

cells)

that

is

potentially

as

efficacious

as—if

not

better

than—Gilead

Sciences’

(also

a

Fund

holding)

magrolimab,

and

for

less

than

half

of

what

Gilead

paid

for

Trillium

rival

Forty

Seven

in

2020.

In

some

ways

the

acquisition

was

not

that

surprising,

given

that

Pfizer

made

a

significant

equity

investment

in

Trillium

last

year.

Trillium’s

anti-CD47

antibodies

are

the

only

ones

to

have

shown

monotherapy

activity

in

lymphoma,

whereas

magrolimab

and

others

are

used

in

combination

with

other

antibodies.

Importantly,

Trillium’s

treatments

are

also

better

tolerated

than

magrolimab

and

other

competitors

since

they

do

not

cause

anemia.

Elsewhere

in

the

portfolio,

absolute

performance

in

the

pharmaceuticals

industry

was

aided

primarily

by

big

rallies

in

Intra-Cellular

Therapies

and

Centessa

Pharmaceuticals.

Intra-Cellular

develops

innovative

treatments

focused

on

neuropsychiatric

and

neurologic

disorders,

while

Centessa—

which

holds

roughly

300

active

patents

in

the

field—is

a

consortium

of

10

separate

single-asset

drug

developers

under

a

deconstructed

research

and

development

operating

model

(creating

an

“asset-centric”

environment)

that

collectively

improves

their

productivity.

Within

the

life

sciences

tools

and

services

space,

the

top

contributors

were

Thermo

Fisher

Scientific

and

Illumina.

Thermo

Fisher

specializes

in

analytical

instruments,

equipment,

reagents

and

consumables,

software

and

services

for

research,

analysis,

discovery,

and

diagnostics.

It

operates

through

the

following

segments:

Life

Sciences

Solutions,

Analytical

Instruments,

Specialty

Diagnostics,

and

Laboratory

Products

and

Services.

Illumina

engages

in

the

development,

manufacturing

and

marketing

of

life

science

tools

and

integrated

systems

for

large-scale

analysis

of

genetic

variation

and

function.

In

particular,

Thermo

Fisher

repeatedly

rallied

to

new

all-time

highs

as

it

beat

consensus

expectations

in

its

second

and

third

quarter

earnings

and

raised

its

full-year

2021

guidance.

The

rally

was

driven

by

better

than

expected

testing

volumes

pertaining

to

the

Delta

variant

and

strong

base

business

growth.

Strength

in

the

base

business

was

fueled

by

pharmaceutical

biotechnology

customers,

and

as

the

company

appeared

to

be

making

progress

in

closing

an

accretive

acquisition

(due

to

close

by

year-end

2021).

Both

2021

and

2022

guidance

were

lifted,

with

2021

raised

from

strong

third-quarter

results

and

2022

raised

from

strength

in

core

business.

According

to

our

analysis,

all

of

Thermo

Fisher’s

end

markets

were

performing

well,

and

it

was

seeing

minimal

supply

chain

disruptions.

Thank

you

for

your

continued

participation

in

Franklin

Biotechnology

Discovery

Fund.

We

look

forward

to

serving

your

future

investment

needs.

Top

10

Holdings

10/31/21

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

Regeneron

Pharmaceuticals,

Inc.

5.6%

Biotechnology,

United

States

Amgen,

Inc.

5.2%

Biotechnology,

United

States

Horizon

Therapeutics

plc

4.6%

Biotechnology,

United

States

Illumina,

Inc.

4.4%

Life

Sciences

Tools

&

Services,

United

States

Gilead

Sciences,

Inc.

4.4%

Biotechnology,

United

States

Moderna

,

Inc.

4.0%

Biotechnology,

United

States

Mirati

Therapeutics,

Inc.

3.6%

Biotechnology,

United

States

Biogen,

Inc.

3.1%

Biotechnology,

United

States

Vertex

Pharmaceuticals,

Inc.

3.0%

Biotechnology,

United

States

Ascendis

Pharma

A/S

3.0%

Biotechnology,

Denmark

Franklin

Biotechnology

Discovery

Fund

7

franklintempleton.com

Semiannual

Report

Evan

McCulloch,

CFA

Lead

Portfolio

Manager

Wendy

Lam,

Ph.D.

Akiva

Felt

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

Biotechnology

Discovery

Fund

8

franklintempleton.com

Semiannual

Report

The

performance

table

does

not

reflect

any

taxes

that

a

shareholder

would

pay

on

Fund

dividends,

capital

gain

distributions,

if

any,

or

any

realized

gains

on

the

sale

of

Fund

shares.

Total

return

reflects

reinvestment

of

the

Fund’s

dividends

and

capital

gain

distributions,

if

any,

and

any

unrealized

gains

or

losses.

Your

dividend

income

will

vary

depending

on

dividends

or

interest

paid

by

securities

in

the

Fund’s

portfolio,

adjusted

for

operating

expenses

of

each

class.

Capital

gain

distributions

are

net

profits

realized

from

the

sale

of

portfolio

securities.

Performance

as

of

10

/3

1

/2

1

1

Cumulative

total

return

excludes

sales

charges.

Average

annual

total

return

includes

maximum

sales

charges.

Sales

charges

will

vary

depending

on

the

size

of

the

investment

and

the

class

of

share

purchased.

The

maximum

is

5.50%

and

the

minimum

is

0%.

Class

A

:

5.50%

maximum

initial

sales

charge;

Advisor

Class:

no

sales

charges.

For

other

share

classes,

visit

franklintempleton.com.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

For

most

recent

month-end

performance,

go

to

franklintempleton.com

or

call

(800)

342-5236

.

Share

Class

Cumulative

Total

Return

2

Average

Annual

Total

Return

3

–

A

4

6-Month

-6.85%

-11.98%

1-Year

+2.84%

-2.82%

5-Year

+64.16%

+9.18%

10-Year

+311.77%

+14.55%

Advisor

6-Month

-6.73%

-6.73%

1-Year

+3.10%

+3.10%

5-Year

+66.23%

+10.70%

10-Year

+322.69%

+15.51%

See

page

9

for

Performance

Summary

footnotes.

Franklin

Biotechnology

Discovery

Fund

Performance

Summary

9

franklintempleton.com

Semiannual

Report

Each

class

of

shares

is

available

to

certain

eligible

investors

and

has

different

annual

fees

and

expenses,

as

described

in

the

prospectus.

All

investments

involve

risks,

including

possible

loss

of

principal.

The

Fund

is

a

nondiversified

fund

that

concentrates

in

a

single

sector,

which

involves

risks

such

as

patent

considerations,

product

liability,

government

regulatory

requirements,

and

regulatory

approval

for

new

drugs

and

medical

products.

Biotechnol-

ogy

companies

often

are

small

and/or

relatively

new.

Smaller

companies

can

be

particularly

sensitive

to

changes

in

economic

conditions

and

have

less

certain

growth

prospects

than

larger,

more

established

companies

and

can

be

volatile,

especially

over

the

short

term.

The

Fund

may

also

invest

in

foreign

companies,

which

involve

special

risks,

including

currency

fluctuations

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

8/31/22.

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.

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.

Total

Annual

Operating

Expenses

5

Share

Class

With

Fee

Waiver

Without

Fee

Waiver

A

0.98%

0.99%

Advisor

0.73%

0.74%

Your

Fund’s

Expenses

Franklin

Biotechnology

Discovery

Fund

10

franklintempleton.com

Semiannual

Report

As

a

Fund

shareholder,

you

can

incur

two

types

of

costs:

(1)

transaction

costs,

including

sales

charges

(loads)

on

Fund

purchases

and

redemptions;

and

(2)

ongoing

Fund

costs,

including

management

fees,

distribution

and

service

(12b-1)

fees,

and

other

Fund

expenses.

All

mutual

funds

have

ongoing

costs,

sometimes

referred

to

as

operating

expenses.

The

table

below

shows

ongoing

costs

of

investing

in

the

Fund

and

can

help

you

understand

these

costs

and

compare

them

with

those

of

other

mutual

funds.

The

table

assumes

a

$1,000

investment

held

for

the

six

months

indicated.

Actual

Fund

Expenses

The

table

below

provides

information

about

actual

account

values

and

actual

expenses

in

the

columns

under

the

heading

“Actual.”

In

these

columns

the

Fund’s

actual

return,

which

includes

the

effect

of

Fund

expenses,

is

used

to

calculate

the

“Ending

Account

Value”

for

each

class

of

shares.

You

can

estimate

the

expenses

you

paid

during

the

period

by

following

these

steps

(

of

course,

your

account

value

and

expenses

will

differ

from

those

in

this

illustration

):

Divide

your

account

value

by

$1,000

(

if

your

account

had

an

$8,600

value,

then

$8,600

÷

$1,000

=

8.6

).

Then

multiply

the

result

by

the

number

in

the

row

for

your

class

of

shares

under

the

headings

“Actual”

and

“Expenses

Paid

During

Period”

(

if

Actual

Expenses

Paid

During

Period

were

$7.50,

then

8.6

x

$7.50

=

$64.50

).

In

this

illustration,

the

actual

expenses

paid

this

period

are

$64.50.

Hypothetical

Example

for

Comparison

with

Other

Funds

Under

the

heading

“Hypothetical”

in

the

table,

information

is

provided

about

hypothetical

account

values

and

hypothetical

expenses

based

on

the

Fund’s

actual

expense

ratio

and

an

assumed

rate

of

return

of

5%

per

year

before

expenses,

which

is

not

the

Fund’s

actual

return.

This

information

may

not

be

used

to

estimate

the

actual

ending

account

balance

or

expenses

you

paid

for

the

period,

but

it

can

help

you

compare

ongoing

costs

of

investing

in

the

Fund

with

those

of

other

funds.

To

do

so,

compare

this

5%

hypothetical

example

for

the

class

of

shares

you

hold

with

the

5%

hypothetical

examples

that

appear

in

the

shareholder

reports

of

other

funds.

Please

note

that

expenses

shown

in

the

table

are

meant

to

highlight

ongoing

costs

and

do

not

reflect

any

transactional

costs.

Therefore,

information

under

the

heading

“Hypothetical”

is

useful

in

comparing

ongoing

costs

only,

and

will

not

help

you

compare

total

costs

of

owning

different

funds.

In

addition,

if

transactional

costs

were

included,

your

total

costs

would

have

been

higher.

1.

Expenses

are

equal

to

the

annualized

expense

ratio

for

the

six-month

period

as

indicated

above—in

the

far

right

column—multiplied

by

the

simple

average

account

value

over

the

period

indicated,

and

then

multiplied

by

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

$931.50

$5.00

$1,020.03

$5.23

1.03%

C

$1,000

$928.00

$8.64

$1,016.24

$9.03

1.78%

R6

$1,000

$933.30

$3.19

$1,021.91

$3.33

0.65%

Advisor

$1,000

$932.70

$3.78

$1,021.29

$3.95

0.78%

11

franklintempleton.com

Semiannual

Report

Franklin

Natural

Resources

Fund

This

semiannual

report

for

Franklin

Natural

Resources

Fund

covers

the

period

ended

October

31

,

2021

.

Your

Fund’s

Goal

and

Main

Investments

The

Fund

seeks

to

provide

high

total

return.

Total

return

consists

of

capital

appreciation

and

current

dividend

and

interest

income.

Under

normal

market

conditions,

the

Fund

invests

at

least

80%

of

its

net

assets

in

equity

and

debt

securities

of

companies

that

own,

produce,

refine,

process,

transport

or

market

natural

resources,

as

well

as

those

that

provide

related

services.

Performance

Overview

The

Fund’s

Class

A

shares

posted

a

+14.94%

cumulative

total

return

for

the

six

months

under

review.

In

comparison,

the

Standard

&

Poor’s

North

American

Natural

Resources

Sector

Index,

which

tracks

companies

involved

in

industries

such

as

mining,

energy,

timber

and

forestry

services,

and

the

production

of

pulp

and

paper,

posted

a

+14.03%

cumulative

total

return.

1

Also

in

comparison,

the

Standard

&

Poor’s

500

Index,

which

is

a

broad

measure

of

the

U.S.

stock

market,

posted

a

+10.91%

cumulative

total

return.

1

Please

note

index

performance

information

is

provided

for

reference

and

we

do

not

attempt

to

track

any

index

but

rather

undertake

investments

on

the

basis

of

fundamental

research.

The

Fund’s

strategy,

which

focuses

on

companies

with

higher

long-term

growth

potential,

differs

from

the

natural

resources

index’s

large

weighting

in

income-oriented

companies

that

we

believe

typically

provide

more

limited

opportunities

for

growth.

This

difference

may

occasionally

lead

to

wide

performance

discrepancies,

especially

in

periods

when

investors

focus

on

short-term

safety

and

yield

or,

conversely,

when

investors

focus

more

heavily

on

companies

with

stronger

growth

prospects

and

greater

commodity

price

leverage.

You

can

find

the

Fund’s

long-term

performance

data

in

the

Performance

Summary

beginning

on

page

14

.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

For

most

recent

month-end

performance,

go

to

franklintempleton.com

or

call

(800)

342-5236

.

Investment

Strategy

We

are

research-driven,

fundamental

investors,

pursuing

a

growth

strategy.

As

bottom-up

investors

focusing

primarily

on

individual

securities,

we

choose

companies

that

have

identifiable

drivers

of

future

earnings

growth

and

that

present,

in

our

opinion,

the

best

trade-off

between

potential

earnings

growth,

business

and

financial

risk,

and

valuation.

Also,

in

seeking

sustainable

growth

characteristics,

we

look

for

companies

that

we

believe

can

produce

sustainable

earnings

growth

and

cash

flow

growth

or

the

potential

to

generate

income.

We

rely

on

a

team

of

analysts

to

help

provide

in-depth

industry

expertise

and

use

both

qualitative

and

quantitative

analysis

to

evaluate

companies

for

distinct

and

sustainable

competitive

advantages

likely

to

lead

to

growth

in

earnings

and/or

share

price.

Competitive

advantages,

such

as

a

particular

product

niche,

proven

technology,

sound

financial

position

and

strong

management,

are

all

factors

we

believe

may

contribute

to

strong

growth

potential.

Sector

Overview

Global

commodity

prices

were

mixed

during

the

six

months

ended

October

31,

2021,

with

energy

prices

increasing

significantly

while

most

metals

declined.

Global

vaccine

progress

aided

economic

recoveries,

and

simultaneous

infrastructure

programs

in

the

U.S.

and

China

supported

demand

for

raw

materials.

However,

some

commodity

prices

were

pressured

by

supply

chain

issues,

which

hindered

factory

output,

and

signs

of

an

economic

slowdown

in

China.

Geographic

Composition

10/31/21

%

of

Total

Net

Assets

North

America

80.6%

Europe

8.6%

Australia

&

New

Zealand

3.1%

Middle East & Africa

1.8%

Latin

America

&

Caribbean

1.6%

Other

0.5%

Short-Term

Investments

&

Other

Net

Assets

3.8%

1.

Source:

Morningstar.

The

indexes

are

unmanaged

and

include

reinvestment

of

any

income

or

distributions.

They

do

not

reflect

any

fees,

expenses

or

sales

charges.

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

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

29

.

Franklin

Natural

Resources

Fund

12

franklintempleton.com

Semiannual

Report

Crude

oil

prices

rose

significantly

during

the

period,

as

global

energy

demand

continued

to

recover

from

pandemic-induced

lows.

Demand

was

boosted

by

increased

economic

activity

and

a

natural

gas

shortage,

which

led

power

suppliers

to

turn

to

petroleum

products

to

fill

the

gap.

Oil

prices

were

also

pushed

upward

by

low

supply

caused

by

multiple

factors:

purposeful

production

curtailments

by

the

Organization

of

the

Petroleum

Exporting

Countries

(OPEC)

and

certain

non-

members,

low

levels

of

capital

spending

by

U.S.

exploration

and

production

companies,

and

hurricanes

disrupting

extraction

in

the

Gulf

of

Mexico.

U.S.

natural

gas

prices

nearly

doubled

during

the

period.

Heat

waves

in

the

Western

U.S.

increased

demand

for

air

conditioning

and

droughts

in

the

U.S.

and

South

America

limited

production

of

hydroelectric

power,

which

put

more

demand

on

natural

gas-fired

power

plants.

Inventories

in

the

U.S.

ended

the

period

significantly

lower

than

in

the

prior

year,

though

by

the

end

of

October

production

was

above

pre-pandemic

levels

and

the

inventory

deficit

compared

to

historical

averages

had

diminished.

Gold

prices

ended

the

period

slightly

above

where

they

began.

Inflationary

fears

and

demand

for

gold

were

mostly

offset

by

signs

that

central

banks

could

tighten

monetary

policies

along

with

investor

preferences

for

equities

and

cryptocurrencies.

Silver

prices

fell

due

to

decreased

industrial

demand

and

the

aforementioned

potential

tightening

of

central

bank

policies.

Decreased

industrial

demand,

including

reduced

auto

production,

also

sent

platinum

and

palladium

prices

down

significantly,

though

both

remained

above

pre-pandemic

levels.

Industrial

metals

prices

declined

during

the

period.

Copper

prices

fell

modestly,

largely

due

to

the

Chinese

government

releasing

state

reserves

of

the

metal

in

an

effort

to

tamp

down

commodity

prices

and

support

the

country’s

manufacturing

sector,

which

in

September

2021

contracted

for

the

first

time

since

the

start

of

the

pandemic.

The

price

of

iron

ore

fell

significantly,

suffering

its

worst

ever

quarterly

decline

in

2021’s

third

quarter.

Prices

were

hurt

by

the

Chinese

government’s

decision

to

reduce

steel

production

in

an

effort

to

moderate

iron

prices

and

curb

pollution

along

with

a

crackdown

on

speculative

property

development,

which

was

likely

to

reduce

construction

activity,

a

key

source

of

demand

for

the

metal.

Manager’s

Discussion

Natural

resources

equities

rose

during

the

period,

though

performance

varied

greatly

among

different

industries.

Energy

equities

were

boosted

by

rising

oil

prices,

which

were

supported

by

increased

global

vaccination

rates,

economic

reopenings

and

supply

curtailments

by

OPEC

and

non-OPEC

members.

Rising

natural

gas

prices

also

helped

energy

equities,

though

the

use

of

long-term

contracts

for

most

sales

in

Europe

and

Asia

somewhat

dampened

this

effect.

Besides

increased

commodity

prices,

energy

stocks

benefited

from

companies’

disciplined

spending

practices

and

a

return

of

cash

to

shareholders

through

dividends

and

share

repurchases.

The

performance

of

metals-related

equities

lagged

those

in

the

energy

sector.

Gold

stocks

fell

during

the

period,

and

iron

ore-related

equities

were

hurt

by

China’s

efforts

to

tamp

down

commodity

prices,

reduce

emissions

through

production

curtailment

and

crack

down

on

excesses

in

the

real

estate

sector.

Mining

equities

were

also

hurt

by

rising

nationalism

in

Chile

and

Peru

and

the

specter

of

higher

duties

and

taxes

for

select

copper

producers.

In

this

environment,

overweightings

and

stock

selection

in

oil

and

gas

exploration

and

production

(E&P)

and

oil

and

gas

equipment

and

services

contributed

to

the

Fund’s

relative

performance.

In

E&P,

Devon

Energy

and

Coterra

Energy

were

significant

contributors,

while

Ranger

Energy

Services

helped

performance

in

equipment

and

services.

An

off-benchmark

position

in

electric

car

manufacturer

Lucid

Group,

the

Fund’s

only

holding

in

the

automobile

manufacturers

industry,

helped

relative

performance.

Lucid

has

plans

to

build

a

network

of

charging

stations,

and

the

company

was

purchased

through

a

private

SPAC

offering

during

the

period.

This

holding

and

others

tied

to

electrification

and

low

carbon

fuels

fall

under

the

energy

transition

theme

where

we

have

been

seeking

to

increase

exposure.

Portfolio

Composition

10/31/21

%

of

Total

Net

Assets

Oil

&

Gas

Exploration

&

Production

22.3%

Integrated

Oil

&

Gas

16.9%

Oil

&

Gas

Equipment

&

Services

10.7%

Gold

7.2%

Oil

&

Gas

Storage

&

Transportation

6.8%

Oil

&

Gas

Refining

&

Marketing

5.7%

Copper

5.0%

Diversified

Metals

&

Mining

4.3%

Industrial

Gases

2.8%

Electrical

Components

&

Equipment

1.9%

Automobile

Manufacturers

1.9%

Fertilizers

&

Agricultural

Chemicals

1.4%

Agricultural

Products

1.0%

Construction

Materials

1.0%

Other

7.3%

Short-Term

Investments

&

Other

Net

Assets

3.8%

Franklin

Natural

Resources

Fund

13

franklintempleton.com

Semiannual

Report

Underweightings

and

stock

selection

in

paper

packaging

and

metal

and

glass

containers,

both

consumer-facing

industries,

also

helped

relative

performance.

Gold

equities

detracted

on

an

absolute

basis,

but

our

underweighted

position

in

the

industry

contributed

to

relative

performance.

Turning

to

relative

detractors,

stock

selection

and

an

overweighting

in

copper

and

stock

selection

in

diversified

metals

and

mining

hurt

relative

performance.

Copper

holdings

were

hurt

by

off-benchmark

positions

in

Chile-

based

miners

Antofagasta

and

Lundin

Mining,

which

could

be

negatively

impacted

by

political

shifts

in

Chile.

In

diversified

metals,

off-benchmark

positions

in

iron

ore

miners

BHP

Group

and

Rio

Tinto

were

negatively

impacted

by

falling

iron

ore

prices.

Relative

performance

was

also

hurt

by

the

Fund’s

cash

position,

which

was

somewhat

elevated

during

the

period

as

we

reduced

holdings

in

mining

equities

to

limit

exposure

during

challenging

times

for

the

industry.

Several

renewable

energy-related

industries

in

which

the

Fund

held

single,

off-benchmark

stocks

also

hurt

relative

performance.

Individual

detractors

included

wind

blade

manufacturer

TPI

Composites,

solar

financier

Sunlight

Financial

Holdings

(not

held

at

period-end)

and

electric

vehicle

bus

manufacturer

Proterra,

all

of

which

were

hurt

by

delays

in

passage

of

the

bipartisan

infrastructure

bill

and

partisan

reconciliation

bill,

and

the

eventual

downsizing

of

the

latter.

Thank

you

for

your

continued

participation

in

Franklin

Natural

Resources

Fund.

We

look

forward

to

serving

your

future

investment

needs.

Frederick

G.

Fromm,

CFA

Lead

Portfolio

Manager

Matthew

J.

Adams,

CFA

Stephen

M.

Land,

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.

Top

10

Holdings

10/31/21

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

Chevron

Corp.

4.6%

Oil,

Gas

&

Consumable

Fuels,

United

States

ConocoPhillips

4.3%

Oil,

Gas

&

Consumable

Fuels,

United

States

Exxon

Mobil

Corp.

3.5%

Oil,

Gas

&

Consumable

Fuels,

United

States

EOG

Resources,

Inc.

3.5%

Oil,

Gas

&

Consumable

Fuels,

United

States

Suncor

Energy,

Inc.

3.4%

Oil,

Gas

&

Consumable

Fuels,

Canada

Devon

Energy

Corp.

3.3%

Oil,

Gas

&

Consumable

Fuels,

United

States

Coterra

Energy,

Inc.

2.8%

Oil,

Gas

&

Consumable

Fuels,

United

States

Pioneer

Natural

Resources

Co.

2.6%

Oil,

Gas

&

Consumable

Fuels,

United

States

Canadian

Natural

Resources

Ltd.

2.5%

Oil,

Gas

&

Consumable

Fuels,

Canada

Marathon

Petroleum

Corp.

2.3%

Oil,

Gas

&

Consumable

Fuels,

United

States

Performance

Summary

as

of

October

31,

2021

Franklin

Natural

Resources

Fund

14

franklintempleton.com

Semiannual

Report

The

performance

table

does

not

reflect

any

taxes

that

a

shareholder

would

pay

on

Fund

dividends,

capital

gain

distributions,

if

any,

or

any

realized

gains

on

the

sale

of

Fund

shares.

Total

return

reflects

reinvestment

of

the

Fund’s

dividends

and

capital

gain

distributions,

if

any,

and

any

unrealized

gains

or

losses.

Your

dividend

income

will

vary

depending

on

dividends

or

interest

paid

by

securities

in

the

Fund’s

portfolio,

adjusted

for

operating

expenses

of

each

class.

Capital

gain

distributions

are

net

profits

realized

from

the

sale

of

portfolio

securities.

Performance

as

of

10

/3

1

/2

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

1

Average

Annual

Total

Return

2

–

A

3

6-Month

+14.94%

+8.59%

1-Year

+81.43%

+71.39%

5-Year

+0.08%

-1.11%

10-Year

-29.64%

-4.00%

Advisor

6-Month

+15.07%

+15.07%

1-Year

+81.94%

+81.94%

5-Year

+1.32%

+0.26%

10-Year

-27.74%

-3.20%

See

page

15

for

Performance

Summary

footnotes.

Franklin

Natural

Resources

Fund

Performance

Summary

15

franklintempleton.com

Semiannual

Report

Each

class

of

shares

is

available

to

certain

eligible

investors

and

has

different

annual

fees

and

expenses,

as

described

in

the

prospectus.

All

investments

involve

risks,

including

possible

loss

of

principal.

Investing

in

a

fund

concentrating

in

the

natural

resources

sector

involves

special

risks,

includ-

ing

increased

susceptibility

to

adverse

economic

and

regulatory

developments

affecting

the

sector.

Growth

stock

prices

may

fall

dramatically

if

the

company

fails

to

meet

projections

of

earnings

or

revenue;

their

prices

may

be

more

volatile

than

other

securities,

particularly

over

the

short

term.

Smaller

companies

can

be

particularly

sensitive

to

changes

in

economic

conditions

and

have

less

certain

growth

prospects

than

larger,

more

established

companies

and

can

be

volatile,

especially

over

the

short

term.

The

Fund

may

also

invest

in

foreign

companies,

which

involve

special

risks,

including

currency

fluctuations

and

political

uncertainty.

Events

such

as

the

spread

of

deadly

diseases,

disasters,

and

financial,

political

or

social

disruptions,

may

heighten

risks

and

adversely

affect

perfor-

mance.

The

Fund’s

prospectus

also

includes

a

description

of

the

main

investment

risks.

1.

Cumulative

total

return

represents

the

change

in

value

of

an

investment

over

the

periods

indicated.

2.

Average

annual

total

return

represents

the

average

annual

change

in

value

of

an

investment

over

the

periods

indicated.

Return

for

less

than

one

year,

if

any,

has

not

been

annualized.

3.

Prior

to

9/10/18,

these

shares

were

offered

at

a

higher

initial

sales

charge

of

5.75%,

thus

actual

returns

(with

sales

charges)

would

have

differed.

Average

annual

total

returns

(with

sales

charges)

have

been

restated

to

reflect

the

current

maximum

initial

sales

charge

of

5.50%.

4.

Figures

are

as

stated

in

the

Fund’s

current

prospectus

and

may

differ

from

the

expense

ratios

disclosed

in

the

Your

Fund’s

Expenses

and

Financial

Highlights

sections

in

this

report.

In

periods

of

market

volatility,

assets

may

decline

significantly,

causing

total

annual

Fund

operating

expenses

to

become

higher

than

the

figures

shown.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

Total

Annual

Operating

Expenses

4

Share

Class

A

1.25%

Advisor

1.00%

Your

Fund’s

Expenses

Franklin

Natural

Resources

Fund

16

franklintempleton.com

Semiannual

Report

As

a

Fund

shareholder,

you

can

incur

two

types

of

costs:

(1)

transaction

costs,

including

sales

charges

(loads)

on

Fund

purchases

and

redemptions;

and

(2)

ongoing

Fund

costs,

including

management

fees,

distribution

and

service

(12b-1)

fees,

and

other

Fund

expenses.

All

mutual

funds

have

ongoing

costs,

sometimes

referred

to

as

operating

expenses.

The

table

below

shows

ongoing

costs

of

investing

in

the

Fund

and

can

help

you

understand

these

costs

and

compare

them

with

those

of

other

mutual

funds.

The

table

assumes

a

$1,000

investment

held

for

the

six

months

indicated.

Actual

Fund

Expenses

The

table

below

provides

information

about

actual

account

values

and

actual

expenses

in

the

columns

under

the

heading

“Actual.”

In

these

columns

the

Fund’s

actual

return,

which

includes

the

effect

of

Fund

expenses,

is

used

to

calculate

the

“Ending

Account

Value”

for

each

class

of

shares.

You

can

estimate

the

expenses

you

paid

during

the

period

by

following

these

steps

(

of

course,

your

account

value

and

expenses

will

differ

from

those

in

this

illustration

):

Divide

your

account

value

by

$1,000

(

if

your

account

had

an

$8,600

value,

then

$8,600

÷

$1,000

=

8.6

).

Then

multiply

the

result

by

the

number

in

the

row

for

your

class

of

shares

under

the

headings

“Actual”

and

“Expenses

Paid

During

Period”

(

if

Actual

Expenses

Paid

During

Period

were

$7.50,

then

8.6

x

$7.50

=

$64.50

).

In

this

illustration,

the

actual

expenses

paid

this

period

are

$64.50.

Hypothetical

Example

for

Comparison

with

Other

Funds

Under

the

heading

“Hypothetical”

in

the

table,

information

is

provided

about

hypothetical

account

values

and

hypothetical

expenses

based

on

the

Fund’s

actual

expense

ratio

and

an

assumed

rate

of

return

of

5%

per

year

before

expenses,

which

is

not

the

Fund’s

actual

return.

This

information

may

not

be

used

to

estimate

the

actual

ending

account

balance

or

expenses

you

paid

for

the

period,

but

it

can

help

you

compare

ongoing

costs

of

investing

in

the

Fund

with

those

of

other

funds.

To

do

so,

compare

this

5%

hypothetical

example

for

the

class

of

shares

you

hold

with

the

5%

hypothetical

examples

that

appear

in

the

shareholder

reports

of

other

funds.

Please

note

that

expenses

shown

in

the

table

are

meant

to

highlight

ongoing

costs

and

do

not

reflect

any

transactional

costs.

Therefore,

information

under

the

heading

“Hypothetical”

is

useful

in

comparing

ongoing

costs

only,

and

will

not

help

you

compare

total

costs

of

owning

different

funds.

In

addition,

if

transactional

costs

were

included,

your

total

costs

would

have

been

higher.

1.

Expenses

are

equal

to

the

annualized

expense

ratio

for

the

six-month

period

as

indicated

above—in

the

far

right

column—multiplied

by

the

simple

average

account

value

over

the

period

indicated,

and

then

multiplied

by

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

$1,149.40

$6.27

$1,019.37

$5.89

1.16%

C

$1,000

$1,145.00

$10.32

$1,015.58

$9.70

1.91%

R6

$1,000

$1,152.00

$3.70

$1,021.77

$3.47

0.68%

Advisor

$1,000

$1,150.70

$4.93

$1,020.62

$4.63

0.91%

Franklin

Strategic

Series

Financial

Highlights

Franklin

Biotechnology

Discovery

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

17

.

a

Six

Months

Ended

October

31,

2021

(unaudited)

Year

Ended

April

30,

2021

2020

2019

2018

2017

Class

A

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$163.50

$150.48

$138.85

$146.14

$147.22

$128.19

Income

from

investment

operations

a

:

Net

investment

(loss)

b

..............

(0.46)

(0.99)

(0.69)

(0.99)

(0.80)

(0.79)

Net

realized

and

unrealized

gains

(losses)

(10.74)

38.85

26.48

(1.75)

3.32

25.75

Total

from

investment

operations

........

(11.20)

37.86

25.79

(2.74)

2.52

24.96

Less

distributions

from:

Net

investment

income

..............

—

—

—

—

—

(1.73)

Net

realized

gains

.................

—

(24.84)

(14.16)

(4.55)

(3.60)

(4.20)

Total

distributions

...................

—

(24.84)

(14.16)

(4.55)

(3.60)

(5.93)

Net

asset

value,

end

of

period

..........

$152.30

$163.50

$150.48

$138.85

$146.14

$147.22

Total

return

c

.......................

(6.85)%

24.26%

18.52%

(1.60)%

1.69%

20.02%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

..........................

1.03%

0.98%

1.03%

1.02%

1.05%

1.04%

Expenses

net

of

waiver

and

payments

by

affiliates

..........................

1.03%

e

0.97%

f

1.01%

f

1.00%

f

1.03%

f

1.02%

f

Net

investment

(loss)

................

(0.58)%

(0.58)%

(0.49)%

(0.67)%

(0.53)%

(0.58)%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$1,029,448

$1,160,451

$960,305

$924,611

$1,081,883

$1,176,687

Portfolio

turnover

rate

................

14.49%

47.30%

32.92%

28.62%

26.95%

34.12%

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

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable,

and

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Strategic

Series

Financial

Highlights

Franklin

Biotechnology

Discovery

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

18

a

Six

Months

Ended

October

31,

2021

(unaudited)

Year

Ended

April

30,

2021

2020

2019

2018

2017

Class

C

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$152.95

$143.00

$133.51

$141.75

$143.98

$125.99

Income

from

investment

operations

a

:

Net

investment

(loss)

b

..............

(0.99)

(2.16)

(1.70)

(2.03)

(1.90)

(1.81)

Net

realized

and

unrealized

gains

(losses)

(10.02)

36.95

25.35

(1.66)

3.27

25.29

Total

from

investment

operations

........

(11.01)

34.79

23.65

(3.69)

1.37

23.48

Less

distributions

from:

Net

investment

income

..............

—

—

—

—

—

(1.29)

Net

realized

gains

.................

—

(24.84)

(14.16)

(4.55)

(3.60)

(4.20)

Total

distributions

...................

—

(24.84)

(14.16)

(4.55)

(3.60)

(5.49)

Net

asset

value,

end

of

period

..........

$141.94

$152.95

$143.00

$133.51

$141.75

$143.98

Total

return

c

.......................

(7.20)%

23.33%

17.62%

(2.33)%

0.93%

19.14%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

..........................

1.78%

1.73%

1.78%

1.77%

1.80%

1.79%

Expenses

net

of

waiver

and

payments

by

affiliates

..........................

1.78%

e

1.72%

f

1.76%

f

1.75%

f

1.78%

f

1.77%

f

Net

investment

(loss)

................

(1.33)%

(1.32)%

(1.24)%

(1.42)%

(1.28)%

(1.33)%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$50,889

$64,801

$48,363

$46,508

$58,433

$53,935

Portfolio

turnover

rate

................

14.49%

47.30%

32.92%

28.62%

26.95%

34.12%

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

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable,

and

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Strategic

Series

Financial

Highlights

Franklin

Biotechnology

Discovery

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

19

a

Six

Months

Ended

October

31,

2021

(unaudited)

Year

Ended

April

30,

2021

2020

2019

2018

2017

Class

R6

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$172.21

$156.99

$143.83

$150.65

$151.03

$131.37

Income

from

investment

operations

a

:

Net

investment

(loss)

b

..............

(0.17)

(0.45)

(0.18)

(0.46)

(0.17)

(0.25)

Net

realized

and

unrealized

gains

(losses)

(11.32)

40.51

27.50

(1.81)

3.39

26.41

Total

from

investment

operations

........

(11.49)

40.06

27.32

(2.27)

3.22

26.16

Less

distributions

from:

Net

investment

income

..............

—

—

—

—

—

(2.30)

Net

realized

gains

.................

—

(24.84)

(14.16)

(4.55)

(3.60)

(4.20)

Total

distributions

...................

—

(24.84)

(14.16)

(4.55)

(3.60)

(6.50)

Net

asset

value,

end

of

period

..........

$160.72

$172.21

$156.99

$143.83

$150.65

$151.03

Total

return

c

.......................

(6.67)%

24.67%

18.95%

(1.24)%

2.11%

20.50%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

..........................

0.74%

0.71%

0.74%

0.70%

0.65%

0.63%

Expenses

net

of

waiver

and

payments

by

affiliates

..........................

0.65%

0.64

%

e

0.64%

e

0.63%

e

0.61%

e

0.61%

e

Net

investment

(loss)

................

(0.21)%

(0.25)%

(0.12)%

(0.30)%

(0.11)%

(0.17)%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$15,481

$16,721

$9,484

$6,164

$8,307

$8,891

Portfolio

turnover

rate

................

14.49%

47.30%

32.92%

28.62%

26.95%

34.12%

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

Total

return

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Strategic

Series

Financial

Highlights

Franklin

Biotechnology

Discovery

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

20

a

Six

Months

Ended

October

31,

2021

(unaudited)

Year

Ended

April

30,

2021

2020

2019

2018

2017

Advisor

Class

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$169.95

$155.30

$142.56

$149.54

$150.20

$130.67

Income

from

investment

operations

a

:

Net

investment

(loss)

b

..............

(0.27)

(0.59)

(0.34)

(0.63)

(0.45)

(0.46)

Net

realized

and

unrealized

gains

(losses)

(11.17)

40.08

27.24

(1.80)

3.39

26.27

Total

from

investment

operations

........

(11.44)

39.49

26.90

(2.43)

2.94

25.81

Less

distributions

from:

Net

investment

income

..............

—

—

—

—

—

(2.08)

Net

realized

gains

.................

—

(24.84)

(14.16)

(4.55)

(3.60)

(4.20)

Total

distributions

...................

—

(24.84)

(14.16)

(4.55)

(3.60)

(6.28)

Net

asset

value,

end

of

period

..........

$158.51

$169.95

$155.30

$142.56

$149.54

$150.20

Total

return

c

.......................

(6.73)%

24.56%

18.82%

(1.36)%

1.94%

20.32%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

..........................

0.78%

0.73%

0.78%

0.77%

0.80%

0.79%

Expenses

net

of

waiver

and

payments

by

affiliates

..........................

0.78%

e

0.72%

f

0.76%

f

0.75%

f

0.78%

f

0.77%

f

Net

investment

(loss)

................

(0.33)%

(0.33)%

(0.24)%

(0.42)%

(0.28)%

(0.33)%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$172,476

$206,375

$159,348

$153,874

$180,219

$159,894

Portfolio

turnover

rate

................

14.49%

47.30%

32.92%

28.62%

26.95%

34.12%

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

Total

return

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Strategic

Series

Statement

of

Investments

(unaudited),

October

31,

2021

Franklin

Biotechnology

Discovery

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

21

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

97.4%

Biotechnology

77.5%

a

89bio,

Inc.

...........................................

United

States

284,400

$

5,005,440

a,b

Acumen

Pharmaceuticals,

Inc.

...........................

United

States

336,100

4,722,205

a,b

Adagio

Therapeutics,

Inc.

...............................

United

States

176,800

5,169,632

a

Akouos

,

Inc.

.........................................

United

States

157,600

1,468,832

a

Albireo

Pharma,

Inc.

...................................

United

States

102,400

2,992,128

a

Alector

,

Inc.

..........................................

United

States

488,545

10,620,968

a

Alnylam

Pharmaceuticals,

Inc.

............................

United

States

6,603

1,053,575

a

ALX

Oncology

Holdings,

Inc.

.............................

United

States

86,100

4,825,044

Amgen,

Inc.

.........................................

United

States

318,700

65,961,339

a

Apellis

Pharmaceuticals,

Inc.

.............................

United

States

30,358

933,205

a

Applied

Molecular

Transport,

Inc.

.........................

United

States

138,000

3,107,760

a

Applied

Therapeutics,

Inc.

...............................

United

States

384,957

5,647,319

a

Arcus

Biosciences,

Inc.

.................................

United

States

519,014

17,355,828

a

Arcutis

Biotherapeutics

,

Inc.

.............................

United

States

125,200

2,651,736

a

Argenx

SE,

ADR

......................................

Netherlands

51,298

15,489,944

a

Ascendis

Pharma

A/S,

ADR

.............................

Denmark

248,400

37,659,924

a

Biogen,

Inc.

.........................................

United

States

148,175

39,515,309

a

BioMarin

Pharmaceutical,

Inc.

............................

United

States

142,456

11,286,789

a

BioNTech

SE,

ADR

....................................

Germany

13,310

3,709,896

a

Blueprint

Medicines

Corp.

...............................

United

States

90,874

10,222,416

a

Bridgebio

Pharma,

Inc.

.................................

United

States

118,800

5,866,344

a,b

Candel

Therapeutics,

Inc.

...............................

United

States

400,800

4,500,984

a,c,d

Centessa

Pharmaceuticals

plc

...........................

United

States

189,736

3,137,302

a

Centessa

Pharmaceuticals

plc,

ADR

.......................

United

States

71,600

1,231,520

a

Codiak

Biosciences,

Inc.

................................

United

States

123,288

1,776,580

a

CRISPR

Therapeutics

AG

...............................

Switzerland

130,614

11,928,977

a

Cullinan

Oncology,

Inc.

.................................

United

States

113,700

2,526,414

a

Cytokinetics,

Inc.

......................................

United

States

254,100

8,870,631

a,c,d

Day

One

Biopharmaceuticals,

Inc.

.........................

United

States

370,698

8,669,167

a

Deciphera

Pharmaceuticals,

Inc.

..........................

United

States

835,318

27,891,268

a

Dyne

Therapeutics,

Inc.

................................

United

States

215,539

3,127,471

a,b

Equillium

,

Inc.

........................................

United

States

294,800

1,860,188

a

Exscientia

plc,

ADR

....................................

United

Kingdom

44,600

989,674

a

Fate

Therapeutics,

Inc.

.................................

United

States

242,110

13,025,518

a,b

Gemini

Therapeutics,

Inc.

...............................

United

States

895,889

3,404,378

Gilead

Sciences,

Inc.

..................................

United

States

858,713

55,713,299

a

Harpoon

Therapeutics,

Inc.

..............................

United

States

220,200

1,378,452

a

Heron

Therapeutics,

Inc.

................................

United

States

1,739,677

19,153,844

a

Horizon

Therapeutics

plc

................................

United

States

488,349

58,557,929

a

Insmed

,

Inc.

.........................................

United

States

906,600

27,333,990

a,c,d

Intarcia

Therapeutics,

Inc.,

DD

...........................

United

States

80,195

—

a

Intellia

Therapeutics,

Inc.

................................

United

States

121,053

16,097,628

a

Iovance

Biotherapeutics

,

Inc.

.............................

United

States

1,395,901

33,934,353

a

IVERIC

bio,

Inc.

......................................

United

States

419,108

7,418,212

a

KalVista

Pharmaceuticals,

Inc.

...........................

United

States

165,600

2,977,488

a

Karuna

Therapeutics,

Inc.

...............................

United

States

42,300

5,938,074

a

Keros

Therapeutics,

Inc.

................................

United

States

148,751

6,205,892

a

Kezar

Life

Sciences,

Inc.

................................

United

States

853,550

6,828,400

a

Kodiak

Sciences,

Inc.

..................................

United

States

77,300

9,051,057

a,b

Kronos

Bio,

Inc.

......................................

United

States

167,371

2,754,927

a

Krystal

Biotech,

Inc.

...................................

United

States

62,400

3,125,616

a

Kura

Oncology,

Inc.

....................................

United

States

132,400

2,174,008

a

Legend

Biotech

Corp.,

ADR

.............................

United

States

159,125

8,354,062

a,b

LogicBio

Therapeutics,

Inc.

..............................

United

States

661,200

2,413,380

a

Merus

NV

...........................................

Netherlands

73,200

2,053,260

a

Mirati

Therapeutics,

Inc.

................................

United

States

243,619

46,048,863

a

Moderna

,

Inc.

........................................

United

States

146,015

50,405,838

a

Neurocrine

Biosciences,

Inc.

.............................

United

States

215,800

22,747,478

Franklin

Strategic

Series

Statement

of

Investments

(unaudited)

Franklin

Biotechnology

Discovery

Fund

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

22

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Biotechnology

(continued)

a

Novavax

,

Inc.

........................................

United

States

160,438

$

23,877,988

a,b

Point

Biopharma

Global,

Inc.

.............................

United

States

429,800

3,429,804

a

Praxis

Precision

Medicines,

Inc.

..........................

United

States

103,600

2,154,880

a,b

Prometheus

Biosciences,

Inc.

............................

United

States

207,500

6,610,950

a

PTC

Therapeutics,

Inc.

.................................

United

States

799,400

30,321,242

a

Regeneron

Pharmaceuticals,

Inc.

.........................

United

States

110,958

71,006,463

a,b

Reneo

Pharmaceuticals,

Inc.

.............................

United

States

174,986

1,147,908

a,b

Repare

Therapeutics,

Inc.

...............................

Canada

106,400

2,661,064

a

Rocket

Pharmaceuticals,

Inc.

............................

United

States

375,771

11,164,156

a

Sage

Therapeutics,

Inc.

................................

United

States

101,070

4,079,185

a

Scholar

Rock

Holding

Corp.

.............................

United

States

41,500

1,091,450

a

Sutro

Biopharma,

Inc.

..................................

United

States

669,974

13,506,676

a,b

Taysha

Gene

Therapies,

Inc.

.............................

United

States

304,256

4,758,564

a

Ultragenyx

Pharmaceutical,

Inc.

..........................

United

States

83,996

7,048,944

a

Vertex

Pharmaceuticals,

Inc.

.............................

United

States

205,416

37,987,581

a

Viridian

Therapeutics,

Inc.

...............................

United

States

213,700

3,867,970

a,b

VistaGen

Therapeutics,

Inc.

.............................

United

States

3,617,653

8,284,425

a,b

Yumanity

Therapeutics,

Inc.

.............................

United

States

90,804

830,857

a

Zymeworks

,

Inc.

......................................

Canada

471,320

10,486,870

983,188,732

Capital

Markets

1.8%

a,d,e

CM

Life

Sciences

III,

Inc.,

A

..............................

United

States

708,600

7,064,742

a

FS

Development

Corp.

II,

A

..............................

United

States

164,600

1,665,752

a

Health

Sciences

Acquisitions

Corp.

2

.......................

United

States

171,600

1,691,976

a

Jiya

Acquisition

Corp.,

A

................................

United

States

208,800

2,046,240

a

Omega

Alpha

SPAC,

A

.................................

United

States

294,400

2,876,288

a

Panacea

Acquisition

Corp.

II,

A

...........................

United

States

195,100

1,906,127

a

Social

Capital

Suvretta

Holdings

Corp.

I,

A

...................

United

States

143,000

1,418,560

a

Social

Capital

Suvretta

Holdings

Corp.

II,

A

..................

United

States

143,000

1,418,560

a,b

Social

Capital

Suvretta

Holdings

Corp.

III,

A

..................

United

States

143,000

1,415,700

a

Social

Capital

Suvretta

Holdings

Corp.

IV,

A

..................

United

States

143,000

1,412,840

22,916,785

Health

Care

Providers

&

Services

0.7%

a

Guardant

Health,

Inc.

..................................

United

States

79,466

9,280,834

Life

Sciences

Tools

&

Services

6.4%

a

Alpha

Teknova

,

Inc.

....................................

United

States

64,404

1,480,648

a

Illumina,

Inc.

.........................................

United

States

135,900

56,406,654

a,b

Nautilus

Biotechnology,

Inc.

..............................

United

States

628,100

3,354,054

Thermo

Fisher

Scientific,

Inc.

............................

United

States

31,300

19,815,091

81,056,447

Pharmaceuticals

11.0%

a,b

Angion

Biomedica

Corp.

................................

United

States

256,000

1,067,520

AstraZeneca

plc,

ADR

..................................

United

Kingdom

309,900

19,331,562

a

Athira

Pharma,

Inc.

....................................

United

States

779,576

10,189,058

a,b

EyePoint

Pharmaceuticals,

Inc.

...........................

United

States

836,730

9,597,293

a

Intra-Cellular

Therapies,

Inc.

.............................

United

States

487,600

21,000,932

a

Jazz

Pharmaceuticals

plc

...............................

United

States

222,400

29,588,096

a

Marinus

Pharmaceuticals,

Inc.

............................

United

States

149,200

1,715,800

a

Pliant

Therapeutics,

Inc.

................................

United

States

149,100

2,375,163

a

Reata

Pharmaceuticals,

Inc.,

A

...........................

United

States

215,756

20,714,734

a

Relmada

Therapeutics,

Inc.

..............................

United

States

91,266

2,142,013

a

Revance

Therapeutics,

Inc.

..............................

United

States

275,500

3,788,125

Franklin

Strategic

Series

Statement

of

Investments

(unaudited)

Franklin

Biotechnology

Discovery

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

23

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Pharmaceuticals

(continued)

a

Zogenix

,

Inc.

.........................................

United

States

1,144,759

$

17,549,155

139,059,451

Total

Common

Stocks

(Cost

$818,485,462)

.....................................

1,235,502,249

Preferred

Stocks

0.5%

Biotechnology

0.4%

a,c,d

Amunix

Pharmaceuticals,

Inc.,

B

..........................

United

States

2,333,755

3,365,410

a,c,d

Pipeline

Therapeutics,

Inc.,

C

............................

United

States

779,505

1,511,820

4,877,230

Health

Care

Providers

&

Services

0.1%

a,c,d,f

Artiva

Biotherapeutics

,

Inc.,

B

............................

United

States

189,499

1,604,904

a

Total

Preferred

Stocks

(Cost

$8,298,863)

.......................................

6,482,134

Warrants

Warrants

0.1%

Pharmaceuticals

0.1%

a

Nuvation

Bio,

Inc.,

7/07/27

..............................

United

States

115,266

289,318

Total

Warrants

(Cost

$—)

.....................................................

289,318

Principal

Amount

*

Corporate

Bonds

0.2%

Software

0.2%

c,d

HilleVax

,

Inc.

,

6

%

,

8/31/22

...............................

United

States

2,652,900

2,652,900

Total

Corporate

Bonds

(Cost

$2,652,900)

.......................................

2,652,900

Total

Long

Term

Investments

(Cost

$829,437,225)

...............................

1,244,926,601

a

Short

Term

Investments

3.6%

a

a

Country

Shares

a

Value

a

Money

Market

Funds

2.4%

g,h

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

30,877,144

30,877,144

Total

Money

Market

Funds

(Cost

$30,877,144)

..................................

30,877,144

Franklin

Strategic

Series

Statement

of

Investments

(unaudited)

Franklin

Biotechnology

Discovery

Fund

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

24

Short

Term

Investments

(continued)

a

a

Country

Shares

a

Value

a

a

a

a

a

a

i

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

1.2%

Money

Market

Funds

1.2%

g,h

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

14,818,088

$

14,818,088

Total

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

(Cost

$14,818,088)

...........................................................

14,818,088

Total

Short

Term

Investments

(Cost

$45,695,232

)

................................

45,695,232

a

Total

Investments

(Cost

$875,132,457)

101.8%

..................................

$1,290,621,833

Other

Assets,

less

Liabilities

(1.8)%

...........................................

(22,328,508)

Net

Assets

100.0%

...........................................................

$1,268,293,325

See

A

bbreviations

on

page

51.

*

The

principal

amount

is

stated

in

U.S.

dollars

unless

otherwise

indicated.

a

Non-income

producing.

b

A

portion

or

all

of

the

security

is

on

loan

at

October

31,

2021.

See

Note

1

(

d

).

c

Fair

valued

using

significant

unobservable

inputs.

See

Note

12

regarding

fair

value

measurements.

d

See

Note

9

regarding

restricted

securities.

e

A

portion

or

all

of

the

security

purchased

on

a

delayed

delivery

basis.

See

Note

1

(

c

).

f

See

Note

10

regarding

holdings

of

5%

voting

securities.

g

See

Note

3

(

f

)

regarding

investments

in

affiliated

management

investment

companies.

h

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

i

See

Note

1

(

d

)

regarding

securities

on

loan.

Franklin

Strategic

Series

Financial

Highlights

Franklin

Natural

Resources

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

25

a

Six

Months

Ended

October

31,

2021

(unaudited)

Year

Ended

April

30,

2021

2020

2019

2018

2017

Class

A

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$20.02

$13.60

$23.58

$27.96

$25.11

$25.02

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.35

0.28

0.34

0.31

0.39

c

0.20

Net

realized

and

unrealized

gains

(losses)

2.64

6.54

(9.96)

(4.20)

2.77

0.17

Total

from

investment

operations

........

2.99

6.82

(9.62)

(3.89)

3.16

0.37

Less

distributions

from:

Net

investment

income

..............

—

(0.40)

(0.36)

(0.49)

(0.31)

(0.28)

Net

asset

value,

end

of

period

..........

$23.01

$20.02

$13.60

$23.58

$27.96

$25.11

Total

return

d

.......................

14.94%

50.55%

(41.30)%

(13.69)%

12.74%

1.37%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

..........................

1.16%

1.24%

1.17%

1.03%

1.13%

1.06%

Expenses

net

of

waiver

and

payments

by

affiliates

..........................

1.16%

f

1.24%

f,g

1.17%

f,g

1.03%

f,g

1.13%

f,g

1.05%

g

Net

investment

income

...............

3.29%

1.71%

1.75%

1.21%

1.56%

c

0.79%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$203,630

$176,127

$123,467

$247,362

$344,695

$398,703

Portfolio

turnover

rate

................

13.31%

49.23%

25.60%

29.83%

29.98%

29.74%

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

$0.16

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

0.91%.

d

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable,

and

is

not

annualized

for

periods

less

than

one

year.

e

Ratios

are

annualized

for

periods

less

than

one

year.

f

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

g

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Strategic

Series

Financial

Highlights

Franklin

Natural

Resources

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

26

a

Six

Months

Ended

October

31,

2021

(unaudited)

Year

Ended

April

30,

2021

2020

2019

2018

2017

Class

C

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$19.58

$13.25

$22.82

$27.17

$24.28

$24.25

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.26

0.15

0.19

0.11

0.20

c

0.01

Net

realized

and

unrealized

gains

(losses)

2.58

6.38

(9.70)

(4.07)

2.69

0.15

Total

from

investment

operations

........

2.84

6.53

(9.51)

(3.96)

2.89

0.16

Less

distributions

from:

Net

investment

income

..............

—

(0.20)

(0.06)

(0.39)

—

(0.13)

Net

asset

value,

end

of

period

..........

$22.42

$19.58

$13.25

$22.82

$27.17

$24.28

Total

return

d

.......................

14.50%

49.42%

(41.71)%

(14.37)%

11.90%

0.63%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

..........................

1.91%

1.99%

1.92%

1.78%

1.88%

1.81%

Expenses

net

of

waiver

and

payments

by

affiliates

..........................

1.91%

f

1.99%

f,g

1.92%

f,g

1.78%

f,g

1.88%

f,g

1.80%

g

Net

investment

income

...............

2.49%

0.93%

1.00%

0.46%

0.81%

c

0.04%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$26,182

$27,753

$23,391

$49,620

$83,814

$96,835

Portfolio

turnover

rate

................

13.31%

49.23%

25.60%

29.83%

29.98%

29.74%

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

$0.16

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

0.16%.

d

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable,

and

is

not

annualized

for

periods

less

than

one

year.

e

Ratios

are

annualized

for

periods

less

than

one

year.

f

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

g

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Strategic

Series

Financial

Highlights

Franklin

Natural

Resources

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

27

a

Six

Months

Ended

October

31,

2021

(unaudited)

Year

Ended

April

30,

2021

2020

2019

2018

2017

Class

R6

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$21.58

$14.63

$25.22

$29.79

$26.87

$26.73

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.43

0.39

0.54

0.45

0.57

c

0.47

Net

realized

and

unrealized

gains

(losses)

2.85

7.05

(10.76)

(4.49)

2.95

0.04

Total

from

investment

operations

........

3.28

7.44

(10.22)

(4.04)

3.52

0.51

Less

distributions

from:

Net

investment

income

..............

—

(0.49)

(0.37)

(0.53)

(0.60)

(0.37)

Net

asset

value,

end

of

period

..........

$24.86

$21.58

$14.63

$25.22

$29.79

$26.87

Total

return

d

.......................

15.20%

51.43%

(41.02)%

(13.31)%

13.37%

1.89%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

..........................

0.86%

0.89%

0.72%

0.62%

0.64%

0.83%

Expenses

net

of

waiver

and

payments

by

affiliates

..........................

0.68%

0.72%

f

0.66%

f

0.59%

f

0.57%

f

0.54%

f

Net

investment

income

...............

3.70%

2.22%

2.26%

1.65%

2.12%

c

1.30%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$2,291

$1,722

$839

$15,627

$15,866

$218

Portfolio

turnover

rate

................

13.31%

49.23%

25.60%

29.83%

29.98%

29.74%

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

$0.16

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

1.47%.

d

Total

return

is

not

annualized

for

periods

less

than

one

year.

e

Ratios

are

annualized

for

periods

less

than

one

year.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Strategic

Series

Financial

Highlights

Franklin

Natural

Resources

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

28

a

Six

Months

Ended

October

31,

2021

(unaudited)

Year

Ended

April

30,

2021

2020

2019

2018

2017

Advisor

Class

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$21.44

$14.54

$25.20

$29.80

$26.81

$26.71

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.40

0.33

0.41

0.40

0.49

c

0.29

Net

realized

and

unrealized

gains

(losses)

2.83

7.01

(10.64)

(4.49)

2.95

0.17

Total

from

investment

operations

........

3.23

7.34

(10.23)

(4.09)

3.44

0.46

Less

distributions

from:

Net

investment

income

..............

—

(0.44)

(0.43)

(0.51)

(0.45)

(0.36)

Net

asset

value,

end

of

period

..........

$24.67

$21.44

$14.54

$25.20

$29.80

$26.81

Total

return

d

.......................

15.07%

50.95%

(41.15)%

(13.50)%

13.04%

1.64%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

..........................

0.91%

1.00%

0.92%

0.78%

0.88%

0.81%

Expenses

net

of

waiver

and

payments

by

affiliates

..........................

0.91%

f

1.00%

f,g

0.92%

f,g

0.78%

f,g

0.88%

f,g

0.80%

g

Net

investment

income

...............

3.51%

1.93%

2.00%

1.46%

1.81%

c

1.04%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$47,510

$39,562

$28,334

$62,639

$78,443

$94,070

Portfolio

turnover

rate

................

13.31%

49.23%

25.60%

29.83%

29.98%

29.74%

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

$0.16

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

1.16%.

d

Total

return

is

not

annualized

for

periods

less

than

one

year.

e

Ratios

are

annualized

for

periods

less

than

one

year.

f

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

g

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Strategic

Series

Statement

of

Investments

(unaudited),

October

31,

2021

Franklin

Natural

Resources

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

29

a

a

Country

Shares

a

Value

a

Common

Stocks

95.4%

Agricultural

Products

1.0%

Bunge

Ltd.

..........................................

United

States

17,200

$

1,593,408

a

Darling

Ingredients,

Inc.

................................

United

States

15,000

1,267,799

2,861,207

Automobile

Manufacturers

1.9%

a

Lucid

Group,

Inc.

.....................................

United

States

141,414

5,230,904

a

Construction

Machinery

&

Heavy

Trucks

0.4%

a,b

Proterra

,

Inc.

.........................................

United

States

98,600

1,105,306

a

Construction

Materials

1.0%

Martin

Marietta

Materials,

Inc.

............................

United

States

6,900

2,710,596

Copper

5.0%

Antofagasta

plc

.......................................

Chile

98,200

1,915,345

a

ERO

Copper

Corp.

....................................

Canada

108,000

2,014,476

First

Quantum

Minerals

Ltd.

.............................

Zambia

103,200

2,442,653

Freeport-McMoRan,

Inc.

................................

United

States

157,200

5,929,584

a

Imperial

Metals

Corp.

..................................

Canada

122,760

396,672

Lundin

Mining

Corp.

...................................

Chile

171,700

1,493,827

14,192,557

Diversified

Chemicals

0.8%

Huntsman

Corp.

......................................

United

States

68,300

2,225,214

Diversified

Metals

&

Mining

4.3%

a

29Metals

Ltd.

........................................

Australia

1,022,100

1,984,698

Anglo

American

plc

....................................

South

Africa

65,600

2,495,530

b

BHP

Group

plc,

ADR

...................................

Australia

51,200

2,712,576

a

Glencore

plc

.........................................

Australia

364,400

1,822,145

b

Rio

Tinto

plc,

ADR

.....................................

Australia

23,200

1,467,864

Teck

Resources

Ltd.,

B

.................................

Canada

47,500

1,325,250

11,808,063

Electrical

Components

&

Equipment

1.9%

a

Fluence

Energy,

Inc.

...................................

United

States

67,500

2,400,975

a

FREYR

Battery

SA

....................................

Norway

169,400

1,716,022

a

Shoals

Technologies

Group,

Inc.,

A

........................

United

States

40,500

1,255,095

5,372,092

Environmental

&

Facilities

Services

0.8%

a

Li-Cycle

Holdings

Corp.

.................................

Canada

173,800

2,248,972

a

Fertilizers

&

Agricultural

Chemicals

1.4%

Corteva

,

Inc.

.........................................

United

States

40,700

1,756,205

Nutrien

Ltd.

..........................................

Canada

30,500

2,132,255

3,888,460

Food

Distributors

0.4%

a

Performance

Food

Group

Co.

............................

United

States

27,000

1,221,210

a

Gold

7.2%

Agnico

Eagle

Mines

Ltd.

................................

Canada

51,700

2,743,495

Alamos

Gold,

Inc.,

A

...................................

Canada

241,100

1,787,946

B2Gold

Corp.

........................................

Canada

363,800

1,501,751

Barrick

Gold

Corp.

....................................

Canada

298,391

5,481,443

Newcrest

Mining

Ltd.

...................................

Australia

26,800

502,121

Newmont

Corp.

.......................................

United

States

111,015

5,994,810

Franklin

Strategic

Series

Statement

of

Investments

(unaudited)

Franklin

Natural

Resources

Fund

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

30

a

a

Country

Shares

a

Value

a

Common

Stocks

(continued)

Gold

(continued)

b

SSR

Mining,

Inc.

......................................

Canada

131,400

$

2,073,492

20,085,058

Heavy

Electrical

Equipment

0.4%

a

TPI

Composites,

Inc.

...................................

United

States

35,200

1,183,776

a

Industrial

Gases

2.8%

Air

Products

and

Chemicals,

Inc.

..........................

United

States

13,100

3,927,511

Linde

plc

............................................

United

Kingdom

11,900

3,798,480

7,725,991

Integrated

Oil

&

Gas

16.8%

Chevron

Corp.

.......................................

United

States

112,500

12,880,125

Exxon

Mobil

Corp.

.....................................

United

States

150,800

9,722,076

Occidental

Petroleum

Corp.

.............................

United

States

112,600

3,775,478

Royal

Dutch

Shell

plc,

ADR,

A

............................

Netherlands

121,921

5,598,612

Suncor

Energy,

Inc.

....................................

Canada

365,800

9,618,539

TotalEnergies

SE,

ADR

.................................

France

110,610

5,542,667

47,137,497

Investment

Banking

&

Brokerage

0.5%

a,c,d,e

Ivanhoe

Capital

Acquisition

Corp.,

A

.......................

Singapore

150,000

1,529,385

a

Metal

&

Glass

Containers

0.9%

Ball

Corp.

...........................................

United

States

16,700

1,527,716

Crown

Holdings,

Inc.

...................................

United

States

10,400

1,081,496

2,609,212

Oil

&

Gas

Drilling

0.9%

Helmerich

&

Payne,

Inc.

................................

United

States

40,600

1,260,224

Patterson-UTI

Energy,

Inc.

..............................

United

States

157,600

1,349,056

2,609,280

Oil

&

Gas

Equipment

&

Services

10.0%

Baker

Hughes

Co.

.....................................

United

States

140,500

3,523,740

Cactus,

Inc.,

A

........................................

United

States

29,100

1,265,850

a

ChampionX

Corp.

.....................................

United

States

71,837

1,884,285

Halliburton

Co.

.......................................

United

States

148,535

3,711,890

a

Liberty

Oilfield

Services,

Inc.,

A

...........................

United

States

89,000

1,149,880

a

NexTier

Oilfield

Solutions,

Inc.

............................

United

States

220,183

982,016

a

Nine

Energy

Service,

Inc.

...............................

United

States

337,992

628,665

a

Oceaneering

International,

Inc.

...........................

United

States

77,900

1,059,440

a

Oil

States

International,

Inc.

.............................

United

States

101,966

617,914

a

Ranger

Energy

Services,

Inc.

............................

United

States

178,357

1,774,652

Schlumberger

NV

.....................................

United

States

182,247

5,879,288

a

Schoeller-Bleckmann

Oilfield

Equipment

AG

.................

Austria

34,600

1,411,181

a

Select

Energy

Services,

Inc.,

A

...........................

United

States

193,119

1,160,645

a,b

Technip

Energies

NV

...................................

France

40,899

629,398

a

TechnipFMC

plc

......................................

United

Kingdom

305,300

2,250,061

27,928,905

Oil

&

Gas

Exploration

&

Production

22.3%

Aker

BP

ASA

.........................................

Norway

51,400

1,972,224

Cairn

Energy

plc

......................................

United

Kingdom

454,828

1,135,489

Canadian

Natural

Resources

Ltd.

.........................

Canada

164,300

6,981,323

ConocoPhillips

.......................................

United

States

161,891

12,059,261

Coterra

Energy,

Inc.

...................................

United

States

367,416

7,833,309

Devon

Energy

Corp.

...................................

United

States

231,882

9,293,831

Franklin

Strategic

Series

Statement

of

Investments

(unaudited)

Franklin

Natural

Resources

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

31

a

a

Country

Shares

a

Value

a

Common

Stocks

(continued)

Oil

&

Gas

Exploration

&

Production

(continued)

EOG

Resources,

Inc.

..................................

United

States

104,400

$

9,652,824

a

EQT

Corp.

..........................................

United

States

108,500

2,160,235

Hess

Corp.

..........................................

United

States

47,000

3,880,790

Pioneer

Natural

Resources

Co.

...........................

United

States

38,301

7,161,521

62,130,807

Oil

&

Gas

Refining

&

Marketing

5.7%

Marathon

Petroleum

Corp.

..............................

United

States

97,800

6,447,954

b

New

Fortress

Energy,

Inc.

...............................

United

States

22,000

660,000

Phillips

66

...........................................

United

States

61,300

4,584,014

Valero

Energy

Corp.

...................................

United

States

56,700

4,384,611

16,076,579

Oil

&

Gas

Storage

&

Transportation

6.8%

Enbridge,

Inc.

........................................

Canada

64,647

2,706,123

Kinder

Morgan,

Inc.

....................................

United

States

98,100

1,643,175

Targa

Resources

Corp.

.................................

United

States

56,000

3,061,520

TC

Energy

Corp.

......................................

Canada

108,200

5,853,620

Williams

Cos.,

Inc.

(The)

................................

United

States

197,400

5,544,966

18,809,404

Paper

Packaging

0.4%

Packaging

Corp.

of

America

.............................

United

States

7,200

989,064

Semiconductor

Equipment

0.5%

a

SolarEdge

Technologies,

Inc.

............................

United

States

3,700

1,312,316

a

Steel

0.4%

Vale

SA,

ADR

........................................

Brazil

81,200

1,033,676

Trading

Companies

&

Distributors

0.9%

a

Univar

Solutions,

Inc.

..................................

United

States

101,600

2,598,928

a

Total

Common

Stocks

(Cost

$177,451,384)

.....................................

266,624,459

a

Convertible

Preferred

Stocks

0.3%

Oil

&

Gas

Equipment

&

Services

0.3%

a,c,d

Ranger

Energy

Services,

Inc.,

A

..........................

United

States

114,286

929,331

a

Total

Convertible

Preferred

Stocks

(Cost

$800,000)

..............................

929,331

Warrants

a

a

a

a

a

Warrants

0.1%

Integrated

Oil

&

Gas

0.1%

a

Occidental

Petroleum

Corp.

,

8/03/27

.......................

United

States

17,900

269,216

Total

Warrants

(Cost

$88,605)

.................................................

269,216

Principal

Amount

*

Convertible

Bonds

0.4%

Oil

&

Gas

Equipment

&

Services

0.4%

f

Oil

States

International,

Inc.,

Senior

Note,

144A,

4.75%,

4/01/26

..

United

States

1,200,000

1,141,193

Total

Convertible

Bonds

(Cost

$1,200,000)

.....................................

1,141,193

Total

Long

Term

Investments

(Cost

$179,539,989)

...............................

268,964,199

a

Franklin

Strategic

Series

Statement

of

Investments

(unaudited)

Franklin

Natural

Resources

Fund

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

32

Short

Term

Investments

7.7%

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Money

Market

Funds

5.2%

g,h

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

14,537,159

$

14,537,159

Total

Money

Market

Funds

(Cost

$14,537,159)

..................................

14,537,159

i

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

2.5%

Money

Market

Funds

2.5%

g,h

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

6,958,612

6,958,612

Total

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

(Cost

$6,958,612)

.................................................................

6,958,612

Total

Short

Term

Investments

(Cost

$21,495,771

)

................................

21,495,771

a

Total

Investments

(Cost

$201,035,760)

103.9%

..................................

$290,459,970

Other

Assets,

less

Liabilities

(3.9)%

...........................................

(10,847,875)

Net

Assets

100.0%

...........................................................

$279,612,095

See

Abbreviations

on

page

51

.

*

The

principal

amount

is

stated

in

U.S.

dollars

unless

otherwise

indicated.

a

Non-income

producing.

b

A

portion

or

all

of

the

security

is

on

loan

at

October

31,

2021.

See

Note

1(d).

c

Fair

valued

using

significant

unobservable

inputs.

See

Note

12

regarding

fair

value

measurements.

d

See

Note

9

regarding

restricted

securities.

e

A

portion

or

all

of

the

security

purchased

on

a

delayed

delivery

basis.

See

Note

1(c).

f

Security

was

purchased

pursuant

to

Rule

144A

or

Regulation

S

under

the

Securities

Act

of

1933.

144A

securities

may

be

sold

in

transactions

exempt

from

registration

only

to

qualified

institutional

buyers

or

in

a

public

offering

registered

under

the

Securities

Act

of

1933.

Regulation

S

securities

cannot

be

sold

in

the

United

States

without

either

an

effective

registration

statement

filed

pursuant

to

the

Securities

Act

of

1933,

or

pursuant

to

an

exemption

from

registration.

At

October

31,

2021,

the

value

of

this

security

was

$1,141,193,

representing

0.4%

of

net

assets.

g

See

Note

3(f)

regarding

investments

in

affiliated

management

investment

companies.

h

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

i

See

Note

1(d)

regarding

securities

on

loan.

Franklin

Strategic

Series

Financial

Statements

Statements

of

Assets

and

Liabilities

October

31,

2021

(unaudited)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

33

Franklin

Biotechnology

Discovery

Fund

Franklin

Natural

Resources

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

..................................................

$827,352,736

$179,539,989

Cost

-

Non-controlled

affiliates

(Note

3

f

and

10

)

..................................

47,779,721

21,495,771

Value

-

Unaffiliated

issuers

(Includes

securities

loaned

of

$14,213,533

and

$6,627,286

respectively)

............................................................

$1,243,321,697

$268,964,199

Value

-

Non-controlled

affiliates

(Note

3

f

and

10

)

.................................

47,300,136

21,495,771

Cash

...................................................................

30,773

12,137

Foreign

currency,

at

value

(cost

$–

and

$60,933

respectively)

.........................

—

60,933

Receivables:

Investment

securities

sold

..................................................

2,412,913

2,078

Capital

shares

sold

.......................................................

789,132

505,420

Dividends

and

interest

....................................................

59,851

215,899

Total

assets

.........................................................

1,293,914,502

291,256,437

Liabilities:

Payables:

Investment

securities

purchased

.............................................

7,920,706

3,390,000

Capital

shares

redeemed

..................................................

1,632,219

917,414

Management

fees

........................................................

660,289

124,868

Distribution

fees

.........................................................

261,870

63,789

Transfer

agent

fees

.......................................................

118,750

87,484

Payable

upon

return

of

securities

loaned

(Note

1

d

)

.................................

14,818,088

6,958,612

Accrued

expenses

and

other

liabilities

..........................................

209,255

102,175

Total

liabilities

........................................................

25,621,177

11,644,342

Net

assets,

at

value

................................................

$1,268,293,325

$279,612,095

Net

assets

consist

of:

Paid-in

capital

............................................................

$714,847,919

$411,601,344

Total

distributable

earnings

(losses)

............................................

553,445,406

(131,989,249)

Net

assets,

at

value

................................................

$1,268,293,325

$279,612,095

Franklin

Strategic

Series

Financial

Statements

Statements

of

Assets

and

Liabilities

(continued)

October

31,

2021

(unaudited)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

34

Franklin

Biotechnology

Discovery

Fund

Franklin

Natural

Resources

Fund

Class

A:

Net

assets,

at

value

......................................................

$1,029,447,804

$203,629,675

Shares

outstanding

.......................................................

6,759,294

8,850,959

Net

asset

value

per

share

a

.................................................

$152.30

$23.01

Maximum

offering

price

per

share

(net

asset

value

per

share

÷

94.50%)

...............

$161.16

$24.35

Class

C:

Net

assets,

at

value

......................................................

$50,889,255

$26,181,503

Shares

outstanding

.......................................................

358,534

1,167,790

Net

asset

value

and

maximum

offering

price

per

share

a

............................

$141.94

$22.42

Class

R6:

Net

assets,

at

value

......................................................

$15,480,678

$2,291,030

Shares

outstanding

.......................................................

96,321

92,156

Net

asset

value

and

maximum

offering

price

per

share

............................

$160.72

$24.86

Advisor

Class:

Net

assets,

at

value

......................................................

$172,475,588

$47,509,887

Shares

outstanding

.......................................................

1,088,131

1,925,848

Net

asset

value

and

maximum

offering

price

per

share

............................

$158.51

$24.67

a

Redemption

price

is

equal

to

net

asset

value

less

contingent

deferred

sales

charges,

if

applicable.

Franklin

Strategic

Series

Financial

Statements

Statements

of

Operations

for

the

six

months

ended

October

31,

2021

(unaudited)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

35

Franklin

Biotechnology

Discovery

Fund

Franklin

Natural

Resources

Fund

Investment

income:

Dividends:

(net

of

foreign

taxes

of

$–

and

$143,244,

respectively)

Unaffiliated

issuers

.......................................................

$2,864,716

$5,754,669

Non-controlled

affiliates

(Note

3

f

and

10

)

.......................................

1,164

463

Interest:

Unaffiliated

issuers

.......................................................

26,691

28,500

Income

from

securities

loaned:

Unaffiliated

entities

(net

of

fees

and

rebates)

....................................

160,635

44,799

Non-controlled

affiliates

(Note

3

f

)

............................................

1,540

137

Total

investment

income

..................................................

3,054,746

5,828,568

Expenses:

Management

fees

(Note

3

a

)

..................................................

4,007,246

715,954

Interest

expense

(Note

4)

....................................................

—

37

Distribution

fees:

(Note

3c

)

    Class

A

...............................................................

1,380,899

236,979

    Class

C

...............................................................

291,523

137,341

Transfer

agent

fees:

(Note

3e

)

    Class

A

...............................................................

839,642

244,461

    Class

C

...............................................................

44,325

35,739

    Class

R6

..............................................................

9,039

1,977

    Advisor

Class

...........................................................

143,338

56,077

Custodian

fees

(Note

4

)

.....................................................

23,984

1,631

Reports

to

shareholders

fees

.................................................

106,199

51,469

Registration

and

filing

fees

...................................................

71,930

48,686

Professional

fees

..........................................................

36,548

26,461

Trustees'

fees

and

expenses

.................................................

9,418

1,718

Other

...................................................................

28,938

13,292

Total

expenses

........................................................

6,993,029

1,571,822

Expenses

waived/paid

by

affiliates

(Note

3

f

and

3

g

)

.............................

(25,728)

(5,847)

Net

expenses

........................................................

6,967,301

1,565,975

Net

investment

income

(loss)

...........................................

(3,912,555)

4,262,593

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

Unaffiliated

issuers

.....................................................

40,312,002

8,326,915

Foreign

currency

transactions

...............................................

—

35,442

Net

realized

gain

(loss)

.................................................

40,312,002

8,362,357

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

.....................................................

(133,148,154)

23,129,593

Non-controlled

affiliates

(Note

3

f

and

10

)

.....................................

(479,585)

—

Translation

of

other

assets

and

liabilities

denominated

in

foreign

currencies

.............

—

(566,255)

Net

change

in

unrealized

appreciation

(depreciation)

...........................

(133,627,739)

22,563,338

Net

realized

and

unrealized

gain

(loss)

...........................................

(93,315,737)

30,925,695

Net

increase

(decrease)

in

net

assets

resulting

from

operations

.........................

$(97,228,292)

$35,188,288

Franklin

Strategic

Series

Financial

Statements

Statements

of

Changes

in

Net

Assets

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

36

Franklin

Biotechnology

Discovery

Fund

Franklin

Natural

Resources

Fund

Six

Months

Ended

October

31,

2021

(unaudited)

Year

Ended

April

30,

2021

Six

Months

Ended

October

31,

2021

(unaudited)

Year

Ended

April

30,

2021

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

(loss)

.......

$

(3,912,555)

$(8,190,243)

$4,262,593

$3,277,215

Net

realized

gain

(loss)

............

40,312,002

260,875,031

8,362,357

(40,534,611)

Net

change

in

unrealized

appreciation

(depreciation)

.................

(133,627,739)

37,007,017

22,563,338

118,462,452

Net

increase

(decrease)

in

net

assets

resulting

from

operations

.

(97,228,292)

289,691,805

35,188,288

81,205,056

Distributions

to

shareholders:

Class

A

........................

—

(158,473,630)

—

(3,383,596)

Class

C

........................

—

(9,137,943)

—

(282,821)

Class

R6

.......................

—

(1,586,782)

—

(30,669)

Advisor

Class

...................

—

(27,324,424)

—

(789,349)

Total

distributions

to

shareholders

.....

—

(196,522,779)

—

(4,486,435)

Capital

share

transactions:

(Note

2

)

Class

A

........................

(52,901,191)

124,171,813

1,639,843

(2,174,380)

Class

C

........................

(9,517,526)

14,137,153

(4,887,998)

(5,035,749)

Class

R6

.......................

(123,179)

6,785,898

308,307

437,681

Advisor

Class

...................

(20,284,200)

32,584,271

2,199,893

(812,850)

Total

capital

share

transactions

.......

(82,826,096)

177,679,135

(739,955)

(7,585,298)

Net

increase

(decrease)

in

net

assets

.....................

(180,054,388)

270,848,161

34,448,333

69,133,323

Net

assets:

Beginning

of

period

................

1,448,347,713

1,177,499,552

245,163,762

176,030,439

End

of

period

.....................

$1,268,293,325

$1,448,347,713

$279,612,095

$245,163,762

Franklin

Strategic

Series

37

franklintempleton.com

Semiannual

Report

Notes

to

Financial

Statements

(unaudited)

1.

Organization

and

Significant

Accounting

Policies

Franklin

Strategic

Series (Trust)

is

registered

under

the

Investment

Company

Act

of

1940

(1940

Act)

as

an

open-

end

management

investment

company,

consisting

of

eleven

separate

funds, two

of

which

are

included

in

this

report

(Funds)

and

applies

the

specialized

accounting

and

reporting

guidance

in

U.S.

Generally

Accepted

Accounting

Principles

(U.S.

GAAP).

The

Funds

offer four classes

of

shares: Class A,

Class

C,

Class R6

and

Advisor

Class.

Effective

August

2,

2021,

Class

C

shares

automatically

convert

to

Class

A

shares

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.

The

following

summarizes

the Funds'

significant

accounting

policies. 

a.

Financial

Instrument

Valuation 

The Funds'

investments

in

financial

instruments

are

carried

at

fair

value

daily.

Fair

value

is

the

price

that

would

be

received

to

sell

an

asset

or

paid

to

transfer

a

liability

in

an

orderly

transaction

between

market

participants

on

the

measurement

date.

The Funds calculate the

net

asset

value

(NAV)

per

share

each

business

day

as

of

4

p.m.

Eastern

time

or

the

regularly

scheduled

close

of

the

New

York

Stock

Exchange

(NYSE),

whichever

is

earlier.

Under

compliance

policies

and

procedures

approved

by

the

Trust's

Board

of

Trustees

(the

Board),

the

Funds' administrator

has

responsibility

for

oversight

of

valuation,

including

leading

the

cross-functional

Valuation

Committee

(VC).

The

Funds

may

utilize

independent

pricing

services,

quotations

from

securities

and

financial

instrument

dealers,

and

other

market

sources

to

determine

fair

value. 

Equity

securities

listed

on

an

exchange

or

on

the

NASDAQ

National

Market

System

are

valued

at

the

last

quoted

sale

price

or

the

official

closing

price of

the

day,

respectively.

Foreign

equity

securities

are

valued

as

of

the

close

of

trading

on

the

foreign

stock

exchange

on

which

the

security

is

primarily

traded,

or

as

of

4

p.m.

Eastern

time.

The

value

is

then

converted

into

its

U.S.

dollar

equivalent

at

the

foreign

exchange

rate

in

effect

at

4

p.m.

Eastern

time

on

the

day

that

the

value

of

the

security

is

determined.

Over-the-counter

(OTC)

securities

are

valued

within

the

range

of

the

most

recent

quoted

bid

and

ask

prices.

Securities

that

trade

in

multiple

markets

or

on

multiple

exchanges

are

valued

according

to

the

broadest

and

most

representative

market.

Certain

equity

securities

are

valued

based

upon

fundamental

characteristics

or

relationships

to

similar

securities. 

Debt

securities

generally

trade

in

the

OTC

market rather

than

on

a

securities

exchange.

The

Funds'

pricing

services

use

multiple

valuation

techniques

to

determine

fair

value.

In

instances

where

sufficient

market

activity

exists,

the

pricing

services

may

utilize

a

market-based

approach

through

which

quotes

from

market

makers

are

used

to

determine

fair

value.

In

instances

where

sufficient

market

activity

may

not

exist

or

is

limited,

the

pricing

services

also

utilize

proprietary

valuation

models

which

may

consider

market

characteristics

such

as

benchmark

yield

curves,

credit

spreads,

estimated

default

rates,

anticipated

market

interest

rate

volatility,

coupon

rates,

anticipated

timing

of

principal

repayments,

underlying

collateral,

and

other

unique

security

features

in

order

to

estimate

the

relevant

cash

flows,

which

are

then

discounted

to

calculate

the

fair

value.

Investments

in open-end mutual

funds

are

valued

at

the

closing

NAV.

The

Funds

have

procedures

to

determine

the

fair

value

of

financial

instruments

for

which

market

prices

are

not

reliable

or

readily

available.

Under

these

procedures,

the

Funds

primarily

employ

a

market-based

approach

which

may

use

related

or

comparable

assets

or

liabilities,

recent

transactions,

market

multiples,

book

values,

and

other

relevant

information

for

the

investment

to

determine

the

fair

value

of

the

investment.

An

income-based

valuation

approach

may

also

be

used

in

which

the

anticipated

future

cash

flows

of

the

investment

are

discounted

to

calculate

fair

value.

Discounts

may

also

be

applied

due

to

the

nature

or

duration

of

any

restrictions

on

the

disposition

of

the

investments.

Due

to

the

inherent

uncertainty

of

valuations

of

such

investments,

the

fair

values

may

differ

significantly

from

the

values

that

would

have

been

used

had

an

active

market

existed.

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.

Occasionally,

events

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

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

38

franklintempleton.com

Semiannual

Report

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'

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”).

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.

Securities

Purchased

on

a

Delayed

Delivery

Basis

Certain

or

all

Funds

purchase

securities

on

a

delayed

delivery

basis,

with

payment

and

delivery

scheduled

for

a

future

date.

These

transactions

are

subject

to

market

fluctuations

and

are

subject

to

the

risk

that

the

value

at

delivery

may

be

more

or

less

than

the

trade

date

purchase

price.

Although

the

Funds

will

generally

purchase

these

securities

with

the

intention

of

holding

the

securities,

they

may

sell

the

securities

before

the

settlement

date.

d.

Securities

Lending

Certain

or

all

Funds

participate

in

an

agency

based

securities

lending

program

to

earn

additional

income.

The

Fund

receives

collateral

in

the

form

of

cash

and/or

U.S.

Government

and

Agency

securities

against

the

loaned

securities

in

an

amount

equal

to

at

least

102%

of

the

fair

value

of

the

loaned

securities.

Collateral

is

maintained

over

the

life

of

the

loan

in

an

amount

not

less

than

100%

of

the

fair

value

of

loaned

securities,

as

determined

at

the

close

of

Fund

business

each

day;

any

additional

collateral

required

due

to

changes

in

security

values

is

delivered

to

the

Fund

on

the

next

business

day.

Any

cash

collateral

received

is

deposited

into

a

joint

cash

account

with

other

funds

and

is

used

to

invest

in

a

money

market

fund

managed

by

Franklin

Advisers,

Inc.,

an

affiliate

of

the

Funds,

and/or

uninvested

cash

as

included

in

due

from

custodian

in

the

Statements

of

Assets

and

Liabilities. The

Fund

may

receive

income

from

the

investment

of

cash

collateral,

in

addition

to

lending

fees

and

rebates

paid

by

the

borrower.

Income

from

securities

loaned,

net

of

fees

paid

to

the

securities

lending

agent

and/or

third-party

vendor,

is

reported

separately

in

the

Statements

of

Operations.

The

Fund

bears

the

market

risk

with

respect

to any

cash collateral

investment,

securities

loaned,

and

the

risk

that

the

agent

may

default

on

its

obligations

to

the

Fund.

If

the

borrower

defaults

on

its

obligation

to

return

the

securities

loaned,

the

Fund

has

the

1.

Organization

and

Significant

Accounting

Policies

(continued)

a.

Financial

Instrument

Valuation 

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

39

franklintempleton.com

Semiannual

Report

right

to

repurchase

the

securities

in

the

open

market

using

the

collateral

received.

The

securities

lending

agent

has

agreed

to

indemnify

the

Fund

in

the

event

of

default

by

a

third

party

borrower.

e.

Income

and

Deferred

Taxes

It

is 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.

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. 

f.

Security

Transactions,

Investment

Income,

Expenses

and

Distributions

Security

transactions

are

accounted

for

on

trade

date.

Realized

gains

and

losses

on

security

transactions

are

determined

on

a

specific

identification

basis.

Interest

income

and

estimated

expenses

are

accrued

daily.

Amortization

of

premium

and

accretion

of

discount

on

debt

securities

are

included

in

interest

income.

Facility

fees

are

recognized

as

income

over

the

expected

term

of

the

loan.

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.

g.

Accounting

Estimates

The

preparation

of

financial

statements

in

accordance

with

U.S.

GAAP

requires

management

to

make

estimates

and

assumptions

that

affect

the

reported

amounts

of

assets

and

liabilities

at

the

date

of

the

financial

statements

and

the

amounts

of

income

and

expenses

during

the

reporting

period.

Actual

results

could

differ

from

those

estimates.

1.

Organization

and

Significant

Accounting

Policies

(continued)

d.

Securities

Lending

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

40

franklintempleton.com

Semiannual

Report

h.

Guarantees

and

Indemnifications

Under

the

Trust's

organizational

documents,

its

officers

and

trustees

are

indemnified

by

the

Trust

against

certain

liabilities

arising

out

of

the

performance

of

their

duties

to

the

Trust.

Additionally,

in

the

normal

course

of

business,

the

Trust,

on

behalf

of

the

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.

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

Biotechnology

Discovery

Fund

Franklin

Natural

Resources

Fund

Shares

Amount

Shares

Amount

Class

A

Class

A

Shares:

Six

Months

ended

October

31,

2021

Shares

sold

a

...................................

321,566

$50,577,389

1,291,621

$27,640,308

Shares

redeemed

...............................

(659,828)

(103,478,580)

(1,238,348)

(26,000,465)

Net

increase

(decrease)

..........................

(338,262)

$(52,901,191)

53,273

$1,639,843

Year

ended

April

30,

2021

Shares

sold

a

...................................

1,106,111

$190,970,597

2,266,637

$38,321,213

Shares

issued

in

reinvestment

of

distributions

..........

873,696

151,123,087

195,163

3,313,861

Shares

redeemed

...............................

(1,263,851)

(217,921,871)

(2,741,345)

(43,809,454)

Net

increase

(decrease)

..........................

715,956

$124,171,813

(279,545)

$(2,174,380)

Class

C

Class

C

Shares:

Six

Months

ended

October

31,

2021

Shares

sold

...................................

26,281

$3,853,732

209,215

$4,425,509

Shares

redeemed

a

..............................

(91,422)

(13,371,258)

(458,633)

(9,313,507)

Net

increase

(decrease)

..........................

(65,141)

$(9,517,526)

(249,418)

$(4,887,998)

Year

ended

April

30,

2021

Shares

sold

...................................

139,814

$22,954,794

375,909

$6,161,042

Shares

issued

in

reinvestment

of

distributions

..........

56,116

9,105,394

16,868

281,023

Shares

redeemed

a

..............................

(110,459)

(17,923,035)

(740,499)

(11,477,814)

Net

increase

(decrease)

..........................

85,471

$14,137,153

(347,722)

$(5,035,749)

Class

R6

Class

R6

Shares:

Six

Months

ended

October

31,

2021

Shares

sold

...................................

16,082

$2,663,307

30,818

$721,972

Shares

redeemed

...............................

(16,855)

(2,786,486)

(18,459)

(413,665)

Net

increase

(decrease)

..........................

(773)

$(123,179)

12,359

$308,307

Year

ended

April

30,

2021

Shares

sold

...................................

59,665

$10,868,376

49,526

$940,798

Shares

issued

in

reinvestment

of

distributions

..........

8,532

1,552,442

1,679

30,669

Shares

redeemed

...............................

(31,511)

(5,634,920)

(28,743)

(533,786)

Net

increase

(decrease)

..........................

36,686

$6,785,898

22,462

$437,681

Advisor

Class

1.

Organization

and

Significant

Accounting

Policies

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

41

franklintempleton.com

Semiannual

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

Biotechnology

Discovery

Fund

pays

an

investment

management

fee

to

Advisers

based

on

the

average

daily

net

assets

of

the

Fund

as

follows:

Franklin

Biotechnology

Discovery

Fund

Franklin

Natural

Resources

Fund

Shares

Amount

Shares

Amount

Advisor

Class

Shares:

Six

Months

ended

October

31,

2021

Shares

sold

...................................

75,295

$12,311,100

409,701

$9,457,740

Shares

redeemed

...............................

(201,522)

(32,595,300)

(329,130)

(7,257,847)

Net

increase

(decrease)

..........................

(126,227)

$(20,284,200)

80,571

$2,199,893

Year

ended

April

30,

2021

Shares

sold

...................................

482,142

$85,624,728

940,812

$16,811,124

Shares

issued

in

reinvestment

of

distributions

..........

137,265

24,655,507

43,029

781,847

Shares

redeemed

...............................

(431,123)

(77,695,964)

(1,086,738)

(18,405,821)

Net

increase

(decrease)

..........................

188,284

$32,584,271

(102,897)

$(812,850)

a

May

include

a

portion

of

Class

C

shares

that

were

automatically

converted

to

Class

A.

Subsidiary

Affiliation

Franklin

Advisers,

Inc.

(Advisers)

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

0.775%

Up

to

and

including

$100

million

0.650%

Over

$100

million,

up

to

and

including

$200

million

0.635%

Over

$200

million,

up

to

and

including

$250

million

0.585%

Over

$250

million,

up

to

and

including

$700

million

0.550%

Over

$700

billion,

up

to

and

including

$1.2

billion

0.525%

Over

$1.2

billion,

up

to

and

including

$7.5

billion

0.515%

Over

$7.5

billion,

up

to

and

including

$10

billion

0.505%

Over

$10

billion,

up

to

and

including

$12.5

billion

0.495%

Over

$12.5

billion,

up

to

and

including

$15

billion

0.475%

In

excess

of

$15

billion

2.

Shares

of

Beneficial

Interest

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

42

franklintempleton.com

Semiannual

Report

Franklin

Natural

Resources

Fund

pays

an

investment

management

fee

to

Advisers

based

on

the

average

daily

net

assets

of

the

Fund

as

follows:

For

the

period

ended

October

31,

2021,

each

Fund's

annualized

gross

effective

investment

management

fee

rate

based

on

average

daily

net

assets

was

as

follows:

b.

Administrative

Fees

Under

an

agreement

with

Advisers,

FT

Services

provides

administrative

services

to

the

Funds.

The

fee

is

paid

by

Advisers

based

on

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

for

each

class.

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

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:

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

0.625%

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

Franklin

Biotechnology

Discovery

Fund

Franklin

Natural

Resources

Fund

Gross

effective

investment

management

fee

rate

........

0.586%

0.545%

Franklin

Biotechnology

Discovery

Fund

Franklin

Natural

Resources

Fund

Reimbursement

Plans:

Class

A

...............................

0.35%

0.35%

Class

C

...............................

1.00%

1.00%

3.

Transactions

with

Affiliates

(continued)

a.

Management

Fees

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

43

franklintempleton.com

Semiannual

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

period:

e.

Transfer

Agent

Fees

Each

class

of

shares

pays

transfer

agent

fees

to

Investor

Services

for

its

performance

of

shareholder

servicing

obligations.

The

fees

are

based

on

an

annualized

asset

based

fee

of

0.02%

plus

a

transaction

based

fee.

In

addition,

each

class

reimburses

Investor

Services

for

out

of

pocket

expenses

incurred

and,

except

for

Class

R6,

reimburses

shareholder

servicing

fees

paid

to

third

parties.

These

fees

are

allocated

daily

based

upon

their

relative

proportion

of

such

classes'

aggregate

net

assets.

Class

R6

pays

Investor

Services

transfer

agent

fees

specific

to

that

class.

For

the

period

ended

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

period

ended

October

31,

2021,

investments

in

affiliated

management

investment

companies

were

as

follows:

Franklin

Biotechnology

Discovery

Fund

Franklin

Natural

Resources

Fund

Sales

charges

retained

net

of

commissions

paid

to

unaffiliated

brokers/dealers

..................

$74,473

$19,064

CDSC

retained

...........................

$8,738

$1,982

Franklin

Biotechnology

Discovery

Fund

Franklin

Natural

Resources

Fund

Transfer

agent

fees

........................

$391,443

$154,796

    aa

Value

at

Beginning

of

Period

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Period

Number

of

Shares

Held

at

End

of

Period

Investment

Income

a      

a  

a  

a  

a  

a  

a  

a  

Franklin

Biotechnology

Discovery

Fund

Non-Controlled

Affiliates

Dividends

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.

$62,712,992

$131,415,729

$(163,251,577)

$—

$—

$30,877,144

30,877,144

$1,164

3.

Transactions

with

Affiliates

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

44

franklintempleton.com

Semiannual

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

August

31,

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

period ended

October

31,

2021,

there

were

no

credits

earned.

    aa

Value

at

Beginning

of

Period

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Period

Number

of

Shares

Held

at

End

of

Period

Investment

Income

a      

a  

a  

a  

a  

a  

a  

a  

Franklin

Biotechnology

Discovery

Fund

(continued)

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.

$28,782,225

$128,515,179

$(142,479,316)

$

—

$

—

$14,818,088

14,818,088

$1,540

Total

Affiliated

Securities

...

$91,495,217

$259,930,908

$(305,730,893)

$—

$—

$45,695,232

$2,704

Franklin

Natural

Resources

Fund

Non-Controlled

Affiliates

Dividends

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.

$11,479,563

$37,243,873

$(34,186,277)

$—

$—

$14,537,159

14,537,159

$463

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.

$450,105

$27,517,071

$(21,008,564)

—

—

$6,958,612

6,958,612

$137

Total

Affiliated

Securities

...

$11,929,668

$64,760,944

$(55,194,841)

$—

$—

$21,495,771

$600

3.

Transactions

with

Affiliates

(continued)

f.

Investments

in

Affiliated

Management

Investment

Companies

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

45

franklintempleton.com

Semiannual

Report

5.

Income

Taxes

For

tax

purposes,

capital

losses

may

be

carried

over

to

offset

future

capital

gains. 

At

April

30,

2021,

the

capital

loss

carryforwards

were

as

follows:

At

October

31,

2021,

the

cost

of

investments

and

net

unrealized

appreciation

(depreciation)

for

income

tax

purposes

were

as

follows:

Differences

between

income

and/or

capital

gains

as

determined

on

a

book

basis

and

a

tax

basis

are

primarily

due

to

differing

treatment

of

wash

sales,

passive

foreign

investment

company

shares,

foreign

currency

transactions

and

installment

sale

income.

6.

Investment

Transactions

Purchases

and

sales

of

investments

(excluding

short

term

securities)

for

the

period

ended

October

31,

2021,

were

as

follows:

At

October

31,

2021,

in

connection

with

securities

lending

transactions,

the

Franklin

Biotechnology

Discovery

Fund

and

Franklin

Natural

Resources

Fund

loaned

equity

investments

and

received

$14,818,088

and

$6,958,612

of

cash

collateral,

respectively.

The

gross

amount

of

recognized

liability

for

such

transactions

is

included

in

payable

upon

return

of

securities

loaned

in

the

Statement

of

Assets

and

Liabilities.

The

agreements

can

be

terminated

at

any

time.

Franklin

Natural

Resources

Fund

1

1

Capital

loss

carryforwards

not

subject

to

expiration:

Short

term

.............................

$

14,240,875

Long

term

.............................

216,157,741

Total

capital

loss

carryforwards

............

$230,398,616

Franklin

Biotechnology

Discovery

Fund

Franklin

Natural

Resources

Fund

a

a

a

Cost

of

investments

.......................

$881,522,019

$209,509,708

Unrealized

appreciation

.....................

$487,819,672

$95,530,289

Unrealized

depreciation

.....................

(78,719,858)

(14,580,027)

Net

unrealized

appreciation

(depreciation)

.......

$409,099,814

$80,950,262

Franklin

Biotechnology

Discovery

Fund

Franklin

Natural

Resources

Fund

Purchases

..............................

$193,827,211

$33,664,995

Sales

..................................

$252,493,141

$36,441,772

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

46

franklintempleton.com

Semiannual

Report

7.

Concentration

of

Risk

Investing

in

foreign

securities

may

include

certain

risks

and

considerations

not

typically

associated

with

investing

in

U.S.

securities,

such

as

fluctuating

currency

values

and

changing

local,

regional

and

global

economic,

political

and

social

conditions,

which

may

result

in

greater

market

volatility.

Political

and

financial

uncertainty

in

many

foreign

regions

may

increase

market

volatility

and

the

economic

risk

of

investing

in

foreign

securities.

In

addition,

certain

foreign

securities

may

not

be

as

liquid

as

U.S.

securities.

8.

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.

9.

Restricted

Securities

Certain

or

all

Funds

invest

in

securities

that

are

restricted

under

the

Securities

Act

of

1933

(1933

Act).

Restricted

securities

are

often

purchased

in

private

placement

transactions,

and

cannot

be

sold

without

prior

registration

unless

the

sale

is

pursuant

to

an

exemption

under

the

1933

Act.

Disposal

of

these

securities

may

require

greater

effort

and

expense,

and

prompt

sale

at

an

acceptable

price

may

be

difficult.

The

Funds

may

have

registration

rights

for

restricted

securities.

The

issuer

generally

incurs

all

registration

costs.

At

October

31,

2021,

investments

in

restricted

securities,

excluding

securities

exempt

from

registration

under

the

1933

Act,

were

as

follows:

Principal

Amount

*

/

Shares

Issuer

Acquisition

Date

Cost

Value

Franklin

Biotechnology

Discovery

Fund

2,333,755

Amunix

Pharmaceuticals,

Inc.,

B

................

2/26/21

$

4,125,379

$

3,365,410

189,499

Artiva

Biotherapeutics

,

Inc.,

B

...................

2/22/21

2,084,489

1,604,904

189,736

a

Centessa

Pharmaceuticals

plc

..................

1/28/21

2,087,096

3,137,302

708,600

CM

Life

Sciences

III,

Inc.,

A

....................

8/06/21

7,086,000

7,064,742

370,698

Day

One

Biopharmaceuticals,

Inc.

...............

2/01/21

4,999,991

8,669,167

2,652,900

HilleVax

,

Inc.,

6%,

8/31/22

.....................

8/31/21

2,652,900

2,652,900

80,195

Intarcia

Therapeutics,

Inc.,

DD

..................

3/26/14

2,597,516

—

779,505

Pipeline

Therapeutics,

Inc.,

C

...................

2/09/21

2,088,995

1,511,820

Total

Restricted

Securities

(Value

is

2.2%

of

Net

Assets)

..............

$27,722,366

$28,006,245

Shares

Issuer

Acquisition

Date

Cost

Value

Franklin

Natural

Resources

Fund

150,000

Ivanhoe

Capital

Acquisition

Corp.,

A

..............

7/09/21

$

1,500,000

$

1,529,385

114,286

b

Ranger

Energy

Services,

Inc.,

A

.................

9/30/21

800,000

929,331

Total

Restricted

Securities

(Value

is

0.9%

of

Net

Assets)

..............

$2,300,000

$2,458,716

*

In

U.S.

dollars

unless

otherwise

indicated.

a

The

Fund

also

invests

in

unrestricted

securities

of

the

issuer,

valued

at

$1,231,520

as

of

October

31,

2021.

b

The

Fund

also

invests

in

unrestricted

securities

of

the

issuer,

valued

at

$1,774,652

as

of

October

31,

2021.

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

47

franklintempleton.com

Semiannual

Report

10.

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

period

ended

October

31,

2021,

investments

in

“affiliated

companies”

were

as

follows:

11.

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

period

ended

October

31,

2021,

the

Funds

did

not

use

the

Global

Credit

Facility.

12.

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.

Value

at

Beginning

of

Period

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Period

Number

of

Shares

Held

at

End

of

Period

Investment

Income

Franklin

Biotechnology

Discovery

Fund

Non-Controlled

Affiliates

Dividends

Artiva

Biotherapeutics

,

Inc.,

B

..........

$

2,084,489

$

—

$

—

$

—

$

(479,585)

$

1,604,904

189,499

$

—

Total

Affiliated

Securities

(Value

is

0.1%

of

Net

Assets)

..........

$2,084,489

$—

$—

$

—

$

(479,585)

$1,604,904

$—

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

48

franklintempleton.com

Semiannual

Report

A

summary

of

inputs

used

as

of

October

31,

2021,

in

valuing

the

Fund's

assets

and

liabilities

carried

at

fair

value,

is

as

follows:

Level

1

Level

2

Level

3

Total

Franklin

Biotechnology

Discovery

Fund

Assets:

Investments

in

Securities:

a

Common

Stocks

:

Biotechnology

.........................

$

971,382,263

$

—

$

11,806,469

b

$

983,188,732

Capital

Markets

........................

22,916,785

—

—

22,916,785

Health

Care

Providers

&

Services

..........

9,280,834

—

—

9,280,834

Life

Sciences

Tools

&

Services

............

81,056,447

—

—

81,056,447

Pharmaceuticals

.......................

139,059,451

—

—

139,059,451

Preferred

Stocks

........................

—

—

6,482,134

6,482,134

Warrants

..............................

289,318

—

—

289,318

Corporate

Bonds

........................

—

—

2,652,900

2,652,900

Short

Term

Investments

...................

45,695,232

—

—

45,695,232

Total

Investments

in

Securities

...........

$1,269,680,330

$—

$20,941,503

$1,290,621,833

Level

1

Level

2

Level

3

Total

Franklin

Natural

Resources

Fund

Assets:

Investments

in

Securities:

a

Common

Stocks

:

Agricultural

Products

....................

$

2,861,207

$

—

$

—

$

2,861,207

Automobile

Manufacturers

...............

5,230,904

—

—

5,230,904

Construction

Machinery

&

Heavy

Trucks

.....

1,105,306

—

—

1,105,306

Construction

Materials

..................

2,710,596

—

—

2,710,596

Copper

..............................

12,277,212

1,915,345

—

14,192,557

Diversified

Chemicals

...................

2,225,214

—

—

2,225,214

Diversified

Metals

&

Mining

...............

5,505,690

6,302,373

—

11,808,063

Electrical

Components

&

Equipment

........

5,372,092

—

—

5,372,092

Environmental

&

Facilities

Services

.........

2,248,972

—

—

2,248,972

Fertilizers

&

Agricultural

Chemicals

.........

3,888,460

—

—

3,888,460

Food

Distributors

......................

1,221,210

—

—

1,221,210

Gold

................................

19,582,937

502,121

—

20,085,058

Heavy

Electrical

Equipment

..............

1,183,776

—

—

1,183,776

Industrial

Gases

.......................

7,725,991

—

—

7,725,991

Integrated

Oil

&

Gas

....................

47,137,497

—

—

47,137,497

Investment

Banking

&

Brokerage

..........

—

—

1,529,385

1,529,385

Metal

&

Glass

Containers

................

2,609,212

—

—

2,609,212

Oil

&

Gas

Drilling

......................

2,609,280

—

—

2,609,280

Oil

&

Gas

Equipment

&

Services

...........

25,888,326

2,040,579

—

27,928,905

Oil

&

Gas

Exploration

&

Production

.........

59,023,094

3,107,713

—

62,130,807

Oil

&

Gas

Refining

&

Marketing

............

16,076,579

—

—

16,076,579

Oil

&

Gas

Storage

&

Transportation

.........

18,809,404

—

—

18,809,404

Paper

Packaging

......................

989,064

—

—

989,064

Semiconductor

Equipment

...............

1,312,316

—

—

1,312,316

Steel

................................

1,033,676

—

—

1,033,676

Trading

Companies

&

Distributors

..........

2,598,928

—

—

2,598,928

Convertible

Preferred

Stocks

...............

—

—

929,331

929,331

Warrants

..............................

269,216

—

—

269,216

Convertible

Bonds

.......................

—

1,141,193

—

1,141,193

Short

Term

Investments

...................

21,495,771

—

—

21,495,771

Total

Investments

in

Securities

...........

$272,991,930

$15,009,324

c

$2,458,716

$290,459,970

12.

Fair

Value

Measurements

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

49

franklintempleton.com

Semiannual

Report

A

reconciliation

in

which

Level

3

inputs

are

used

in

determining

fair

value

is

presented

when

there

are

significant

Level

3

assets

and/or

liabilities

at

the

beginning

and/or

end

of

the period.

At

October

31,

2021,

the

reconciliation is

as follows:

a

For

detailed

categories,

see

the

accompanying

Statement

of

Investments.

b

Includes

securities

determined

to

have

no

value

at

October

31,

2021.

c

Includes

foreign

securities

valued

at

$13,868,131,

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.

Balance

at

Beginning

of

Period

Purchases

a

Sales

b

Transfer

Into

Level

3

Transfer

Out

of

Level

3

Net

Accretion

(

Amortiza

-

tion

)

Net

Realized

Gain

(Loss)

Net

Unr

ealized

Appreciatio

n

(

Depreciation

)

Balance

at

End

of

Period

Net

Change

in

Unrealized

Appreciation

(Depreciation)

on

Assets

Held

at

Period

End

a

a

a

a

a

a

a

a

a

a

a

Franklin

Biotechnology

Discovery

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Biotechnology

......

$

—

$

7,087,093

$

—

$

—

$

—

$

—

$

—

$

4,719,376

$

11,806,469

c

$

4,719,376

Capital

Markets

.....

5,631,994

—

(5,191,890)

—

—

—

—

(440,104)

—

—

Convertible

Preferred

Stocks

:

Pharmaceuticals

....

5,000,000

—

(5,000,000)

—

—

—

—

—

—

—

Preferred

Stocks

:

Biotechnology

......

5,574,503

—

—

—

—

—

—

(697,273)

4,877,230

(697,273)

Health

Care

Providers

&

Services

........

2,084,489

—

—

—

—

—

—

(479,585)

1,604,904

(479,585)

Pharmaceuticals

....

2,087,102

2,087,101

(4,174,203)

—

—

—

—

—

—

—

Corporate

Bonds

:

Software

..........

—

2,652,900

—

—

—

—

—

—

2,652,900

—

Escrows

and

Litigation

Trusts

...........

851,316

—

(852,046)

—

—

—

(1,087,487)

1,088,217

—

—

Total

Investments

in

Securities

............

$21,229,404

$11,827,094

$(15,218,139)

$—

$—

$—

$(1,087,487)

$4,190,631

$20,941,503

$3,542,518

Balance

at

Beginning

of

Period

Purchases

a

Sales

b

Transfer

Into

Level

3

Transfer

Out

of

Level

3

Net

Accretion

(

Amortiza

-

tion

)

Net

Realized

Gain

(Loss)

Net

Unr

ealized

Appreciatio

n

(

Depreciation

)

Balance

at

End

of

Period

Net

Change

in

Unrealized

Appreciation

(Depreciation)

on

Assets

Held

at

Period

End

a

a          

a

a

a

a

a

a

a

a

a

Franklin

Natural

Resources

Fund

Assets:

Investments

in

Securities:

Common

Stocks

Consumer

Finance

...

$

743,430

$

—

$

(743,430)

$

—

$

—

$

—

$

—

$

—

$

—

$

—

Environmental

&

Facilities

Services

..

1,738,000

—

(1,738,000)

—

—

—

—

—

—

—

Investment

Banking

&

Brokerage

.......

3,796,238

1,500,000

(3,688,210)

—

—

—

—

(78,643)

1,529,385

29,385

Convertible

Preferred

Stocks

Oil

&

Gas

Equipment

&

Services

........

—

800,000

—

—

—

—

—

129,331

929,331

129,331

Total

Investments

in

Securities

.

$6,277,668

$2,300,000

$(6,169,640)

$—

$—

$

—

$

—

$

50,688

$2,458,716

$

158,716

12.

Fair

Value

Measurements

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

50

franklintempleton.com

Semiannual

Report

Significant

unobservable

valuation

inputs

for

material

Level

3 assets

and/or

liabilities and

impact

to

fair

value

as

a

result

of

changes

in

unobservable

valuation

inputs

as

of

October

31,

2021,

are

as

follows:

a

Weighted

based

on

the

relative

fair

value

of

the

financial

instruments.

b

Represents

the

directional

change

in

the

fair

value

that

would

result

from

a

significant

and

reasonable

increase

in

the

corresponding

input.

A

significant

and

reasonable

decrease

in

the

input

would

have

the

opposite

effect.

Significant

impacts,

if

any,

to

fair

value

and/or

net

assets

have

been

indicated.

c

Represents

a

significant

impact

to

fair

value

but

not

net

assets.

d

Includes

fair

value

of

immaterial

assets

and/or

liabilities

developed

using

various

valuation

techniques

and

unobservable

inputs.

May

also

include

values

derived

using

private

transaction

prices

or

non-public

third

party

pricing

information

which

is

unobservable.

e

Includes

securities

determined

to

have

no

value

at

October

31,

2021.

13.

New

Accounting

Pronouncements

In

March

2020,

the

Financial

Accounting

Standards

Board

issued

Accounting

Standards

Update

(ASU)

No.

2020-04,

Reference

Rate

Reform

(Topic

848)

–

Facilitation

of

the

Effects

of

Reference

Rate

Reform

on

Financial

Reporting.

The

amendments

in

the

ASU

provides

optional

temporary

financial

reporting

relief

from

the

effect

of

certain

types

of

contract

modifications

due

to

the

planned

discontinuation

of

the

London

Interbank

Offered

Rate

and

other

interbank-offered

based

reference

rates

as

of

the

end

of

2021.

The

ASU

is

effective

for

certain

reference

rate-related

contract

modifications

that

occur

during

the

period

March

12,

2020

through

December

31,

2022. Management

has

reviewed

the

requirements

and

believes

the

adoption

of

this

ASU

will

not

have

a

material

impact

on

the

financial

statements.

14.

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.

a

Purchases

include

all

purchases

of

securities

and

securities

received

in

corporate

actions.

b

Sales

include

all

sales

of

securities,

maturities,

paydowns

and

securities

tendered

in

corporate

actions.

c

Includes

securities

determined

to

have

no

value.

Description

Fair

Value

at

End

of

Period

Valuation

Technique

Unobservable

Inputs

Amount

/

Range

(Weighted

Average)

a

Impact

to

Fair

Value

if

Input

Increases

b

Franklin

Biotechnology

Discovery

Fund

Assets:

Investments

in

Securities:

Common

Stocks:

Biotechnology

...............

$11,806,469

Market

comparables

Discount

for

lack

of

marketability

3.8%-4.3%

(4.2%)

Decrease

Preferred

Stocks:

Biotechnology

...............

4,877,230

Market

comparables 

Volatility

of

peers

(18.4)%-(27.6)%

((21.3)%)

Increase 

c

Health

Care

Providers

&

Services

1,604,904

Market

comparables 

Volatility

of

peers

(23.0%)

Increase

c

All

other

investments

2,652,900

d,e

Total

.......................

$20,941,503

12.

Fair

Value

Measurements

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

51

franklintempleton.com

Semiannual

Report

Abbreviations

Selected

Portfolio

ADR

American

Depositary

Receipt

SPAC

Special

Purpose

Acquisition

Company

Franklin

Strategic

Series

Shareholder

Information

52

franklintempleton.com

Semiannual

Report

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.

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.

Franklin

Strategic

Series

Shareholder

Information

53

franklintempleton.com

Semiannual

Report

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.

FSS2

S

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.

Semiannual

Report

and

Shareholder

Letter

Franklin

Strategic

Series

Investment

Manager

Distributor

Shareholder

Services

Franklin

Advisers,

Inc.

Franklin

Distributors,

LLC

(800)

DIAL

BEN

®

/

342-5236

franklintempleton.com

(800)

632-2301

SEMIANNUAL

REPORT

AND

SHAREHOLDER

LETTER

Franklin

Strategic

Income

Fund

A

Series

of

Franklin

Strategic

Series

October

31,

2021

Sign

up

for

electronic

delivery

at

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Not

FDIC

Insured

May

Lose

Value

No

Bank

Guarantee

franklintempleton.com

Semiannual

Report

1

SHAREHOLDER

LETTER

Dear

Shareholder:

During

the

six

months

ended

October

31,

2021,

the

U.S.

economy

continued

to

recover

from

the

COVID-19

pandemic,

benefiting

equities.

Growth

accelerated

in

2021’s

first

half

as

the

reopening

of

businesses,

widespread

COVID-19

vaccinations

and

federal

assistance

programs

continued

to

boost

consumer

spending.

Inflation

increased

in

April

and

rose

further

during

the

reporting

period

due

to

increased

demand

for

goods

amid

supply-chain

bottlenecks.

During

the

summer,

investors

became

concerned

the

swiftly

spreading

Delta

variant

of

COVID-19

could

hinder

the

economic

recovery,

and

growth

slowed

in

2021’s

third

quarter.

During

the

reporting

period,

the

U.S.

Federal

Reserve

(Fed),

in

its

efforts

to

support

U.S.

economic

activity,

held

the

federal

funds

rate

unchanged

at

0.25%,

and

it

continued

broad

quantitative

easing

measures

to

bolster

credit

markets.

The

Fed

also

adjusted

its

economic

growth

and

inflation

projections

higher

and

expected

to

begin

decreasing

its

asset

purchases

later

this

year,

while

delaying

any

interest

rate

increases

until

reaching

its

goal

of

maximum

U.S.

employment.

In

this

environment,

investment-grade

bonds,

as

measured

by

the

Bloomberg

U.S.

Aggregate

Bond

Index,

posted

a

+1.06%

total

return

for

the

six-month

period.

1

We

are

committed

to

our

long-term

perspective

and

disciplined

investment

approach

as

we

conduct

a

rigorous,

fundamental

analysis

of

securities

with

a

regular

emphasis

on

investment

risk

management.

We

believe

active,

professional

investment

management

serves

investors

well.

We

also

recognize

the

important

role

of

financial

professionals

in

today’s

markets

and

encourage

investors

to

continue

to

seek

their

advice.

Amid

changing

markets

and

economic

conditions,

we

are

confident

investors

with

a

well-diversified

portfolio

and

a

patient,

long-term

outlook

should

be

well-positioned

for

the

years

ahead.

In

addition,

Franklin

Strategic

Income

Fund’s

semiannual

report

includes

more

detail

about

prevailing

conditions

and

a

discussion

about

investment

decisions

during

the

period.

All

securities

markets

fluctuate,

as

do

mutual

fund

share

prices.

We

thank

you

for

investing

with

Franklin

Templeton,

welcome

your

questions

and

comments,

and

look

forward

to

serving

your

future

investment

needs.

Sincerely,

Edward

Perks,

CFA

President

and

Chief

Executive

Officer

–

Investment

Management

Franklin

Strategic

Series

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.

1.

Source:

Morningstar.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

franklintempleton.com

Semiannual

Report

2

Contents

Semiannual

Report

Franklin

Strategic

Income

Fund

3

Performance

Summary

5

Your

Fund’s

Expenses

7

Financial

Highlights

and

Statement

of

Investments

8

Financial

Statements

39

Notes

to

Financial

Statements

44

Shareholder

Information

64

Visit

franklintempleton.com

for

fund

updates,

to

access

your

account,

or

to

find

helpful

financial

planning

tools.

3

franklintempleton.com

Semiannual

Report

SEMIANNUAL

REPORT

Franklin

Strategic

Income

Fund

This

semiannual

report

for

Franklin

Strategic

Income

Fund

covers

the

period

ended

October

31,

2021.

Your

Fund’s

Goal

and

Main

Investments

The

Fund

seeks

to

earn

a

high

level

of

current

income.

A

secondary

goal

is

capital

appreciation

over

the

long

term.

The

Fund

uses

an

active

asset

allocation

process

and

under

normal

market

conditions

invests

at

least

65%

of

its

assets

in

U.S.

and

foreign

debt

securities,

including

those

in

emerging

markets.

The

Fund

may

invest

in

all

varieties

of

fixed,

variable

and

floating

rate

income

securities,

including

bonds,

U.S.

and

foreign

government

and

agency

securities,

corporate

loans

(and

loan

participations),

mortgage-backed

securities

and

other

asset-backed

securities.

Performance

Overview

The

Fund’s

Class

A

shares

posted

a

+1.74%

cumulative

total

return

for

the

six

months

under

review.

In

comparison,

the

Bloomberg

U.S.

Aggregate

Bond

Index,

which

represents

the

U.S.

investment-grade

fixed

rate

taxable

bond

market,

posted

a

+1.06%

cumulative

total

return.

1

The

Lipper

Multi-Sector

Income

Funds

Classification

Average,

which

consists

of

funds

chosen

by

Lipper

that

seek

current

income

by

allocating

assets

among

different

fixed

income

securities

sectors,

with

a

significant

portion

rated

below

investment

grade,

posted

a

+1.26%

cumulative

total

return.

2

You

can

find

more

of

the

Fund’s

performance

data

in

the

Performance

Summary

beginning

on

page

5

.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

For

most

recent

month-end

performance,

go

to

franklintempleton.com

or

call

(800)

342-5236.

Economic

and

Market

Overview

The

U.S.

bond

market,

as

measured

by

the

Bloomberg

U.S.

Aggregate

Bond

Index,

posted

a

+1.06%

total

return

for

the

six

months

ended

October

31,

2021.

1

The

inflation

rate

was

elevated

during

the

six-month

period

amid

increased

demand

and

supply-chain

bottlenecks.

U.S.

consumer

spending

on

goods

remained

strong,

adding

to

pressure

on

the

prices

of

many

products.

Longer-term

bonds

generally

outperformed

shorter-term

bonds

as

the

yield

curve

flattened.

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

and

mortgage

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.

U.S.

Treasury

bonds,

as

measured

by

the

Bloomberg

U.S.

Treasury

Index,

posted

a

+1.01%

total

return

for

the

six-

month

period.

1

The

10-year

U.S.

Treasury

yield

(which

moves

inversely

to

price)

declined

amid

uncertainty

about

the

pace

of

the

recovery

and

the

timing

of

future

Fed

monetary

policy

shifts.

Mortgage-backed

securities

(MBS),

as

measured

by

the

Bloomberg

MBS

Index,

posted

a

-0.31%

total

return

for

the

period,

despite

ongoing

Fed

support.

1

Corporate

bonds

generally

followed

a

similar

trajectory

as

U.S.

Treasuries,

but

they

benefited

from

a

continued

decline

in

spreads

between

the

10-year

U.S.

Treasury

and

corporate

bond

yields

amid

an

increase

in

investors’

appetite

for

risk.

High-yield

corporate

bonds,

as

represented

by

the

Bloomberg

U.S.

Corporate

High

Yield

Bond

Index,

posted

a

+2.36%

total

return,

while

investment-grade

corporate

bonds,

as

represented

by

the

Bloomberg

U.S.

Corporate

Bond

Index,

posted

a

+2.66%

total

return.

1

1.

Source:

Morningstar.

Treasuries,

if

held

to

maturity,

offer

a

fixed

rate

of

return

and

a

fixed

principal

value;

their

interest

payments

and

principal

are

guaranteed.

2.

Source:

Lipper,

a

Thomson

Reuters

Company.

For

the

six-month

period

ended

10/31/21,

this

category

consisted

of

369

funds.

Lipper

calculations

do

not

include

sales

charges

or

expense

subsidization

by

a

fund’s

manager.

Fund

performance

relative

to

the

average

may

have

differed

if

these

or

other

factors

had

been

considered.

The

indexes

are

unmanaged

and

include

reinvestment

of

any

income

or

distributions.

They

do

not

reflect

any

fees,

expenses

or

sales

charges.

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

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

13

.

Franklin

Strategic

Income

Fund

4

franklintempleton.com

Semiannual

Report

Investment

Strategy

We

use

an

active

asset

allocation

strategy

to

try

to

achieve

the

Fund’s

investment

goals.

We

employ

a

top-down

analysis

of

macroeconomic

trends

combined

with

a

bottom-

up

fundamental

analysis

of

market

sectors,

industries

and

issuers

to

try

to

take

advantage

of

varying

sector

reactions

to

economic

events.

We

regularly

enter

into

various

currency-

related

transactions

involving

derivative

instruments,

including

currency

and

cross

currency

forwards,

currency

swaps,

currency

and

currency

index

futures

contracts

and

currency

options.

The

Fund

also

regularly

enters

into

interest-rate

and

credit-related

transactions

involving

derivative

instruments,

including

interest-rate,

fixed

income

total

return

and

credit

default

swaps

and

interest

rate

and/or

bond

futures

contracts.

Manager’s

Discussion

Over

the

reporting

period,

fixed

income

total

return

performance

was

mixed,

with

spread

sectors

generally

posting

positive

total

returns,

while

higher

quality

government

and

agency

sectors

lagged.

On

an

excess

returns

basis,

most

fixed

income

sectors,

including

Treasury

Inflation-Protected

Securities

(TIPS),

high-yield

corporate

credit

(HY)

and

senior

secured

floating-rate

bank

loans

outperformed

U.S.

Treasuries,

while

U.S.

agency

securities,

emerging

market

bonds

and

fixed-rate

agency

mortgage-

backed

securities

(MBS)

posted

negative

excess

returns

Additionally,

fixed

income

spreads

tightened

across

most

asset

classes

over

the

period.

While

portfolio

positioning

was

diversified

from

a

risk

perspective,

the

Fund’s

largest

allocation

was

in

corporate

credit—inclusive

of

HY

and

investment-grade

corporate

credit

(IG),

senior

secured

floating-rate

bank

loans

and

collateralized

loan

obligations

(CLOs)—with

a

majority

of

credit

exposure

in

HY

corporate

securities.

We

remain

constructive

on

the

HY

asset

class

and

added

to

the

sector

over

the

reporting

period

as

credit

fundamentals

for

the

U.S.

HY

corporate

bond

market

have

meaningfully

improved

the

last

two

quarters.

We

maintained

our

allocation

to

IG

corporate

bonds

and

senior

secured

floating-rate

bank

loans,

while

paring

our

CLO

exposure.

We

remain

generally

comfortable

with

IG

corporate

bonds

fundamentals

and

market

technical

conditions

and

believe

the

sector

should

still

benefit

from

above

trend

growth,

even

if

gross

domestic

product

and

earnings

growth

have

peaked.

We

reduced

our

allocations

to

MBS,

TIPS

and

taxable

municipal

bonds.

During

the

period,

our

allocation

to

corporate

credit,

inclusive

of

HY,

senior

secured

floating-rate

bank

loans

and

IG,

was

the

most

significant

contributor

to

performance,

primarily

from

HY

allocation.

Our

U.S.

yield

curve

positioning

also

helped

Fund

results,

as

did

non-dollar

denominated

debt

holdings

and

taxable

municipal

bond

allocation.

In

contrast,

our

allocation

to

MBS

was

a

slight

detractor

from

Fund

performance.

During

the

period,

foreign

currency

exposure

detracted

from

performance,

as

gains

mainly

from

our

Indonesian

rupiah

and

Mexican

peso

positions

were

offset

by

negative

returns

mainly

from

our

South

Korean

won,

Brazilian

real,

Turkish

lira

and

Australian

dollar

positions.

Thank

you

for

your

participation

in

Franklin

Strategic

Income

Fund.

We

look

forward

to

continuing

to

serve

your

investment

needs.

Sonal

Desai,

Ph.D.

Patricia

O’Connor,

CFA

William

Chong,

CFA,

FRM

David

Yuen,

CFA,

FRM

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.

Portfolio

Composition

10/31/21

%

of

Total

Net

Assets

Corporate

Bonds

51.1%

Foreign

Government

and

Agency

Securities

14.6%

Residential

Mortgage-Backed

Securities

8.3%

Management

Investment

Companies

8.3%

Asset-Backed

Securities

7.0%

U.S.

Government

and

Agency

Securities

2.1%

Senior

Floating

Rate

Interests

1.6%

Other

3.4%

Short-Term

Investments

&

Other

Net

Assets

3.6%

Performance

Summary

as

of

October

31,

2021

Franklin

Strategic

Income

Fund

5

franklintempleton.com

Semiannual

Report

The

performance

tables

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

3.75%

and

the

minimum

is

0%.

Class

A:

3.75%

maximum

initial

sales

charge;

Advisor

Class:

no

sales

charges.

For

other

share

classes,

visit

franklintempleton.com.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

For

most

recent

month-end

performance,

go

to

franklintempleton.com

or

call

(800)

342-5236.

Share

Class

Cumulative

Total

Return

2

Average

Annual

Total

Return

3

–

A

4

6-Month

+1.74%

-2.10%

1-Year

+6.13%

+2.14%

5-Year

+17.13%

+2.42%

10-Year

+41.28%

+3.12%

Advisor

6-Month

+1.87%

+1.87%

1-Year

+6.38%

+6.38%

5-Year

+18.58%

+3.47%

10-Year

+44.95%

+3.78%

30-Day

Standardized

Yield

6

Share

Class

Distribution

Rate

5

(with

fee

waiver)

(without

fee

waiver)

A

3.73%

2.47%

2.43%

Advisor

4.14%

2.82%

2.77%

See

page

6

for

Performance

Summary

footnotes.

Franklin

Strategic

Income

Fund

Performance

Summary

6

franklintempleton.com

Semiannual

Report

Each

class

of

shares

is

available

to

certain

eligible

investors

and

has

different

annual

fees

and

expenses,

as

described

in

the

prospectus.

All

investments

involve

risks,

including

possible

loss

of

principal.

Bond

prices

generally

move

in

the

opposite

direction

of

interest

rates.

Thus,

as

prices

of

bonds

in

the

Fund

adjust

to

a

rise

in

interest

rates,

the

Fund’s

share

price

may

decline.

Changes

in

the

financial

strength

of

a

bond

issuer

or

in

a

bond’s

credit

rating

may

affect

its

value.

High

yields

reflect

the

higher

credit

risks

associated

with

certain

lower-rated

securities

held

in

the

portfolio.

Floating-rate

loans

and

high-yield

corporate

bonds

are

rated

below

investment

grade

and

are

subject

to

greater

risk

of

default,

which

could

result

in

loss

of

principal—a

risk

that

may

be

heightened

in

a

slowing

economy.

The

risks

of

foreign

securities

include

currency

fluctuations

and

political

uncertainty.

Investments

in

developing

markets

involve

heightened

risks

related

to

the

same

factors,

in

addition

to

those

associated

with

their

relatively

small

size

and

lesser

liquidity.

Investing

in

derivative

securities

and

the

use

of

foreign

currency

techniques

involve

special

risks

as

such

may

not

achieve

the

anticipated

benefits

and/or

may

result

in

losses

to

the

Fund.

Events

such

as

the

spread

of

deadly

diseases,

disasters,

and

financial,

political

or

social

disruptions,

may

heighten

risks

and

adversely

affect

perfor-

mance.

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

8/31/22.

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

3/1/19,

these

shares

were

offered

at

a

higher

initial

sales

charge

of

4.25%,

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

3.75%.

5.

Distribution

rate

is

based

on

the

sum

of

the

respective

class’s

dividend

distributions

over

the

past

six

months

and

the

maximum

offering

price

(NAV

for

Advisor

Class)

per

share

on

10/31/21.

6.

The

Fund’s

30-day

standardized

yield

is

calculated

over

a

trailing

30-day

period

using

the

yield

to

maturity

on

bonds

and/or

the

dividends

accrued

on

stocks.

It

may

not

equal

the

Fund’s

actual

income

distribution

rate,

which

reflects

the

Fund’s

past

dividends

paid

to

shareholders.

7.

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

Consolidated

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

(5/1/21–10/31/21)

Share

Class

Net

Investment

Income

A

$0.1642

C

$0.1427

R

$0.1522

R6

$0.1819

Advisor

$0.1761

Total

Annual

Operating

Expenses

7

Share

Class

With

Fee

Waiver

Without

Fee

Waiver

A

0.87%

0.89%

Advisor

0.62%

0.64%

Your

Fund’s

Expenses

Franklin

Strategic

Income

Fund

7

franklintempleton.com

Semiannual

Report

As

a

Fund

shareholder,

you

can

incur

two

types

of

costs:

(1)

transaction

costs,

including

sales

charges

(loads)

on

Fund

purchases

and

redemptions;

and

(2)

ongoing

Fund

costs,

including

management

fees,

distribution

and

service

(12b-1)

fees,

and

other

Fund

expenses.

All

mutual

funds

have

ongoing

costs,

sometimes

referred

to

as

operating

expenses.

The

table

below

shows

ongoing

costs

of

investing

in

the

Fund

and

can

help

you

understand

these

costs

and

compare

them

with

those

of

other

mutual

funds.

The

table

assumes

a

$1,000

investment

held

for

the

six

months

indicated.

Actual

Fund

Expenses

The

table

below

provides

information

about

actual

account

values

and

actual

expenses

in

the

columns

under

the

heading

“Actual.”

In

these

columns

the

Fund’s

actual

return,

which

includes

the

effect

of

Fund

expenses,

is

used

to

calculate

the

“Ending

Account

Value”

for

each

class

of

shares.

You

can

estimate

the

expenses

you

paid

during

the

period

by

following

these

steps

(

of

course,

your

account

value

and

expenses

will

differ

from

those

in

this

illustration

):

Divide

your

account

value

by

$1,000

(

if

your

account

had

an

$8,600

value,

then

$8,600

÷

$1,000

=

8.6

).

Then

multiply

the

result

by

the

number

in

the

row

for

your

class

of

shares

under

the

headings

“Actual”

and

“Expenses

Paid

During

Period”

(

if

Actual

Expenses

Paid

During

Period

were

$7.50,

then

8.6

x

$7.50

=$64.50

).

In

this

illustration,

the

actual

expenses

paid

this

period

are

$64.50.

Hypothetical

Example

for

Comparison

with

Other

Funds

Under

the

heading

“Hypothetical”

in

the

table,

information

is

provided

about

hypothetical

account

values

and

hypothetical

expenses

based

on

the

Fund’s

actual

expense

ratio

and

an

assumed

rate

of

return

of

5%

per

year

before

expenses,

which

is

not

the

Fund’s

actual

return.

This

information

may

not

be

used

to

estimate

the

actual

ending

account

balance

or

expenses

you

paid

for

the

period,

but

it

can

help

you

compare

ongoing

costs

of

investing

in

the

Fund

with

those

of

other

funds.

To

do

so,

compare

this

5%

hypothetical

example

for

the

class

of

shares

you

hold

with

the

5%

hypothetical

examples

that

appear

in

the

shareholder

reports

of

other

funds.

Please

note

that

expenses

shown

in

the

table

are

meant

to

highlight

ongoing

costs

and

do

not

reflect

any

transactional

costs.

Therefore,

information

under

the

heading

“Hypothetical”

is

useful

in

comparing

ongoing

costs

only,

and

will

not

help

you

compare

total

costs

of

owning

different

funds.

In

addition,

if

transactional

costs

were

included,

your

total

costs

would

have

been

higher.

1.

Expenses

are

equal

to

the

annualized

expense

ratio

for

the

six-month

period

as

indicated

above—in

the

far

right

column—multiplied

by

the

simple

average

account

value

over

the

period

indicated,

and

then

multiplied

by

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

$1,017.40

$4.28

$1,020.96

$4.29

0.84%

C

$1,000

$1,015.10

$6.33

$1,018.92

$6.34

1.25%

R

$1,000

$1,015.10

$5.55

$1,019.70

$5.56

1.09%

R6

$1,000

$1,019.30

$2.40

$1,022.82

$2.41

0.47%

Advisor

$1,000

$1,018.70

$3.01

$1,022.22

$3.02

0.59%

Franklin

Strategic

Series

Financial

Highlights

Franklin

Strategic

Income

Fund

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

8

2

a

Six

Months

Ended

October

31,

2021

(unaudited)

Year

Ended

April

30,

2021*

2020

a

2019

a

2018

a

2017

a

Class

A

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$9.44

$8.67

$9.61

$9.61

$9.84

$9.32

Income

from

investment

operations

b

:

Net

investment

income

c

.............

0.15

0.37

0.38

0.42

0.39

0.39

Net

realized

and

unrealized

gains

(losses)

0.01

0.75

(0.90)

—

d

(0.32)

0.30

Total

from

investment

operations

........

0.16

1.12

(0.52)

0.42

0.07

0.69

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

....................

(0.16)

(0.35)

(0.42)

(0.42)

(0.30)

(0.17)

Net

asset

value,

end

of

period

..........

$9.44

$9.44

$8.67

$9.61

$9.61

$9.84

Total

return

e

.......................

1.74%

13.05%

(5.72)%

4.52%

0.64%

7.50%

Ratios

to

average

net

assets

f

Expenses

before

waiver

and

payments

by

affiliates

..........................

0.89%

0.88%

0.88%

0.89%

0.90%

0.88%

Expenses

net

of

waiver

and

payments

by

affiliates

g

..........................

0.84%

0.86%

0.86%

0.84%

0.85%

0.82%

Net

investment

income

...............

3.08%

3.93%

4.01%

4.39%

3.93%

4.08%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$2,968,424

$2,862,068

$2,686,523

$3,131,799

$3,291,002

$3,833,786

Portfolio

turnover

rate

................

32.93%

111.72%

h

118.64%

116.21%

h

115.94%

140.83%

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

i

........................

21.97%

54.21%

h

86.69%

39.01%

h

47.40%

87.33%

*Includes

the

consolidated

operations

of

FT

Holdings

Corporation

II

from

May

1,

2020

through

April

27,

2021.

a

Includes

the

consolidated

operations

of

FT

Holdings

Corporation

II.

b

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

c

Based

on

average

daily

shares

outstanding.

d

Amount

rounds

to

less

than

$0.01

per

share.

e

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable,

and

is

not

annualized

for

periods

less

than

one

year.

f

Ratios

are

annualized

for

periods

less

than

one

year.

g

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

h

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

i

See

Note

1(i)

regarding

mortgage

dollar

rolls.

Franklin

Strategic

Series

Financial

Highlights

Franklin

Strategic

Income

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

9

a

Six

Months

Ended

October

31,

2021

(unaudited)

Year

Ended

April

30,

2021*

2020

a

2019

a

2018

a

2017

a

Class

C

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$9.44

$8.67

$9.61

$9.60

$9.84

$9.31

Income

from

investment

operations

b

:

Net

investment

income

c

.............

0.13

0.33

0.34

0.38

0.35

0.35

Net

realized

and

unrealized

gains

(losses)

0.01

0.75

(0.90)

0.01

(0.33)

0.31

Total

from

investment

operations

........

0.14

1.08

(0.56)

0.39

0.02

0.66

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

....................

(0.14)

(0.31)

(0.38)

(0.38)

(0.26)

(0.13)

Net

asset

value,

end

of

period

..........

$9.44

$9.44

$8.67

$9.61

$9.60

$9.84

Total

return

d

.......................

1.51%

12.58%

(6.11)%

4.19%

0.14%

7.19%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

..........................

1.29%

1.28%

1.28%

1.29%

1.30%

1.28%

Expenses

net

of

waiver

and

payments

by

affiliates

f

..........................

1.25%

1.26%

1.26%

1.24%

1.25%

1.22%

Net

investment

income

...............

2.65%

3.51%

3.61%

3.99%

3.53%

3.68%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$227,217

$387,589

$518,795

$716,327

$1,078,890

$1,385,981

Portfolio

turnover

rate

................

32.93%

111.72%

g

118.64%

116.21%

g

115.94%

140.83%

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

h

........................

21.97%

54.21%

g

86.69%

39.01%

g

47.40%

87.33%

*

Includes

the

consolidated

operations

of

FT

Holdings

Corporation

II

from

May

1,

2020

through

April

27,

2021.

a

Includes

the

consolidated

operations

of

FT

Holdings

Corporation

II.

b

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

c

Based

on

average

daily

shares

outstanding.

d

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable,

and

is

not

annualized

for

periods

less

than

one

year.

e

Ratios

are

annualized

for

periods

less

than

one

year.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

g

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

h

See

Note

1(i)

regarding

mortgage

dollar

rolls.

Franklin

Strategic

Series

Financial

Highlights

Franklin

Strategic

Income

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

10

a

Six

Months

Ended

October

31,

2021

(unaudited)

Year

Ended

April

30,

2021*

2020

a

2019

a

2018

a

2017

a

Class

R

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$9.40

$8.63

$9.57

$9.57

$9.81

$9.28

Income

from

investment

operations

b

:

Net

investment

income

c

.............

0.13

0.34

0.36

0.39

0.36

0.37

Net

realized

and

unrealized

gains

(losses)

0.02

0.76

(0.91)

0.01

(0.33)

0.31

Total

from

investment

operations

........

0.15

1.10

(0.55)

0.40

0.03

0.68

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

....................

(0.15)

(0.33)

(0.39)

(0.40)

(0.27)

(0.15)

Net

asset

value,

end

of

period

..........

$9.40

$9.40

$8.63

$9.57

$9.57

$9.81

Total

return

d

.......................

1.51%

12.83%

(5.98)%

4.28%

0.29%

7.38%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

..........................

1.14%

1.13%

1.13%

1.14%

1.15%

1.13%

Expenses

net

of

waiver

and

payments

by

affiliates

f

..........................

1.09%

1.11%

1.11%

1.09%

1.10%

1.07%

Net

investment

income

...............

2.83%

3.68%

3.76%

4.14%

3.68%

3.83%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$55,862

$59,366

$62,063

$85,458

$105,692

$146,552

Portfolio

turnover

rate

................

32.93%

111.72%

g

118.64%

116.21%

g

115.94%

140.83%

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

h

........................

21.97%

54.21%

g

86.69%

39.01%

g

47.40%

87.33%

*Includes

the

consolidated

operations

of

FT

Holdings

Corporation

II

from

May

1,

2020

through

April

27,

2021.

a

Includes

the

consolidated

operations

of

FT

Holdings

Corporation

II.

b

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

c

Based

on

average

daily

shares

outstanding.

d

Total

return

is

not

annualized

for

periods

less

than

one

year.

e

Ratios

are

annualized

for

periods

less

than

one

year.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

g

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

h

See

Note

1(i)

regarding

mortgage

dollar

rolls.

Franklin

Strategic

Series

Financial

Highlights

Franklin

Strategic

Income

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

11

a

Six

Months

Ended

October

31,

2021

(unaudited)

Year

Ended

April

30,

2021*

2020

a

2019

a

2018

a

2017

a

Class

R6

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$9.45

$8.68

$9.63

$9.62

$9.86

$9.33

Income

from

investment

operations

b

:

Net

investment

income

c

.............

0.17

0.40

0.43

0.45

0.43

0.43

Net

realized

and

unrealized

gains

(losses)

0.01

0.75

(0.93)

0.02

(0.34)

0.31

Total

from

investment

operations

........

0.18

1.15

(0.50)

0.47

0.09

0.74

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

....................

(0.18)

(0.38)

(0.45)

(0.46)

(0.33)

(0.21)

Net

asset

value,

end

of

period

..........

$9.45

$9.45

$8.68

$9.63

$9.62

$9.86

Total

return

d

.......................

1.93%

13.45%

(5.46)%

5.03%

0.95%

8.03%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

..........................

0.54%

0.54%

0.52%

0.51%

0.50%

0.48%

Expenses

net

of

waiver

and

payments

by

affiliates

f

..........................

0.47%

0.50%

0.49%

0.45%

0.45%

0.42%

Net

investment

income

...............

3.45%

4.30%

4.38%

4.78%

4.33%

4.48%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$143,595

$132,736

$133,575

$307,287

$433,068

$369,106

Portfolio

turnover

rate

................

32.93%

111.72%

g

118.64%

116.21%

g

115.94%

140.83%

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

h

........................

21.97%

54.21%

g

86.69%

39.01%

g

47.40%

87.33%

*Includes

the

consolidated

operations

of

FT

Holdings

Corporation

II

from

May

1,

2020

through

April

27,

2021.

a

Includes

the

consolidated

operations

of

FT

Holdings

Corporation

II.

b

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

c

Based

on

average

daily

shares

outstanding.

d

Total

return

is

not

annualized

for

periods

less

than

one

year.

e

Ratios

are

annualized

for

periods

less

than

one

year.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

g

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

h

See

Note

1(i)

regarding

mortgage

dollar

rolls.

Franklin

Strategic

Series

Financial

Highlights

Franklin

Strategic

Income

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

12

a

Six

Months

Ended

October

31,

2021

(unaudited)

Year

Ended

April

30,

2021*

2020

a

2019

a

2018

a

2017

a

Advisor

Class

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$9.45

$8.68

$9.62

$9.62

$9.85

$9.33

Income

from

investment

operations

b

:

Net

investment

income

c

.............

0.16

0.39

0.40

0.44

0.41

0.42

Net

realized

and

unrealized

gains

(losses)

0.02

0.75

(0.90)

—

d

(0.32)

0.30

Total

from

investment

operations

........

0.18

1.14

(0.50)

0.44

0.09

0.72

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

....................

(0.18)

(0.37)

(0.44)

(0.44)

(0.32)

(0.20)

Net

asset

value,

end

of

period

..........

$9.45

$9.45

$8.68

$9.62

$9.62

$9.85

Total

return

e

.......................

1.87%

13.32%

(5.47)%

4.88%

0.79%

7.76%

Ratios

to

average

net

assets

f

Expenses

before

waiver

and

payments

by

affiliates

..........................

0.64%

0.63%

0.63%

0.64%

0.65%

0.63%

Expenses

net

of

waiver

and

payments

by

affiliates

g

..........................

0.59%

0.61%

0.61%

0.59%

0.60%

0.57%

Net

investment

income

...............

3.33%

4.18%

4.26%

4.64%

4.18%

4.33%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$443,301

$462,624

$517,522

$608,317

$933,747

$1,070,103

Portfolio

turnover

rate

................

32.93%

111.72%

h

118.64%

116.21%

h

115.94%

140.83%

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

i

........................

21.97%

54.21%

h

86.69%

39.01%

h

47.40%

87.33%

*

Includes

the

consolidated

operations

of

FT

Holdings

Corporation

II

from

May

1,

2020

through

April

27,

2021.

a

Includes

the

consolidated

operations

of

FT

Holdings

Corporation

II.

b

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

c

Based

on

average

daily

shares

outstanding

d

Amount

rounds

to

less

than

$0.01

per

share.

e

Total

return

is

not

annualized

for

periods

less

than

one

year.

f

Ratios

are

annualized

for

periods

less

than

one

year.

g

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

h

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

i

See

Note

1(i)

regarding

mortgage

dollar

rolls.

Franklin

Strategic

Series

Statement

of

Investments

(unaudited),

October

31,

2021

Franklin

Strategic

Income

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

13

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

0.3%

Energy

Equipment

&

Services

0.1%

a

Weatherford

International

plc

.............................

United

States

151,545

$

4,403,898

Machinery

0.1%

a

Birch

Permian

Holdings,

Inc.

.............................

United

States

46,176

692,640

a

Birch

Permian

Holdings,

Inc.

.............................

United

States

359,948

5,354,226

6,046,866

Media

0.1%

a

Clear

Channel

Outdoor

Holdings,

Inc.

......................

United

States

285,564

828,135

a

iHeartMedia

,

Inc.,

A

....................................

United

States

115,085

2,230,347

a,b

iHeartMedia

,

Inc.,

B

...................................

United

States

1,941

34,984

3,093,466

Multiline

Retail

0.0%

a,b,c

K2016470219

South

Africa

Ltd.,

A

.........................

South

Africa

125,940,079

—

a,b,c

K2016470219

South

Africa

Ltd.,

B

.........................

South

Africa

12,532,821

—

—

Oil,

Gas

&

Consumable

Fuels

0.0%

†

a

Amplify

Energy

Corp.

..................................

United

States

5,288

18,032

a,b

Riviera

Resources,

Inc.

.................................

United

States

84,462

21,817

39,849

Specialty

Retail

0.0%

†

a

Party

City

Holdco,

Inc.

..................................

United

States

1

7

Total

Common

Stocks

(Cost

$23,885,831)

......................................

13,584,086

Management

Investment

Companies

8.3%

Capital

Markets

8.3%

d

Franklin

Floating

Rate

Income

Fund

.......................

United

States

34,705,988

282,853,805

SPDR

Blackstone

Senior

Loan

ETF

.......................

United

States

750,000

34,425,000

317,278,805

Total

Management

Investment

Companies

(Cost

$375,545,063)

...................

317,278,805

Warrants

Warrants

0.0%

†

Oil,

Gas

&

Consumable

Fuels

0.0%

†

a,b

Battalion

Oil

Corp.,

A,

10/08/22

...........................

United

States

10,639

2

a,b

Battalion

Oil

Corp.,

B,

10/08/22

...........................

United

States

13,300

1

a,b

Battalion

Oil

Corp.,

C,

10/08/22

...........................

United

States

17,100

—

a,b

Chaparral

Energy,

Inc.,

10/01/24

..........................

United

States

9

—

a,b

Chaparral

Energy,

Inc.,

10/01/25

..........................

United

States

9

—

3

Paper

&

Forest

Products

0.0%

†

a

Verso

Corp.,

7/25/23

...................................

United

States

4,095

22,522

Software

0.0%

a,b,c

WorkCapital

BSD

SARL,

2/13/26

..........................

Luxembourg

6,000,000

—

Total

Warrants

(Cost

$750,000)

................................................

22,525

Franklin

Strategic

Series

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

14

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Convertible

Bonds

0.0%

†

Wireless

Telecommunication

Services

0.0%

†

e,f,g

Digicel

Group

Holdings

Ltd.,

Sub.

Bond,

144A,

PIK,

7%,

Perpetual

Bermuda

642,010

$

584,619

Total

Convertible

Bonds

(Cost

$155,658)

.......................................

584,619

Corporate

Bonds

51.1%

Aerospace

&

Defense

0.7%

Boeing

Co.

(The),

Senior

Note,

2.196%,

2/04/26

..............

United

States

9,500,000

9,519,078

g

TransDigm

,

Inc.,

Senior

Secured

Note,

144A,

6.25%,

3/15/26

....

United

States

15,000,000

15,675,000

25,194,078

Air

Freight

&

Logistics

0.1%

g

DAE

Funding

LLC,

Senior

Note,

144A,

1.55%,

8/01/24

.........

United

Arab

Emirates

2,300,000

2,271,825

FedEx

Corp.,

Senior

Bond,

4.05%,

2/15/48

..................

United

States

1,200,000

1,370,552

3,642,377

Airlines

0.7%

g

American

Airlines

Inc

/

AAdvantage

Loyalty

IP

Ltd.,

Senior

Secured

Note,

144A,

5.75%,

4/20/29

............................

United

States

5,900,000

6,357,250

g

Delta

Air

Lines,

Inc.

/

SkyMiles

IP

Ltd.,

Senior

Secured

Note,

144A,

4.5%,

10/20/25

.....................................

United

States

10,400,000

11,098,905

g

Hawaiian

Brand

Intellectual

Property

Ltd.

/

HawaiianMiles

Loyalty

Ltd.,

Senior

Secured

Note,

144A,

5.75%,

1/20/26

............

United

States

9,100,000

9,566,375

g

United

Airlines,

Inc.,

Senior

Secured

Note,

144A,

4.375%,

4/15/26

.

United

States

1,700,000

1,760,724

28,783,254

Auto

Components

1.3%

g

Allison

Transmission,

Inc.

,

Senior

Bond,

144A,

5.875%,

6/01/29

.....................

United

States

7,000,000

7,542,500

Senior

Bond,

144A,

3.75%,

1/30/31

......................

United

States

6,700,000

6,449,051

Dana,

Inc.,

Senior

Note,

5.625%,

6/15/28

...................

United

States

12,400,000

13,128,500

g

Dornoch

Debt

Merger

Sub,

Inc.,

Senior

Note,

144A,

6.625%,

10/15/29

..........................................

United

States

8,600,000

8,492,500

Goodyear

Tire

&

Rubber

Co.

(The)

,

Senior

Bond,

4.875%,

3/15/27

..........................

United

States

4,700,000

5,004,325

g

Senior

Note,

144A,

5%,

7/15/29

........................

United

States

8,300,000

8,766,875

49,383,751

Automobiles

0.3%

g

Jaguar

Land

Rover

Automotive

plc,

Senior

Note,

144A,

5.5%,

7/15/29

...........................................

United

Kingdom

11,800,000

11,446,059

Banks

1.6%

Banco

Santander

SA,

Sub.

Bond,

2.749%,

12/03/30

...........

Spain

3,000,000

2,946,355

Bank

of

America

Corp.

,

Senior

Bond,

3.248%,

10/21/27

.........................

United

States

5,000,000

5,334,000

Senior

Bond,

2.676%

to

6/19/40,

FRN

thereafter,

6/19/41

.....

United

States

4,000,000

3,858,795

g

China

Construction

Bank

Corp.,

Sub.

Bond,

Reg

S,

4.25%

to

2/27/24,

FRN

thereafter,

2/27/29

........................

China

8,000,000

8,456,366

f

Comerica,

Inc.,

Junior

Sub.

Bond,

5.625%

to

10/01/25,

FRN

thereafter,

Perpetual

.................................

United

States

3,000,000

3,318,750

HSBC

Holdings

plc,

Senior

Bond,

2.848%

to

6/04/30,

FRN

thereafter,

6/04/31

...........................................

United

Kingdom

8,300,000

8,438,655

JPMorgan

Chase

&

Co.

,

Senior

Bond,

2.522%

to

4/22/30,

FRN

thereafter,

4/22/31

.....

United

States

9,400,000

9,519,676

Franklin

Strategic

Series

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

15

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Banks

(continued)

JPMorgan

Chase

&

Co.,

(continued)

Senior

Bond,

2.525%

to

11/19/40,

FRN

thereafter,

11/19/41

....

United

States

4,000,000

$

3,804,235

g

Societe

Generale

SA,

Senior

Bond,

144A,

2.889%

to

6/09/31,

FRN

thereafter,

6/09/32

...................................

France

7,500,000

7,493,454

SVB

Financial

Group,

Senior

Bond,

3.125%,

6/05/30

...........

United

States

2,700,000

2,872,340

g

UniCredit

SpA

,

Senior

Bond,

144A,

3.127%

to

6/03/31,

FRN

thereafter,

6/03/32

...................................

Italy

5,300,000

5,279,536

61,322,162

Beverages

0.5%

Anheuser-Busch

InBev

Worldwide,

Inc.,

Senior

Bond,

3.5%,

6/01/30

Belgium

10,000,000

10,971,935

g

Primo

Water

Holdings,

Inc.,

Senior

Note,

144A,

4.375%,

4/30/29

..

Canada

9,000,000

8,930,897

19,902,832

Biotechnology

0.2%

AbbVie,

Inc.,

Senior

Note,

3.2%,

11/21/29

...................

United

States

6,000,000

6,415,708

Building

Products

0.7%

Carrier

Global

Corp.,

Senior

Note,

2.722%,

2/15/30

............

United

States

16,000,000

16,431,017

Owens

Corning,

Senior

Bond,

4.3%,

7/15/47

.................

United

States

2,000,000

2,359,387

g

Standard

Industries,

Inc.

,

Senior

Bond,

144A,

4.75%,

1/15/28

......................

United

States

4,800,000

4,956,000

Senior

Bond,

144A,

4.375%,

7/15/30

.....................

United

States

1,600,000

1,602,000

Senior

Bond,

144A,

3.375%,

1/15/31

.....................

United

States

1,400,000

1,300,089

26,648,493

Capital

Markets

0.8%

Goldman

Sachs

Group,

Inc.

(The),

Senior

Bond,

3.21%

to

4/22/41,

FRN

thereafter,

4/22/42

...............................

United

States

7,000,000

7,267,203

Morgan

Stanley,

Senior

Bond,

3.591%

to

7/22/27,

FRN

thereafter,

7/22/28

...........................................

United

States

10,000,000

10,816,696

g

MSCI,

Inc.,

Senior

Bond,

144A,

3.25%,

8/15/33

...............

United

States

11,800,000

11,860,416

29,944,315

Chemicals

3.8%

g

Alpek

SAB

de

CV,

Senior

Bond,

144A,

4.25%,

9/18/29

.........

Mexico

8,000,000

8,478,000

g

Axalta

Coating

Systems

LLC,

Senior

Note,

144A,

3.375%,

2/15/29

United

States

6,150,000

5,865,009

g

Braskem

Idesa

SAPI,

Senior

Secured

Bond,

144A,

6.99%,

2/20/32

Mexico

7,000,000

7,175,000

g

Braskem

Netherlands

Finance

BV,

Senior

Bond,

144A,

4.5%,

1/31/30

...........................................

Brazil

15,600,000

15,850,068

CF

Industries,

Inc.,

Senior

Bond,

5.15%,

3/15/34

..............

United

States

3,400,000

4,140,010

g

CNAC

HK

Finbridge

Co.

Ltd.,

Senior

Note,

Reg

S,

4.875%,

3/14/25

China

7,800,000

8,506,620

g

Consolidated

Energy

Finance

SA,

Senior

Note,

144A,

5.625%,

10/15/28

..........................................

Switzerland

6,700,000

6,675,545

g

CVR

Partners

LP

/

CVR

Nitrogen

Finance

Corp.,

Senior

Secured

Note,

144A,

6.125%,

6/15/28

...........................

United

States

3,000,000

3,108,750

g

Diamond

BC

BV,

Senior

Note,

144A,

4.625%,

10/01/29

.........

United

States

3,200,000

3,226,400

g

Element

Solutions,

Inc.,

Senior

Note,

144A,

3.875%,

9/01/28

.....

United

States

10,000,000

10,003,300

g

Gates

Global

LLC

/

Gates

Corp.,

Senior

Note,

144A,

6.25%,

1/15/26

United

States

12,500,000

12,937,500

g

GPD

Cos.,

Inc.,

Senior

Secured

Note,

144A,

10.125%,

4/01/26

...

United

States

5,000,000

5,356,250

g

Ingevity

Corp.,

Senior

Note,

144A,

3.875%,

11/01/28

...........

United

States

3,900,000

3,836,430

g

LSF11

A5

HoldCo

LLC,

Senior

Note,

144A,

6.625%,

10/15/29

....

United

States

5,600,000

5,612,376

Methanex

Corp.,

Senior

Note,

5.125%,

10/15/27

..............

Canada

5,000,000

5,281,250

g

SABIC

Capital

II

BV,

Senior

Bond,

144A,

4.5%,

10/10/28

........

Saudi

Arabia

5,500,000

6,257,861

Sasol

Financing

USA

LLC,

Senior

Bond,

6.5%,

9/27/28

.........

South

Africa

8,900,000

9,867,875

Franklin

Strategic

Series

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

16

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Chemicals

(continued)

g

SCIH

Salt

Holdings,

Inc.

,

Senior

Note,

144A,

6.625%,

5/01/29

.....................

United

States

4,200,000

$

3,960,012

Senior

Secured

Note,

144A,

4.875%,

5/01/28

..............

United

States

3,100,000

3,034,125

g

Syngenta

Finance

NV,

Senior

Note,

144A,

4.892%,

4/24/25

......

Switzerland

8,000,000

8,668,231

g

Unifrax

Escrow

Issuer

Corp.

,

Senior

Note,

144A,

7.5%,

9/30/29

.......................

United

States

2,000,000

1,990,730

Senior

Secured

Note,

144A,

5.25%,

9/30/28

...............

United

States

3,000,000

2,996,250

Westlake

Chemical

Corp.,

Senior

Bond,

3.375%,

6/15/30

.......

United

States

2,500,000

2,676,244

g

Yara

International

ASA,

Senior

Bond,

144A,

3.148%,

6/04/30

.....

Brazil

1,400,000

1,468,169

146,972,005

Commercial

Services

&

Supplies

0.9%

g

Allied

Universal

Holdco

LLC

/

Allied

Universal

Finance

Corp.,

Senior

Note,

144A,

6%,

6/01/29

..............................

United

States

10,100,000

9,954,964

g

Allied

Universal

Holdco

LLC

/

Allied

Universal

Finance

Corp.

/

Atlas

LuxCo

4

SARL,

Senior

Secured

Note,

144A,

4.625%,

6/01/28

..

United

States

4,100,000

4,068,020

g

APCOA

Parking

Holdings

GmbH,

Senior

Secured

Note,

144A,

4.625%,

1/15/27

.....................................

Germany

1,700,000

EUR

1,955,794

g

APX

Group,

Inc.,

Senior

Note,

144A,

5.75%,

7/15/29

...........

United

States

7,200,000

7,146,000

g

Prime

Security

Services

Borrower

LLC

/

Prime

Finance,

Inc.,

Senior

Secured

Note,

144A,

3.375%,

8/31/27

....................

United

States

13,000,000

12,468,885

35,593,663

Communications

Equipment

0.3%

g

CommScope

Technologies

LLC,

Senior

Bond,

144A,

6%,

6/15/25

.

United

States

12,652,000

12,545,913

Construction

&

Engineering

0.1%

g

Arcosa

,

Inc.,

Senior

Note,

144A,

4.375%,

4/15/29

.............

United

States

2,600,000

2,657,044

g

Rutas

2

and

7

Finance

Ltd.,

Senior

Secured

Bond,

144A,

Zero

Cpn

.,

9/30/36

...........................................

United

States

1,200,000

885,972

3,543,016

Construction

Materials

0.2%

g

Cemex

SAB

de

CV,

Senior

Bond,

144A,

3.875%,

7/11/31

.......

Mexico

7,000,000

7,034,650

Consumer

Finance

0.3%

AerCap

Ireland

Capital

DAC

/

AerCap

Global

Aviation

Trust,

Senior

Bond,

3.4%,

10/29/33

.................................

Ireland

4,500,000

4,585,541

OneMain

Finance

Corp.,

Senior

Note,

4%,

9/15/30

............

United

States

5,000,000

4,862,775

g

PRA

Group,

Inc.,

Senior

Note,

144A,

5%,

10/01/29

............

United

States

2,600,000

2,572,544

12,020,860

Containers

&

Packaging

1.7%

g

Ardagh

Metal

Packaging

Finance

USA

LLC

/

Ardagh

Metal

Packaging

Finance

plc,

Senior

Note,

144A,

4%,

9/01/29

.......

United

States

5,800,000

5,774,770

g

Ardagh

Packaging

Finance

plc

/

Ardagh

Holdings

USA,

Inc.,

Senior

Note,

144A,

5.25%,

8/15/27

............................

United

States

3,700,000

3,695,375

Crown

Americas

LLC

/

Crown

Americas

Capital

Corp.

VI,

Senior

Note,

4.75%,

2/01/26

.................................

United

States

7,100,000

7,324,005

g

Mauser

Packaging

Solutions

Holding

Co.,

Senior

Note,

144A,

7.25%,

4/15/25

...........................................

United

States

15,000,000

14,545,950

g

Owens-Brockway

Glass

Container,

Inc.,

Senior

Note,

144A,

5.875%,

8/15/23

...........................................

United

States

10,000,000

10,537,500

g

Pactiv

Evergreen

Group

Issuer

LLC

/

Pactiv

Evergreen

Group

Issuer,

Inc.,

Senior

Secured

Note,

144A,

4.375%,

10/15/28

..........

United

States

6,100,000

6,023,750

Franklin

Strategic

Series

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

17

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Containers

&

Packaging

(continued)

g

Pactiv

Evergreen

Group

Issuer,

Inc./Pactiv

Evergreen

Group

Issuer

LLC/Reynolds

Group

Holdings

Ltd.,

Senior

Secured

Note,

144A,

4%,

10/15/27

.......................................

United

States

4,600,000

$

4,506,850

g

Sealed

Air

Corp.,

Senior

Bond,

144A,

5.125%,

12/01/24

........

United

States

9,000,000

9,708,750

WRKCo

,

Inc.,

Senior

Bond,

3%,

6/15/33

....................

United

States

3,600,000

3,740,909

65,857,859

Diversified

Financial

Services

0.6%

h

Cia

Securitizadora

de

Creditos

Financeiros

Vert

-Fintech,

12,

Senior

Secured

Note,

FRN,

0%,

(BZDIOVRA

+

5.75%),

2/14/24

......

Brazil

11,513,000

BRL

2,512,881

g

Jefferson

Capital

Holdings

LLC,

Senior

Note,

144A,

6%,

8/15/26

..

United

States

7,000,000

7,097,335

g

MPH

Acquisition

Holdings

LLC,

Senior

Note,

144A,

5.75%,

11/01/28

United

States

13,000,000

11,880,700

21,490,916

Diversified

Telecommunication

Services

1.4%

g

Altice

France

Holding

SA,

Senior

Note,

144A,

6%,

2/15/28

......

Luxembourg

9,100,000

8,660,242

g

Altice

France

SA

,

Senior

Secured

Note,

144A,

5.5%,

1/15/28

................

France

2,500,000

2,509,375

Senior

Secured

Note,

144A,

5.5%,

10/15/29

...............

France

3,000,000

2,944,410

AT&T,

Inc.,

Senior

Bond,

3.65%,

9/15/59

....................

United

States

4,000,000

4,065,711

CCO

Holdings

LLC

/

CCO

Holdings

Capital

Corp.

,

g

Senior

Bond,

144A,

4.5%,

8/15/30

.......................

United

States

2,000,000

2,038,260

Senior

Bond,

4.5%,

5/01/32

............................

United

States

13,000,000

13,078,065

g

Iliad

Holding

SAS

,

Senior

Secured

Note,

144A,

6.5%,

10/15/26

...............

France

2,800,000

2,888,676

Senior

Secured

Note,

144A,

7%,

10/15/28

.................

France

5,400,000

5,573,016

g

Virgin

Media

Secured

Finance

plc,

Senior

Secured

Bond,

144A,

4.5%,

8/15/30

......................................

United

Kingdom

10,600,000

10,600,106

52,357,861

Electric

Utilities

1.8%

g

CGNPC

International

Ltd.,

Senior

Bond,

Reg

S,

3.75%,

12/11/27

..

China

3,289,000

3,494,287

Duke

Energy

Corp.

,

Senior

Bond,

2.45%,

6/01/30

...........................

United

States

3,800,000

3,801,480

Senior

Bond,

3.75%,

9/01/46

...........................

United

States

1,600,000

1,743,269

Exelon

Corp.

,

Senior

Bond,

4.05%,

4/15/30

...........................

United

States

13,400,000

15,095,405

Senior

Bond,

4.45%,

4/15/46

...........................

United

States

1,400,000

1,733,640

Southern

Co.

(The),

Senior

Bond,

4.4%,

7/01/46

..............

United

States

5,000,000

5,966,885

g

State

Grid

Overseas

Investment

BVI

Ltd.,

Senior

Bond,

144A,

3.5%,

5/04/27

...........................................

China

15,800,000

17,138,344

Virginia

Electric

and

Power

Co.,

Senior

Bond,

6.35%,

11/30/37

...

United

States

820,000

1,175,489

g

Vistra

Operations

Co.

LLC

,

Senior

Note,

144A,

4.375%,

5/01/29

.....................

United

States

11,000,000

10,903,750

Senior

Secured

Bond,

144A,

4.3%,

7/15/29

................

United

States

6,000,000

6,425,392

67,477,941

Electrical

Equipment

0.5%

g

Sensata

Technologies

BV,

Senior

Note,

144A,

4%,

4/15/29

......

United

States

9,600,000

9,762,336

g

Vertiv

Group

Corp.,

Senior

Secured

Note,

144A,

4.125%,

11/15/28

United

States

8,500,000

8,468,125

18,230,461

Franklin

Strategic

Series

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

18

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Electronic

Equipment,

Instruments

&

Components

0.3%

CDW

LLC

/

CDW

Finance

Corp.,

Senior

Note,

3.25%,

2/15/29

....

United

States

5,000,000

$

5,076,300

Flex

Ltd.,

Senior

Bond,

4.875%,

5/12/30

....................

United

States

7,100,000

8,146,001

13,222,301

Energy

Equipment

&

Services

0.6%

g

Nabors

Industries

Ltd.,

Senior

Note,

144A,

7.25%,

1/15/26

......

United

States

6,000,000

5,830,170

g

Schlumberger

Holdings

Corp.,

Senior

Note,

144A,

3.9%,

5/17/28

..

United

States

3,800,000

4,164,571

g

Weatherford

International

Ltd.

,

Senior

Note,

144A,

11%,

12/01/24

.......................

United

States

554,000

578,434

Senior

Note,

144A,

8.625%,

4/30/30

.....................

United

States

11,700,000

12,034,445

22,607,620

Entertainment

0.6%

g

Live

Nation

Entertainment,

Inc.,

Senior

Secured

Note,

144A,

3.75%,

1/15/28

...........................................

United

States

5,800,000

5,749,250

Netflix,

Inc.

,

Senior

Bond,

4.375%,

11/15/26

.........................

United

States

11,800,000

13,142,250

g

Senior

Bond,

144A,

4.875%,

6/15/30

.....................

United

States

2,000,000

2,352,540

21,244,040

Equity

Real

Estate

Investment

Trusts

(REITs)

1.4%

g

American

Finance

Trust,

Inc.

/

American

Finance

Operating

Partner

LP,

Senior

Note,

144A,

4.5%,

9/30/28

.....................

United

States

5,300,000

5,306,625

g

Global

Net

Lease,

Inc.

/

Global

Net

Lease

Operating

Partnership

LP,

Senior

Note,

144A,

3.75%,

12/15/27

......................

United

States

7,700,000

7,616,370

g

MGM

Growth

Properties

Operating

Partnership

LP

/

MGP

Finance

Co-Issuer,

Inc.,

Senior

Note,

144A,

3.875%,

2/15/29

..........

United

States

3,300,000

3,498,891

MPT

Operating

Partnership

LP

/

MPT

Finance

Corp.

,

Senior

Bond,

5.25%,

8/01/26

...........................

United

States

4,200,000

4,331,250

Senior

Bond,

3.5%,

3/15/31

............................

United

States

4,000,000

4,035,800

g

Park

Intermediate

Holdings

LLC

/

PK

Domestic

Property

LLC

/

PK

Finance

Co-Issuer

,

Senior

Secured

Note,

144A,

5.875%,

10/01/28

.............

United

States

6,700,000

7,009,875

Senior

Secured

Note,

144A,

4.875%,

5/15/29

..............

United

States

1,700,000

1,723,400

SBA

Communications

Corp.,

Senior

Note,

3.875%,

2/15/27

......

United

States

5,000,000

5,162,650

Simon

Property

Group

LP,

Senior

Bond,

4.25%,

11/30/46

.......

United

States

3,000,000

3,569,456

g

VICI

Properties

LP

/

VICI

Note

Co.,

Inc.

,

Senior

Bond,

144A,

4.125%,

8/15/30

.....................

United

States

1,300,000

1,366,625

Senior

Note,

144A,

3.75%,

2/15/27

......................

United

States

7,500,000

7,715,625

g

XHR

LP,

Senior

Secured

Note,

144A,

4.875%,

6/01/29

.........

United

States

3,500,000

3,595,200

54,931,767

Food

&

Staples

Retailing

0.2%

g

Cencosud

SA,

Senior

Bond,

144A,

4.375%,

7/17/27

...........

Chile

6,900,000

7,343,325

Food

Products

1.5%

B&G

Foods,

Inc.,

Senior

Note,

5.25%,

9/15/27

...............

United

States

7,000,000

7,187,510

g

Bimbo

Bakeries

USA,

Inc.,

Senior

Bond,

144A,

4%,

5/17/51

.....

Mexico

2,000,000

2,207,990

g

Chobani

LLC

/

Chobani

Finance

Corp.,

Inc.,

Senior

Secured

Note,

144A,

4.625%,

11/15/28

...............................

United

States

7,000,000

7,166,250

g

JBS

Finance

Luxembourg

SARL,

Senior

Bond,

144A,

3.625%,

1/15/32

...........................................

United

States

3,500,000

3,460,345

Kraft

Heinz

Foods

Co.,

Senior

Note,

3.875%,

5/15/27

..........

United

States

11,500,000

12,475,809

g

Lamb

Weston

Holdings,

Inc.,

Senior

Note

,

144A,

4.125%,

1/31/30

United

States

11,800,000

11,825,960

Franklin

Strategic

Series

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

19

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Food

Products

(continued)

g

Pilgrim's

Pride

Corp.,

Senior

Bond,

144A,

3.5%,

3/01/32

........

United

States

7,500,000

$

7,528,125

g

Post

Holdings,

Inc.,

Senior

Bond,

144A,

4.5%,

9/15/31

.........

United

States

7,000,000

6,868,505

58,720,494

Gas

Utilities

0.1%

Piedmont

Natural

Gas

Co.,

Inc.,

Senior

Bond,

3.35%,

6/01/50

....

United

States

2,800,000

2,935,183

Health

Care

Equipment

&

Supplies

0.3%

g

Mozart

Debt

Merger

Sub,

Inc.

,

Senior

Note,

144A,

5.25%,

10/01/29

.....................

United

States

5,300,000

5,386,125

Senior

Secured

Note,

144A,

3.875%,

4/01/29

..............

United

States

4,300,000

4,283,875

9,670,000

Health

Care

Providers

&

Services

1.8%

Anthem,

Inc.,

Senior

Bond,

3.7%,

9/15/49

...................

United

States

1,400,000

1,574,317

Centene

Corp.

,

Senior

Note,

4.25%,

12/15/27

..........................

United

States

3,000,000

3,146,250

Senior

Note,

2.45%,

7/15/28

...........................

United

States

2,300,000

2,295,073

Senior

Note,

4.625%,

12/15/29

.........................

United

States

2,300,000

2,484,000

Senior

Note,

3.375%,

2/15/30

..........................

United

States

1,400,000

1,438,577

Senior

Note,

2.625%,

8/01/31

..........................

United

States

5,300,000

5,220,420

g

CHS/Community

Health

Systems,

Inc.

,

Secured

Note,

144A,

6.875%,

4/15/29

....................

United

States

8,000,000

8,242,120

Senior

Secured

Note,

144A,

5.625%,

3/15/27

..............

United

States

3,700,000

3,876,490

Senior

Secured

Note,

144A,

6%,

1/15/29

..................

United

States

3,600,000

3,793,500

CVS

Health

Corp.

,

Senior

Bond,

4.3%,

3/25/28

............................

United

States

1,270,000

1,438,470

Senior

Bond,

1.75%,

8/21/30

...........................

United

States

4,000,000

3,812,460

g

DaVita,

Inc.,

Senior

Note,

144A,

4.625%,

6/01/30

.............

United

States

9,500,000

9,559,375

g

ModivCare

Escrow

Issuer,

Inc.,

Senior

Note,

144A,

5%,

10/01/29

.

United

States

4,400,000

4,481,048

Orlando

Health

Obligated

Group,

3.777%,

10/01/28

............

United

States

3,870,000

4,225,249

Quest

Diagnostics,

Inc.,

Senior

Bond,

2.8%,

6/30/31

...........

United

States

2,100,000

2,175,632

g

Tenet

Healthcare

Corp.,

Senior

Secured

Note,

144A,

4.25%,

6/01/29

United

States

11,500,000

11,655,595

69,418,576

Hotels,

Restaurants

&

Leisure

3.3%

g

Boyd

Gaming

Corp.,

Senior

Bond,

144A,

4.75%,

6/15/31

........

United

States

6,600,000

6,798,114

g

Caesars

Entertainment,

Inc.,

Senior

Secured

Note,

144A,

6.25%,

7/01/25

...........................................

United

States

3,700,000

3,896,470

g

Carnival

Corp.,

Senior

Note,

144A,

5.75%,

3/01/27

............

United

States

6,000,000

6,112,500

g

Golden

Nugget,

Inc.,

Senior

Note,

144A,

6.75%,

10/15/24

.......

United

States

8,200,000

8,230,750

g

International

Game

Technology

plc,

Senior

Secured

Note,

144A,

5.25%,

1/15/29

.....................................

United

States

10,000,000

10,525,000

Las

Vegas

Sands

Corp.,

Senior

Bond,

3.9%,

8/08/29

...........

United

States

8,300,000

8,451,564

g

Melco

Resorts

Finance

Ltd.,

Senior

Note,

144A,

5.75%,

7/21/28

..

Hong

Kong

5,900,000

5,885,250

MGM

Resorts

International,

Senior

Note,

4.75%,

10/15/28

.......

United

States

10,000,000

10,407,087

g

Motion

Bondco

DAC,

Senior

Note,

144A,

6.625%,

11/15/27

......

United

Kingdom

2,000,000

2,008,530

g

NCL

Corp.

Ltd.,

Senior

Note,

144A,

5.875%,

3/15/26

...........

United

States

17,700,000

17,766,375

g

Papa

John's

International,

Inc.,

Senior

Note,

144A,

3.875%,

9/15/29

United

States

3,200,000

3,132,000

g

Penn

National

Gaming,

Inc.,

Senior

Note,

144A,

4.125%,

7/01/29

.

United

States

6,000,000

5,857,500

g

Premier

Entertainment

Sub

LLC

/

Premier

Entertainment

Finance

Corp.

,

Senior

Bond,

144A,

5.875%,

9/01/31

.....................

United

States

3,900,000

3,982,875

Franklin

Strategic

Series

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

20

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Hotels,

Restaurants

&

Leisure

(continued)

g

Premier

Entertainment

Sub

LLC

/

Premier

Entertainment

Finance

Corp.,

(continued)

Senior

Note,

144A,

5.625%,

9/01/29

.....................

United

States

4,300,000

$

4,380,625

g

Royal

Caribbean

Cruises

Ltd.,

Senior

Note,

144A,

5.5%,

8/31/26

..

United

States

14,200,000

14,484,000

g

Studio

City

Finance

Ltd.,

Senior

Note,

144A,

5%,

1/15/29

.......

Macau

11,700,000

10,610,087

g

Wynn

Macau

Ltd.,

Senior

Note,

144A,

5.625%,

8/26/28

.........

Macau

4,600,000

4,302,518

126,831,245

Household

Durables

0.8%

g

M/I

Homes,

Inc.,

Senior

Note,

144A,

3.95%,

2/15/30

...........

United

States

5,900,000

5,833,625

Mohawk

Industries,

Inc.,

Senior

Bond,

3.625%,

5/15/30

.........

United

States

14,300,000

15,483,630

g

Williams

Scotsman

International,

Inc.,

Senior

Secured

Note,

144A,

4.625%,

8/15/28

.....................................

United

States

7,500,000

7,762,500

29,079,755

Household

Products

0.7%

g

Central

Garden

&

Pet

Co.,

Senior

Bond,

144A,

4.125%,

4/30/31

..

United

States

7,000,000

7,008,750

g

Energizer

Holdings,

Inc.,

Senior

Note,

144A,

4.375%,

3/31/29

....

United

States

13,500,000

12,953,250

g

Kimberly-Clark

de

Mexico

SAB

de

CV,

Senior

Bond,

144A,

2.431%,

7/01/31

...........................................

Mexico

2,200,000

2,184,567

g

Spectrum

Brands,

Inc.,

Senior

Bond,

144A,

3.875%,

3/15/31

.....

United

States

4,800,000

4,710,504

26,857,071

Independent

Power

and

Renewable

Electricity

Producers

1.6%

g

Atlantica

Sustainable

Infrastructure

plc,

Senior

Note,

144A,

4.125%,

6/15/28

...........................................

Spain

3,400,000

3,468,000

g

Calpine

Corp.

,

Senior

Bond,

144A,

5%,

2/01/31

........................

United

States

4,300,000

4,220,149

Senior

Note,

144A,

5.125%,

3/15/28

.....................

United

States

4,000,000

3,985,000

Senior

Note,

144A,

4.625%,

2/01/29

.....................

United

States

6,500,000

6,313,125

g

Clearway

Energy

Operating

LLC,

Senior

Note,

144A,

3.75%,

2/15/31

United

States

7,800,000

7,731,945

g

Colbun

SA

,

Senior

Bond,

144A,

3.95%,

10/11/27

.....................

Chile

7,500,000

8,006,325

Senior

Bond,

144A,

3.15%,

3/06/30

......................

Chile

2,900,000

2,919,473

g

InterGen

NV,

Senior

Secured

Bond,

144A,

7%,

6/30/23

.........

Netherlands

11,900,000

11,725,130

g

Talen

Energy

Supply

LLC

,

Senior

Note,

144A,

10.5%,

1/15/26

......................

United

States

3,000,000

1,989,255

Senior

Secured

Note,

144A,

7.25%,

5/15/27

...............

United

States

10,800,000

10,348,992

60,707,394

Insurance

0.3%

Arch

Capital

Group

Ltd.,

Senior

Bond,

3.635%,

6/30/50

.........

United

States

10,000,000

11,048,447

Interactive

Media

&

Services

0.4%

g

Tencent

Holdings

Ltd.,

Senior

Bond,

144A,

2.39%,

6/03/30

......

China

17,100,000

16,693,799

Internet

&

Direct

Marketing

Retail

0.6%

Alibaba

Group

Holding

Ltd.,

Senior

Bond,

4%,

12/06/37

.........

China

4,000,000

4,346,239

JD.com,

Inc.,

Senior

Bond,

3.375%,

1/14/30

.................

China

12,200,000

12,679,265

g

Match

Group

Holdings

II

LLC,

Senior

Note,

144A,

3.625%,

10/01/31

United

States

5,700,000

5,540,343

22,565,847

IT

Services

0.8%

g

Cablevision

Lightpath

LLC,

Senior

Secured

Note,

144A,

3.875%,

9/15/27

...........................................

United

States

9,200,000

8,969,540

Franklin

Strategic

Series

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

21

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

IT

Services

(continued)

g

Gartner,

Inc.

,

Senior

Note,

144A,

4.5%,

7/01/28

.......................

United

States

7,000,000

$

7,297,150

Senior

Note,

144A,

3.625%,

6/15/29

.....................

United

States

2,200,000

2,213,750

g

Presidio

Holdings,

Inc.,

Senior

Secured

Note,

144A,

4.875%,

2/01/27

United

States

12,000,000

12,225,000

30,705,440

Machinery

0.4%

g

Manitowoc

Co.,

Inc.

(The),

Secured

Note,

144A,

9%,

4/01/26

....

United

States

7,000,000

7,462,140

g

TK

Elevator

U.S.

Newco

,

Inc.,

Senior

Secured

Note,

144A,

5.25%,

7/15/27

...........................................

Germany

9,000,000

9,171,450

16,633,590

Marine

0.3%

g

ICTSI

Treasury

BV,

Senior

Bond,

Reg

S,

4.625%,

1/16/23

.......

Philippines

12,000,000

12,535,980

Media

2.3%

Charter

Communications

Operating

LLC

/

Charter

Communications

Operating

Capital,

Senior

Secured

Bond,

2.8%,

4/01/31

.......

United

States

15,900,000

15,825,373

g

Clear

Channel

Outdoor

Holdings,

Inc.

,

Senior

Note,

144A,

7.75%,

4/15/28

......................

United

States

5,200,000

5,392,140

Senior

Note,

144A,

7.5%,

6/01/29

.......................

United

States

3,500,000

3,585,330

g

Clear

Channel

Worldwide

Holdings,

Inc.,

Senior

Secured

Note,

144A,

5.125%,

8/15/27

................................

United

States

3,200,000

3,286,400

g

Diamond

Sports

Group

LLC

/

Diamond

Sports

Finance

Co.

,

Senior

Note,

144A,

6.625%,

8/15/27

.....................

United

States

4,500,000

1,350,000

Senior

Secured

Note,

144A,

5.375%,

8/15/26

..............

United

States

4,300,000

2,438,122

g

DIRECTV

Holdings

LLC

/

DIRECTV

Financing

Co.,

Inc.,

Senior

Secured

Note,

144A,

5.875%,

8/15/27

....................

United

States

2,300,000

2,387,170

Fox

Corp.,

Senior

Bond,

3.5%,

4/08/30

.....................

United

States

1,400,000

1,521,418

g

Nexstar

Media,

Inc.,

Senior

Note,

144A,

4.75%,

11/01/28

........

United

States

8,000,000

8,183,200

g

Outfront

Media

Capital

LLC

/

Outfront

Media

Capital

Corp.,

Senior

Note,

144A,

4.25%,

1/15/29

............................

United

States

11,000,000

10,793,750

g

Sinclair

Television

Group,

Inc.

,

Senior

Bond,

144A,

5.5%,

3/01/30

.......................

United

States

3,900,000

3,736,337

Senior

Secured

Note,

144A,

4.125%,

12/01/30

.............

United

States

7,600,000

7,248,918

g

Sirius

XM

Radio,

Inc.,

Senior

Note,

144A,

4%,

7/15/28

.........

United

States

6,000,000

6,050,700

g

Univision

Communications,

Inc.,

Senior

Secured

Note,

144A,

5.125%,

2/15/25

.....................................

United

States

16,000,000

16,260,000

88,058,858

Metals

&

Mining

1.1%

g

Constellium

SE,

Senior

Note,

144A,

3.75%,

4/15/29

...........

United

States

10,200,000

9,876,660

g

CSN

Inova

Ventures,

Senior

Note,

144A,

6.75%,

1/28/28

........

Brazil

8,000,000

8,506,000

g

FMG

Resources

August

2006

Pty.

Ltd.,

Senior

Bond,

144A,

4.375%,

4/01/31

...........................................

Australia

13,300,000

13,482,875

g

Novelis

Corp.

,

Senior

Bond,

144A,

3.875%,

8/15/31

.....................

United

States

2,200,000

2,150,610

Senior

Note,

144A,

3.25%,

11/15/26

.....................

United

States

1,700,000

1,697,875

g

SunCoke

Energy,

Inc.,

Senior

Secured

Note,

144A,

4.875%,

6/30/29

United

States

6,100,000

6,061,875

41,775,895

Mortgage

Real

Estate

Investment

Trusts

(REITs)

0.0%

†

g

Apollo

Commercial

Real

Estate

Finance,

Inc.,

Senior

Secured

Note,

144A,

4.625%,

6/15/29

................................

United

States

1,400,000

1,349,250

Franklin

Strategic

Series

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

22

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Multiline

Retail

0.0%

b,e,g

K2016470219

South

Africa

Ltd.,

Senior

Secured

Note,

144A,

PIK,

3%,

12/31/22

.......................................

South

Africa

10,594,042

$

—

b,e,g

K2016470260

South

Africa

Ltd.,

Senior

Secured

Note,

144A,

PIK,

25%,

12/31/22

......................................

South

Africa

3,798,736

—

—

Multi-Utilities

0.2%

Dominion

Energy,

Inc.,

C,

Senior

Note,

3.375%,

4/01/30

........

United

States

7,800,000

8,393,795

Oil,

Gas

&

Consumable

Fuels

5.1%

g

Antero

Resources

Corp.

,

Senior

Note,

144A,

8.375%,

7/15/26

.....................

United

States

1,106,000

1,245,633

Senior

Note,

144A,

7.625%,

2/01/29

.....................

United

States

2,600,000

2,882,750

Apache

Corp.

,

Senior

Note,

4.625%,

11/15/25

.........................

United

States

5,600,000

6,043,744

Senior

Note,

4.875%,

11/15/27

.........................

United

States

5,000,000

5,431,350

Canadian

Natural

Resources

Ltd.,

Senior

Bond,

2.95%,

7/15/30

..

Canada

3,700,000

3,816,274

Cheniere

Corpus

Christi

Holdings

LLC,

Senior

Secured

Note,

5.875%,

3/31/25

.....................................

United

States

6,400,000

7,166,248

g

Cheniere

Energy

Partners

LP,

Senior

Note,

144A,

4%,

3/01/31

...

United

States

12,000,000

12,495,192

g

Crestwood

Midstream

Partners

LP

/

Crestwood

Midstream

Finance

Corp.,

Senior

Note,

144A,

6%,

2/01/29

....................

United

States

15,200,000

15,772,506

g

CrownRock

LP

/

CrownRock

Finance,

Inc.,

Senior

Note,

144A,

5%,

5/01/29

...........................................

United

States

3,100,000

3,196,875

g

CVR

Energy,

Inc.,

Senior

Note,

144A,

5.25%,

2/15/25

..........

United

States

5,000,000

4,945,543

g

DT

Midstream,

Inc.,

Senior

Bond,

144A,

4.375%,

6/15/31

.......

United

States

4,600,000

4,666,378

Energy

Transfer

LP,

Senior

Bond,

4.05%,

3/15/25

.............

United

States

1,300,000

1,393,954

EnLink

Midstream

LLC

,

Senior

Bond,

5.375%,

6/01/29

..........................

United

States

10,900,000

11,295,125

g

Senior

Note,

144A,

5.625%,

1/15/28

.....................

United

States

1,700,000

1,804,826

e,g

EnQuest

plc,

Senior

Note,

144A,

Reg

S,

PIK,

7%,

10/15/23

......

United

Kingdom

11,037,421

10,628,975

g

Hilcorp

Energy

I

LP

/

Hilcorp

Finance

Co.

,

Senior

Bond,

144A,

6%,

2/01/31

........................

United

States

6,500,000

6,681,112

Senior

Note,

144A,

5.75%,

2/01/29

......................

United

States

2,000,000

2,032,500

g

Martin

Midstream

Partners

LP

/

Martin

Midstream

Finance

Corp.

,

Secured

Note,

144A,

10%,

2/29/24

......................

United

States

3,608,495

3,707,909

Secured

Note,

144A,

11.5%,

2/28/25

.....................

United

States

16,387,122

17,072,432

MPLX

LP,

Senior

Note,

2.65%,

8/15/30

.....................

United

States

15,000,000

14,941,865

Occidental

Petroleum

Corp.

,

Senior

Bond,

8.875%,

7/15/30

..........................

United

States

6,800,000

9,222,500

Senior

Bond,

6.125%,

1/01/31

..........................

United

States

5,900,000

7,072,625

Senior

Bond,

6.45%,

9/15/36

...........................

United

States

5,000,000

6,369,750

g

Rattler

Midstream

LP,

Senior

Note,

144A,

5.625%,

7/15/25

......

United

States

8,200,000

8,579,250

Sabine

Pass

Liquefaction

LLC,

Senior

Secured

Note,

4.5%,

5/15/30

United

States

10,000,000

11,401,184

Sunoco

LP

/

Sunoco

Finance

Corp.,

Senior

Note,

4.5%,

5/15/29

..

United

States

12,000,000

12,150,000

g

Venture

Global

Calcasieu

Pass

LLC

,

Senior

Secured

Bond,

144A,

4.125%,

8/15/31

..............

United

States

2,600,000

2,694,120

Senior

Secured

Note,

144A,

3.875%,

8/15/29

..............

United

States

2,600,000

2,648,750

197,359,370

Paper

&

Forest

Products

0.4%

g

Glatfelter

Corp.,

Senior

Note,

144A,

4.75%,

11/15/29

...........

United

States

4,300,000

4,386,000

Franklin

Strategic

Series

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

23

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Paper

&

Forest

Products

(continued)

Suzano

Austria

GmbH

,

Senior

Bond,

3.75%,

1/15/31

...........................

Brazil

7,100,000

$

7,119,241

DM3N,

Senior

Bond,

3.125%,

1/15/32

....................

Brazil

4,400,000

4,162,994

15,668,235

Personal

Products

0.4%

g

Oriflame

Investment

Holding

plc,

Senior

Secured

Note,

144A,

5.125%,

5/04/26

.....................................

Switzerland

9,600,000

9,531,360

g

Prestige

Brands,

Inc.,

Senior

Bond,

144A,

3.75%,

4/01/31

.......

United

States

5,900,000

5,708,250

15,239,610

Pharmaceuticals

1.4%

g

Bausch

Health

Cos.,

Inc.

,

Senior

Bond,

144A,

5.25%,

2/15/31

......................

United

States

4,000,000

3,602,560

Senior

Secured

Note,

144A,

4.875%,

6/01/28

..............

United

States

6,300,000

6,495,615

g

Bayer

US

Finance

II

LLC,

Senior

Bond,

144A,

4.375%,

12/15/28

..

Germany

11,700,000

13,179,717

g

Endo

Dac

/

Endo

Finance

LLC

/

Endo

Finco

,

Inc.,

Secured

Note,

144A,

9.5%,

7/31/27

.................................

United

States

6,580,000

6,541,079

g

Organon

&

Co.

/

Organon

Foreign

Debt

Co-Issuer

BV

,

Senior

Bond,

144A,

5.125%,

4/30/31

.....................

United

States

7,300,000

7,538,564

Senior

Secured

Note,

144A,

4.125%,

4/30/28

..............

United

States

10,100,000

10,251,500

Royalty

Pharma

plc,

Senior

Bond,

3.3%,

9/02/40

..............

United

States

5,300,000

5,303,193

52,912,228

Real

Estate

Management

&

Development

1.0%

g

China

Overseas

Finance

Cayman

VI

Ltd.,

Senior

Bond,

Reg

S,

5.95%,

5/08/24

.....................................

China

7,500,000

8,230,443

g

Country

Garden

Holdings

Co.

Ltd.,

Senior

Secured

Note,

Reg

S,

7.25%,

4/08/26

.....................................

China

3,900,000

4,054,724

g

Five

Point

Operating

Co.

LP

/

Five

Point

Capital

Corp.,

Senior

Note,

144A,

7.875%,

11/15/25

...............................

United

States

8,000,000

8,334,000

g

Forestar

Group,

Inc.,

Senior

Note,

144A,

3.85%,

5/15/26

........

United

States

5,300,000

5,306,599

g

Howard

Hughes

Corp.

(The),

Senior

Note,

144A,

5.375%,

8/01/28

.

United

States

10,000,000

10,500,000

g

Vivion

Investments

SARL,

Senior

Note,

Reg

S,

3%,

8/08/24

.....

Luxembourg

1,800,000

EUR

2,009,171

38,434,937

Road

&

Rail

0.8%

CSX

Corp.,

Senior

Bond,

4.1%,

3/15/44

....................

United

States

1,600,000

1,873,251

g

First

Student

Bidco

,

Inc.

/

First

Transit

Parent,

Inc.,

Senior

Secured

Note,

144A,

4%,

7/31/29

..............................

United

States

8,300,000

8,123,625

g

Kazakhstan

Temir

Zholy

Finance

BV,

Senior

Bond,

144A,

6.95%,

7/10/42

...........................................

Kazakhstan

14,900,000

20,218,108

30,214,984

Software

0.3%

Anagram,

Inc.,

Secured

Note,

10%,

8/15/26

.................

United

States

656,442

677,069

g

Rocket

Software,

Inc.,

Senior

Note,

144A,

6.5%,

2/15/29

........

United

States

10,000,000

9,566,750

10,243,819

Specialty

Retail

1.0%

AutoNation,

Inc.,

Senior

Bond,

4.75%,

6/01/30

...............

United

States

1,900,000

2,208,739

g

Lithia

Motors,

Inc.

,

Senior

Bond,

144A,

4.375%,

1/15/31

.....................

United

States

5,000,000

5,331,025

Franklin

Strategic

Series

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

24

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Specialty

Retail

(continued)

g

Lithia

Motors,

Inc.,

(continued)

Senior

Note,

144A,

3.875%,

6/01/29

.....................

United

States

6,100,000

$

6,328,811

g

Michaels

Cos.,

Inc.

(The)

,

Senior

Note,

144A,

7.875%,

5/01/29

.....................

United

States

6,100,000

6,170,089

Senior

Secured

Note,

144A,

5.25%,

5/01/28

...............

United

States

2,700,000

2,730,510

g

Park

River

Holdings,

Inc.,

Senior

Note,

144A,

6.75%,

8/01/29

....

United

States

11,400,000

11,190,069

g

Party

City

Holdings,

Inc.,

Senior

Secured

Note

,

144A,

5.75%,

(6-month

USD

LIBOR

+

5%),

7/15/25

.....................

United

States

1,153,545

1,074,896

g

Victoria's

Secret

&

Co.,

Senior

Note,

144A,

4.625%,

7/15/29

.....

United

States

4,100,000

4,123,165

39,157,304

Technology

Hardware,

Storage

&

Peripherals

0.1%

Teledyne

FLIR

LLC,

Senior

Note,

2.5%,

8/01/30

..............

United

States

2,100,000

2,111,134

Thrifts

&

Mortgage

Finance

0.7%

g

Ladder

Capital

Finance

Holdings

LLLP

/

Ladder

Capital

Finance

Corp.,

Senior

Note,

144A,

4.75%,

6/15/29

.................

United

States

2,700,000

2,723,625

MGIC

Investment

Corp.,

Senior

Note,

5.25%,

8/15/28

..........

United

States

7,000,000

7,456,260

g

PennyMac

Financial

Services,

Inc.,

Senior

Note,

144A,

5.375%,

10/15/25

..........................................

United

States

8,100,000

8,363,250

g

United

Wholesale

Mortgage

LLC,

Senior

Note,

144A,

5.5%,

11/15/25

United

States

9,500,000

9,465,990

28,009,125

Tobacco

0.4%

Altria

Group,

Inc.,

Senior

Bond,

3.4%,

5/06/30

................

United

States

12,400,000

12,991,541

g

Imperial

Brands

Finance

plc,

Senior

Bond,

144A,

3.875%,

7/26/29

.

United

Kingdom

2,200,000

2,350,432

15,341,973

Trading

Companies

&

Distributors

0.7%

g

Ahern

Rentals,

Inc.,

Secured

Note,

144A,

7.375%,

5/15/23

......

United

States

2,000,000

1,920,000

g

H&E

Equipment

Services,

Inc.,

Senior

Note,

144A,

3.875%,

12/15/28

United

States

13,600,000

13,515,000

g

Herc

Holdings,

Inc.,

Senior

Note,

144A,

5.5%,

7/15/27

..........

United

States

5,300,000

5,531,875

g

WESCO

Distribution,

Inc.,

Senior

Note,

144A,

7.25%,

6/15/28

....

United

States

5,500,000

6,072,880

27,039,755

Wireless

Telecommunication

Services

0.7%

e,g

Digicel

Group

Holdings

Ltd.,

Senior

Note,

144A,

PIK,

8%,

4/01/25

.

Bermuda

142,062

136,826

Hughes

Satellite

Systems

Corp.,

Senior

Note,

6.625%,

8/01/26

...

United

States

8,000,000

9,079,600

T-Mobile

USA,

Inc.

,

Senior

Secured

Bond,

3.3%,

2/15/51

.....................

United

States

4,800,000

4,716,416

Senior

Secured

Note,

3.875%,

4/15/30

...................

United

States

13,400,000

14,661,351

28,594,193

Total

Corporate

Bonds

(Cost

$1,946,318,838)

...................................

1,959,464,513

a

h,i

Senior

Floating

Rate

Interests

1.6%

Aerospace

&

Defense

0.2%

Dynasty

Acquisition

Co.,

Inc.

,

2020

Term

Loan,

B1,

3.632%,

(3-month

USD

LIBOR

+

3.5%),

4/06/26

...........................................

United

States

5,125,057

5,014,817

2020

Term

Loan,

B2,

3.632%,

(3-month

USD

LIBOR

+

3.5%),

4/06/26

...........................................

United

States

2,755,407

2,696,139

7,710,956

a

a

a

a

a

a

Franklin

Strategic

Series

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

25

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

h,i

Senior

Floating

Rate

Interests

(continued)

Airlines

0.3%

j

Air

Canada,

Term

Loan,

4.25%,

(3-month

USD

LIBOR

+

3.5%),

8/11/28

...........................................

Canada

9,800,000

$

9,916,375

Kestrel

Bidco

,

Inc.,

Term

Loan,

4%,

(3-month

USD

LIBOR

+

3%),

12/11/26

..........................................

Canada

2,689,785

2,651,334

12,567,709

a

a

a

a

a

a

Diversified

Consumer

Services

0.2%

KUEHG

Corp.,

Term

Loan,

B3,

4.75%,

(3-month

USD

LIBOR

+

3.75%),

2/21/25

.....................................

United

States

7,081,769

7,029,116

Entertainment

0.2%

Diamond

Sports

Group

LLC,

Term

Loan,

3.34%,

(1-month

USD

LIBOR

+

3.25%),

8/24/26

..............................

United

States

2,940,000

1,565,550

William

Morris

Endeavor

Entertainment

LLC

(IMG

Worldwide

Holdings

LLC),

First

Lien,

Term

Loan,

B1,

2.84%,

(1-month

USD

LIBOR

+

2.75%),

5/18/25

..............................

United

States

7,204,357

7,082,279

8,647,829

a

a

a

a

a

a

Leisure

Products

0.3%

Hercules

Achievement,

Inc.

(Varsity

Brands

Holding

Co.,

Inc.),

First

Lien,

Initial

Term

Loan,

4.5%,

(1-month

USD

LIBOR

+

3.5%),

12/16/24

..........................................

United

States

7,932,310

7,845,570

Motion

Acquisition

Ltd.

,

Term

Loan,

B1,

3.382%,

(3-month

USD

LIBOR

+

3.25%),

11/12/26

United

Kingdom

3,404,848

3,324,239

Term

Loan,

B2,

3.382%,

(3-month

USD

LIBOR

+

3.25%),

11/12/26

United

Kingdom

485,402

473,910

11,643,719

a

a

a

a

a

a

Media

0.2%

Cengage

Learning,

Inc.,

First

Lien,

Term

Loan,

B,

5.75%,

(3-month

USD

LIBOR

+

4.75%),

7/14/26

..........................

United

States

7,089,812

7,135,222

Clear

Channel

Outdoor

Holdings,

Inc.,

Term

Loan,

B,

3.629%,

(2-month

USD

LIBOR

+

3.5%;

3-month

USD

LIBOR

+

3.5%),

8/21/26

...........................................

United

States

1,396,438

1,376,211

8,511,433

a

a

a

a

a

a

Personal

Products

0.2%

Coty,

Inc.,

USD

Term

Loan,

B,

2.337%,

(1-month

USD

LIBOR

+

2.25%),

4/07/25

.....................................

United

States

6,588,602

6,506,244

Software

0.0%

b,c,k

WorkCapital

BSD

SARL,

Term

Loan,

6.5%,

(1-month

USD

LIBOR),

11/02/22

..........................................

Luxembourg

20,000,000

—

Total

Senior

Floating

Rate

Interests

(Cost

$82,191,697)

..........................

62,617,006

l

Marketplace

Loans

0.8%

Diversified

Financial

Services

0.8%

b

Freedom

Financial

Asset

Management

LLC,

5.99%

-

25.49%,

8/03/23

-

12/07/26

...................................

United

States

10,151,138

10,327,407

b

LendingClub

Corp.

-

LCX

PM,

6.74%

-

23.99%,

9/04/23

-

2/01/26

.

United

States

2,781,672

2,631,332

b

LendingClub

Corp.

-

LCX,

5%

-

25.65%,

5/31/22

-

3/13/25

.......

United

States

2,015,272

1,834,362

b

Prosper

Funding

LLC,

8.7%

-

25.75%,

11/12/23

-

10/12/26

......

United

States

3,312,788

176,041

b

Prosper

Funding

LLC,

9.62%

-

29.08%,

7/23/24

-

10/28/26

......

United

States

3,491,016

3,466,202

b

Square

Loans,

Zero

Cpn

.,

3/29/23

-

4/26/23

.................

United

States

8,217,582

7,582,786

b

Upgrade,

Inc.,

15.86%

-

30.51%,

11/05/22

-

1/22/25

...........

United

States

885,467

810,494

Franklin

Strategic

Series

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

26

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

l

Marketplace

Loans

(continued)

Diversified

Financial

Services

(continued)

b

Upstart

Network,

Inc.,

5.92%

-

32.85%,

9/14/24

-

9/14/28

.......

United

States

5,012,373

$

5,007,290

31,835,914

a

a

a

a

a

a

Total

Marketplace

Loans

(Cost

$32,299,784)

....................................

31,835,914

m

Loan

Participations

and

Assignments

0.4%

g

Russian

Railways

Via

RZD

Capital

plc,

Senior

Bond,

Reg

S,

5.7%,

4/05/22

...........................................

Russia

14,600,000

14,907,038

Total

Loan

Participations

and

Assignments

(Cost

$14,738,558)

...................

14,907,038

Foreign

Government

and

Agency

Securities

14.6%

g

African

Export-Import

Bank

(The),

Senior

Bond,

144A,

3.994%,

9/21/29

...........................................

Supranational

n

19,100,000

19,959,500

g

Angola

Government

Bond,

Senior

Bond,

144A,

8.25%,

5/09/28

...

Angola

26,800,000

27,001,536

g

Banque

Centrale

de

Tunisie

,

Senior

Note,

Reg

S,

5.625%,

2/17/24

Tunisia

24,800,000

EUR

23,509,248

g

Banque

Ouest

Africaine

de

Developpement

,

Senior

Bond,

144A,

5%,

7/27/27

...........................................

Supranational

n

11,500,000

12,780,157

g

Belarus

Government

Bond

,

Senior

Bond,

144A,

7.625%,

6/29/27

.....................

Belarus

11,400,000

11,124,120

Senior

Bond,

144A,

6.2%,

2/28/30

.......................

Belarus

12,300,000

10,715,452

Brazil

Notas

do

Tesouro

Nacional

,

o

Index

Linked,

6%,

5/15/23

.............................

Brazil

35,171,841

BRL

6,312,128

Senior

Bond,

3.875%,

6/12/30

..........................

Brazil

9,300,000

8,742,372

Colombia

Government

Bond

,

Senior

Bond,

3.875%,

4/25/27

..........................

Colombia

14,000,000

14,532,280

Senior

Bond,

9.85%,

6/28/27

...........................

Colombia

55,750,000,000

COP

17,041,514

Senior

Bond,

4.5%,

3/15/29

............................

Colombia

2,800,000

2,963,324

Senior

Bond,

5%,

6/15/45

.............................

Colombia

20,700,000

20,462,571

g

Comision

Federal

de

Electricidad

,

Senior

Bond,

144A,

3.348%,

2/09/31

...........................................

Mexico

9,500,000

9,167,785

g

Dominican

Republic

Government

Bond

,

Senior

Bond,

144A,

6.85%,

1/27/45

......................

Dominican

Republic

6,800,000

7,599,068

Senior

Note,

144A,

8.9%,

2/15/23

.......................

Dominican

Republic

838,300,000

DOP

15,814,738

Ecopetrol

SA

,

Senior

Bond,

4.125%,

1/16/25

..........................

Colombia

3,800,000

3,936,135

j

Senior

Bond,

4.625%,

11/02/31

.........................

Colombia

4,400,000

4,373,138

g

Egypt

Government

Bond,

Senior

Bond,

144A,

7.625%,

5/29/32

...

Egypt

6,000,000

5,818,446

f,g

Electricite

de

France

SA

,

Junior

Sub.

Bond,

144A,

5.25%

to

1/29/23,

FRN

thereafter,

Perpetual

..........................................

France

25,000,000

25,918,750

Junior

Sub.

Bond,

144A,

5.625%

to

1/22/24,

FRN

thereafter,

Perpetual

..........................................

France

5,000,000

5,320,000

g

Export-Import

Bank

of

India,

Senior

Bond,

144A,

3.875%,

2/01/28

.

India

16,000,000

17,169,107

g

Gabon

Government

Bond

,

144A,

6.375%,

12/12/24

...............................

Gabon

6,043,918

6,432,119

Franklin

Strategic

Series

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

27

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Foreign

Government

and

Agency

Securities

(continued)

g

Gabon

Government

Bond,

(continued)

Senior

Bond,

144A,

6.625%,

2/06/31

.....................

Gabon

15,150,000

$

15,154,696

g

Indonesia

Asahan

Aluminium

Persero

PT,

Senior

Bond,

144A,

5.45%,

5/15/30

.....................................

Indonesia

13,800,000

15,792,444

Indonesia

Government

Bond

,

g

Senior

Bond,

144A,

4.35%,

1/08/27

......................

Indonesia

8,100,000

9,073,893

g

Senior

Bond,

144A,

3.85%,

7/18/27

......................

Indonesia

22,000,000

24,194,052

g

Senior

Bond,

144A,

4.625%,

4/15/43

.....................

Indonesia

7,000,000

8,002,550

FR39,

11.75%,

8/15/23

...............................

Indonesia

29,150,000,000

IDR

2,330,477

FR44,

10%,

9/15/24

..................................

Indonesia

8,340,000,000

IDR

673,393

FR56,

8.375%,

9/15/26

...............................

Indonesia

215,988,000,000

IDR

17,280,565

g

Iraq

Government

Bond,

Senior

Bond,

144A,

5.8%,

1/15/28

......

Iraq

22,262,500

21,708,720

g

Israel

Electric

Corp.

Ltd.,

Senior

Secured

Bond,

144A,

Reg

S,

4.25%,

8/14/28

...........................................

Israel

9,200,000

10,281,000

g

Kazakhstan

Government

Bond,

Senior

Bond,

144A,

4.875%,

10/14/44

..........................................

Kazakhstan

14,600,000

17,923,763

Mexico

Government

Bond

,

Senior

Bond,

3.75%,

1/11/28

...........................

Mexico

4,000,000

4,338,900

Senior

Bond,

4.75%,

4/27/32

...........................

Mexico

6,400,000

7,192,640

Peru

Government

Bond,

Senior

Bond,

6.55%,

3/14/37

..........

Peru

8,600,000

11,738,871

Petroleos

Mexicanos

,

Senior

Bond,

6.625%,

6/15/35

...........

Mexico

6,500,000

6,308,803

g

Romania

Government

Bond,

Senior

Bond,

144A,

6.125%,

1/22/44

.

Romania

4,700,000

6,137,392

g

Russia

Government

Bond

,

Senior

Bond,

144A,

5.625%,

4/04/42

.....................

Russia

5,800,000

7,543,654

Senior

Bond,

Reg

S,

4.75%,

5/27/26

.....................

Russia

12,000,000

13,477,500

South

Africa

Government

Bond

,

Senior

Bond,

4.85%,

9/30/29

...........................

South

Africa

6,000,000

6,164,340

p

Senior

Bond,

5.875%,

6/22/30

..........................

South

Africa

6,500,000

7,149,935

Turkey

Government

Bond

,

Senior

Bond,

4.875%,

10/09/26

.........................

Turkey

8,000,000

7,606,256

Senior

Bond,

5.95%,

1/15/31

...........................

Turkey

15,500,000

14,531,079

g

Ukraine

Government

Bond

,

Senior

Bond,

144A,

7.375%,

9/25/32

.....................

Ukraine

6,000,000

6,187,320

Senior

Note,

144A,

7.75%,

9/01/23

.......................

Ukraine

4,355,000

4,648,035

Senior

Note,

144A,

7.75%,

9/01/24

.......................

Ukraine

4,355,000

4,705,647

VRI,

GDP

Linked

Security,

Senior

Bond,

144A,

5/31/40

.......

Ukraine

9,990,000

10,552,237

o

Uruguay

Government

Bond,

Index

Linked,

Senior

Bond,

3.7%,

6/26/37

...........................................

Uruguay

986,674,755

UYU

24,762,238

Total

Foreign

Government

and

Agency

Securities

(Cost

$571,882,314)

............

562,153,888

U.S.

Government

and

Agency

Securities

2.1%

U.S.

Treasury

Bonds

,

7.125%,

2/15/23

.....................................

United

States

3,000,000

3,263,906

6.25%,

8/15/23

.....................................

United

States

4,000,000

4,416,250

Franklin

Strategic

Series

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

28

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

U.S.

Government

and

Agency

Securities

(continued)

U.S.

Treasury

Bonds,

(continued)

6.875%,

8/15/25

.....................................

United

States

1,000,000

$

1,221,367

U.S.

Treasury

Notes

,

1.5%,

11/30/21

......................................

United

States

30,000,000

30,034,099

1.125%,

2/28/27

.....................................

United

States

40,000,000

39,766,407

Total

U.S.

Government

and

Agency

Securities

(Cost

$78,344,394)

.................

78,702,029

Asset-Backed

Securities

7.0%

Airlines

0.0%

†

United

Airlines

Pass-Through

Trust,

2020-1,

B,

4.875%,

7/15/27

..

United

States

1,077,600

1,140,405

Consumer

Finance

0.5%

q

Citibank

Credit

Card

Issuance

Trust,

2017-A7,

A7,

FRN,

0.457%,

(1-month

USD

LIBOR

+

0.37%),

8/08/24

..................

United

States

20,069,000

20,122,215

Diversified

Financial

Services

6.5%

g,q

AMMC

CLO

XI

Ltd.,

2012-11A,

CR2,

144A,

FRN,

2.028%,

(3-month

USD

LIBOR

+

1.9%),

4/30/31

...........................

United

States

1,000,000

996,934

g,q

Antares

CLO

Ltd.,

2018-1A,

B,

144A,

FRN,

1.781%,

(3-month

USD

LIBOR

+

1.65%),

4/20/31

..............................

United

States

17,500,000

17,480,928

g,q

BCC

Middle

Market

CLO

LLC,

2018-1A,

A2,

144A,

FRN,

2.282%,

(3-month

USD

LIBOR

+

2.15%),

10/20/30

.................

United

States

6,300,000

6,285,899

g,q

BlueMountain

CLO

Ltd.

,

2012-2A,

BR2,

144A,

FRN,

1.581%,

(3-month

USD

LIBOR

+

1.45%),

11/20/28

....................................

United

States

6,710,000

6,721,580

2012-2A,

CR2,

144A,

FRN,

2.131%,

(3-month

USD

LIBOR

+

2%),

11/20/28

..........................................

United

States

2,730,000

2,738,118

2014-2A,

CR2,

144A,

FRN,

2.332%,

(3-month

USD

LIBOR

+

2.2%),

10/20/30

.....................................

United

States

3,800,000

3,809,139

2016-3A,

CR,

144A,

FRN,

2.325%,

(3-month

USD

LIBOR

+

2.2%),

11/15/30

..........................................

United

States

300,000

299,279

2018-1A,

D,

144A,

FRN,

3.179%,

(3-month

USD

LIBOR

+

3.05%),

7/30/30

...........................................

United

States

5,000,000

4,795,473

g,q

BlueMountain

Fuji

EUR

CLO

V

DAC,

5A,

B,

144A,

FRN,

1.55%,

(3-month

EURIBOR

+

1.55%),

1/15/33

....................

Ireland

6,200,000

EUR

7,174,935

g,q

BlueMountain

Fuji

US

CLO

III

Ltd.,

2017-3A,

C,

144A,

FRN,

1.824%,

(3-month

USD

LIBOR

+

1.7%),

1/15/30

...................

United

States

1,250,000

1,239,825

g,q

Burnham

Park

CLO

Ltd.,

2016-1A,

BR,

144A,

FRN,

1.631%,

(3-month

USD

LIBOR

+

1.5%),

10/20/29

..................

United

States

3,500,000

3,490,744

g,q

Buttermilk

Park

CLO

Ltd.,

2018-1A,

C,

144A,

FRN,

2.224%,

(3-month

USD

LIBOR

+

2.1%),

10/15/31

..................

United

States

9,730,950

9,743,741

g,q

Carlyle

Global

Market

Strategies

CLO

Ltd.

,

2013-3A,

BR,

144A,

FRN,

1.824%,

(3-month

USD

LIBOR

+

1.7%),

10/15/30

..........................................

United

States

300,000

294,370

2014-2RA,

B,

144A,

FRN,

1.95%,

(3-month

USD

LIBOR

+

1.825%),

5/15/31

....................................

United

States

580,000

578,946

2014-4RA,

C,

144A,

FRN,

3.024%,

(3-month

USD

LIBOR

+

2.9%),

7/15/30

...........................................

United

States

3,000,000

2,866,322

g,q

Carlyle

GMS

Finance

MM

CLO

LLC,

2015-1A,

A2R,

144A,

FRN,

2.324%,

(3-month

USD

LIBOR

+

2.2%),

10/15/31

............

United

States

12,000,000

11,925,210

g,r

Consumer

Loan

Underlying

Bond

Certificate

Issuer

Trust

I

,

2018-14,

PT,

144A,

FRN,

9.77%,

9/16/41

..................

United

States

34,810

33,700

2018-29,

PT,

144A,

FRN,

26%,

12/15/43

..................

United

States

620,937

617,849

2019-26,

PT,

144A,

FRN,

19.146%,

8/15/44

................

United

States

2,371,014

2,365,419

Franklin

Strategic

Series

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

29

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Asset-Backed

Securities

(continued)

Diversified

Financial

Services

(continued)

g,r

Consumer

Loan

Underlying

Bond

Certificate

Issuer

Trust

I,

(continued)

2019-31,

PT,

144A,

FRN,

17.761%,

9/15/44

................

United

States

2,201,994

$

2,179,580

2019-37,

PT,

144A,

FRN,

19.281%,

10/17/44

...............

United

States

2,211,650

2,181,305

2019-42,

PT,

144A,

FRN,

17.966%,

11/15/44

...............

United

States

2,545,717

2,537,890

2019-51,

PT,

144A,

FRN,

16.243%,

1/15/45

................

United

States

2,801,090

2,794,245

2019-52,

PT,

144A,

FRN,

16.466%,

1/15/45

................

United

States

2,819,273

2,833,664

2019-S1,

PT,

144A,

FRN,

15.633%,

4/15/44

................

United

States

1,268,235

1,243,369

2019-S2,

PT,

144A,

FRN,

14.1%,

5/16/44

..................

United

States

943,502

932,713

2019-S3,

PT,

144A,

FRN,

14.113%,

6/15/44

................

United

States

1,444,283

1,434,438

2019-S4,

PT,

144A,

FRN,

11.884%,

8/15/44

................

United

States

1,769,634

1,767,348

2019-S5,

PT,

144A,

FRN,

12.928%,

9/15/44

................

United

States

1,797,798

1,793,638

2019-S6,

PT,

144A,

FRN,

11.237%,

10/17/44

...............

United

States

1,732,556

1,698,877

2019-S7,

PT,

144A,

FRN,

11.038%,

12/15/44

...............

United

States

1,505,517

1,485,386

2019-S8,

PT,

144A,

FRN,

10.143%,

1/15/45

................

United

States

2,005,084

1,971,746

2020-2,

PT,

144A,

FRN,

15.906%,

3/15/45

.................

United

States

2,759,585

2,762,515

2020-7,

PT,

144A,

FRN,

15.76%,

4/17/45

..................

United

States

1,627,020

1,608,397

g,q

Dryden

38

Senior

Loan

Fund,

2015-38A,

CR,

144A,

FRN,

2.124%,

(3-month

USD

LIBOR

+

2%),

7/15/30

.....................

United

States

7,186,000

7,204,850

g,q

Dryden

55

CLO

Ltd.,

2018-55A,

D,

144A,

FRN,

2.974%,

(3-month

USD

LIBOR

+

2.85%),

4/15/31

..........................

United

States

3,000,000

2,966,545

g,q

Galaxy

XVIII

CLO

Ltd.,

2018-28A,

C,

144A,

FRN,

2.074%,

(3-month

USD

LIBOR

+

1.95%),

7/15/31

..........................

United

States

3,070,000

3,062,670

g,q

Galaxy

XXVII

CLO

Ltd.,

2018-27A,

C,

144A,

FRN,

1.925%,

(3-month

USD

LIBOR

+

1.8%),

5/16/31

...........................

United

States

3,600,000

3,598,367

g

Home

Partners

of

America

Trust,

2021-2,

B,

144A,

2.302%,

12/17/26

United

States

12,370,000

12,369,879

g,q

HPS

Loan

Management

Ltd.,

13A-18,

C,

144A,

FRN,

2.274%,

(3-month

USD

LIBOR

+

2.15%),

10/15/30

.................

United

States

4,950,000

4,954,213

g,q

LCM

XVII

LP

,

17A,

BRR,

144A,

FRN,

1.724%,

(3-month

USD

LIBOR

+

1.6%),

10/15/31

..........................................

United

States

4,590,000

4,595,065

17A,

CRR,

144A,

FRN,

2.224%,

(3-month

USD

LIBOR

+

2.1%),

10/15/31

..........................................

United

States

4,240,000

4,230,463

g,q

LCM

XVIII

LP,

18A,

DR,

144A,

FRN,

2.932%,

(3-month

USD

LIBOR

+

2.8%),

4/20/31

....................................

United

States

6,860,000

6,657,129

g,q

Madison

Park

Euro

Funding

VIII

DAC,

8A,

BRN,

144A,

FRN,

1.7%,

(3-month

EURIBOR

+

1.7%),

4/15/32

.....................

Ireland

4,100,000

EUR

4,749,319

g,r

Mill

City

Mortgage

Loan

Trust,

2018-4,

A1B,

144A,

FRN,

3.5%,

4/25/66

...........................................

United

States

11,016,006

11,321,878

g,q

Neuberger

Berman

CLO

XXII

Ltd.,

2016-22A,

CR,

144A,

FRN,

2.322%,

(3-month

USD

LIBOR

+

2.2%),

10/17/30

............

United

States

2,129,630

2,135,432

g,q

Octagon

Investment

Partners

28

Ltd.,

2016-1A,

BR,

144A,

FRN,

1.924%,

(3-month

USD

LIBOR

+

1.8%),

10/24/30

............

United

States

3,914,730

3,924,722

g,q

Octagon

Investment

Partners

36

Ltd.,

2018-1A,

A1,

144A,

FRN,

1.094%,

(3-month

USD

LIBOR

+

0.97%),

4/15/31

............

United

States

7,475,000

7,473,869

g,q

Octagon

Investment

Partners

37

Ltd.,

2018-2A,

C,

144A,

FRN,

2.974%,

(3-month

USD

LIBOR

+

2.85%),

7/25/30

............

United

States

4,000,000

3,971,839

g,q

Octagon

Investment

Partners

38

Ltd.,

2018-1A,

C,

144A,

FRN,

3.081%,

(3-month

USD

LIBOR

+

2.95%),

7/20/30

............

United

States

5,000,000

4,937,500

g,r

Prosper

Pass-Thru

Trust

III

,

2020-PT1,

A,

144A,

FRN,

8.796%,

3/15/26

.................

United

States

1,692,638

1,708,709

2020-PT2,

A,

144A,

FRN,

9.444%,

4/15/26

.................

United

States

1,877,457

1,846,375

2020-PT3,

A,

144A,

FRN,

7.183%,

5/15/26

.................

United

States

548,067

550,925

g,q

Strata

CLO

I

Ltd.,

2018-1A,

B,

144A,

FRN,

2.324%,

(3-month

USD

LIBOR

+

2.2%),

1/15/31

...............................

United

States

14,100,000

14,080,679

Franklin

Strategic

Series

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

30

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Asset-Backed

Securities

(continued)

Diversified

Financial

Services

(continued)

g,r

Upgrade

Master

Pass-Thru

Trust

,

2019-PT1,

A,

144A,

FRN,

13.317%,

6/15/25

................

United

States

788,105

$

742,177

2019-PT2,

A,

144A,

FRN,

14.028%,

2/15/26

................

United

States

1,505,485

1,527,102

g,q

Voya

CLO

Ltd.

,

2013-2A,

A2AR,

144A,

FRN,

1.524%,

(3-month

USD

LIBOR

+

1.4%),

4/25/31

......................................

United

States

2,200,000

2,191,837

2013-2A,

BR,

144A,

FRN,

1.974%,

(3-month

USD

LIBOR

+

1.85%),

4/25/31

.....................................

United

States

5,770,000

5,704,375

2014-1A,

CR2,

144A,

FRN,

2.922%,

(3-month

USD

LIBOR

+

2.8%),

4/18/31

......................................

United

States

8,000,000

7,790,898

2015-2A,

BR,

144A,

FRN,

1.624%,

(3-month

USD

LIBOR

+

1.5%),

7/23/27

...........................................

United

States

9,290,000

9,306,320

2016-1A,

BR,

144A,

FRN,

1.932%,

(3-month

USD

LIBOR

+

1.8%),

1/20/31

...........................................

United

States

590,000

587,787

246,874,446

a

a

a

a

a

a

Total

Asset-Backed

Securities

(Cost

$266,705,253)

..............................

268,137,066

Commercial

Mortgage-Backed

Securities

0.2%

Diversified

Financial

Services

0.2%

g,q

BX

Commercial

Mortgage

Trust

,

2021-VOLT,

A,

144A,

FRN,

0.79%,

(1-month

USD

LIBOR

+

0.7%),

9/15/36

...........................................

United

States

2,480,000

2,484,028

2021-VOLT,

B,

144A,

FRN,

1.04%,

(1-month

USD

LIBOR

+

0.95%),

9/15/36

.....................................

United

States

3,890,000

3,899,837

r

Commercial

Mortgage

Trust,

2006-GG7,

AJ,

FRN,

6.012%,

7/10/38

United

States

2,336,688

1,966,705

8,350,570

a

a

a

a

a

a

Total

Commercial

Mortgage-Backed

Securities

(Cost

$8,621,544)

.................

8,350,570

Mortgage-Backed

Securities

0.8%

s

Federal

Home

Loan

Mortgage

Corp.

(FHLMC)

Adjustable

Rate

0.0%

†

FHLMC,

2.348%,

(1-year

CMT

T-Note

+/-

MBS

Margin),

1/01/33

..

United

States

9,855

9,821

Federal

Home

Loan

Mortgage

Corp.

(FHLMC)

Fixed

Rate

0.1%

FHLMC

Gold

Pools,

15

Year,

5%,

7/01/22

...................

United

States

3,858

3,995

FHLMC

Gold

Pools,

20

Year,

5%,

5/01/27

-

5/01/30

............

United

States

183,071

202,514

FHLMC

Gold

Pools,

30

Year,

4.5%,

10/01/40

.................

United

States

67,532

74,793

FHLMC

Gold

Pools,

30

Year,

5%,

3/01/34

-

2/01/38

............

United

States

411,761

464,999

FHLMC

Gold

Pools,

30

Year,

5.5%,

6/01/33

-

6/01/36

..........

United

States

510,847

585,854

FHLMC

Gold

Pools,

30

Year,

6%,

6/01/33

-

6/01/37

............

United

States

191,791

218,621

FHLMC

Gold

Pools,

30

Year,

6.5%,

12/01/25

-

6/01/36

.........

United

States

57,652

66,073

FHLMC

Gold

Pools,

30

Year,

7%,

4/01/28

-

8/01/32

............

United

States

10,661

11,133

FHLMC

Gold

Pools,

30

Year,

7.5%,

1/01/26

-

1/01/31

..........

United

States

3,012

3,513

FHLMC

Gold

Pools,

30

Year,

8%,

11/01/25

-

1/01/26

...........

United

States

46

46

FHLMC

Gold

Pools,

30

Year,

9%,

12/01/24

..................

United

States

27

29

1,631,570

s

Federal

National

Mortgage

Association

(FNMA)

Adjustable

Rate

0.0%

†

FNMA,

2.289%,

(1-year

CMT

T-Note

+/-

MBS

Margin),

12/01/34

..

United

States

76,973

78,597

Federal

National

Mortgage

Association

(FNMA)

Fixed

Rate

0.7%

FNMA,

15

Year,

2.5%,

7/01/27

...........................

United

States

116,459

121,588

FNMA,

15

Year,

5.5%,

4/01/22

...........................

United

States

476

478

FNMA,

20

Year,

4.5%,

3/01/28

...........................

United

States

34,309

37,074

Franklin

Strategic

Series

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

31

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Mortgage-Backed

Securities

(continued)

Federal

National

Mortgage

Association

(FNMA)

Fixed

Rate

(continued)

FNMA,

20

Year,

5%,

9/01/23

-

6/01/31

......................

United

States

222,441

$

246,132

FNMA,

30

Year,

3%,

9/01/48

-

9/01/51

......................

United

States

21,990,524

23,082,509

FNMA,

30

Year,

4.5%,

2/01/41

...........................

United

States

172,295

191,097

FNMA,

30

Year,

5%,

10/01/35

............................

United

States

414,189

473,319

FNMA,

30

Year,

5.5%,

9/01/33

-

12/01/35

...................

United

States

643,762

739,222

FNMA,

30

Year,

6%,

6/01/34

-

5/01/38

......................

United

States

1,081,243

1,237,052

FNMA,

30

Year,

6.5%,

3/01/28

-

10/01/37

...................

United

States

191,801

220,090

FNMA,

30

Year,

7.5%,

10/01/29

...........................

United

States

3,333

3,867

FNMA,

30

Year,

8%,

1/01/25

-

5/01/26

......................

United

States

1,257

1,370

26,353,798

Government

National

Mortgage

Association

(GNMA)

Fixed

Rate

0.0%

†

GNMA

I,

30

Year,

8%,

2/15/25

............................

United

States

17

18

GNMA

I,

Single-family,

30

Year,

5%,

6/15/34

-

7/15/34

..........

United

States

68,911

79,034

GNMA

I,

Single-family,

30

Year,

5.5%,

2/15/33

-

6/15/36

........

United

States

234,406

267,402

GNMA

I,

Single-family,

30

Year,

6%,

8/15/36

.................

United

States

11,250

12,923

GNMA

I,

Single-family,

30

Year,

6.5%,

2/15/29

-

3/15/32

........

United

States

4,008

4,480

GNMA

I,

Single-family,

30

Year,

7%,

11/15/27

-

5/15/28

.........

United

States

4,484

4,504

GNMA

I,

Single-family,

30

Year,

7.5%,

9/15/23

-

5/15/27

........

United

States

413

424

GNMA

I,

Single-family,

30

Year,

8%,

7/15/26

-

9/15/27

..........

United

States

2,197

2,268

GNMA

I,

Single-family,

30

Year,

8.5%,

8/15/24

................

United

States

28

28

GNMA

I,

Single-family,

30

Year,

9%,

1/15/25

.................

United

States

91

92

GNMA

I,

Single-family,

30

Year,

9.5%,

6/15/25

................

United

States

253

253

GNMA

II,

Single-family,

30

Year,

5%,

9/20/33

-

11/20/33

.........

United

States

112,476

127,008

GNMA

II,

Single-family,

30

Year,

5.5%,

6/20/34

...............

United

States

59,220

69,729

GNMA

II,

Single-family,

30

Year,

6%,

11/20/34

................

United

States

61,644

72,268

GNMA

II,

Single-family,

30

Year,

6.5%,

7/20/28

-

12/20/31

.......

United

States

35,095

39,931

GNMA

II,

Single-family,

30

Year,

7.5%,

4/20/32

...............

United

States

13,075

14,740

695,102

Total

Mortgage-Backed

Securities

(Cost

$27,601,931)

............................

28,768,888

Municipal

Bonds

0.9%

California

0.1%

San

Bernardino

Community

College

District,

GO,

2019

A-1,

3.271%,

8/01/39

...........................................

United

States

2,160,000

2,279,050

Illinois

0.2%

State

of

Illinois,

GO,

2003,

5.1%,

6/01/33

...................

United

States

6,960,000

8,121,819

New

Jersey

0.1%

New

Jersey

Transportation

Trust

Fund

Authority,

Revenue,

2019

B,

Refunding,

4.131%,

6/15/42

............................

United

States

3,535,000

4,042,649

New

York

0.2%

Metropolitan

Transportation

Authority,

Revenue,

2020

E,

Refunding,

4%,

11/15/45

.......................................

United

States

5,340,000

5,952,038

New

York

State

Dormitory

Authority,

State

University

of

New

York,

Revenue,

2019

B,

Refunding,

3.142%,

7/01/43

..............

United

States

3,145,000

3,294,907

9,246,945

Ohio

0.1%

State

of

Ohio,

Cleveland

Clinic

Health

System

Obligated

Group,

Revenue,

2019

G,

Refunding,

3.276%,

1/01/42

.............

United

States

1,975,000

2,134,709

Pennsylvania

0.1%

University

of

Pittsburgh-of

the

Commonwealth

System

of

Higher

Education,

Revenue,

2017

C,

Refunding,

3.005%,

9/15/41

.....

United

States

5,500,000

5,791,596

Franklin

Strategic

Series

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

32

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Municipal

Bonds

(continued)

Texas

0.1%

Texas

State

University

System,

Revenue,

2019

B,

Refunding,

3.289%,

3/15/40

.....................................

United

States

1,965,000

$

2,045,748

Total

Municipal

Bonds

(Cost

$30,511,929)

......................................

33,662,516

Residential

Mortgage-Backed

Securities

8.3%

Diversified

Financial

Services

1.7%

g

BRAVO

Residential

Funding

Trust

,

2019-1,

A1C,

144A,

3.5%,

3/25/58

.......................

United

States

3,241,852

3,306,893

r

2019-2,

A3,

144A,

FRN,

3.5%,

10/25/44

...................

United

States

5,651,316

5,847,111

g,r

CIM

Trust

,

2019-INV1,

A1,

144A,

FRN,

4%,

2/25/49

..................

United

States

2,242,802

2,271,096

2019-INV2,

A3,

144A,

FRN,

4%,

5/25/49

..................

United

States

3,574,612

3,646,495

g,r

J.P.

Morgan

Mortgage

Trust,

2021-13,

A4,

144A,

FRN,

2.5%,

4/25/52

United

States

16,310,000

16,547,005

g,r

OBX

Trust,

2021-J3,

A4,

144A,

FRN,

2.5%,

10/25/51

...........

United

States

3,282,605

3,336,217

g,r

Provident

Funding

Associates

LLP,

2021-J1,

A3,

144A,

FRN,

2.5%,

2/20/49

...........................................

United

States

9,864,699

10,025,808

g,r

Provident

Funding

Mortgage

Trust

,

2019-1,

A2,

144A,

FRN,

3%,

12/25/49

....................

United

States

2,190,908

2,204,043

2020-1,

A3,

144A,

FRN,

3%,

2/25/50

.....................

United

States

209,316

209,485

g,r

PSMC

Trust,

2021-3,

A3,

144A,

FRN,

2.5%,

8/25/51

...........

United

States

18,970,397

19,305,119

66,699,272

a

a

a

a

a

a

Thrifts

&

Mortgage

Finance

6.6%

q

FHLMC

Structured

Agency

Credit

Risk

Debt

Notes

,

2013-DN2,

M2,

FRN,

4.339%,

(1-month

USD

LIBOR

+

4.25%),

11/25/23

..........................................

United

States

6,498,814

6,705,681

2014-DN2,

M3,

FRN,

3.689%,

(1-month

USD

LIBOR

+

3.6%),

4/25/24

...........................................

United

States

12,237,486

12,478,390

2014-DN3,

M3,

FRN,

4.089%,

(1-month

USD

LIBOR

+

4%),

8/25/24

...........................................

United

States

343,428

352,050

2014-DN4,

M3,

FRN,

4.639%,

(1-month

USD

LIBOR

+

4.55%),

10/25/24

..........................................

United

States

3,751,848

3,867,149

2014-HQ1,

M3,

FRN,

4.189%,

(1-month

USD

LIBOR

+

4.1%),

8/25/24

...........................................

United

States

343,094

346,616

2014-HQ3,

M3,

FRN,

4.839%,

(1-month

USD

LIBOR

+

4.75%),

10/25/24

..........................................

United

States

431,733

434,212

2015-DNA1,

M3,

FRN,

3.389%,

(1-month

USD

LIBOR

+

3.3%),

10/25/27

..........................................

United

States

1,098,215

1,118,583

2015-DNA3,

M3,

FRN,

4.789%,

(1-month

USD

LIBOR

+

4.7%),

4/25/28

...........................................

United

States

12,227,984

12,672,203

2016-DNA2,

M3,

FRN,

4.739%,

(1-month

USD

LIBOR

+

4.65%),

10/25/28

..........................................

United

States

10,739,784

11,149,358

2017-DNA2,

M2,

FRN,

3.539%,

(1-month

USD

LIBOR

+

3.45%),

10/25/29

..........................................

United

States

5,868,312

6,063,666

2017-DNA3,

M2,

FRN,

2.589%,

(1-month

USD

LIBOR

+

2.5%),

3/25/30

...........................................

United

States

26,312,269

26,903,143

2017-HQA2,

M2,

FRN,

2.739%,

(1-month

USD

LIBOR

+

2.65%),

12/25/29

..........................................

United

States

2,595,136

2,653,358

q

FNMA

Connecticut

Avenue

Securities

,

2013-C01,

M2,

FRN,

5.339%,

(1-month

USD

LIBOR

+

5.25%),

10/25/23

..........................................

United

States

5,922,528

6,166,900

2014-C01,

M2,

FRN,

4.489%,

(1-month

USD

LIBOR

+

4.4%),

1/25/24

...........................................

United

States

7,453,995

7,699,099

Franklin

Strategic

Series

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

33

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Residential

Mortgage-Backed

Securities

(continued)

Thrifts

&

Mortgage

Finance

(continued)

q

FNMA

Connecticut

Avenue

Securities,

(continued)

2014-C02,

1M2,

FRN,

2.689%,

(1-month

USD

LIBOR

+

2.6%),

5/25/24

...........................................

United

States

6,770,732

$

6,859,189

2014-C03,

1M2,

FRN,

3.089%,

(1-month

USD

LIBOR

+

3%),

7/25/24

...........................................

United

States

14,367,031

14,620,698

2014-C03,

2M2,

FRN,

2.989%,

(1-month

USD

LIBOR

+

2.9%),

7/25/24

...........................................

United

States

1,317,550

1,342,597

2015-C01,

1M2,

FRN,

4.389%,

(1-month

USD

LIBOR

+

4.3%),

2/25/25

...........................................

United

States

2,719,721

2,779,245

2015-C02,

1M2,

FRN,

4.089%,

(1-month

USD

LIBOR

+

4%),

5/25/25

...........................................

United

States

8,572,372

8,755,138

2015-C02,

2M2,

FRN,

4.089%,

(1-month

USD

LIBOR

+

4%),

5/25/25

...........................................

United

States

968,019

972,036

2015-C03,

1M2,

FRN,

5.089%,

(1-month

USD

LIBOR

+

5%),

7/25/25

...........................................

United

States

9,959,594

10,263,047

2015-C03,

2M2,

FRN,

5.089%,

(1-month

USD

LIBOR

+

5%),

7/25/25

...........................................

United

States

1,342,013

1,353,124

2016-C01,

1M2,

FRN,

6.839%,

(1-month

USD

LIBOR

+

6.75%),

8/25/28

...........................................

United

States

2,100,547

2,220,439

2016-C02,

1M2,

FRN,

6.089%,

(1-month

USD

LIBOR

+

6%),

9/25/28

...........................................

United

States

18,553,078

19,426,095

2016-C03,

1M2,

FRN,

5.389%,

(1-month

USD

LIBOR

+

5.3%),

10/25/28

..........................................

United

States

10,424,506

10,957,459

2016-C04,

1M2,

FRN,

4.339%,

(1-month

USD

LIBOR

+

4.25%),

1/25/29

...........................................

United

States

6,271,664

6,497,300

2016-C05,

2M2,

FRN,

4.539%,

(1-month

USD

LIBOR

+

4.45%),

1/25/29

...........................................

United

States

3,486,645

3,632,579

2016-C06,

1M2,

FRN,

4.339%,

(1-month

USD

LIBOR

+

4.25%),

4/25/29

...........................................

United

States

1,595,848

1,659,511

2016-C07,

2M2,

FRN,

4.439%,

(1-month

USD

LIBOR

+

4.35%),

5/25/29

...........................................

United

States

2,449,646

2,556,775

2017-C01,

1M2,

FRN,

3.639%,

(1-month

USD

LIBOR

+

3.55%),

7/25/29

...........................................

United

States

15,461,352

15,970,466

2017-C03,

1M2,

FRN,

3.089%,

(1-month

USD

LIBOR

+

3%),

10/25/29

..........................................

United

States

21,921,611

22,605,018

2017-C04,

2M2,

FRN,

2.939%,

(1-month

USD

LIBOR

+

2.85%),

11/25/29

..........................................

United

States

5,933,583

6,092,501

2017-C05,

1M2,

FRN,

2.289%,

(1-month

USD

LIBOR

+

2.2%),

1/25/30

...........................................

United

States

14,852,450

15,132,179

252,305,804

a

a

a

a

a

a

Total

Residential

Mortgage-Backed

Securities

(Cost

$330,383,399)

................

319,005,076

Shares

Escrows

and

Litigation

Trusts

0.0%

†

a,b

K2016470219

South

Africa

Ltd.,

Escrow

Account

..............

South

Africa

620,001

ZAR

—

Mesquite

Energy,

Inc.,

Escrow

Account

.....................

United

States

6,000,000

195,000

a,b

Millennium

Corporate

Claim

Trust,

Escrow

Account

............

United

States

8,736,450

—

a,b

Millennium

Lender

Claim

Trust,

Escrow

Account

..............

United

States

8,736,450

—

Total

Escrows

and

Litigation

Trusts

(Cost

$5,707,489)

...........................

195,000

Total

Long

Term

Investments

(Cost

$3,795,643,682)

.............................

3,699,269,539

a

Franklin

Strategic

Series

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

34

a

a

Number

of

Contracts

Notional

Amount

#

a

Value

a

a

a

a

aa

a

a

Options

Purchased

0.0%

†

Calls

-

Over-the-Counter

Interest

Rate

Swaptions

0.0%

†

Receive

Fixed

1.08%,

Pay

Floating

3-month

USD

LIBOR,

Counterparty

DBAB,

Expires

3/28/22

.....................

1

117,000,000

$

478,908

Puts

-

Over-the-Counter

Currency

Options

Foreign

Exchange

EUR/RUB,

Counterparty

MSCO,

October

Strike

Price

82.83

RUB,

Expires

10/27/22

......................

1

20,000,000

EUR

312,605

Total

Options

Purchased

(Cost

$978,284)

......................................

791,513

Short

Term

Investments

3.6%

a

a

Country

Shares

a

Value

a

Money

Market

Funds

1.3%

d,t

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

50,142,051

50,142,051

Total

Money

Market

Funds

(Cost

$50,142,051)

..................................

50,142,051

Principal

Amount

*

a

a

a

a

a

Repurchase

Agreements

2.2%

u

Joint

Repurchase

Agreement,

0.02%,

11/01/21

(Maturity

Value

$85,743,359)

BNP

Paribas

Securities

Corp.

(Maturity

Value

$56,568,323)

Deutsche

Bank

Securities,

Inc.

(Maturity

Value

$10,318,356)

HSBC

Securities

(USA)

Inc.

(Maturity

Value

$18,856,680)

Collateralized

by

U.S.

Government

Agency

Securities,

4%

-

5%,

10/20/40

-

2/20/49;

U.S.

Treasury

Bill,

Discount

Note,

4/28/22;

and

U.S.

Treasury

Note,

2.5%,

1/31/24

(valued

at

$87,523,571)

....

85,743,216

85,743,216

Total

Repurchase

Agreements

(Cost

$85,743,216)

...............................

85,743,216

v

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

0.1%

Country

Shares

Money

Market

Funds

0.1%

d,t

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

2,760,000

2,760,000

Franklin

Strategic

Series

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

35

Short

Term

Investments

(continued)

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Repurchase

Agreements

0.0%

†

u

Joint

Repurchase

Agreement,

BNP

Paribas

SA,

0.05%,

11/01/21

(Maturity

Value

$690,027)

Collateralized

by

U.S.

Treasury

Bond,

6.25%,

8/15/23;

U.S.

Treasury

Bond,

Strip,

11/15/22;

U.S.

Treasury

Notes,

0.125%

-

2.625%,

9/30/22

-

5/31/26;

and

U.S.

Treasury

Bills,

Discount

Notes,

2/24/22

-

9/08/22

(valued

at

$703,825)

..............

690,024

$

690,024

Total

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

(Cost

$3,450,024)

............................................................

3,450,024

Total

Short

Term

Investments

(Cost

$139,335,291

)

...............................

139,335,291

a

Total

Investments

(Cost

$3,935,957,257)

100.0%

................................

$3,839,396,343

Options

Written

(0.0)%

†

......................................................

(904,035)

Other

Assets,

less

Liabilities

(0.0)%

†

...........................................

(93,842)

Net

Assets

100.0%

...........................................................

$3,838,398,466

Number

of

Contracts

Notional

Amount

#

w

Options

Written

(0.0)%

†

Puts

-

Over-the-Counter

Interest

Rate

Swaptions

(0.0)%

†

Receive

Floating

3-month

USD

LIBOR,

Pay

Fixed

1.48%,

Counterparty

DBAB,

Expires

3/28/22

.....................

1

(117,000,000)

(904,035)

(904,035)

Total

Options

Written

(Premiums

received

$616,590)

............................

$

(904,035)

#

Notional

amount

is

the

number

of

units

specified

in

the

contract,

and

can

include

currency

units,

bushels,

shares,

pounds,

barrels

or

other

units.

Currency

units

are

stated

in

U.S.

dollars

unless

otherwise

indicated.

*

The

principal

amount

is

stated

in

U.S.

dollars

unless

otherwise

indicated.

†

Rounds

to

less

than

0.1%

of

net

assets.

a

Non-income

producing.

b

Fair

valued

using

significant

unobservable

inputs.

See

Note

12

regarding

fair

value

measurements.

c

See

Note

9

regarding

restricted

securities.

d

See

Note

3(f)

regarding

investments

in

affiliated

management

investment

companies.

e

Income

may

be

received

in

additional

securities

and/or

cash.

f

Perpetual

security

with

no

stated

maturity

date.

g

Security

was

purchased

pursuant

to

Rule

144A

or

Regulation

S

under

the

Securities

Act

of

1933.

144A

securities

may

be

sold

in

transactions

exempt

from

registration

only

to

qualified

institutional

buyers

or

in

a

public

offering

registered

under

the

Securities

Act

of

1933.

Regulation

S

securities

cannot

be

sold

in

the

United

States

without

either

an

effective

registration

statement

filed

pursuant

to

the

Securities

Act

of

1933,

or

pursuant

to

an

exemption

from

registration.

At

October

31,

2021,

the

aggregate

value

of

these

securities

was

$2,102,903,158,

representing

54.8%

of

net

assets.

h

The

coupon

rate

shown

represents

the

rate

at

period

end.

i

See

Note

1(j)

regarding

senior

floating

rate

interests.

j

A

portion

or

all

of

the

security

purchased

on

a

delayed

delivery

basis.

See

Note

1(d).

k

See

Note

7

regarding

credit

risk

and

defaulted

securities.

l

See

Note

1(h)

regarding

Marketplace

Lending.

m

See

Note

1(g)

regarding

loan

participations

and

assignments.

n

A

supranational

organization

is

an

entity

formed

by

two

or

more

central

governments

through

international

treaties.

o

Principal

amount

of

security

is

adjusted

for

inflation.

See

Note

1(l).

p

A

portion

or

all

of

the

security

is

on

loan

at

October

31,

2021.

See

Note

1(e).

q

The

coupon

rate

shown

represents

the

rate

inclusive

of

any

caps

or

floors,

if

applicable,

in

effect

at

period

end.

r

Adjustable

rate

security

with

an

interest

rate

that

is

not

based

on

a

published

reference

index

and

spread.  The

rate

is

based

on

the

structure

of

the

agreement

and

current

market

conditions.

The

coupon

rate

shown

represents

the

rate

at

period

end.

Franklin

Strategic

Series

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

36

At

October

31,

2021,

the

Fund

had

the

following futures

contracts

outstanding.

See

Note

1(f)

. 

At

October

31,

2021,

the

Fund

had

the

following

forward

exchange

contracts

outstanding.

See

Note

1(f)

. 

s

Adjustable

Rate

Mortgage-Backed

Security

(ARM);

the

rate

shown

is

the

effective

rate

at

period

end.

ARM

rates

are

not

based

on

a

published

reference

rate

and

spread,

but

instead

pass-through

weighted

average

interest

income

inclusive

of

any

caps

or

floors,

if

applicable,

from

the

underlying

mortgage

loans

in

which

the

majority

of

mortgages

pay

interest

based

on

the

index

shown

at

their

designated

reset

dates

plus

a

spread,

less

the

applicable

servicing

and

guaranty

fee

(MBS

margin).

t

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

u

See

Note

1(c)

regarding

joint

repurchase

agreement.

v

See

Note

1(e)

regarding

securities

on

loan.

w

See

Note

1(f)

regarding

written

options.

Futures

Contracts

Description

Type

Number

of

Contracts

Notional

Amount

*

Expiration

Date

Value/

Unrealized

Appreciation

(Depreciation)

Interest

rate

contracts

U.S.

Treasury

10

Year

Notes

....................

Short

777

$

101,556,328

12/21/21

$

1,379,337

U.S.

Treasury

10

Year

Ultra

Notes

................

Short

162

23,495,062

12/21/21

381,385

U.S.

Treasury

2

Year

Notes

.....................

Long

624

136,812,000

12/31/21

(590,636)

U.S.

Treasury

5

Year

Notes

.....................

Short

1,896

230,838,000

12/31/21

82,770

U.S.

Treasury

Long

Bonds

.....................

Short

174

27,986,812

12/21/21

292,170

Total

Futures

Contracts

......................................................................

$1,545,026

*

As

of

period

end.

Forward

Exchange

Contracts

Currency

Counter-

party

a

Type

Quantity

Contract

Amount

*

Settlement

Date

Unrealized

Appreciation

Unrealized

Depreciation

a

a

a

a

a

a

a

a

OTC

Forward

Exchange

Contracts

Brazilian

Real

......

JPHQ

Buy

74,547,215

13,672,097

11/08/21

$

—

$

(474,130)

Brazilian

Real

......

JPHQ

Sell

123,273,007

22,501,519

11/08/21

677,054

—

Canadian

Dollar

....

JPHQ

Buy

15,500,000

12,532,544

11/08/21

—

(10,985)

Canadian

Dollar

....

JPHQ

Sell

15,500,000

12,456,257

11/08/21

—

(65,302)

Chinese

Yuan

......

JPHQ

Buy

64,000,000

9,811,095

11/15/21

166,752

—

Chinese

Yuan

......

JPHQ

Sell

64,000,000

9,820,168

11/15/21

—

(157,679)

Mexican

Peso

......

JPHQ

Buy

144,000,000

7,185,658

11/22/21

—

(212,793)

Turkish

Lira

........

JPHQ

Buy

59,000,000

6,789,413

12/06/21

—

(752,396)

Euro

.............

JPHQ

Sell

37,546,300

43,544,316

1/18/22

56,411

(642)

Indonesian

Rupiah

..

JPHQ

Sell

70,300,000,000

4,943,741

1/18/22

43,831

—

South

Korean

Won

..

JPHQ

Buy

10,300,000,000

8,687,658

1/27/22

65,056

—

Australian

Dollar

....

JPHQ

Buy

11,000,000

7,970,877

1/31/22

305,853

—

Total

Forward

Exchange

Contracts

...................................................

$1,314,957

$(1,673,927)

Net

unrealized

appreciation

(depreciation)

............................................

$(358,970)

*

In

U.S.

dollars

unless

otherwise

indicated.

a

May

be

comprised

of

multiple

contracts

with

the

same

counterparty,

currency

and

settlement

date.

Franklin

Strategic

Series

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

37

At

October

31,

2021,

the

Fund

had

the

following credit

default

swap

contracts outstanding.

See

Note

1(f)

. 

Credit

Default

Swap

Contracts

Description

Periodic

Payment

Rate

Received

(Paid)

Payment

Frequency

Counter-

party

Maturity

Date

Notional

Amount

(a)

Value

Unamortized

Upfront

Payments

(Receipts)

Unrealized

Appreciation

(Depreciation)

Rating

(b)

Centrally

Cleared

Swap

Contracts

Contracts

to

Sell

Protection

(c)(d)

Traded

Index

iTraxx

Europe

Crossover

36

.

5.00%

Quarterly

12/20/26

10,000,000

EUR

$

1,358,563

$

1,310,261

$

48,302

Total

Centrally

Cleared

Swap

Contracts

.....................................

$1,358,563

$1,310,261

$48,302

OTC

Swap

Contracts

Contracts

to

Sell

Protection

(c)(d)

Single

Name

Air

France-KLM

.

5.00%

Quarterly

BOFA

6/20/26

970,000

EUR

53,615

18,082

35,533

NR

Air

France-KLM

.

5.00%

Quarterly

JPHQ

6/20/26

2,310,000

EUR

127,682

37,616

90,066

NR

Air

France-KLM

.

5.00%

Quarterly

MSCO

12/20/25

6,680,000

EUR

387,596

6,614

380,982

NR

American

Airlines

Group,

Inc.

..

5.00%

Quarterly

CITI

12/20/21

8,100,000

53,742

(72,921)

126,663

CCC

American

Airlines

Group,

Inc.

..

5.00%

Quarterly

GSCO

6/20/22

2,000,000

25,696

(11,894)

37,590

CCC

Carnival

Corp.

..

1.00%

Quarterly

CITI

12/20/26

11,820,000

(1,593,607)

(1,507,557)

(86,050)

B-

Mexico

Government

Bond

......

1.00%

Quarterly

GSCO

6/20/26

9,250,000

38,559

24,917

13,642

BBB

Nordstrom,

Inc.

.

1.00%

Quarterly

JPHQ

12/20/26

9,400,000

(736,895)

(824,238)

87,343

BB+

United

Airlines

Holdings,

Inc.

.

5.00%

Quarterly

JPHQ

12/20/26

7,725,000

279,650

242,608

37,042

B

Traded

Index

BNP

Paribas

Haverhill

Index,

Tranche

5-10%

4.10%

Quarterly

BNDP

12/20/23

3,150,000

EUR

32,335

—

32,335

(e)

Citibank

Bespoke

Franklin,

Equity

Tranche

0-5%

—%

Quarterly

CITI

12/20/22

9,500,000

(1,780,099)

(1,489,382)

(290,717)

Non-

Investment

Grade

(e)

Citibank

Bespoke

Kona

Index,

Equity

Tranche

0-5%

—%

Quarterly

CITI

12/20/23

7,800,000

(2,857,247)

(2,537,925)

(319,322)

Non-

Investment

Grade

(e)

Citibank

Bespoke

Palm

Beach

Index,

Mezzanine

Tranche

5-10%

1.97%

Quarterly

CITI

12/20/22

10,600,000

120,508

—

120,508

Non-

Investment

Grade

(e)

Citibank

Bespoke

Palm

Beach

Index,

Mezzanine

Tranche

5-10%

2.42%

Quarterly

CITI

12/20/22

7,900,000

80,695

—

80,695

Non-

Investment

Grade

Franklin

Strategic

Series

Statement

of

Investments

(unaudited)

Franklin

Strategic

Income

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

38

Credit

Default

Swap

Contracts

(continued)

Description

Periodic

Payment

Rate

Received

(Paid)

Payment

Frequency

Counter-

party

Maturity

Date

Notional

Amount

(a)

Value

Unamortized

Upfront

Payments

(Receipts)

Unrealized

Appreciation

(Depreciation)

Rating

(b)

OTC

Swap

Contracts

(continued)

Contracts

to

Sell

Protection

(c)(d)

(continued)

Traded

Index

(continued)

(e)

Citibank

Bespoke

Phoenix

Index,

Mezzanine

Tranche

5-7%

2.90%

Quarterly

CITI

12/20/21

8,500,000

$

56,878

$

—

$

56,878

Non-

Investment

Grade

MCDX.

NA.MAIN.31

.

1.00%

Quarterly

CITI

12/20/23

23,060,000

244,752

99,639

145,113

Investment

Grade

(e)

Morgan

Stanley

Bespoke

Pecan

Index,

Mezzanine

Tranche

5-10%

4.10%

Quarterly

MSCO

12/20/21

9,000,000

30,701

—

30,701

Non-

Investment

Grade

(e)

Morgan

Stanley

Bespoke

Pecan

Index,

Mezzanine

Tranche

5-10%

3.98%

Quarterly

MSCO

12/20/21

9,000,000

27,947

—

27,947

Non-

Investment

Grade

Total

OTC

Swap

Contracts

..............................................

$(5,407,492)

$(6,014,441)

$606,949

Total

Credit

Default

Swap

Contracts

....................................

$(4,048,929)

$

(4,704,180)

$655,251

(a)

In

U.S.

dollars

unless

otherwise

indicated.

For

contracts

to

sell

protection,

the

notional

amount

is

equal

to

the

maximum

potential

amount

of

the

future

payments

and

no

recourse

provisions

have

been

entered

into

in

association

with

the

contracts.

(b)

Based

on

Standard

and

Poor's

(S&P)

Rating

for

single

name

swaps

and

internal

ratings

for

index

swaps.

Internal

ratings

based

on

mapping

into

equivalent

ratings

from

external

vendors.

(c)

Performance

triggers

for

settlement

of

contract

include

default,

bankruptcy

or

restructuring

for

single

name

swaps,

and

failure

to

pay

or

bankruptcy

of

the

underlying

securities

for

traded

index

swaps.

(d)

The

fund

enters

contracts

to

sell

protection

to

create

a

long

credit

position.

(e)

Represents

a

custom

index

comprised

of

a

basket

of

underlying

instruments.

See

Note 10 regarding

other

derivative

information.

See

Abbreviations

on

page

63.

Franklin

Strategic

Series

Financial

Statements

Statement

of

Assets

and

Liabilities

October

31,

2021

(unaudited)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

39

Franklin

Strategic

Income

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

...................................................................

$3,455,379,653

Cost

-

Controlled

affiliates

(Note

3f

)

............................................................

341,242,313

Cost

-

Non-controlled

affiliates

(Note

3f

)

........................................................

52,902,051

Cost

-

Unaffiliated

repurchase

agreements

......................................................

86,433,240

Value

-

Unaffiliated

issuers

(Includes

securities

loaned

of

$3,365,837)

.................................

$3,417,207,247

Value

-

Controlled

affiliates

(Note

3f

)

...........................................................

282,853,805

Value

-

Non-controlled

affiliates

(Note

3f

)

........................................................

52,902,051

Value

-

Unaffiliated

repurchase

agreements

......................................................

86,433,240

Cash

....................................................................................

7,002,599

Foreign

currency,

at

value

(cost

$1,012,806)

......................................................

1,007,795

Receivables:

Investment

securities

sold

...................................................................

8,711,322

Capital

shares

sold

........................................................................

2,529,596

Dividends

and

interest

.....................................................................

35,287,390

Deposits

with

brokers

for:

OTC

derivative

contracts

..................................................................

7,357,626

Futures

contracts

........................................................................

3,335,947

Centrally

cleared

swap

contracts

............................................................

986,446

OTC

swap

contracts

(upfront

payments

$429,487)

..................................................

429,476

Unrealized

appreciation

on

OTC

forward

exchange

contracts

..........................................

1,314,957

Unrealized

appreciation

on

OTC

swap

contracts

....................................................

1,303,038

Deferred

tax

benefit

.........................................................................

981,055

Total

assets

..........................................................................

3,909,643,590

Liabilities:

Payables:

Investment

securities

purchased

..............................................................

35,064,828

Capital

shares

redeemed

...................................................................

18,197,642

Management

fees

.........................................................................

1,335,105

Distribution

fees

..........................................................................

783,059

Transfer

agent

fees

........................................................................

820,673

Trustees'

fees

and

expenses

.................................................................

11,454

Distributions

to

shareholders

.................................................................

643,605

Variation

margin

on

futures

contracts

...........................................................

88,276

Variation

margin

on

centrally

cleared

swap

contracts

...............................................

401,038

Deposits

from

brokers

for:

OTC

derivative

contracts

..................................................................

310,000

OTC

swap

contracts

(upfront

receipts

$6,443,932)

..................................................

6,443,917

Unrealized

depreciation

on

OTC

swap

contracts

....................................................

696,089

Options

written,

at

value

(premiums

received

$616,590)

..............................................

904,035

Unrealized

depreciation

on

OTC

forward

exchange

contracts

..........................................

1,673,927

Payable

upon

return

of

securities

loaned

(Note

1

e

)

..................................................

3,450,024

Deferred

tax

...............................................................................

139,383

Accrued

expenses

and

other

liabilities

...........................................................

282,069

Total

liabilities

.........................................................................

71,245,124

Net

assets,

at

value

.................................................................

$3,838,398,466

Net

assets

consist

of:

Paid-in

capital

.............................................................................

$4,511,056,576

Total

distributable

earnings

(losses)

.............................................................

(672,658,110)

Net

assets,

at

value

.................................................................

$3,838,398,466

Franklin

Strategic

Series

Financial

Statements

Statement

of

Assets

and

Liabilities

(continued)

October

31,

2021

(unaudited)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

40

Franklin

Strategic

Income

Fund

Class

A:

Net

assets,

at

value

.......................................................................

$2,968,423,982

Shares

outstanding

........................................................................

314,579,255

Net

asset

value

per

share

a

..................................................................

$9.44

Maximum

offering

price

per

share

(net

asset

value

per

share

÷

96.25%)

................................

$9.81

Class

C:

Net

assets,

at

value

.......................................................................

$227,217,432

Shares

outstanding

........................................................................

24,069,910

Net

asset

value

and

maximum

offering

price

per

share

a

.............................................

$9.44

Class

R:

Net

assets,

at

value

.......................................................................

$55,861,608

Shares

outstanding

........................................................................

5,945,790

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$9.40

Class

R6:

Net

assets,

at

value

.......................................................................

$143,594,660

Shares

outstanding

........................................................................

15,192,505

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$9.45

Advisor

Class:

Net

assets,

at

value

.......................................................................

$443,300,784

Shares

outstanding

........................................................................

46,916,129

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$9.45

a

Redemption

price

is

equal

to

net

asset

value

less

contingent

deferred

sales

charges,

if

applicable.

Franklin

Strategic

Series

Financial

Statements

Statement

of

Operations

for

the

six

months

ended

October

31,

2021

(unaudited)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

41

Franklin

Strategic

Income

Fund

Investment

income:

Dividends:

Unaffiliated

issuers

........................................................................

$507,704

Controlled

affiliates

(Note

3f)

.................................................................

5,111,862

Non-controlled

affiliates

(Note

3f)

.............................................................

2,550

Interest:

(net

of

foreign

taxes

of

$70,455)

Unaffiliated

issuers:

Paydown

gain

(loss)

.....................................................................

(6,390,509)

Paid

in

cash

a

...........................................................................

77,630,555

Income

from

securities

loaned:

Unaffiliated

entities

(net

of

fees

and

rebates)

.....................................................

17,956

Non-controlled

affiliates

(Note

3f)

.............................................................

146

Total

investment

income

...................................................................

76,880,264

Expenses:

Management

fees

(Note

3

a

)

...................................................................

8,956,600

Distribution

fees:

(Note

3c

)

    Class

A

................................................................................

3,679,561

    Class

C

................................................................................

1,040,632

    Class

R

................................................................................

144,525

Transfer

agent

fees:

(Note

3e

)

    Class

A

................................................................................

2,206,824

    Class

C

................................................................................

240,903

    Class

R

................................................................................

43,358

    Class

R6

...............................................................................

35,125

    Advisor

Class

............................................................................

347,756

Custodian

fees

(Note

4

)

......................................................................

41,487

Reports

to

shareholders

fees

..................................................................

187,443

Registration

and

filing

fees

....................................................................

84,847

Professional

fees

...........................................................................

56,099

Trustees'

fees

and

expenses

..................................................................

28,341

Marketplace

lending

fees

(Note

1h)

.............................................................

120,884

Other

....................................................................................

95,218

Total

expenses

.........................................................................

17,309,603

Expense

reductions

(Note

4

)

...............................................................

(845)

Expenses

waived/paid

by

affiliates

(Note

3f

and

3g)

..............................................

(903,513)

Net

expenses

.........................................................................

16,405,245

Net

investment

income

................................................................

60,475,019

Franklin

Strategic

Series

Financial

Statements

Statement

of

Operations

(continued)

for

the

six

months

ended

October

31,

2021

(unaudited)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

42

Franklin

Strategic

Income

Fund

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

Unaffiliated

issuers

......................................................................

(4,289,051)

Written

options

...........................................................................

1,082,610

Foreign

currency

transactions

................................................................

112,975

Forward

exchange

contracts

.................................................................

561,990

Futures

contracts

.........................................................................

(5,197,530)

Swap

contracts

...........................................................................

8,257,566

Net

realized

gain

(loss)

..................................................................

528,560

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

......................................................................

(7,514,120)

Controlled

affiliates

(Note

3

f

)

...............................................................

14,241,589

Translation

of

other

assets

and

liabilities

denominated

in

foreign

currencies

..............................

(55,743)

Written

options

...........................................................................

(652,875)

Forward

exchange

contracts

.................................................................

437,545

Futures

contracts

.........................................................................

2,733,941

Swap

contracts

...........................................................................

(4,006,880)

Change

in

deferred

taxes

on

unrealized

appreciation

...............................................

(30,791)

Net

change

in

unrealized

appreciation

(depreciation)

............................................

5,152,666

Net

realized

and

unrealized

gain

(loss)

............................................................

5,681,226

Net

increase

(decrease)

in

net

assets

resulting

from

operations

..........................................

$66,156,245

a

Includes

amortization

of

premium

and

accretion

of

discount.

Franklin

Strategic

Series

Financial

Statements

Statement

of

Changes

in

Net

Assets

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

43

Franklin

Strategic

Income

Fund

Six

Months

Ended

October

31,

2021

(unaudited)

Year

Ended

April

30,

2021*

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

.................................................

$60,475,019

$158,061,455

Net

realized

gain

(loss)

.................................................

528,560

(63,087,171)

Net

change

in

unrealized

appreciation

(depreciation)

...........................

5,152,666

398,717,983

Net

increase

(decrease)

in

net

assets

resulting

from

operations

................

66,156,245

493,692,267

Distributions

to

shareholders:

Class

A

.............................................................

(50,558,579)

(107,559,827)

Class

C

.............................................................

(4,537,188)

(15,093,095)

Class

R

.............................................................

(917,223)

(2,213,268)

Class

R6

............................................................

(2,656,941)

(5,315,212)

Advisor

Class

........................................................

(8,485,690)

(20,592,895)

Total

distributions

to

shareholders

..........................................

(67,155,621)

(150,774,297)

Capital

share

transactions:

(Note

2

)

Class

A

.............................................................

108,021,938

(62,316,513)

Class

C

.............................................................

(161,365,717)

(174,939,408)

Class

R

.............................................................

(3,498,370)

(8,115,630)

Class

R6

............................................................

10,975,725

(11,480,330)

Advisor

Class

........................................................

(19,118,948)

(100,161,067)

Total

capital

share

transactions

............................................

(64,985,372)

(357,012,948)

Net

increase

(decrease)

in

net

assets

...................................

(65,984,748)

(14,094,978)

Net

assets:

Beginning

of

period

.....................................................

3,904,383,214

3,918,478,192

End

of

period

..........................................................

$3,838,398,466

$3,904,383,214

*

Includes

t

he

consolidated

operations

of

FT

Holdings

Corporation

II

from

May

1,

2020

through

April

27,

2021.

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

Franklin

Strategic

Income

Fund

44

franklintempleton.com

Semiannual

Report

1.

Organization

and

Significant

Accounting

Policies

Franklin

Strategic

Series (Trust)

is

registered

under

the

Investment

Company

Act

of

1940

(1940

Act)

as

an

open-

end

management

investment

company,

consisting

of

eleven

separate

funds

and

applies

the

specialized

accounting

and

reporting

guidance

in

U.S.

Generally

Accepted

Accounting

Principles

(U.S.

GAAP).

Franklin

Strategic

Income

Fund

(Fund)

is

included

in

this

report.

The

Fund

offers

five

classes

of

shares:

Class

A,

Class

C,

Class

R,

Class

R6

and

Advisor

Class.

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.

The

following

summarizes

the Fund's

significant

accounting

policies.

a.

Financial

Instrument

Valuation 

The

Fund's

investments

in

financial

instruments

are

carried

at

fair

value

daily.

Fair

value

is

the

price

that

would

be

received

to

sell

an

asset

or

paid

to

transfer

a

liability

in

an

orderly

transaction

between

market

participants

on

the

measurement

date.

The

Fund

calculates

the

net

asset

value

(NAV)

per

share

each business

day as

of

4

p.m.

Eastern

time

or

the

regularly

scheduled

close

of

the

New

York

Stock

Exchange

(NYSE),

whichever

is

earlier.

Under

compliance

policies

and

procedures

approved

by

the

Trust's

Board

of

Trustees

(the

Board),

the Fund's

administrator

has

responsibility

for

oversight

of

valuation,

including

leading

the

cross-functional

Valuation

Committee

(VC).

The

Fund

may

utilize

independent

pricing

services,

quotations

from

securities

and

financial

instrument

dealers,

and

other

market

sources

to

determine

fair

value. 

Equity

securities

and

derivative

financial

instruments

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

Fund's

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.

Securities

denominated

in

a

foreign

currency

are

converted

into

their

U.S.

dollar

equivalent

at

the

foreign

exchange

rate

in

effect

at

4

p.m.

Eastern

time

on

the

date

that

the

values

of

the

foreign

debt

securities

are

determined.

Investments

in 

open-end mutual

funds

are

valued

at

the

closing

NAV.

Investments

in

repurchase

agreements

are

valued

at

cost,

which

approximates

fair

value.

Certain

derivative

financial

instruments

are

centrally

cleared

or

trade

in

the

OTC

market.

The

Fund's

pricing

services

use

various

techniques

including

industry

standard

option

pricing

models

and

proprietary

discounted

cash

flow

models

to

determine

the

fair

value

of

those

instruments.

The

Fund's

net

benefit

or

obligation

under

the

derivative

contract,

as

measured

by

the

fair

value

of

the

contract,

is

included

in

net

assets.

The

Fund

has

procedures

to

determine

the

fair

value

of

financial

instruments

for

which

market

prices

are

not

reliable

or

readily

available.

Under

these

procedures,

the Fund

primarily

employs

a

market-based

approach

which

may

use

related

or

comparable

assets

or

liabilities,

recent

transactions,

market

multiples,

book

values,

and

other

relevant

information

for

the

investment

to

determine

the

fair

value

of

the

investment.

An

income-based

valuation

approach

may

also

be

used

in

which

the

anticipated

future

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

45

franklintempleton.com

Semiannual

Report

Franklin

Strategic

Income

Fund

(continued)

cash

flows

of

the

investment

are

discounted

to

calculate

fair

value.

Discounts

may

also

be

applied

due

to

the

nature

or

duration

of

any

restrictions

on

the

disposition

of

the

investments.

Due

to

the

inherent

uncertainty

of

valuations

of

such

investments,

the

fair

values

may

differ

significantly

from

the

values

that

would

have

been

used

had

an

active

market

existed.

Trading

in

securities

on

foreign

securities

stock

exchanges

and

OTC

markets

may

be

completed

before

4

p.m.

Eastern

time.

In

addition,

trading

in

certain

foreign

markets

may

not

take

place

on

every

Fund's

business

day.

Events

can

occur

between

the

time

at

which

trading

in

a

foreign

security

is

completed

and

4

p.m.

Eastern

time

that

might

call

into

question

the

reliability

of

the

value

of

a

portfolio

security

held

by

the

Fund.

As

a

result,

differences

may

arise

between

the

value

of

the

Fund's

portfolio

securities

as

determined

at

the

foreign

market

close

and

the

latest

indications

of

value

at

4

p.m.

Eastern

time.

In

order

to

minimize

the

potential

for

these

differences,

an

independent

pricing

service

may

be

used

to

adjust

the

value

of

the

Fund's

portfolio

securities

to

the

latest

indications

of

fair

value

at

4

p.m.

Eastern

time.

At

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

Fund's

NAV

is

not

calculated,

which

could

result

in

differences

between

the

value

of

the

Fund's

portfolio

securities

on

the

last

business

day

and

the

last

calendar

day

of

the

reporting

period.

Any

security

valuation

changes

due

to

an

open

foreign

market

are

adjusted

and

reflected

by

the

Fund

for

financial

reporting

purposes.

b.

Foreign

Currency

Translation 

Portfolio

securities

and

other

assets

and

liabilities

denominated

in

foreign

currencies

are

translated

into

U.S.

dollars

based

on

the

exchange

rate

of

such

currencies

against

U.S.

dollars

on

the

date

of

valuation.

The

Fund

may

enter

into

foreign

currency

exchange

contracts

to

facilitate

transactions

denominated

in

a

foreign

currency.

Purchases

and

sales

of

securities,

income

and

expense

items

denominated

in

foreign

currencies

are

translated

into

U.S.

dollars

at

the

exchange

rate

in

effect

on

the

transaction

date.

Portfolio

securities

and

assets

and

liabilities

denominated

in

foreign

currencies

contain

risks

that

those

currencies

will

decline

in

value

relative

to

the

U.S.

dollar.

Occasionally,

events

may

impact

the

availability

or

reliability

of

foreign

exchange

rates

used

to

convert

the

U.S.

dollar

equivalent

value.

If

such

an

event

occurs,

the

foreign

exchange

rate

will

be

valued

at

fair

value

using

procedures

established

and

approved

by

the

Board.

The

Fund

does

not

separately

report

the

effect

of

changes

in

foreign

exchange

rates

from

changes

in

market

prices

on

securities

held.

Such

changes

are

included

in

net

realized

and

unrealized

gain

or

loss

from

investments

in

the

Statement

of

Operations.

Realized

foreign

exchange

gains

or

losses

arise

from

sales

of

foreign

currencies,

currency

gains

or

losses

realized

between

the

trade

and

settlement

dates

on

securities

transactions

and

the

difference

between

the

recorded

amounts

of

dividends,

interest,

and

foreign

withholding

taxes

and

the

U.S.

dollar

equivalent

of

the

amounts

actually

received

or

paid.

Net

unrealized

foreign

exchange

gains

and

losses

arise

from

changes

in

foreign

exchange

rates

on

foreign

denominated

assets

and

liabilities

other

than

investments

in

securities

held

at

the

end

of

the

reporting

period.

c.

Joint

Repurchase

Agreement

The

Fund

enters

into

a

joint

repurchase

agreement

whereby

its

uninvested

cash

balance

is

deposited

into

a

joint

cash

account

with

other

funds

managed

by

the

investment

manager

or

an

affiliate

of

the

investment

manager

and

is

used

to

invest

in

one

or

more

repurchase

agreements.

The

value

and

face

amount

of

the

joint

repurchase

agreement

are

allocated

to

the

funds

based

on

their

pro-rata

interest.

A

repurchase

agreement

is

accounted

for

as

a

loan

by

the

Fund

to

the

seller,

collateralized

by

securities

which

are

delivered

to

the

Fund's

custodian.

The

fair

value,

including

accrued

interest,

of

the

initial

collateralization

is

required

to

be

at

least

102%

of

the

dollar

amount

invested

by

the

funds,

with

the

value

of

the

underlying

securities

marked

to

market

daily

to

maintain

coverage

of

at

least

100%.

Repurchase

agreements

are

subject

to

the

terms

of

Master

Repurchase

Agreements

(MRAs)

with

approved

counterparties

(sellers).

The

MRAs

contain

various

provisions,

including

but

not

limited

to

events

of

default

and

maintenance

of

collateral

for

repurchase

agreements.

In

the

event

of

default

by

either

1.

Organization

and

Significant

Accounting

Policies

(continued)

a.

Financial

Instrument

Valuation 

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

46

franklintempleton.com

Semiannual

Report

Franklin

Strategic

Income

Fund

(continued)

the

seller

or

the

Fund,

certain

MRAs

may

permit

the

non-

defaulting

party

to

net

and

close-out

all

transactions,

if

any,

traded

under

such

agreements.

The

Fund

may

sell

securities

it

holds

as

collateral

and

apply

the

proceeds

towards

the

repurchase

price

and

any

other

amounts

owed

by

the

seller

to

the

Fund

in

the

event

of

default

by

the

seller.

This

could

involve

costs

or

delays

in

addition

to

a

loss

on

the

securities

if

their

value

falls

below

the

repurchase

price

owed

by

the

seller.

The

joint

repurchase

agreement

held

by

the Fund

at

period

end,

as

indicated

in

the

Statement

of

Investments,

had

been

entered

into

on

October

29,

2021.

d.

Securities

Purchased

on

a

Delayed

Delivery

and

TBA

Basis

The

Fund

purchases

securities

on

a

when-issued

or

delayed

delivery

and

to-be-announced

(TBA)

basis,

with

payment

and

delivery

scheduled

for

a

future

date.

These

transactions

are

subject

to

market

fluctuations

and

are

subject

to

the

risk

that

the

value

at

delivery

may

be

more

or

less

than

the

trade

date

purchase

price.

Although

the

Fund

will

generally

purchase

these

securities

with

the

intention

of

holding

the

securities,

it

may

sell

the

securities

before

the

settlement

date.

Collateral

has

been

pledged

and/or

received

for

open

TBA

trades.

e.

Securities

Lending

The

Fund

participates

in

an

agency

based

securities

lending

program

to

earn

additional

income.

The

Fund

receives

collateral

in

the

form

of

cash

and/or

U.S.

Government

and

Agency

securities

against

the

loaned

securities

in

an

amount

equal

to

at

least

102%

of

the

fair

value

of

the

loaned

securities.

Collateral

is

maintained

over

the

life

of

the

loan

in

an

amount

not

less

than

100%

of

the

fair

value

of

loaned

securities,

as

determined

at

the

close

of

Fund

business

each

day;

any

additional

collateral

required

due

to

changes

in

security

values

is

delivered

to

the

Fund

on

the

next

business

day.

Any

cash

collateral

received

is

deposited

into

a

joint

cash

account

with

other

funds

and

is

used

to

invest

in

a

money

market

fund

managed

by

Franklin

Advisers,

Inc.,

an

affiliate

of

the Fund,

and/or

a

joint

repurchase

agreement

in

the

Statement

of

Assets

and

Liabilities.

The

Fund

may

receive

income

from

the

investment

of

cash

collateral,

in

addition

to

lending

fees

and

rebates

paid

by

the

borrower.

Income

from

securities

loaned,

net

of

fees

paid

to

the

securities

lending

agent

and/or

third-party

vendor,

is

reported

separately

in

the

Statement

of

Operations.

The

Fund

bears

the

market

risk

with

respect

to any

cash collateral

investment,

securities

loaned,

and

the

risk

that

the

agent

may

default

on

its

obligations

to

the

Fund.

If

the

borrower

defaults

on

its

obligation

to

return

the

securities

loaned,

the

Fund

has

the

right

to

repurchase

the

securities

in

the

open

market

using

the

collateral

received.

The

securities

lending

agent

has

agreed

to

indemnify

the

Fund

in

the

event

of

default

by

a

third

party

borrower.

f.

Derivative

Financial

Instruments

The

Fund

invested

in

derivative

financial

instruments

in

order

to

manage

risk

or

gain

exposure

to

various

other

investments

or

markets.

Derivatives

are

financial

contracts

based

on

an

underlying

or

notional

amount,

require

no

initial

investment

or

an

initial

net

investment

that

is

smaller

than

would

normally

be

required

to

have

a

similar

response

to

changes

in

market

factors,

and

require

or

permit

net

settlement.

Derivatives

contain

various

risks

including

the

potential

inability

of

the

counterparty

to

fulfill

their

obligations

under

the

terms

of

the

contract,

the

potential

for

an

illiquid

secondary

market,

and/or

the

potential

for

market

movements

which

expose

the

Fund

to

gains

or

losses

in

excess

of

the

amounts

shown

in

the Statement

of

Assets

and

Liabilities.

Realized

gain

and

loss

and

unrealized

appreciation

and

depreciation

on

these

contracts

for

the

period

are

included

in

the Statement

of

Operations. 

Derivative

counterparty

credit

risk

is

managed

through

a

formal

evaluation

of

the

creditworthiness

of

all

potential

counterparties.

The

Fund

attempts

to

reduce

its

exposure

to

counterparty

credit

risk

on

OTC

derivatives,

whenever

possible,

by

entering

into

International

Swaps

and

Derivatives

Association

(ISDA)

master

agreements

with

certain

counterparties.

These

agreements

contain

various

provisions,

including

but

not

limited

to

collateral

requirements,

events

of

default,

or

early

termination.

Termination

events

applicable

to

the

counterparty

include

certain

deteriorations

in

the

credit

quality

of

the

counterparty.

Termination

events

applicable

to

the

Fund

include

failure

of

the

Fund

to

maintain

certain

net

asset

levels

and/or

limit

the

decline

in

net

assets

over

various

periods

of

time.

In

the

event

of

default

or

early

termination,

the

ISDA

master

agreement

gives

the

non-defaulting

party

the

right

to

net

and

close-out

all

transactions

traded,

whether

or

not

arising

under

the

ISDA

agreement,

to

one

net

amount

payable

by

one

counterparty

to

the

other.

However,

absent

an

event

1.

Organization

and

Significant

Accounting

Policies

(continued)

c.

Joint

Repurchase

Agreement

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

47

franklintempleton.com

Semiannual

Report

Franklin

Strategic

Income

Fund

(continued)

of

default

or

early

termination,

OTC

derivative

assets

and

liabilities

are

presented

gross

and

not

offset

in

the

Statement

of

Assets

and

Liabilities.

Early

termination

by

the

counterparty

may

result

in

an

immediate

payment

by

the

Fund

of

any

net

liability

owed

to

that

counterparty

under

the

ISDA

agreement.

Collateral

requirements

differ

by

type

of

derivative.

Collateral

or

initial

margin

requirements

are

set

by

the

broker

or

exchange

clearing

house

for

exchange

traded

and

centrally

cleared

derivatives.

Initial

margin

deposited

is

held

at

the

exchange

and

can

be

in

the

form

of

cash

and/or

securities.

For

OTC

derivatives

traded

under

an

ISDA

master

agreement,

posting

of

collateral

is

required

by

either

the

Fund

or

the

applicable

counterparty

if

the

total

net

exposure

of

all

OTC

derivatives

with

the

applicable

counterparty

exceeds

the

minimum

transfer

amount,

which

typically

ranges

from

$100,000

to

$250,000,

and

can

vary

depending

on

the

counterparty

and

the

type

of

agreement.

Generally,

collateral

is

determined

at

the

close

of

Fund

business

each

day

and

any

additional

collateral

required

due

to

changes

in

derivative

values

may

be

delivered

by

the

Fund

or

the

counterparty

the

next

business

day,

or

within

a

few

business

days.

Collateral

pledged

and/or

received

by

the

Fund

for

OTC

derivatives,

if

any,

is

held

in

segregated

accounts

with

the

Fund's

custodian/counterparty

broker

and

can

be

in

the

form

of

cash

and/or

securities.

Unrestricted

cash

may

be

invested

according

to

the

Fund's

investment

objectives.

To

the

extent

that

the

amounts

due

to

the

Fund

from

its

counterparties

are

not

subject

to

collateralization

or

are

not

fully

collateralized,

the

Fund

bears

the

risk

of

loss

from

counterparty

non-performance.

The

Fund

entered

into

exchange

traded

futures

contracts

primarily

to

manage

and/or

gain

exposure

to

interest

rate

risk.

A

futures

contract

is

an

agreement

between

the

Fund

and

a

counterparty

to

buy

or

sell

an

asset

at

a

specified

price

on

a

future

date.

Required

initial

margins

are

pledged

by

the

Fund,

and

the

daily

change

in

fair

value

is

accounted

for

as

a

variation

margin

payable

or

receivable

in

the

Statement

of

Assets

and

Liabilities.

The

Fund entered

into

OTC

forward

exchange

contracts

primarily

to

manage

and/or

gain

exposure

to

certain

foreign

currencies.

A

forward

exchange

contract

is

an

agreement

between

the

Fund

and

a

counterparty

to

buy

or

sell

a

foreign

currency at

a

specific

exchange

rate

on

a

future

date.

The

Fund

entered

into

credit

default

swap

contracts

primarily

to

manage

and/or

gain

exposure

to

credit

risk.

A

credit

default

swap

is

an

agreement

between

the

Fund

and

a

counterparty

whereby

the

buyer

of

the

contract

receives

credit

protection

and

the

seller

of

the

contract

guarantees

the

credit

worthiness

of

a

referenced

debt

obligation.

These

agreements

may

be

privately

negotiated

in

the

over-the-

counter

market

(OTC

credit

default

swaps)

or

may

be

executed

in

a

multilateral

trade

facility

platform,

such

as

a

registered

exchange

(centrally

cleared

credit

default

swaps).

The

underlying

referenced

debt

obligation

may

be

a

single

issuer

of

corporate

or

sovereign

debt,

a

credit

index,

a

basket

of

issuers

or

indices,

or

a

tranche

of

a

credit

index

or

basket

of

issuers

or

indices.

In

the

event

of

a

default

of

the

underlying

referenced

debt

obligation,

the

buyer

is

entitled

to

receive

the

notional

amount

of

the

credit

default

swap

contract

from

the

seller

in

exchange

for

the

referenced

debt

obligation,

a

net

settlement

amount

equal

to

the

notional

amount

of

the

credit

default

swap

less

the

recovery

value

of

the

referenced

debt

obligation,

or

other

agreed

upon

amount.

For

centrally

cleared

credit

default

swaps,

required

initial

margins

are

pledged

by

the

Fund,

and

the

daily

change

in

fair

value

is

accounted

for

as

a

variation

margin

payable

or

receivable

in

the

Statement

of

Assets

and

Liabilities.

Over

the

term

of

the

contract,

the

buyer

pays

the

seller

a

periodic

stream

of

payments,

provided

that

no

event

of

default

has

occurred.

Such

periodic

payments

are

accrued

daily

as

an

unrealized

appreciation

or

depreciation

until

the

payments

are

made,

at

which

time

they

are

realized.

Upfront

payments

and

receipts

are

reflected

in

the Statement

of

Assets

and

Liabilities

and

represent

compensating

factors

between

stated

terms

of

the

credit

default

swap

agreement

and

prevailing

market

conditions

(credit

spreads

and

other

relevant

factors).

These

upfront

payments

and

receipts

are

amortized

over

the

term

of

the

contract

as

a

realized

gain

or

loss

in

the Statement

of

Operations.

The

Fund

entered

into

OTC

cross

currency

swap

contracts

primarily

to

manage

and/or

gain

exposure

to

interest

rate

risk.

A

cross

currency

swap

is

an

agreement

between

the

Fund

and

a

counterparty

to

exchange

cash

flows

(determined

using

either

a

fixed

or

floating

rate)

based

on

the

notional

amounts

of

two

different

currencies.

The

1.

Organization

and

Significant

Accounting

Policies

(continued)

f.

Derivative

Financial

Instruments

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

48

franklintempleton.com

Semiannual

Report

Franklin

Strategic

Income

Fund

(continued)

notional

amounts

are

typically

determined

based

on

the

spot

exchange

rates

at

the

opening

of

the

contract.

Cross

currency

swaps

may

require

the

exchange

of

notional

amounts

at

the

opening

and/or

closing

of

the

contract.

Over

the

term

of

the

contract,

contractually

required

payments

to

be

paid

and

to

be

received

are

accrued

daily

and

recorded

as

unrealized

depreciation

and

appreciation

until

the

payments

are

made,

at

which

time

they

are

realized.

Upfront

payments

and

receipts

are

reflected

in

the

Statement

of

Assets

and

Liabilities

and

represent

compensating

factors

between

stated

terms

of

the

cross

currency

swap

contract

and

prevailing

market

conditions

(interest

rate

spreads

and

other

relevant

factors).

These

upfront

payments

and

receipts

are

amortized

over

the

term

of

the

contract

as

a

realized

gain

or

loss

in

the

Statement

of

Operations.

The

Fund

entered

into

inflation

index

swap

contracts

primarily

to

manage

and/or

gain

exposure

to

inflation

risk.

An

inflation

index

swap

is

an

agreement

between

the

Fund

and

a

counterparty

to

exchange

cash

flows

whereby

one

party

makes

payments

based

on

the

percentage

change

in

an

index

that

serves

as

a

measure

of

inflation

and

the

other

party

makes

a

regular

payment

based

on

a

compounded

fixed

rate,

applied

to

a

notional

amount.

These

agreements

may

be

privately

negotiated

in

the

over-the-counter

market

(OTC

inflation

index

swap)

or

may

be

executed

on

a

registered

exchange

(centrally

cleared

inflation

index

swap).

For

centrally

cleared

inflation

index

swaps,

required

initial

margins

are

pledged

by

the

Fund,

and

the

daily

change

in

fair

value

is

accounted

for

as

a

variation

margin

payable

or

receivable.

Over

the

term

of

the

contract,

contractually

required

payments

to

be

paid

and

to

be

received

are

accrued

daily

and

recorded

as

unrealized

depreciation

and

appreciation

until

the

payments

are

made,

at

which

time

they

are

realized.

Typically,

an

inflation

index

swap

has

payment

obligations

netted

and

exchanged

upon

maturity.

The

Fund

purchased

or

wrote

exchange

traded

and/or

OTC

option

contracts

primarily

to

manage

and/or

gain

exposure

to

interest

rate

risk.

An

option

is

a

contract

entitling

the

holder

to

purchase

or

sell

a

specific

amount

of

shares

or

units

of

an

asset

or

notional

amount

of

a

swap

(swaption),

at

a

specified

price.

When

an

option

is

purchased

or

written,

an

amount

equal

to

the

premium

paid

or

received

is

recorded

as

an

asset

or

liability,

respectively.

Upon

exercise

of

an

option,

the

acquisition

cost

or

sales

proceeds

of

the

underlying

investment

is

adjusted

by

any

premium

received

or

paid.

Upon

expiration

of

an

option,

any

premium

received

or

paid

is

recorded

as

a

realized

gain

or

loss.

Upon

closing

an

option

other

than

through

expiration

or

exercise,

the

difference

between

the

premium

received

or

paid

and

the

cost

to

close

the

position

is

recorded

as

a

realized

gain

or

loss.

The

Fund

invests

in

value

recovery

instruments

(VRI)

primarily

to

gain

exposure

to

economic

growth.

Periodic

payments

from

VRI

are

dependent

on

established

benchmarks

for

underlying

variables.

VRI

has

a

notional

amount,

which

is

used

to

calculate

amounts

of

payments

to

holders.

Payments

are

recorded

upon

receipt

as

realized

gains

in

the

Statement

of

Operations.

The

risks

of

investing

in

VRI

include

growth

risk,

liquidity,

and

the

potential

loss

of

investment.

See

Note

10 regarding

other

derivative

information.

g.

Loan

Participation

Notes

The

Fund

invests

in

loan

participation

notes

(Participations).

Participations

are

loans

originally

issued

to

a

borrower

by

one

or

more

financial

institutions

(the

Lender)

and

subsequently

sold

to

other

investors,

such

as

the Fund.

Participations

typically

result

in

the

Fund

having

a

contractual

relationship

only

with

the

Lender

and

not

with

the

borrower.

The

Fund

has

the

right

to

receive

from

the

Lender

any

payments

of

principal,

interest

and

fees

which

the

Lender

received

from

the

borrower.

The

Fund

generally

has

no

rights

to

either

enforce

compliance

by

the

borrower

with

the

terms

of

the

loan

agreement

or

to

any

collateral

relating

to

the

original

loan.

As

a

result,

the Fund

assumes

the

credit

risk

of

both

the

borrower

and

the

Lender

that

is

selling

the

Participation.

The

Participations

may

also

involve

interest

rate

risk

and

liquidity

risk,

including

the

potential

default

or

insolvency

of

the

borrower

and/or

the

Lender.

h.

Marketplace

Lending

The

Fund

invests

in

loans

obtained

through

marketplace

lending.

Marketplace

lending,

sometimes

referred

to

as

peer-to-peer

lending,

is

a

method

of

financing

in

which

a

platform

facilitates

the

borrowing

and

lending

of

money.

It

is

considered

an

alternative

to

more

traditional

forms

of

debt

financing.

Prospective

borrowers

are

required

to

provide

certain

financial

information

to

the

platform,

including,

but

not

limited

to,

the

intended

purpose

of

the

loan,

income,

employment

information,

credit

score,

debt-to-income

ratio,

1.

Organization

and

Significant

Accounting

Policies

(continued)

f.

Derivative

Financial

Instruments

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

49

franklintempleton.com

Semiannual

Report

Franklin

Strategic

Income

Fund

(continued)

credit

history

(including

defaults

and

delinquencies)

and

home

ownership

status.

Based

on

this

and

other

information,

the

platform

assigns

its

own

credit

rating

to

the

borrower

and

sets

the

interest

rate

for

the

requested

loan.

The

platform

then

posts

the

borrowing

requests

online,

giving

investors

the

opportunity

to

purchase

the

loans

based

on

factors

such

as

the

interest

rates

and

expected

yields

of

the

loans,

the

borrower

background

data,

and

the

credit

rating

assigned

by

the

platform.

When

the

Fund

invests

in

these

loans,

it

usually

purchases

all

rights,

title

and

interest

in

the

loans

pursuant

to

a

loan

purchase

agreement

directly

from

the

platform.

The

platform

or

a

third-party

servicer

typically

continues

to

service

the

loans,

collecting

payments

and

distributing

them

to

the

Fund,

less

any

servicing

fees

assessed.

The

servicer

is

typically

responsible

for

taking

actions

against

a

borrower

in

the

event

of

a

default

on

the

loan.

Servicing

fees,

along

with

other

administration

fees,

are

included

in

marketplace

lending

fees

in

the

Statement

of

Operations.

The Fund,

as

an

investor

in

a

loan,

would

be

entitled

to

receive

payment

only

from

the

borrower

and

would

not

be

able

to

recover

any

deficiency

from

the

platform,

except

under

very

narrow

circumstances.

The

loans

in

which

the

Fund

may

invest

are

unsecured.

i.

Mortgage

Dollar

Rolls

The

Fund

enters

into

mortgage

dollar

rolls,

typically

on

a

TBA

basis.

Mortgage

dollar

rolls

are

agreements

between

the

Fund

and

a

financial

institution

where

the

Fund

sells

(or

buys)

mortgage-backed

securities

for

delivery

on

a

specified

date

and

simultaneously

contracts

to

repurchase

(or

sell)

substantially

similar

(same

type,

coupon,

and

maturity)

securities

at

a

future

date

and

at

a

predetermined

price.

Gains

or

losses

are

realized

on

the

initial

sale,

and

the

difference

between

the

repurchase

price

and

the

sale

price

is

recorded

as

an

unrealized

gain

or

loss

to

the

Fund

upon

entering

into

the

mortgage

dollar

roll.

In

addition,

the

Fund

may

invest

the

cash

proceeds

that

are

received

from

the

initial

sale.

During

the

period

between

the

sale

and

repurchase,

the

Fund

is

not

entitled

to

principal

and

interest

paid

on

the

mortgage

backed

securities.

Transactions

in

mortgage

dollar

rolls

are

accounted

for

as

purchases

and

sales

and

may

result

in

an

increase

to

the

Fund's

portfolio

turnover

rate.

The

risks

of

mortgage

dollar

roll

transactions

include

the

potential

inability

of

the

counterparty

to

fulfill

its

obligations.

j.

Senior

Floating

Rate

Interests

The

Fund

invests

in

senior

secured

corporate

loans

that

pay

interest

at

rates

which

are

periodically

reset

by

reference

to

a

base

lending

rate

plus

a

spread.

These

base

lending

rates

are

generally

the

prime

rate

offered

by

a

designated

U.S.

bank

or

the

London

InterBank

Offered

Rate

(LIBOR).

Senior

secured

corporate

loans

often

require

prepayment

of

principal

from

excess

cash

flows

or

at

the

discretion

of

the

borrower.

As

a

result,

actual

maturity

may

be

substantially

less

than

the

stated

maturity.

Senior

secured

corporate

loans

in

which

the Fund

invests

are

generally

readily

marketable,

but

may

be

subject

to

certain

restrictions

on

resale.

k.

Income

and

Deferred

Taxes

It

is the Fund's

policy

to

qualify

as

a

regulated

investment

company

under

the

Internal

Revenue

Code. The Fund

intends

to

distribute

to

shareholders

substantially

all

of

its

taxable

income

and

net

realized

gains

to

relieve

it

from

federal

income

and if

applicable, excise

taxes.

As

a

result,

no

provision

for

U.S.

federal

income

taxes

is

required.

The

Fund

may

be

subject

to

foreign

taxation

related

to

income

received,

capital

gains

on

the

sale

of

securities

and

certain

foreign

currency

transactions

in

the

foreign

jurisdictions

in

which

it

invests.

Foreign

taxes,

if

any,

are

recorded

based

on

the

tax

regulations

and

rates

that

exist

in

the

foreign

markets

in

which

the

Fund

invests.

When

a

capital

gain

tax

is

determined

to

apply,

the

Fund

records

an

estimated

deferred

tax

liability

in

an

amount

that

would

be

payable

if

the

securities

were

disposed

of

on

the

valuation

date.

The

Fund

may

recognize

an

income

tax

liability

related

to

its

uncertain

tax

positions

under

U.S.

GAAP

when

the

uncertain

tax

position

has

a

less

than

50%

probability

that

it

will

be

sustained

upon

examination

by

the

tax

authorities

based

on

its

technical

merits.

As

of

October

31,

2021,

the

Fund

has

determined

that

no

tax

liability

is

required

in

its

financial

statements

related

to

uncertain

tax

positions

for

any

open

tax

years

(or

expected

to

be

taken

in

future

tax

years).

Open

tax

years

are

those

that

remain

subject

to

examination

and

are

based

on

the

statute

of

limitations

in

each

jurisdiction

in

which

the

Fund

invests. 

1.

Organization

and

Significant

Accounting

Policies

(continued)

h.

Marketplace

Lending

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

50

franklintempleton.com

Semiannual

Report

Franklin

Strategic

Income

Fund

(continued)

l.

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.

Paydown

gains

and

losses

are

recorded

as

an

adjustment

to

interest

income.

Facility

fees

are

recognized

as

income

over

the

expected

term

of

the

loan.

Dividend

income

is

recorded

on

the

ex-dividend

date

except

for

certain

dividends

from

securities

where

the

dividend

rate

is

not

available.

In

such

cases,

the

dividend

is

recorded

as

soon

as

the

information

is

received

by

the

Fund.

Distributions

to

shareholders

are

recorded

on

the

ex-dividend

date.

Distributable

earnings

are

determined

according

to

income

tax

regulations

(tax

basis)

and

may

differ

from

earnings

recorded

in

accordance

with

U.S.

GAAP.

These

differences

may

be

permanent

or

temporary.

Permanent

differences

are

reclassified

among

capital

accounts

to

reflect

their

tax

character.

These

reclassifications

have

no

impact

on

net

assets

or

the

results

of

operations.

Temporary

differences

are

not

reclassified,

as

they

may

reverse

in

subsequent

periods.

Common

expenses

incurred

by

the

Trust

are

allocated

among

the

Funds

based

on

the

ratio

of

net

assets

of

each

Fund

to

the

combined

net

assets

of

the

Trust

or

based

on

the

ratio

of

number

of

shareholders

of

each

Fund

to

the

combined

number

of

shareholders

of

the

Trust.

Fund

specific

expenses

are

charged

directly

to

the

Fund

that

incurred

the

expense.

Realized

and

unrealized

gains

and

losses

and

net

investment

income,

excluding

class

specific

expenses,

are

allocated

daily

to

each

class

of

shares

based

upon

the

relative

proportion

of

net

assets

of

each

class.

Differences

in

per

share

distributions

by

class

are

generally

due

to

differences

in

class

specific

expenses.

Inflation-indexed

bonds

are

adjusted

for

inflation

through

periodic

increases

or

decreases

in

the

security's

interest

accruals,

face

amount,

or

principal

redemption

value,

by

amounts

corresponding

to

the

rate

of

inflation

as

measured

by

an

index.

Any

increase

or

decrease

in

the

face

amount

or

principal

redemption

value

will

be

included

as

interest

income

in

the

Statement

of

Operations.

m.

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.

n.

Guarantees

and

Indemnifications

Under

the

Trust's

organizational

documents,

its

officers

and

trustees

are

indemnified

by

the

Trust

against

certain

liabilities

arising

out

of

the

performance

of

their

duties

to

the

Trust.

Additionally,

in

the

normal

course

of

business,

the

Trust, on

behalf

of

the

Fund,

enters

into

contracts

with

service

providers

that

contain

general

indemnification

clauses.

The

Trust's

maximum

exposure

under

these

arrangements

is

unknown

as

this

would

involve

future

claims

that

may

be

made

against

the

Trust

that

have

not

yet

occurred.

Currently,

the

Trust

expects

the

risk

of

loss

to

be

remote.

2.

Shares

of

Beneficial

Interest

At

October

31,

2021,

there

were

an

unlimited

number

of

shares

authorized

(without

par

value).

Transactions

in

the

Fund's

shares

were

as

follows:

1.

Organization

and

Significant

Accounting

Policies

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

51

franklintempleton.com

Semiannual

Report

Franklin

Strategic

Income

Fund

(continued)

3.

Transactions

with

Affiliates

Franklin

Resources,

Inc.

is

the

holding

company

for

various

subsidiaries

that

together

are

referred

to

as

Franklin

Templeton.

Certain

officers

and

trustees

of

the

Trust

are

also

officers

and/or

directors

of

the

following

subsidiaries:

Six

Months

Ended

October

31,

2021

Year

Ended

April

30,

2021

Shares

Amount

Shares

Amount

Class

A

Shares:

Shares

sold

a

...................................

33,808,357

$321,336,165

44,940,433

$419,168,623

Shares

issued

in

reinvestment

of

distributions

..........

5,030,856

47,773,005

10,896,555

101,560,092

Shares

redeemed

...............................

(27,469,771)

(261,087,232)

(62,539,562)

(583,045,228)

Net

increase

(decrease)

..........................

11,369,442

$108,021,938

(6,702,574)

$(62,316,513)

Class

C

Shares:

Shares

sold

...................................

1,399,308

$13,302,564

4,080,529

$38,026,405

Shares

issued

in

reinvestment

of

distributions

..........

462,291

4,391,174

1,553,033

14,456,669

Shares

redeemed

a

..............................

(18,842,310)

(179,059,455)

(24,428,891)

(227,422,482)

Net

increase

(decrease)

..........................

(16,980,711)

$(161,365,717)

(18,795,329)

$(174,939,408)

Class

R

Shares:

Shares

sold

...................................

515,751

$4,884,379

1,625,591

$15,106,571

Shares

issued

in

reinvestment

of

distributions

..........

96,587

913,173

236,633

2,195,157

Shares

redeemed

...............................

(982,644)

(9,295,922)

(2,735,323)

(25,417,358)

Net

increase

(decrease)

..........................

(370,306)

$(3,498,370)

(873,099)

$(8,115,630)

Class

R6

Shares:

Shares

sold

...................................

2,230,508

$21,235,635

4,216,330

$39,518,885

Shares

issued

in

reinvestment

of

distributions

..........

242,061

2,302,248

494,788

4,618,696

Shares

redeemed

...............................

(1,319,505)

(12,562,158)

(6,056,322)

(55,617,911)

Net

increase

(decrease)

..........................

1,153,064

$10,975,725

(1,345,204)

$(11,480,330)

Advisor

Class

Shares:

Shares

sold

...................................

3,617,016

$34,436,988

13,810,883

$128,667,962

Shares

issued

in

reinvestment

of

distributions

..........

843,698

8,021,710

2,092,114

19,511,932

Shares

redeemed

...............................

(6,478,397)

(61,577,646)

(26,597,589)

(248,340,961)

Net

increase

(decrease)

..........................

(2,017,683)

$(19,118,948)

(10,694,592)

$(100,161,067)

a

May

include

a

portion

of

Class

C

shares

that

were

automatically

converted

to

Class

A.

Subsidiary

Affiliation

Franklin

Advisers,

Inc.

(Advisers)

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

2.

Shares

of

Beneficial

Interest

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

52

franklintempleton.com

Semiannual

Report

Franklin

Strategic

Income

Fund

(continued)

a.

Management

Fees

The

Fund

pays

an

investment

management

fee

to

Advisers

based

on

the

average

daily

net

assets

of

the

Fund

as

follows:

For

the

period

ended

October

31,

2021,

the

annualized

gross

effective

investment

management

fee

rate

was

0.456%

of

the

Fund’s

average

daily

net

assets.

b.

Administrative

Fees

Under

an

agreement

with

Advisers,

FT

Services

provides

administrative

services

to

the

Fund.

The

fee

is

paid

by

Advisers

based

on

the

Fund's

average

daily

net

assets,

and

is

not

an

additional

expense

of

the

Fund.

c.

Distribution

Fees

The

Board

has

adopted

distribution

plans

for

each

share

class,

with

the

exception

of

Class

R6

and

Advisor

Class

shares,

pursuant

to

Rule

12b-1

under

the

1940

Act.

Under

the

Fund’s

Class

A

reimbursement

distribution

plan,

the

Fund

reimburses

Distributors

for

costs

incurred

in

connection

with

the

servicing,

sale

and

distribution

of

the

Fund's

shares

up

to

the

maximum

annual

plan

rate.

Under

the

Class

A

reimbursement

distribution

plan,

costs

exceeding

the

maximum

for

the

current

plan

year

cannot

be

reimbursed

in

subsequent

periods.

In

addition,

under

the

Fund’s

Class

C

and

R

compensation

distribution

plans,

the

Fund

pays

Distributors

for

costs

incurred

in

connection

with

the

servicing,

sale

and

distribution

of

the

Fund's

shares

up

to

the

maximum

annual

plan

rate

for

each

class.

The

plan

year,

for

purposes

of

monitoring

compliance

with

the

maximum

annual

plan

rates,

is

February

1

through

January

31.

The

maximum

annual

plan

rates,

based

on

the

average

daily

net

assets,

for

each

class,

are

as

follows:

d.

Sales

Charges/Underwriting

Agreements

Front-end

sales

charges

and

contingent

deferred

sales

charges

(CDSC)

do

not

represent

expenses

of

the

Fund.

These

charges

are

deducted

from

the

proceeds

of

sales

of

Fund

shares

prior

to

investment

or

from

redemption

proceeds

prior

to

remittance,

as

applicable.

Distributors

has

advised

the

Fund

of

the

following

commission

transactions

related

to

the

sales

and

redemptions

of

the

Fund's

shares

for

the

period:

Annualized

Fee

Rate

Net

Assets

0.625%

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%

Over

$15

billion,

up

to

and

including

$17.5

billion

0.380%

Over

$17.5

billion,

up

to

and

including

$20

billion

0.360%

Over

$20

billion,

up

to

and

including

$35

billion

0.355%

Over

$35

billion,

up

to

and

including

$50

billion

0.350%

In

excess

of

$50

billion

Class

A

..................................................................................

0.25%

Class

C

..................................................................................

0.65%

Class

R

..................................................................................

0.50%

3.

Transactions

with

Affiliates

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

53

franklintempleton.com

Semiannual

Report

Franklin

Strategic

Income

Fund

(continued)

e.

Transfer

Agent

Fees

Each

class

of

shares pays

transfer

agent

fees

to

Investor

Services

for

its

performance

of

shareholder

servicing

obligations.

The

fees

are

based

on

an

annualized

asset

based

fee

of

0.02%

plus

a

transaction

based

fee.

In

addition,

each

class reimburses

Investor

Services

for

out

of

pocket

expenses

incurred

and,

except

for

Class

R6,

reimburses

shareholder

servicing

fees

paid

to

third

parties.

These

fees

are

allocated

daily

based

upon

their

relative

proportion

of

such

classes'

aggregate

net

assets.

Class

R6

pays

Investor

Services

transfer

agent

fees

specific

to

that

class.

For

the

period

ended

October

31,

2021,

the

Fund

paid

transfer

agent

fees

of

$2,873,966,

of

which $1,325,476

was

retained

by

Investor

Services.

f.

Investments

in

Affiliated

Management

Investment

Companies

The

Fund

invests

in

one

or

more

affiliated

management

investment

companies.

As

defined

in

the

1940

Act,

an

investment

is

deemed

to

be

a

“Controlled

Affiliate”

of

a

fund

when

a

fund

owns,

either

directly

or

indirectly,

25%

or

more

of

the

affiliated

fund’s

outstanding

shares

or

has

the

power

to

exercise

control

over

management

or

policies

of

such

fund.

The

Fund

does

not

invest

for

purposes

of

exercising

a

controlling

influence

over

the

management

or

policies.

Management

fees

paid

by

the

Fund

are

waived

on

assets

invested

in

the

affiliated

management

investment

companies,

as

noted

in

the

Statement

of

Operations,

in

an

amount

not

to

exceed

the

management

and

administrative

fees

paid

directly

or

indirectly

by

each

affiliate.

During

the

period

ended

October

31,

2021,

the

Fund

held

investments

in

affiliated

management

investment

companies

as

follows:

Sales

charges

retained

net

of

commissions

paid

to

unaffiliated

brokers/dealers

..............................

$56,681

CDSC

retained

..............................................................................

$23,364

    aa

Value

at

Beginning

of

Period

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Period

Number

of

Shares

Held

at

End

of

Period

Investment

Income

a      

a  

a  

a  

a  

a  

a  

a  

Franklin

Strategic

Income

Fund

Controlled

Affiliates

Dividends

Franklin

Floating

Rate

Income

Fund

..................

$269,318,469

$—

$(706,253)

$

—

$

14,241,589

$

282,853,805

34,705,988

$

5,111,862

Non-Controlled

Affiliates

Dividends

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.

$50,800,930

$2,569,143

$(3,228,022)

$—

$—

$50,142,051

50,142,051

$2,550

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.

$3,737,000

$35,335,000

$(36,312,000)

$

—

$

—

$2,760,000

2,760,000

$146

Total

Affiliated

Securities

...

$323,856,399

$37,904,143

$(40,246,275)

$—

$14,241,589

$335,755,856

$5,114,558

3.

Transactions

with

Affiliates

(continued)

d.

Sales

Charges/Underwriting

Agreements

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

54

franklintempleton.com

Semiannual

Report

Franklin

Strategic

Income

Fund

(continued)

g.

Waivers

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

August

31,

2022.

4.

Expense

Offset

Arrangement

The

Fund

has

entered

into

an

arrangement

with

its

custodian

whereby

credits

realized

as

a

result

of

uninvested

cash

balances

are

used

to

reduce

a

portion

of

the

Fund's

custodian

expenses.

During

the

period

ended

October

31,

2021,

the

custodian

fees

were

reduced

as

noted

in

the

Statement

of

Operations.

5.

Income

Taxes

For

tax

purposes,

capital

losses

may

be

carried

over

to

offset

future

capital

gains.

At

April

30,

2021,

the

capital

loss

carryforwards

were

as

follows:

At

October

31,

2021,

the

cost

of

investments

and

net

unrealized

appreciation

(depreciation)

for

income

tax

purposes

were

as

follows:

Differences

between

income

and/or

capital

gains

as

determined

on

a

book

basis

and

a

tax

basis

are

primarily

due

to

differing

treatments

of

defaulted

securities,

foreign

currency

transactions,

payments-in-kind,

bond

discounts

and

premiums,

swaps,

inflation

related

adjustments

on

foreign

securities,

financial

futures

transactions

and

transfer

in-kind.

6.

Investment

Transactions

Purchases

and

sales

of

investments

(excluding

short

term

securities)

for

the

period

ended

October

31,

2021,

aggregated

$1,258,443,383

and

$1,440,704,385,

respectively.

At

October

31,

2021,

in

connection

with

securities

lending

transactions,

the

Fund

loaned

non-U.S.

sovereign

debt

and

received

$3,450,024

of

cash

collateral.

The

gross

amount

of

recognized

liability

for

such

transactions

is

included

in

payable

upon

return

of

securities

loaned

in

the

Statement

of

Assets

and

Liabilities.

The

agreements

can

be

terminated

at

any

time.

Capital

loss

carryforwards

not

subject

to

expiration:

Short

term

................................................................................

$79,106,941

Long

term

................................................................................

516,471,525

Total

capital

loss

carryforwards

...............................................................

$595,578,466

Cost

of

investments

..........................................................................

$3,918,472,723

Unrealized

appreciation

........................................................................

$138,216,288

Unrealized

depreciation

........................................................................

(221,059,574)

Net

unrealized

appreciation

(depreciation)

..........................................................

$(82,843,286)

3.

Transactions

with

Affiliates

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

55

franklintempleton.com

Semiannual

Report

Franklin

Strategic

Income

Fund

(continued)

7.

Credit Risk

and

Defaulted

Securities

At

October

31,

2021,

the

Fund

had

48.6%

of

its

portfolio

invested

in

high

yield,

senior

secured

floating

rate

loans,

or

other

securities

rated

below

investment

grade

and

unrated

securities.

These

securities

may

be

more

sensitive

to

economic

conditions

causing

greater

price

volatility

and

are

potentially

subject

to

a

greater

risk

of

loss

due

to

default

than

higher

rated

securities.

The

Fund

held

defaulted

securities

and/or

other

securities

for

which

the

income

has

been

deemed

uncollectible.

At

October

31,

2021,

the

aggregate

value

of

these

securities

was

$-,

representing

-%

of

the

Fund's

net

assets.

The

Fund

discontinues

accruing

income

on

securities

for

which

income

has

been

deemed

uncollectible

and

provides

an

estimate

for

losses

on

interest

receivable.

The

securities

have

been

identified

in

the

accompanying

Statement

of

Investments.

8.

Novel

Coronavirus

Pandemic 

The

global

outbreak

of

the

novel

coronavirus

disease,

known

as

COVID-19, has

caused

adverse

effects

on

many

companies,

sectors,

nations,

regions

and

the

markets

in

general, and

may

continue for

an unpredictable duration.

The

effects

of

this

pandemic

may

materially

impact

the

value

and

performance

of

the Fund, its ability

to

buy

and

sell

fund

investments

at

appropriate

valuations

and its ability

to

achieve its investment

objectives.

9.

Restricted

Securities

The

Fund

invests

in

securities

that

are

restricted

under

the

Securities

Act

of

1933

(1933

Act).

Restricted

securities

are

often

purchased

in

private

placement

transactions,

and

cannot

be

sold

without

prior

registration

unless

the

sale

is

pursuant

to

an

exemption

under

the

1933

Act.

Disposal

of

these

securities

may

require

greater

effort

and

expense,

and

prompt

sale

at

an

acceptable

price

may

be

difficult.

The Fund

may

have

registration

rights

for

restricted

securities.

The

issuer

generally

incurs

all

registration

costs.

At

October

31,

2021,

investments

in

restricted

securities,

excluding

securities

exempt

from

registration

under

the

1933

Act,

were

as

follows:

Principal

Amount

*

/

Shares

/

Warrants

Issuer

Acquisition

Date

Cost

Value

Franklin

Strategic

Income

Fund

125,940,079

K2016470219

South

Africa

Ltd.,

A

...............

2/08/13

-

2/01/17

$

977,123

$

—

12,532,821

K2016470219

South

Africa

Ltd.,

B

...............

2/01/17

9,307

—

6,000,000

WorkCapital

BSD

SARL,

2/13/26

................

2/15/19

750,000

—

20,000,000

WorkCapital

BSD

SARL,

Term

Loan,

6.5%,

11/02/22

.

2/13/19

19,530,078

—

Total

Restricted

Securities

(Value

is

—%

of

Net

Assets)

..............

$21,266,508

$—

*

In

U.S.

dollars

unless

otherwise

indicated.

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

56

franklintempleton.com

Semiannual

Report

Franklin

Strategic

Income

Fund

(continued)

10.

Other

Derivative

Information

At

October

31,

2021,

the

Fund's

investments

in

derivative

contracts

are

reflected

in

the

Statement of

Assets

and

Liabilities

as

follows:

Asset

Derivatives

Liability

Derivatives

Derivative

Contracts

Not

Accounted

for

as

Hedging

Instruments

Statement

of

Assets

and

Liabilities

Location

Fair

Value

Statement

of

Assets

and

Liabilities

Location

Fair

Value

Franklin

Strategic

Income

Fund

Interest

rate

contracts

.......

Investments

in

securities,

at

value

$

478,908

a

Options

written,

at

value

$

904,035

Variation

margin

on

futures

contracts

2,135,662

b

Variation

margin

on

futures

contracts

590,636

b

Foreign

exchange

contracts

..

Investments

in

securities,

at

value

312,605

a

Options

written,

at

value

—

Unrealized

appreciation

on

OTC

forward

exchange

contracts

1,314,957

Unrealized

depreciation

on

OTC

forward

exchange

contracts

1,673,927

Credit

contracts

............

Variation

margin

on

centrally

cleared

swap

contracts

48,302

c

Variation

margin

on

centrally

cleared

swap

contracts

—

OTC

swap

contracts

(upfront

payments)

429,476

OTC

swap

contracts

(upfront

receipts)

6,443,917

Unrealized

appreciation

on

OTC

swap

contracts

1,303,038

Unrealized

depreciation

on

OTC

swap

contracts

696,089

Value

recovery

instruments

...

Investments

in

securities,

at

value

10,552,237

d

Total

....................

$16,575,185

$10,308,604

a

Purchased

option

contracts

are

included

in

investments

in

securities,

at

value

in

the

Statement

of

Assets

and

Liabilities.

b

This

amount

reflects

the

cumulative

appreciation

(depreciation)

of

futures

contracts

as

reported

in

the

Statement

of

Investments.

Only

the

variation

margin

receivable/

payable

at

period

end

is

separately

reported

within

the

Statement

of

Assets

and

Liabilities.

Prior

variation

margin

movements

were

recorded

to

cash

upon

receipt

or

payment.

c

This

amount

reflects

the

cumulative

appreciation

(depreciation)

of

centrally

cleared

swap

contracts

as

reported

in

the

Statement

of

Investments.

Only

the

variation

margin

receivable/payable

at

period

end

is

separately

reported

within

the

Statement

of

Assets

and

Liabilities.

Prior

variation

margin

movements

were

recorded

to

cash

upon

receipt

or

payment.

d

VRI

are

included

in

investments

in

securities,

at

value

in

the

Statement

of

Assets

and

Liabilities.

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

57

franklintempleton.com

Semiannual

Report

Franklin

Strategic

Income

Fund

(continued)

For

the

period

ended

October

31,

2021,

the

effect

of

derivative

contracts

in

the

Statement

of

Operations

was

as

follows:

For

the

period

ended

October

31,

2021,

the

average

month

end

notional

amount

of

futures

contracts,

options

and

swap

contracts,

the

average

month

end

contract

value

for

forward

exchange

contracts

and

average

month

end

fair

value

of

VRI,

were

as

follows:

Derivative

Contracts

Not

Accounted

for

as

Hedging

Instruments

Statement

of

Operations

Location

Net

Realized

Gain

(Loss)

for

the

Period

Statement

of

Operations

Location

Net

Change

in

Unrealized

Appreciation

(Depreciation)

for

the

Period

Franklin

Strategic

Income

Fund

Net

realized

gain

(loss)

from:

Net

change

in

unrealized

  appreciation

(depreciation)

on:

Interest

rate

contracts

..........

Investments

$(1,103,530)

Investments

$257,353

a

Written

options

1,082,610

Written

options

(652,875)

Futures

contracts

(5,197,530)

Futures

contracts

2,733,941

Swap

contracts

3,306,094

Swap

contracts

(2,170,716)

Foreign

exchange

contracts

.....

Investments

—

Investments

(50,259)

Swap

contracts

(200,657)

Swap

contracts

203,321

Forward

exchange

contracts

561,990

Forward

exchange

contracts

437,545

Credit

contracts

...............

Swap

contracts

5,152,129

Swap

contracts

(2,039,485)

Value

recovery

instruments

Investments

—

Investments

$(21,229)

a

Total

.......................

$3,601,106

$(1,302,404)

a

Purchased

option

contracts

and

VRI

are

included

in

net

realized

gain

(loss)

from

investments

and

net

change

in

unrealized

appreciation

(depreciation)

on

investments

in

the

Statement

of

Operations.

Franklin

Strategic

Income

Fund

Futures

contracts

.........................

$570,414,335

Swap

Contracts

..........................

163,247,611

Forward

exchange

contracts

.................

34,993,681

Options

.................................

186,159,714

VRI

....................................

7,969,808

10.

Other

Derivative

Information

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

58

franklintempleton.com

Semiannual

Report

Franklin

Strategic

Income

Fund

(continued)

At

October

31,

2021,

the

Fund's

OTC

derivative

assets

and

liabilities

are

as

follows:

At

October

31,

2021,

OTC

derivative

assets,

which

may

be

offset

against

the

Fund's

OTC

derivative

liabilities

and

collateral

received

from

the

counterparty,

are

as

follows:

At

October

31,

2021,

OTC

derivative

liabilities,

which

may

be

offset

against

the

Fund's

OTC

derivative

assets

and

collateral

pledged

to

the

counterparty,

are

as

follows:

Gross

Amounts

of

Assets

and

Liabilities

Presented

in

the

Statement

of

Assets

and

Liabilities

Assets

a

Liabilities

a

Franklin

Strategic

Income

Fund

Derivatives

Forward

exchange

contracts

.............................

$

1,314,957

$

1,673,927

Options

purchased

.....................................

791,513

—

Options

written

........................................

—

904,035

Swap

contracts

.......................................

1,732,514

7,140,006

Total

.............................................

$3,838,984

$9,717,968

a

Absent

an

event

of

default

or

early

termination,

OTC

derivative

assets

and

liabilities

are

presented

gross

and

not

offset

in

the

Statement

of

Assets

and

Liabilities.

Amounts

Not

Offset

in

the

Statement

of

Assets

and

Liabilities

Gross

Amounts

of

Assets

Presented

in

the

Statement

of

Assets

and

Liabilities

Financial

Instruments

Available

for

Offset

Financial

Instruments

Collateral

Received

Cash

Collateral

Received

Net

Amount

(Not

less

than

zero)

Franklin

Strategic

Income

Fund

Counterparty

BNDP

...................

$32,335

$—

$—

$—

$32,335

BOFA

....................

53,615

—

—

—

53,615

CITI

.....................

629,496

(629,496)

—

—

—

DBAB

...................

478,908

(478,908)

—

—

—

GSCO

...................

76,149

(11,894)

—

—

64,255

JPHQ

...................

1,809,632

(1,809,632)

—

—

—

MSCO

...................

758,849

—

—

(310,000)

448,849

Total

...................

$3,838,984

$(2,929,930)

$

—

$(310,000)

$599,054

$

1

10.

Other

Derivative

Information

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

59

franklintempleton.com

Semiannual

Report

Franklin

Strategic

Income

Fund

(continued)

See

Note

1(f) regarding

derivative

financial

instruments. 

See

Abbreviations

on

page

63.

11.

Credit

Facility

The

Fund,

together

with

other

U.S.

registered

and

foreign

investment

funds

(collectively,

Borrowers),

managed

by

Franklin

Templeton,

are

borrowers

in

a

joint

syndicated

senior

unsecured

credit

facility

totaling

$2.675

billion

(Global

Credit

Facility)

which

matures

on

February

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

Fund

shall,

in

addition

to

interest

charged

on

any

borrowings

made

by

the

Fund

and

other

costs

incurred

by

the

Fund,

pay

its

share

of

fees

and

expenses

incurred

in

connection

with

the

implementation

and

maintenance

of

the

Global

Credit

Facility,

based

upon

its

relative

share

of

the

aggregate

net

assets

of

all

of

the

Borrowers,

including

an

annual

commitment

fee

of

0.15%

based

upon

the

unused

portion

of

the

Global

Credit

Facility.

These

fees

are

reflected

in

other

expenses

in

the

Statement

of

Operations.

During

the

period

ended

October

31,

2021,

the

Fund

did

not

use

the

Global

Credit

Facility.

12.

Fair

Value

Measurements

The

Fund

follows

a

fair

value

hierarchy

that

distinguishes

between

market

data

obtained

from

independent

sources

(observable

inputs)

and

the

Fund's

own

market

assumptions

(unobservable

inputs).

These

inputs

are

used

in

determining

the

value

of

the

Fund's

financial

instruments

and

are

summarized

in

the

following

fair

value

hierarchy:

Level

1

–

quoted

prices

in

active

markets

for

identical

financial

instruments

Amounts

Not

Offset

in

the

Statement

of

Assets

and

Liabilities

Gross

Amounts

of

Liabilities

Presented

in

the

Statement

of

Assets

and

Liabilities

Financial

Instruments

Available

for

Offset

Financial

Instruments

Collateral

Pledged

Cash

Collateral

Pledged

a

Net

Amount

(Not

less

than

zero)

Franklin

Strategic

Income

Fund

Counterparty

BNDP

...................

$—

$—

$—

$—

$—

BOFA

....................

—

—

—

—

—

CITI

.....................

6,303,874

(629,496)

—

(5,420,000)

254,378

DBAB

...................

904,035

(478,908)

—

(420,000)

5,127

GSCO

...................

11,894

(11,894)

—

—

—

JPHQ

...................

2,498,165

(1,809,632)

—

(688,533)

—

MSCO

...................

—

—

—

—

—

Total

...................

$9,717,968

$(2,929,930)

$—

$(6,528,533)

$259,505

a

In

some

instances,

the

collateral

amounts

disclosed

in

the

table

above

were

adjusted

due

to

the

requirement

to

limit

collateral

amounts

to

avoid

of

over

collateralization.

Actual

collateral

received

and/or

pledged

may

be

more

than

the

amounts

disclosed

herein.

10.

Other

Derivative

Information

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

60

franklintempleton.com

Semiannual

Report

Franklin

Strategic

Income

Fund

(continued)

Level

2

–

other

significant

observable

inputs

(including

quoted

prices

for

similar

financial

instruments,

interest

rates,

prepayment

speed,

credit

risk,

etc.)

Level

3

–

significant

unobservable

inputs

(including

the

Fund's

own

assumptions

in

determining

the

fair

value

of

financial

instruments)

The

input

levels

are

not

necessarily

an

indication

of

the

risk

or

liquidity

associated

with

financial

instruments

at

that

level.

A

summary

of

inputs

used

as

of

October

31,

2021,

in

valuing

the

Fund's

assets

and

liabilities

carried

at

fair

value,

is

as

follows:

Level

1

Level

2

Level

3

Total

Franklin

Strategic

Income

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Energy

Equipment

&

Services

.............

$

4,403,898

$

—

$

—

$

4,403,898

Machinery

............................

—

6,046,866

—

6,046,866

Media

...............................

3,058,482

—

34,984

3,093,466

Multiline

Retail

........................

—

—

—

a

—

Oil,

Gas

&

Consumable

Fuels

.............

18,032

—

21,817

39,849

Specialty

Retail

........................

7

—

—

7

Management

Investment

Companies

.........

317,278,805

—

—

317,278,805

Warrants

:

Oil,

Gas

&

Consumable

Fuels

.............

—

—

3

a

3

Paper

&

Forest

Products

.................

22,522

—

—

22,522

Software

.............................

—

—

—

a

—

Convertible

Bonds

.......................

—

584,619

—

584,619

Corporate

Bonds

:

Aerospace

&

Defense

...................

—

25,194,078

—

25,194,078

Air

Freight

&

Logistics

...................

—

3,642,377

—

3,642,377

Airlines

..............................

—

28,783,254

—

28,783,254

Auto

Components

......................

—

49,383,751

—

49,383,751

Automobiles

..........................

—

11,446,059

—

11,446,059

Banks

...............................

—

61,322,162

—

61,322,162

Beverages

...........................

—

19,902,832

—

19,902,832

Biotechnology

.........................

—

6,415,708

—

6,415,708

Building

Products

......................

—

26,648,493

—

26,648,493

Capital

Markets

........................

—

29,944,315

—

29,944,315

Chemicals

...........................

—

146,972,005

—

146,972,005

Commercial

Services

&

Supplies

...........

—

35,593,663

—

35,593,663

Communications

Equipment

..............

—

12,545,913

—

12,545,913

Construction

&

Engineering

...............

—

3,543,016

—

3,543,016

Construction

Materials

..................

—

7,034,650

—

7,034,650

Consumer

Finance

.....................

—

12,020,860

—

12,020,860

Containers

&

Packaging

.................

—

65,857,859

—

65,857,859

Diversified

Financial

Services

.............

—

21,490,916

—

21,490,916

Diversified

Telecommunication

Services

.....

—

52,357,861

—

52,357,861

Electric

Utilities

........................

—

67,477,941

—

67,477,941

Electrical

Equipment

....................

—

18,230,461

—

18,230,461

Electronic

Equipment,

Instruments

&

Components

........................

—

13,222,301

—

13,222,301

Energy

Equipment

&

Services

.............

—

22,607,620

—

22,607,620

Entertainment

.........................

—

21,244,040

—

21,244,040

Equity

Real

Estate

Investment

Trusts

(REITs)

.

—

54,931,767

—

54,931,767

Food

&

Staples

Retailing

.................

—

7,343,325

—

7,343,325

Food

Products

........................

—

58,720,494

—

58,720,494

Gas

Utilities

..........................

—

2,935,183

—

2,935,183

12.

Fair

Value

Measurements

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

61

franklintempleton.com

Semiannual

Report

Franklin

Strategic

Income

Fund

(continued)

Level

1

Level

2

Level

3

Total

Franklin

Strategic

Income

Fund

(continued)

Assets:

(continued)

Investments

in

Securities:

Corporate

Bonds:

Health

Care

Equipment

&

Supplies

.........

$

—

$

9,670,000

$

—

$

9,670,000

Health

Care

Providers

&

Services

..........

—

69,418,576

—

69,418,576

Hotels,

Restaurants

&

Leisure

.............

—

126,831,245

—

126,831,245

Household

Durables

....................

—

29,079,755

—

29,079,755

Household

Products

....................

—

26,857,071

—

26,857,071

Independent

Power

and

Renewable

Electricity

Producers

..........................

—

60,707,394

—

60,707,394

Insurance

............................

—

11,048,447

—

11,048,447

Interactive

Media

&

Services

..............

—

16,693,799

—

16,693,799

Internet

&

Direct

Marketing

Retail

..........

—

22,565,847

—

22,565,847

IT

Services

...........................

—

30,705,440

—

30,705,440

Machinery

............................

—

16,633,590

—

16,633,590

Marine

..............................

—

12,535,980

—

12,535,980

Media

...............................

—

88,058,858

—

88,058,858

Metals

&

Mining

.......................

—

41,775,895

—

41,775,895

Mortgage

Real

Estate

Investment

Trusts

(REITs)

............................

—

1,349,250

—

1,349,250

Multiline

Retail

........................

—

—

—

a

—

Multi-Utilities

..........................

—

8,393,795

—

8,393,795

Oil,

Gas

&

Consumable

Fuels

.............

—

197,359,370

—

197,359,370

Paper

&

Forest

Products

.................

—

15,668,235

—

15,668,235

Personal

Products

.....................

—

15,239,610

—

15,239,610

Pharmaceuticals

.......................

—

52,912,228

—

52,912,228

Real

Estate

Management

&

Development

....

—

38,434,937

—

38,434,937

Road

&

Rail

..........................

—

30,214,984

—

30,214,984

Software

.............................

—

10,243,819

—

10,243,819

Specialty

Retail

........................

—

39,157,304

—

39,157,304

Technology

Hardware,

Storage

&

Peripherals

.

—

2,111,134

—

2,111,134

Thrifts

&

Mortgage

Finance

...............

—

28,009,125

—

28,009,125

Tobacco

.............................

—

15,341,973

—

15,341,973

Trading

Companies

&

Distributors

..........

—

27,039,755

—

27,039,755

Wireless

Telecommunication

Services

.......

—

28,594,193

—

28,594,193

Senior

Floating

Rate

Interests

...............

—

62,617,006

—

a

62,617,006

Marketplace

Loans

......................

—

—

31,835,914

31,835,914

Loan

Participations

and

Assignments

.........

—

14,907,038

—

14,907,038

Foreign

Government

and

Agency

Securities

....

—

562,153,888

—

562,153,888

U.S.

Government

and

Agency

Securities

.......

—

78,702,029

—

78,702,029

Asset-Backed

Securities

..................

—

268,137,066

—

268,137,066

Commercial

Mortgage-Backed

Securities

......

—

8,350,570

—

8,350,570

Mortgage-Backed

Securities

................

—

28,768,888

—

28,768,888

Municipal

Bonds

.........................

—

33,662,516

—

33,662,516

Residential

Mortgage-Backed

Securities

......

—

319,005,076

—

319,005,076

Escrows

and

Litigation

Trusts

...............

—

195,000

—

a

195,000

Options

purchased

.......................

—

791,513

—

791,513

Short

Term

Investments

...................

52,902,051

86,433,240

—

139,335,291

Total

Investments

in

Securities

...........

$377,683,797

$3,429,819,828

$31,892,718

$3,839,396,343

Other

Financial

Instruments:

Forward

exchange

contracts

...............

$

—

$

1,314,957

$

—

$

1,314,957

Futures

contracts

........................

2,135,662

—

—

2,135,662

Swap

contracts

.........................

—

1,351,339

—

1,351,339

Total

Other

Financial

Instruments

.........

$2,135,662

$2,666,296

$—

$4,801,958

12.

Fair

Value

Measurements

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

62

franklintempleton.com

Semiannual

Report

Franklin

Strategic

Income

Fund

(continued)

A

reconciliation

in

which

Level

3

inputs

are

used

in

determining

fair

value

is

presented

when

there

are

significant

Level

3

assets

and/or

liabilities

at

the

beginning

and/or

end

of

the

period.

13.

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

and

2023.

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.

14.

Subsequent

Events

The

Fund

has

evaluated

subsequent

events

through

the

issuance

of

the financial

statements

and

determined

that

no

events

have

occurred

that

require

disclosure.

Level

1

Level

2

Level

3

Total

Franklin

Strategic

Income

Fund

(continued)

Liabilities:

Other

Financial

Instruments:

Options

written

..........................

$

—

$

904,035

$

—

$

904,035

Forward

exchange

contracts

................

—

1,673,927

—

1,673,927

Futures

contracts

........................

590,636

—

—

590,636

Swap

contracts

..........................

—

696,088

—

696,088

Total

Other

Financial

Instruments

.........

$590,636

$3,274,050

$—

$3,864,686

a

Includes

securities

determined

to

have

no

value

at

October

31,

2021.

12.

Fair

Value

Measurements

(continued)

Franklin

Strategic

Series

Notes

to

Financial

Statements

(unaudited)

63

franklintempleton.com

Semiannual

Report

Franklin

Strategic

Income

Fund

(continued)

Abbreviations

Counterparty

BNDP

BNP

Paribas

SA

BOFA

Bank

of

America,

N.A.

CITI

Citibank

Inc.

DBAB

Deutsche

Bank

AG

GSCO

Goldman

Sachs

Group,

Inc.

JPHQ

JPMorgan

Chase

Bank

NA

MSCO

Morgan

Stanley

Selected

Portfolio

BZDIOVRA

Brazil

Inter-Bank

Deposit

Rate

CLO

Collateralized

Loan

Obligation

CMT

Constant

Monthly

U.S.

Treasury

Securities

Yield

Curve

Rate

Index

CVR

Contingent

Voting

Rights

ETF

Exchange-Traded

Fund

EURIBOR

Euro

Inter-Bank

Offer

Rate

FHLMC

Federal

Home

Loan

Mortgage

Corp.

FNMA

Federal

National

Mortgage

Association

FRN

Floating

Rate

Note

GDP

Gross

Domestic

Product

GNMA

Government

National

Mortgage

Association

GO

General

Obligation

LIBOR

London

Inter-Bank

Offered

Rate

MBS

Mortgage-Backed

Security

PIK

Payment-In-Kind

T-Note

Treasury

Note

VRI

Value

Recovery

Instrument

Cu

r

rency

BRL

Brazilian

Real

COP

Colombian

Peso

DOP

Dominican

Peso

EUR

Euro

IDR

Indonesian

Rupiah

USD

United

States

Dollar

UYU

Uruguayan

Peso

Franklin

Strategic

Series

Shareholder

Information

64

franklintempleton.com

Semiannual

Report

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.

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

Fund’s

investment

manager

has

established

Proxy

Voting

Policies

and

Procedures

(Policies)

that

the

Fund

uses

to

determine

how

to

vote

proxies

relating

to

portfolio

securities.

Shareholders

may

view

the

Fund’s

complete

Policies

online

at

franklintempleton.com.

Alternatively,

shareholders

may

request

copies

of

the

Policies

free

of

charge

by

calling

the

Proxy

Group

collect

at

(954)

527-

7678

or

by

sending

a

written

request

to:

Franklin

Templeton

Companies,

LLC,

300

S.E.

2nd

Street,

Fort

Lauderdale,

FL

33301,

Attention:

Proxy

Group.

Copies

of

the

Fund’s

proxy

voting

records

are

also

made

available

online

at

franklintempleton.com

and

posted

on

the

U.S.

Securities

and

Exchange

Commission’s

website

at

sec.gov

and

reflect

the

most

recent

12-month

period

ended

June

30.

Franklin

Strategic

Series

Shareholder

Information

65

franklintempleton.com

Semiannual

Report

Quarterly

Statement

of

Investments

The

Trust,

on

behalf

of

the

Fund,

files

a

complete

statement

of

investments

with

the

U.S.

Securities

and

Exchange

Commission

for

the

first

and

third

quarters

for

each

fiscal

year

as

an

exhibit

to

its

report

on

Form

N-PORT.

Shareholders

may

view

the

filed

Form

N-PORT

by

visiting

the

Commission’s

website

at

sec.gov.

The

filed

form

may

also

be

viewed

and

copied

at

the

Commission’s

Public

Reference

Room

in

Washington,

DC.

Information

regarding

the

operations

of

the

Public

Reference

Room

may

be

obtained

by

calling

(800)

SEC-0330.

Householding

of

Reports

and

Prospectuses

You

will

receive,

or

receive

notice

of

the

availability

of,

the

Fund’s

financial

reports

every

six

months.

In

addition,

you

will

receive

an

annual

updated

summary

prospectus

(detail

prospectus

available

upon

request).

To

reduce

Fund

expenses,

we

try

to

identify

related

shareholders

in

a

household

and

send

only

one

copy

of

the

financial

reports

(to

the

extent

received

by

mail)

and

summary

prospectus.

This

process,

called

“householding,”

will

continue

indefinitely

unless

you

instruct

us

otherwise.

If

you

prefer

not

to

have

these

documents

householded,

please

call

us

at

(800)

632-2301.

At

any

time

you

may

view

current

prospectuses/

summary

prospectuses

and

financial

reports

on

our

website.

If

you

choose,

you

may

receive

these

documents

through

electronic

delivery.

194

S

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.

Semiannual

Report

and

Shareholder

Letter

Franklin

Strategic

Income

Fund

Investment

Manager

Distributor

Shareholder

Services

Franklin

Advisers,

Inc.

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 expert is Mary C. Choksi and she is "independent" as defined under the relevant Securities and Exchange Commission Rules and Releases.

Item 4.

Principal Accountant Fees and Services.

N/A

Item 5. Audit Committee

 

of Listed Registrants. N/A

Item 6. Schedule of Investments. N/A

Item 7.  Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. N/A

Item 8.  Portfolio Managers of Closed-End Management Investment Companies. N/A

Item 9.  Purchases of Equity Securities by Closed-End Management Investment Company and

Affiliated Purchasers. N/A

Item 10.  Submission of Matters to a Vote of Security Holders.

There have been no changes to the procedures by which shareholders may recommend nominees to the Registrant's Board of Trustees that would require disclosure herein.

Item 11. Controls and Procedures.

(a)

  Evaluation of Disclosure Controls and Procedures. 

The Registrant maintains disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in the Registrant’s filings under the Securities Exchange Act of 1934, as amended, and the Investment Company Act of 1940 is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. Such information is accumulated and communicated to the Registrant’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Registrant’s management, including the principal executive officer and the principal financial officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

Within 90 days prior to the filing date of this Shareholder Report on Form N-CSR, the Registrant had carried out an evaluation, under the supervision and with the participation of the Registrant’s management, including the Registrant’s principal executive officer and the Registrant’s principal financial officer, of the effectiveness of the design and operation of the Registrant’s disclosure controls and procedures. Based on such evaluation, the Registrant’s principal executive officer and principal financial officer concluded that the Registrant’s disclosure controls and procedures are effective.

(b)   Changes in Internal Controls

. 

There have been no changes in the Registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect the internal control over financial reporting.

Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Company. N/A

Item 13. Exhibits.

(a) (1) Code of Ethics

codeofethics

(a) (2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer - Finance and Administration, and Jeffrey W. White, Interim Chief Financial Officer, Chief Accounting Officer and Treasurer

section302

(b)   Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer - Finance and Administration, and Jeffrey W. White, Interim Chief Financial Officer, Chief Accounting Officer and Treasurer

section906

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

FRANKLIN

STRATEGIC SERIES

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\Jeffrey W. White________________________

     Jeffrey W. White

     Interim Chief Financial Officer, Chief Accounting Officer and Treasurer

Date December 23, 2021