UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-08226
Templeton Global Investment Trust
(Exact name of registrant as specified in charter)
300 S.E. 2nd Street, Fort Lauderdale, FL 33301-1923
(Address of principal executive offices) (Zip code)
Craig S. Tyle, One Franklin Parkway, San Mateo, CA 94403-1906
(Name and address of agent for service)
Registrant's telephone number, including area code: (954) 527-7500
Date of fiscal year end: _3/31__
Date of reporting period: 3/31/16__
Item 1. Reports to Stockholders.
Annual Report
and Shareholder Letter
March 31, 2016
Templeton BRIC Fund
A SERIES OF TEMPLETON GLOBAL INVESTMENT TRUST
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| Contents | |
| Annual Report | |
| Templeton BRIC Fund | 3 |
| Performance Summary | 7 |
| Your Fund’s Expenses | 11 |
| Financial Highlights and Statement of Investments | 13 |
| Financial Statements | 18 |
| Notes to Financial Statements | 22 |
| Report of Independent Registered | |
| Public Accounting Firm | 30 |
| Tax Information | 31 |
| Meeting of Shareholders | 32 |
| Board Members and Officers | 33 |
| Shareholder Information | 38 |
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Templeton BRIC Fund
This annual report for Templeton BRIC Fund covers the fiscal year ended March 31, 2016. The reorganization of Templeton BRIC Fund into Templeton Developing Markets Trust, as approved by shareholders, was completed on May 13, 2016. Shares of Templeton BRIC Fund share classes A, C and Advisor were exchanged for shares in Templeton Developing Markets Trust share classes A, C and Advisor, respectively.
Your Fund’s Goal and Main Investments
The Fund seeks long-term capital appreciation. Under normal market conditions, the Fund invests at least 80% of its net assets in securities of BRIC companies—those companies that are organized under the laws of, have a principal office in, or whose principal trading market is in Brazil, Russia, India or China (including the People’s Republic of China, Hong Kong and Taiwan); or derive 50% or more of their total revenue or profit from either goods or services produced or sales made in, or have 50% or more of their assets in, BRIC countries.
Performance Overview
The Fund’s Class A shares had a -12.06% cumulative total return for the 12 months ended March 31, 2016. In comparison, the MSCI BRIC Index had a -15.11% total return for the same period.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. In addition, the Fund’s return reflects the effect of fees and expenses for professional management, while an index does not have such costs. You can find the Fund’s long-term performance data in the Performance Summary beginning on page 7.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
*China Region includes China, Hong Kong and Taiwan.
Economic and Market Overview
The global economy expanded moderately during the 12 months under review as many emerging market economies continued to grow and many developed market economies continued to recover. For the 12 months ended March 31, 2016, BRIC stocks, as measured by the MSCI BRIC Index, had a -15.11% total return.1
Events in China significantly affected stock performance in all regions during the 12 months under review. China under-performed its BRIC peers, as measured by the MSCI China Index’s -18.66% total return for the 12-month period.1 China’s gross domestic product (GDP) grew an estimated 6.7% in 2016’s first quarter, after expanding 6.9% in 2015, as growth in industrial production, fixed-asset investments and retail sales was countered by weakness in imports and exports.2 The People’s Bank of China (PBOC) cut its benchmark interest rate and the cash reserve requirement ratio for banks several times to support liquidity, credit and growth. Furthermore, the PBOC lowered short-term borrowing costs for smaller banks to help banks access funds in times of a liquidity crunch and to avoid
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.
2. Source: The website of the National Bureau of Statistics of the People’s Republic of China (www.stats.gov.cn).
The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI). The SOI
begins on page 16.
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heightened volatility in money market rates. After reaching multi-year highs in 2015’s second quarter, Chinese equity markets corrected amid investor concerns about economic growth and liquidity. Investor anxiety about China’s moderating economic growth and lower commodity demand, as well as the PBOC’s effective currency devaluation, contributed to volatility in global stock, commodity and currency markets. However, accommodative monetary policies of several major central banks provided investors with some optimism. China took additional monetary and fiscal stimulus measures to support economic growth, bolstering investor sentiment in December. But a plunge in China’s domestic A-share market on January 4, which triggered the country’s new circuit-breaker system and halted trading, led to declines in emerging market stocks, exacerbated by a collapse in crude oil prices and investor concerns about global economic growth. Stocks began to regain some ground in late January as crude oil prices appeared to stabilize and the PBOC further reduced the cash reserve requirement ratio for banks.
Indian stocks, as measured by the MSCI India Index, had a -13.15% total return for the 12 months under review, resulting partly from the Indian rupee’s weakness against the U.S. dollar.1 India’s GDP grew 7.3% year-over-year in the December quarter, down from the September quarter’s 7.7% rate.3 Growth drivers included the manufacturing and services sectors, which offset weakness in the agriculture industry. After reducing its benchmark interest rate several times in 2015, the Reserve Bank of India maintained the rate at 6.75% in 2016’s first quarter. The inflation rate rose to a period high in January but declined slightly in February.
Brazilian stocks, as measured by the MSCI Brazil Index, had a -11.47% total return for the 12-month period, resulting from currency depreciation and investor concerns about lower commodity prices, high interest rates, credit rating downgrades, political instability and a continued economic downturn.1 In 2015’s fourth quarter, Brazil’s quarterly GDP continued to contract, largely due to a decline in consumption and investments, but at a slower rate compared with the second and third quarters. For 2015 as a whole, GDP contracted 3.8%.4 The Central Bank of Brazil paused from raising its benchmark interest rate, which
stood at a nine-year high of 14.25% at period-end, as it sought to balance concerns about rising inflation and domestic and global economic risks. Political, economic and debt concerns led independent credit rating agencies Standard & Poor’s (S&P), Moody’s Investors Service and Fitch Ratings to lower Brazil’s sovereign credit rating to below investment grade (lower than BBB-/Baa3), with S&P lowering the country’s rating further below investment grade, to BB.5 Brazilian stocks rallied toward period-end as the likelihood of President Dilma Rousseff’s impeachment raised investors’ hopes for a change in leadership well before the 2018 election.
Russia was the strongest BRIC performer, as measured by the MSCI Russia Index’s +2.48% total return for the 12 months under review.1 Russia’s GDP contracted 3.7% in 2015, the first annual decline since 2009, due to low oil prices, economic sanctions and a weak currency.6 Despite a high inflation rate, the Central Bank of Russia (CBR) cut its benchmark interest rate several times during the period’s first half to stimulate the economy. In March, the CBR left the interest rate unchanged at 11.00% as it remained concerned about inflation risks resulting from oil market developments and budget uncertainties. In February, the government announced plans to launch a privatization drive to ease fiscal pressures amid a low oil price environment. In the same month, Russia and certain Organization of the Petroleum Exporting Countries (OPEC) members (Saudi Arabia, Venezuela and Qatar) agreed to freeze oil production at January levels, contingent on cooperation from other OPEC members and several other major oil producers.
Investment Strategy
Our investment strategy employs a fundamental research, value-oriented, long-term approach. We focus on the market price of a company’s securities relative to our evaluation of the company’s long-term (typically five years) earnings, asset value and cash flow potential. We also consider a company’s profit and loss outlook, balance sheet strength, cash flow trends and asset value in relation to the current price. The analysis considers the company’s corporate governance behavior as well as its position in its sector, the economic framework and political environment.
3. Source: India Central Statistics Office.
4. Source: Brazilian Institute of Geography and Statistics (IBGE).
5. This does not indicate a rating of the Fund.
6. Source: Federal State Statistics Service, Russia.
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Manager’s Discussion
During the 12 months under review, stock price corrections exacerbated by the U.S. dollar’s strength against most emerging market currencies affected the performance of most Fund investments. Consistent with our long-term investment strategy, we viewed such periods of heightened market volatility in the context of a historical, long-term uptrend. We continued to monitor economic and market developments in BRIC countries and globally while seeking to minimize risk and to establish long-term positions in quality companies at share prices we considered attractive.
Key detractors from the Fund’s absolute performance during the 12-month reporting period included positions in Beijing Capital Land, Banco Bradesco and China Life Insurance.
Beijing Capital Land, a midsize residential and commercial property developer, participated in the Chinese equity market’s overall strength in April 2015. Indications that the company was well positioned to benefit from the development of the Beijing-Tianjin-Hebei regions also contributed to investor enthusiasm. However, the Chinese market’s subsequent correction and the company’s release of weak first-half 2015 corporate results showing a sharp profit margin decline hurt the company’s stock price. Shares remained weak over most of the period as full-year 2015 results also disappointed due to continued profit margin decline. Supporting the company’s shares were the Chinese equity market’s rebound near period-end, investor expectations of further monetary easing and the company’s potential A-share issuance.
Banco Bradesco, one of Brazil’s largest financial conglomerates, continued to produce solid corporate results despite the country’s difficult economic environment. However, investor concerns about deteriorating asset quality and higher loan-loss provisions weighed on share price performance. The Brazilian market as a whole came under pressure during most of the reporting period, further hurting Banco Bradesco’s shares. Lower commodity and energy prices coincided with an economic recession, rising unemployment and political uncertainty, pressuring equities and the Brazilian real. S&P’s, Moody’s and Fitch’s downgrades of the country’s sovereign credit rating to below investment grade further heightened market anxiety. However, the increased likelihood of President Dilma Rousseff’s impeachment raised investors’ hopes for a change in leadership well before the 2018 election, bolstering investor confidence and leading Brazilian stocks, including Banco Bradesco’s, to rebound sharply in 2016’s first quarter.
China Life Insurance is one of China’s largest life insurance companies. Disappointing 2015 earnings, mainly due to
| Top 10 Holdings | ||
| 3/31/16 | ||
| Company | % of Total | |
| Sector/Industry, Country | Net Assets | |
| Tencent Holdings Ltd. | 8.6 | % |
| Internet Software & Services, China | ||
| China Mobile Ltd. | 6.1 | % |
| Wireless Telecommunication Services, China | ||
| Naspers Ltd. | 4.4 | % |
| Media, South Africa | ||
| Reliance Industries Ltd. | 3.5 | % |
| Oil, Gas & Consumable Fuels, India | ||
| Banco Bradesco SA | 3.3 | % |
| Banks, Brazil | ||
| JD.com Inc. | 3.2 | % |
| Internet & Catalog Retail, China | ||
| Bajaj Holdings and Investment Ltd. | 3.2 | % |
| Diversified Financial Services, India | ||
| China Petroleum and Chemical Corp. | 3.1 | % |
| Oil, Gas & Consumable Fuels, China | ||
| Alibaba Group Holding Ltd. | 3.0 | % |
| Internet Software & Services, China | ||
| Dr. Reddy’s Laboratories Ltd. | 2.8 | % |
| Pharmaceuticals, India |
weaker-than-expected investment income in 2015’s second half and a decline in the recurring investment yield, as well as investor concerns about a lower interest rate environment and the Chinese currency’s depreciation, hurt the stock price during the period. Further dampening investor sentiment were concerns that China Life’s recent acquisitions of commercial banks might raise the company’s risk profile.
Despite a challenging market environment, many of the Fund’s holdings performed well. Key contributors to absolute performance included investments in TravelSky Technology, Tencent Holdings and TSMC (Taiwan Semiconductor Manufacturing Co.).
TravelSky is the monopoly provider of information technology (IT) solutions for China’s air travel and tourism industries. Its shares appreciated substantially in April, benefiting from regulatory changes that allowed mainland Chinese mutual funds to buy Hong Kong-listed shares. Although its share price subsequently declined, it recovered in the latter part of the reporting period. Supporting the company’s shares were solid 2015 earnings, largely driven by cost-cutting measures; expected capitalization and monetization of TravelSky’s mobile application, UmeTrip; China’s airport infrastructure plans; and growth in travelers.
Tencent is one of the world’s largest and most widely used Inter-net service portals. Founded in 1998 to provide instant
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messenger services, the company rapidly grew into a provider of mass media, entertainment, and Internet and mobile phone value-added services in China and internationally. Tencent reported solid earnings in 2015, supported by strong mobile gaming and advertising revenues. Moreover, China’s Internet sector has been growing rapidly and could benefit further from the government’s “Internet Plus” strategy, which is designed to integrate the Internet with traditional businesses to support the country’s economic growth.
TSMC is the world’s largest independent integrated circuit foundry. Better-than-expected fourth-quarter 2015 earnings and company management’s upgraded guidance for 2016’s first quarter supported share price performance. Analysts’ suggestions that TSMC may win exclusive rights to supply processors for the next-generation Apple iPhones also helped the company’s share performance. Furthermore, a strong semiconductor demand outlook, driven by rising silicon content in mobile devices and other objects with embedded technology and network connectivity, led investors to view the company positively.
It is important to recognize the effect of currency movements on the Fund’s performance. In general, if the value of the U.S. dollar goes up compared with a foreign currency, an investment traded in that foreign currency will go down in value because it will be worth fewer U.S. dollars. This can have a negative effect on Fund performance. Conversely, when the U.S. dollar weakens in relation to a foreign currency, an investment traded in that foreign currency will increase in value, which can contribute to Fund performance. The U.S. dollar rose in value relative to most emerging market currencies during the period, and the Fund benefited from a relatively low allocation to Russia, whose currency was the weakest among BRIC countries. However, one cannot expect the same result in future periods.
During the past 12 months, our continued search for what we considered undervalued companies with attractive prospects led us to undertake selective purchases within BRIC countries and initiate exposure to South Africa. In sector terms, we made selective purchases largely in IT, consumer discretionary and health care.7 Key purchases included new investments in the aforementioned China Life Insurance; Naspers, a South Africa-listed diversified media group with interests in Internet services, pay television and print media companies in China, India,
Russia and elsewhere; and Alibaba Group Holding, China’s largest e-commerce company.
Conversely, we conducted some sales as we sought to strategically reposition the Fund’s portfolio and meet share redemptions. As a result, we trimmed investments largely in Brazil and China primarily through China H shares.8 In sector terms, we reduced investments largely in financials, energy and materials.9 Key sales included closing positions in Chinese commercial banks ICBC (Industrial and Commercial Bank of China) and Bank of China, as well as trimming investments in China Construction Bank and in the aforementioned TravelSky Technology and Beijing Capital Land.
Thank you for your participation in Templeton BRIC Fund. It has been a pleasure serving your investment needs.
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2016, 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.
7. The IT sector comprises electronic equipment, instruments and components; Internet software and services; IT services; semiconductors and semiconductor equipment;
and software in the SOI. The consumer discretionary sector comprises auto components, automobiles, Internet and catalog retail, media, and specialty retail in the SOI. The
health care sector comprises biotechnology, health care equipment and supplies, health care providers and services, and pharmaceuticals in the SOI.
8. “China H” denotes shares of China-incorporated, Hong Kong Stock Exchange-listed companies with most businesses in China.
9. The financials sector comprises banks, diversified financial services, insurance, and real estate management and development in the SOI. The energy sector comprises oil,
gas and consumable fuels in the SOI. The materials sector comprises construction materials, containers and packaging, and metals and mining in the SOI.
See www.franklintempletondatasources.com for additional data provider information.
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TEMPLETON BRIC FUND
Performance Summary as of March 31, 2016
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. The performance table and graphs do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares. Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses.
| Net Asset Value | ||||||
| Share Class (Symbol) | 3/31/16 | 3/31/15 | Change | |||
| A (TABRX) | $ | 8.39 | $ | 9.78 | -$ | 1.39 |
| C (TPBRX) | $ | 8.22 | $ | 9.64 | -$ | 1.42 |
| Advisor (TZBRX) | $ | 8.36 | $ | 9.74 | -$ | 1.38 |
| Distributions1 (4/1/15–3/31/16) | ||
| Dividend | ||
| Share Class | Income | |
| A | $ | 0.2167 |
| C | $ | 0.1939 |
| Advisor | $ | 0.2243 |
See page 10 for Performance Summary footnotes.
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TEMPLETON BRIC FUND
Performance as of 3/31/162
Cumulative total return excludes sales charges. Average annual total return and value of $10,000 investment include maximum sales charges. Class A: 5.75% maximum initial sales charge; Class C: 1% contingent deferred sales charge in first year only; Advisor Class: no sales charges.
| Cumulative | Average Annual | Value of $10,000 | Total Annual Operating Expenses6 | |||||||
| Share Class | Total Return3 | Total Return4 | Investment5 | (with waiver) | (without waiver) | |||||
| A | 1.97 | % | 2.04 | % | ||||||
| 1-Year | -12.06 | % | -17.14 | % | $ | 8,286 | ||||
| 5-Year | -40.74 | % | -10.99 | % | $ | 5,586 | ||||
| Since Inception (6/1/06) | -2.79 | % | -0.89 | % | $ | 9,162 | ||||
| C | 2.72 | % | 2.79 | % | ||||||
| 1-Year | -12.68 | % | -13.53 | % | $ | 8,647 | ||||
| 5-Year | -42.78 | % | -10.57 | % | $ | 5,722 | ||||
| Since Inception (6/1/06) | -9.18 | % | -0.98 | % | $ | 9,082 | ||||
| Advisor7 | 1.72 | % | 1.79 | % | ||||||
| 1-Year | -11.82 | % | -11.82 | % | $ | 8,818 | ||||
| 5-Year | -39.85 | % | -9.67 | % | $ | 6,015 | ||||
| Since Inception (6/1/06) | -0.60 | % | -0.06 | % | $ | 9,940 | ||||
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.
See page 10 for Performance Summary footnotes.
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PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment2
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index.
See page 10 for Performance Summary footnotes.
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TEMPLETON BRIC FUND
PERFORMANCE SUMMARY
All investments involve risks, including possible loss of principal. Special risks are associated with foreign investing, including currency fluctuations, economic
instability and political developments. Investments in BRIC companies, which are located in, or operate in, emerging market countries, involve heightened risks
related to the same factors, in addition to those associated with these companies’ smaller size, lesser liquidity and the lack of established legal, political, busi-
ness and social frameworks to support securities markets in the countries in which they operate. The Fund is a nondiversified fund. It may invest a greater
portion of its assets in the securities of one issuer than a diversified fund, which may result in greater fluctuation in the value of the Fund’s shares. All invest-
ments in emerging markets should be considered long-term investments that could experience significant price volatility in any given year. The Fund is designed
for the aggressive portion of a well-diversified portfolio. The Fund is actively managed but there is no guarantee that the manager’s investment decisions will
produce the desired results. The Fund’s prospectus also includes a description of the main investment risks.
Class C: These shares have higher annual fees and expenses than Class A shares.
Advisor Class: Shares are available to certain eligible investors as described in the prospectus.
1. The distribution amount is the sum of the dividend payments to shareholders for the period shown and includes only estimated tax-basis net investment income.
2. The Fund has an expense reduction contractually guaranteed through at least 7/31/16 and a fee waiver associated with any investment in a Franklin Templeton money fund,
contractually guaranteed through at least its current fiscal year-end. Fund investment results reflect the expense reduction and fee waiver, to the extent applicable; without
these reductions, the results would have been lower.
3. Cumulative total return represents the change in value of an investment over the periods indicated.
4. 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.
5. These figures represent the value of a hypothetical $10,000 investment in the Fund over the periods indicated.
6. Figures are as stated in the Fund’s current prospectus. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to
become higher than the figures shown.
7. Effective 8/1/08, the Fund began offering Advisor Class shares, which do not have sales charges or a Rule 12b-1 plan. Performance quotations for this class reflect the fol-
lowing methods of calculation: (a) For periods prior to 8/1/08, a restated figure is used based upon the Fund’s Class A performance, excluding the effect of Class A’s maximum
initial sales charge, but reflecting the effect of the Class A Rule 12b-1 fees; and (b) for periods after 8/1/08, actual Advisor Class performance is used reflecting all charges and
fees applicable to that class. Since 8/1/08 (commencement of sales), the cumulative and average annual total returns of Advisor Class shares were -36.06% and -5.67%.
8. Source: Morningstar. The MSCI BRIC Index is a free float-adjusted, market capitalization-weighted index designed to measure equity market performance in Brazil, Russia,
India and China.
See www.franklintempletondatasources.com for additional data provider information.
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Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs:
- Transaction costs, including sales charges (loads) on Fund purchases; and
- 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 following table 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 first line (Actual) for each share class listed in the table provides actual account values and expenses. The “Ending Account Value” is derived from the Fund’s actual return, which includes the effect of Fund expenses.
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:
1. Divide your account value by $1,000.
If an account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6.
2. Multiply the result by the number under the heading “Expenses Paid During Period.”
If Expenses Paid During Period were $7.50, then 8.6 × $7.50 = $64.50.
In this illustration, the estimated expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Information in the second line (Hypothetical) for each class in the table can help you compare ongoing costs of investing in the Fund with those of other mutual funds. This information may not be used to estimate the actual ending account balance or expenses you paid during the period. The hypothetical “Ending Account Value” is based on the actual expense ratio for each class and an assumed 5% annual rate of return before expenses, which does not represent the Fund’s actual return. The figure under the heading “Expenses Paid During Period” shows the hypothetical expenses your account would have incurred under this scenario. You can compare this figure with the 5% hypothetical examples that appear in shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transaction costs, such as sales charges. Therefore, the second line for each class is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transaction costs were included, your total costs would have been higher. Please refer to the Fund prospectus for additional information on operating expenses.
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YOUR FUND’S EXPENSES
| Beginning Account | Ending Account | Expenses Paid During | ||||
| Share Class | Value 10/1/15 | Value 3/31/16 | Period* 10/1/15–3/31/16 | |||
| A | ||||||
| Actual | $ | 1,000 | $ | 1,051.50 | $ | 10.15 |
| Hypothetical (5% return before expenses) | $ | 1,000 | $ | 1,015.10 | $ | 9.97 |
| C | ||||||
| Actual | $ | 1,000 | $ | 1,048.30 | $ | 13.93 |
| Hypothetical (5% return before expenses) | $ | 1,000 | $ | 1,011.40 | $ | 13.68 |
| Advisor | ||||||
| Actual | $ | 1,000 | $ | 1,052.60 | $ | 8.83 |
| Hypothetical (5% return before expenses) | $ | 1,000 | $ | 1,016.40 | $ | 8.67 |
*Expenses are calculated using the most recent six-month expense ratio, net of expense waivers, annualized for each class (A: 1.98%; C: 2.72%;
and Advisor: 1.72%), multiplied by the average account value over the period, multiplied by 183/366 to reflect the one-half year period.
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| Financial Highlights | |||||||||||||||
| Templeton BRIC Fund | |||||||||||||||
| Year Ended March 31, | |||||||||||||||
| 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||
| Class A | |||||||||||||||
| Per share operating performance | |||||||||||||||
| (for a share outstanding throughout the year) | |||||||||||||||
| Net asset value, beginning of year | $ | 9.78 | $ | 10.32 | $ | 11.28 | $ | 12.21 | $ | 15.44 | |||||
| Income from investment operationsa: | |||||||||||||||
| Net investment incomeb | 0.10 | 0.13 | 0.28 | 0.12 | 0.14 | ||||||||||
| Net realized and unrealized gains (losses) | (1.27 | ) | (0.53 | ) | (0.90 | ) | (0.99 | ) | (3.22 | ) | |||||
| Total from investment operations | (1.17 | ) | (0.40 | ) | (0.62 | ) | (0.87 | ) | (3.08 | ) | |||||
| Less distributions from net investment income | (0.22 | ) | (0.14 | ) | (0.34 | ) | (0.06 | ) | (0.15 | ) | |||||
| Net asset value, end of year | $ | 8.39 | $ | 9.78 | $ | 10.32 | $ | 11.28 | $ | 12.21 | |||||
| Total returnc | (12.06 | )% | (3.89 | )% | (5.69 | )% | (7.15 | )% | (19.93 | )% | |||||
| Ratios to average net assets | |||||||||||||||
| Expenses before waiver and payments by affiliates | 2.15 | % | 2.07 | % | 2.10 | % | 2.06 | % | 2.02 | % | |||||
| Expenses net of waiver and payments by affiliates | 1.99 | % | 2.00 | % | 2.00 | % | 2.06 | % | 2.02 | % | |||||
| Net investment income | 1.09 | % | 1.20 | % | 2.61 | % | 1.02 | % | 1.05 | % | |||||
| Supplemental data | |||||||||||||||
| Net assets, end of year (000’s) | $ | 93,606 | $ | 136,298 | $ | 182,772 | $ | 270,172 | $ | 398,712 | |||||
| Portfolio turnover rate | 39.59 | % | 30.87 | % | 19.88 | % | 29.92 | % | 18.48 | % | |||||
aThe 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.
bBased on average daily shares outstanding.
cTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable.
franklintempleton.com The accompanying notes are an integral part of these financial statements. | Annual Report 13
TEMPLETON GLOBAL INVESTMENT TRUST
CONSOLIDATED FINANCIAL STATEMENTS
| Templeton BRIC Fund (continued) | |||||||||||||||
| Year Ended March 31, | |||||||||||||||
| 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||
| Class C | |||||||||||||||
| Per share operating performance | |||||||||||||||
| (for a share outstanding throughout the year) | |||||||||||||||
| Net asset value, beginning of year | $ | 9.64 | $ | 10.16 | $ | 11.10 | $ | 12.04 | $ | 15.20 | |||||
| Income from investment operationsa: | |||||||||||||||
| Net investment incomeb | 0.03 | 0.06 | 0.20 | 0.03 | 0.05 | ||||||||||
| Net realized and unrealized gains (losses) | (1.26 | ) | (0.52 | ) | (0.89 | ) | (0.97 | ) | (3.16 | ) | |||||
| Total from investment operations | (1.23 | ) | (0.46 | ) | (0.69 | ) | (0.94 | ) | (3.11 | ) | |||||
| Less distributions from net investment income | (0.19 | ) | (0.06 | ) | (0.25 | ) | — | (0.05 | ) | ||||||
| Net asset value, end of year | $ | 8.22 | $ | 9.64 | $ | 10.16 | $ | 11.10 | $ | 12.04 | |||||
| Total returnc | (12.68 | )% | (4.57 | )% | (6.37 | )% | (7.81 | )% | (20.46 | )% | |||||
| Ratios to average net assets | |||||||||||||||
| Expenses before waiver and payments by affiliates | 2.88 | % | 2.79 | % | 2.82 | % | 2.77 | % | 2.72 | % | |||||
| Expenses net of waiver and payments by affiliates | 2.72 | % | 2.72 | % | 2.72 | % | 2.77 | % | 2.72 | % | |||||
| Net investment income | 0.36 | % | 0.48 | % | 1.89 | % | 0.31 | % | 0.35 | % | |||||
| Supplemental data | |||||||||||||||
| Net assets, end of year (000’s) | $ | 26,775 | $ | 41,594 | $ | 58,216 | $ | 89,887 | $ | 127,570 | |||||
| Portfolio turnover rate | 39.59 | % | 30.87 | % | 19.88 | % | 29.92 | % | 18.48 | % | |||||
aThe 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.
bBased on average daily shares outstanding.
cTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable.
14 Annual Report | The accompanying notes are an integral part of these consolidated financial statements. franklintempleton.com
TEMPLETON GLOBAL INVESTMENT TRUST
CONSOLIDATED FINANCIAL STATEMENTS
| Templeton BRIC Fund (continued) | |||||||||||||||
| Year Ended March 31, | |||||||||||||||
| 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||
| Advisor Class | |||||||||||||||
| Per share operating performance | |||||||||||||||
| (for a share outstanding throughout the year) | |||||||||||||||
| Net asset value, beginning of year | $ | 9.74 | $ | 10.28 | $ | 11.25 | $ | 12.18 | $ | 15.42 | |||||
| Income from investment operationsa: | |||||||||||||||
| Net investment incomeb | 0.12 | 0.16 | 0.30 | 0.15 | 0.15 | ||||||||||
| Net realized and unrealized gains (losses) | (1.28 | ) | (0.52 | ) | (0.90 | ) | (0.98 | ) | (3.19 | ) | |||||
| Total from investment operations | (1.16 | ) | (0.36 | ) | (0.60 | ) | (0.83 | ) | (3.04 | ) | |||||
| Less distributions from net investment income | (0.22 | ) | (0.18 | ) | (0.37 | ) | (0.10 | ) | (0.20 | ) | |||||
| Net asset value, end of year | $ | 8.36 | $ | 9.74 | $ | 10.28 | $ | 11.25 | $ | 12.18 | |||||
| Total return | (11.82 | )% | (3.55 | )% | (5.48 | )% | (6.86 | )% | (19.66 | )% | |||||
| Ratios to average net assets | |||||||||||||||
| Expenses before waiver and payments by affiliates | 1.88 | % | 1.79 | % | 1.82 | % | 1.77 | % | 1.72 | % | |||||
| Expenses net of waiver and payments by affiliates | 1.72 | % | 1.72 | % | 1.72 | % | 1.77 | % | 1.72 | % | |||||
| Net investment income | 1.36 | % | 1.48 | % | 2.89 | % | 1.31 | % | 1.35 | % | |||||
| Supplemental data | |||||||||||||||
| Net assets, end of year (000’s) | $ | 4,190 | $ | 6,838 | $ | 9,426 | $ | 13,549 | $ | 23,410 | |||||
| Portfolio turnover rate | 39.59 | % | 30.87 | % | 19.88 | % | 29.92 | % | 18.48 | % | |||||
aThe 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.
bBased on average daily shares outstanding.
franklintempleton.com The accompanying notes are an integral part of these consolidated financial statements. | Annual Report 15
TEMPLETON GLOBAL INVESTMENT TRUST
| Statement of Investments, March 31, 2016 | ||||
| Templeton BRIC Fund | ||||
| Industry | Shares | Value | ||
| Common Stocks 90.1% | ||||
| Brazil 6.3% | ||||
| AES Tiete Energia SA | Independent Power & Renewable | |||
| Electricity Producers | 313,000 | $ | 1,344,199 | |
| Ambev SA | Beverages | 374,430 | 1,957,491 | |
| BM&F BOVESPA SA | Diversified Financial Services | 497,300 | 2,124,635 | |
| BRF SA | Food Products | 91,200 | 1,299,890 | |
| M Dias Branco SA | Food Products | 12,300 | 230,187 | |
| Mahle-Metal Leve SA Industria e Comercio | Auto Components | 2,000 | 13,089 | |
| Totvs SA | Software | 113,800 | 859,846 | |
| 7,829,337 | ||||
| China 44.3% | ||||
| a Alibaba Group Holding Ltd., ADR | Internet Software & Services | 46,740 | 3,693,862 | |
| a Baidu Inc., ADR | Internet Software & Services | 17,940 | 3,424,387 | |
| Beijing Capital Land Ltd., H | Real Estate Management & Development | 2,939,800 | 1,224,072 | |
| Brilliance China Automotive Holdings Ltd | Automobiles | 770,000 | 797,063 | |
| China Construction Bank Corp., H | Banks | 2,048,000 | 1,309,478 | |
| China Life Insurance Co. Ltd., H | Insurance | 1,096,000 | 2,704,202 | |
| China Medical System Holdings Ltd | Pharmaceuticals | 1,554,400 | 2,156,064 | |
| China Mobile Ltd | Wireless Telecommunication Services | 681,859 | 7,594,426 | |
| China Petroleum and Chemical Corp., H | Oil, Gas & Consumable Fuels | 5,854,392 | 3,848,917 | |
| China Telecom Corp. Ltd., H | Diversified Telecommunication Services | 4,318,000 | 2,282,197 | |
| a Chinasoft International Ltd | IT Services | 7,178,000 | 2,646,404 | |
| CPMC Holdings Ltd | Containers & Packaging | 4,331,300 | 2,138,472 | |
| a JD.com Inc., ADR | Internet & Catalog Retail | 152,081 | 4,030,147 | |
| Leju Holdings Ltd., ADR | Internet Software & Services | 123,741 | 644,691 | |
| PetroChina Co. Ltd., H | Oil, Gas & Consumable Fuels | 998,000 | 663,845 | |
| Ping An Insurance (Group) Co. of China Ltd | Insurance | 425,000 | 2,035,328 | |
| Shanghai Pharmaceuticals Holding Co. Ltd., H | Health Care Providers & Services | 381,200 | 756,764 | |
| a SouFun Holdings Ltd., ADR | Internet Software & Services | 106,986 | 640,846 | |
| Tencent Holdings Ltd | Internet Software & Services | 526,795 | 10,763,599 | |
| TravelSky Technology Ltd., H | IT Services | 1,092,700 | 1,794,556 | |
| 55,149,320 | ||||
| Hong Kong 1.1% | ||||
| Luk Fook Holdings (International) Ltd | Specialty Retail | 604,184 | 1,372,340 | |
| India 24.5% | ||||
| Apollo Tyres Ltd | Auto Components | 673,735 | 1,778,526 | |
| Bajaj Holdings and Investment Ltd | Diversified Financial Services | 181,042 | 4,012,681 | |
| Biocon Ltd | Biotechnology | 358,724 | 2,616,999 | |
| Cairn India Ltd | Oil, Gas & Consumable Fuels | 896,312 | 2,081,316 | |
| Dr. Reddy’s Laboratories Ltd | Pharmaceuticals | 75,863 | 3,475,351 | |
| Grasim Industries Ltd | Construction Materials | 14,235 | 825,922 | |
| ICICI Bank Ltd | Banks | 438,660 | 1,566,808 | |
| Infosys Ltd | IT Services | 141,199 | 2,596,374 | |
| Maharashtra Seamless Ltd | Metals & Mining | 725,197 | 1,573,422 | |
| Mindtree Ltd | IT Services | 169,314 | 1,669,374 | |
| Oil & Natural Gas Corp. Ltd | Oil, Gas & Consumable Fuels | 605,700 | 1,957,292 | |
| Reliance Industries Ltd | Oil, Gas & Consumable Fuels | 276,584 | 4,363,227 | |
| Tata Consultancy Services Ltd | IT Services | 42,320 | 1,609,827 | |
| a Tata Motors Ltd., A | Automobiles | 74,531 | 324,368 | |
| 30,451,487 | ||||
16 Annual Report | The accompanying notes are an integral part of these financial statements. franklintempleton.com
TEMPLETON GLOBAL INVESTMENT TRUST
STATEMENT O F INVESTMENTS
| Templeton BRIC Fund (continued) | |||||
| Industry | Shares | Value | |||
| Common Stocks (continued) | |||||
| Russia 5.5% | |||||
| Gazprom PAO, ADR | Oil, Gas & Consumable Fuels | 582,446 | $ | 2,512,090 | |
| LUKOIL PJSC, ADR | Oil, Gas & Consumable Fuels | 73,700 | 2,831,185 | ||
| LUKOIL PJSC, ADR (London Stock Exchange) | Oil, Gas & Consumable Fuels | 6,250 | 240,094 | ||
| a,b Mail.ru Group Ltd., GDR, Reg S | Internet Software & Services | 22,153 | 480,720 | ||
| MMC Norilsk Nickel PJSC, ADR | Metals & Mining | 64,100 | 827,531 | ||
| 6,891,620 | |||||
| South Africa 4.4% | |||||
| Naspers Ltd., N | Media | 39,617 | 5,530,650 | ||
| Taiwan 4.0% | |||||
| Hon Hai Precision Industry Co. Ltd | Electronic Equipment, Instruments & Components | 541,300 | 1,425,181 | ||
| Merida Industry Co. Ltd | Leisure Products | 100,000 | 442,437 | ||
| Pacific Hospital Supply Co. Ltd | Health Care Equipment & Supplies | 210,500 | 532,001 | ||
| PChome Online Inc | Internet Software & Services | 49,000 | 539,322 | ||
| Taiwan Semiconductor Manufacturing Co. Ltd | Semiconductors & Semiconductor Equipment | 405,000 | 2,037,072 | ||
| 4,976,013 | |||||
| Total Common Stocks | |||||
| (Cost $108,029,820) | 112,200,767 | ||||
| Preferred Stocks 8.0% | |||||
| Brazil 8.0% | |||||
| Banco Bradesco SA, ADR, pfd | Banks | 552,599 | 4,116,863 | ||
| Itau Unibanco Holding SA, ADR, pfd | Banks | 335,772 | 2,884,281 | ||
| Itausa – Investimentos Itau SA, pfd | Banks | 832,839 | 1,890,134 | ||
| a Petroleo Brasileiro SA, ADR, pfd | Oil, Gas & Consumable Fuels | 241,500 | 1,093,995 | ||
| Total Preferred Stocks | |||||
| (Cost $12,929,854) | 9,985,273 | ||||
| Total Investments before Short Term | |||||
| Investments | |||||
| (Cost $120,959,674) | 122,186,040 | ||||
| Short Term Investments | |||||
| (Cost $2,805,832) 2.3% | |||||
| Money Market Funds 2.3% | |||||
| United States 2.3% | |||||
| a,c Institutional Fiduciary Trust Money | |||||
| Market Portfolio | 2,805,832 | 2,805,832 | |||
| Total Investments | |||||
| (Cost $123,765,506) 100.4% | 124,991,872 | ||||
| Other Assets, less Liabilities (0.4)% | (421,433 | ) | |||
| Net Assets 100.0% | $ | 124,570,439 | |||
See Abbreviations on page 29.
aNon-income producing.
bSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States.
Such a security 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. This security has been deemed liquid under guidelines approved by the Trust’s Board of Trustees. At March 31, 2016, the value of this security was
$480,720, representing 0.39% of net assets.
cSee Note 3(f) regarding investments in affiliated management investment companies.
franklintempleton.com
The accompanying notes are an integral part of these financial statements. | Annual Report 17
TEMPLETON GLOBAL INVESTMENT TRUST
Financial Statements
Statement of Assets and Liabilities
March 31, 2016
| Templeton BRIC Fund | |||
| Assets: | |||
| Investments in securities: | |||
| Cost - Unaffiliated issuers | $ | 120,959,674 | |
| Cost - Non-controlled affiliates (Note 3f) | 2,805,832 | ||
| Total cost of investments | $ | 123,765,506 | |
| Value - Unaffiliated issuers | $ | 122,186,040 | |
| Value - Non-controlled affiliates (Note 3f) | 2,805,832 | ||
| Total value of investments | 124,991,872 | ||
| Receivables: | |||
| Capital shares sold | 42,840 | ||
| Dividends | 10,462 | ||
| Foreign tax | 98,272 | ||
| Other assets | 77 | ||
| Total assets | 125,143,523 | ||
| Liabilities: | |||
| Payables: | |||
| Capital shares redeemed | 227,415 | ||
| Management fees | 133,338 | ||
| Distribution fees | 75,137 | ||
| Transfer agent fees | 84,915 | ||
| Professional fees | 49,243 | ||
| Accrued expenses and other liabilities | 3,036 | ||
| Total liabilities | 573,084 | ||
| Net assets, at value | $ | 124,570,439 | |
| Net assets consist of: | |||
| Paid-in capital | $ | 437,736,871 | |
| Distributions in excess of net investment income | 780,506 | ||
| Net unrealized appreciation (depreciation) | 1,170,363 | ||
| Accumulated net realized gain (loss) | (315,117,301 | ) | |
| Net assets, at value | $ | 124,570,439 | |
18 Annual Report | The accompanying notes are an integral part of these financial statements.
franklintempleton.com
TEMPLETON BRIC FUND
FINANCIAL STATEMENTS
Statement of Assets and Liabilities (continued)
March 31, 2016
| Templeton BRIC Fund | ||
| Class A: | ||
| Net assets, at value | $ | 93,606,025 |
| Shares outstanding | 11,160,955 | |
| Net asset value per sharea | $ | 8.39 |
| Maximum offering price per share (net asset value per share ÷ 94.25%) | $ | 8.90 |
| Class C: | ||
| Net assets, at value | $ | 26,774,732 |
| Shares outstanding | 3,256,238 | |
| Net asset value and maximum offering price per sharea | $ | 8.22 |
| Advisor Class: | ||
| Net assets, at value | $ | 4,189,682 |
| Shares outstanding | 500,799 | |
| Net asset value and maximum offering price per share | $ | 8.36 |
a Redemption price is equal to net asset value less contingent deferred sales charges, if applicable.
franklintempleton.com The accompanying notes are an integral part of these consolidated financial statements. | Annual Report 19
TEMPLETON GLOBAL INVESTMENT TRUST
FINANCIAL STATEMENTS
| Statement of Operations | |||
| for the year ended March 31, 2016 | |||
| Templeton BRIC Fund | |||
| Investment income: | |||
| Dividends (net of foreign taxes of $555,698) | $ | 4,773,834 | |
| Expenses: | |||
| Management fees (Note 3a) | 2,015,294 | ||
| Distribution fees: (Note 3c) | |||
| Class A | 312,313 | ||
| Class C | 341,426 | ||
| Transfer agent fees: (Note 3e) | |||
| Class A | 483,900 | ||
| Class C | 143,688 | ||
| Advisor Class | 25,538 | ||
| Custodian fees (Note 4) | 35,901 | ||
| Reports to shareholders | 37,619 | ||
| Registration and filing fees | 52,212 | ||
| Professional fees | 73,219 | ||
| Trustees’ fees and expenses | 7,141 | ||
| Other | 58,648 | ||
| Total expenses | 3,586,899 | ||
| Expenses waived/paid by affiliates (Note 3f and 3g) | (269,472 | ) | |
| Net expenses | 3,317,427 | ||
| Net investment income | 1,456,407 | ||
| Realized and unrealized gains (losses): | |||
| Net realized gain (loss) from: | |||
| Investments | (17,605,497 | ) | |
| Foreign currency transactions | (71,818 | ) | |
| Net realized gain (loss) | (17,677,315 | ) | |
| Net change in unrealized appreciation (depreciation) on: | |||
| Investments | (5,040,888 | ) | |
| Translation of other assets and liabilities denominated in foreign currencies | 464 | ||
| Net change in unrealized appreciation (depreciation) | (5,040,424 | ) | |
| Net realized and unrealized gain (loss) | (22,717,739 | ) | |
| Net increase (decrease) in net assets resulting from operations | $ | (21,261,332 | ) |
20 Annual Report | The accompanying notes are an integral part of these financial statements. franklintempleton.com
TEMPLETON GLOBAL INVESTMENT TRUST
FINANCIAL STATEMENTS
| Statements of Changes in Net Assets | ||||||
| Templeton BRIC Fund | ||||||
| Year Ended March 31, | ||||||
| 2016 | 2015 | |||||
| Increase (decrease) in net assets: | ||||||
| Operations: | ||||||
| Net investment income | $ | 1,456,407 | $ | 2,405,122 | ||
| Net realized gain (loss) | (17,677,315 | ) | 8,342,204 | |||
| Net change in unrealized appreciation (depreciation) | (5,040,424 | ) | (17,156,611 | ) | ||
| Net increase (decrease) in net assets resulting from operations | (21,261,332 | ) | (6,409,285 | ) | ||
| Distributions to shareholders from: | ||||||
| Net investment income: | ||||||
| Class A | (2,629,172 | ) | (2,092,490 | ) | ||
| Class C | (688,263 | ) | (270,191 | ) | ||
| Advisor Class | (129,412 | ) | (138,571 | ) | ||
| Total distributions to shareholders | (3,446,847 | ) | (2,501,252 | ) | ||
| Capital share transactions: (Note 2) | ||||||
| Class A | (24,582,849 | ) | (39,817,856 | ) | ||
| Class C | (9,218,932 | ) | (14,770,395 | ) | ||
| Advisor Class | (1,649,391 | ) | (2,184,847 | ) | ||
| Total capital share transactions | (35,451,172 | ) | (56,773,098 | ) | ||
| Net increase (decrease) in net assets | (60,159,351 | ) | (65,683,635 | ) | ||
| Net assets: | ||||||
| Beginning of year | 184,729,790 | 250,413,425 | ||||
| End of year | $ | 124,570,439 | $ | 184,729,790 | ||
| Undistributed net investment income included in net assets: | ||||||
| End of year | $ | 780,506 | $ | 313,876 | ||
franklintempleton.com The accompanying notes are an integral part of these financial statements. | Annual Report 21
TEMPLETON GLOBAL INVESTMENT TRUST
Notes to Financial Statements
Templeton BRIC Fund
1. Organization and Significant Accounting Policies
Templeton Global Investment Trust (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company, consisting of six separate funds and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP). Templeton BRIC Fund (Fund) is included in this report. The financial statements of the remaining funds in the Trust are presented separately. The Fund offers three classes of shares: Class A, Class C, and Advisor Class. Each class of shares differs by its initial sales load, contingent deferred sales charges, voting rights on matters affecting a single class, its exchange privilege and fees primarily 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 as of 4 p.m. Eastern time each day the New York Stock Exchange (NYSE) is open for trading. 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 and Liquidity Oversight Committee (VLOC). The VLOC provides administration and oversight of the Fund’s valuation policies and procedures, which are approved annually by the Board. Among other things, these procedures allow the Fund to 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 whichever is earlier. The value is then converted into its U.S. dollar equivalent at the foreign exchange rate in effect at 4 p.m. Eastern time on the day that the value of the security is determined. Over-the-counter (OTC) securities are valued within the range of the most recent quoted bid and ask prices. Securities that trade in multiple markets or on multiple exchanges are valued according to the broadest and most representative market. Certain equity securities are valued based upon fundamental characteristics or relationships to similar securities.
Investments in open-end mutual funds are valued at the closing NAV.
The Fund has procedures to determine the fair value of financial instruments for which market prices are not reliable or readily available. Under these procedures, the VLOC convenes on a regular basis to review such financial instruments and considers a number of factors, including significant unobservable valuation inputs, when arriving at fair value. The VLOC primarily employs a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. The VLOC employs various methods for calibrating these valuation approaches including a regular review of key inputs and assumptions, transactional back-testing or disposition analysis, and reviews of any related market activity.
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 NYSE business day. Occasionally, events occur between the time at which trading in a foreign security is completed and the close of the NYSE 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 the close of the NYSE. In order to minimize the potential for these differences, the VLOC monitors price movements following the close of trading in foreign stock markets through a series of country specific market proxies (such as baskets of American Depositary Receipts, futures contracts and exchange traded funds). These price movements are measured against established trigger
22 Annual Report
franklintempleton.com
TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
Templeton BRIC Fund (continued)
thresholds for each specific market proxy to assist in determining if an event has occurred that may call into question the reliability of the values of the foreign securities held by the Fund. If such an event occurs, the securities may be valued using fair value procedures, which may include the use of independent pricing services.
When the last day of the reporting period is a non-business day, certain foreign markets may be open on those days that the NYSE is closed, 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 significant security valuation changes due to an open foreign market are adjusted and reflected by the Fund for financial reporting purposes.
b. Foreign Currency Translation
Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the exchange rate of such currencies against U.S. dollars on the date of valuation. The Fund may enter into foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of securities, income and expense items denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date. Portfolio securities and assets and liabilities denominated in foreign currencies contain risks that those currencies will decline in value relative to the U.S. dollar. Occasionally, events may impact the availability or reliability of foreign exchange rates used to convert the U.S. dollar equivalent value. If such an event occurs, the foreign exchange rate will be valued at fair value using procedures established and approved by the Board.
The Fund does not separately report the effect of changes in foreign exchange rates from changes in market prices on securities held. Such changes are included in net realized and unrealized gain or loss from investments in the Statement of Operations.
Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions and the difference between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in foreign exchange rates on foreign denominated assets and liabilities
other than investments in securities held at the end of the reporting period.
c. Income and Deferred Taxes
It is the Fund’s policy to qualify as a regulated investment company under the Internal Revenue Code. The Fund intends to distribute to shareholders substantially all of its taxable income and net realized gains to relieve it from federal income and excise taxes. As a result, no provision for U.S. federal income taxes is required.
The Fund may be subject to foreign taxation related to income received, capital gains on the sale of securities and certain foreign currency transactions in the foreign jurisdictions in which it invests. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests. When a capital gain tax is determined to apply, the Fund records an estimated deferred tax liability in an amount that would be payable if the securities were disposed of on the valuation date.
The Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain tax position has a less than 50% probability that it will be sustained upon examination by the tax authorities based on its technical merits. As of March 31, 2016, 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 on future tax returns). Open tax years are those that remain subject to examination and are based on each tax jurisdiction’s statute of limitation.
d. Security Transactions, Investment Income, Expenses and Distributions
Security transactions are accounted for on trade date. Realized gains and losses on security transactions are determined on a specific identification basis. Estimated expenses are accrued daily. Dividend income recorded on the ex-dividend date except for certain dividends from foreign 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 and are determined according to income tax regulations (tax basis). Distributable earnings determined on a tax basis 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
franklintempleton.com
Annual Report
23
TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
Templeton BRIC Fund (continued)
1. Organization and Significant Accounting
Policies (continued)
d. Security Transactions, Investment Income, Expenses and Distributions (continued)
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. Fund specific expenses are charged directly to the fund that incurred the expense.
Realized and unrealized gains and losses and net investment income, not including class specific expenses, are allocated daily to each class of shares based upon the relative proportion of net assets of each class. Differences in per share distributions, by class, are generally due to differences in class specific expenses.
e. Accounting Estimates
The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
f. Guarantees and Indemnifications
Under the Trust’s organizational documents, its officers and trustees are indemnified by the Trust against certain liabilities arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust, on behalf of the Fund, enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred. Currently, the Trust expects the risk of loss to be remote.
2. Shares of Beneficial Interest
At March 31, 2016, there were an unlimited number of shares authorized ($0.01 par value). Transactions in the Fund’s shares were as follows:
| Year Ended March 31, | ||||||||||||
| 2016 | 2015 | |||||||||||
| Shares | Amount | Shares | Amount | |||||||||
| Class A Shares: | ||||||||||||
| Shares sold | 1,283,875 | $ | 11,523,371 | 1,663,035 | $ | 17,836,239 | ||||||
| Shares issued in reinvestment of distributions | 314,193 | 2,582,670 | 205,575 | 2,039,325 | ||||||||
| Shares redeemed | (4,376,947 | ) | (38,688,890 | ) | (5,644,625 | ) | (59,693,420 | ) | ||||
| Net increase (decrease) | (2,778,879 | ) | $ | (24,582,849 | ) | (3,776,015 | ) | $ | (39,817,856 | ) | ||
| Class C Shares: | ||||||||||||
| Shares sold | 203,870 | $ | 1,849,344 | 310,908 | $ | 3,239,852 | ||||||
| Shares issued in reinvestment of distributions | 78,853 | 636,347 | 25,130 | 246,273 | ||||||||
| Shares redeemed | (1,342,706 | ) | (11,704,623 | ) | (1,750,888 | ) | (18,256,520 | ) | ||||
| Net increase (decrease) | (1,059,983 | ) | $ | (9,218,932 | ) | (1,414,850 | ) | $ | (14,770,395 | ) | ||
| Advisor Class Shares: | ||||||||||||
| Shares sold | 405,125 | $ | 3,984,701 | 221,366 | $ | 2,420,582 | ||||||
| Shares issued in reinvestment of distributions | 13,327 | 109,150 | 11,621 | 114,703 | ||||||||
| Shares redeemed | (619,939 | ) | (5,743,242 | ) | (447,287 | ) | (4,720,132 | ) | ||||
| Net increase (decrease) | (201,487 | ) | $ | (1,649,391 | ) | (214,300 | ) | $ | (2,184,847 | ) | ||
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TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
Templeton BRIC Fund (continued)
3. Transactions with Affiliates
Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton Investments. Certain officers and trustees of the Trust are also officers and/or directors of the following subsidiaries:
| Subsidiary | Affiliation |
| Templeton Asset Management Ltd. (TAML) | Investment manager |
| Franklin Templeton Services, LLC (FT Services) | Administrative manager |
| Franklin Templeton Distributors, Inc. (Distributors) | Principal underwriter |
| Franklin Templeton Investor Services, LLC (Investor Services) | Transfer agent |
| a. Management Fees | ||
| The Fund pays an investment management fee to TAML based on the average daily net assets of the Fund as follows: | ||
| Annualized Fee Rate | Net Assets | |
| 1.300 | % | Up to and including $1 billion |
| 1.250 | % | Over $1 billion, up to and including $5 billion |
| 1.200 | % | Over $5 billion, up to and including $10 billion |
| 1.150 | % | Over $10 billion, up to and including $15 billion |
| 1.100 | % | Over $15 billion, up to and including $20 billion |
| 1.050 | % | In excess of $20 billion |
For the year ended March 31, 2016, the annualized effective management fee rate was 1.300% of the Fund’s average daily net assets.
b. Administrative Fees
Under an agreement with TAML, FT Services provides administrative services to the Fund. The fee is paid by TAML based on 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 Advisor Class shares, pursuant to Rule 12b-1 under the 1940 Act. Under the Fund’s Class A reimbursement distribution plan, the Fund reimburses Distributors for costs incurred in connection with the servicing, sale and distribution of the Fund’s shares up to the maximum annual plan rate. Under the Class A reimbursement distribution plan, costs exceeding the maximum for the current plan year cannot be reimbursed in subsequent periods. In addition, under the Fund’s Class C compensation distribution plan, the Fund pays Distributors for costs incurred in connection with the servicing, sale and distribution of the Fund’s shares up to the maximum annual plan rate. The plan year, for purposes of monitoring compliance with the maximum annual plan rates, is February 1 through January 31.
| The maximum annual plan rates, based on the average daily net assets, for each class, are as follows: | |
| Class A | 0.35% |
| Class C | 1.00% |
Effective August 1, 2015, the Board has set the current rate at 0.25% per year for Class A shares until further notice and approval by the Board. Prior to August 1, 2015, the Board had set the rate at 0.30% per year for Class A shares.
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
franklintempleton.com Annual Report 25
TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
Templeton BRIC Fund (continued)
3. Transactions with Affiliates (continued)
d. Sales Charges/Underwriting Agreements (continued)
applicable. Distributors has advised the Fund of the following commission transactions related to the sales and redemptions of the Fund’s shares for the year:
| Sales charges retained net of commissions paid to unaffiliated broker/dealers | $ | 22,558 |
| CDSC retained | $ | 2,388 |
e. Transfer Agent Fees
Each class of shares pays transfer agent fees to Investor Services for its performance of shareholder servicing obligations and reimburses Investor Services for out of pocket expenses incurred, including shareholder servicing fees paid to third parties. These fees are allocated daily based upon their relative proportion of such classes’ aggregate net assets.
For the year ended March 31, 2016, the Fund paid transfer agent fees of $653,126, of which $325,401 was retained by Investor Services.
f. Investments in Affiliated Management Investment Companies
The Fund invests in an affiliated management investment company for purposes other than 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 company, 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. Prior to April 1, 2013, the waiver was accounted for as a reduction to management fees.
| Number of | Number of | % of Affiliated Fund | |||||||||
| Shares Held | Shares Held | Value | Shares Outstanding | ||||||||
| at Beginning | Gross | Gross | at End | at End | Investment | Realized | Held at End | ||||
| of Year | Additions | Reductions | of Year | of Year | Income | Gain (Loss) | of Year | ||||
| Non-Controlled Affiliates | |||||||||||
| Institutional Fiduciary Trust | |||||||||||
| Money Market Portfolio | 5,897,606 | 57,483,805 | (60,575,579 | ) | 2,805,832 | $ | 2,805,832 | $ — | $ — | 0.01 | % |
g. Waiver and Expense Reimbursements
TAML has contractually agreed in advance to waive or limit its fees and to assume as its own expense certain expenses otherwise payable by the Fund so that the expenses (excluding distribution fees, and acquired fund fees and expenses) for each class of the Fund do not exceed 1.72% based on the average net assets of each class (other than certain non-routine expenses or costs, including those relating to litigation, indemnification, reorganizations, and liquidations) until July 31, 2016.
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 year ended March 31, 2016, there were no credits earned.
5. Income Taxes
For tax purposes, capital losses may be carried over to offset future capital gains. Capital loss carryforwards with no expiration, if any, must be fully utilized before those losses with expiration dates.
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TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
| Templeton BRIC Fund (continued) | ||
| At March 31, 2016, capital loss carryforwards were as follows: | ||
| Capital loss carryforwards subject to expiration: | ||
| 2017 | $ | 85,086,528 |
| 2018 | 170,308,709 | |
| 2019 | 12,538,988 | |
| Capital loss carryforwards not subject to expiration: | ||
| Short term | 7,797,048 | |
| Long term | 38,569,115 | |
| Total capital loss carryforwards | $ | 314,300,388 |
The tax character of distributions paid during the years ended March 31, 2016 and 2015, was as follows:
| 2016 | 2015 | |||
| Distributions paid from Ordinary Income: | $ | 3,446,847 | $ | 2,501,252 |
At March 31, 2016, the cost of investments, net unrealized appreciation (depreciation) and undistributed ordinary income for income tax purposes were as follows:
| Cost of investments | $ | 125,903,213 | |
| Unrealized appreciation | $ | 18,877,222 | |
| Unrealized depreciation | (19,788,563 | ) | |
| Net unrealized appreciation (depreciation) | $ | (911,341 | ) |
| Distributable earnings – undistributed ordinary income | $ | 2,101,296 |
Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatments of corporate actions.
6. Investment Transactions
Purchases and sales of investments (excluding short term securities) for the year ended March 31, 2016, aggregated $57,622,803 and $92,500,599, respectively.
7. Concentration of Risk
Investing in foreign securities may include certain risks and considerations not typically associated with investing in U.S. securities, such as fluctuating currency values and changing local and regional economic, political and social conditions, which may result in greater market volatility. In addition, certain foreign securities may not be as liquid as U.S. securities.
The United States and other nations have imposed and could impose additional sanctions on certain issuers in Russia due to regional conflicts. These sanctions could result in the devaluation of Russia’s currency, a downgrade in Russian issuers’ credit ratings, or a decline in the value and liquidity of Russian stocks or other securities. Such sanctions could also adversely affect Russia’s economy, possibly forcing the economy into a recession. The Fund may be prohibited from investing in securities issued by companies subject to such sanctions. In addition, if the Fund holds the securities of an issuer that is subject to such sanctions, an immediate freeze of that issuer’s securities could result, impairing the ability of the Fund to buy, sell, receive or deliver those securities. There is also the risk that countermeasures could be taken by Russia’s government, which could involve the seizure of the Fund’s assets. These risks could affect the value of the Fund’s portfolio. While the Fund holds securities of certain companies recently impacted by the sanctions, the restrictions do not impact the existing investments in those issuers. At March 31, 2016 the Fund had 5.5% of its net assets invested in Russia.
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TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
Templeton BRIC Fund (continued)
8. Credit Facility
The Fund, together with other U.S. registered and foreign investment funds (collectively, Borrowers), managed by Franklin Temple-ton Investments, are borrowers in a joint syndicated senior unsecured credit facility totaling $2 billion (Global Credit Facility) which matures on February 10, 2017. 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 0.07% based upon the unused portion of the Global Credit Facility. Effective February 12, 2016, the annual commitment fee is 0.15%. These fees are reflected in other expenses in the Statement of Operations. During the year ended March 31, 2016, the Fund did not use the Global Credit Facility.
9. Fair Value Measurements
The Fund follows a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Fund’s own market assumptions (unobservable inputs). These inputs are used in determining the value of the Fund’s financial instruments and are summarized in the following fair value hierarchy:
- Level 1 – quoted prices in active markets for identical financial instruments
- Level 2 – other significant observable inputs (including quoted prices for similar financial instruments, interest rates, prepay- ment 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.
For movements between the levels within the fair value hierarchy, the Fund has adopted a policy of recognizing the transfers as of the date of the underlying event which caused the movement.
A summary of inputs used as of March 31, 2016, in valuing the Fund’s assets carried at fair value, is as follows:
| Level 1 | Level 2 | Level 3 | Total | |||||
| Assets: | ||||||||
| Investments in Securities: | ||||||||
| Equity Investments:a | ||||||||
| Russia | $ | 720,814 | $ | 6,170,806 | $ | — | $ | 6,891,620 |
| All Other Equity Investmentsb | 115,294,420 | — | — | 115,294,420 | ||||
| Short Term Investments | 2,805,832 | — | — | 2,805,832 | ||||
| Total Investments in Securities | $ | 118,821,066 | $ | 6,170,806 | $ | — | $ | 124,991,872 |
| aIncludes common and preferred stocks. | ||||||||
| bFor detailed categories, see the accompanying Statement of Investments. | ||||||||
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TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
Templeton BRIC Fund (continued)
10. 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 except for the following:
On May 13, 2016, Templeton Developing Markets Trust (Acquiring Fund), pursuant to an agreement and Plan of Reorganization approved on April 12, 2016 by shareholders of the Fund, acquired 100% of the Fund’s net assets, primarily made up of investment securities, through a tax-free exchange of shares of the Acquiring Fund for the net assets of the Fund. Capital losses obtained by the Acquiring Fund, may be carried over to offset future capital gains subject to limitations.
| Abbreviations | |
| Selected Portfolio | |
| ADR | American Depositary Receipt |
| GDR | Global Depositary Receipt |
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TEMPLETON GLOBAL INVESTMENT TRUST
Report of Independent Registered Public Accounting Firm
To the Board of Trustees and Shareholders of Templeton BRIC Fund
In our opinion, the accompanying statement of assets and liabilities, including the statement of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Templeton BRIC Fund (the “Fund”) at March 31, 2016, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at March 31, 2016 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
May 17, 2016
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TEMPLETON GLOBAL INVESTMENT TRUST
Tax Information (unaudited)
Templeton BRIC Fund
Under Section 854(b)(1)(B) of the Internal Revenue Code (Code), the Fund hereby reports the maximum amount allowable but no less than $1,165,793 as qualified dividends for purposes of the maximum rate under Section 1(h)(11) of the Code for the fiscal year ended March 31, 2016. Distributions, including qualified dividend income, paid during calendar year 2016 will be reported to shareholders on Form 1099-DIV by mid-February 2017. Shareholders are advised to check with their tax advisors for information on the treatment of these amounts on their individual income tax returns.
At March 31, 2015, more than 50% of the Fund’s total assets were invested in securities of foreign issuers. In most instances, foreign taxes were withheld from income paid to the Fund on these investments. As shown in the table below, the Fund hereby reports to shareholders the foreign source income and foreign taxes paid, pursuant to Section 853 of the Code. This written statement will allow shareholders of record on December 9, 2015 to treat their proportionate share of foreign taxes paid by the Fund as having been paid directly by them. The shareholder shall consider these amounts as foreign taxes paid in the tax year in which they receive the Fund distribution.
The following table provides a detailed analysis of foreign tax paid, foreign source income, and foreign source qualified dividends as reported by the Fund, to Class A, Class C, and Advisor Class shareholders of record.
| Foreign Tax Paid | Foreign Source Income | Foreign Source Qualified | ||||
| Class | Per Share | Per Share | Dividends Per Share | |||
| Class A | $ | 0.0298 | $ | 0.3408 | $ | 0.1666 |
| Class C | $ | 0.0298 | $ | 0.2315 | $ | 0.1132 |
| Advisor Class | $ | 0.0298 | $ | 0.3754 | $ | 0.1835 |
Foreign Tax Paid Per Share (Column 1) is the amount per share available to you, as a tax credit (assuming you held your shares in the Fund for a minimum of 16 days during the 31-day period beginning 15 days before the ex-dividend date of the Fund’s distribution to which the foreign taxes relate), or, as a tax deduction.
Foreign Source Income Per Share (Column 2) is the amount per share of income dividends attributable to foreign securities held by the Fund, plus any foreign taxes withheld on these dividends. The amounts reported include foreign source qualified dividends that have not been adjusted for the rate differential applicable to such dividend income.1
Foreign Source Qualified Dividends Per Share (Column 3) is the amount per share of foreign source qualified dividends, plus any foreign taxes withheld on these dividends. These amounts represent the portion of the Foreign Source Income reported to you in column 2 that were derived from qualified foreign securities held by the Fund.1
By mid-February 2016, shareholders received Form 1099-DIV which included their share of taxes paid and foreign source income distributed during the calendar year 2015. The Foreign Source Income reported on Form 1099-DIV has not been adjusted for the rate differential on foreign source qualified dividend income. Shareholders are advised to check with their tax advisors for information on the treatment of these amounts on their 2015 individual income tax returns.
1Qualified dividends are taxed at reduced long term capital gains tax rates. In determining the amount of foreign tax credit that may be applied against the U.S. tax liability of individuals receiving foreign source qualified dividends, adjustments may be required to the foreign tax credit limitation calculation to reflect the rate differential applicable to such dividend income. The rules however permit certain individuals to elect not to apply the rate differential adjustments for capital gains and/or dividends for any taxable year. Please consult your tax advisor and the instructions to Form 1116 for more information.
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TEMPLETON GLOBAL INVESTMENT TRUST
TEMPLETON BRIC FUND
Meeting of Shareholders
Special Meeting of Shareholders, April 12, 2016
A Special Meeting of Shareholders (the “Meeting”) of Templeton BRIC Fund, a series of Templeton Global Investment Trust, was held at the offices of Franklin Templeton Investments, 300 S.E. 2nd Street, Fort Lauderdale, Florida, on April 12, 2016. The purpose of the meeting was to approve an Agreement and Plan of Reorganization between Templeton Global Investment Trust, on behalf of its series, Templeton BRIC Fund, and Templeton Developing Markets Trust, that provides for: (i) the acquisition of substantially all of the assets of Templeton BRIC Fund by Templeton Developing Markets Trust in exchange solely for shares of Templeton Developing Markets Trust, (ii) the distribution of such shares to the shareholders of Templeton BRIC Fund, and (iii) the complete liquidation and dissolution of Templeton BRIC Fund. At the Meeting, shareholders approved the Agreement and Plan of Reorganization. No other business was transacted at the Meeting with respect to the fund.
The results of the voting at the Meeting are as follows:
Proposal: To approve an Agreement and Plan of Reorganization between Templeton Global Investment Trust, on behalf of its series, Templeton BRIC Fund, and Templeton Developing Markets Trust.
| % of | % of | ||||
| Number | Outstanding | Shares | |||
| of Shares | Shares | Present | |||
| Affirmative | 6,393,952.3330 | 39.078 | % | 75.503 | % |
| Against | 220,964.8430 | 1.350 | % | 2.609 | % |
| Abstain | 288,977.7540 | 1.766 | % | 3.412 | % |
| Broker Non-Vote | 1,564,633.0960 | 9.562 | % | 18.476 | % |
| Total | 8,468,528.0260 | 51.756 | % | 100.000 | % |
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TEMPLETON GLOBAL INVESTMENT TRUST
| Board Members and Officers | |||||
| The name, year of birth and address of the officers and board members, as well as their affiliations, positions held with the | |||||
| Trust, principal occupations during at least the past five years and number of U.S. registered portfolios overseen in the Franklin | |||||
| Templeton Investments fund complex, are shown below. Generally, each board member serves until that person’s successor is | |||||
| elected and qualified. | |||||
| Independent Board Members | |||||
| Number of Portfolios in | |||||
| Name, Year of Birth | Length of | Fund Complex Overseen | Other Directorships Held During | ||
| and Address | Position | Time Served | by Board Member* | at Least the Past 5 Years | |
| Harris J. Ashton (1932) | Trustee | Since 1994 | 145 | Bar-S Foods (meat packing company) | |
| 300 S.E. 2nd Street | (1981-2010). | ||||
| Fort Lauderdale, FL 33301-1923 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Director of various companies; and formerly, Director, RBC Holdings, Inc. (bank holding company) (until 2002); and President, Chief | |||||
| Executive Officer and Chairman of the Board, General Host Corporation (nursery and craft centers) (until 1998). | |||||
| Ann Torre Bates (1958) | Trustee | Since 2008 | 40 | Navient Corporation (loan | |
| 300 S.E. 2nd Street | management, servicing and asset | ||||
| Fort Lauderdale, FL 33301-1923 | recovery) (2014-present), Ares Capital | ||||
| Corporation (specialty finance | |||||
| company) (2010-present), United | |||||
| Natural Foods, Inc. (distributor of | |||||
| natural, organic and specialty foods) | |||||
| (2013-present), Allied Capital | |||||
| Corporation (financial services) | |||||
| (2003-2010) and SLM Corporation | |||||
| (Sallie Mae) (1997-2014). | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Director of various companies; and formerly, Executive Vice President and Chief Financial Officer, NHP Incorporated (manager of multifamily | |||||
| housing) (1995-1997); and Vice President and Treasurer, US Airways, Inc. (until 1995). | |||||
| Frank J. Crothers (1944) | Trustee | Since 2001 | 24 | Fortis, Inc. (utility holding company) | |
| 300 S.E. 2nd Street | (2007-present) and AML Foods | ||||
| Fort Lauderdale, FL 33301-1923 | Limited (retail distributors) | ||||
| (1989-present). | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Director and Vice Chairman, Caribbean Utilities Company, Ltd.; director of various other private business and nonprofit organizations; and | |||||
| formerly, Chairman, Atlantic Equipment and Power Ltd. (1977-2003). | |||||
| Edith E. Holiday (1952) | Lead | Trustee since | 145 | Hess Corporation (exploration and | |
| 300 S.E. 2nd Street | Independent | 1996 and Lead | refining of oil and gas) (1993-present), | ||
| Fort Lauderdale, FL 33301-1923 | Trustee | Independent | Canadian National Railway (railroad) | ||
| Trustee since | (2001-present), White Mountains | ||||
| 2007 | Insurance Group, Ltd. (holding | ||||
| company) (2004-present), RTI | |||||
| International Metals, Inc. (manufacture | |||||
| and distribution of titanium) | |||||
| (1999-2015) and H.J. Heinz Company | |||||
| (processed foods and allied products) | |||||
| (1994-2013). | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Director or Trustee of various companies and trusts; and formerly, Assistant to the President of the United States and Secretary of the | |||||
| Cabinet (1990-1993); General Counsel to the United States Treasury Department (1989-1990); and Counselor to the Secretary and Assistant | |||||
| Secretary for Public Affairs and Public Liaison – United States Treasury Department (1988-1989). | |||||
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TEMPLETON GLOBAL INVESTMENT TRUST
| Independent Board Members (continued) | |||||
| Number of Portfolios in | |||||
| Name, Year of Birth | Length of | Fund Complex Overseen | Other Directorships Held During | ||
| and Address | Position | Time Served | by Board Member* | at Least the Past 5 Years | |
| J. Michael Luttig (1954) | Trustee | Since 2009 | 145 | Boeing Capital Corporation (aircraft | |
| 300 S.E. 2nd Street | financing) (2006-2013). | ||||
| Fort Lauderdale, FL 33301-1923 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Executive Vice President, General Counsel and member of the Executive Council, The Boeing Company (aerospace company) (2006-present); | |||||
| and formerly, Federal Appeals Court Judge, U.S. Court of Appeals for the Fourth Circuit (1991-2006). | |||||
| David W. Niemiec (1949) | Trustee | Since 2006 | 40 | Emeritus Corporation (assisted | |
| 300 S.E. 2nd Street | living) (1999-2010) and OSI | ||||
| Fort Lauderdale, FL 33301-1923 | Pharmaceuticals, Inc. | ||||
| (pharmaceutical products) | |||||
| (2006-2010). | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Advisor, Saratoga Partners (private equity fund); and formerly, Managing Director, Saratoga Partners (1998-2001) and SBC Warburg Dillon | |||||
| Read (investment banking) (1997-1998); Vice Chairman, Dillon, Read & Co. Inc. (investment banking) (1991-1997); and Chief Financial | |||||
| Officer, Dillon, Read & Co. Inc. (1982-1997). | |||||
| Frank A. Olson (1932) | Trustee | Since 2003 | 145 | Hess Corporation (exploration and | |
| 300 S.E. 2nd Street | refining of oil and gas) (1998-2013). | ||||
| Fort Lauderdale, FL 33301-1923 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Director of various companies; and formerly, Chairman of the Board, The Hertz Corporation (car rental) (1980-2000) and Chief Executive | |||||
| Officer (1977-1999); and Chairman of the Board, President and Chief Executive Officer, UAL Corporation (airlines) (June-December 1987). | |||||
| Larry D. Thompson (1945) | Trustee | Since 2006 | 145 | The Southern Company (energy | |
| 300 S.E. 2nd Street | company) (2014-present; previously | ||||
| Fort Lauderdale, FL 33301-1923 | 2010-2012), Graham Holdings | ||||
| Company (education and media | |||||
| organization) (2011-present) and | |||||
| Cbeyond, Inc. (business | |||||
| communications provider) | |||||
| (2010-2012). | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Director of various companies; John A. Sibley Professor of Corporate and Business Law, University of Georgia School of Law (2015-present; | |||||
| previously 2011-2012); and formerly, Executive Vice President – Government Affairs, General Counsel and Corporate Secretary, PepsiCo, | |||||
| Inc. (consumer products) (2012-2014); Senior Vice President – Government Affairs, General Counsel and Secretary, PepsiCo, Inc. (2004- | |||||
| 2011); Senior Fellow of The Brookings Institution (2003-2004); Visiting Professor, University of Georgia School of Law (2004); and Deputy | |||||
| Attorney General, U.S. Department of Justice (2001-2003). | |||||
| Constantine D. Tseretopoulos (1954) | Trustee | Since 2001 | 24 | None | |
| 300 S.E. 2nd Street | |||||
| Fort Lauderdale, FL 33301-1923 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Physician, Chief of Staff, owner and operator of the Lyford Cay Hospital (1987-present); director of various nonprofit organizations; and | |||||
| formerly, Cardiology Fellow, University of Maryland (1985-1987); and Internal Medicine Resident, Greater Baltimore Medical Center | |||||
| (1982-1985). | |||||
| Robert E. Wade (1946) | Trustee | Since 2006 | 40 | El Oro Ltd (investments) | |
| 300 S.E. 2nd Street | (2003-present). | ||||
| Fort Lauderdale, FL 33301-1923 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Attorney at law engaged in private practice (1972-2008) and member of various boards. | |||||
| 34 | Annual Report | franklintempleton.com | |||
TEMPLETON GLOBAL INVESTMENT TRUST
| Interested Board Members and Officers | |||||
| Number of Portfolios in | |||||
| Name, Year of Birth and | Length of | Fund Complex Overseen | Other Directorships Held During | ||
| Address | Position | Time Served | by Board Member* | at Least the Past 5 Years | |
| **Gregory E. Johnson (1961) | Trustee | Since 2006 | 161 | None | |
| One Franklin Parkway | |||||
| San Mateo, CA 94403-1906 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Chairman of the Board, Member – Office of the Chairman, Director and Chief Executive Officer, Franklin Resources, Inc.; officer and/or | |||||
| director or trustee, as the case may be, of some of the other subsidiaries of Franklin Resources, Inc. and of 44 of the investment companies in | |||||
| Franklin Templeton Investments; Vice Chairman, Investment Company Institute; and formerly, President, Franklin Resources, Inc. (1994- | |||||
| 2015). | |||||
| **Rupert H. Johnson, Jr. (1940) Chairman of the | Chairman of | 145 | None | ||
| One Franklin Parkway | Board, Trustee and | the Board, | |||
| San Mateo, CA 94403-1906 | Vice President | Trustee since | |||
| 2013 | , and | ||||
| Vice President | |||||
| since 1996 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Vice Chairman, Member – Office of the Chairman and Director, Franklin Resources, Inc.; Director, Franklin Advisers, Inc.; Senior Vice | |||||
| President, Franklin Advisory Services, LLC; and officer and/or director or trustee, as the case may be, of some of the other subsidiaries of | |||||
| Franklin Resources, Inc. and of 42 of the investment companies in Franklin Templeton Investments. | |||||
| Alison E. Baur (1964) | Vice President | Since 2012 | Not Applicable | Not Applicable | |
| One Franklin Parkway | |||||
| San Mateo, CA 94403-1906 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Deputy General Counsel, Franklin Templeton Investments; and officer of some of the other subsidiaries of Franklin Resources, Inc. and of 44 | |||||
| of the investment companies in Franklin Templeton Investments. | |||||
| Norman J. Boersma (1957) | President and Chief | Since 2012 | Not Applicable | Not Applicable | |
| Lyford Cay | Executive Officer – | ||||
| Nassau, Bahamas | Investment | ||||
| Management | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Director, President and Chief Executive Officer, Templeton Global Advisors Ltd.; Chief Investment Officer of Templeton Global Equity Group; | |||||
| officer of six of the investment companies in Franklin Templeton Investments; and formerly, Executive Vice President, Franklin Templeton | |||||
| Investments Corp. (1993-2014). | |||||
| Laura F. Fergerson (1962) | Chief Executive | Since 2009 | Not Applicable | Not Applicable | |
| One Franklin Parkway | Officer – Finance | ||||
| San Mateo, CA 94403-1906 | and Administration | ||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Senior Vice President, Franklin Templeton Services, LLC; Vice President, Franklin Advisers, Inc. and Franklin Templeton Institutional, LLC; | |||||
| and officer of 44 of the investment companies in Franklin Templeton Investments. | |||||
| Aliya S. Gordon (1973) | Vice President | Since 2009 | Not Applicable | Not Applicable | |
| One Franklin Parkway | |||||
| San Mateo, CA 94403-1906 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Senior Associate General Counsel, Franklin Templeton Investments; and officer of 44 of the investment companies in Franklin Templeton | |||||
| Investments. | |||||
franklintempleton.com Annual Report 35
TEMPLETON GLOBAL INVESTMENT TRUST
| Interested Board Members and Officers (continued) | ||||
| Number of Portfolios in | ||||
| Name, Year of Birth | Length of | Fund Complex Overseen | Other Directorships Held During | |
| and Address | Position | Time Served | by Board Member* | at Least the Past 5 Years |
| Steven J. Gray (1955) | Vice President | Since 2009 | Not Applicable | Not Applicable |
| One Franklin Parkway | ||||
| San Mateo, CA 94403-1906 | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||
| Senior Associate General Counsel, Franklin Templeton Investments; Vice President, Franklin Templeton Distributors, Inc. and Franklin | ||||
| Alternative Strategies Advisers, LLC; and officer of 44 of the investment companies in Franklin Templeton Investments. | ||||
| Selena L. Holmes (1965) | Vice President – | Since 2012 | Not Applicable | Not Applicable |
| 100 Fountain Parkway | AML Compliance | |||
| St. Petersburg, FL 33716-1205 | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||
| Director, Global Compliance Monitoring; Chief Compliance Officer, Franklin Alternative Strategies Advisers, LLC; Vice President, Franklin | ||||
| Templeton Companies, LLC; and officer of 44 of the investment companies in Franklin Templeton Investments. | ||||
| Kimberly H. Novotny (1972) | Vice President | Since 2013 | Not Applicable | Not Applicable |
| 300 S.E. 2nd Street | ||||
| Fort Lauderdale, FL 33301-1923 | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||
| Associate General Counsel, Franklin Templeton Investments; Vice President and Corporate Secretary, Fiduciary Trust International of the | ||||
| South; Vice President and Assistant Secretary, Templeton Investment Counsel, LLC; Assistant Secretary, Franklin Resources, Inc.; and officer | ||||
| of 44 of the investment companies in Franklin Templeton Investments. | ||||
| Mark H. Otani (1968) | Treasurer, | Since 2009 | Not Applicable | Not Applicable |
| One Franklin Parkway | Chief Financial | |||
| San Mateo, CA 94403-1906 | Officer and Chief | |||
| Accounting Officer | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||
| Treasurer, U.S. Fund Administration & Reporting, Franklin Templeton Investments; and officer of 13 of the investment companies in Franklin | ||||
| Templeton Investments. | ||||
| Robert C. Rosselot (1960) | Chief | Since 2013 | Not Applicable | Not Applicable |
| 300 S.E. 2nd Street | Compliance | |||
| Fort Lauderdale, FL 33301-1923 | Officer | |||
| Principal Occupation During at Least the Past 5 Years: | ||||
| Director, Global Compliance, Franklin Templeton Investments; Vice President, Franklin Templeton Companies, LLC; officer of 44 of the | ||||
| investment companies in Franklin Templeton Investments; and formerly, Senior Associate General Counsel, Franklin Templeton Investments | ||||
| (2007-2013); and Secretary and Vice President, Templeton Group of Funds (2004-2013). | ||||
| Karen L. Skidmore (1952) | Vice President | Since 2009 | Not Applicable | Not Applicable |
| One Franklin Parkway | ||||
| San Mateo, CA 94403-1906 | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||
| Senior Associate General Counsel, Franklin Templeton Investments; and officer of 44 of the investment companies in Franklin Templeton | ||||
| Investments. | ||||
36 Annual Report franklintempleton.com
TEMPLETON GLOBAL INVESTMENT TRUST
| Interested Board Members and Officers (continued) | ||||
| Number of Portfolios in | ||||
| Name, Year of Birth | Length of | Fund Complex Overseen | Other Directorships Held During | |
| and Address | Position | Time Served | by Board Member* | at Least the Past 5 Years |
| Navid Tofigh (1972) | Vice President | Since | Not Applicable | Not Applicable |
| One Franklin Parkway | November 2015 | |||
| San Mateo, CA 94403-1906 | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||
| Associate General Counsel, Franklin Templeton Investments; and officer of 44 of the investment companies in Franklin Templeton | ||||
| Investments. | ||||
| Craig S. Tyle (1960) | Vice President | Since 2005 | Not Applicable | Not Applicable |
| One Franklin Parkway | ||||
| San Mateo, CA 94403-1906 | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||
| General Counsel and Executive Vice President, Franklin Resources, Inc.; and officer of some of the other subsidiaries of Franklin Resources, | ||||
| Inc. and of 44 of the investment companies in Franklin Templeton Investments. | ||||
| Lori A. Weber (1964) | Secretary and Vice | Secretary since | Not Applicable | Not Applicable |
| 300 S.E. 2nd Street | President | 2013 and Vice | ||
| Fort Lauderdale, | President since | |||
| FL 33301-1923 | 2011 | |||
| Principal Occupation During at Least the Past 5 Years: | ||||
| Senior Associate General Counsel, Franklin Templeton Investments; Assistant Secretary, Franklin Resources, Inc.; Vice President and | ||||
| Secretary, Templeton Investment Counsel, LLC; and officer of 44 of the investment companies in Franklin Templeton Investments. | ||||
*We base the number of portfolios on each separate series of the U.S. registered investment companies within the Franklin Templeton Investments fund complex. These
portfolios have a common investment manager or affiliated investment managers.
**Gregory E. Johnson is considered to be an interested person of the Fund under the federal securities laws due to his position as an officer and director of Franklin
Resources, Inc. (Resources), which is the parent company of the Fund’s investment manager and distributor. Rupert H. Johnson, Jr. is considered to be an interested person
of the Fund under the federal securities laws due to his position as officer and director and major shareholder of Resources.
Note 1: Rupert H. Johnson, Jr. is the uncle of Gregory E. Johnson.
Note 2: Officer information is current as of the date of this report. It is possible that after this date, information about officers may change.
The Sarbanes-Oxley Act of 2002 and Rules adopted by the U.S. Securities and Exchange Commission require the Fund to disclose whether the Fund’s Audit
Committee includes at least one member who is an audit committee financial expert within the meaning of such Act and Rules. The Fund’s Board has determined
that there is at least one such financial expert on the Audit Committee and has designated each of Ann Torre Bates and David W. Niemiec as an audit committee
financial expert. The Board believes that Ms. Bates and Mr. Niemiec qualify as such an expert in view of their extensive business background and experience.
Ms. Bates has served as a member of the Fund Audit Committee since 2008. She currently serves as a director of Navient Corporation (2014-present),
Ares Capital Corporation (2010-present) and United Natural Foods, Inc. (2013-present) and was formerly a director of SLM Corporation from 1997 to 2014 and
Allied Capital Corporation from 2003 to 2010, Executive Vice President and Chief Financial Officer of NHP Incorporated from 1995 to 1997 and Vice President and
Treasurer of US Airways, Inc. until 1995. Mr. Niemiec has served as a member of the Fund Audit Committee since 2006, currently serves as an Advisor to Saratoga
Partners and was formerly its Managing Director from 1998 to 2001. Mr. Niemiec was formerly a director of Emeritus Corporation from 1999 to 2010 and OSI
Pharmaceuticals, Inc. from 2006 to 2010, Managing Director of SBC Warburg Dillon Read from 1997 to 1998, and was Vice Chairman from 1991 to 1997 and Chief
Financial Officer from 1982 to 1997 of Dillon, Read & Co. Inc. As a result of such background and experience, the Board believes that Ms. Bates and Mr. Niemiec
have each acquired an understanding of generally accepted accounting principles and financial statements, the general application of such principles in
connection with the accounting estimates, accruals and reserves, and analyzing and evaluating financial statements that present a breadth and level of
complexity of accounting issues generally comparable to those of the Fund, as well as an understanding of internal controls and procedures for financial
reporting and an understanding of audit committee functions. Ms. Bates and Mr. Niemiec are independent Board members as that term is defined under the
applicable U.S. Securities and Exchange Commission Rules and Releases.
The Statement of Additional Information (SAI) includes additional information about the board members and is available, without charge, upon request.
Shareholders may call (800) DIAL BEN/342-5236 to request the SAI.
franklintempleton.com Annual Report 37
TEMPLETON GLOBAL INVESTMENT TRUST TEMPLETON BRIC FUND
Shareholder Information
Board Review of Investment Management Agreement
At a meeting held February 23, 2016, the Board of Trustees (Board), including a majority of trustees that are not “interested persons” as such term is defined in section 2(a)(19) of the Investment Company Act of 1940 (hereinafter referred to as “non-interested Trustees” or “independent Trustees”), approved renewal of the investment management agreements for each of the separate funds comprising the Templeton Global Investment Trust, including Templeton BRIC Fund (Fund(s)). In reaching this decision, the Board took into account information furnished throughout the year at regular Board meetings, as well as information prepared specifically in connection with the annual renewal review process. Information furnished and discussed throughout the year included investment performance reports and related financial information for each Fund, along with periodic reports on expenses, shareholder services, legal and compliance matters, risk control, pricing, brokerage commissions and execution and other services provided by the Investment Manager (Manager) and its affiliates, as well as marketing support payments made to financial intermediaries. Information furnished specifically in connection with the renewal process included a report for each Fund prepared by Broadridge Financial Solutions, Inc. (Broadridge), an independent organization, as well as additional material, including a Fund profitability analysis prepared by management. The Broadridge reports, which utilized data from Lipper, Inc. (Lipper), compared each Fund’s investment performance and expenses with those of other mutual funds deemed comparable to the Fund as selected by Lipper. The Fund profitability analysis discussed the profitability to Franklin Templeton Investments (FTI) from its overall U.S. fund operations, as well as on an individual fund-by-fund basis. Additional material accompanying such profitability analysis included information on a fund-by-fund basis listing portfolio managers and other accounts they manage, as well as information on management fees charged by the Manager and its affiliates to U.S. mutual funds and other accounts, including management’s explanation of differences where relevant. Such material also included a memorandum prepared by management describing project initiatives and capital investments relating to the services provided to the Funds by the FTI organization, as well as a memorandum relating to economies of scale and an analysis concerning transfer agent fees charged by an affiliate of the Manager. The Board also received a report on all marketing support payments made by FTI to financial intermediaries during the past year, as well as a memorandum relating to third-party servicing arrangements in response to a Guidance Update from the U.S. Securities and
Exchange Commission (SEC) relating to mutual fund distribution and sub-accounting fees.
In considering such materials, the independent Trustees received assistance and advice from and met separately with independent counsel. While the investment management agreements for all Funds, and subadvisory agreements where applicable, were considered at the same Board meeting, the Board dealt with each Fund separately. In approving continuance of the investment management agreement for each Fund, the Board, including a majority of independent Trustees, determined that the existing management fee structure was fair and reasonable and that continuance of the investment management agreement was in the best interests of such Fund and its shareholders. While attention was given to all information furnished, the following discusses some primary factors relevant to the Board’s decision.
NATURE, EXTENT AND QUALITY OF SERVICES. The Board was satisfied with the nature and quality of the overall services provided by the Manager and its affiliates to the Fund and its shareholders, other than as noted below with respect to investment performance and expenses. The Board’s opinion was based, in part, upon periodic reports furnished to it showing that the investment policies and restrictions for the Fund were consistently complied with as well as other reports periodically furnished to the Board covering matters such as the compliance of portfolio managers and other management personnel with the code of ethics adopted throughout the Franklin Templeton fund complex, the adherence to fair value pricing procedures established by the Board, and the accuracy of net asset value calculations. The Board also noted the extent of benefits provided Fund shareholders from being part of the Franklin Templeton family of funds, including the right to exchange investments between the same class of shares of different funds without a sales charge, the ability to reinvest Fund dividends into other funds and the right to combine holdings in other funds to obtain a reduced sales charge. Favorable consideration was given to management’s continual efforts and expenditures in establishing effective business continuity plans and developing strategies to address cybersecurity threats. Additionally, the Board noted the Manager’s continued attention to pricing and valuation issues, particularly with respect to complex securities. Among other factors taken into account by the Board were the Manager’s best execution trading policies, including a favorable report by an independent portfolio trading analytical firm that also covered FOREX transactions. Consideration was also given to the experience of the Fund’s portfolio management team, the number of accounts managed and general method of
38 Annual Report
franklintempleton.com
TEMPLETON GLOBAL INVESTMENT TRUST
TEMPLETON BRIC FUND
SHAREHOLDER INFORMATION
compensation. In this latter respect, the Board noted that a primary factor in management’s determination of a portfolio manager’s bonus compensation was the relative investment performance of the funds he or she managed and that a portion of such bonus was required to be invested in a predesignated list of funds within such person’s fund management area so as to be aligned with the interests of shareholders. The Board also took into account the quality of transfer agent and shareholder services provided Fund shareholders by an affiliate of the Manager and steps taken by FTI to enhance analytical support to the investment management groups and provide additional oversight of liquidity risk and complex securities. The Board also took into account, among other things, management’s efforts in establishing a global credit facility for the benefit of the Fund and other accounts managed by FTI to provide a source of cash for temporary and emergency purposes or to meet unusual redemption requests as well as the strong financial position of the Manager’s parent company and its commitment to the mutual fund business as evidenced by its continued introduction of new funds and reassessment of the fund offerings in response to the market environment.
INVESTMENT PERFORMANCE. The Board placed significant emphasis on the investment performance of the Fund in view of its importance to shareholders. While consideration was given to performance reports and discussions with portfolio managers at Board meetings during the year, particular attention in assessing performance was given to the Broadridge reports furnished for the agreement renewal. The Broadridge reports prepared for the Fund showed the investment performance of its Class A shares in comparison to a performance universe selected by Lipper. The following summarizes the performance results for the Fund and the Board’s view of such performance.
The Lipper performance universe for this Fund consisted of all retail and institutional emerging markets funds as selected by Lipper. The Broadridge report showed the Fund’s total return in 2015 to be in the middle performing quintile of the performance universe, and on an annualized basis to be in the lowest performing quintile of such universe for the previous three- and five-year periods. The Board acknowledged the more recent improved performance of the Fund but noted that in October 2015 management had proposed, and the Board approved, the reorganization of this Fund into Templeton Developing Markets Trust. In light of this plan, the Board determined that no further action was necessary.
COMPARATIVE EXPENSES. Consideration was given to the management fees and total expense ratio of the Fund com-
pared with those of a group of other funds selected by Lipper as its appropriate Lipper expense group. Lipper expense data is based upon information taken from each fund’s most recent annual report, which reflects historical asset levels that may be quite different from those currently existing, particularly in a period of market volatility. While recognizing such inherent limitation and the fact that expense ratios generally increase as assets decline and decrease as assets grow, the Board believed the independent analysis conducted by Lipper to be an appropriate measure of comparative expenses. In reviewing comparative costs, Lipper provides information on the Fund’s contractual investment management fee in comparison with the contractual management fee that would have been charged by other funds within its Lipper expense group assuming they were similar in size to the Fund, as well as the actual total expense ratio of the Fund in comparison with those of its Lipper expense group. The Lipper contractual investment management fee analysis includes administrative charges as being part of the contractual investment management fee, and actual total expenses, for comparative consistency, are shown by Lipper for Fund Class A shares for funds having multiple share classes. The Broadridge report for the Fund showed its contractual investment management fee rate to be 20 basis points above the Lipper expense group median, and its actual total expense ratio to be the second-highest in its Lipper expense group, though shareholders have benefited from management fee waivers. The Board observed that the pending reorganization of the Fund into Templeton Developing Markets Trust in the first half of 2016 would benefit Fund shareholders by reducing fees and expenses.
MANAGEMENT PROFITABILITY. The Board also considered the level of profits realized by the Manager and its affiliates in connection with the operation of the Fund. In this respect, the Board reviewed the Fund profitability analysis that addresses the overall profitability of Franklin Templeton’s U.S. fund business, as well as its profits in providing management and other services to each of the individual funds during the 12-month period ended September 30, 2015, being the most recent fiscal year-end for Franklin Resources, Inc., the Manager’s parent. In reviewing the analysis, the Board recognized that allocation methodologies are inherently subjective and various allocation methodologies may be reasonable while producing different results. In this respect, the Board noted that while management continually makes refinements to its methodologies in response to organizational and product related changes, the overall approach as defined by the primary drivers and activity measurements has remained consistent with that used in the Fund profitability report presentations from prior years. Additionally, the Fund’s independent registered public
franklintempleton.com
Annual Report
39
TEMPLETON GLOBAL INVESTMENT TRUST TEMPLETON BRIC FUND
SHAREHOLDER INFORMATION
Board Review of Investment Management Agreement (continued)
accounting firm had been engaged by the Manager to periodically review the reasonableness of the allocation methodologies to be used solely by the Fund’s Board in reference to the profitability analysis. In reviewing and discussing such analysis, management discussed with the Board its belief that costs incurred in establishing the infrastructure necessary for the type of mutual fund operations conducted by the Manager and its affiliates may not be fully reflected in the expenses allocated to the Fund in determining its profitability, as well as the fact that the level of profits, to a certain extent, reflected operational cost savings and efficiencies initiated by management. The Board also took into account management’s expenditures in improving shareholder services provided to the Funds, as well as the need to implement systems to meet additional regulatory and compliance requirements resulting from statutes such as the Sarbanes-Oxley and Dodd-Frank Acts and recent SEC and other regulatory requirements. In addition, the Board considered a third-party study comparing the profitability of the Manager’s parent on an overall basis to other publicly held managers broken down to show profitability from management operations exclusive of distribution expenses, as well as profitability including distribution expenses. The Board also considered the extent to which the Manager and its affiliates might derive ancillary benefits from fund operations, including revenues generated from transfer agent services and potential benefits resulting from personnel and systems enhancements necessitated by fund growth, as well as increased leverage with the service providers and counterparties, allocation of fund brokerage and the use of commission dollars to pay for research. Based upon its consideration of all these factors, the Board determined that the level of profits realized by the Manager and its affiliates from providing services to the Fund was not excessive in view of the nature, quality and extent of services provided.
ECONOMIES OF SCALE. The Board also considered whether economies of scale are realized by the Manager as the Fund grows larger and the extent to which this is reflected in the level of management fees charged. While recognizing that any precise determination is inherently subjective, the Board noted that based upon the Fund profitability analysis, it appears that as some funds get larger, at some point economies of scale do result in the Manager realizing a larger profit margin on management services provided such a fund. The Board also noted that economies of scale are shared with the Fund and its shareholders through management fee breakpoints so that as the Fund grows in size, its effective management fee rate declines. In view of the specialized nature and size of the Fund, whose expenses are being subsidized by management, the Board questioned whether economies of scale existed. The investment management advisory agreement for the Fund provides for breakpoints that are above the Fund’s existing asset size, and to the extent economies of scale may be realized by the Manager and its affiliates, the Board believes the schedule of fees for the Fund provides a sharing of benefits with the Fund and its shareholders.
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.
40 Annual Report
franklintempleton.com
TEMPLETON GLOBAL INVESTMENT TRUST
TEMPLETON BRIC FUND
SHAREHOLDER INFORMATION
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 on Form N-Q. Shareholders may view the filed Form N-Q 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 the Fund’s financial reports every six months as well as an annual updated summary prospectus (prospectus available upon request). To reduce Fund expenses, we try to identify related shareholders in a household and send only one copy of the financial reports and summary prospectus. This process, called “householding,” will continue indefinitely unless you instruct us otherwise. If you prefer not to have these documents householded, please call us at (800) 632-2301. At any time you may view current prospectuses/summary prospectuses and financial reports on our website. If you choose, you may receive these documents through electronic delivery.
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Annual Report
41
Annual Report and Shareholder Letter
Templeton BRIC Fund
Investment Manager
Templeton Asset Management Ltd.
Distributor
Franklin Templeton Distributors, Inc.
(800) DIAL BEN® / 342-5236
franklintempleton.com
Shareholder Services
(800) 632-2301
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.
| © 2016 Franklin Templeton Investments. All rights reserved. | 405 A 05/16 |
Annual Report
and Shareholder Letter
March 31, 2016
Templeton Emerging Markets Balanced Fund
A SERIES OF TEMPLETON GLOBAL INVESTMENT TRUST
Sign up for electronic delivery at franklintempleton.com/edelivery
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2 Annual Report
franklintempleton.com
Annual Report
Templeton Emerging Markets Balanced Fund
This annual report for Templeton Emerging Markets Balanced Fund covers the fiscal year ended March 31, 2016.
Your Fund’s Goal and Main Investments
The Fund seeks both income and capital appreciation. Under normal market conditions, the Fund invests at least 80% of its net assets plus any borrowings in a diversified portfolio of equity securities and fixed and floating rate debt obligations issued by governments, government-related entities and corporate entities that are located, incorporated or have significant business activities in or are impacted by economic developments in developing or emerging market countries. The Fund normally invests at least 25% of its net assets in equity securities and at least 25% of its net assets in fixed income senior securities.
Performance Overview
The Fund’s Class A shares had a -10.57% cumulative total return for the 12 months ended March 31, 2016. For comparison, an equally weighted combination of the MSCI Emerging Markets (EM) Index and the J.P. Morgan (JPM) Emerging Markets Bond Index (EMBI) Global had a -3.70% total return for the same period.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. In addition, the Fund’s return reflects the effect of fees and expenses for professional management, while an index does not have such costs. You can find more of the Fund’s performance data in the Performance Summary beginning on page 9.
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.
*Figures reflect certain derivatives held in the portfolio (or their underlying reference assets) and may not total 100% or may be negative due to rounding, use of any derivatives, unsettled trades or other factors.
Economic and Market Overview
The global economy expanded moderately during the 12 months under review. Although some emerging market countries faced headwinds such as soft domestic demand, geopolitical crises, weak exports and high inflation, emerging market economies overall continued to grow faster than developed market economies. China’s economy grew at a less robust pace in 2015 than in 2014, and it continued to moderate in 2016’s first quarter as growth in industrial production, fixed-asset investments and retail sales was countered by weakness in imports and exports. Russia’s 2015 gross domestic product (GDP) contracted amid declining oil prices and a weakening Russian ruble. In 2015’s fourth quarter, Brazil’s quarterly GDP continued to contract but at a slower rate compared with the second and third quarters. In contrast, South Korea, Indonesia and Hungary showed signs of improvement.
Several emerging market central banks, including those of Brazil, Mexico and South Africa, raised their benchmark interest rates to control inflation and support their currencies, while some, including those of India, Russia and China, lowered their benchmark interest rates to promote economic growth. The People’s Bank of China (PBOC) also reduced the cash reserve requirement for banks several times during the
1. Source: Morningstar. The Fund’s blended benchmark is currently weighted 50% for the MSCI EM Index and 50% for the JPM EMBI Global and is rebalanced monthly. For
the 12 months ended 3/31/16, the MSCI EM Index posted a -11.70% total return and the JPM EMBI Global posted a +4.36% total return.
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.
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 20.
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Annual Report
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TEMPLETON EMERGING MARKETS BALANCED FUND
period to support liquidity, credit and growth. Additionally, the PBOC lowered short-term borrowing costs for smaller banks to help banks access funds in times of a liquidity crunch and to avoid heightened volatility in money market rates. After effectively devaluating the Chinese currency several times during the period, the PBOC allowed it to appreciate against the U.S. dollar in March, which was in line with many currencies’ appreciation against the U.S. dollar for the same month.
Events in China significantly affected stock performance in all regions during the review period. The Chinese government’s efforts to promote stable growth supported China’s domestic stock market in 2015’s first half. However, tight liquidity conditions and uncertainties about the PBOC’s monetary policy led China’s domestic market to correct from June through August, contributing to a global stock market correction. Investor concerns about China’s moderating economic growth and lower commodity demand, as well as the PBOC’s effective currency devaluation, particularly in August, contributed to volatility in global stock, commodity and currency markets. Price declines of many commodities, particularly crude oil, negatively affected certain commodity-producing countries’ economies, financial positions and currencies, weighing further on investor sentiment.
However, accommodative monetary policies of several major central banks provided investors with some optimism. China took additional monetary and fiscal stimulus measures to support economic growth, bolstering investor sentiment in December. But a plunge in China’s domestic A-share market on January 4, which triggered the country’s new circuit-breaker system and halted trading, led to declines in emerging market stocks, exacerbated by a collapse in crude oil prices and investor concerns about global economic growth. Stocks began to regain some ground in late January as crude oil prices appeared to stabilize and the PBOC further reduced the cash reserve requirement for banks. For the 12 months ended March 31, 2016, emerging market stocks, as measured by the MSCI EM Index, had a -11.70% total return.1 U.S. dollar-denominated emerging market bonds, as measured by the JPM EMBI Global, generated a +4.36% total return for the same period.1
Despite the return of market pessimism in early 2016, we continued to believe that fears of global deflation were unwarranted and that markets were overestimating the extent to which lower headline inflation reflected structurally weaker global demand. Underlying inflation in the U.S. was not adequately priced into bond yields during the period, in our
*Figures reflect certain derivatives held in the portfolio (or their underlying reference assets) and may not total 100% or may be negative due to rounding, use of any derivatives, unsettled trades or other factors.
assessment, and we were wary of the lack of inflation being priced into bond yields across the globe. In our view, there were more risks of inflation moving to the upside than to the downside, yet markets appeared to price in deflation and downside risks. Additionally, markets seemed to regard emerging economies as being in near-crisis condition, reacting as if conditions were worse than the 2008 global financial crisis or the Asian financial crisis of 1997 and 1998. However, several emerging market economies were in far better shape, by our assessment, with larger foreign reserves and more diversified, growing economies. We were focused on the opportunity sets in specific emerging market currencies and believed that fears of a systemic crisis across the asset class were exaggerated. Over the final weeks of February, risk
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appetites returned and several local-currency markets rallied, creating a positive trend for global markets that largely carried through to the close of the period in March.
Investment Strategy
When choosing equity investments for the Fund, we apply a fundamental research, value-oriented, long-term approach, focusing on the market price of a company’s securities relative to our evaluation of the company’s long-term earnings, asset value and cash flow potential. We also consider a company’s profit and loss outlook, balance sheet strength, cash flow trends and asset value in relation to the current price.
When choosing fixed income investments for the Fund, we allocate the Fund’s assets based upon our assessment of changing market, political and economic conditions. We consider various factors, including evaluation of interest and currency exchange rate changes and credit risks. We regularly enter into currency-related transactions involving certain derivative instruments, principally currency and cross currency forwards, but we may also use currency and currency index futures contracts, to provide a hedge against risks associated with other fixed income securities held in the Fund or to implement a currency investment strategy.
| What is a currency forward contract? |
| A currency forward contract is an agreement between the Fund |
| and a counterparty to buy or sell a foreign currency in exchange |
| for another currency at a specific exchange rate on a future |
| date. |
| What is a futures contract? |
| A futures contract, or a future, is an agreement between the |
| Fund and a counterparty made through a U.S. or foreign futures |
| exchange to buy or sell an asset at a specific price on a future |
| date. |
Manager’s Discussion
We continued to allocate in favor of equities during the period as we sought to take advantage of valuation opportunities within emerging market equities. Within fixed income, we sought to take advantage of valuation opportunities in emerging market countries with favorable growth prospects, low indebtedness and higher reserves.
Equity
During the 12 months under review, stock price corrections exacerbated by the U.S. dollar’s strength against most emerging
| Top Five Equity Holdings | ||
| 3/31/16 | ||
| Company | % of Total | |
| Sector/Industry, Country | Net Assets | |
| Taiwan Semiconductor Manufacturing Co. Ltd. | 3.6 | % |
| Semiconductors & Semiconductor Equipment, Taiwan | ||
| Naspers Ltd. | 3.5 | % |
| Media, South Africa | ||
| Unilever PLC | 3.2 | % |
| Personal Products, U.K. | ||
| Tencent Holdings Ltd. | 2.5 | % |
| Internet Software & Services, China | ||
| Brilliance China Automotive Holdings Ltd. | 2.1 | % |
| Automobiles, China |
market currencies affected the performance of most of the Fund’s equity investments. Consistent with our long-term investment strategy, we viewed such periods of heightened market volatility in the context of a historical, long-term uptrend. We continued to monitor global economic and market developments while seeking to minimize risk and to establish long-term positions in quality companies at share prices we considered attractive.
Major detractors from the Fund’s absolute performance during the 12-month period included positions in Brilliance China Automotive Holdings, MTN Group and China Life Insurance.
Brilliance China Automotive, a major Chinese automobile manufacturer, has a joint venture with German luxury automobile manufacturer BMW to produce and sell BMW 3-series and 5-series models in China. The company’s reduced 2015 earnings, resulting from price cuts, larger dealer incentives and muted sales growth, led to the share price decline. Further hurting shares were investor concerns about competition and loss of market share. Investor sentiment improved in March, however, due to expectations that Brilliance China’s new product launches could drive sales and profitability in 2016’s second half.
MTN Group is Africa’s largest cellular network in subscriber terms. The South Africa-based company is the dominant mobile operator in Nigeria, where operations were impacted by a challenging business environment. Disappointing 2015 earnings amid a weak economic backdrop and regional currency depreciation hurt share price performance. Further weighing on investor sentiment was the Nigerian Communications Commission’s imposition of a significant fine. However, news that MTN offered a settlement led the share price to rebound toward period-end, as many investors expected that, if accepted, the settlement could eliminate a long, drawn-out dispute and possibly lead to a higher dividend payout.
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China Life Insurance is one of China’s largest life insurance companies. Disappointing 2015 earnings, mainly due to weaker-than-expected investment income in 2015’s second half and a decline in the recurring investment yield, as well as investor concerns about a lower interest rate environment and the Chinese currency’s depreciation, hurt the stock price during the period. Further dampening investor sentiment were concerns that China Life’s recent acquisitions of commercial banks might raise the company’s risk profile.
Despite a challenging market environment, many of the Fund’s investment’s performed well and contributed to absolute performance. Key contributors included TSMC (Taiwan Semiconductor Manufacturing Co.), Unilever and Tencent Holdings.
TSMC is the world’s largest independent integrated circuit foundry. Better-than-expected fourth-quarter 2015 earnings and company management’s upgraded guidance for 2016’s first quarter supported share price performance. Analysts’ suggestions that TSMC may win exclusive rights to supply processors for the next-generation Apple iPhones also helped the company’s share performance. Furthermore, a strong semiconductor demand outlook, driven by rising silicon content in mobile devices and other objects with embedded technology and network connectivity, led investors to view the company positively.
Unilever is a U.K.-listed global consumer products company with a significant emerging market exposure. Its shares performed relatively well during the period, driven by better-than-expected 2015 corporate results and continued emerging market demand. Further supporting investor sentiment in Unilever were expectations that the company is well positioned to benefit from the growing demand for personal care, food, refreshment and home care products from the billions of people in emerging market countries.
Tencent is one of the world’s largest and most widely used Internet service portals. Founded in 1998 to provide instant messenger services, the company rapidly grew into a provider of mass media, entertainment, and Internet and mobile phone value-added services in China and internationally. Tencent
reported solid earnings in 2015, supported by strong mobile gaming and advertising revenues. Moreover, China’s Internet sector has been growing rapidly and could benefit further from the government’s “Internet Plus” strategy, which is designed to integrate the Internet with traditional businesses to support the country’s economic growth.
It is important to recognize the effect of currency movements on the Fund’s performance. In general, if the value of the U.S. dollar goes up compared with a foreign currency, an investment traded in that foreign currency will go down in value because it will be worth fewer U.S. dollars. This can have a negative effect on Fund performance. Conversely, when the U.S. dollar weakens in relation to a foreign currency, an investment traded in that foreign currency will increase in value, which can contribute to Fund performance. The U.S. dollar appreciated against most emerging market currencies during the period, and the Fund’s equity portion benefited from relatively low allocations to markets with especially weak currencies, such as Brazil, Mexico and Russia. However, one cannot expect the same result in future periods.
During the past 12 months, our continued search for what we considered undervalued investments with attractive fundamentals led us to increase the Fund’s equity holdings largely in South Korea, Taiwan, Brazil and India. We also initiated equity exposure to several countries, notably Russia and Cambodia. In sector terms, we increased the Fund’s equity investments mainly in information technology (IT) and consumer discretionary and initiated exposure to health care.2 Key purchases included new positions in Baidu.com, China’s leading Internet search engine, and Hon Hai Precision, a major Taiwanese electronics contract manufacturing company, as well as additional investment in Banco Bradesco, one of Brazil’s largest financial conglomerates.
Conversely, we reduced the Fund’s equity holdings largely in South Africa, Pakistan and China primarily in China H and Red Chip shares as we sought to focus on opportunities we considered more attractively valued within our investment universe.3 In sector terms, we reduced equity holdings largely in financials, energy and materials, and conducted some sales
2. The IT sector comprises communications equipment; electronic equipment, instruments and components; Internet software and services; IT services; semiconductors and
semiconductor equipment; software; and technology hardware, storage and peripherals in the equity section of the SOI. The consumer discretionary sector comprises auto
components; automobiles; distributors; hotels, restaurants and leisure; Internet and catalog retail; media; specialty retail; and textiles, apparel and luxury goods in the equity
section of the SOI. The health care sector comprises pharmaceuticals in the equity section of the SOI.
3. “China H” denotes shares of China-incorporated, Hong Kong Stock Exchange-listed companies with most businesses in China. “Red Chip” denotes shares of Hong Kong
Stock Exchange-listed companies substantially owned by Chinese mainland state entities, with significant exposure to China.
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in industrials.4 Key sales included closing the Fund’s position in Pakistan-based United Bank and trimming investments in Land and Houses, a Thai real estate developer, and Remgro, a South African conglomerate
| Top Five Fixed Income Holdings* | ||
| 3/31/16 | ||
| % of Total | ||
| Issue/Issuer | Net Assets | |
| Nota Do Tesouro Nacional, Brazil | 4.6 | % |
| Government of Mexico | 3.2 | % |
| Government of Ukraine | 3.1 | % |
| Government of Indonesia | 2.2 | % |
| Government of Ghana | 2.2 | % |
| * Excludes short-term investments. |
Fixed Income
On the whole, we continued to position our strategies for rising rates by maintaining low portfolio duration and aiming at a negative correlation with U.S. Treasury returns. We also continued to actively seek select duration exposures that we believe can offer positive real yields without taking undue interest-rate risk, favoring countries that we believe have solid underlying fundamentals and prudent fiscal, monetary and financial policies. When investing globally, investment opportunities may take time to materialize, which may require weathering short-term volatility as the longer term investing theses develop. During the period we shifted out of markets that we were previously contrarian on in order to reallocate to positions that we believe have fundamentally attractive valuations for the medium term ahead. We also maintained our exposures to several of our strongest investment convictions and added to those types of positions as prices became cheaper during periods of heightened volatility. Despite the persistence of volatility during the period, we remained encouraged by the
vast set of what we considered fundamentally attractive valuations across the global bond and currency markets. We were positioned for depreciation of the euro, rising U.S. Treasury yields, and currency appreciation in select emerging markets. During the period, we used currency forward contracts to actively manage exposure to currencies. We also used interest rate swaps to tactically manage duration exposures.
| What is duration? |
| Duration is a measure of a bond’s price sensitivity to interest |
| rate changes. In general, a portfolio of securities with a lower |
| duration can be expected to be less sensitive to interest rate |
| changes than a portfolio with a higher duration. |
| What is an interest rate swap? |
| An interest rate swap is an agreement between two parties to |
| exchange interest rate payment obligations, generally one |
| based on an interest rate fixed to maturity and the other based |
| on an interest rate that changes in accordance with changes in |
| a designated benchmark (for example, LIBOR, prime, |
| commercial paper or other benchmarks). |
During the period, overall credit exposures and interest rate strategies contributed to absolute performance. Credit exposures in Europe contributed to absolute return. The Fund maintained a defensive approach regarding interest rates in emerging markets. Select duration exposures in Latin America, peripheral Europe and Asia ex-Japan contributed to absolute performance.
Overall currency positions detracted from absolute performance. Currency positions in Latin America and Asia ex-Japan detracted from absolute return, as did the Fund’s net-negative position in the euro, achieved through currency forward contracts.
4. The financials sector comprises banks, capital markets, diversified financial services, insurance, and real estate management and development in the equity section of the
SOI. The energy sector comprises oil, gas and consumable fuels in the equity section of the SOI. The materials sector comprises construction materials, paper and forest
products, and metals and mining in the equity section of the SOI. The industrials sector comprises construction and engineering, trading companies and distributors, and
transportation infrastructure in the equity section of the SOI.
See www.franklintempletondatasources.com for additional data provider information.
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TEMPLETON EMERGING MARKETS BALANCED FUND
Thank you for your participation in Templeton Emerging Markets Balanced Fund. We look forward to serving your future investment needs.
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2016, 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.
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TEMPLETON EMERGING MARKETS BALANCED FUND
Performance Summary as of March 31, 2016
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. The performance table and graphs do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares. Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses.
| Net Asset Value | ||||||
| Share Class (Symbol) | 3/31/16 | 3/31/15 | Change | |||
| A (TAEMX) | $ | 8.33 | $ | 9.36 | -$ | 1.03 |
| C (N/A) | $ | 8.25 | $ | 9.30 | -$ | 1.05 |
| R (N/A) | $ | 8.32 | $ | 9.35 | -$ | 1.03 |
| Advisor (TZEMX) | $ | 8.35 | $ | 9.38 | -$ | 1.03 |
| Distributions1 (4/1/15–3/31/16) | ||||||
| Dividend | ||||||
| Share Class | Income | |||||
| A | $ | 0.0404 | ||||
| R | $ | 0.0211 | ||||
| Advisor | $ | 0.0613 | ||||
See page 13 for Performance Summary footnotes.
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TEMPLETON EMERGING MARKETS BALANCED FUND
PERFORMANCE SUMMARY
Performance as of 3/31/162
Cumulative total return excludes sales charges. Average annual total return and value of $10,000 investment include maximum sales
charges. Class A: 5.75% maximum initial sales charge; Class C: 1% contingent deferred sales charge in first year only;
Class R/Advisor Class: no sales charges.
| Total Annual Operating Expenses6 | ||||||||||
| Cumulative | Average Annual | Value of | ||||||||
| Share Class | Total Return3 | Total Return4 | $ | 10,000 Investment5 | (with waiver) | (without waiver) | ||||
| A | 1.48 | % | 2.05 | % | ||||||
| 1-Year | -10.57 | % | -15.70 | % | $ | 8,430 | ||||
| 3-Year | -20.97 | % | -9.34 | % | $ | 7,451 | ||||
| Since Inception (10/3/11) | -6.36 | % | -2.74 | % | $ | 8,825 | ||||
| C | 2.23 | % | 2.80 | % | ||||||
| 1-Year | -11.29 | % | -12.18 | % | $ | 8,782 | ||||
| 3-Year | -22.69 | % | -8.22 | % | $ | 7,731 | ||||
| Since Inception (10/3/11) | -9.48 | % | -2.19 | % | $ | 9,052 | ||||
| R | 1.73 | % | 2.30 | % | ||||||
| 1-Year | -10.79 | % | -10.79 | % | $ | 8,921 | ||||
| 3-Year | -21.47 | % | -7.74 | % | $ | 7,853 | ||||
| Since Inception (10/3/11) | -7.39 | % | -1.69 | % | $ | 9,261 | ||||
| Advisor | 1.23 | % | 1.80 | % | ||||||
| 1-Year | -10.32 | % | -10.32 | % | $ | 8,968 | ||||
| 3-Year | -20.27 | % | -7.27 | % | $ | 7,973 | ||||
| Since Inception (10/3/11) | -5.21 | % | -1.18 | % | $ | 9,479 | ||||
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.
See page 13 for Performance Summary footnotes.
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PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment2
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales
charge, Fund expenses, account fees and reinvested distributions. The unmanaged indexes include reinvestment of any income or
distributions. They differ from the Fund in composition and do not pay management fees or expenses. One cannot invest directly in
an index.
See page 13 for Performance Summary footnotes.
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TEMPLETON EMERGING MARKETS BALANCED FUND
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment2 (continued)
See page 13 for Performance Summary footnotes.
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PERFORMANCE SUMMARY
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. 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. Investments in emerging market countries involve special risks including currency fluctuations and economic and political uncertainties, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets. Smaller company stocks have historically exhibited greater price volatility than large-company stocks, particularly over the short term. The risks associated with higher yielding, lower rated securities include higher risks of default and loss of principal. The Fund’s investments in derivative securities, such as swaps, financial futures and options contracts, and use of foreign currency techniques involve special risks, as such techniques may not achieve the anticipated benefits and/or may result in losses to the Fund. The markets for particular securities or types of securities are or may become relatively illiquid. Reduced liquidity will have an adverse impact on the security’s value and on the Fund’s ability to sell such securities when necessary to meet the Fund’s liquidity needs or in response to a specific market event. 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. The Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results. The Fund’s prospectus also includes a description of the main investment risks.
Class C: These shares have higher annual fees and expenses than Class A shares.
Class R: Shares are available to certain eligible investors as described in the prospectus. These shares have higher annual fees and expenses than Class A shares.
Advisor Class: Shares are available to certain eligible investors as described in the prospectus.
1. The distribution amount is the sum of the dividend payments to shareholders for the period shown and includes only estimated tax-basis net investment income.
2. The Fund has an expense reduction contractually guaranteed through at least 7/31/16 and a fee waiver associated with any investment in a Franklin Templeton money fund,
contractually guaranteed through at least its current fiscal year-end. Fund investment results reflect the expense reduction and fee waiver, to the extent applicable; without
these reductions, the results would have been lower.
3. Cumulative total return represents the change in value of an investment over the periods indicated.
4. Average annual total return represents the average annual change in value of an investment over the periods indicated. Return for less than one year, ifany,hasnotbeen
annualized.
5. These figures represent the value of a hypothetical $10,000 investment in the Fund over the periods indicated.
6. Figures are as stated in the Fund’s current prospectus. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to
become higher than the figures shown.
7. Source: Morningstar. The MSCI EM Index is a free float-adjusted, market capitalization-weighted index designed to measure the equity market performance of global
emerging markets. The JPM EMBI Global tracks total returns for U.S. dollar-denominated debt instruments issued by emerging market sovereign and quasi-sovereign
entities: Brady bonds, loans and Eurobonds.
See www.franklintempletondatasources.com for additional data provider information.
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TEMPLETON EMERGING MARKETS BALANCED FUND
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs:
- Transaction costs, including sales charges (loads) on Fund purchases; and
- 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 following table 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 first line (Actual) for each share class listed in the table provides actual account values and expenses. The “Ending Account Value” is derived from the Fund’s actual return, which includes the effect of Fund expenses.
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:
| 1. | Divide your account value by $1,000. |
| If an account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6. | |
| 2. | Multiply the result by the number under the heading “Expenses Paid During Period.” |
| If Expenses Paid During Period were $7.50, then 8.6 x $7.50 = $64.50. |
In this illustration, the estimated expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Information in the second line (Hypothetical) for each class in the table can help you compare ongoing costs of investing in the Fund with those of other mutual funds. This information may not be used to estimate the actual ending account balance or expenses you paid during the period. The hypothetical “Ending Account Value” is based on the actual expense ratio for each class and an assumed 5% annual rate of return before expenses, which does not represent the Fund’s actual return. The figure under the heading “Expenses Paid During Period” shows the hypothetical expenses your account would have incurred under this scenario. You can compare this figure with the 5% hypothetical examples that appear in shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transaction costs, such as sales charges. Therefore, the second line for each class is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transaction costs were included, your total costs would have been higher. Please refer to the Fund prospectus for additional information on operating expenses.
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| TEMPLETON EMERGING MARKETS BALANCED FUND | |||||||
| YOUR FUND’S EXPENSES | |||||||
| Beginning Account | Ending Account | Expenses Paid During | |||||
| Share Class | Value 10/1/15 | Value 3/31/16 | Period* 10/1/15–3/31/16 | ||||
| A | |||||||
| Actual | $ | 1,000 | $ | 1,071.20 | $ | 7.66 | |
| Hypothetical (5% return before expenses) | $ | 1,000 | $ | 1,017.60 | $ | 7.47 | |
| C | |||||||
| Actual | $ | 1,000 | $ | 1,065.90 | $ | 11.52 | |
| Hypothetical (5% return before expenses) | $ | 1,000 | $ | 1,013.85 | $ | 11.23 | |
| R | |||||||
| Actual | $ | 1,000 | $ | 1,068.70 | $ | 8.95 | |
| Hypothetical (5% return before expenses) | $ | 1,000 | $ | 1,016.35 | $ | 8.72 | |
| Advisor | |||||||
| Actual | $ | 1,000 | $ | 1,072.00 | $ | 6.37 | |
| Hypothetical (5% return before expenses) | $ | 1,000 | $ | 1,018.85 | $ | 6.21 | |
*Expenses are calculated using the most recent six-month expense ratio, net of expense waivers, annualized for each class (A: 1.48%;
C: 2.23%; R: 1.73% and Advisor:1.23%), multiplied by the average account value over the period, multiplied by 183/366 to reflect the one-half
year period.
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| TEMPLETON GLOBAL INVESTMENT TRUST | |||||||||||||||
| Financial Highlights | |||||||||||||||
| Templeton Emerging Markets Balanced Fund | |||||||||||||||
| Year Ended March 31, | |||||||||||||||
| 2016 | 2015 | 2014 | 2013 | 2012 | a | ||||||||||
| Class A | |||||||||||||||
| Per share operating performance | |||||||||||||||
| (for a share outstanding throughout the year) | |||||||||||||||
| Net asset value, beginning of year | $ | 9.36 | $ | 10.10 | $ | 11.38 | $ | 11.53 | $ | 10.00 | |||||
| Income from investment operationsb: | |||||||||||||||
| Net investment incomec | 0.23 | 0.30 | 0.36 | 0.34 | 0.12 | ||||||||||
| Net realized and unrealized gains (losses) | (1.22 | ) | (0.67 | ) | (1.32 | ) | (0.08 | ) | 1.47 | ||||||
| Total from investment operations | (0.99 | ) | (0.37 | ) | (0.96 | ) | 0.26 | 1.59 | |||||||
| Less distributions from: | |||||||||||||||
| Net investment income | (0.04 | ) | (0.37 | ) | (0.31 | ) | (0.41 | ) | (0.06 | ) | |||||
| Net realized gains | — | — | (0.01 | ) | (—)d | — | |||||||||
| Total distributions | (0.04 | ) | (0.37 | ) | (0.32 | ) | (0.41 | ) | (0.06 | ) | |||||
| Net asset value, end of year. | $ | 8.33 | $ | 9.36 | $ | 10.10 | $ | 11.38 | $ | 11.53 | |||||
| Total returne | (10.57 | )% | (3.66 | )% | (8.27 | )% | 2.21 | % | 15.92 | % | |||||
| Ratios to average net assetsf | |||||||||||||||
| Expenses before waiver and payments by affiliates | 2.25 | % | 2.10 | % | 2.04 | % | 2.09 | % | 2.43 | % | |||||
| Expenses net of waiver and payments by affiliates | 1.50 | % | 1.53 | % | 1.54 | % | 1.44 | % | 1.40 | % | |||||
| Net investment income | 2.65 | % | 3.00 | % | 3.52 | % | 3.01 | % | 2.16 | % | |||||
| Supplemental data | |||||||||||||||
| Net assets, end of year (000’s) | $ | 23,171 | $ | 30,151 | $ | 29,971 | $ | 26,559 | $ | 14,730 | |||||
| Portfolio turnover rate | 65.41 | % | 48.32 | % | 69.27 | % | 4.65 | % | —% | ||||||
aFor the period October 3, 2011 (commencement of operations) to March 31, 2012.
bThe 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 shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dAmount rounds to less than $0.01 per share.
eTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year.
fRatios are annualized for periods less than one year.
16 Annual Report | The accompanying notes are an integral part of these financial statements.
franklintempleton.com
| TEMPLETON GLOBAL INVESTMENT TRUST | |||||||||||||||
| FINANCIAL HIGHLIGHTS | |||||||||||||||
| Templeton Emerging Markets Balanced Fund (continued) | |||||||||||||||
| Year Ended March 31, | |||||||||||||||
| 2016 | 2015 | 2014 | 2013 | 2012 | a | ||||||||||
| Class C | |||||||||||||||
| Per share operating performance | |||||||||||||||
| (for a share outstanding throughout the year) | |||||||||||||||
| Net asset value, beginning of year | $ | 9.30 | $ | 10.03 | $ | 11.32 | $ | 11.49 | $ | 10.00 | |||||
| Income from investment operationsb: | |||||||||||||||
| Net investment incomec | 0.16 | 0.23 | 0.28 | 0.24 | 0.14 | ||||||||||
| Net realized and unrealized gains (losses) | (1.21 | ) | (0.66 | ) | (1.31 | ) | (0.07 | ) | 1.41 | ||||||
| Total from investment operations | (1.05 | ) | (0.43 | ) | (1.03 | ) | 0.17 | 1.55 | |||||||
| Less distributions from: | |||||||||||||||
| Net investment income | — | (0.30 | ) | (0.25 | ) | (0.34 | ) | (0.06 | ) | ||||||
| Net realized gains | — | — | (0.01 | ) | (—)d | — | |||||||||
| Total distributions | — | (0.30 | ) | (0.26 | ) | (0.34 | ) | (0.06 | ) | ||||||
| Net asset value, end of year. | $ | 8.25 | $ | 9.30 | $ | 10.03 | $ | 11.32 | $ | 11.49 | |||||
| Total returne | (11.29 | )% | (4.27 | )% | (8.96 | )% | 1.38 | % | 15.49 | % | |||||
| Ratios to average net assetsf | |||||||||||||||
| Expenses before waiver and payments by affiliates | 2.98 | % | 2.80 | % | 2.73 | % | 2.88 | % | 3.26 | % | |||||
| Expenses net of waiver and payments by affiliates | 2.23 | % | 2.23 | % | 2.23 | % | 2.23 | % | 2.23 | % | |||||
| Net investment income | 1.92 | % | 2.30 | % | 2.83 | % | 2.22 | % | 1.33 | % | |||||
| Supplemental data | |||||||||||||||
| Net assets, end of year (000’s) | $ | 3,462 | $ | 4,079 | $ | 4,250 | $ | 3,256 | $ | 534 | |||||
| Portfolio turnover rate | 65.41 | % | 48.32 | % | 69.27 | % | 4.65 | % | —% | ||||||
aFor the period October 3, 2011 (commencement of operations) to March 31, 2012.
bThe 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 shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dAmount rounds to less than $0.01 per share.
eTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year.
fRatios are annualized for periods less than one year.
franklintempleton.com
The accompanying notes are an integral part of these financial statements. | Annual Report 17
| TEMPLETON GLOBAL INVESTMENT TRUST | |||||||||||||||
| FINANCIAL HIGHLIGHTS | |||||||||||||||
| Templeton Emerging Markets Balanced Fund (continued) | |||||||||||||||
| Year Ended March 31, | |||||||||||||||
| 2016 | 2015 | 2014 | 2013 | 2012 | a | ||||||||||
| Class R | |||||||||||||||
| Per share operating performance | |||||||||||||||
| (for a share outstanding throughout the year) | |||||||||||||||
| Net asset value, beginning of year | $ | 9.35 | $ | 10.09 | $ | 11.37 | $ | 11.51 | $ | 10.00 | |||||
| Income from investment operationsb: | |||||||||||||||
| Net investment incomec | 0.16 | 0.29 | 0.36 | 0.30 | 0.13 | ||||||||||
| Net realized and unrealized gains (losses) | (1.17 | ) | (0.68 | ) | (1.34 | ) | (0.07 | ) | 1.44 | ||||||
| Total from investment operations | (1.01 | ) | (0.39 | ) | (0.98 | ) | 0.23 | 1.57 | |||||||
| Less distributions from: | |||||||||||||||
| Net investment income | (0.02 | ) | (0.35 | ) | (0.29 | ) | (0.37 | ) | (0.06 | ) | |||||
| Net realized gains | — | — | (0.01 | ) | (—)d | — | |||||||||
| Total distributions | (0.02 | ) | (0.35 | ) | (0.30 | ) | (0.37 | ) | (0.06 | ) | |||||
| Net asset value, end of year. | $ | 8.32 | $ | 9.35 | $ | 10.09 | $ | 11.37 | $ | 11.51 | |||||
| Total returne | (10.79 | )% | (3.85 | )% | (8.45 | )% | 1.92 | % | 15.71 | % | |||||
| Ratios to average net assetsf | |||||||||||||||
| Expenses before waiver and payments by affiliates | 2.48 | % | 2.30 | % | 2.23 | % | 2.38 | % | 2.76 | % | |||||
| Expenses net of waiver and payments by affiliates | 1.73 | % | 1.73 | % | 1.73 | % | 1.73 | % | 1.73 | % | |||||
| Net investment income | 2.42 | % | 2.80 | % | 3.33 | % | 2.72 | % | 1.83 | % | |||||
| Supplemental data | |||||||||||||||
| Net assets, end of year (000’s) | $ | 149 | $ | 52 | $ | 53 | $ | 56 | $ | 20 | |||||
| Portfolio turnover rate | 65.41 | % | 48.32 | % | 69.27 | % | 4.65 | % | —% | ||||||
aFor the period October 3, 2011 (commencement of operations) to March 31, 2012.
bThe 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 shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dAmount rounds to less than $0.01 per share.
eTotal return is not annualized for periods less than one year.
fRatios are annualized for periods less than one year.
18 Annual Report | The accompanying notes are an integral part of these financial statements.
franklintempleton.com
| TEMPLETON GLOBAL INVESTMENT TRUST | |||||||||||||||
| FINANCIAL HIGHLIGHTS | |||||||||||||||
| Templeton Emerging Markets Balanced Fund (continued) | |||||||||||||||
| Year Ended March 31, | |||||||||||||||
| 2016 | 2015 | 2014 | 2013 | 2012 | a | ||||||||||
| Advisor Class | |||||||||||||||
| Per share operating performance | |||||||||||||||
| (for a share outstanding throughout the year) | |||||||||||||||
| Net asset value, beginning of year | $ | 9.38 | $ | 10.11 | $ | 11.40 | $ | 11.54 | $ | 10.00 | |||||
| Income from investment operationsb: | |||||||||||||||
| Net investment incomec | 0.25 | 0.34 | 0.42 | 0.37 | 0.12 | ||||||||||
| Net realized and unrealized gains (losses) | (1.22 | ) | (0.67 | ) | (1.36 | ) | (0.08 | ) | 1.49 | ||||||
| Total from investment operations | (0.97 | ) | (0.33 | ) | (0.94 | ) | 0.29 | 1.61 | |||||||
| Less distributions from: | |||||||||||||||
| Net investment income | (0.06 | ) | (0.40 | ) | (0.34 | ) | (0.43 | ) | (0.07 | ) | |||||
| Net realized gains | — | — | (0.01 | ) | (—)d | — | |||||||||
| Total distributions | (0.06 | ) | (0.40 | ) | (0.35 | ) | (0.43 | ) | (0.07 | ) | |||||
| Net asset value, end of year. | $ | 8.35 | $ | 9.38 | $ | 10.11 | $ | 11.40 | $ | 11.54 | |||||
| Total returne | (10.32 | )% | (3.28 | )% | (8.07 | )% | 2.43 | % | 16.07 | % | |||||
| Ratios to average net assetsf | |||||||||||||||
| Expenses before waiver and payments by affiliates | 1.98 | % | 1.80 | % | 1.73 | % | 1.88 | % | 2.26 | % | |||||
| Expenses net of waiver and payments by affiliates | 1.23 | % | 1.23 | % | 1.23 | % | 1.23 | % | 1.23 | % | |||||
| Net investment income | 2.92 | % | 3.30 | % | 3.83 | % | 3.22 | % | 2.33 | % | |||||
| Supplemental data | |||||||||||||||
| Net assets, end of year (000’s) | $ | 6,522 | $ | 8,068 | $ | 8,911 | $ | 17,346 | $ | 12,087 | |||||
| Portfolio turnover rate | 65.41 | % | 48.32 | % | 69.27 | % | 4.65 | % | —% | ||||||
aFor the period October 3, 2011 (commencement of operations) to March 31, 2012.
bThe 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 shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dAmount rounds to less than $0.01 per share.
eTotal return is not annualized for periods less than one year.
fRatios are annualized for periods less than one year.
franklintempleton.com
The accompanying notes are an integral part of these financial statements. | Annual Report 19
| TEMPLETON GLOBAL INVESTMENT TRUST | ||||
| Statement of Investments, March 31, 2016 | ||||
| Templeton Emerging Markets Balanced Fund | ||||
| Shares/ | ||||
| Industry | Warrants | Value | ||
| Common Stocks and Other Equity Interests 52.1% | ||||
| Argentina 0.1% | ||||
| MercadoLibre Inc | Internet Software & Services | 400 | $ | 47,140 |
| Belgium 1.2% | ||||
| Anheuser-Busch InBev NV | Beverages | 3,269 | 406,513 | |
| Brazil 1.2% | ||||
| BM&F BOVESPA SA | Diversified Financial Services | 9,000 | 38,451 | |
| CETIP SA Mercados Organizados | Capital Markets | 11,400 | 127,145 | |
| Duratex SA | Paper & Forest Products | 14,400 | 30,281 | |
| a Duratex SA, BDR | Paper & Forest Products | 569 | 627 | |
| M Dias Branco SA | Food Products | 5,600 | 104,801 | |
| Mahle-Metal Leve SA Industria e Comercio | Auto Components | 6,600 | 43,195 | |
| Totvs SA | Software | 7,300 | 55,157 | |
| 399,657 | ||||
| Cambodia 0.7% | ||||
| NagaCorp Ltd | Hotels, Restaurants & Leisure | 370,000 | 236,099 | |
| China 11.2% | ||||
| a Baidu Inc., ADR | Internet Software & Services | 2,835 | 541,145 | |
| Brilliance China Automotive Holdings Ltd | Automobiles | 664,600 | 687,959 | |
| China Life Insurance Co. Ltd., H. | Insurance | 66,000 | 162,844 | |
| China Mobile Ltd | Wireless Telecommunication Services | 41,500 | 462,220 | |
| China Petroleum and Chemical Corp., H | Oil, Gas & Consumable Fuels | 580,000 | 381,316 | |
| COSCO Pacific Ltd | Transportation Infrastructure | 78,700 | 103,481 | |
| Dah Chong Hong Holdings Ltd | Distributors | 143,700 | 58,537 | |
| NetEase Inc., ADR | Internet Software & Services | 1,794 | 257,583 | |
| Poly Culture Group Corp. Ltd., H | Media | 17,600 | 41,338 | |
| Tencent Holdings Ltd | Internet Software & Services | 40,000 | 817,289 | |
| Uni-President China Holdings Ltd | Food Products | 258,000 | 205,539 | |
| 3,719,251 | ||||
| Hong Kong 2.4% | ||||
| Dairy Farm International Holdings Ltd | Food & Staples Retailing | 34,000 | 205,360 | |
| MGM China Holdings Ltd | Hotels, Restaurants & Leisure | 201,200 | 306,572 | |
| Sands China Ltd | Hotels, Restaurants & Leisure | 67,600 | 274,936 | |
| 786,868 | ||||
| Hungary 0.5% | ||||
| Richter Gedeon Nyrt. | Pharmaceuticals | 8,173 | 162,974 | |
| India 4.3% | ||||
| Dr. Reddy’s Laboratories Ltd., ADR | Pharmaceuticals | 2,094 | 94,628 | |
| ICICI Bank Ltd., ADR | Banks | 36,700 | 262,772 | |
| Infosys Ltd., ADR | IT Services | 32,360 | 615,487 | |
| a Tata Motors Ltd., ADR | Automobiles | 15,510 | 450,565 | |
| 1,423,452 | ||||
| Indonesia 3.2% | ||||
| Astra International Tbk PT. | Automobiles | 763,100 | 420,833 | |
| Bank Danamon Indonesia Tbk PT | Banks | 1,801,700 | 520,782 | |
| Semen Indonesia (Persero) Tbk PT | Construction Materials | 162,000 | 125,383 | |
| 1,066,998 | ||||
20 Annual Report
franklintempleton.com
TEMPLETON GLOBAL INVESTMENT TRUST
STATEMENT OF INVESTMENTS
| Templeton Emerging Markets Balanced Fund (continued) | ||||
| Shares/ | ||||
| Industry | Warrants | Value | ||
| Common Stocks and Other Equity Interests (continued) | ||||
| Mexico 0.4% | ||||
| America Movil SAB de CV, L, ADR | Wireless Telecommunication Services | 6,100 | $ | 94,733 |
| Nemak SAB de CV | Auto Components | 15,000 | 21,565 | |
| a Telesites SAB de CV. | Diversified Telecommunication Services | 6,100 | 3,442 | |
| 119,740 | ||||
| Nigeria 0.0%† | ||||
| Nigerian Breweries PLC | Beverages | 12,098 | 6,504 | |
| Pakistan 0.6% | ||||
| Habib Bank Ltd | Banks | 117,800 | 192,560 | |
| Peru 0.1% | ||||
| a Compania de Minas Buenaventura SA, ADR | Metals & Mining | 2,896 | 21,315 | |
| Philippines 0.2% | ||||
| a Bloomberry Resorts Corp | Hotels, Restaurants & Leisure | 706,600 | 79,220 | |
| Russia 0.9% | ||||
| a,b Mail.ru Group Ltd., GDR, Reg S | Internet Software & Services | 6,952 | 150,858 | |
| a Yandex NV, A | Internet Software & Services | 10,780 | 165,150 | |
| 316,008 | ||||
| Singapore 0.0%† | ||||
| DBS Group Holdings Ltd | Banks | 1,400 | 15,980 | |
| South Africa 5.8% | ||||
| a,c,d Edcon Holdings Ltd., F wts., 2/20/49. | Specialty Retail | 84 | 1 | |
| a,c,d Edcon Holdings Ltd., F1 wts., 2/20/49 | Specialty Retail | 1,503,436 | 17,113 | |
| a,c,d Edcon Holdings Ltd., F2 wts., 2/20/49 | Specialty Retail | 121,748 | 1,386 | |
| Massmart Holdings Ltd | Food & Staples Retailing | 13,577 | 116,639 | |
| MTN Group Ltd | Wireless Telecommunication Services | 23,808 | 218,030 | |
| Naspers Ltd., N | Media | 8,313 | 1,160,519 | |
| Remgro Ltd | Diversified Financial Services | 23,822 | 403,689 | |
| 1,917,377 | ||||
| South Korea 6.7% | ||||
| Bukwang Pharmaceutical Co. Ltd | Pharmaceuticals | 25 | 632 | |
| Daelim Industrial Co. Ltd | Construction & Engineering | 2,845 | 225,759 | |
| Fila Korea Ltd | Textiles, Apparel & Luxury Goods | 2,587 | 214,997 | |
| Hankook Tire Co. Ltd | Auto Components | 1,583 | 75,176 | |
| Hanon Systems | Auto Components | 11,010 | 88,425 | |
| Hyundai Development Co | Construction & Engineering | 8,160 | 327,322 | |
| iMarketkorea Inc | Trading Companies & Distributors | 5,050 | 83,541 | |
| Interpark Corp | Internet & Catalog Retail | 3,300 | 27,137 | |
| KT Skylife Co. Ltd | Media | 13,494 | 195,545 | |
| Samsung Electronics Co. Ltd | Technology Hardware, Storage & Peripherals | 570 | 652,842 | |
| SK Hynix Inc | Semiconductors & Semiconductor Equipment | 14,140 | 347,478 | |
| 2,238,854 | ||||
| Taiwan 6.3% | ||||
| Catcher Technology Co. Ltd | Technology Hardware, Storage & Peripherals | 21,000 | 172,131 | |
| Hon Hai Precision Industry Co. Ltd | Electronic Equipment, Instruments | |||
| & Components | 180,900 | 476,289 | ||
| Largan Precision Co. Ltd | Electronic Equipment, Instruments | |||
| & Components | 1,000 | 77,465 | ||
| Pegatron Corp | Technology Hardware, Storage & Peripherals | 70,200 | 163,687 | |
franklintempleton.com
Annual Report
21
TEMPLETON GLOBAL INVESTMENT TRUST
STATEMENT OF INVESTMENTS
| Templeton Emerging Markets Balanced Fund (continued) | ||||||
| Shares/ | ||||||
| Industry | Warrants | Value | ||||
| Common Stocks and Other Equity Interests (continued) | ||||||
| Taiwan (continued) | ||||||
| Taiwan Semiconductor Manufacturing Co. Ltd | Semiconductors & Semiconductor Equipment | 240,000 | $ | 1,207,154 | ||
| 2,096,726 | ||||||
| Thailand 3.1% | ||||||
| Kasikornbank PCL, fgn | Banks | 45,000 | 224,167 | |||
| Kiatnakin Bank PCL, fgn | Banks | 75,200 | 89,906 | |||
| Land and Houses PCL, fgn | Real Estate Management & Development | 200,800 | 51,157 | |||
| Land and Houses PCL, NVDR | Real Estate Management & Development | 212,660 | 54,179 | |||
| PTT Exploration and Production PCL, fgn | Oil, Gas & Consumable Fuels | 43,500 | 86,988 | |||
| Siam Commercial Bank PCL, fgn | Banks | 22,800 | 91,512 | |||
| Thai Beverage PCL, fgn | Beverages | 214,100 | 113,612 | |||
| Univanich Palm Oil PCL, fgn | Food Products | 1,657,000 | 337,249 | |||
| 1,048,770 | ||||||
| United Kingdom 3.2% | ||||||
| Unilever PLC | Personal Products | 23,186 | 1,050,359 | |||
| Total Common Stocks and Other | ||||||
| Equity Interests (Cost $17,747,661) | 17,352,365 | |||||
| e Participatory Notes (Cost $73,172) | ||||||
| 0.2% | ||||||
| Saudi Arabia 0.2% | ||||||
| f Deutsche Bank AG/London, Samba Financial | ||||||
| Group, 144A, 9/27/16 | Banks | 10,797 | 58,730 | |||
| Preferred Stocks 3.6% | ||||||
| Brazil 3.6% | ||||||
| Banco Bradesco SA, ADR, pfd | Banks | 83,100 | 619,095 | |||
| Itau Unibanco Holding SA, ADR, pfd | Banks | 69,275 | 595,072 | |||
| 1,214,167 | ||||||
| Total Preferred Stocks | ||||||
| (Cost $1,030,790) | 1,214,167 | |||||
| Principal | ||||||
| Amount* | ||||||
| Corporate Bonds and Notes 2.6% | ||||||
| Mexico 0.0%† | ||||||
| f,g Corporacion GEO SAB de CV, senior note, 144A, | ||||||
| 8.875%, 3/27/22 | Household Durables | 200,000 | 130 | |||
| Nigeria 0.5% | ||||||
| f Access Bank PLC, sub. note, 144A, 9.25% to | ||||||
| 6/23/19, FRN thereafter, 6/24/21 | Banks | 200,000 | 167,156 | |||
| Poland 0.4% | ||||||
| f,h Play Topco SA, senior note, 144A, PIK, 7.75%, | ||||||
| 2/28/20 | Communications Equipment | 120,000 | EUR | 139,647 | ||
| Romania 0.4% | ||||||
| f Cable Communications Systems NV, senior | ||||||
| secured note, 144A, 7.50%, 11/01/20 | Media | 100,000 | EUR | 121,701 | ||
22 Annual Report
franklintempleton.com
TEMPLETON GLOBAL INVESTMENT TRUST
STATEMENT OF INVESTMENTS
Templeton Emerging Markets Balanced Fund (continued)
| Principal | |||||
| Industry | Amount* | Value | |||
| Corporate Bonds and Notes (continued) | |||||
| South Africa 0.3% | |||||
| c,f Edcon Ltd., | |||||
| senior secured note, 144A, 9.50%, 3/01/18 | Specialty Retail | 135,000 | EUR $ | 55,806 | |
| hsenior secured note, 144A, PIK, 8.00%, | |||||
| 6/30/19 | Specialty Retail | 11,094 | EUR | 9,957 | |
| hsenior secured note, 144A, PIK, 8.00%, | |||||
| 6/30/19 | Specialty Retail | 22,190 | EUR | 19,917 | |
| hsenior secured note, 144A, PIK, 12.75%, | |||||
| 6/30/19 | Specialty Retail | 34,046 | EUR | 12,189 | |
| 97,869 | |||||
| Ukraine 1.0% | |||||
| f,i Ukreximbank (BIZ Finance PLC), loan | |||||
| participation, senior note, 144A, 9.75%, 1/22/25 | Diversified Financial Services | 400,000 | 344,000 | ||
| Total Corporate Bonds and Notes | |||||
| (Cost $1,269,069) | 870,503 | ||||
| Foreign Government and Agency | |||||
| Securities 26.5% | |||||
| Brazil 4.7% | |||||
| Letra Tesouro Nacional, Strip, 10/01/16. | 80 | j | BRL | 20,800 | |
| Nota Do Tesouro Nacional, | |||||
| 10.00%, 1/01/17 | 1,720 | j | BRL | 465,723 | |
| 10.00%, 1/01/21 | 310 | j | BRL | 75,590 | |
| 10.00%, 1/01/23 | 10 | j | BRL | 2,336 | |
| 10.00%, 1/01/25 | 2,820 | j | BRL | 636,509 | |
| 10.00%, 1/01/27 | 30 | j | BRL | 6,607 | |
| kIndex Linked, 6.00%, 8/15/18 | 80 | j | BRL | 62,815 | |
| kIndex Linked, 6.00%, 5/15/19 | 70 | j | BRL | 54,877 | |
| kIndex Linked, 6.00%, 8/15/20 | 20 | j | BRL | 15,602 | |
| kIndex Linked, 6.00%, 8/15/22 | 60 | j | BRL | 46,099 | |
| kIndex Linked, 6.00%, 5/15/23 | 128 | j | BRL | 98,114 | |
| kIndex Linked, 6.00%, 8/15/24 | 10 | j | BRL | 7,661 | |
| kIndex Linked, 6.00%, 5/15/45 | 100 | j | BRL | 73,612 | |
| 1,566,345 | |||||
| Colombia 0.2% | |||||
| Government of Colombia, | |||||
| senior bond, 7.75%, 4/14/21 | 9,000,000 | COP | 3,060 | ||
| senior bond, 9.85%, 6/28/27 | 12,000,000 | COP | 4,648 | ||
| Titulos De Tesoreria B, | |||||
| 7.75%, 9/18/30 | 75,000,000 | COP | 23,571 | ||
| senior bond, 7.00%, 5/04/22 | 14,000,000 | COP | 4,487 | ||
| senior bond, 10.00%, 7/24/24 | 53,000,000 | COP | 19,794 | ||
| senior bond, 7.50%, 8/26/26 | 24,000,000 | COP | 7,577 | ||
| 63,137 | |||||
| Ecuador 1.7% | |||||
| f Government of Ecuador, senior note, 144A, 7.95%, | |||||
| 6/20/24 | 700,000 | 583,887 | |||
| franklintempleton.com | Annual Report | 23 | |||
TEMPLETON GLOBAL INVESTMENT TRUST
STATEMENT OF INVESTMENTS
| Templeton Emerging Markets Balanced Fund (continued) | |||||
| Principal | |||||
| Amount* | Value | ||||
| Foreign Government and Agency | |||||
| Securities (continued) | |||||
| Ghana 2.2% | |||||
| Government of Ghana, | |||||
| 19.24%, 5/30/16 | 165,000 | GHS | $ | 42,720 | |
| 24.44%, 5/29/17 | 10,000 | GHS | 2,626 | ||
| 23.00%, 8/21/17 | 310,000 | GHS | 80,332 | ||
| 23.23%, 2/19/18 | 140,000 | GHS | 36,345 | ||
| 23.47%, 5/21/18 | 280,000 | GHS | 72,916 | ||
| 24.50%, 10/22/18. | 409,000 | GHS | 107,938 | ||
| senior note, 24.00%, 11/23/20 | 1,470,000 | GHS | 384,040 | ||
| 726,917 | |||||
| Indonesia 2.2% | |||||
| Government of Indonesia, | |||||
| 7.875%, 4/15/19 | 36,000,000 | IDR | 2,779 | ||
| 8.375%, 3/15/34 | 890,000,000 | IDR | 69,053 | ||
| FR31, 11.00%, 11/15/20 | 31,000,000 | IDR | 2,676 | ||
| FR34, 12.80%, 6/15/21. | 1,775,000,000 | IDR | 165,396 | ||
| FR35, 12.90%, 6/15/22. | 35,000,000 | IDR | 3,341 | ||
| FR36, 11.50%, 9/15/19. | 63,000,000 | IDR | 5,360 | ||
| FR43, 10.25%, 7/15/22. | 43,000,000 | IDR | 3,681 | ||
| FR61, 7.00%, 5/15/22 | 24,000,000 | IDR | 1,766 | ||
| senior bond, 5.625%, 5/15/23 | 9,000,000 | IDR | 610 | ||
| senior bond, FR53, 8.25%, 7/15/21 | 208,000,000 | IDR | 16,420 | ||
| senior bond, FR56, 8.375%, 9/15/26 | 109,000,000 | IDR | 8,760 | ||
| senior bond, FR70, 8.375%, 3/15/24 | 5,538,000,000 | IDR | 439,577 | ||
| senior note, 8.50%, 10/15/16 | 125,000,000 | IDR | 9,634 | ||
| 729,053 | |||||
| Malaysia 0.5% | |||||
| Government of Malaysia, | |||||
| 3.314%, 10/31/17. | 80,000 | MYR | 20,640 | ||
| senior bond, 4.262%, 9/15/16 | 180,000 | MYR | 46,465 | ||
| senior bond, 3.814%, 2/15/17 | 140,000 | MYR | 36,217 | ||
| senior note, 3.172%, 7/15/16 | 90,000 | MYR | 23,098 | ||
| senior note, 3.394%, 3/15/17 | 50,000 | MYR | 12,893 | ||
| senior note, 4.012%, 9/15/17 | 100,000 | MYR | 26,050 | ||
| 165,363 | |||||
| Mexico 3.2% | |||||
| Government of Mexico, | |||||
| 7.25%, 12/15/16 | 157,300 | l | MXN | 930,929 | |
| 7.75%, 12/14/17 | 20,460 | l | MXN | 125,400 | |
| senior note, 8.50%, 12/13/18 | 100 | l | MXN | 633 | |
| senior note, M, 5.00%, 6/15/17 | 2,900 | l | MXN | 16,961 | |
| 1,073,923 | |||||
| Mongolia 0.5% | |||||
| f Government of Mongolia, senior note, 144A, | |||||
| 5.125%, 12/05/22 | 200,000 | 156,273 | |||
24 Annual Report
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TEMPLETON GLOBAL INVESTMENT TRUST
STATEMENT OF INVESTMENTS
| Templeton Emerging Markets Balanced Fund (continued) | |||
| Principal | |||
| Amount* | Value | ||
| Foreign Government and Agency | |||
| Securities (continued) | |||
| Philippines 0.7% | |||
| Government of the Philippines, | |||
| senior note, 1.625%, 4/25/16 | 6,170,000 | PHP $ | 134,299 |
| senior note, 3.875%, 11/22/19 | 4,010,000 | PHP | 88,844 |
| senior note, 5-72, 2.125%, 5/23/18. | 20,000 | PHP | 431 |
| 223,574 | |||
| Poland 0.9% | |||
| m Government of Poland, | |||
| FRN, 1.75%, 1/25/17 | 571,000 | PLN | 153,552 |
| FRN, 1.75%, 1/25/21 | 579,000 | PLN | 153,290 |
| 306,842 | |||
| Republic of Montenegro 0.4% | |||
| f Government of Montenegro, 144A, 5.375%, | |||
| 5/20/19 | 110,000 | EUR | 128,369 |
| Senegal 0.6% | |||
| f Government of Senegal, 144A, 6.25%, 7/30/24 | 200,000 | 186,000 | |
| Serbia 1.2% | |||
| Serbia Treasury Bond, 8.00%, 10/22/20 | 14,830,000 | RSD | 146,337 |
| Serbia Treasury Note, | |||
| 10.00%, 12/19/16. | 1,900,000 | RSD | 18,397 |
| 10.00%, 11/08/17. | 510,000 | RSD | 5,129 |
| 10.00%, 4/27/18 | 17,600,000 | RSD | 179,203 |
| 10.00%, 3/20/21 | 2,430,000 | RSD | 25,794 |
| 10.00%, 6/05/21 | 2,500,000 | RSD | 26,517 |
| 401,377 | |||
| South Korea 0.1% | |||
| Korea Treasury Bond, senior note, 2.00%, 3/10/21 . | 30,590,000 | KRW | 27,300 |
| Sri Lanka 0.7% | |||
| Government of Sri Lanka, | |||
| 10.60%, 7/01/19 | 1,200,000 | LKR | 7,870 |
| 10.60%, 9/15/19 | 30,000 | LKR | 196 |
| 9.25%, 5/01/20 | 160,000 | LKR | 985 |
| A, 5.80%, 1/15/17 | 8,300,000 | LKR | 54,998 |
| A, 7.50%, 8/15/18 | 20,000 | LKR | 125 |
| A, 9.00%, 5/01/21 | 20,610,000 | LKR | 122,051 |
| A, 11.00%, 8/01/21 | 960,000 | LKR | 6,195 |
| B, 5.80%, 7/15/17 | 2,900,000 | LKR | 18,708 |
| D, 8.50%, 6/01/18 | 3,780,000 | LKR | 24,367 |
| 235,495 | |||
| Ukraine 3.1% | |||
| f Government of Ukraine, | |||
| 144A, 7.75%, 9/01/20 | 630,000 | 592,137 | |
| 144A, 7.75%, 9/01/21 | 274,000 | 254,655 | |
| 144A, 7.75%, 9/01/22 | 129,000 | 118,954 | |
| a,n144A, VRI, GDP Linked Securities, 5/31/40 | 252,000 | 83,905 | |
| 1,049,651 | |||
| franklintempleton.com | Annual Report | 25 | |
TEMPLETON GLOBAL INVESTMENT TRUST
STATEMENT OF INVESTMENTS
| Templeton Emerging Markets Balanced Fund (continued) | ||||||
| Principal | ||||||
| Amount* | Value | |||||
| Foreign Government and Agency | ||||||
| Securities (continued) | ||||||
| Uruguay 2.1% | ||||||
| o Government of Uruguay, | ||||||
| Index Linked, 4.25%, 4/05/27 | 480,073 | UYU | $ | 14,012 | ||
| senior bond, Index Linked, 5.00%, 9/14/18 | 84,732 | UYU | 2,671 | |||
| senior bond, Index Linked, 4.375%, 12/15/28 . | 9,600,390 | UYU | 280,665 | |||
| senior bond, Index Linked, 4.00%, 7/10/30 | 332,593 | UYU | 9,355 | |||
| Uruguay Notas del Tesoro, | ||||||
| 11.00%, 3/21/17 | 80,000 | UYU | 2,414 | |||
| 7, 13.25%, 4/08/18. | 1,290,000 | UYU | 39,189 | |||
| o10, Index Linked, 4.25%, 1/05/17 | 33,505 | UYU | 1,053 | |||
| o13, Index Linked, 4.00%, 5/25/25 | 164,174 | UYU | 4,922 | |||
| o18, Index Linked, 2.25%, 8/23/17 | 2,794,317 | UYU | 85,064 | |||
| o19, Index Linked, 2.50%, 9/27/22 | 67,010 | UYU | 1,852 | |||
| senior note, 13.90%, 7/29/20 | 822,000 | UYU | 25,023 | |||
| Uruguay Treasury Bill, | ||||||
| Strip, 4/21/16. | 1,755,000 | UYU | 54,900 | |||
| Strip, 6/09/16. | 333,000 | UYU | 10,213 | |||
| Strip, 7/28/16. | 321,000 | UYU | 9,650 | |||
| Strip, 9/15/16. | 250,000 | UYU | 7,383 | |||
| Strip, 11/03/16 | 330,000 | UYU | 9,563 | |||
| Strip, 2/10/17. | 140,000 | UYU | 3,913 | |||
| Strip, 4/03/17. | 1,935,000 | UYU | 53,051 | |||
| Strip, 5/19/17. | 2,590,000 | UYU | 69,848 | |||
| 684,741 | ||||||
| Zambia 1.5% | ||||||
| f Government of Zambia, senior bond, 144A, | ||||||
| 8.97%, 7/30/27 | 230,000 | 190,272 | ||||
| f Government of Zambia International Bond, | ||||||
| 144A, 5.375%, 9/20/22 | 200,000 | 152,318 | ||||
| 144A, 8.50%, 4/14/24 | 200,000 | 166,545 | ||||
| 509,135 | ||||||
| Total Foreign Government and | ||||||
| Agency Securities | ||||||
| (Cost $9,975,629) | 8,817,382 | |||||
| Total Investments before Short Term | ||||||
| Investments (Cost $30,096,321) | 28,313,147 | |||||
| Short Term Investments 13.1% | ||||||
| Foreign Government and Agency | ||||||
| Securities 1.2% | ||||||
| Malaysia 0.5% | ||||||
| p Bank of Negara Monetary Note, 5/03/16 - | ||||||
| 10/18/16 | 625,000 | MYR | 158,747 | |||
| p Malaysia Treasury Bill, 5/27/16 - 1/20/17 | 40,000 | MYR | 10,143 | |||
| 168,890 | ||||||
| Mexico 0.7% | ||||||
| p Mexico Treasury Bill, 4/14/16 - 2/02/17 | 392,940 | q | MXN | 225,276 | ||
26 Annual Report
franklintempleton.com
TEMPLETON GLOBAL INVESTMENT TRUST
STATEMENT OF INVESTMENTS
| Templeton Emerging Markets Balanced Fund (continued) | ||||
| Principal | ||||
| Amount* | Value | |||
| Foreign Government and Agency | ||||
| Securities (continued) | ||||
| Philippines 0.0%† | ||||
| p Philippine Treasury Bill, 8/03/16 - 2/22/17 | 860,000 | PHP | $ | 18,616 |
| Uruguay 0.0%† | ||||
| p Uruguay Treasury Bill, 4/11/16 | 30,000 | UYU | 943 | |
| Total Foreign Government and | ||||
| Agency Securities (Cost $402,387) | 413,725 | |||
| Total Investments before Money | ||||
| Market Funds (Cost $30,498,708) | 28,726,872 | |||
| Shares | ||||
| Money Market Funds (Cost $3,951,977) 11.9% | ||||
| United States 11.9% | ||||
| a,r Institutional Fiduciary Trust Money Market | ||||
| Portfolio. | 3,951,977 | 3,951,977 | ||
| Total Investments (Cost $34,450,685) | ||||
| 98.1%. | 32,678,849 | |||
| Other Assets, less Liabilities 1.9% | 625,313 | |||
| Net Assets 100.0%. | $ | 33,304,162 | ||
†Rounds to less than 0.1% of net assets.
*The principal amount is stated in U.S. dollars unless otherwise indicated.
aNon-income producing.
bSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States.
Such a security 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. This security has been deemed liquid under guidelines approved by the Trust’s Board of Trustees. At March 31, 2016, the value of this security was
$150,858, representing 0.45% of net assets.
cAt March 31, 2016, pursuant to the Fund’s policies and the requirements of applicable securities law, the Fund is restricted from trading these securities at year end.
dSee Note 9 regarding restricted securities.
eSee Note 1(e) regarding Participatory Notes.
fSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and 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. These securities have been deemed liquid under guidelines approved by the Trust’s Board of Trustees. At
March 31, 2016, the aggregate value of these securities was $3,542,548, representing 10.64% of net assets.
gSee Note 7regarding defaulted securities.
hIncome may be received in additional securities and/or cash.
iSee Note 1(d) regarding loan participation notes.
jPrincipal amount is stated in 1,000 Brazilian Real Peso Units.
kRedemption price at maturity is adjusted for inflation. See Note 1(g).
lPrincipal amount is stated in 100 Mexican Peso units.
mThe coupon rate shown represents the rate at period end.
nThe principal represents the notional amount. See Note 1(c) regarding value recovery instruments.
oPrincipal amount of security is adjusted for inflation. See Note 1(g).
pThe security is traded on a discount basis with no stated coupon rate.
qPrincipal amount is stated in 10 Mexican Peso Units.
rSee Note 3(f) regarding investments in affiliated management investment companies.
franklintempleton.com
Annual Report
27
TEMPLETON GLOBAL INVESTMENT TRUST
STATEMENT OF INVESTMENTS
Templeton Emerging Markets Balanced Fund (continued)
At March 31, 2016, the Fund had the following forward exchange contracts outstanding. See Note 1(c).
| Forward Exchange Contracts | |||||||||||
| Contract | Settlement | Unrealized | Unrealized | ||||||||
| Currency | Counterpartya Type | Quantity | Amount | Date | Appreciation | Depreciation | |||||
| OTC Forward Exchange Contracts | |||||||||||
| Malaysian Ringgit | JPHQ | Buy | 310,750 | $ | 68,849 | 4/01/16 | $ | 10,752 | $ | — | |
| Malaysian Ringgit | JPHQ | Sell | 310,750 | 78,456 | 4/01/16 | — | (1,144 | ) | |||
| Malaysian Ringgit | JPHQ | Buy | 25,770 | 5,794 | 4/05/16 | 808 | — | ||||
| Malaysian Ringgit | DBAB | Buy | 238,900 | 53,821 | 4/07/16 | 7,389 | — | ||||
| Ghanaian Cedi | BZWS | Buy | 29,574 | 6,265 | 4/08/16 | 1,415 | — | ||||
| Chilean Peso | MSCO | Buy | 13,909,000 | 20,278 | 4/11/16 | 464 | — | ||||
| Malaysian Ringgit | JPHQ | Buy | 155,000 | 34,953 | 4/11/16 | 4,766 | — | ||||
| Chilean Peso | DBAB | Buy | 56,385,000 | 82,326 | 4/18/16 | 1,707 | — | ||||
| Chilean Peso | DBAB | Buy | 55,692,500 | 75,423 | 4/21/16 | 7,555 | — | ||||
| Euro | JPHQ | Sell | 130,000 | 141,631 | 4/21/16 | — | (6,433 | ) | |||
| Euro | DBAB | Sell | 121,000 | 130,995 | 4/22/16 | — | (6,823 | ) | |||
| Euro | JPHQ | Sell | 66,000 | 74,096 | 4/25/16 | — | (1,084 | ) | |||
| South Korean Won | HSBK | Buy | 25,000,000 | 21,474 | 4/25/16 | 335 | — | ||||
| South Korean Won | HSBK | Sell | 25,000,000 | 20,244 | 4/25/16 | — | (1,565 | ) | |||
| South Korean Won | HSBK | Buy | 7,000,000 | 6,013 | 4/26/16 | 94 | — | ||||
| South Korean Won | HSBK | Sell | 7,000,000 | 5,659 | 4/26/16 | — | (447 | ) | |||
| Euro | DBAB | Sell | 100,000 | 110,870 | 4/28/16 | — | (3,049 | ) | |||
| Euro | JPHQ | Sell | 27,000 | 30,213 | 4/29/16 | — | (545 | ) | |||
| Indian Rupee | JPHQ | Buy | 12,595,000 | 182,800 | 4/29/16 | 6,539 | — | ||||
| South Korean Won | HSBK | Buy | 9,000,000 | 7,729 | 5/02/16 | 120 | — | ||||
| South Korean Won | HSBK | Sell | 9,000,000 | 7,265 | 5/02/16 | — | (585 | ) | |||
| Chilean Peso | MSCO | Buy | 27,874,500 | 38,779 | 5/12/16 | 2,672 | — | ||||
| Euro | BZWS | Sell | 136,000 | 156,210 | 5/18/16 | 1,177 | — | ||||
| Euro | JPHQ | Sell | 109,400 | 125,560 | 5/20/16 | 841 | — | ||||
| South Korean Won | JPHQ | Buy | 145,000,000 | 132,523 | 5/23/16 | — | (6,115 | ) | |||
| South Korean Won | JPHQ | Sell | 145,000,000 | 117,126 | 5/23/16 | — | (9,282 | ) | |||
| South Korean Won | HSBK | Buy | 19,000,000 | 16,308 | 5/24/16 | 255 | — | ||||
| South Korean Won | HSBK | Sell | 19,000,000 | 15,378 | 5/24/16 | — | (1,185 | ) | |||
| Malaysian Ringgit | HSBK | Buy | 250,000 | 59,333 | 5/31/16 | 4,703 | — | ||||
| South Korean Won | HSBK | Buy | 7,000,000 | 6,007 | 5/31/16 | 94 | — | ||||
| South Korean Won | HSBK | Sell | 7,000,000 | 5,654 | 5/31/16 | — | (447 | ) | |||
| South Korean Won | JPHQ | Buy | 145,000,000 | 130,267 | 5/31/16 | — | (3,882 | ) | |||
| South Korean Won | JPHQ | Sell | 145,000,000 | 117,114 | 5/31/16 | — | (9,271 | ) | |||
| Chilean Peso | CITI | Buy | 28,321,000 | 40,427 | 6/02/16 | 1,606 | — | ||||
| South Korean Won | HSBK | Buy | 19,000,000 | 16,305 | 6/02/16 | 255 | — | ||||
| South Korean Won | HSBK | Sell | 19,000,000 | 15,343 | 6/02/16 | — | (1,217 | ) | |||
| Euro | CITI | Sell | 363,000 | 386,771 | 6/03/16 | — | (27,251 | ) | |||
| Euro | DBAB | Sell | 123,000 | 137,860 | 6/06/16 | — | (2,442 | ) | |||
| South Korean Won | GSCO | Buy | 25,000,000 | 21,454 | 6/07/16 | 333 | — | ||||
| South Korean Won | GSCO | Sell | 25,000,000 | 20,209 | 6/07/16 | — | (1,577 | ) | |||
| Euro | DBAB | Sell | 137,000 | 149,351 | 6/09/16 | — | (6,936 | ) | |||
| Chilean Peso | JPHQ | Buy | 28,064,000 | 40,899 | 6/10/16 | 723 | — | ||||
| Chilean Peso | MSCO | Buy | 13,909,000 | 20,157 | 6/10/16 | 472 | — | ||||
| Ghanaian Cedi | BZWS | Buy | 60,000 | 11,505 | 6/10/16 | 3,438 | — | ||||
| Australian Dollar | CITI | Sell | 117,000 | 83,732 | 6/14/16 | — | (5,661 | ) | |||
| Australian Dollar | JPHQ | Sell | 173,000 | 125,175 | 6/14/16 | — | (7,004 | ) | |||
| South Korean Won | JPHQ | Buy | 588,927,300 | 496,692 | 6/17/16 | 16,394 | — | ||||
| South Korean Won | JPHQ | Sell | 588,927,300 | 475,574 | 6/17/16 | — | (37,511 | ) | |||
28 Annual Report
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TEMPLETON GLOBAL INVESTMENT TRUST
STATEMENT OF INVESTMENTS
| Templeton Emerging Markets Balanced Fund (continued) | |||||||||||
| Forward Exchange Contracts (continued) | |||||||||||
| Contract | Settlement | Unrealized | Unrealized | ||||||||
| Currency | Counterpartya Type | Quantity | Amount | Date | Appreciation | Depreciation | |||||
| OTC Forward Exchange Contracts (continued) | |||||||||||
| Euro | DBAB | Sell | 66,600 | $ | 73,953 | 6/20/16 | $ | — | $ | (2,050 | ) |
| Philippine Peso. | DBAB | Buy | 1,885,120 | 41,094 | 6/30/16 | — | (215 | ) | |||
| Philippine Peso. | JPHQ | Buy | 1,863,000 | 40,704 | 7/01/16 | — | (305 | ) | |||
| Malaysian Ringgit | JPHQ | Buy | 361,050 | 93,600 | 7/05/16 | — | (1,184 | ) | |||
| Euro | DBAB | Sell | 41,018 | 44,290 | 7/07/16 | — | (2,546 | ) | |||
| Euro | DBAB | Sell | 120,000 | 131,442 | 7/29/16 | — | (5,685 | ) | |||
| Euro | DBAB | Sell | 31,000 | 34,523 | 8/05/16 | — | (911 | ) | |||
| Mexican Peso. | CITI | Buy | 7,208,000 | 428,054 | 8/08/16 | — | (15,704 | ) | |||
| Euro | DBAB | Sell | 117,750 | 130,950 | 8/15/16 | — | (3,687 | ) | |||
| Euro | DBAB | Sell | 120,000 | 135,720 | 8/31/16 | — | (1,567 | ) | |||
| Mexican Peso. | CITI | Buy | 7,253,572 | 415,297 | 9/06/16 | — | (1,404 | ) | |||
| Australian Dollar | CITI | Sell | 116,000 | 83,564 | 9/14/16 | — | (4,712 | ) | |||
| Malaysian Ringgit | HSBK | Buy | 550,000 | 136,405 | 9/28/16 | 4,035 | — | ||||
| Australian Dollar | BOFA | Sell | 696,000 | 519,912 | 9/29/16 | — | (9,402 | ) | |||
| Philippine Peso. | DBAB | Buy | 5,554,840 | 119,631 | 9/30/16 | 337 | — | ||||
| Euro | DBAB | Sell | 623,000 | 715,036 | 10/17/16 | 1,032 | — | ||||
| Euro | BZWS | Sell | 100,000 | 108,436 | 11/16/16 | — | (6,310 | ) | |||
| Brazilian Real | HSBK | Buy | 300,000 | 70,547 | 11/21/16 | 7,430 | — | ||||
| Australian Dollar | JPHQ | Sell | 118,000 | 83,978 | 12/12/16 | — | (5,493 | ) | |||
| Australian Dollar | JPHQ | Sell | 58,000 | 41,521 | 12/14/16 | — | (2,453 | ) | |||
| Euro | JPHQ | Sell | 53,000 | 58,714 | 12/19/16 | — | (2,182 | ) | |||
| Euro | CITI | Sell | 28,594 | 31,694 | 1/19/17 | — | (1,202 | ) | |||
| Philippine Peso. | DBAB | Buy | 5,554,840 | 112,258 | 1/31/17 | 7,092 | — | ||||
| Euro | DBAB | Sell | 100,000 | 110,332 | 2/03/17 | — | (4,781 | ) | |||
| Euro | DBAB | Sell | 339,000 | 381,273 | 2/23/17 | — | (9,280 | ) | |||
| Malaysian Ringgit | JPHQ | Buy | 310,750 | 77,808 | 4/03/17 | 871 | — | ||||
| Total Forward Exchange Contracts | $ | 95,704 | $ | (222,529 | ) | ||||||
| Net unrealized appreciation (depreciation) | $ | (126,825 | ) | ||||||||
| aMay be comprised of multiple contracts with the same counterparty, currency and settlement date. | |||||||||||
At March 31, 2016, the Fund had the following interest rate swap contracts outstanding. See Note 1(c).
| Interest Rate Swap Contracts | |||||||||
| Notional | Expiration | Unrealized | Unrealized | ||||||
| Description | Exchange | Amount | Date | Appreciation | Depreciation | ||||
| Centrally Cleared Swap Contracts | |||||||||
| Receive Floating rate 3-month USD BBA LIBOR | |||||||||
| Pay Fixed rate 0.926% | LCH | $ | 810,000 | 10/17/17 | $ | — | $ | (4,026 | ) |
| Receive Floating rate 3-month USD BBA LIBOR | |||||||||
| Pay Fixed rate 2.775% | CME | 20,000 | 10/04/23 | — | (2,163 | ) | |||
| Receive Floating rate 3-month USD BBA LIBOR | |||||||||
| Pay Fixed rate 2.795% | CME | 20,000 | 10/04/23 | — | (2,194 | ) | |||
| Receive Floating rate 3-month USD BBA LIBOR | |||||||||
| Pay Fixed rate 2.765% | CME | 20,000 | 10/07/23 | — | (2,147 | ) |
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Annual Report
29
| TEMPLETON GLOBAL INVESTMENT TRUST | |||||||||
| STATEMENT OF INVESTMENTS | |||||||||
| Templeton Emerging Markets Balanced Fund (continued) | |||||||||
| Interest Rate Swap Contracts (continued) | |||||||||
| Notional | Expiration | Unrealized | Unrealized | ||||||
| Description | Exchange | Amount | Date | Appreciation | Depreciation | ||||
| Centrally Cleared Swap Contracts (continued) | |||||||||
| Receive Floating rate 3-month USD BBA LIBOR | |||||||||
| Pay Fixed rate 1.914% | LCH | $ | 680,000 | 1/22/25 | $ | — | $ | (22,064 | ) |
| Receive Floating rate 3-month USD BBA LIBOR | |||||||||
| Pay Fixed rate 1.970% | LCH | 850,000 | 1/23/25 | — | (31,527 | ) | |||
| Receive Floating rate 3-month USD BBA LIBOR | |||||||||
| Pay Fixed rate 1.973% | LCH | 510,000 | 1/27/25 | — | (19,015 | ) | |||
| Receive Floating rate 3-month USD BBA LIBOR | |||||||||
| Pay Fixed rate 1.937% | LCH | 130,000 | 1/29/25 | — | (4,434 | ) | |||
| Receive Floating rate 3-month USD BBA LIBOR | |||||||||
| Pay Fixed rate 1.942% | LCH | 110,000 | 1/30/25 | — | (3,784 | ) | |||
| Receive Floating rate 3-month USD BBA LIBOR | |||||||||
| Pay Fixed rate 1.817% | LCH | 160,000 | 2/03/25 | — | (3,773 | ) | |||
| Receive Floating rate 3-month USD BBA LIBOR | |||||||||
| Pay Fixed rate 3.668% | CME | 10,000 | 10/04/43 | — | (3,573 | ) | |||
| Receive Floating rate 3-month USD BBA LIBOR | |||||||||
| Pay Fixed rate 3.687% | CME | 10,000 | 10/04/43 | — | (3,615 | ) | |||
| Receive Floating rate 3-month USD BBA LIBOR | |||||||||
| Pay Fixed rate 3.675% | CME | 10,000 | 10/07/43 | — | (3,587 | ) | |||
| Net unrealized appreciation (depreciation) | $ | (105,902 | ) | ||||||
See Abbreviations on page 47.
30 Annual Report | The accompanying notes are an integral part of these financial statements.
franklintempleton.com
TEMPLETON GLOBAL INVESTMENT TRUST
Financial Statements
Statement of Assets and Liabilities
March 31, 2016
| Templeton Emerging Markets Balanced Fund | |||
| Assets: | |||
| Investments in securities: | |||
| Cost - Unaffiliated issuers | $ | 30,498,708 | |
| Cost - Non-controlled affiliates (Note 3f) | 3,951,977 | ||
| Total cost of investments | $ | 34,450,685 | |
| Value - Unaffiliated issuers | $ | 28,726,872 | |
| Value - Non-controlled affiliates (Note 3f) | 3,951,977 | ||
| Total value of investments | 32,678,849 | ||
| Foreign currency, at value (cost $445,615) | 448,119 | ||
| Receivables: | |||
| Capital shares sold | 46,423 | ||
| Dividends and interest | 292,747 | ||
| Due from brokers | 133,680 | ||
| Unrealized appreciation on OTC forward exchange contracts | 95,704 | ||
| Other assets. | 21 | ||
| Total assets | 33,695,543 | ||
| Liabilities: | |||
| Payables: | |||
| Investment securities purchased | 31,460 | ||
| Capital shares redeemed | 9,341 | ||
| Distribution fees | 14,576 | ||
| Transfer agent fees | 12,999 | ||
| Professional fees. | 63,289 | ||
| Variation margin | 9,946 | ||
| Unrealized depreciation on OTC forward exchange contracts | 222,529 | ||
| Deferred tax | 4,843 | ||
| Accrued expenses and other liabilities | 22,398 | ||
| Total liabilities | 391,381 | ||
| Net assets, at value. | $ | 33,304,162 | |
| Net assets consist of: | |||
| Paid-in capital. | $ | 43,765,293 | |
| Undistributed net investment income | 136,389 | ||
| Net unrealized appreciation (depreciation) | (2,004,607 | ) | |
| Accumulated net realized gain (loss) | (8,592,913 | ) | |
| Net assets, at value. | $ | 33,304,162 | |
franklintempleton.com
The accompanying notes are an integral part of these financial statements. | Annual Report 31
TEMPLETON GLOBAL INVESTMENT TRUST
FINANCIAL STATEMENTS
Statement of Assets and Liabilities (continued)
March 31, 2016
| Templeton Emerging Markets Balanced Fund | ||
| Class A: | ||
| Net assets, at value. | $ | 23,171,491 |
| Shares outstanding | 2,781,296 | |
| Net asset value per sharea | $ | 8.33 |
| Maximum offering price per share (net asset value per share ÷ 94.25%) | $ | 8.84 |
| Class C: | ||
| Net assets, at value. | $ | 3,462,010 |
| Shares outstanding | 419,512 | |
| Net asset value and maximum offering price per sharea | $ | 8.25 |
| Class R: | ||
| Net assets, at value. | $ | 148,719 |
| Shares outstanding | 17,879 | |
| Net asset value and maximum offering price per share | $ | 8.32 |
| Advisor Class : | ||
| Net assets, at value. | $ | 6,521,942 |
| Shares outstanding | 781,421 | |
| Net asset value and maximum offering price per share | $ | 8.35 |
aRedemption price is equal to net asset value less contingent deferred sales charges, if applicable.
32 Annual Report | The accompanying notes are an integral part of these financial statements.
franklintempleton.com
TEMPLETON GLOBAL INVESTMENT TRUST
FINANCIAL STATEMENTS
Statement of Operations
for the year ended March 31, 2016
| Templeton Emerging Markets Balanced Fund | |||
| Investment income: | |||
| Dividends (net of foreign taxes of $71,697) | $ | 520,580 | |
| Interest (net of foreign taxes of $6,262) | 842,551 | ||
| Inflation principal adjustments | 145,810 | ||
| Total investment income | 1,508,941 | ||
| Expenses: | |||
| Management fees (Note 3a) | 419,115 | ||
| Distribution fees: (Note 3c) | |||
| Class A | 69,476 | ||
| Class C | 37,387 | ||
| Class R | 318 | ||
| Transfer agent fees: (Note 3e) | |||
| Class A | 68,205 | ||
| Class C | 9,884 | ||
| Class R | 168 | ||
| Advisor Class | 18,229 | ||
| Custodian fees (Note 4) | 17,251 | ||
| Reports to shareholders | 28,823 | ||
| Registration and filing fees | 60,724 | ||
| Professional fees | 72,075 | ||
| Other | 26,943 | ||
| Total expenses. | 828,598 | ||
| Expenses waived/paid by affiliates (Note 3f and 3g) | (273,291 | ) | |
| Net expenses. | 555,307 | ||
| Net investment income | 953,634 | ||
| Realized and unrealized gains (losses): | |||
| Net realized gain (loss) from: | |||
| Investments (net of foreign taxes of $13,154) | (4,955,109 | ) | |
| Foreign currency transactions | (10,600 | ) | |
| Swap contracts | (48,054 | ) | |
| Net realized gain (loss) | (5,013,763 | ) | |
| Net change in unrealized appreciation (depreciation) on: | |||
| Investments | 16,165 | ||
| Translation of other assets and liabilities | |||
| denominated in foreign currencies | (395,612 | ) | |
| Swap contracts | (101,509 | ) | |
| Change in deferred taxes on unrealized appreciation | 8,343 | ||
| Net change in unrealized appreciation (depreciation) | (472,613 | ) | |
| Net realized and unrealized gain (loss) | (5,486,376 | ) | |
| Net increase (decrease) in net assets resulting from operations | $ | (4,532,742 | ) |
franklintempleton.com
The accompanying notes are an integral part of these financial statements. | Annual Report 33
| TEMPLETON GLOBAL INVESTMENT TRUST | |||||||
| FINANCIAL STATEMENTS | |||||||
| Statements of Changes in Net Assets | |||||||
| Templeton Emerging Markets Balanced Fund | |||||||
| Year Ended March 31, | |||||||
| 2016 | 2015 | ||||||
| Increase (decrease) in net assets: | |||||||
| Operations: | |||||||
| Net investment income | $ | 953,634 | $ | 1,347,291 | |||
| Net realized gain (loss) | (5,013,763 | ) | (835,378 | ) | |||
| Net change in unrealized appreciation (depreciation) | (472,613 | ) | (2,290,171 | ) | |||
| Net increase (decrease) in net assets resulting from operations | (4,532,742 | ) | (1,778,258 | ) | |||
| Distributions to shareholders from: | |||||||
| Net investment income: | |||||||
| Class A | (123,817 | ) | (1,231,002 | ) | |||
| Class C | — | (137,716 | ) | ||||
| Class R | (112 | ) | (2,053 | ) | |||
| Advisor Class | (49,737 | ) | (322,259 | ) | |||
| Total distributions to shareholders | (173,666 | ) | (1,693,030 | ) | |||
| Capital share transactions: (Note 2) | |||||||
| Class A | (3,612,998 | ) | 2,719,973 | ||||
| Class C | (135,553 | ) | 170,090 | ||||
| Class R | 91,670 | 3,321 | |||||
| Advisor Class | (682,747 | ) | (256,598 | ) | |||
| Total capital share transactions | (4,339,628 | ) | 2,636,786 | ||||
| Net increase (decrease) in net assets | (9,046,036 | ) | (834,502 | ) | |||
| Net assets: | |||||||
| Beginning of year. | 42,350,198 | 43,184,700 | |||||
| End of year | $ | 33,304,162 | $ | 42,350,198 | |||
| Undistributed net investment income included in net assets: | |||||||
| End of year | $ | 136,389 | $ | — | |||
| Distributions in excess of net investment income included in net assets: | |||||||
| End of year | $ | — | $ | (253,304 | ) | ||
34 Annual Report | The accompanying notes are an integral part of these financial statements.
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TEMPLETON GLOBAL INVESTMENT TRUST
Notes to Financial Statements
Templeton Emerging Markets Balanced Fund
1. Organization and Significant Accounting Policies
Templeton Global Investment Trust (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company, consisting of six separate funds and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP). Templeton Emerging Markets Balanced Fund (Fund) is included in this report. The financial statements of the remaining funds in the Trust are presented separately. The Fund offers four classes of shares: Class A. Class C, Class R, and Advisor Class. Each class of shares differs by its initial sales load, contingent deferred sales charges, voting rights on matters affecting a single class, its exchange privilege and fees primarily 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 as of 4 p.m. Eastern time each day the New York Stock Exchange (NYSE) is open for trading. 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 and Liquidity Oversight Committee (VLOC). The VLOC provides administration and oversight of the Fund’s valuation policies and procedures, which are approved annually by the Board. Among other things, these procedures allow the Fund to 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 (derivatives) 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 4 p.m. Eastern time, whichever is earlier. 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.
Certain derivatives 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 VLOC convenes on a regular basis to review such financial instruments and considers a number of factors, including significant unobservable valuation inputs, when arriving at fair value. The VLOC 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
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TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
Templeton Emerging Markets Balanced Fund (continued)
1. Organization and Significant Accounting
Policies (continued)
a. Financial Instrument Valuation (continued)
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. The VLOC employs various methods for calibrating these valuation approaches including a regular review of key inputs and assumptions, transactional back-testing or disposition analysis, and reviews of any related market activity.
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 NYSE business day. Occasionally, events occur between the time at which trading in a foreign security is completed and the close of the NYSE 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 the close of the NYSE. In order to minimize the potential for these differences, the VLOC monitors price movements following the close of trading in foreign stock markets through a series of country specific market proxies (such as baskets of American Depositary Receipts, futures contracts and exchange traded funds). These price movements are measured against established trigger thresholds for each specific market proxy to assist in determining if an event has occurred that may call into question the reliability of the values of the foreign securities held by the Fund. If such an event occurs, the securities may be valued using fair value procedures, which may include the use of independent pricing services.
When the last day of the reporting period is a non-business day, certain foreign markets may be open on those days that the NYSE is closed, 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
significant security valuation changes due to an open foreign market are adjusted and reflected by the Fund for financial reporting purposes.
b. Foreign Currency Translation
Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the exchange rate of such currencies against U.S. dollars on the date of valuation. The Fund may enter into foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of securities, income and expense items denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date. Portfolio securities and assets and liabilities denominated in foreign currencies contain risks that those currencies will decline in value relative to the U.S. dollar. Occasionally, events may impact the availability or reliability of foreign exchange rates used to convert the U.S. dollar equivalent value. If such an event occurs, the foreign exchange rate will be valued at fair value using procedures established and approved by the Board.
The Fund does not separately report the effect of changes in foreign exchange rates from changes in market prices on securities held. Such changes are included in net realized and unrealized gain or loss from investments in the Statement of Operations.
Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions and the difference between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period.
c. Derivative Financial Instruments
The Fund invested in derivatives 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
36 Annual Report
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TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
Templeton Emerging Markets Balanced Fund (continued)
their obligations under the terms of the contract, the potential for an illiquid secondary market, and/or the potential for market movements which expose the Fund to gains or losses in excess of the amounts shown in the Statement of Assets and Liabilities. Realized gain and loss and unrealized appreciation and depreciation on these contracts for the period are included in the Statement of Operations.
Derivative counterparty credit risk is managed through a formal evaluation of the creditworthiness of all potential counterparties The Fund attempts to reduce its exposure to counterparty credit risk on OTC derivatives, whenever possible, by entering into International Swaps and Derivatives Association (ISDA) master agreements with certain counterparties. These agreements contain various provisions, including but not limited to collateral requirements, events of default, or early termination. Termination events applicable to the counterparty include certain deteriorations in the credit quality of the counterparty. Termination events applicable to the Fund include failure of the Fund to maintain certain net asset levels and/or limit the decline in net assets over various periods of time. In the event of default or early termination, the ISDA master agreement gives the non-defaulting party the right to net and close-out all transactions traded, whether or not arising under the ISDA agreement, to one net amount payable by one counterparty to the other. However, absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities. Early termination by the counterparty may result in an immediate payment by the Fund of any net liability owed to that counterparty under the ISDA agreement.
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 the 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 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 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 interest rate swap contracts primarily to manage interest rate risk. An interest rate swap is an agreement between the Fund and a counterparty to exchange cash flows based on the difference between two interest rates, applied to a notional amount. These agreements may be privately negotiated in the over-the-counter market (OTC interest rate swaps) or may be executed on a registered exchange (centrally cleared interest rate swaps). For centrally cleared interest rate 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, 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.
The Fund invests in value recovery instruments (VRI) primarily to gain exposure to growth risk. 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.
d. 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
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Annual Report
37
TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
Templeton Emerging Markets Balanced Fund (continued)
1. Organization and Significant Accounting
Policies (continued)
d. Loan Participation Notes (continued)
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.
e. Participatory Notes
The Fund invests in Participatory Notes (P-Notes). P-notes are promissory notes that are designed to offer a return linked to the performance of a particular underlying equity security or market. P-Notes are issued by banks or broker-dealers and allow the Fund to gain exposure to common stocks in markets where direct investment is not allowed. Income received from P-Notes is recorded as dividend income in the Statement of Operations. P-Notes may contain various risks including the potential inability of the counterparty to fulfill their obligations under the terms of the contract. These securities may be more volatile and less liquid than other investments held by the Fund.
f. Income and Deferred Taxes
It is the Fund’s policy to qualify as a regulated investment company under the Internal Revenue Code. The Fund intends to distribute to shareholders substantially all of its taxable income and net realized gains to relieve it from federal income and excise taxes. As a result, no provision for U.S. federal income taxes is required.
The Fund may be subject to foreign taxation related to income received, capital gains on the sale of securities and certain foreign currency transactions in the foreign jurisdictions in which it invests. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests. When a capital gain tax is determined to apply, the Fund records an estimated deferred tax liability in an amount that would be payable if the securities were disposed of on the valuation date.
The Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain tax position has a less than 50% probability that it will be sustained upon examination by the tax authorities based on its technical merits. As of March 31, 2016, 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 on future tax returns). Open tax years are those that remain subject to examination and are based on each tax jurisdiction’s statute of limitation.
g. Security Transactions, Investment Income, Expenses and Distributions
Security transactions are accounted for on trade date. Realized gains and losses on security transactions are determined on a specific identification basis. Interest income and estimated expenses are accrued daily. Amortization of premium and accretion of discount on debt securities are included in interest income. Dividend income is recorded on the ex-dividend date except for certain dividends from foreign 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 and are determined according to income tax regulations (tax basis). Distributable earnings determined on a tax basis 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. Fund specific expenses are charged directly to the Fund that incurred the expense.
Realized and unrealized gains and losses and net investment income, not including 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
38 Annual Report
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TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
Templeton Emerging Markets Balanced Fund (continued)
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 inflation principal adjustments in the Statement of Operations.
h. 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.
i. 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 March 31, 2016, there were an unlimited number of shares authorized ($0.01 par value). Transactions in the Fund’s shares were as follows:
| Year Ended March 31, | |||||||||||
| 2016 | 2015 | ||||||||||
| Shares | Amount | Shares | Amount | ||||||||
| Class A Shares: | |||||||||||
| Shares sold | 659,544 | $ | 5,625,747 | 1,143,138 | $ | 11,610,919 | |||||
| Shares issued in reinvestment of distributions. | 13,494 | 112,221 | 117,730 | 1,121,630 | |||||||
| Shares redeemed | (1,112,325 | ) | (9,350,966 | ) | (1,008,348 | ) | (10,012,576 | ) | |||
| Net increase (decrease) | (439,287 | ) | $ | (3,612,998 | ) | 252,520 | $ | 2,719,973 | |||
| Class C Shares: | |||||||||||
| Shares sold | 125,643 | $ | 1,088,240 | 139,771 | $ | 1,410,008 | |||||
| Shares issued in reinvestment of distributions. | — | — | 14,353 | 135,315 | |||||||
| Shares redeemed | (144,639 | ) | (1,223,793 | ) | (139,121 | ) | (1,375,233 | ) | |||
| Net increase (decrease) | (18,996 | ) | $ | (135,553 | ) | 15,003 | $ | 170,090 | |||
| Class R Shares: | |||||||||||
| Shares sold | 14,473 | $ | 109,928 | 2,721 | $ | 27,696 | |||||
| Shares issued in reinvestment of distributions. | 13 | 112 | 216 | 2,053 | |||||||
| Shares redeemed | (2,197 | ) | (18,370 | ) | (2,599 | ) | (26,428 | ) | |||
| Net increase (decrease) | 12,289 | $ | 91,670 | 338 | $ | 3,321 | |||||
| Advisor Class Shares: | |||||||||||
| Shares sold | 63,892 | $ | 556,058 | 148,900 | $ | 1,481,515 | |||||
| Shares issued in reinvestment of distributions. | 1,768 | 14,847 | 9,621 | 91,800 | |||||||
| Shares redeemed | (144,453 | ) | (1,253,652 | ) | (179,583 | ) | (1,829,913 | ) | |||
| Net increase (decrease) | (78,793 | ) | $ | (682,747 | ) | (21,062 | ) | $ | (256,598 | ) | |
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39
TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
Templeton Emerging Markets Balanced Fund (continued)
3. Transactions with Affiliates
Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton Investments. Certain officers and trustees of the Trust are also officers and/or directors of the following subsidiaries:
| Subsidiary | Affiliation |
| Templeton Asset Management Ltd. (TAML) | Investment manager |
| Franklin Advisers, Inc. (Advisers) | Investment manager |
| Franklin Templeton Services, LLC (FT Services) | Administrative manager |
| Franklin Templeton Distributors, Inc. (Distributors) | Principal underwriter |
| Franklin Templeton Investor Services, LLC (Investor Services) | Transfer agent |
| a. Management Fees | |
The Fund pays an investment management fee to TAML based on the average daily net assets of the Fund as follows:
| Annualized Fee Rate | Net Assets | |
| 1.150 | % | Up to and including $1 billion |
| 1.100 | % | Over $1 billion, up to and including $5 billion |
| 1.050 | % | Over $5 billion, up to and including $10 billion |
| 1.000 | % | Over $10 billion, up to and including $15 billion |
| 0.950 | % | Over $15 billion, up to and including $20 billion |
| 0.900 | % | In excess of $20 billion |
For the year ended March 31, 2016, the effective investment management fee rate was 1.150% of the Fund’s average daily net assets.
Under a subadvisory agreement, Advisers, an affiliate of TAML, provides subadvisory services to the Fund. The subadvisory fee is paid by TAML based on the Fund’s average daily net assets, and is not an additional expense of the Fund.
b. Administrative Fees
Under an agreement with TAML, FT Services provides administrative services to the Fund .The fee is paid by TAML 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 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:
| Class A | 0.30 | % |
| Class C | 1.00 | % |
| Class R | 0.50 | % |
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TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
Templeton Emerging Markets Balanced Fund (continued)
Effective August 1, 2015, 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 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 year:
| Sales charges retained net of commissions paid to | ||
| unaffiliated brokers/dealers. | $ | 11,901 |
| CDSC retained | $ | 1,869 |
| e. Transfer Agent Fees | ||
Each class of shares pays transfer agent fees to Investor Services for its performance of shareholder servicing obligations and reimburses Investor Services for out of pocket expenses incurred, including shareholder servicing fees paid to third parties. These fees are allocated daily based upon their relative proportion of such classes’ aggregate net assets.
For the year ended March 31, 2016, the Fund paid transfer agent fees of $96,486, of which $43,002 was retained by Investor Services.
f. Investments in Affiliated Management Investment Companies
The Fund invests in an affiliated management investment company for purposes other than 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 company, 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. Prior to April 1, 2013, the waiver was accounted for as a reduction to management fees.
| % of | |||||||||||
| Affiliated | |||||||||||
| Number of | Number of | Fund Shares | |||||||||
| Shares Held | Shares | Value | Outstanding | ||||||||
| at Beginning | Gross | Gross | Held at End | at End | Investment | Realized | Held at End | ||||
| of Year | Additions | Reductions | of Year | of Year | Income | Gain (Loss) | of Year | ||||
| Non-Controlled Affiliates | |||||||||||
| Institutional Fiduciary Trust Money Market | |||||||||||
| Portfolio | 2,680,673 | 16,173,262 | (14,901,958 | ) | 3,951,977 | $ | 3,951,977 | $- | $- | 0.02 | % |
| g. Waiver and Expense Reimbursements | |||||||||||
TAML has contractually agreed in advance to waive or limit its fees and to assume as its own expense certain expenses otherwise payable by the Fund so that the expenses (excluding distribution fees, and acquired fund fees and expenses) for Class A, Class C, Class R and Advisor Class of the Fund do not exceed 1.23% (other than certain non-routine expenses or costs, including those relating to litigation, indemnification, reorganizations, and liquidations) until July 31, 2016.
h. Other Affiliated Transactions
At March 31, 2016, Advisers owned 20.68% of the Fund’s outstanding shares.
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41
TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
Templeton Emerging Markets Balanced Fund (continued)
4. Expense Offset Arrangement
The Fund has entered into an arrangement with its custodian whereby credits realized as a result of uninvested cash balances are used to reduce a portion of the Fund’s custodian expenses. During the year ended March 31, 2016, there were no credits earned.
5. Income Taxes
For tax purposes, capital losses may be carried over to offset future capital gains, if any.
At March 31, 2016, the capital loss carryforwards were as follows:
| Capital loss carryforwards not subject to expiration: | ||
| Short term | $ | 4,734,506 |
| Long term | 3,651,910 | |
| Total capital loss carryforwards | $ | 8,386,416 |
The tax character of distributions paid during the years ended March 31, 2016 and 2015, was as follows:
| 2016 | 2015 | |||
| Distributions paid from Ordinary income | $ | 173,573 | $ | 1,693,030 |
At March 31, 2016, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:
| Cost of investments | $ | 34,690,866 | |
| Unrealized appreciation | $ | 1,974,778 | |
| Unrealized depreciation | (3,986,795 | ) | |
| Net unrealized appreciation (depreciation) | $ | (2,012,017 | ) |
Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatments of wash sales, corporate actions and foreign currency transactions.
6. Investment Transactions
Purchases and sales of investments (excluding short term securities) for the year ended March 31, 2016, aggregated $20,015,776 and $24,101,598, respectively.
7. Credit Risk and Defaulted Securities
At March 31, 2016, the Fund had 19.63% of its portfolio invested in high yield or other securities rated below investment grade. 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 a defaulted security and/or other securities for which the income has been deemed uncollectible. At March 31, 2016, the value of this security represents less than 0.05% 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 security has been identified in the accompanying Statement of Investments.
42 Annual Report
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TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
Templeton Emerging Markets Balanced Fund (continued)
8. 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 and regional economic, political and social conditions, which may result in greater market volatility. In addition, certain foreign securities may not be as liquid as U.S. securities.
9. Restricted Securities
The Fund invests in securities that are restricted under the Securities Act of 1933 (1933 Act) or which are subject to legal, contractual, or other agreed upon restrictions on resale. 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 March 31, 2016, the Fund held investments in restricted securities, excluding certain securities exempt from registration under the 1933 Act deemed to be liquid, as follows:
| Acquisition | ||||||
| Warrants | Issuer | Dates | Cost | Value | ||
| 84 | a Edcon Holdings Ltd., F wts., 2/20/49 | 11/08/13 | $ | 1 | $ | 1 |
| 1,503,436 | a Edcon Holdings Ltd., F1 wts., 2/20/49 | 11/08/13 | 15,930 | 17,113 | ||
| 121,748 | a Edcon Holdings Ltd., F2 wts., 2/20/49 | 11/08/13 | 1,290 | 1,386 | ||
| Total Restricted Securities (Value is 0.06% of Net Assets) | $ | 17,221 | $ | 18,500 |
aThe Fund also invests in unrestricted securities of the issuer, valued at $97,869 as of March 31, 2016.
10. Other Derivative Information
At March 31, 2016, the Fund’s investments in derivative contracts are reflected in the Statement of Assets and Liabilities as follows:
| Asset Derivatives | Liability Derivatives | ||||||
| Derivative Contracts | Statement of | Statement of | |||||
| Not Accounted for as | Assets and Liabilities | Assets and Liabilities | |||||
| Hedging Instruments | Location | Fair Value | Location | Fair Value | |||
| Interest rate contracts | Variation margin | $ | — | Variation margin | $ | 105,902 | a |
| Foreign exchange contracts | Unrealized appreciation on OTC | Unrealized depreciation on OTC | |||||
| swap contracts | 95,704 | swap contracts | 222,529 | ||||
| Value recovery instruments | Investments in securities, at value | 83,905 | |||||
| Totals | $ | 179,609 | $ | 328,431 | |||
aThis amount reflects the cumulative appreciation (depreciation) of centrally cleared swaps 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.
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TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
Templeton Emerging Markets Balanced Fund (continued)
10. Other Derivative Information (continued)
For the year ended March 31, 2016, the effect of derivative contracts in the Fund’s Statement of Operations was as follows:
| Net Change in | ||||||||
| Unrealized | ||||||||
| Derivative Contacts | Realized | Appreciation | ||||||
| Not Accounted for as | Statement of Operations | Gain (Loss) | Statement of | (Depreciation) | ||||
| Hedging Instruments | Locations | for the Year | Operations Locations | for the Year | ||||
| Net realized gain (loss) from: | Net change in unrealized | |||||||
| appreciation (depreciation) on: | ||||||||
| Interest rate contracts | Swap contracts | $ | (48,054 | ) | Swap contracts | $ | (101,509 | ) |
| Foreign exchange contracts | Foreign currency transactions | 6,715 | a | Translation of other assets and | (412,852 | )a | ||
| liabilities denominated in | ||||||||
| foreign currencies | ||||||||
| Value recovery instruments | Investments | — | Investments | (15,635 | ) | |||
| Totals | $ | (41,339 | ) | $ | (529,996 | ) | ||
| aForward exchange contracts are included in net realized gain (loss) from foreign currency transactions and net change in unrealized appreciation (depreciation) on | ||||||||
| translation of other assets and liabilities denominated in foreign currencies in the Statement of Operations. | ||||||||
For the year ended March 31, 2016, the average month end fair value of derivatives represented 1.37% of average month end net assets. The average month end number of open derivatives contracts for the year was 71.
At March 31, 2015, the Fund’s OTC derivative assets and liabilities, are as follows:
| Gross and Net Amounts of | ||||
| Assets and Liabilities Presented | ||||
| in the Statement of Assets and Liabilities | ||||
| Assetsa | Liabilitiesa | |||
| Derivatives | ||||
| Forward exchange contracts | $ | 95,704 | $ | 222,529 |
| aAbsent 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. | ||||
At March 31, 2016, the Fund’s OTC derivative assets, which may be offset against the Fund’s OTC derivative liabilities and collateral received from the counterparty, is as follows:
| Amounts Not Offset in the | ||||||||
| Statement of Assets and Liabilities | ||||||||
| Gross and | ||||||||
| Net Amounts of | Financial | Financial | ||||||
| Assets Presented in | Instruments | Instruments | Cash | Net Amount | ||||
| the Statement of | Available for | Collateral | Collateral | (Not less | ||||
| Assets and Liabilities | Offset | Receiveda | Received | than zero) | ||||
| Counterparty | ||||||||
| BOFA | $ - | $ | - | $- | $- | $ | - | |
| BZWS. | 6,030 | (6,030 | ) | - | - | - | ||
| CITI | 1,606 | (1,606 | ) | - | - | - | ||
| DBAB | 25,113 | (25,113 | ) | - | - | - | ||
| GSCO | 333 | (333 | ) | - | - | - | ||
| HSBK | 17,320 | (5,446 | ) | - | - | 11,874 | ||
| JPHQ | 41,694 | (41,694 | ) | - | - | - | ||
| MSCO | 3,608 | - | - | - | 3,608 | |||
| Total | $ 95,704 | $ | (80,222 | ) | $- | $- | $ | 15,482 |
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TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
Templeton Emerging Markets Balanced Fund (continued)
At March 31, 2016, the Fund’s OTC derivative liabilities, which may be offset against the Fund’s OTC derivative assets and collateral pledged to the counterparty, is as follows:
| Amounts Not Offset in the | |||||||||
| Statement of Assets and Liabilities | |||||||||
| Gross and | |||||||||
| Net Amounts of | Financial | Financial | |||||||
| Assets Presented in | Instruments | Instruments | Cash | Net Amount | |||||
| the Statement of | Available for | Collateral | Collateral | (Not less | |||||
| Assets and Liabilities | Offset | Receiveda | Received | than zero) | |||||
| Counterparty | |||||||||
| BOFA | $ | 9,402 | $ | - | $- | $ | $ | 9,402 | |
| BZWS. | 6,310 | (6,030 | ) | - | - | 280 | |||
| CITI | 55,933 | (1,606 | ) | - | - | 54,327 | |||
| DBAB | 49,972 | (25,113 | ) | - | - | 24,859 | |||
| GSCO | 1,577 | (333 | ) | - | - | 1,244 | |||
| HSBK | 5,446 | (5,446 | ) | - | - | - | |||
| JPHQ | 93,889 | (41,694 | ) | - | - | 52,195 | |||
| MSCO | - | - | - | - | - | ||||
| Total | $ | 222,529 | $ | (80,222 | ) | $- | $- | $ | 142,307 |
See Note 1(c) regarding derivative financial instruments.
See Abbreviations on page 47.
11. Credit Facility
The Fund, together with other U.S. registered and foreign investment funds (collectively, Borrowers), managed by Franklin Templeton Investments, are borrowers in a joint syndicated senior unsecured credit facility totaling $2 billion (Global Credit Facility) which matures on February 10, 2017. 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 0.07% based upon the unused portion of the Global Credit Facility. Effective February 12, 2016, the annual commitment fee is 0.15%. These fees are reflected in other expenses in the Statement of Operations. During the year ended March 31, 2016, 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 The independent sources (observable inputs) and the Fund’s own market assumptions (unobservable inputs). These inputs are used in determining the value of the Fund’s financial instruments and are summarized in the following fair value hierarchy:
- Level 1 – quoted prices in active markets for identical financial instruments
- Level 2 – other significant observable inputs (including quoted prices for similar financial instruments, interest rates, prepayment speed, credit risk, etc.)
- Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of financial instruments)
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45
TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
Templeton Emerging Markets Balanced Fund (continued)
12. Fair Value Measurements (continued)
The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.
For movements between the levels within the fair value hierarchy, the Fund has adopted a policy of recognizing the transfers as of the date of the underlying event which caused the movement.
A summary of inputs used as of March 31, 2016, in valuing the Fund’s assets and liabilities carried at fair value, is as follows:
| Level 1 | Level 2 | Level 3 | Total | |||||
| Assets: | ||||||||
| Investments in Securities: | ||||||||
| Equity Investments:a | ||||||||
| South Africa | $ | 1,898,877 | $ | — | $ | 18,500 | $ | 1,917,377 |
| All Other Equity Investmentsb | 16,649,155 | — | — | 16,649,155 | ||||
| Participatory Notes | — | 58,730 | — | 58,730 | ||||
| Corporate Bonds and Notes | — | 870,373 | 130 | 870,503 | ||||
| Foreign Government and Agency Securities | — | 8,817,382 | — | 8,817,382 | ||||
| Short Term Investments | 3,951,977 | 413,725 | — | 4,365,702 | ||||
| Total Investments in Securities | $ | 22,500,009 | $ | 10,160,210 | $ | 18,630 | $ | 32,678,849 |
| Other Financial Instruments | ||||||||
| Forward Exchange Contracts | $ | — | $ | 95,704 | $ | — | $ | 95,704 |
| Liabilities: | ||||||||
| Other Financial Instruments | ||||||||
| Forward Exchange Contracts | $ | — | $ | 222,529 | $ | — | $ | 222,529 |
| Swap Contracts. | — | 105,902 | — | 105,902 | ||||
| Total Other Financial Instruments | $ | — | $ | 328,431 | $ | — | $ | 328,431 |
aIncludes common and preferred stocks as well as other equity investments.
bFor detailed categories, see the accompanying Statement of Investments.
A reconciliation of assets in which Level 3 inputs are used in determining fair value is presented when there are significant Level 3 financial instruments at the end of the year.
13. Subsequent Events
The Fund has evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure.
46 Annual Report
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TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
| Templeton Emerging Markets Balanced Fund (continued) | |||||
| Abbreviations | |||||
| Counterparty/Exchange | Currency | Selected Portfolio | |||
| BOFA | Bank of America Corp. | BRL | Brazilian Real | ADR | American Depositary Receipt |
| BZWS | Barclays Bank PLC | COP | Colombian Peso | BDR | Brazilian Depositary Receipt |
| CITI | Citigroup N.A. | EUR | Euro | FRN | Floating Rate Note |
| CME | Chicago Mercantile Exchange | GHS | Ghanaian Cedi | GDP | Gross Domestic Product |
| DBAB | Deutsche Bank AG | IDR | Indonesian Rupiah | GDR | Global Depositary Receipt |
| GSCO | The Goldman Sachs Group, Inc. | KRW | South Korean Won | PIK | Payment-In-Kind |
| HSBK | HSBC Bank PLC | LKR | Sri Lankan Rupee | VRI | Value Recovery Instruments |
| JPHQ | JPMorgan Chase Bank, N.A. | MXN | Mexican Peso | ||
| LCH | London Clearing House | MYR | Malaysian Ringgit | ||
| MSCO | Morgan Stanley | PHP | Philippine Peso | ||
| PLN | Polish Zloty | ||||
| RSD | Serbian Dinar | ||||
| UYU | Uruguayan Peso | ||||
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47
TEMPLETON GLOBAL INVESTMENT TRUST
Report of Independent Registered Public Accounting Firm
To the Board of Trustees and Shareholders of Templeton Emerging Markets Balanced Fund
In our opinion, the accompanying statement of assets and liabilities, including the statement of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Templeton Emerging Markets Balanced Fund (the "Fund") at March 31, 2016, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at March 31, 2016 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
May 17, 2016
48 Annual Report
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TEMPLETON GLOBAL INVESTMENT TRUST
Tax Information (unaudited)
Templeton Emerging Markets Balanced Fund
Under Section 854(b)(1)(A) of the Internal Revenue Code (Code), the Fund hereby reports 4.34% of the ordinary income dividends as income qualifying for the dividends received deduction for the fiscal year ended March 31, 2016.
Under Section 854(b)(1)(B) of the Code, the Fund hereby reports the maximum amount allowable but no less than $359,166 as qualified dividends for purposes of the maximum rate under Section 1(h)(11) of the Code for the fiscal year ended March 31, 2016. Distributions, including qualified dividend income, paid during calendar year 2016 will be reported to shareholders on Form 1099-DIV by mid-February 2017. Shareholders are advised to check with their tax advisors for information on the treatment of these amounts on their individual income tax returns.
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TEMPLETON GLOBAL INVESTMENT TRUST
| Board Members and Officers | |||||
| The name, year of birth and address of the officers and board members, as well as their affiliations, positions held with the Trust, | |||||
| principal occupations during at least the past five years and number of U.S. registered portfolios overseen in the Franklin Templeton | |||||
| Investments fund complex, are shown below. Generally, each board member serves until that person’s successor is elected and | |||||
| qualified. | |||||
| Independent Board Members | |||||
| Number of Portfolios in | |||||
| Name, Year of Birth | Length of | Fund Complex Overseen | Other Directorships Held | ||
| and Address | Position | Time Served | by Board Member* | During at Least the Past 5 Years | |
| Harris J. Ashton (1932) | Trustee | Since 1994 | 145 | Bar-S Foods (meat packing company) | |
| 300 S.E. 2nd Street | (1981-2010). | ||||
| Fort Lauderdale, FL 33301-1923 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Director of various companies; and formerly, Director, RBC Holdings, Inc. (bank holding company) (until 2002); and President, Chief Executive | |||||
| Officer and Chairman of the Board, General Host Corporation (nursery and craft centers) (until 1998). | |||||
| Ann Torre Bates (1958) | Trustee | Since 2008 | 40 | Navient Corporation (loan | |
| 300 S.E. 2nd Street | management, servicing and asset | ||||
| Fort Lauderdale, FL 33301-1923 | recovery) (2014-present), Ares Capital | ||||
| Corporation (specialty finance | |||||
| company) (2010-present), United | |||||
| Natural Foods, Inc. (distributor of | |||||
| natural, organic and specialty foods) | |||||
| (2013-present), Allied Capital | |||||
| Corporation (financial services) | |||||
| (2003-2010) and SLM Corporation | |||||
| (Sallie Mae) (1997-2014). | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Director of various companies; and formerly, Executive Vice President and Chief Financial Officer, NHP Incorporated (manager of multifamily | |||||
| housing) (1995-1997); and Vice President and Treasurer, US Airways, Inc. (until 1995). | |||||
| Frank J. Crothers (1944) | Trustee | Since 2001 | 24 | Fortis, Inc. (utility holding company) | |
| 300 S.E. 2nd Street | (2007-present) and AML Foods Limited | ||||
| Fort Lauderdale, FL 33301-1923 | (retail distributors) (1989-present). | ||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Director and Vice Chairman, Caribbean Utilities Company, Ltd.; director of various other private business and nonprofit organizations; and | |||||
| formerly, Chairman, Atlantic Equipment and Power Ltd. (1977-2003). | |||||
| Edith E. Holiday (1952) | Lead | Trustee since | 145 | Hess Corporation (exploration and | |
| 300 S.E. 2nd Street | Independent | 1996 and Lead | refining of oil and gas) (1993-present), | ||
| Fort Lauderdale, FL 33301-1923 | Trustee | Independent | Canadian National Railway (railroad) | ||
| Trustee since 2007 | (2001-present), White Mountains | ||||
| Insurance Group, Ltd. (holding | |||||
| company) (2004-present), RTI | |||||
| International Metals, Inc. (manufacture | |||||
| and distribution of titanium) | |||||
| (1999-2015) and H.J. Heinz Company | |||||
| (processed foods and allied products) | |||||
| (1994-2013). | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Director or Trustee of various companies and trusts; and formerly, Assistant to the President of the United States and Secretary of the | |||||
| Cabinet (1990-1993); General Counsel to the United States Treasury Department (1989-1990); and Counselor to the Secretary and Assistant | |||||
| Secretary for Public Affairs and Public Liaison – United States Treasury Department (1988-1989). | |||||
| J. Michael Luttig (1954) | Trustee | Since 2009 | 145 | Boeing Capital Corporation (aircraft | |
| 300 S.E. 2nd Street | financing) (2006-2013). | ||||
| Fort Lauderdale, FL 33301-1923 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Executive Vice President, General Counsel and member of the Executive Council, The Boeing Company (aerospace company) (2006-present); | |||||
| and formerly, Federal Appeals Court Judge, U.S. Court of Appeals for the Fourth Circuit (1991-2006). | |||||
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TEMPLETON GLOBAL INVESTMENT TRUST
| Independent Board Members (continued) | |||||
| Number of Portfolios in | |||||
| Name, Year of Birth | Length of | Fund Complex Overseen | Other Directorships Held | ||
| and Address | Position | Time Served | by Board Member* | During at Least the Past 5 Years | |
| David W. Niemiec (1949) | Trustee | Since 2006 | 40 | Emeritus Corporation (assisted living) | |
| 300 S.E. 2nd Street | (1999-2010) and OSI Pharmaceuticals, | ||||
| Fort Lauderdale, FL 33301-1923 | Inc. (pharmaceutical products) | ||||
| (2006-2010). | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Advisor, Saratoga Partners (private equity fund); and formerly, Managing Director, Saratoga Partners (1998-2001) and SBC Warburg Dillon | |||||
| Read (investment banking) (1997-1998); Vice Chairman, Dillon, Read & Co. Inc. (investment banking) (1991-1997); and Chief Financial Officer, | |||||
| Dillon, Read & Co. Inc. (1982-1997). | |||||
| Frank A. Olson (1932) | Trustee | Since 2003 | 145 | Hess Corporation (exploration and | |
| 300 S.E. 2nd Street | refining of oil and gas) (1998-2013). | ||||
| Fort Lauderdale, FL 33301-1923 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Director of various companies; and formerly, Chairman of the Board, The Hertz Corporation (car rental) (1980-2000) and Chief Executive | |||||
| Officer (1977-1999); and Chairman of the Board, President and Chief Executive Officer, UAL Corporation (airlines) (June-December 1987). | |||||
| Larry D. Thompson (1945) | Trustee | Since 2006 | 145 | The Southern Company (energy | |
| 300 S.E. 2nd Street | company) (2014-present; previously | ||||
| Fort Lauderdale, FL 33301-1923 | 2010-2012), Graham Holdings | ||||
| Company (education and media | |||||
| organization) (2011-present) and | |||||
| Cbeyond, Inc. (business | |||||
| communications provider) | |||||
| (2010-2012). | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Director of various companies; John A. Sibley Professor of Corporate and Business Law, University of Georgia School of Law (2015-present; | |||||
| previously 2011-2012); and formerly, Executive Vice President – Government Affairs, General Counsel and Corporate Secretary, PepsiCo, | |||||
| Inc. (consumer products) (2012-2014); Senior Vice President – Government Affairs, General Counsel and Secretary, PepsiCo, Inc. | |||||
| (2004-2011); Senior Fellow of The Brookings Institution (2003-2004); Visiting Professor, University of Georgia School of Law (2004); and | |||||
| Deputy Attorney General, U.S. Department of Justice (2001-2003). | |||||
| Constantine D. Tseretopoulos | Trustee | Since 2001 | 24 | None | |
| (1954 | ) | ||||
| 300 S.E. 2nd Street | |||||
| Fort Lauderdale, FL 33301-1923 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Physician, Chief of Staff, owner and operator of the Lyford Cay Hospital (1987-present); director of various nonprofit organizations; and | |||||
| formerly, Cardiology Fellow, University of Maryland (1985-1987); and Internal Medicine Resident, Greater Baltimore Medical Center | |||||
| (1982-1985). | |||||
| Robert E. Wade (1946) | Trustee | Since 2006 | 40 | El Oro Ltd (investments) | |
| 300 S.E. 2nd Street | (2003-present). | ||||
| Fort Lauderdale, FL 33301-1923 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Attorney at law engaged in private practice (1972-2008) and member of various boards. | |||||
franklintempleton.com Annual Report 51
TEMPLETON GLOBAL INVESTMENT TRUST
| Interested Board Members and Officers | |||||
| Number of Portfolios in | |||||
| Name, Year of Birth | Length of | Fund Complex Overseen | Other Directorships Held | ||
| and Address | Position | Time Served | by Board Member* | During at Least the Past 5 Years | |
| **Gregory E. Johnson (1961) | Trustee | Since 2006 | 161 | None | |
| One Franklin Parkway | |||||
| San Mateo, CA 94403-1906 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Chairman of the Board, Member – Office of the Chairman, Director and Chief Executive Officer, Franklin Resources, Inc.; officer and/or | |||||
| director or trustee, as the case may be, of some of the other subsidiaries of Franklin Resources, Inc. and of 44 of the investment companies in | |||||
| Franklin Templeton Investments; Vice Chairman, Investment Company Institute; and formerly, President, Franklin Resources, Inc. | |||||
| (1994-2015). | |||||
| **Rupert H. Johnson, Jr. (1940) | Chairman of | Chairman of the | 145 | None | |
| One Franklin Parkway | the Board, | Board, Trustee | |||
| San Mateo, CA 94403-1906 | Trustee and | since 2013, | |||
| Vice President | and Vice President | ||||
| since 1996 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Vice Chairman, Member – Office of the Chairman and Director, Franklin Resources, Inc.; Director, Franklin Advisers, Inc.; Senior Vice | |||||
| President, Franklin Advisory Services, LLC; and officer and/or director or trustee, as the case may be, of some of the other subsidiaries of | |||||
| Franklin Resources, Inc. and of 42 of the investment companies in Franklin Templeton Investments. | |||||
| Alison E. Baur (1964) | Vice President | Since 2012 | Not Applicable | Not Applicable | |
| One Franklin Parkway | |||||
| San Mateo, CA 94403-1906 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Deputy General Counsel, Franklin Templeton Investments; and officer of some of the other subsidiaries of Franklin Resources, Inc. and of 44 | |||||
| of the investment companies in Franklin Templeton Investments. | |||||
| Norman J. Boersma (1957) | President and | Since 2012 | Not Applicable | Not Applicable | |
| Lyford Cay | Chief Executive | ||||
| Nassau, Bahamas | Officer – | ||||
| Investment | |||||
| Management | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Director, President and Chief Executive Officer, Templeton Global Adviors Ltd.; Chief Investment Officer of Templeton Global Equity Group; | |||||
| officer of six of the investment companies in Franklin Templeton Investments; and formerly, Executive Vice President, Franklin Templeton | |||||
| Investments Corp. (1993-2014). | |||||
| Laura F. Fergerson (1962) | Chief | Since 2009 | Not Applicable | Not Applicable | |
| One Franklin Parkway | Executive | ||||
| San Mateo, CA 94403-1906 | Officer – | ||||
| Finance and | |||||
| Administration | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Senior Vice President, Franklin Templeton Services, LLC; Vice President, Franklin Advisers, Inc. and Franklin Templeton Institutional, LLC; and | |||||
| officer of 44 of the investment companies in Franklin Templeton Investments. | |||||
| Aliya S. Gordon (1973) | Vice President | Since 2009 | Not Applicable | Not Applicable | |
| One Franklin Parkway | |||||
| San Mateo, CA 94403-1906 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Senior Associate General Counsel, Franklin Templeton Investments; and officer of 44 of the investment companies in Franklin Templeton | |||||
| Investments. | |||||
| Steven J. Gray (1955) | Vice President | Since 2009 | Not Applicable | Not Applicable | |
| One Franklin Parkway | |||||
| San Mateo, CA 94403-1906 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Senior Associate General Counsel, Franklin Templeton Investments; Vice President, Franklin Templeton Distributors, Inc. and Franklin | |||||
| Alternative Strategies Advisers, LLC; and officer of 44 of the investment companies in Franklin Templeton Investments. | |||||
| 52 | Annual Report | franklintempleton.com | |||
TEMPLETON GLOBAL INVESTMENT TRUST
| Interested Board Members and Officers (continued) | |||||
| Number of Portfolios in | |||||
| Name, Year of Birth | Length of | Fund Complex Overseen | Other Directorships Held | ||
| and Address | Position | Time Served | by Board Member* | During at Least the Past 5 Years | |
| Selena L. Holmes (1965) | Vice President | Since 2012 | Not Applicable | Not Applicable | |
| 100 Fountain Parkway | – AML | ||||
| St. Petersburg, FL 33716-1205 | Compliance | ||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Director, Global Compliance Monitoring; Chief Compliance Officer, Franklin Alternative Strategies Advisers, LLC; Vice President, Franklin | |||||
| Templeton Companies, LLC; and officer of 44 of the investment companies in Franklin Templeton Investments. | |||||
| Kimberly H. Novotny (1972) | Vice President | Since 2013 | Not Applicable | Not Applicable | |
| 300 S.E. 2nd Street | |||||
| Fort Lauderdale, FL 33301-1923 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Associate General Counsel, Franklin Templeton Investments; Vice President and Corporate Secretary, Fiduciary Trust International of the | |||||
| South; Vice President and Assistant Secretary, Templeton Investment Counsel, LLC; Assistant Secretary, Franklin Resources, Inc.; and officer | |||||
| of 44 of the investment companies in Franklin Templeton Investments. | |||||
| Mark H. Otani (1968) | Treasurer, | Since 2009 | Not Applicable | Not Applicable | |
| One Franklin Parkway | Chief Financial | ||||
| San Mateo, CA 94403-1906 | Officer and | ||||
| Chief | |||||
| Accounting | |||||
| Officer | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Treasurer, U.S. Fund Administration & Reporting, Franklin Templeton Investments; and officer of 13 of the investment companies in Franklin | |||||
| Templeton Investments. | |||||
| Robert C. Rosselot (1960) | Chief | Since 2013 | Not Applicable | Not Applicable | |
| 300 S.E. 2nd Street | Compliance | ||||
| Fort Lauderdale, FL 33301-1923 | Officer | ||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Director, Global Compliance, Franklin Templeton Investments; Vice President, Franklin Templeton Companies, LLC; officer of 44 of the | |||||
| investment companies in Franklin Templeton Investments; and formerly, Senior Associate General Counsel, Franklin Templeton Investments | |||||
| (2007-2013); and Secretary and Vice President, Templeton Group of Funds (2004-2013). | |||||
| Karen L. Skidmore (1952) | Vice President | Since 2009 | Not Applicable | Not Applicable | |
| One Franklin Parkway | |||||
| San Mateo, CA 94403-1906 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Senior Associate General Counsel, Franklin Templeton Investments; and officer of 44 of the investment companies in Franklin Templeton | |||||
| Investments. | |||||
| Navid Tofigh (1972) | Vice President | Since November | Not Applicable | Not Applicable | |
| One Franklin Parkway | 2015 | ||||
| San Mateo, CA 94403-1906 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Associate General Counsel, Franklin Templeton Investments; and officer of 44 of the investment companies in Franklin Templeton Investments. | |||||
| Craig S. Tyle (1960) | Vice President | Since 2005 | Not Applicable | Not Applicable | |
| One Franklin Parkway | |||||
| San Mateo, CA 94403-1906 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| General Counsel and Executive Vice President, Franklin Resources, Inc.; and officer of some of the other subsidiaries of Franklin Resources, | |||||
| Inc. and of 44 of the investment companies in Franklin Templeton Investments. | |||||
| franklintempleton.com | Annual Report | 53 | |||
TEMPLETON GLOBAL INVESTMENT TRUST
| Interested Board Members and Officers (continued) | ||||
| Number of Portfolios in | ||||
| Name, Year of Birth | Length of | Fund Complex Overseen | Other Directorships Held | |
| and Address | Position | Time Served | by Board Member* | During at Least the Past 5 Years |
| Lori A. Weber (1964) | Secretary and | Secretary since | Not Applicable | Not Applicable |
| 300 S.E. 2nd Street | Vice President | 2013 and Vice | ||
| Fort Lauderdale, FL 33301-1923 | President since | |||
| 2011 | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||
| Senior Associate General Counsel, Franklin Templeton Investments; Assistant Secretary, Franklin Resources, Inc.; Vice President and | ||||
| Secretary, Templeton Investment Counsel, LLC; and officer of 44 of the investment companies in Franklin Templeton Investments. | ||||
| *We base the number of portfolios on each separate series of the U.S. registered investment companies within the Franklin Templeton Investments fund complex. These | ||||
| portfolios have a common investment manager or affiliated investment managers. | ||||
| **Gregory E. Johnson is considered to be an interested person of the Fund under the federal securities laws due to his position as an officer and director of Franklin | ||||
| Resources, Inc. (Resources), which is the parent company of the Fund’s investment manager and distributor. Rupert H. Johnson, Jr. is considered to be an interested person | ||||
| of the Fund under the federal securities laws due to his position as officer and director and major shareholder of Resources. | ||||
| Note 1: Rupert H. Johnson, Jr. is the uncle of Gregory E. Johnson. | ||||
| Note 2: Officer information is current as of the date of this report. It is possible that after this date, information about officers may change. | ||||
| The Sarbanes-Oxley Act of 2002 and Rules adopted by the U.S. Securities and Exchange Commission require the Fund to disclose whether the Fund’s Audit | ||||
| Committee includes at least one member who is an audit committee financial expert within the meaning of such Act and Rules. The Fund’s Board has determined | ||||
| that there is at least one such financial expert on the Audit Committee and has designated each of Ann Torre Bates and David W. Niemiec as an audit committee | ||||
| financial expert. The Board believes that Ms. Bates and Mr. Niemiec qualify as such an expert in view of their extensive business background and experience. Ms. | ||||
| Bates has served as a member of the Fund Audit Committee since 2008. She currently serves as a director of Navient Corporation (2014-present), Ares Capital | ||||
| Corporation (2010-present) and United Natural Foods, Inc. (2013-present) and was formerly a director of SLM Corporation from 1997 to 2014 and Allied Capital | ||||
| Corporation from 2003 to 2010, Executive Vice President and Chief Financial Officer of NHP Incorporated from 1995 to 1997 and Vice President and Treasurer of | ||||
| US Airways, Inc. until 1995. Mr. Niemiec has served as a member of the Fund Audit Committee since 2006, currently serves as an Advisor to Saratoga Partners | ||||
| and was formerly its Managing Director from 1998 to 2001. Mr. Niemiec was formerly a director of Emeritus Corporation from 1999 to 2010 and OSI Pharmaceu- | ||||
| ticals, Inc. from 2006 to 2010, Managing Director of SBC Warburg Dillon Read from 1997 to 1998, and was Vice Chairman from 1991 to 1997 and Chief Financial | ||||
| Officer from 1982 to 1997 of Dillon, Read & Co. Inc. As a result of such background and experience, the Board believes that Ms. Bates and Mr. Niemiec have each | ||||
| acquired an understanding of generally accepted accounting principles and financial statements, the general application of such principles in connection with | ||||
| the accounting estimates, accruals and reserves, and analyzing and evaluating financial statements that present a breadth and level of complexity of accounting | ||||
| issues generally comparable to those of the Fund, as well as an understanding of internal controls and procedures for financial reporting and an understanding | ||||
| of audit committee functions. Ms. Bates and Mr. Niemiec are independent Board members as that term is defined under the applicable U.S. Securities and | ||||
| Exchange Commission Rules and Releases. | ||||
| The Statement of Additional Information (SAI) includes additional information about the board members and is available, without charge, upon request. | ||||
| Shareholders may call (800) DIAL BEN/342-5236 to request the SAI. | ||||
54 Annual Report franklintempleton.com
TEMPLETON GLOBAL INVESTMENT TRUST
TEMPLETON EMERGING MARKETS BALANCED FUND
Shareholder Information
Board Review of Investment Management Agreement
At a meeting held February 23, 2016, the Board of Trustees (Board), including a majority of trustees that are not “interested persons” as such term is defined in section 2(a)(19) of the Investment Company Act of 1940 (hereinafter referred to as “non-interested Trustees” or “independent Trustees”), approved renewal of the investment management agreements for each of the separate funds comprising the Templeton Global Investment Trust, including including Templeton Emerging Markets Balanced Fund (Fund(s)). In reaching this decision, the Board took into account information furnished throughout the year at regular Board meetings, as well as information prepared specifically in connection with the annual renewal review process. Information furnished and discussed throughout the year included investment performance reports and related financial information for each Fund, along with periodic reports on expenses, shareholder services, legal and compliance matters, risk control, pricing, brokerage commissions and execution and other services provided by the Investment Manager (Manager) and its affiliates, as well as marketing support payments made to financial intermediaries. Information furnished specifically in connection with the renewal process included a report for each Fund prepared by Broadridge Financial Solutions, Inc. (Broadridge), an independent organization, as well as additional material, including a Fund profitability analysis prepared by management. The Broadridge reports, which utilized data from Lipper, Inc. (Lipper), compared each Fund’s investment performance and expenses with those of other mutual funds deemed comparable to the Fund as selected by Lipper. The Fund profitability analysis discussed the profitability to Franklin Templeton Investments (FTI) from its overall U.S. fund operations, as well as on an individual fund-by-fund basis. Additional material accompanying such profitability analysis included information on a fund-by-fund basis listing portfolio managers and other accounts they manage, as well as information on management fees charged by the Manager and its affiliates to U.S. mutual funds and other accounts, including management’s explanation of differences where relevant. Such material also included a memorandum prepared by management describing project initiatives and capital investments relating to the services provided to the Funds by the FTI organization, as well as a memorandum relating to economies of scale and an analysis concerning transfer agent fees charged by an affiliate of the Manager. The Board also received a report on all marketing support payments made by
FTI to financial intermediaries during the past year, as well as a memorandum relating to third-party servicing arrangements in response to a Guidance Update from the U.S. Securities and Exchange Commission (SEC) relating to mutual fund distribution and sub-accounting fees.
In considering such materials, the independent Trustees received assistance and advice from and met separately with independent counsel. While the investment management agreements for all Funds, and subadvisory agreements where applicable, were considered at the same Board meeting, the Board dealt with each Fund separately. In approving continuance of the investment management agreement for each Fund, the Board, including a majority of independent Trustees, determined that the existing management fee structure was fair and reasonable and that continuance of the investment management agreement was in the best interests of such Fund and its shareholders. While attention was given to all information furnished, the following discusses some primary factors relevant to the Board’s decision.
NATURE, EXTENT AND QUALITY OF SERVICES. The Board was satisfied with the nature and quality of the overall services provided by the Manager and its affiliates to the Fund and its shareholders, other than as noted below with respect to investment performance and expenses. The Board’s opinion was based, in part, upon periodic reports furnished to it showing that the investment policies and restrictions for the Fund were consistently complied with as well as other reports periodically furnished to the Board covering matters such as the compliance of portfolio managers and other management personnel with the code of ethics adopted throughout the Franklin Templeton fund complex, the adherence to fair value pricing procedures established by the Board, and the accuracy of net asset value calculations. The Board also noted the extent of benefits provided Fund shareholders from being part of the Franklin Templeton family of funds, including the right to exchange investments between the same class of shares of different funds without a sales charge, the ability to reinvest Fund dividends into other funds and the right to combine holdings in other funds to obtain a reduced sales charge. Favorable consideration was given to management’s continual efforts and expenditures in establishing effective business continuity plans and developing strategies to address cybersecurity threats. Additionally, the Board noted the Manager’s continued attention to pricing and valuation issues, particularly with respect to complex securities. Among other factors taken into account by the Board were the Manager’s
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TEMPLETON GLOBAL INVESTMENT TRUST
TEMPLETON EMERGING MARKETS BALANCED FUND
SHAREHOLDER INFORMATION
Board Review of Investment Management Agreement (continued)
best execution trading policies, including a favorable report by an independent portfolio trading analytical firm that also covered FOREX transactions. Consideration was also given to the experience of the Fund’s portfolio management team, the number of accounts managed and general method of compensation. In this latter respect, the Board noted that a primary factor in management’s determination of a portfolio manager’s bonus compensation was the relative investment performance of the funds he or she managed and that a portion of such bonus was required to be invested in a predesignated list of funds within such person’s fund management area so as to be aligned with the interests of shareholders. The Board also took into account the quality of transfer agent and shareholder services provided Fund shareholders by an affiliate of the Manager and steps taken by FTI to enhance analytical support to the investment management groups and provide additional oversight of liquidity risk and complex securities. The Board also took into account, among other things, management’s efforts in establishing a global credit facility for the benefit of the Fund and other accounts managed by FTI to provide a source of cash for temporary and emergency purposes or to meet unusual redemption requests as well as the strong financial position of the Manager’s parent company and its commitment to the mutual fund business as evidenced by its continued introduction of new funds and reassessment of the fund offerings in response to the market environment.
INVESTMENT PERFORMANCE. The Board placed significant emphasis on the investment performance of the Fund in view of its importance to shareholders. While consideration was given to performance reports and discussions with portfolio managers at Board meetings during the year, particular attention in assessing performance was given to the Broadridge reports furnished for the agreement renewal. The Broadridge reports prepared for the Fund showed the investment performance of its Class A shares in comparison to a performance universe selected by Lipper. The following summarizes the performance results for the Fund and the Board’s view of such performance.
The Lipper performance universe for this Fund consisted of all retail and institutional emerging markets funds. This Fund whose investment objective is a combination of income and capital appreciation has been in existence for only four full years. The Fund’s 2015 and annualized three-year income returns as shown in the Broadridge report were in the middle and highest quintiles for such universe, respectively. However,
the Fund’s 2015 and annualized three-year total returns were in the middle and lowest- performing quintiles of such universe, respectively. In view of the Fund’s relatively short period of operations, the Board did not believe the Fund’s performance as shown in the Broadridge report to be particularly meaningful.
COMPARATIVE EXPENSES. Consideration was given to the management fees and total expense ratio of the Fund compared with those of a group of other funds selected by Lipper as its appropriate Lipper expense group. Lipper expense data is based upon information taken from each fund’s most recent annual report, which reflects historical asset levels that may be quite different from those currently existing, particularly in a period of market volatility. While recognizing such inherent limitation and the fact that expense ratios generally increase as assets decline and decrease as assets grow, the Board believed the independent analysis conducted by Lipper to be an appropriate measure of comparative expenses. In reviewing comparative costs, Lipper provides information on the Fund’s contractual investment management fee in comparison with the contractual management fee that would have been charged by other funds within its Lipper expense group assuming they were similar in size to the Fund, as well as the actual total expense ratio of the Fund in comparison with those of its Lipper expense group. The Lipper contractual investment management fee analysis includes administrative charges as being part of the contractual investment management fee, and actual total expenses, for comparative consistency, are shown by Lipper for Fund Class A shares for funds having multiple share classes. The Broadridge report for the Fund showed its contractual investment management fee rate to be within two basis points of the median of its Lipper expense group, and its actual total expense ratio was 13 basis points below the median of such group. The Board found such comparative expenses as shown in the Broadridge report to be satisfactory and noted that this Fund had only been in existence for four years and the Fund’s expenses had been subsidized by management fee waivers.
MANAGEMENT PROFITABILITY. The Board also considered the level of profits realized by the Manager and its affiliates in connection with the operation of the Fund. In this respect, the Board reviewed the Fund profitability analysis that addresses the overall profitability of Franklin Templeton’s U.S. fund business, as well as its profits in providing management and other services to each of the individual funds during the 12-month period ended September 30, 2015, being the most recent fiscal year-end for Franklin Resources, Inc., the
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TEMPLETON GLOBAL INVESTMENT TRUST
TEMPLETON EMERGING MARKETS BALANCED FUND
SHAREHOLDER INFORMATION
Manager’s parent. In reviewing the analysis, the Board recognized that allocation methodologies are inherently subjective and various allocation methodologies may be reasonable while producing different results. In this respect, the Board noted that while management continually makes refinements to its methodologies in response to organizational and product related changes, the overall approach as defined by the primary drivers and activity measurements has remained consistent with that used in the Fund profitability report presentations from prior years. Additionally, the Fund’s independent registered public accounting firm had been engaged by the Manager to periodically review the reasonableness of the allocation methodologies to be used solely by the Fund’s Board in reference to the profitability analysis. In reviewing and discussing such analysis, management discussed with the Board its belief that costs incurred in establishing the infrastructure necessary for the type of mutual fund operations conducted by the Manager and its affiliates may not be fully reflected in the expenses allocated to the Fund in determining its profitability, as well as the fact that the level of profits, to a certain extent, reflected operational cost savings and efficiencies initiated by management. The Board also took into account management’s expenditures in improving shareholder services provided to the Funds, as well as the need to implement systems to meet additional regulatory and compliance requirements resulting from statutes such as the Sarbanes-Oxley and Dodd-Frank Acts and recent SEC and other regulatory requirements. In addition, the Board considered a third-party study comparing the profitability of the Manager’s parent on an overall basis to other publicly held managers broken down to show profitability from management operations exclusive of distribution expenses, as well as profitability including distribution expenses. The Board also considered the extent to which the Manager and its affiliates might derive ancillary benefits from fund operations, including revenues generated from transfer agent services and potential benefits resulting from personnel and systems enhancements necessitated by fund growth, as well as increased leverage with the service providers and counterparties, allocation of fund brokerage and the use of commission dollars to pay for research. Based upon its consideration of all these factors,
the Board determined that the level of profits realized by the Manager and its affiliates from providing services to the Fund was not excessive in view of the nature, quality and extent of services provided.
ECONOMIES OF SCALE.The Board also considered whether economies of scale are realized by the Manager as the Fund grows larger and the extent to which this is reflected in the level of management fees charged. While recognizing that any precise determination is inherently subjective, the Board noted that based upon the Fund profitability analysis, it appears that as some funds get larger, at some point economies of scale do result in the Manager realizing a larger profit margin on management services provided such a fund. The Board also noted that economies of scale are shared with the Fund and its shareholders through management fee breakpoints so that as the Fund grows in size, its effective management fee rate declines. In view of the specialized nature and size of the Fund, whose expenses are being subsidized by management, the Board questioned whether economies of scale existed. The investment management advisory agreement for the Fund provides for breakpoints that are above the Fund’s existing asset size, and to the extent economies of scale may be realized by the Manager and its affiliates, the Board believes the schedule of fees for the Fund provides a sharing of benefits with the Fund and its shareholders.
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.
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57
TEMPLETON GLOBAL INVESTMENT TRUST
TEMPLETON EMERGING MARKETS BALANCED FUND
SHAREHOLDER INFORMATION
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 on Form N-Q. Shareholders may view the filed Form N-Q by visiting the Commission’s website at sec.gov. The filed form may also be viewed and copied at the Commission’s Public Reference Room in Washington, DC. Information regarding the operations of the Public Reference Room may be obtained by calling (800) SEC-0330.
Householding of Reports and Prospectuses
You will receive each Fund’s financial reports every six months as well as an annual updated summary prospectus (prospectus available upon request). To reduce Fund expenses, we try to identify related shareholders in a household and send only one copy of the financial reports and summary prospectus. This process, called “householding,” will continue indefinitely unless you instruct us otherwise. If you prefer not to have these documents householded, please call us at (800) 632-2301. At any time you may view current prospectuses/summary prospectuses and financial reports on our website. If you choose, you may receive these documents through electronic delivery.
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Annual Report and Shareholder Letter
Templeton Emerging Markets Balanced Fund
Investment Manager
Templeton Asset Management Ltd.
Subadvisor
Franklin Advisers, Inc.
Distributor
Franklin Templeton Distributors, Inc.
(800) DIAL BEN® / 342-5236
franklintempleton.com
Shareholder Services
(800) 632-2301
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.
| © 2016 Franklin Templeton Investments. All rights reserved. | 080 A 05/16 |
Annual Report and Shareholder Letter
March 31, 2016
Templeton Emerging Markets Small Cap Fund
A SERIES OF TEMPLETON GLOBAL INVESTMENT TRUST
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2 Annual Report
franklintempleton.com
Annual Report
Templeton Emerging Markets Small Cap Fund
This annual report for Templeton Emerging Markets Small Cap Fund covers the fiscal year ended March 31, 2016.
Your Fund’s Goal and Main Investments
The Fund seeks long-term capital appreciation. Under normal market conditions, the Fund invests at least 80% of its net assets in securities of small cap companies located in emerging market countries, as defined in the Fund’s prospectus.
Performance Overview
For the 12 months under review, the Fund’s Class A shares had a -6.60% cumulative total return. For comparison, the MSCI Emerging Markets (EM) Small Cap Index, which measures performance of small-cap stocks in emerging markets, had a -8.93% total return for the same period.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. In addition, the Fund’s return reflects the effect of fees and expenses for professional management, while an index does not have such costs. You can find the Fund’s long-term performance data in the Performance Summary beginning on page 7.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
Economic and Market Overview
The global economy expanded moderately during the 12 months under review. Although some emerging market countries faced headwinds such as soft domestic demand, geopolitical crises, weak exports and high inflation, emerging market economies overall continued to grow faster than developed market economies. China’s economy grew at a less robust pace in 2015 than in 2014, and it continued to moderate in 2016’s first quarter as growth in industrial production,
fixed-asset investments and retail sales was countered by weakness in imports and exports. Russia’s 2015 gross domestic product (GDP) contracted amid declining oil prices and a weakening Russian ruble. In 2015’s fourth quarter, Brazil’s quarterly GDP continued to contract but at a slower rate compared with the second and third quarters. In contrast, South Korea, Indonesia and Hungary showed signs of improvement.
Several emerging market central banks, including those of Brazil, Mexico and South Africa, raised their benchmark interest rates to control inflation and support their currencies, while some, including those of India, Russia and China, lowered their benchmark interest rates to promote economic growth. The People’s Bank of China (PBOC) also reduced the cash reserve requirement for banks several times during the period to support liquidity, credit and growth. Additionally, the PBOC lowered short-term borrowing costs for smaller banks to help banks access funds in times of a liquidity crunch and to avoid heightened volatility in money market rates. After effectively devaluating the Chinese currency several times during the period, the PBOC allowed it to appreciate against the U.S. dollar in March, which was in line with many
| 1. Source: Morningstar. | ||
| The index is unmanaged and includes reinvestment of any income or distributions. It does not reflect any fees, expenses or sales charges. One cannot invest directly in an | ||
| index, and an index is not representative of the Fund’s portfolio. | ||
| 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 18. | ||
| franklintempleton.com | Annual Report | 3 |
TEMPLETON EMERGING MARKETS SMALL CAP FUND
currencies’ appreciation against the U.S. dollar for the same month.
Events in China significantly affected stock performance in all regions during the review period. The Chinese government’s efforts to promote stable growth supported China’s domestic stock market in 2015’s first half. However, tight liquidity conditions and uncertainties about the PBOC’s monetary policy led China’s domestic market to correct from June through August, contributing to a global stock market correction. Investor concerns about China’s moderating economic growth and lower commodity demand, as well as the PBOC’s effective currency devaluation, particularly in August, contributed to volatility in global stock, commodity and currency markets. Price declines of many commodities, particularly crude oil, negatively affected certain commodity-producing countries’ economies, financial positions and currencies, weighing further on investor sentiment.
However, accommodative monetary policies of several major central banks provided investors with some optimism. China took additional monetary and fiscal stimulus measures to support economic growth, bolstering investor sentiment in December. But a plunge in China’s domestic A-share market on January 4, which triggered the country’s new circuit-breaker system and halted trading, led to declines in emerging market stocks, exacerbated by a collapse in crude oil prices and investor concerns about global economic growth. Stocks began to regain some ground in late January as crude oil prices appeared to stabilize and the PBOC further reduced the cash reserve requirement for banks. For the 12 months ended March 31, 2016, emerging market small cap stocks, as measured by the MSCI EM Small Cap Index, had a -8.93% total return.1
Investment Strategy
Our investment strategy employs a fundamental research, value-oriented, long-term approach. We focus on the market price of a company’s securities relative to our evaluation of the company’s long-term (typically five years) earnings, asset value and cash flow potential. We also consider a company’s profit and loss outlook, balance sheet strength, cash flow trends and asset value in relation to the current price. The analysis considers the company’s corporate governance behavior as well as its position in its sector, the economic framework and political environment.
Manager’s Discussion
During the 12 months under review, stock price corrections exacerbated by the U.S. dollar’s strength against most emerging
| Top 10 Countries | ||
| 3/31/16 | ||
| % of Total | ||
| Net Assets | ||
| India | 13.5 | % |
| South Korea | 10.4 | % |
| China | 9.8 | % |
| Taiwan | 8.7 | % |
| Turkey | 8.0 | % |
| Poland | 5.5 | % |
| Hong Kong | 4.3 | % |
| Egypt | 3.9 | % |
| Thailand | 3.6 | % |
| Russia | 3.3 | % |
market currencies affected the performance of many Fund investments. Consistent with our long-term investment strategy, we viewed such periods of heightened market volatility in the context of a historical, long-term uptrend. We continued to monitor economic and market developments globally, while seeking to minimize risk and to establish long-term positions in quality companies at share prices we considered attractive.
Many of the Fund’s holdings performed well during the 12-month reporting period despite a challenging market environment. Key contributors to absolute performance included the Fund’s investments in DO & CO Restaurants & Catering, Vieworks and Interojo.
DO & CO, an Austria-listed company with operations in emerging market countries, focuses on three main areas: airline catering; international event catering; and restaurants, lounges and hotels. Solid operating income, driven by growth in the airline catering and international event catering divisions, and a positive growth outlook supported the company’s share price performance. Additionally, DO & CO’s potential joint venture with an Asian airline, new airport project in Istanbul, extension of its Turkish Airlines contract, and merger and acquisition opportunities led investors to view the company’s stock positively.
Vieworks develops and produces digital medical systems based on digital image acquisition, digital image processing and digital communication. Record-high revenues and operating profit in 2015’s fourth quarter and strong revenue and operating profit growth in 2015, driven by flat-panel digital radiography, drove the South Korea-based company’s stock price. A strong growth potential, driven by new product launches, new customers and market share expansion, led investors to maintain a favorable outlook on the company.
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TEMPLETON EMERGING MARKETS SMALL CAP FUND
| Top 10 Holdings | ||
| 3/31/16 | ||
| Company | % of Total | |
| Sector/Industry, Country | Net Assets | |
| Pinar Sut Mamulleri Sanayii AS | 2.8 | % |
| Food Products, Turkey | ||
| Bajaj Holdings and Investment Ltd. | 2.5 | % |
| Diversified Financial Services, India | ||
| Apollo Tyres Ltd. | 2.4 | % |
| Auto Components, India | ||
| JK Cement Ltd. | 2.2 | % |
| Construction Materials, India | ||
| Fila Korea Ltd. | 2.2 | % |
| Textiles, Apparel & Luxury Goods, South Korea | ||
| Beauty Community PCL | 1.9 | % |
| Specialty Retail, Thailand | ||
| Digital China Holdings Ltd. | 1.8 | % |
| Electronic Equipment, Instruments & Components, | ||
| China | ||
| Youngone Corp. | 1.8 | % |
| Textiles, Apparel & Luxury Goods, South Korea | ||
| Jiangling Motors Corp. Ltd. | 1.7 | % |
| Automobiles, China | ||
| TravelSky Technology Ltd. | 1.6 | % |
| IT Services, China |
Interojo, a major contact lens manufacturer in South Korea, produces contact lenses under its own brand and as an ODM (original design manufacturer) for international contact lens companies. Interojo’s stock price rose significantly in the reporting period’s first half and remained elevated, driven by strong corporate earnings results and growth prospects. Further supporting shares were Interojo’s introduction of its own contact lens brand in China’s retail market and a new client in Japan.
In contrast, key detractors from the Fund’s absolute performance included positions in Pinar Sut (Pinar Sut Mamulleri Sanayii), Jiangling Motors and EIPICO (Egyptian International Pharmaceutical Industries Co.).
Pinar Sut, one of Turkey’s leading dairy companies, produces milk, cheese, butter, yogurt, fruit juices and instant desserts under the well-established PINAR brand name. The company is Turkey’s market leader in the milk and cheese segment. Relatively weaker second- and third-quarter earnings and profit margins negatively affected the company’s share price during most of the reporting period. Further hurting shares were rising
competition, weaker domestic demand and geopolitical developments. However, better-than-expected fourth-quarter 2015 corporate results led the share price to rebound from its 12-month low in early 2016.
Jiangling Motors is engaged in the development, manufacture and sales of commercial vehicles and related components primarily in China. Its major products include Transit series commercial vehicles (through a joint venture with Ford Motor) and JMC series light trucks, pickups and sport utility vehicles (through a joint venture with Isuzu Motors). A decline in first-half 2015 sales and earnings led the company’s share price to correct in the first half of the reporting period. Also dampening investor confidence in the company were concerns that a challenging economic environment could further impact China’s commercial vehicle industry.
EIPICO, Egypt’s leading domestic pharmaceuticals company, reported worse-than-expected fourth-quarter 2015 earnings, partly due to modest sales growth and high selling, general and administrative expenses. Further pressuring the company was the central bank’s devaluation of the Egyptian pound, which caused imported raw materials to become more expensive in local currency terms. Also weighing on EIPICO’s share performance was the broader Egyptian market’s weakness, as measured by the MSCI Egypt Index.
It is important to recognize the effect of currency movements on the Fund’s performance. In general, if the value of the U.S. dollar goes up compared with a foreign currency, an investment traded in that foreign currency will go down in value because it will be worth fewer U.S. dollars. This can have a negative effect on Fund performance. Conversely, when the U.S. dollar weakens in relation to a foreign currency, an investment traded in that foreign currency will increase in value, which can contribute to Fund performance. For the 12 months ended March 31, 2016, the U.S. dollar rose in value relative to most emerging market currencies. As a result, the Fund’s performance was negatively affected by the portfolio’s investment predominantly in securities with non-U.S. currency exposure.
During the past 12 months, portfolio inflows and our continued search for what we considered undervalued investments with attractive valuations led us to increase the Fund’s holdings largely in Taiwan, Thailand, Egypt and Poland, and to make select purchases in India and China mainly through China H,
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Annual Report
5
TEMPLETON EMERGING MARKETS SMALL CAP FUND
Red Chip and P Chip shares.2 Additionally, we initiated exposures to Georgia and Pakistan. In sector terms, we increased investments largely in information technology (IT), financials and materials, and made select purchases in consumer discretionary.3 Key purchases included an additional investment in Apollo Tyres, one of India’s largest tire companies, and new positions in India-based Tata Chemicals, one of the world’s biggest soda ash and sodium bicarbonate producers, and ADLINK Technology, one of Taiwan’s major industrial computer manufacturers.
Conversely, we conducted some sales as we sought to focus on opportunities we considered to be more attractively valued within our investment universe. As a result, we reduced investments in certain countries, notably Malaysia and Russia. We also made select sales in Hong Kong and eliminated exposures to Romania and Turkmenistan. In sector terms, we reduced holdings largely in health care and energy.4 Key sales included trimming positions in the aforementioned DO & CO, as well as in Hartalega Holdings, a Malaysian disposable glove manufacturer, and AmorePacific Group, a South Korean cosmetics, personal care, green tea and health products manufacturer.
Thank you for your continued participation in Templeton Emerging Markets Small Cap Fund. We look forward to serving your future investment needs.
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2016, 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.
2. “China H” denotes shares of China-incorporated, Hong Kong Stock Exchange-listed companies with most businesses in China. “Red Chip” denotes shares of Hong Kong
Stock Exchange-listed companies substantially owned by Chinese mainland state entities, with significant exposure to China. “P Chip” denotes shares of Hong Kong Stock
Exchange-listed companies controlled by Chinese mainland individuals and incorporated outside of China, with a majority of their business in China.
3. The IT sector comprises electronic equipment, instruments and components; Internet software and services; IT services; semiconductor and semiconductor equipment; and
technology hardware, storage and peripherals in the SOI. The financials sector comprises banks, consumer finance, diversified financial services, real estate investment trusts
(REITS), and real estate management and development in the SOI. The materials sector comprises chemicals, construction materials, containers and packaging, and paper
and forest products in the SOI. The consumer discretionary sector comprises auto components; automobiles; diversified consumer services; hotels, restaurants and leisure;
household durables; Internet and catalog retail; leisure products; media; specialty retail; and textiles, apparel and luxury goods in the SOI.
4. The health care sector comprises biotechnology, health care equipment and supplies, health care providers and services, and pharmaceuticals in the SOI. The energy sector
comprises energy equipment and services; and oil, gas and consumable fuels in the SOI.
See www.franklintempletondatasources.com for additional data provider information.
6 Annual Report franklintempleton.com
TEMPLETON EMERGING MARKETS SMALL CAP FUND
Performance Summary as of March 31, 2016
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. The performance table and graphs do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares. Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses.
| Net Asset Value | ||||||
| Share Class (Symbol) | 3/31/16 | 3/31/15 | Change | |||
| A (TEMMX) | $ | 11.41 | $ | 12.25 | -$ | 0.84 |
| C (TCEMX) | $ | 10.96 | $ | 11.82 | -$ | 0.86 |
| R (N/A) | $ | 11.33 | $ | 12.16 | -$ | 0.83 |
| Advisor (TEMZX) | $ | 11.52 | $ | 12.37 | -$ | 0.85 |
| Distributions1 (4/1/15–3/31/16) | ||||||
| Dividend | ||||||
| Share Class | Income | |||||
| A | $ | 0.0306 | ||||
| R | $ | 0.0010 | ||||
| Advisor | $ | 0.0637 | ||||
See page 11 for Performance Summary footnotes.
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TEMPLETON EMERGING MARKETS SMALL CAP FUND
PERFORMANCE SUMMARY
Performance as of 3/31/162
Cumulative total return excludes sales charges. Average annual total return and value of $10,000 investment include maximum sales
charges. Class A: 5.75% maximum initial sales charge; Class C: 1% contingent deferred sales charge in first year only;
Class R/Advisor Class: no sales charges.
| Total Annual Operating Expenses6 | ||||||||||
| Cumulative | Average Annual | Value of | ||||||||
| Share Class | Total Return3 | Total Return4 | $ | 10,000 Investment5 | (with waiver) | (without waiver) | ||||
| A | 1.98 | % | 2.00 | % | ||||||
| 1-Year | -6.60 | % | -11.99 | % | $ | 8,801 | ||||
| 5-Year | -2.24 | % | -1.63 | % | $ | 9,212 | ||||
| Since Inception (10/2/06) | +39.38 | % | +2.92 | % | $ | 13,137 | ||||
| C | 2.73 | % | 2.75 | % | ||||||
| 1-Year | -7.28 | % | -8.20 | % | $ | 9,180 | ||||
| 5-Year | -5.71 | % | -1.17 | % | $ | 9,429 | ||||
| Since Inception (10/2/06) | +30.55 | % | +2.85 | % | $ | 13,055 | ||||
| R | 2.23 | % | 2.25 | % | ||||||
| 1-Year | -6.82 | % | -6.82 | % | $ | 9,318 | ||||
| 5-Year | -3.36 | % | -0.68 | % | $ | 9,664 | ||||
| Since Inception (10/2/06) | +36.65 | % | +3.34 | % | $ | 13,665 | ||||
| Advisor | 1.73 | % | 1.75 | % | ||||||
| 1-Year | -6.35 | % | -6.35 | % | $ | 9,365 | ||||
| 5-Year | -0.89 | % | -0.18 | % | $ | 9,911 | ||||
| Since Inception (10/2/06) | +43.33 | % | +3.86 | % | $ | 14,333 | ||||
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.
See page 11 for Performance Summary footnotes.
8 Annual Report
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TEMPLETON EMERGING MARKETS SMALL CAP FUND
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment2
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index.
See page 11 for Performance Summary footnotes.
franklintempleton.com Annual Report 9
TEMPLETON EMERGING MARKETS SMALL CAP FUND
PERFORMANCE SUMMARY
See page 11 for Performance Summary footnotes.
10 Annual Report franklintempleton.com
TEMPLETON EMERGING MARKETS SMALL CAP FUND
PERFORMANCE SUMMARY
All investments involve risks, including possible loss of principal. Special risks are associated with foreign investing, including currency fluctuations, economic
instability and political developments. Investments in emerging markets, of which frontier markets are a subset, involve heightened risks related to the same
factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to
support securities markets. Because these frameworks are typically even less developed in frontier markets, as well as various factors including the increased
potential for extreme price volatility, illiquidity, trade barriers and exchange controls, the risks associated with emerging markets are magnified in frontier markets.
Smaller company stocks have historically had more price volatility than large-company stocks, particularly over the short term. All investments in the Fund
should be thought of as long-term investments that could experience significant price volatility in any given year. The Fund is designed for the aggressive portion
of a well-diversified portfolio. The Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results.
The Fund’s prospectus also includes a description of the main investment risks.
Class C: These shares have higher annual fees and expenses than Class A shares.
Class R: Shares are available to certain eligible investors as described in the prospectus. These shares have higher annual fees and expenses than Class A shares.
Advisor Class: Shares are available to certain eligible investors as described in the prospectus.
1. The distribution amount is the sum of the dividend payments to shareholders for the period shown and includes only estimated tax-basis net investment income.
2. The Fund has a fee waiver associated with any investment in a Franklin Templeton money fund, contractually guaranteed through at least its current fiscal year-end. Fund
investment results reflect the fee waiver, to the extent applicable; without this reduction, the results would have been lower.
3. Cumulative total return represents the change in value of an investment over the periods indicated.
4. Average annual total return represents the average annual change in value of an investment over the periods indicated. Return for less than one year, ifany,hasnotbeen
annualized.
5. These figures represent the value of a hypothetical $10,000 investment in the Fund over the periods indicated.
6. Figures are as stated in the Fund’s current prospectus. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to
become higher than the figures shown.
7. Source: Morningstar. The MSCI EM Small Cap Index is a free float-adjusted, market capitalization-weighted index designed to measure performance of small-cap equities in
emerging markets.
See www.franklintempletondatasources.com for additional data provider information.
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Annual Report
11
TEMPLETON EMERGING MARKETS SMALL CAP FUND
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs:
- Transaction costs, including sales charges (loads) on Fund purchases; and
- 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 following table 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 first line (Actual) for each share class listed in the table provides actual account values and expenses. The “Ending Account Value” is derived from the Fund’s actual return, which includes the effect of Fund expenses.
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:
| 1. | Divide your account value by $1,000. |
| If an account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6. | |
| 2. | Multiply the result by the number under the heading “Expenses Paid During Period.” |
| If Expenses Paid During Period were $7.50, then 8.6 x $7.50 = $64.50. |
In this illustration, the estimated expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Information in the second line (Hypothetical) for each class in the table can help you compare ongoing costs of investing in the Fund with those of other mutual funds. This information may not be used to estimate the actual ending account balance or expenses you paid during the period. The hypothetical “Ending Account Value” is based on the actual expense ratio for each class and an assumed 5% annual rate of return before expenses, which does not represent the Fund’s actual return. The figure under the heading “Expenses Paid During Period” shows the hypothetical expenses your account would have incurred under this scenario. You can compare this figure with the 5% hypothetical examples that appear in shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transaction costs, such as sales charges. Therefore, the second line for each class is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transaction costs were included, your total costs would have been higher. Please refer to the Fund prospectus for additional information on operating expenses.
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| TEMPLETON EMERGING MARKETS SMALL CAP FUND | ||||||
| YOUR FUND’S EXPENSES | ||||||
| Beginning Account | Ending Account | Expenses Paid During | ||||
| Share Class | Value 10/1/15 | Value 3/31/16 | Period* 10/1/15–3/31/16 | |||
| A | ||||||
| Actual | $ | 1,000 | $ | 1,007.10 | $ | 10.04 |
| Hypothetical (5% return before expenses) | $ | 1,000 | $ | 1,015.00 | $ | 10.08 |
| C | ||||||
| Actual | $ | 1,000 | $ | 1,002.70 | $ | 13.72 |
| Hypothetical (5% return before expenses) | $ | 1,000 | $ | 1,011.30 | $ | 13.78 |
| R | ||||||
| Actual | $ | 1,000 | $ | 1,005.40 | $ | 11.28 |
| Hypothetical (5% return before expenses) | $ | 1,000 | $ | 1,013.75 | $ | 11.33 |
| Advisor | ||||||
| Actual | $ | 1,000 | $ | 1,008.20 | $ | 8.79 |
| Hypothetical (5% return before expenses) | $ | 1,000 | $ | 1,016.25 | $ | 8.82 |
*Expenses are calculated using the most recent six-month expense ratio, net of expense waivers, annualized for each class (A: 2.00%;
C: 2.74%; R: 2.25%; and Advisor: 1.75%), multiplied by the average account value over the period, multiplied by 183/366 to reflect the
one-half year period.
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TEMPLETON GLOBAL INVESTMENT TRUST
| Financial Highlights | |||||||||||||||
| Templeton Emerging Markets Small Cap Fund | |||||||||||||||
| Year Ended March 31, | |||||||||||||||
| 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||
| Class A | |||||||||||||||
| Per share operating performance | |||||||||||||||
| (for a share outstanding throughout the year) | |||||||||||||||
| Net asset value, beginning of year | $ | 12.25 | $ | 11.64 | $ | 11.75 | $ | 10.47 | $ | 11.90 | |||||
| Income from investment operationsa: | |||||||||||||||
| Net investment incomeb | 0.04 | —c | 0.06 | 0.03 | 0.03 | ||||||||||
| Net realized and unrealized gains (losses) | (0.85 | ) | 0.63 | (0.09 | ) | 1.35 | (1.46 | ) | |||||||
| Total from investment operations | (0.81 | ) | 0.63 | (0.03 | ) | 1.38 | (1.43 | ) | |||||||
| Less distributions from: | |||||||||||||||
| Net investment income | (0.03 | ) | (0.02 | ) | (0.08 | ) | (0.04 | ) | — | ||||||
| Net realized gains | — | — | — | (0.06 | ) | — | |||||||||
| Total distributions | (0.03 | ) | (0.02 | ) | (0.08 | ) | (0.10 | ) | — | ||||||
| Net asset value, end of year. | $ | 11.41 | $ | 12.25 | $ | 11.64 | $ | 11.75 | $ | 10.47 | |||||
| Total returnd | (6.60 | )% | 5.40 | % | (0.26 | )% | 13.37 | % | (12.02 | )% | |||||
| Ratios to average net assets | |||||||||||||||
| Expenses before waiver and payments by affiliates | 2.00 | % | 2.04 | % | 2.11 | % | 2.16 | % | 2.19 | % | |||||
| Expenses net of waiver and payments by affiliates | 1.99 | % | 2.02 | % | 2.10 | % | 2.10 | % | 2.10 | % | |||||
| Net investment income (loss) | 0.33 | % | (0.05 | )% | 0.39 | % | 0.25 | % | 0.29 | % | |||||
| Supplemental data | |||||||||||||||
| Net assets, end of year (000’s) | $ | 257,977 | $ | 277,148 | $ | 235,046 | $ | 229,475 | $ | 199,865 | |||||
| Portfolio turnover rate | 18.09 | % | 19.21 | % | 22.47 | % | 15.16 | % | 6.52 | % | |||||
aThe 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.
bBased on average daily shares outstanding.
cAmount rounds to less than $0.01 per share.
dTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable.
14 Annual Report | The accompanying notes are an integral part of these financial statements. franklintempleton.com
TEMPLETON GLOBAL INVESTMENT TRUST
FINANCIAL HIGHLIGHTS
| Templeton Emerging Markets Small Cap Fund (continued) | |||||||||||||||
| Year Ended March 31, | |||||||||||||||
| 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||
| Class C | |||||||||||||||
| Per share operating performance | |||||||||||||||
| (for a share outstanding throughout the year) | |||||||||||||||
| Net asset value, beginning of year | $ | 11.82 | $ | 11.30 | $ | 11.42 | $ | 10.21 | $ | 11.69 | |||||
| Income from investment operationsa: | |||||||||||||||
| Net investment income (loss)b | (0.04 | ) | (0.08 | ) | (0.02 | ) | (0.04 | ) | (0.04 | ) | |||||
| Net realized and unrealized gains (losses) | (0.82 | ) | 0.60 | (0.09 | ) | 1.31 | (1.44 | ) | |||||||
| Total from investment operations | (0.86 | ) | 0.52 | (0.11 | ) | 1.27 | (1.48 | ) | |||||||
| Less distributions from: | |||||||||||||||
| Net investment income | — | — | (0.01 | ) | — | — | |||||||||
| Net realized gains | — | — | — | (0.06 | ) | — | |||||||||
| Total distributions | — | — | (0.01 | ) | (0.06 | ) | — | ||||||||
| Net asset value, end of year. | $ | 10.96 | $ | 11.82 | $ | 11.30 | $ | 11.42 | $ | 10.21 | |||||
| Total returnc | (7.28 | )% | 4.60 | % | (0.91 | )% | 12.53 | % | (12.66 | )% | |||||
| Ratios to average net assets | |||||||||||||||
| Expenses before waiver and payments by affiliates | 2.73 | % | 2.74 | % | 2.81 | % | 2.86 | % | 2.89 | % | |||||
| Expenses net of waiver and payments by affiliates | 2.72 | % | 2.72 | % | 2.80 | % | 2.80 | % | 2.80 | % | |||||
| Net investment income (loss) | (0.40 | )% | (0.75 | )% | (0.31 | )% | (0.45 | )% | (0.41 | )% | |||||
| Supplemental data | |||||||||||||||
| Net assets, end of year (000’s) | $ | 62,148 | $ | 73,687 | $ | 62,917 | $ | 64,459 | $ | 59,104 | |||||
| Portfolio turnover rate | 18.09 | % | 19.21 | % | 22.47 | % | 15.16 | % | 6.52 | % | |||||
aThe 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.
bBased on average daily shares outstanding.
cTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable.
franklintempleton.com The accompanying notes are an integral part of these financial statements. | Annual Report 15
TEMPLETON GLOBAL INVESTMENT TRUST
FINANCIAL HIGHLIGHTS
| Templeton Emerging Markets Small Cap Fund (continued) | |||||||||||||||
| Year Ended March 31, | |||||||||||||||
| 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||
| Class R | |||||||||||||||
| Per share operating performance | |||||||||||||||
| (for a share outstanding throughout the year) | |||||||||||||||
| Net asset value, beginning of year | $ | 12.16 | $ | 11.56 | $ | 11.67 | $ | 10.40 | $ | 11.85 | |||||
| Income from investment operationsa: | |||||||||||||||
| Net investment income (loss)b | 0.02 | —c | 0.06 | 0.01 | (—)c | ||||||||||
| Net realized and unrealized gains (losses) | (0.85 | ) | 0.60 | (0.12 | ) | 1.34 | (1.45 | ) | |||||||
| Total from investment operations | (0.83 | ) | 0.60 | (0.06 | ) | 1.35 | (1.45 | ) | |||||||
| Less distributions from: | |||||||||||||||
| Net investment income | (—)c | — | (0.05 | ) | (0.02 | ) | — | ||||||||
| Net realized gains | — | — | — | (0.06 | ) | — | |||||||||
| Total distributions | (—)c | — | (0.05 | ) | (0.08 | ) | — | ||||||||
| Net asset value, end of year. | $ | 11.33 | $ | 12.16 | $ | 11.56 | $ | 11.67 | $ | 10.40 | |||||
| Total return | (6.82 | )% | 5.19 | % | (0.37 | )% | 13.17 | % | (12.24 | )% | |||||
| Ratios to average net assets | |||||||||||||||
| Expenses before waiver and payments by affiliates | 2.23 | % | 2.24 | % | 2.31 | % | 2.36 | % | 2.39 | % | |||||
| Expenses net of waiver and payments by affiliates | 2.22 | % | 2.22 | % | 2.30 | % | 2.30 | % | 2.30 | % | |||||
| Net investment income (loss) | 0.10 | % | (0.25 | )% | 0.19 | % | 0.05 | % | 0.09 | % | |||||
| Supplemental data | |||||||||||||||
| Net assets, end of year (000’s) | $ | 477 | $ | 579 | $ | 659 | $ | 737 | $ | 684 | |||||
| Portfolio turnover rate | 18.09 | % | 19.21 | % | 22.47 | % | 15.16 | % | 6.52 | % | |||||
aThe 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.
bBased on average daily shares outstanding.
cAmount rounds to less than $0.01 per share.
16 Annual Report | The accompanying notes are an integral part of these financial statements. franklintempleton.com
TEMPLETON GLOBAL INVESTMENT TRUST
FINANCIAL HIGHLIGHTS
| Templeton Emerging Markets Small Cap Fund (continued) | |||||||||||||||
| Year Ended March 31, | |||||||||||||||
| 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||
| Advisor Class | |||||||||||||||
| Per share operating performance | |||||||||||||||
| (for a share outstanding throughout the year) | |||||||||||||||
| Net asset value, beginning of year | $ | 12.37 | $ | 11.76 | $ | 11.87 | $ | 10.58 | $ | 11.99 | |||||
| Income from investment operationsa: | |||||||||||||||
| Net investment incomeb | 0.07 | 0.02 | 0.05 | 0.05 | 0.06 | ||||||||||
| Net realized and unrealized gains (losses) | (0.86 | ) | 0.65 | (0.04 | ) | 1.37 | (1.47 | ) | |||||||
| Total from investment operations | (0.79 | ) | 0.67 | 0.01 | 1.42 | (1.41 | ) | ||||||||
| Less distributions from: | |||||||||||||||
| Net investment income | (0.06 | ) | (0.06 | ) | (0.12 | ) | (0.07 | ) | — | ||||||
| Net realized gains | — | — | — | (0.06 | ) | — | |||||||||
| Total distributions | (0.06 | ) | (0.06 | ) | (0.12 | ) | (0.13 | ) | — | ||||||
| Net asset value, end of year. | $ | 11.52 | $ | 12.37 | $ | 11.76 | $ | 11.87 | $ | 10.58 | |||||
| Total return | (6.35 | )% | 5.66 | % | 0.13 | % | 13.66 | % | (11.76 | )% | |||||
| Ratios to average net assets | |||||||||||||||
| Expenses before waiver and payments by affiliates | 1.73 | % | 1.74 | % | 1.81 | % | 1.86 | % | 1.89 | % | |||||
| Expenses net of waiver and payments by affiliates | 1.72 | % | 1.72 | % | 1.80 | % | 1.80 | % | 1.80 | % | |||||
| Net investment income | 0.60 | % | 0.25 | % | 0.69 | % | 0.55 | % | 0.59 | % | |||||
| Supplemental data | |||||||||||||||
| Net assets, end of year (000’s) | $ | 361,128 | $ | 363,848 | $ | 241,453 | $ | 102,842 | $ | 66,488 | |||||
| Portfolio turnover rate | 18.09 | % | 19.21 | % | 22.47 | % | 15.16 | % | 6.52 | % | |||||
aThe 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.
bBased on average daily shares outstanding.
franklintempleton.com The accompanying notes are an integral part of these financial statements. | Annual Report 17
TEMPLETON GLOBAL INVESTMENT TRUST
| Statement of Investments, March 31, 2016 | |||||
| Templeton Emerging Markets Small Cap Fund | |||||
| Shares/ | |||||
| Industry | Warrants | Value | |||
| Common Stocks and Other Equity Interests 95.2% | |||||
| Argentina 0.7% | |||||
| MercadoLibre Inc | Internet Software & Services | 42,000 | $ | 4,949,700 | |
| Austria 1.6% | |||||
| DO & CO Restaurants & Catering AG. | Hotels, Restaurants & Leisure | 92,774 | 11,124,320 | ||
| Botswana 0.3% | |||||
| Letshego Holdings Ltd | Consumer Finance | 9,617,099 | 2,231,167 | ||
| Brazil 2.7% | |||||
| Arezzo Industria e Comercio SA | Textiles, Apparel & Luxury Goods | 236,100 | 1,531,413 | ||
| Cia Hering. | Specialty Retail | 466,500 | 1,906,224 | ||
| Duratex SA | Paper & Forest Products | 270,700 | 569,238 | ||
| a Duratex SA, BDR | Paper & Forest Products | 10,703 | 11,803 | ||
| Gaec Educacao SA | Diversified Consumer Services | 633,400 | 1,750,696 | ||
| Grendene SA | Textiles, Apparel & Luxury Goods | 1,012,512 | 4,809,565 | ||
| JSL SA | Road & Rail | 1,248,503 | 3,072,790 | ||
| b Ser Educacional SA, Reg S. | Diversified Consumer Services | 1,628,100 | 4,775,893 | ||
| 18,427,622 | |||||
| China 9.8% | |||||
| Biostime International Holdings Ltd | Food Products | 29,500 | 108,191 | ||
| COSCO Pacific Ltd | Transportation Infrastructure | 6,214,336 | 8,171,119 | ||
| Digital China Holdings Ltd | Electronic Equipment, Instruments | ||||
| & Components | 9,163,000 | 12,260,880 | |||
| Green Seal Holding Ltd | Chemicals | 866,000 | 3,387,854 | ||
| Jiangling Motors Corp. Ltd., B | Automobiles | 3,948,718 | 11,432,796 | ||
| a Sohu.com Inc | Internet Software & Services | 77,722 | 3,850,348 | ||
| TravelSky Technology Ltd., H. | IT Services | 6,800,200 | 11,168,060 | ||
| Uni-President China Holdings Ltd | Food Products | 11,454,000 | 9,124,987 | ||
| a Xinchen China Power Holdings Ltd | Auto Components | 11,735,200 | 1,860,725 | ||
| Xinyi Solar Holdings Ltd | Semiconductors & Semiconductor Equipment | 15,370,000 | 5,428,890 | ||
| 66,793,850 | |||||
| Czech Republic 1.4% | |||||
| a Fortuna Entertainment Group NV. | Hotels, Restaurants & Leisure | 899,465 | 3,220,281 | ||
| c Pegas Nonwovens SA | Textiles, Apparel & Luxury Goods | 197,073 | 6,176,797 | ||
| 9,397,078 | |||||
| Egypt 3.9% | |||||
| a Arabian Food Industries Co. DOMTY | Food Products | 3,463,043 | 3,938,844 | ||
| Eastern Tobacco | Tobacco | 116,291 | 2,553,702 | ||
| d Edita Food Industries SAE, 144A | Food Products | 1,396,572 | 5,389,729 | ||
| Egyptian International Pharmaceutical Industries Co | Pharmaceuticals | 1,373,432 | 9,279,998 | ||
| a,d Integrated Diagnostics Holdings PLC, 144A | Health Care Providers & Services | 1,049,430 | 5,142,207 | ||
| 26,304,480 | |||||
| Estonia 0.5% | |||||
| Olympic Entertainment Group A.S | Hotels, Restaurants & Leisure | 1,557,217 | 3,456,379 | ||
| Georgia 0.8% | |||||
| a,d Georgia Healthcare Group PLC, 144A | Health Care Providers & Services | 2,288,000 | 5,490,720 | ||
| Hong Kong 4.3% | |||||
| Amvig Holdings Ltd | Containers & Packaging | 6,108,000 | 2,551,119 | ||
| Bonjour Holdings Ltd | Specialty Retail | 10,798,150 | 528,956 | ||
| I.T Ltd | Specialty Retail | 20,830,395 | 5,021,410 | ||
| 18 | Annual Report | franklintempleton.com | |||
TEMPLETON GLOBAL INVESTMENT TRUST
STATEMENT OF INVESTMENTS
| Templeton Emerging Markets Small Cap Fund (continued) | ||||
| Shares/ | ||||
| Industry | Warrants | Value | ||
| Common Stocks and Other Equity Interests (continued) | ||||
| Hong Kong (continued) | ||||
| Ju Teng International Holdings Ltd | Electronic Equipment, Instruments | |||
| & Components | 21,186,000 | $ | 10,924,349 | |
| a Ju Teng International Holdings Ltd., wts., 10/14/16 | Electronic Equipment, Instruments | |||
| & Components | 2,005,000 | 24,554 | ||
| Luk Fook Holdings (International) Ltd | Specialty Retail | 3,888,000 | 8,831,181 | |
| Sa Sa International Holdings Ltd | Specialty Retail | 1,453,455 | 453,423 | |
| Sitoy Group Holdings Ltd | Textiles, Apparel & Luxury Goods | 3,169,500 | 996,936 | |
| 29,331,928 | ||||
| India 13.5% | ||||
| Apollo Tyres Ltd | Auto Components | 6,308,724 | 16,653,774 | |
| Bajaj Holdings and Investment Ltd | Diversified Financial Services | 782,270 | 17,338,518 | |
| Balkrishna Industries Ltd | Auto Components | 717,833 | 6,840,839 | |
| Biocon Ltd | Biotechnology | 1,020,399 | 7,444,115 | |
| Federal Bank Ltd | Banks | 14,915,344 | 10,456,837 | |
| Great Eastern Shipping Co. Ltd | Oil, Gas & Consumable Fuels | 717,900 | 3,378,480 | |
| JK Cement Ltd | Construction Materials | 1,463,742 | 14,923,519 | |
| Redington India Ltd | Electronic Equipment, Instruments | |||
| & Components | 1,822,036 | 3,152,916 | ||
| Tata Chemicals Ltd | Chemicals | 1,700,500 | 9,591,379 | |
| Vardhman Textiles Ltd | Textiles, Apparel & Luxury Goods | 175,834 | 2,052,790 | |
| 91,833,167 | ||||
| Indonesia 1.3% | ||||
| Bank Permata Tbk PT | Banks | 19,105,600 | 973,700 | |
| Hexindo Adiperkasa Tbk PT | Trading Companies & Distributors | 13,609,000 | 1,656,289 | |
| Mandom Indonesia Tbk PT | Personal Products | 2,341,500 | 2,858,637 | |
| a Panin Financial Tbk PT. | Insurance | 246,820,200 | 3,135,357 | |
| 8,623,983 | ||||
| Kazakhstan 0.5% | ||||
| d Kcell JSC, GDR, 144A | Wireless Telecommunication Services | 92,768 | 334,892 | |
| b Kcell JSC, GDR, Reg S | Wireless Telecommunication Services | 40,701 | 146,931 | |
| Nostrum Oil & Gas LP | Oil, Gas & Consumable Fuels | 781,116 | 2,671,464 | |
| 3,153,287 | ||||
| Kuwait 0.9% | ||||
| Kuwait Foods Americana | Hotels, Restaurants & Leisure | 768,500 | 6,263,078 | |
| Malaysia 2.1% | ||||
| 7-Eleven Malaysia Holdings Bhd | Food & Staples Retailing | 16,197,500 | 5,808,530 | |
| Hartalega Holdings Bhd | Health Care Equipment & Supplies | 2,323,300 | 2,886,272 | |
| Oldtown Bhd | Food Products | 15,124,025 | 5,733,493 | |
| 14,428,295 | ||||
| Mexico 1.5% | ||||
| Grupo Herdez SAB de CV | Food Products | 4,483,374 | 9,891,665 | |
| Nigeria 0.6% | ||||
| Access Bank Nigeria PLC | Banks | 42,999,778 | 818,858 | |
| UAC of Nigeria PLC | Industrial Conglomerates | 30,288,005 | 3,074,152 | |
| 3,893,010 | ||||
| Pakistan 0.7% | ||||
| Habib Bank Ltd | Banks | 2,963,600 | 4,844,411 | |
franklintempleton.com
Annual Report
19
TEMPLETON GLOBAL INVESTMENT TRUST
STATEMENT OF INVESTMENTS
| Templeton Emerging Markets Small Cap Fund (continued) | ||||
| Shares/ | ||||
| Industry | Warrants | Value | ||
| Common Stocks and Other Equity Interests (continued) | ||||
| Peru 1.3% | ||||
| b Intercorp Financial Services Inc., Reg S | Banks | 344,940 | $ | 8,913,250 |
| Philippines 0.8% | ||||
| Pepsi-Cola Products Philippines Inc | Beverages | 65,056,200 | 5,509,277 | |
| Poland 5.5% | ||||
| Amica Wronki SA | Household Durables | 112,408 | 5,211,675 | |
| a AmRest Holdings NV | Hotels, Restaurants & Leisure | 58,533 | 3,278,545 | |
| CCC SA | Textiles, Apparel & Luxury Goods | 77,281 | 3,308,626 | |
| Fabryki Mebli Forte SA | Household Durables | 524,600 | 8,084,071 | |
| d Prime Car Management SA, 144A | Road & Rail | 526,165 | 5,323,202 | |
| a SMT SA | IT Services | 353,556 | 1,116,188 | |
| Wawel SA | Food Products | 21,797 | 5,841,586 | |
| c Work Service SA | Professional Services | 1,701,802 | 5,472,985 | |
| 37,636,878 | ||||
| Russia 3.3% | ||||
| b Cherkizovo Group PJSC, GDR, Reg S | Food Products | 224,987 | 2,060,881 | |
| a,b Globaltrans Investment PLC, GDR, Reg S. | Road & Rail | 117,550 | 508,404 | |
| a,d Lenta Ltd., GDR, 144A | Food & Staples Retailing | 208,000 | 1,308,320 | |
| a,b Mail.ru Group Ltd., GDR, Reg S. | Internet Software & Services | 464,316 | 10,075,657 | |
| b O’Key Group SA, GDR, Reg S. | Food & Staples Retailing | 519,393 | 914,131 | |
| a,b X5 Retail Group NV, GDR, Reg S. | Food & Staples Retailing | 370,649 | 7,857,759 | |
| 22,725,152 | ||||
| Singapore 0.7% | ||||
| e OSIM International Ltd | Specialty Retail | 4,869,000 | 4,950,668 | |
| South Korea 10.4% | ||||
| AmorePacific Group | Personal Products | 43,470 | 5,559,382 | |
| Bukwang Pharmaceutical Co. Ltd | Pharmaceuticals | 94,558 | 2,360,828 | |
| Fila Korea Ltd | Textiles, Apparel & Luxury Goods | 176,343 | 14,655,289 | |
| GS Home Shopping Inc | Internet & Catalog Retail | 5,093 | 825,629 | |
| Interojo Co. Ltd | Health Care Equipment & Supplies | 108,314 | 3,645,089 | |
| Interpark Corp | Internet & Catalog Retail | 170,863 | 1,405,071 | |
| a I-Sens Inc | Health Care Equipment & Supplies | 170,452 | 5,386,540 | |
| KT Skylife Co. Ltd | Media | 115,147 | 1,668,630 | |
| LF Corp | Textiles, Apparel & Luxury Goods | 230,380 | 5,208,873 | |
| Medy-tox Inc | Biotechnology | 21,824 | 8,411,322 | |
| Vieworks Co. Ltd | Health Care Equipment & Supplies | 221,640 | 9,596,857 | |
| Youngone Corp | Textiles, Apparel & Luxury Goods | 289,884 | 12,172,185 | |
| 70,895,695 | ||||
| Sri Lanka 1.2% | ||||
| Hemas Holdings PLC | Industrial Conglomerates | 14,964,257 | 8,199,593 | |
| Switzerland 0.2% | ||||
| a,d Wizz Air Holdings PLC, 144A. | Airlines | 60,600 | 1,603,183 | |
| Taiwan 8.7% | ||||
| ADLINK Technology Inc | Technology Hardware, Storage & Peripherals | 4,328,797 | 9,811,295 | |
| Flytech Technology Co. Ltd | Electronic Equipment, Instruments | |||
| & Components | 3,232,220 | 11,089,180 | ||
| Merida Industry Co. Ltd | Leisure Products | 1,490,000 | 6,592,306 | |
| Novatek Microelectronics Corp. Ltd | Semiconductors & Semiconductor Equipment | 1,976,000 | 7,944,983 | |
| PChome Online Inc | Internet Software & Services | 487,000 | 5,360,205 | |
| Shin Zu Shing Co. Ltd | Machinery | 1,793,000 | 6,401,981 | |
20 Annual Report
franklintempleton.com
TEMPLETON GLOBAL INVESTMENT TRUST
STATEMENT OF INVESTMENTS
| Templeton Emerging Markets Small Cap Fund (continued) | ||||
| Shares/ | ||||
| Industry | Warrants | Value | ||
| Common Stocks and Other Equity Interests (continued) | ||||
| Taiwan (continued) | ||||
| St. Shine Optical Co. Ltd | Health Care Equipment & Supplies | 171,000 | $ | 3,488,171 |
| TTY Biopharm Co. Ltd | Pharmaceuticals | 2,521,900 | 8,691,347 | |
| 59,379,468 | ||||
| Thailand 3.6% | ||||
| Beauty Community PCL, fgn | Specialty Retail | 85,618,000 | 13,160,751 | |
| DSG International Thailand PCL, fgn | Household Products | 27,442,800 | 2,984,102 | |
| Major Cineplex Group PCL, fgn | Media | 1,627,500 | 1,401,420 | |
| Tisco Financial Group PCL, fgn | Banks | 5,172,000 | 6,698,719 | |
| 24,244,992 | ||||
| Turkey 8.0% | ||||
| Bizim Toptan Satis Magazalari AS | Food & Staples Retailing | 284,304 | 1,643,475 | |
| Celebi Hava Servisi AS. | Transportation Infrastructure | 254,278 | 3,075,157 | |
| Coca-Cola Icetek AS | Beverages | 372,780 | 5,434,280 | |
| Ozak Gayrimenkul Yatirim Ortakligi | Real Estate Investment Trusts (REITs) | 7,266,311 | 5,466,494 | |
| Pinar Entegre Et ve Un Sanayi AS | Food Products | 1,570,898 | 6,215,583 | |
| f Pinar Sut Mamulleri Sanayii AS | Food Products | 3,279,170 | 18,967,520 | |
| f Reysas Gayrimenkul Yatirim Ortakligi AS | Real Estate Investment Trusts (REITs) | 24,575,397 | 5,755,771 | |
| Soda Sanayii AS | Chemicals | 3,160,481 | 5,708,605 | |
| Yazicilar Holding AS | Industrial Conglomerates | 429,121 | 2,014,645 | |
| 54,281,530 | ||||
| United Arab Emirates 1.1% | ||||
| c Aramex Co | Air Freight & Logistics | 8,427,789 | 7,778,333 | |
| United States 1.2% | ||||
| a Luxoft Holding Inc | IT Services | 147,411 | 8,112,027 | |
| Vietnam 2.1% | ||||
| c DHG Pharmaceutical JSC. | Pharmaceuticals | 1,118,432 | 4,206,985 | |
| Imexpharm Pharmaceutical JSC | Pharmaceuticals | 545,094 | 1,154,555 | |
| Vietnam Container Shipping JSC | Marine | 1,812,676 | 4,870,276 | |
| Vietnam Dairy Products JSC | Food Products | 509,616 | 3,057,947 | |
| a Vingroup JSC | Real Estate Management & Development | 582,500 | 1,231,176 | |
| 14,520,939 | ||||
| Total Common Stocks and Other Equity | ||||
| Interests (Cost $625,353,387) | 649,189,125 | |||
| g Participatory Notes 1.4% | ||||
| Saudi Arabia 1.4% | ||||
| d Deutsche Bank AG/London, Saudi Dairy & Foodstuff Co., | ||||
| 144A, 4/12/18 | Food Products | 40,309 | 1,332,760 | |
| d HSBC Bank PLC, Mouwasat Medical Services Co., 144A, | ||||
| 3/05/18 | Health Care Providers & Services | 279,525 | 8,496,767 | |
| 9,829,527 | ||||
| Total Participatory Notes | ||||
| (Cost $10,405,296) | 9,829,527 | |||
| Preferred Stocks 1.2% | ||||
| Brazil 0.4% | ||||
| Marcopolo SA, pfd | Machinery | 3,572,200 | 2,371,610 | |
| franklintempleton.com | Annual Report 21 | |||
TEMPLETON GLOBAL INVESTMENT TRUST
STATEMENT OF INVESTMENTS
| Templeton Emerging Markets Small Cap Fund (continued) | |||||
| Industry | Shares | Value | |||
| Preferred Stocks (continued) | |||||
| Chile 0.8% | |||||
| Embotelladora Andina SA, pfd., A | Beverages | 1,979,200 | $ | 5,613,494 | |
| Total Preferred Stocks (Cost $9,252,188) | 7,985,104 | ||||
| Total Investments before Short Term | |||||
| Investments (Cost $645,010,871) | 667,003,756 | ||||
| Short Term Investments 2.7% | |||||
| Money Market Funds (Cost $15,965,082) 2.4% | |||||
| United States 2.4% | |||||
| a,h Institutional Fiduciary Trust Money Market Portfolio | 15,965,082 | 15,965,082 | |||
| i Investments from Cash Collateral | |||||
| Received for Loaned Securities | |||||
| (Cost $2,035,000) 0.3% | |||||
| Money Market Funds 0.3% | |||||
| United States 0.3% | |||||
| a,h Institutional Fiduciary Trust Money Market Portfolio | 2,035,000 | 2,035,000 | |||
| Total Investments (Cost $663,010,953) | |||||
| 100.5% | 685,003,838 | ||||
| Other Assets, less Liabilities (0.5)% | (3,274,188 | ) | |||
| Net Assets 100.0% | $ | 681,729,650 | |||
See Abbreviations on page 35.
aNon-income producing.
bSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States.
Such a security 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. These securities have been deemed liquid under guidelines approved by the Trust’s Board of Trustees. At March 31, 2016, the aggregate value of these
securities was $35,252,906, representing 5.17% of net assets.
cAt March 31, 2016, pursuant to the Fund’s policies and the requirements of applicable securities law, the Fund is restricted from trading these securities at year end.
dSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and 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. These securities have been deemed liquid under guidelines approved by the Trust’s Board of Trustees. At
March 31, 2016, the aggregate value of these securities was $34,421,780, representing 5.05% of net assets.
eA portion or all of the security is on loan at March 31, 2016. See Note 1(d).
fSee Note 8 regarding holdings of 5% voting securities.
gSee Note 1(c) regarding Participatory Notes.
hSee Note 3(f) regarding investments in affiliated management investment companies.
iSee Note 1(d) regarding securities on loan.
22 Annual Report | The accompanying notes are an integral part of these financial statements. franklintempleton.com
TEMPLETON GLOBAL INVESTMENT TRUST
Financial Statements
Statement of Assets and Liabilities
March 31, 2016
| Templeton Emerging Markets Small Cap Fund | |||
| Assets: | |||
| Investments in securities: | |||
| Cost - Unaffiliated issuers | $ | 613,391,451 | |
| Cost - Non-controlled affiliates (Note 3f and 8) | 49,619,502 | ||
| Total cost of investments | $ | 663,010,953 | |
| Value - Unaffiliated issuers | $ | 642,280,465 | |
| Value - Non-controlled affiliates (Note 3f and 8) | 42,723,373 | ||
| Total value of investments (includes securities loaned in the amount of $1,881,030) | 685,003,838 | ||
| Cash | 10,540 | ||
| Receivables: | |||
| Investment securities sold | 487,594 | ||
| Capital shares sold | 1,130,703 | ||
| Dividends | 816,563 | ||
| Other assets | 417 | ||
| Total assets | 687,449,655 | ||
| Liabilities: | |||
| Payables: | |||
| Investment securities purchased | 10,703 | ||
| Capital shares redeemed | 1,313,362 | ||
| Management fees | 806,853 | ||
| Distribution fees | 195,767 | ||
| Transfer agent fees | 193,849 | ||
| Payable upon return of securities loaned | 2,035,000 | ||
| Deferred tax | 947,559 | ||
| Accrued expenses and other liabilities | 216,912 | ||
| Total liabilities | 5,720,005 | ||
| Net assets, at value | $ | 681,729,650 | |
| Net assets consist of: | |||
| Paid-in capital | $ | 684,286,703 | |
| Distributions in excess of net investment income | (3,363,460 | ) | |
| Net unrealized appreciation (depreciation) | 21,038,084 | ||
| Accumulated net realized gain (loss) | (20,231,677 | ) | |
| Net assets, at value | $ | 681,729,650 | |
franklintempleton.com
The accompanying notes are an integral part of these financial statements. | Annual Report 23
TEMPLETON GLOBAL INVESTMENT TRUST
FINANCIAL STATEMENTS
Statement of Assets and Liabilities (continued)
March 31, 2016
| Templeton Emerging Markets Small Cap Fund | ||
| Class A: | ||
| Net assets, at value | $ | 257,976,860 |
| Shares outstanding | 22,611,860 | |
| Net asset value per sharea | $ | 11.41 |
| Maximum offering price per share (net asset value per share ÷ 94.25%) | $ | 12.11 |
| Class C: | ||
| Net assets, at value | $ | 62,147,737 |
| Shares outstanding | 5,668,471 | |
| Net asset value and maximum offering price per sharea | $ | 10.96 |
| Class R: | ||
| Net assets, at value | $ | 476,926 |
| Shares outstanding | 42,082 | |
| Net asset value and maximum offering price per share | $ | 11.33 |
| Advisor Class: | ||
| Net assets, at value | $ | 361,128,127 |
| Shares outstanding | 31,339,431 | |
| Net asset value and maximum offering price per share | $ | 11.52 |
aRedemption price is equal to net asset value less contingent deferred sales charges, if applicable.
24 Annual Report | The accompanying notes are an integral part of these financial statements.
franklintempleton.com
TEMPLETON GLOBAL INVESTMENT TRUST
FINANCIAL STATEMENTS
Statement of Operations
for the year ended March 31, 2016
| Templeton Emerging Markets Small Cap Fund | |||
| Investment income: | |||
| Dividends: (net of foreign taxes of $1,503,758) | |||
| Unaffiliated issuers | $ | 14,802,235 | |
| Non-controlled affiliates (Note 8) | 1,688,771 | ||
| Interest | 1,840 | ||
| Income from securities loaned (net of fees and rebates) | 83,599 | ||
| Total investment income | 16,576,445 | ||
| Expenses: | |||
| Management fees (Note 3a) | 10,340,093 | ||
| Distribution fees: (Note 3c) | |||
| Class A | 739,613 | ||
| Class C | 697,232 | ||
| Class R | 2,596 | ||
| Transfer agent fees: (Note 3e) | |||
| Class A | 467,082 | ||
| Class C | 118,972 | ||
| Class R | 879 | ||
| Advisor Class | 622,544 | ||
| Custodian fees (Note 4) | 462,174 | ||
| Reports to shareholders | 101,129 | ||
| Registration and filing fees | 118,321 | ||
| Professional fees | 71,440 | ||
| Trustees’ fees and expenses | 30,954 | ||
| Other | 30,644 | ||
| Total expenses | 13,803,673 | ||
| Expenses waived/paid by affiliates (Note 3f) | (83,316 | ) | |
| Net expenses | 13,720,357 | ||
| Net investment income. | 2,856,088 | ||
| Realized and unrealized gains (losses): | |||
| Net realized gain (loss) from: | |||
| Investments | 4,992,677 | ||
| Foreign currency transactions | (38,379 | ) | |
| Net realized gain (loss) | 4,954,298 | ||
| Net change in unrealized appreciation (depreciation) on: | |||
| Investments | (59,398,248 | ) | |
| Translation of other assets and liabilities | |||
| denominated in foreign currencies. | 5,290 | ||
| Change in deferred taxes on unrealized appreciation | (527,858 | ) | |
| Net change in unrealized appreciation (depreciation) | (59,920,816 | ) | |
| Net realized and unrealized gain (loss) | (54,966,518 | ) | |
| Net increase (decrease) in net assets resulting from operations | $ | (52,110,430 | ) |
franklintempleton.com
The accompanying notes are an integral part of these financial statements. | Annual Report 25
| TEMPLETON GLOBAL INVESTMENT TRUST | ||||||
| FINANCIAL STATEMENTS | ||||||
| Statements of Changes in Net Assets | ||||||
| Templeton Emerging Markets Small Cap Fund | ||||||
| Year Ended March 31, | ||||||
| 2016 | 2015 | |||||
| Increase (decrease) in net assets: | ||||||
| Operations: | ||||||
| Net investment income. | $ | 2,856,088 | $ | 140,980 | ||
| Net realized gain (loss) | 4,954,298 | 14,884,764 | ||||
| Net change in unrealized appreciation (depreciation) | (59,920,816 | ) | 12,974,349 | |||
| Net increase (decrease) in net assets resulting from operations | (52,110,430 | ) | 28,000,093 | |||
| Distributions to shareholders from: | ||||||
| Net investment income: | ||||||
| Class A | (724,228 | ) | (419,135 | ) | ||
| Class R | (44 | ) | — | |||
| Advisor Class | (1,980,404 | ) | (1,580,636 | ) | ||
| Total distributions to shareholders. | (2,704,676 | ) | (1,999,771 | ) | ||
| Capital share transactions: (Note 2) | ||||||
| Class A | 2,154,002 | 30,114,143 | ||||
| Class C | (5,538,924 | ) | 8,031,554 | |||
| Class R | (63,622 | ) | (119,546 | ) | ||
| Advisor Class | 24,730,017 | 111,161,689 | ||||
| Total capital share transactions | 21,281,473 | 149,187,840 | ||||
| Net increase (decrease) in net assets | (33,533,633 | ) | 175,188,162 | |||
| Net assets: | �� | |||||
| Beginning of year | 715,263,283 | 540,075,121 | ||||
| End of year | $ | 681,729,650 | $ | 715,263,283 | ||
| Distributions in excess of net investment income included in net assets: | ||||||
| End of year | $ | (3,363,460 | ) | $ | (4,247,114 | ) |
26 Annual Report | The accompanying notes are an integral part of these financial statements.
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TEMPLETON GLOBAL INVESTMENT TRUST
Notes to Financial Statements
Templeton Emerging Markets Small Cap Fund
1. Organization and Significant Accounting Policies
Templeton Global Investment Trust (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company, consisting of six separate funds and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP). Templeton Emerging Markets Small Cap Fund (Fund) is included in this report. The financial statements of the remaining funds in the Trust are presented separately. The Fund offers four classes of shares: Class A, Class C, Class R, and Advisor Class. Each class of shares differs by its initial sales load, contingent deferred sales charges, voting rights on matters affecting a single class, its exchange privilege and fees primarily 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 as of 4 p.m. Eastern time each day the New York Stock Exchange (NYSE) is open for trading. 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 and Liquidity Oversight Committee (VLOC). The VLOC provides administration and oversight of the Fund’s valuation policies and procedures, which are approved annually by the Board. Among other things, these procedures allow the Fund to 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, whichever is earlier. The value is then converted into its U.S. dollar equivalent at the foreign exchange rate in effect at 4 p.m. Eastern time on the day that the
value of the security is determined. Over-the-counter (OTC) securities are valued within the range of the most recent quoted bid and ask prices. Securities that trade in multiple markets or on multiple exchanges are valued according to the broadest and most representative market. Certain equity securities are valued based upon fundamental characteristics or relationships to similar securities.
Investments in open-end mutual funds are valued at the closing NAV.
The Fund has procedures to determine the fair value of financial instruments for which market prices are not reliable or readily available. Under these procedures, the VLOC convenes on a regular basis to review such financial instruments and considers a number of factors, including significant unobservable valuation inputs, when arriving at fair value. The VLOC primarily employs a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. The VLOC employs various methods for calibrating these valuation approaches including a regular review of key inputs and assumptions, transactional back-testing or disposition analysis, and reviews of any related market activity.
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 NYSE business day. Occasionally, events occur between the time at which trading in a foreign security is completed and the close of the NYSE 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 the close of the NYSE. In order to minimize the potential for these differences, the VLOC monitors price movements following the close of trading in foreign stock markets through a series of country specific market proxies (such as baskets of American
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27
TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
Templeton Emerging Markets Small Cap Fund (continued)
1. Organization and Significant Accounting
Policies (continued)
a. Financial Instrument Valuation (continued)
Depositary Receipts, futures contracts and exchange traded funds). These price movements are measured against established trigger thresholds for each specific market proxy to assist in determining if an event has occurred that may call into question the reliability of the values of the foreign securities held by the Fund. If such an event occurs, the securities may be valued using fair value procedures, which may include the use of independent pricing services.
When the last day of the reporting period is a non-business day, certain foreign markets may be open on those days that the NYSE is closed, 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 significant 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. Participatory Notes
The Fund invests in Participatory Notes (P-Notes). P-notes are promissory notes that are designed to offer a return linked to the performance of a particular underlying equity security or market. P-Notes are issued by banks or broker-dealers and allow the Fund to gain exposure to common stocks in markets where direct investment is not allowed. Income received from P-Notes is recorded as dividend income in the Statement of Operations. P-Notes may contain various risks including the potential inability of the counterparty to fulfill their obligations under the terms of the contract. These securities may be more volatile and less liquid than other investments held by the Fund.
d. Securities Lending
The Fund participates in an agency based securities lending program to earn additional income. The Fund receives cash collateral 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. The collateral is deposited into a joint cash account with other funds and is used to invest in a money market fund managed by Franklin Advisers, Inc., an affiliate of the Fund. The Fund may receive income from the investment of cash collateral, in addition to lending fees and rebates paid by the borrower. Income from securities loaned is reported separately in the Statement of Operations. The Fund bears the market risk with respect to the 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.
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TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
Templeton Emerging Markets Small Cap Fund (continued)
Securities lending transactions are accounted for as secured borrowing transactions. The securities out on loan represent the collateral pledged by the Fund, and the cash collateral received for the loaned securities represents the amount borrowed by the Fund. At March 31, 2016, the Fund’s secured borrowing transactions were as follows:
| Securities lending transactionsa: | ||
| Equity Investmentsb | $ | 2,035,000 |
| aThe agreements open at year end can be terminated at any time. | ||
| bGross amount of recognized liabilities for securities lending transactions is included | ||
| in payable upon return of securities loaned in the Statement of Assets and | ||
| Liabilities. | ||
e. Income and Deferred Taxes
It is the Fund’s policy to qualify as a regulated investment company under the Internal Revenue Code. The Fund intends to distribute to shareholders substantially all of its taxable income and net realized gains to relieve it from federal income and excise taxes. As a result, no provision for U.S. federal income taxes is required.
The Fund may be subject to foreign taxation related to income received, capital gains on the sale of securities and certain foreign currency transactions in the foreign jurisdictions in which it invests. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests. When a capital gain tax is determined to apply, the Fund records an estimated deferred tax liability in an amount that would be payable if the securities were disposed of on the valuation date.
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 March 31, 2016, 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 on future tax returns). Open tax years are those that remain subject to examination and are based on each tax jurisdiction’s statute of limitation.
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. Estimated expenses are accrued daily. Dividend income is recorded on the ex-dividend date
except for certain dividends from foreign 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 and are determined according to income tax regulations (tax basis). Distributable earnings determined on a tax basis 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. Fund specific expenses are charged directly to the Fund that incurred the expense.
Realized and unrealized gains and losses and net investment income, not including class specific expenses, are allocated daily to each class of shares based upon the relative proportion of net assets of each class. Differences in per share distributions, by class, are generally due to differences in class specific expenses.
g. Accounting Estimates
The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
h. Guarantees and Indemnifications
Under the Trust’s organizational documents, its officers and trustees are indemnified by the Trust against certain liabilities arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust, on behalf of the Fund, enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred. Currently, the Trust expects the risk of loss to be remote.
franklintempleton.com Annual Report 29
TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
Templeton Emerging Markets Small Cap Fund (continued)
2. Shares of Beneficial Interest
At March 31, 2016, there were an unlimited number of shares authorized ($0.01 par value). Transactions in the Fund’s shares were
as follows:
| Year Ended March 31, | ||||||||||||
| 2016 | 2015 | |||||||||||
| Shares | Amount | Shares | Amount | |||||||||
| Class A Shares: | ||||||||||||
| Shares sold | 7,397,383 | $ | 87,328,115 | 8,707,935 | $ | 107,927,116 | ||||||
| Shares issued in reinvestment of distributions | 58,776 | 660,642 | 30,574 | 379,121 | ||||||||
| Shares redeemed | (7,474,257 | ) | (85,834,755 | ) | (6,306,208 | ) | (78,192,094 | ) | ||||
| Net increase (decrease) | (18,098 | ) | $ | 2,154,002 | 2,432,301 | $ | 30,114,143 | |||||
| Class C Shares: | ||||||||||||
| Shares sold | 1,454,624 | $ | 16,877,985 | 1,968,030 | $ | 23,629,390 | ||||||
| Shares redeemed | (2,018,443 | ) | (22,416,909 | ) | (1,305,344 | ) | (15,597,836 | ) | ||||
| Net increase (decrease) | (563,819 | ) | $ | (5,538,924 | ) | 662,686 | $ | 8,031,554 | ||||
| Class R Shares: | ||||||||||||
| Shares sold | 6,869 | $ | 81,010 | 18,630 | $ | 230,287 | ||||||
| Shares issued in reinvestment of distributions | 4 | 44 | — | — | ||||||||
| Shares redeemed | (12,414 | ) | (144,676 | ) | (28,015 | ) | (349,833 | ) | ||||
| Net increase (decrease) | (5,541 | ) | $ | (63,622 | ) | (9,385 | ) | $ | (119,546 | ) | ||
| Advisor Class Shares: | ||||||||||||
| Shares sold | 13,598,095 | $ | 159,232,699 | 16,241,452 | $ | 203,021,946 | ||||||
| Shares issued in reinvestment of distributions | 82,622 | 936,936 | 55,109 | 689,414 | ||||||||
| Shares redeemed | (11,750,697 | ) | (135,439,618 | ) | (7,427,051 | ) | (92,549,671 | ) | ||||
| Net increase (decrease) | 1,930,020 | $ | 24,730,017 | 8,869,510 | $ | 111,161,689 | ||||||
3. Transactions with Affiliates
Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton
Investments. Certain officers and trustees of the Trust are also officers and/or directors of the following subsidiaries:
| Subsidiary | Affiliation |
| Templeton Asset Management Ltd. (TAML) | Investment manager |
| Franklin Templeton Services, LLC (FT Services) | Administrative manager |
| Franklin Templeton Distributors, Inc. (Distributors) | Principal underwriter |
| Franklin Templeton Investor Services, LLC (Investor Services) | Transfer agent |
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TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
Templeton Emerging Markets Small Cap Fund (continued)
a. Management Fees
The Fund pays an investment management fee to TAML based on the average daily net assets of the Fund as follows:
| Annualized Fee Rate | Net Assets | |
| 1.450 | % | Up to and including $1 billion |
| 1.400 | % | Over $1 billion, up to and including $5 billion |
| 1.350 | % | Over $5 billion, up to and including $10 billion |
| 1.300 | % | Over $10 billion, up to and including $15 billion |
| 1.250 | % | Over $15 billion, up to and including $20 billion |
| 1.200 | % | In excess of $20 billion |
For the year ended March 31, 2016, the effective management fee rate was 1.450% of the Fund’s average daily net assets.
b. Administrative Fees
Under an agreement with TAML, FT Services provides administrative services to the Fund. The fee is paid by TAML 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 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:
| Class A | 0.35 | % |
| Class C | 1.00 | % |
| Class R | 0.50 | % |
Effective August 1, 2015, the Board has set the current rate at 0.25% per year for Class A shares until further notice and approval by the Board. Prior to August 1, 2015, the Board had set the rate at 0.30% per year for Class A shares.
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 year:
| Sales charges retained net of commissions paid to | ||
| unaffiliated brokers/dealers. | $ | 98,359 |
| CDSC retained | $ | 13,696 |
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TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
Templeton Emerging Markets Small Cap Fund (continued)
| 3. | Transactions with Affiliates (continued) |
| e. | Transfer Agent Fees |
Each class of shares pays transfer agent fees to Investor Services for its performance of shareholder servicing obligations and reimburses Investor Services for out of pocket expenses incurred, including shareholding servicing fees paid to third parties. These fees are allocated daily based upon their relative proportion of such classes’ aggregate net assets.
For the year ended March 31, 2016, the Fund paid transfer agent fees of $1,209,477, of which $560,313 was retained by Investor Services.
f. Investments in Affiliated Management Investment Companies
The Fund invests in an affiliated management investment company for purposes other than 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 company, 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. Prior to April 1, 2013, the waiver was accounted for as a reduction to management fees.
| % of | |||||||||||
| Affiliated | |||||||||||
| Number of | Number of | Fund Shares | |||||||||
| Shares Held | Shares | Value | Outstanding | ||||||||
| at Beginning | Gross | Gross | Held at End | at End | Investment | Realized | Held at End | ||||
| of Year | Additions | Reductions | of Year | of Year | Income | Gain (Loss) | of Year | ||||
| Non-Controlled Affiliates | |||||||||||
| Institutional Fiduciary Trust Money | |||||||||||
| Market Portfolio | 94,698,858 | 150,691,456 | (227,390,232 | ) | 18,000,082 | $ | 18,000,082 | $- | $- | 0.08 | % |
| g. Interfund Transactions | |||||||||||
The Fund engaged in purchases and sales of investments with funds or other accounts that have a common investment manager (or affiliated investment managers), directors, trustees, or officers. During the year ended March 31, 2016, the purchase and sale transactions aggregated $23,411,359 and $0, respectively.
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 year ended March 31, 2016, there were no credits earned.
5. Income Taxes
For tax purposes, capital losses may be carried over to offset future capital gains, if any. At March 31, 2016, the Fund had long-term capital loss carryforwards of $20,184,229.
During the year ended March 31, 2016, the Fund utilized $3,367,379 of capital loss carryforwards.
For tax purposes, the Fund may elect to defer any portion of a late-year ordinary loss to the first day of the following fiscal year. At March 31, 2016, the Fund deferred late-year ordinary losses of $135,023.
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TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
Templeton Emerging Markets Small Cap Fund (continued)
The tax character of distributions paid during the years ended March 31, 2016 and 2015, was as follows:
| 2016 | 2015 | |||
| Distributions paid from ordinary income | $ | 2,704,676 | $ | 1,999,771 |
At March 31, 2016, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:
| Cost of investments | $ | 666,286,838 | |
| Unrealized appreciation | $ | 114,916,678 | |
| Unrealized depreciation | (96,199,678 | ) | |
| Net unrealized appreciation (depreciation) | $ | 18,717,000 | |
Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatments of corporate actions.
6. Investment Transactions
Purchases and sales of investments (excluding short term securities) for the year ended March 31, 2016, aggregated $213,533,073 and $117,780,187 respectively.
7. Concentration of Risk
Investing in foreign securities may include certain risks and considerations not typically associated with investing in U.S. securities, such as fluctuating currency values and changing local and regional economic, political and social conditions, which may result in greater market volatility. In addition, certain foreign securities may not be as liquid as U.S. securities.
8. Holdings of 5% Voting Securities of Portfolio Companies
The 1940 Act defines "affiliated companies" to include investments in portfolio companies in which a fund owns 5% or more of the outstanding voting securities. Investments in "affiliated companies" for the Fund for the year ended March 31, 2016, were as shown below.
| Number of | Number of | ||||||||
| Shares Held | Shares | Realized | |||||||
| at Beginning | Gross | Gross | Held at End | Value at | Investment | Gain | |||
| Name of Issuer | of Year | Additions | Reductions | of Year | End of Year | Income | (Loss) | ||
| Non-Controlled Affiliates | |||||||||
| Pinar Sut Mamulleri Sanayii AS | 3,133,237 | 145,933 | - | 3,279,170 | $ | 18,967,520 | $ | 1,576,016 | $- |
| Reysas Gayrimenkul Yatirim Ortakligi | |||||||||
| AS | 23,975,998 | 599,399 | - | 24,575,397 | 5,755,771 | 112,755 | - | ||
| Total Affiliated Securities (Value is 3.63% of Net Assets) | $ | 24,723,291 | $ | 1,688,771 | $- | ||||
9. Credit Facility
The Fund, together with other U.S. registered and foreign investment funds (collectively, Borrowers), managed by Franklin Templeton Investments, are borrowers in a joint syndicated senior unsecured credit facility totaling $2 billion (Global Credit Facility) which matures on February 10, 2017. 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.
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TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
Templeton Emerging Markets Small Cap Fund (continued)
9. Credit Facility (continued)
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 0.07% based upon the unused portion of the Global Credit Facility. Effective February 12, 2016, the annual commitment fee is 0.15%. These fees are reflected in other expenses in the Statement of Operations. During the year ended March 31, 2016, the Fund did not use the Global Credit Facility.
10. Fair Value Measurements
The Fund follows a fair value hierarchy that distinguishes between market data obtained from The independent sources (observable inputs) and the Fund’s own market assumptions (unobservable inputs). These inputs are used in determining the value of the Fund’s financial instruments and are summarized in the following fair value hierarchy:
- Level 1 – quoted prices in active markets for identical financial instruments
- Level 2 – other significant observable inputs (including quoted prices for similar financial instruments, interest rates, prepayment speed, credit risk, etc.)
- Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of financial instruments)
The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.
For movements between the levels within the fair value hierarchy, the Fund has adopted a policy of recognizing the transfers as of the date of the underlying event which caused the movement.
A summary of inputs used as of March 31, 2016, in valuing the Fund’s assets carried at fair value, is as follows:
| Level 1 | Level 2 | Level 3 | Total | |||||
| Assets: | ||||||||
| Investments in Securities: | ||||||||
| Equity Investments:a | ||||||||
| Georgia | $ | — | $ | 5,490,720 | $ | — | $ | 5,490,720 |
| All Other Equity Investmentsb | 651,683,509 | — | — | 651,683,509 | ||||
| Participatory Notes | — | 9,829,527 | — | 9,829,527 | ||||
| Short Term Investments | 18,000,082 | — | — | 18,000,082 | ||||
| Total Investments in Securities | $ | 669,683,591 | $ | 15,320,247 | $ | — | $ | 685,003,838 |
aIncludes common and preferred stocks as well as other equity investments.
bFor detailed categories, see the accompanying Statement of Investments.
11. Subsequent Events
The Fund has evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure.
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TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
Templeton Emerging Markets Small Cap Fund (continued)
Abbreviations
Selected Portfolio
BDR Brazilian Depositary Receipt
GDR Global Depositary Receipt
franklintempleton.com Annual Report 35
TEMPLETON GLOBAL INVESTMENT TRUST
Report of Independent Registered Public Accounting Firm
To the Board of Trustees and Shareholders of Templeton Emerging Markets Small Cap Fund
In our opinion, the accompanying statement of assets and liabilities, including the statement of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Templeton Emerging Markets Small Cap Fund (the "Fund") at March 31, 2016, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at March 31, 2016 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
May 17, 2016
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TEMPLETON GLOBAL INVESTMENT TRUST
Tax Information (unaudited)
Templeton Emerging Markets Small Cap Fund
Under Section 854(b)(1)(B) of the Internal Revenue Code (Code), the Fund hereby reports the maximum amount allowable but no less than $9,426,885 as qualified dividends for purposes of the maximum rate under Section 1(h)(11) of the Code for the fiscal year ended March 31, 2016. Distributions, including qualified dividend income, paid during calendar year 2016 will be reported to shareholders on Form 1099-DIV by mid-February 2017. Shareholders are advised to check with their tax advisors for information on the treatment of these amounts on their individual income tax returns.
At March 31, 2015, more than 50% of the Fund’s total assets were invested in securities of foreign issuers. In most instances, foreign taxes were withheld from income paid to the Fund on these investments. As shown in the table below, the Fund hereby reports to shareholders the foreign source income and foreign taxes paid, pursuant to Section 853 of the Code. This written statement will allow shareholders of record on December 9, 2015, to treat their proportionate share of foreign taxes paid by the Fund as having been paid directly by them. The shareholder shall consider these amounts as foreign taxes paid in the tax year in which they receive the Fund distribution.
The following table provides a detailed analysis of foreign tax paid, foreign source income, and foreign source qualified dividends as reported by the Fund, to Class A, Class C, Class R, and Advisor Class shareholders of record.
| Foreign Tax Paid | Foreign Source | Foreign Source Qualified | ||||
| Class | Per Share | Income Per Share | Dividends Per Share | |||
| Class A | $ | 0.0155 | $ | 0.0331 | $ | 0.0122 |
| Class C | $ | 0.0155 | $ | 0.0000 | $ | 0.0000 |
| Class R | $ | 0.0155 | $ | 0.0000 | $ | 0.0000 |
| Advisor Class | $ | 0.0155 | $ | 0.0633 | $ | 0.0231 |
Foreign Tax Paid Per Share (Column 1) is the amount per share available to you, as a tax credit (assuming you held your shares in the Fund for a minimum of 16 days during the 31-day period beginning 15 days before the ex-dividend date of the Fund’s distribution to which the foreign taxes relate), or, as a tax deduction.
Foreign Source Income Per Share (Column 2) is the amount per share of income dividends attributable to foreign securities held by the Fund, plus any foreign taxes withheld on these dividends. The amounts reported include foreign source qualified dividends that have not been adjusted for the rate differential applicable to such dividend income.1
Foreign Source Qualified Dividends Per Share (Column 3) is the amount per share of foreign source qualified dividends, plus any foreign taxes withheld on these dividends. These amounts represent the portion of the Foreign Source Income reported to you in column 2 that were derived from qualified foreign securities held by the Fund.1
By mid-February 2016, shareholders received Form 1099-DIV which included their share of taxes paid and foreign source income distributed during the calendar year 2015. The Foreign Source Income reported on Form 1099-DIV has not been adjusted for the rate differential on foreign source qualified dividend income. Shareholders are advised to check with their tax advisors for information on the treatment of these amounts on their 2015 individual income tax returns.
1Qualified dividends are taxed at reduced long term capital gains tax rates. In determining the amount of foreign tax credit that may be applied against the U.S. tax liability of individuals receiving foreign source qualified dividends, adjustments may be required to the foreign tax credit limitation calculation to reflect the rate differential applicable to such dividend income. The rules however permit certain individuals to elect not to apply the rate differential adjustments for capital gains and/or dividends for any taxable year. Please consult your tax advisor and the instructions to Form 1116 for more information.
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TEMPLETON GLOBAL INVESTMENT TRUST
| Board Members and Officers | |||||
| The name, year of birth and address of the officers and board members, as well as their affiliations, positions held with the Trust, | |||||
| principal occupations during at least the past five years and number of U.S. registered portfolios overseen in the Franklin Templeton | |||||
| Investments fund complex, are shown below. Generally, each board member serves until that person’s successor is elected and | |||||
| qualified. | |||||
| Independent Board Members | |||||
| Number of Portfolios in | |||||
| Name, Year of Birth | Length of | Fund Complex Overseen | Other Directorships Held | ||
| and Address | Position | Time Served | by Board Member* | During at Least the Past 5 Years | |
| Harris J. Ashton (1932) | Trustee | Since 1994 | 145 | Bar-S Foods (meat packing company) | |
| 300 S.E. 2nd Street | (1981-2010). | ||||
| Fort Lauderdale, FL 33301-1923 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Director of various companies; and formerly, Director, RBC Holdings, Inc. (bank holding company) (until 2002); and President, Chief Executive | |||||
| Officer and Chairman of the Board, General Host Corporation (nursery and craft centers) (until 1998). | |||||
| Ann Torre Bates (1958) | Trustee | Since 2008 | 40 | Navient Corporation (loan | |
| 300 S.E. 2nd Street | management, servicing and asset | ||||
| Fort Lauderdale, FL 33301-1923 | recovery) (2014-present), Ares Capital | ||||
| Corporation (specialty finance | |||||
| company) (2010-present), United | |||||
| Natural Foods, Inc. (distributor of | |||||
| natural, organic and specialty foods) | |||||
| (2013-present), Allied Capital | |||||
| Corporation (financial services) | |||||
| (2003-2010) and SLM Corporation | |||||
| (Sallie Mae) (1997-2014). | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Director of various companies; and formerly, Executive Vice President and Chief Financial Officer, NHP Incorporated (manager of multifamily | |||||
| housing) (1995-1997); and Vice President and Treasurer, US Airways, Inc. (until 1995). | |||||
| Frank J. Crothers (1944) | Trustee | Since 2001 | 24 | Fortis, Inc. (utility holding company) | |
| 300 S.E. 2nd Street | (2007-present) and AML Foods Limited | ||||
| Fort Lauderdale, FL 33301-1923 | (retail distributors) (1989-present). | ||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Director and Vice Chairman, Caribbean Utilities Company, Ltd.; director of various other private business and nonprofit organizations; and | |||||
| formerly, Chairman, Atlantic Equipment and Power Ltd. (1977-2003). | |||||
| Edith E. Holiday (1952) | Lead | Trustee since | 145 | Hess Corporation (exploration and | |
| 300 S.E. 2nd Street | Independent | 1996 and Lead | refining of oil and gas) (1993-present), | ||
| Fort Lauderdale, FL 33301-1923 | Trustee | Independent | Canadian National Railway (railroad) | ||
| Trustee since 2007 | (2001-present), White Mountains | ||||
| Insurance Group, Ltd. (holding | |||||
| company) (2004-present), RTI | |||||
| International Metals, Inc. (manufacture | |||||
| and distribution of titanium) | |||||
| (1999-2015) and H.J. Heinz Company | |||||
| (processed foods and allied products) | |||||
| (1994-2013). | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Director or Trustee of various companies and trusts; and formerly, Assistant to the President of the United States and Secretary of the | |||||
| Cabinet (1990-1993); General Counsel to the United States Treasury Department (1989-1990); and Counselor to the Secretary and Assistant | |||||
| Secretary for Public Affairs and Public Liaison – United States Treasury Department (1988-1989). | |||||
| J. Michael Luttig (1954) | Trustee | Since 2009 | 145 | Boeing Capital Corporation (aircraft | |
| 300 S.E. 2nd Street | financing) (2006-2013). | ||||
| Fort Lauderdale, FL 33301-1923 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Executive Vice President, General Counsel and member of the Executive Council, The Boeing Company (aerospace company) (2006-present); | |||||
| and formerly, Federal Appeals Court Judge, U.S. Court of Appeals for the Fourth Circuit (1991-2006). | |||||
| 38 | Annual Report | franklintempleton.com | |||
TEMPLETON GLOBAL INVESTMENT TRUST
| Independent Board Members (continued) | ||||||
| Number of Portfolios in | ||||||
| Name, Year of Birth | Length of | Fund Complex Overseen | Other Directorships Held | |||
| and Address | Position | Time Served | by Board Member* | During at Least the Past 5 Years | ||
| David W. Niemiec (1949) | Trustee | Since 2006 | 40 | Emeritus Corporation (assisted living) | ||
| 300 S.E. 2nd Street | (1999-2010) and OSI Pharmaceuticals, | |||||
| Fort Lauderdale, FL 33301-1923 | Inc. (pharmaceutical products) | |||||
| (2006-2010). | ||||||
| Principal Occupation During at Least the Past 5 Years: | ||||||
| Advisor, Saratoga Partners (private equity fund); and formerly, Managing Director, Saratoga Partners (1998-2001) and SBC Warburg Dillon | ||||||
| Read (investment banking) (1997-1998); Vice Chairman, Dillon, Read & Co. Inc. (investment banking) (1991-1997); and Chief Financial Officer, | ||||||
| Dillon, Read & Co. Inc. (1982-1997). | ||||||
| Frank A. Olson (1932) | Trustee | Since 2003 | 145 | Hess Corporation (exploration and | ||
| 300 S.E. 2nd Street | refining of oil and gas) (1998-2013). | |||||
| Fort Lauderdale, FL 33301-1923 | ||||||
| Principal Occupation During at Least the Past 5 Years: | ||||||
| Director of various companies; and formerly, Chairman of the Board, The Hertz Corporation (car rental) (1980-2000) and Chief Executive | ||||||
| Officer (1977-1999); and Chairman of the Board, President and Chief Executive Officer, UAL Corporation (airlines) (June-December 1987). | ||||||
| Larry D. Thompson (1945) | Trustee | Since 2006 | 145 | The Southern Company (energy | ||
| 300 S.E. 2nd Street | company) (2014-present; previously | |||||
| Fort Lauderdale, FL 33301-1923 | 2010-2012), Graham Holdings | |||||
| Company (education and media | ||||||
| organization) (2011-present) and | ||||||
| Cbeyond, Inc. (business | ||||||
| communications provider) | ||||||
| (2010-2012). | ||||||
| Principal Occupation During at Least the Past 5 Years: | ||||||
| Director of various companies; John A. Sibley Professor of Corporate and Business Law, University of Georgia School of Law (2015-present; | ||||||
| previously 2011-2012); and formerly, Executive Vice President – Government Affairs, General Counsel and Corporate Secretary, PepsiCo, | ||||||
| Inc. (consumer products) (2012-2014); Senior Vice President – Government Affairs, General Counsel and Secretary, PepsiCo, Inc. | ||||||
| (2004-2011); Senior Fellow of The Brookings Institution (2003-2004); Visiting Professor, University of Georgia School of Law (2004); and | ||||||
| Deputy Attorney General, U.S. Department of Justice (2001-2003). | ||||||
| Constantine D. Tseretopoulos | Trustee | Since 2001 | 24 | None | ||
| (1954 | ) | |||||
| 300 S.E. 2nd Street | ||||||
| Fort Lauderdale, FL 33301-1923 | ||||||
| Principal Occupation During at Least the Past 5 Years: | ||||||
| Physician, Chief of Staff, owner and operator of the Lyford Cay Hospital (1987-present); director of various nonprofit organizations; and | ||||||
| formerly, Cardiology Fellow, University of Maryland (1985-1987); and Internal Medicine Resident, Greater Baltimore Medical Center | ||||||
| (1982-1985). | ||||||
| Robert E. Wade (1946) | Trustee | Since 2006 | 40 | El Oro Ltd (investments) | ||
| 300 S.E. 2nd Street | (2003-present). | |||||
| Fort Lauderdale, FL 33301-1923 | ||||||
| Principal Occupation During at Least the Past 5 Years: | ||||||
| Attorney at law engaged in private practice (1972-2008) and member of various boards. | ||||||
| franklintempleton.com | Annual Report | 39 | ||||
TEMPLETON GLOBAL INVESTMENT TRUST
| Interested Board Members and Officers | |||||
| Number of Portfolios in | |||||
| Name, Year of Birth | Length of | Fund Complex Overseen | Other Directorships Held | ||
| and Address | Position | Time Served | by Board Member* | During at Least the Past 5 Years | |
| **Gregory E. Johnson (1961) | Trustee | Since 2006 | 161 | None | |
| One Franklin Parkway | |||||
| San Mateo, CA 94403-1906 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Chairman of the Board, Member – Office of the Chairman, Director and Chief Executive Officer, Franklin Resources, Inc.; officer and/or | |||||
| director or trustee, as the case may be, of some of the other subsidiaries of Franklin Resources, Inc. and of 44 of the investment companies in | |||||
| Franklin Templeton Investments; Vice Chairman, Investment Company Institute; and formerly, President, Franklin Resources, Inc. | |||||
| (1994-2015). | |||||
| **Rupert H. Johnson, Jr. (1940) | Chairman of | Chairman of the | 145 | None | |
| One Franklin Parkway | the Board, | Board, Trustee | |||
| San Mateo, CA 94403-1906 | Trustee and | since 2013, | |||
| Vice President | and Vice President | ||||
| since 1996 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Vice Chairman, Member – Office of the Chairman and Director, Franklin Resources, Inc.; Director, Franklin Advisers, Inc.; Senior Vice | |||||
| President, Franklin Advisory Services, LLC; and officer and/or director or trustee, as the case may be, of some of the other subsidiaries of | |||||
| Franklin Resources, Inc. and of 42 of the investment companies in Franklin Templeton Investments. | |||||
| Alison E. Baur (1964) | Vice President | Since 2012 | Not Applicable | Not Applicable | |
| One Franklin Parkway | |||||
| San Mateo, CA 94403-1906 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Deputy General Counsel, Franklin Templeton Investments; and officer of some of the other subsidiaries of Franklin Resources, Inc. and of 44 | |||||
| of the investment companies in Franklin Templeton Investments. | |||||
| Norman J. Boersma (1957) | President and | Since 2012 | Not Applicable | Not Applicable | |
| Lyford Cay | Chief Executive | ||||
| Nassau, Bahamas | Officer – | ||||
| Investment | |||||
| Management | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Director, President and Chief Executive Officer, Templeton Global Adviors Ltd.; Chief Investment Officer of Templeton Global Equity Group; | |||||
| officer of six of the investment companies in Franklin Templeton Investments; and formerly, Executive Vice President, Franklin Templeton | |||||
| Investments Corp. (1993-2014). | |||||
| Laura F. Fergerson (1962) | Chief | Since 2009 | Not Applicable | Not Applicable | |
| One Franklin Parkway | Executive | ||||
| San Mateo, CA 94403-1906 | Officer – | ||||
| Finance and | |||||
| Administration | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Senior Vice President, Franklin Templeton Services, LLC; Vice President, Franklin Advisers, Inc. and Franklin Templeton Institutional, LLC; and | |||||
| officer of 44 of the investment companies in Franklin Templeton Investments. | |||||
| Aliya S. Gordon (1973) | Vice President | Since 2009 | Not Applicable | Not Applicable | |
| One Franklin Parkway | |||||
| San Mateo, CA 94403-1906 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Senior Associate General Counsel, Franklin Templeton Investments; and officer of 44 of the investment companies in Franklin Templeton | |||||
| Investments. | |||||
| Steven J. Gray (1955) | Vice President | Since 2009 | Not Applicable | Not Applicable | |
| One Franklin Parkway | |||||
| San Mateo, CA 94403-1906 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Senior Associate General Counsel, Franklin Templeton Investments; Vice President, Franklin Templeton Distributors, Inc. and Franklin | |||||
| Alternative Strategies Advisers, LLC; and officer of 44 of the investment companies in Franklin Templeton Investments. | |||||
| 40 | Annual Report | franklintempleton.com | |||
TEMPLETON GLOBAL INVESTMENT TRUST
| Interested Board Members and Officers (continued) | |||||
| Number of Portfolios in | |||||
| Name, Year of Birth | Length of | Fund Complex Overseen | Other Directorships Held | ||
| and Address | Position | Time Served | by Board Member* | During at Least the Past 5 Years | |
| Selena L. Holmes (1965) | Vice President | Since 2012 | Not Applicable | Not Applicable | |
| 100 Fountain Parkway | – AML | ||||
| St. Petersburg, FL 33716-1205 | Compliance | ||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Director, Global Compliance Monitoring; Chief Compliance Officer, Franklin Alternative Strategies Advisers, LLC; Vice President, Franklin | |||||
| Templeton Companies, LLC; and officer of 44 of the investment companies in Franklin Templeton Investments. | |||||
| Kimberly H. Novotny (1972) | Vice President | Since 2013 | Not Applicable | Not Applicable | |
| 300 S.E. 2nd Street | |||||
| Fort Lauderdale, FL 33301-1923 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Associate General Counsel, Franklin Templeton Investments; Vice President and Corporate Secretary, Fiduciary Trust International of the | |||||
| South; Vice President and Assistant Secretary, Templeton Investment Counsel, LLC; Assistant Secretary, Franklin Resources, Inc.; and officer | |||||
| of 44 of the investment companies in Franklin Templeton Investments. | |||||
| Mark H. Otani (1968) | Treasurer, | Since 2009 | Not Applicable | Not Applicable | |
| One Franklin Parkway | Chief Financial | ||||
| San Mateo, CA 94403-1906 | Officer and | ||||
| Chief | |||||
| Accounting | |||||
| Officer | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Treasurer, U.S. Fund Administration & Reporting, Franklin Templeton Investments; and officer of 13 of the investment companies in Franklin | |||||
| Templeton Investments. | |||||
| Robert C. Rosselot (1960) | Chief | Since 2013 | Not Applicable | Not Applicable | |
| 300 S.E. 2nd Street | Compliance | ||||
| Fort Lauderdale, FL 33301-1923 | Officer | ||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Director, Global Compliance, Franklin Templeton Investments; Vice President, Franklin Templeton Companies, LLC; officer of 44 of the | |||||
| investment companies in Franklin Templeton Investments; and formerly, Senior Associate General Counsel, Franklin Templeton Investments | |||||
| (2007-2013); and Secretary and Vice President, Templeton Group of Funds (2004-2013). | |||||
| Karen L. Skidmore (1952) | Vice President | Since 2009 | Not Applicable | Not Applicable | |
| One Franklin Parkway | |||||
| San Mateo, CA 94403-1906 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Senior Associate General Counsel, Franklin Templeton Investments; and officer of 44 of the investment companies in Franklin Templeton | |||||
| Investments. | |||||
| Navid Tofigh (1972) | Vice President | Since November | Not Applicable | Not Applicable | |
| One Franklin Parkway | 2015 | ||||
| San Mateo, CA 94403-1906 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Associate General Counsel, Franklin Templeton Investments; and officer of 44 of the investment companies in Franklin Templeton Investments. | |||||
| Craig S. Tyle (1960) | Vice President | Since 2005 | Not Applicable | Not Applicable | |
| One Franklin Parkway | |||||
| San Mateo, CA 94403-1906 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| General Counsel and Executive Vice President, Franklin Resources, Inc.; and officer of some of the other subsidiaries of Franklin Resources, | |||||
| Inc. and of 44 of the investment companies in Franklin Templeton Investments. | |||||
| franklintempleton.com | Annual Report | 41 | |||
TEMPLETON GLOBAL INVESTMENT TRUST
| Interested Board Members and Officers (continued) | ||||
| Number of Portfolios in | ||||
| Name, Year of Birth | Length of | Fund Complex Overseen | Other Directorships Held | |
| and Address | Position | Time Served | by Board Member* | During at Least the Past 5 Years |
| Lori A. Weber (1964) | Secretary and | Secretary since | Not Applicable | Not Applicable |
| 300 S.E. 2nd Street | Vice President | 2013 and Vice | ||
| Fort Lauderdale, FL 33301-1923 | President since | |||
| 2011 | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||
| Senior Associate General Counsel, Franklin Templeton Investments; Assistant Secretary, Franklin Resources, Inc.; Vice President and | ||||
| Secretary, Templeton Investment Counsel, LLC; and officer of 44 of the investment companies in Franklin Templeton Investments. | ||||
| *We base the number of portfolios on each separate series of the U.S. registered investment companies within the Franklin Templeton Investments fund complex. These | ||||
| portfolios have a common investment manager or affiliated investment managers. | ||||
| **Gregory E. Johnson is considered to be an interested person of the Fund under the federal securities laws due to his position as an officer and director of Franklin | ||||
| Resources, Inc. (Resources), which is the parent company of the Fund’s investment manager and distributor. Rupert H. Johnson, Jr. is considered to be an interested person | ||||
| of the Fund under the federal securities laws due to his position as officer and director and major shareholder of Resources. | ||||
| Note 1: Rupert H. Johnson, Jr. is the uncle of Gregory E. Johnson. | ||||
| Note 2: Officer information is current as of the date of this report. It is possible that after this date, information about officers may change. | ||||
| The Sarbanes-Oxley Act of 2002 and Rules adopted by the U.S. Securities and Exchange Commission require the Fund to disclose whether the Fund’s Audit | ||||
| Committee includes at least one member who is an audit committee financial expert within the meaning of such Act and Rules. The Fund’s Board has determined | ||||
| that there is at least one such financial expert on the Audit Committee and has designated each of Ann Torre Bates and David W. Niemiec as an audit committee | ||||
| financial expert. The Board believes that Ms. Bates and Mr. Niemiec qualify as such an expert in view of their extensive business background and experience. Ms. | ||||
| Bates has served as a member of the Fund Audit Committee since 2008. She currently serves as a director of Navient Corporation (2014-present), Ares Capital | ||||
| Corporation (2010-present) and United Natural Foods, Inc. (2013-present) and was formerly a director of SLM Corporation from 1997 to 2014 and Allied Capital | ||||
| Corporation from 2003 to 2010, Executive Vice President and Chief Financial Officer of NHP Incorporated from 1995 to 1997 and Vice President and Treasurer of | ||||
| US Airways, Inc. until 1995. Mr. Niemiec has served as a member of the Fund Audit Committee since 2006, currently serves as an Advisor to Saratoga Partners | ||||
| and was formerly its Managing Director from 1998 to 2001. Mr. Niemiec was formerly a director of Emeritus Corporation from 1999 to 2010 and OSI Pharmaceu- | ||||
| ticals, Inc. from 2006 to 2010, Managing Director of SBC Warburg Dillon Read from 1997 to 1998, and was Vice Chairman from 1991 to 1997 and Chief Financial | ||||
| Officer from 1982 to 1997 of Dillon, Read & Co. Inc. As a result of such background and experience, the Board believes that Ms. Bates and Mr. Niemiec have each | ||||
| acquired an understanding of generally accepted accounting principles and financial statements, the general application of such principles in connection with | ||||
| the accounting estimates, accruals and reserves, and analyzing and evaluating financial statements that present a breadth and level of complexity of accounting | ||||
| issues generally comparable to those of the Fund, as well as an understanding of internal controls and procedures for financial reporting and an understanding | ||||
| of audit committee functions. Ms. Bates and Mr. Niemiec are independent Board members as that term is defined under the applicable U.S. Securities and | ||||
| Exchange Commission Rules and Releases. | ||||
| The Statement of Additional Information (SAI) includes additional information about the board members and is available, without charge, upon request. | ||||
| Shareholders may call (800) DIAL BEN/342-5236 to request the SAI. | ||||
42 Annual Report franklintempleton.com
TEMPLETON GLOBAL INVESTMENT TRUST
TEMPLETON EMERGING MARKETS SMALL CAP FUND
Shareholder Information
Board Review of Investment Management Agreement
At a meeting held February 23, 2016, the Board of Trustees (Board), including a majority of trustees that are not “interested persons” as such term is defined in section 2(a)(19) of the Investment Company Act of 1940 (hereinafter referred to as “non-interested Trustees” or “independent Trustees”), approved renewal of the investment management agreements for each of the separate funds comprising the Templeton Global Investment Trust, including Templeton Emerging Markets Small Cap Fund (Fund(s)). In reaching this decision, the Board took into account information furnished throughout the year at regular Board meetings, as well as information prepared specifically in connection with the annual renewal review process. Information furnished and discussed throughout the year included investment performance reports and related financial information for each Fund, along with periodic reports on expenses, shareholder services, legal and compliance matters, risk control, pricing, brokerage commissions and execution and other services provided by the Investment Manager (Manager) and its affiliates, as well as marketing support payments made to financial intermediaries. Information furnished specifically in connection with the renewal process included a report for each Fund prepared by Broadridge Financial Solutions, Inc. (Broadridge), an independent organization, as well as additional material, including a Fund profitability analysis prepared by management. The Broadridge reports, which utilized data from Lipper, Inc. (Lipper), compared each Fund’s investment performance and expenses with those of other mutual funds deemed comparable to the Fund as selected by Lipper. The Fund profitability analysis discussed the profitability to Franklin Templeton Investments (FTI) from its overall U.S. fund operations, as well as on an individual fund-by-fund basis. Additional material accompanying such profitability analysis included information on a fund-by-fund basis listing portfolio managers and other accounts they manage, as well as information on management fees charged by the Manager and its affiliates to U.S. mutual funds and other accounts, including management’s explanation of differences where relevant. Such material also included a memorandum prepared by management describing project initiatives and capital investments relating to the services provided to the Funds by the FTI organization, as well as a memorandum relating to economies of scale and an analysis concerning transfer agent fees charged by an affiliate of the Manager. The Board also received a report on all marketing support payments made by FTI to financial intermediaries during the past year, as well as a memorandum relating to third-party servicing arrangements in response to a Guidance Update from the U.S. Securities and Exchange Commission (SEC) relating to mutual fund distribution and sub-accounting fees.
In considering such materials, the independent Trustees received assistance and advice from and met separately with independent counsel. While the investment management agreements for all Funds, and subadvisory agreements where applicable, were considered at the same Board meeting, the Board dealt with each Fund separately. In approving continuance of the investment management agreement for each Fund, the Board, including a majority of independent Trustees, determined that the existing management fee structure was fair and reasonable and that continuance of the investment management agreement was in the best interests of such Fund and its shareholders. While attention was given to all information furnished, the following discusses some primary factors relevant to the Board’s decision.
NATURE, EXTENT AND QUALITY OF SERVICES. The Board was satisfied with the nature and quality of the overall services provided by the Manager and its affiliates to the Fund and its shareholders, other than as noted below with respect to investment performance and expenses. The Board’s opinion was based, in part, upon periodic reports furnished to it showing that the investment policies and restrictions for the Fund were consistently complied with as well as other reports periodically furnished to the Board covering matters such as the compliance of portfolio managers and other management personnel with the code of ethics adopted throughout the Franklin Templeton fund complex, the adherence to fair value pricing procedures established by the Board, and the accuracy of net asset value calculations. The Board also noted the extent of benefits provided Fund shareholders from being part of the Franklin Templeton family of funds, including the right to exchange investments between the same class of shares of different funds without a sales charge, the ability to reinvest Fund dividends into other funds and the right to combine holdings in other funds to obtain a reduced sales charge. Favorable consideration was given to management’s continual efforts and expenditures in establishing effective business continuity plans and developing strategies to address cybersecurity threats. Additionally, the Board noted the Manager’s continued attention to pricing and valuation issues,
franklintempleton.com
Annual Report
43
TEMPLETON GLOBAL INVESTMENT TRUST
TEMPLETON EMERGING MARKETS SMALL CAP FUND
SHAREHOLDER INFORMATION
Board Review of Investment Management Agreement (continuted)
particularly with respect to complex securities. Among other factors taken into account by the Board were the Manager’s best execution trading policies, including a favorable report by an independent portfolio trading analytical firm that also covered FOREX transactions. Consideration was also given to the experience of the Fund’s portfolio management team, the number of accounts managed and general method of compensation. In this latter respect, the Board noted that a primary factor in management’s determination of a portfolio manager’s bonus compensation was the relative investment performance of the funds he or she managed and that a portion of such bonus was required to be invested in a predesignated list of funds within such person’s fund management area so as to be aligned with the interests of shareholders. The Board also took into account the quality of transfer agent and shareholder services provided Fund shareholders by an affiliate of the Manager and steps taken by FTI to enhance analytical support to the investment management groups and provide additional oversight of liquidity risk and complex securities. The Board also took into account, among other things, management’s efforts in establishing a global credit facility for the benefit of the Fund and other accounts managed by FTI to provide a source of cash for temporary and emergency purposes or to meet unusual redemption requests as well as the strong financial position of the Manager’s parent company and its commitment to the mutual fund business as evidenced by its continued introduction of new funds and reassessment of the fund offerings in response to the market environment.
INVESTMENT PERFORMANCE. The Board placed significant emphasis on the investment performance of the Fund in view of its importance to shareholders. While consideration was given to performance reports and discussions with portfolio managers at Board meetings during the year, particular attention in assessing performance was given to the Broadridge reports furnished for the agreement renewal. The Broadridge reports prepared for the Fund showed the investment performance of its Class A shares in comparison to a performance universe selected by Lipper. The following summarizes the performance results for the Fund and the Board’s view of such performance.
The Lipper performance universe for this Fund consisted of all retail and institutional emerging markets funds as selected by Lipper. The Broadridge report showed the Fund’s total return in 2015 to be in the highest or best performing quintile of such universe and on an annualized basis to be in the highest
performing quintile of such universe for the previous three- and five-year periods. The Board observed that the performance universe was broad and not limited to funds investing in small cap stocks, but noted that the Fund’s total return was above the median of the performance universe and also compared favorably with most of the other small cap funds included within such performance universe for 2015 and the annualized previous three- and five-year periods. The Board found the Fund’s performance as set forth in the Broadridge report to be satisfactory.
COMPARATIVE EXPENSES. Consideration was given to the management fees and total expense ratio of the Fund compared with those of a group of other funds selected by Lipper as its appropriate Lipper expense group. Lipper expense data is based upon information taken from each fund’s most recent annual report, which reflects historical asset levels that may be quite different from those currently existing, particularly in a period of market volatility. While recognizing such inherent limitation and the fact that expense ratios generally increase as assets decline and decrease as assets grow, the Board believed the independent analysis conducted by Lipper to be an appropriate measure of comparative expenses. In reviewing comparative costs, Lipper provides information on the Fund’s contractual investment management fee in comparison with the contractual management fee that would have been charged by other funds within its Lipper expense group assuming they were similar in size to the Fund, as well as the actual total expense ratio of the Fund in comparison with those of its Lipper expense group. The Lipper contractual investment management fee analysis includes administrative charges as being part of the contractual investment management fee, and actual total expenses, for comparative consistency, are shown by Lipper for Fund Class A shares for funds having multiple share classes. The Broadridge report for the Fund showed its contractual management fee to be the highest within its Lipper expense group, and its actual total expense ratio to be the second-highest within its Lipper expense group. The Board discussed the expenses of this Fund with management and found them to be acceptable, noting the Fund’s specialized nature.
MANAGEMENT PROFITABILITY. The Board also considered the level of profits realized by the Manager and its affiliates in connection with the operation of the Fund. In this respect, the Board reviewed the Fund profitability analysis that addresses the overall profitability of Franklin Templeton’s U.S. fund business, as well as its profits in providing management and other services to each of the individual funds during the
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TEMPLETON GLOBAL INVESTMENT TRUST
TEMPLETON EMERGING MARKETS SMALL CAP FUND
SHAREHOLDER INFORMATION
12-month period ended September 30, 2015, being the most recent fiscal year-end for Franklin Resources, Inc., the Manager’s parent. In reviewing the analysis, the Board recognized that allocation methodologies are inherently subjective and various allocation methodologies may be reasonable while producing different results. In this respect, the Board noted that while management continually makes refinements to its methodologies in response to organizational and product related changes, the overall approach as defined by the primary drivers and activity measurements has remained consistent with that used in the Fund profitability report presentations from prior years. Additionally, the Fund’s independent registered public accounting firm had been engaged by the Manager to periodically review the reasonableness of the allocation methodologies to be used solely by the Fund’s Board in reference to the profitability analysis. In reviewing and discussing such analysis, management discussed with the Board its belief that costs incurred in establishing the infrastructure necessary for the type of mutual fund operations conducted by the Manager and its affiliates may not be fully reflected in the expenses allocated to the Fund in determining its profitability, as well as the fact that the level of profits, to a certain extent, reflected operational cost savings and efficiencies initiated by management. The Board also took into account management’s expenditures in improving shareholder services provided to the Funds, as well as the need to implement systems to meet additional regulatory and compliance requirements resulting from statutes such as the Sarbanes-Oxley and Dodd-Frank Acts and recent SEC and other regulatory requirements. In addition, the Board considered a third-party study comparing the profitability of the Manager’s parent on an overall basis to other publicly held managers broken down to show profitability from management operations exclusive of distribution expenses, as well as profitability including distribution expenses. The Board also considered the extent to which the Manager and its affiliates might derive ancillary benefits from fund operations, including revenues generated from transfer agent services and potential benefits resulting from personnel and systems enhancements necessitated by fund growth, as well as increased leverage with the service providers and counterparties, allocation of fund
brokerage and the use of commission dollars to pay for research. Based upon its consideration of all these factors, the Board determined that the level of profits realized by the Manager and its affiliates from providing services to the Fund was not excessive in view of the nature, quality and extent of services provided.
ECONOMIES OF SCALE. The Board also considered whether economies of scale are realized by the Manager as the Fund grows larger and the extent to which this is reflected in the level of management fees charged. While recognizing that any precise determination is inherently subjective, the Board noted that based upon the Fund profitability analysis, it appears that as some funds get larger, at some point economies of scale do result in the Manager realizing a larger profit margin on management services provided such a fund. The Board also noted that economies of scale are shared with the Fund and its shareholders through management fee breakpoints so that as the Fund grows in size, its effective management fee rate declines. The investment management advisory agreements for the Fund provides for breakpoints that are above the Fund’s existing asset size, and to the extent economies of scale may be realized by the Manager and its affiliates, the Board believes the schedule of fees for the Fund provides a sharing of benefits with the Fund and its shareholders.
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.
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TEMPLETON GLOBAL INVESTMENT TRUST
TEMPLETON EMERGING MARKETS SMALL CAP FUND
SHAREHOLDER INFORMATION
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 on Form N-Q. Shareholders may view the filed Form N-Q 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 the Fund’s financial reports every six months as well as an annual updated summary prospectus (prospectus available upon request). To reduce Fund expenses, we try to identify related shareholders in a household and send only one copy of the financial reports and summary prospectus. This process, called “householding,” will continue indefinitely unless you instruct us otherwise. If you prefer not to have these documents householded, please call us at (800) 632-2301. At any time you may view current prospectuses/summary prospectuses and financial reports on our website. If you choose, you may receive these documents through electronic delivery.
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Annual Report and Shareholder Letter
Templeton Emerging Markets Small Cap Fund
Investment Manager
Templeton Asset Management Ltd.
Distributor
Franklin Templeton Distributors, Inc.
(800) DIAL BEN® / 342-5236
franklintempleton.com
Shareholder Services
(800) 632-2301
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.
| © 2016 Franklin Templeton Investments. All rights reserved. | 426 A 05/16 |
Annual Report
and Shareholder Letter
March 31, 2016
Templeton Frontier Markets Fund
A SERIES OF TEMPLETON GLOBAL INVESTMENT TRUST
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2 Annual Report
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Annual Report
Templeton Frontier Markets Fund
This annual report for Templeton Frontier Markets Fund covers the fiscal year ended March 31, 2016. At the market close on June 28, 2013, the Fund closed to new investors. Existing shareholders may add to their accounts.
Geographic Breakdown
Based on Total Net Assets as of 3/31/16
Your Fund’s Goal and Main Investments
The Fund seeks long-term capital appreciation. Under normal market conditions, the Fund invests at least 80% of its net assets in securities of companies located in “frontier market countries” as defined in the prospectus. Such companies are organized under the laws of, have a principal office in, or have their principal trading markets in, frontier market countries; or derive at least 50% of their total revenue or profit from either goods or services produced or sales made in frontier market countries; or have at least 50% of their assets in, or are linked to currencies of, frontier market countries.
Performance Overview
The Fund’s Class A shares had a -18.75% cumulative total return for the 12 months ended March 31, 2016. For comparison, the MSCI Frontier Markets Index, which measures stock performance in frontier markets, had a -12.15% total
return for the same period.1 Also for comparison, the Standard & Poor’s® (S&P®) Frontier Broad Market Index (BMI), which tracks performance of relatively small and illiquid frontier market stocks, had a -12.16% total return for the same period.2 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. In addition, the Fund’s return reflects the effect of fees and expenses for professional management, while an index does not have such costs. You can find the Fund’s long-term performance data in the Performance Summary beginning on page 7.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
Economic and Market Overview
The global economy grew moderately during the 12 months under review as many emerging and frontier market economies continued to grow and many developed market economies continued to recover.
Vietnam’s gross domestic product (GDP) grew 6.7% in 2015, the fastest rate in five years, driven by strong industrial production and foreign direct investment growth.3 However, the country’s GDP moderated to an estimated 5.5% in 2016’s first quarter as crude oil and agricultural production declined. Following the People’s Bank of China’s effective devaluation of the Chinese renminbi in August, the State Bank of Vietnam devalued the Vietnamese dong for the third time in 2015 to protect exports and support economic growth. However, 2015 export growth was lower than expected, largely due to weak prices for global commodities, including crude oil and coffee. Subsequently, increased imports in 2015 resulted in a first annual trade deficit for the first time since 2011. The
1. Source: Morningstar.
2. Source: Copyright © 2016, S&P Dow Jones Indices LLC. All rights reserved.
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.
3. Source: General Statistics Office of Vietnam.
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 19.
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TEMPLETON FRONTIER MARKETS FUND
Vietnamese government eased foreign ownership restrictions in domestic companies to bolster investment inflows to the country’s equity market, as it sought an upgrade by MSCI to emerging market status from frontier market. In December, the State Bank of Vietnam cut the interest rate for U.S. dollar-denominated deposits to 0% from 0.25%, in an effort to discourage people from holding U.S. dollars and to ease pressure on the Vietnamese dong resulting from the U.S. Federal Reserve’s (Fed’s) interest rate increase. In this environment, Vietnamese stocks had negative returns for the 12-month period.
Saudi Arabia’s GDP expanded 3.6% year-over-year in 2015’s third quarter, slightly below the second quarter’s 3.8% rate.4 A plunge in crude oil prices resulted in slower oil-related sector growth, which was somewhat offset by improved non-oil sector growth. In an attempt to bolster confidence in the international crude oil markets and support prices, in February 2016, Saudi Arabia, along with fellow members of the Organization of the Petroleum Exporting Countries (OPEC) Qatar and Venezuela, had an agreement with Russia to freeze oil production at January levels. This agreement was contingent on cooperation from other OPEC members and several other major oil producers. Saudi Arabian stocks declined for the 12-month period, amid investor concerns about plunging crude oil prices, a cut in government subsidies and spending, and a budget deficit.
Nigeria’s GDP grew 2.8% in 2015, the slowest pace since 1999, largely due to tumbling crude oil prices and lower oil production.5 The non-oil sector continued to support overall growth, driven by trade, agriculture and services. Despite a high inflation rate, in November 2015, the Central Bank of Nigeria (CBN) reduced its benchmark interest rate two percentage points to 11.0%, citing low output growth, rising unemployment and uncertainty over the global economic environment. However, the CBN raised its benchmark interest rate to 12.0% in March to curb rising inflation. The CBN unified the cash reserve requirement ratio for public and private sector deposits in May 2015 with an initial 31.0% rate, but the central bank reduced it several times, down to 22.5% by period-end to promote lending and economic growth. In this environment, Nigerian stocks declined substantially for the 12 months under review.
| Top 10 Countries | ||
| 3/31/16 | ||
| % of Total | ||
| Net Assets | ||
| Vietnam | 11.6 | % |
| Saudi Arabia | 10.3 | % |
| Kuwait | 9.4 | % |
| Nigeria | 8.1 | % |
| United Arab Emirates | 6.5 | % |
| Pakistan | 6.4 | % |
| Egypt | 6.4 | % |
| Romania | 6.0 | % |
| Kenya | 5.9 | % |
| Senegal | 3.6 | % |
Romania’s GDP expanded 3.7% in 2015, an improvement from 2014’s 2.9% pace, mainly due to higher contributions from wholesale and retail, construction, and information and communication.6 In May 2015, the National Bank of Romania (NBR) cut its monetary policy rate from 2.00% to 1.75% to support economic growth and promote inflation. However, Romania entered deflation in June 2015, after a significant reduction in the value added tax (VAT) rate on food items led prices to fall lower than expected. Noting solid economic growth fueled by rising private consumption, the NBR left its monetary policy rate unchanged at 1.75% as it estimated that the inflation rate would return to positive territory after the effects of the VAT reduction fades. Despite heightened global stock market volatility during the 12-month period, Romanian stocks delivered double-digit percentage gains as the Romanian leu remained relatively strong against the U.S. dollar.
Frontier market stocks overall underperformed developed and emerging market stocks during the 12-month period, as weak oil prices hurt certain oil-exporting countries’ economies, financial positions and currencies. Further contributing to heightened stock market volatility were investor concerns about China’s stock market corrections and less robust economy, the pace of the Fed’s interest rate increases, and moderating global economic growth. For the 12 months ended March 31, 2016, frontier market stocks, as measured by the MSCI Frontier Markets Index, had a -12.15% total return, as all major regions had losses.1
4. Source: Central Department of Statistics and Information, Saudi Arabia.
5. Source: National Bureau of Statistics, Nigeria.
6. Source: National Institute of Statistics, Romania.
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TEMPLETON FRONTIER MARKETS FUND
Investment Strategy
Our investment strategy employs a fundamental research, value-oriented, long-term approach. We focus on the market price of a company’s securities relative to our evaluation of the company’s long-term (typically five years) earnings, asset value and cash flow potential. We also consider a company’s profit and loss outlook, balance sheet strength, cash flow trends and asset value in relation to the current price. The analysis considers the company’s corporate governance behavior as well as its position in its sector, the economic framework and political environment.
Manager’s Discussion
During the 12 months under review, stock price corrections exacerbated by the U.S. dollar’s strength against many frontier market currencies affected the performance of most Fund investments. Consistent with our long-term investment strategy, we viewed such periods of heightened market volatility in the context of a historical, long-term uptrend. We continued to monitor economic and market developments globally while seeking to minimize risk and to establish long-term positions in quality companies at share prices we considered attractive.
Key detractors from the Fund’s absolute performance during the 12-month reporting period included positions in Zenith Bank, Delta and EIPICO (Egyptian International Pharmaceutical Industries Co.).
Established in 1990, Zenith Bank is one of Nigeria’s largest banks. It focuses on private-sector banking, notably with high-end domestic corporate clients and multinational corporations, and has built a deep corporate-focused franchise in Nigeria. Despite reporting decent 2015 corporate results, Zenith Bank’s shares performed poorly amid the Nigerian equity market’s overall weakness, as measured by the MSCI Nigeria Index. Further dampening investor sentiment were concerns about the potential effects of low oil prices, capital controls and currency devaluation on the bank’s growth.
Delta is a Zimbabwean holding company for a group of companies engaged in lager and traditional beer brewing, as well as production and bottling of carbonated and non-carbonated drinks. The company also owns a malting business and an extensive distribution business. Revenues for the nine months ended December 2015 declined due to Zimbabwe’s challenging operating conditions, including an unsupportive economic environment that pressured consumers’ disposable incomes and discretionary spending. Further hurting revenues was increasing competition in the country’s beverage industry.
| Top 10 Holdings | ||
| 3/31/16 | ||
| Company | % of Total | |
| Sector/Industry, Country | Net Assets | |
| Aramex Co. | 6.5 | % |
| Air Freight & Logistics, United Arab Emirates | ||
| Kuwait Foods Americana | 5.8 | % |
| Hotels, Restaurants & Leisure, Kuwait | ||
| OMV Petrom SA | 5.2 | % |
| Oil, Gas & Consumable Fuels, Romania | ||
| Vietnam Dairy Products JSC | 3.6 | % |
| Food Products, Vietnam | ||
| Sonatel | 3.6 | % |
| Diversified Telecommunication Services, Senegal | ||
| Zenith Bank PLC | 3.5 | % |
| Banks, Nigeria | ||
| KCB Group Ltd. | 3.4 | % |
| Banks, Kenya | ||
| Bank Muscat SAOG | 3.4 | % |
| Banks, Oman | ||
| Mobile Telecommunications Co. | 3.0 | % |
| Wireless Telecommunication Services, Kuwait | ||
| United Bank Ltd. | 3.0 | % |
| Banks, Pakistan |
EIPICO, Egypt’s leading domestic pharmaceuticals company, reported worse-than-expected fourth-quarter 2015 earnings, partly due to modest sales growth and high selling, general and administrative expenses. Further pressuring the company was the central bank’s devaluation of the Egyptian pound, which caused imported raw materials to become more expensive in local currency terms. Also weighing on EIPICO’s share performance was the broader Egyptian market’s weakness, as measured by the MSCI Egypt Index.
Despite a challenging market environment, many of the Fund’s holdings contributed to absolute performance, notably investments in Vinamilk (Vietnam Dairy Products), Banca Transilvania and Binh Minh Plastics.
Vinamilk, one of Vietnam’s largest dairy companies, reported strong third-quarter 2015 corporate results, which drove its share price to a period high in November. Solid full-year 2015 earnings, driven by better-than-expected domestic revenue growth, helped shares generally remain on an uptrend through the 12-month reporting period. Further supporting investor sentiment were the likelihood of an increase in foreign ownership limit on the company’s shares and the potential divestment by SCIC (State Capital Investment Corporation), Vietnam’s sovereign wealth fund.
Banca Transilvania became Romania’s second-largest bank after it completed its acquisition of Austrian bank Volksbank’s
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TEMPLETON FRONTIER MARKETS FUND
local subsidiary, Volksbank Romania, in April 2015. Investors viewed the transaction positively as they expected synergies from the acquisition and subsequent growth opportunities. Further driving Banca Transilvania’s share price appreciation was a significant net profit increase in 2015, compared with 2014, and the bank’s announcement of a special cash dividend.
Binh Minh Plastics, a leading Vietnamese plastics company, generated double-digit percentage growth in 2015 sales and profits, driven by demand from residential and infrastructure projects and low raw material costs. Its shares generally remained on an uptrend throughout the 12-month period, reaching a record high in March. The likelihood of an increase in foreign ownership limit on the company’s shares and SCIC’s potential divestment further supported investor sentiment.
It is important to recognize the effect of currency movements on the Fund’s performance. In general, if the value of the U.S. dollar goes up compared with a foreign currency, an investment traded in that foreign currency will go down in value because it will be worth fewer U.S. dollars. This can have a negative effect on Fund performance. Conversely, when the U.S. dollar weakens in relation to a foreign currency, an investment traded in that foreign currency will increase in value, which can contribute to Fund performance. The U.S. dollar rose in value relative to many frontier market currencies during the period, and the Fund benefited from relatively low allocations to markets with especially weak currencies, such as Pakistan, Sri Lanka and Kenya. However, one cannot expect the same result in future periods.
During the last 12 months, we made selective purchases as we continued to search for what we considered attractive investment opportunities in frontier markets. Key purchases included additional investments in Americana (Kuwait Foods Americana), one of the MENA (Middle East and North Africa) region’s largest restaurant chain operators and one of the largest fast-moving consumer goods companies engaged in food manufacturing and processing. We also increased the Fund’s holding in KCB Group, one of Kenya’s biggest banks, and initiated a position in telecommunication services provider Telecom Argentina.
Conversely, we reduced the Fund’s investments in most countries and sectors due to share redemptions during the 12-month period and as we sought to focus on opportunities we considered to be more attractively valued within our investment universe. Geographically, some of the largest reductions were in Saudi Arabia,7 Romania and Ukraine. We also undertook some sales in Kuwait and Kazakhstan and eliminated exposure to certain countries, notably Turkmenistan and Qatar. In sector terms, we reduced holdings largely in financials, energy, telecommunication services and materials.8 Key sales included Dragon Oil, an oil and gas explorer principally in the Caspian Sea off the shore of Turkmenistan; SABIC (Saudi Basic Industries Corp.),7 a Saudi Arabian petrochemical producer; and Ooredoo, Qatar’s primary telecommunications operator.
Thank you for your continued participation in Templeton Frontier Markets Fund. We look forward to serving your future investment needs.
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2016, 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.
7. Investments were made through participatory notes, which are equity access products structured as debt obligations and are issued or backed by banks and broker-dealers
and designed to replicate equity market exposure in frontier markets where direct investment is either impossible or difficult due to local investment restrictions.
8. The financials sector comprises banks and consumer finance in the SOI. The energy sector comprises energy equipment and services; and oil, gas and consumable fuels in
the SOI. The telecommunication services sector comprises diversified telecommunication services and wireless telecommunication services in the SOI. The materials sector
comprises metals and mining in the SOI.
See www.franklintempletondatasources.com for additional data provider information.
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TEMPLETON FRONTIER MARKETS FUND
Performance Summary as of March 31, 2016
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. The performance table and graphs do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares. Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses.
| Net Asset Value | ||||||
| Share Class (Symbol) | 3/31/16 | 3/31/15 | Change | |||
| A (TFMAX) | $ | 10.19 | $ | 13.47 | -$ | 3.28 |
| C (FFRMX) | $ | 10.05 | $ | 13.27 | -$ | 3.22 |
| R (N/A) | $ | 10.13 | $ | 13.40 | -$ | 3.27 |
| R6 (FFMRX) | $ | 10.21 | $ | 13.51 | -$ | 3.30 |
| Advisor (FFRZX) | $ | 10.22 | $ | 13.51 | -$ | 3.29 |
| Distributions1 (4/1/15–3/31/16) | ||||||
| Dividend | ||||||
| Share Class | Income | |||||
| A | $ | 0.7774 | ||||
| C | $ | 0.6777 | ||||
| R | $ | 0.7617 | ||||
| R6 | $ | 0.8529 | ||||
| Advisor | $ | 0.8092 | ||||
See page 11 for Performance Summary footnotes.
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TEMPLETON FRONTIER MARKETS FUND
PERFORMANCE SUMMARY
Performance as of 3/31/162
Cumulative total return excludes sales charges. Average annual total return and value of $10,000 investment include maximum sales
charges. Class A: 5.75% maximum initial sales charge; Class C: 1% contingent deferred sales charge in first year only;
Class R/R6/Advisor Class: no sales charges.
| Cumulative | Average Annual | Value of | Total Annual | |||||
| Share Class | Total Return3 | Total Return4 | $ | 10,000 Investment5 | Operating Expenses6 | |||
| A | 1.98 | % | ||||||
| 1-Year | -18.75 | % | -23.41 | % | $ | 7,659 | ||
| 5-Year | -20.46 | % | -5.60 | % | $ | 7,496 | ||
| Since Inception (10/14/08) | +28.65 | % | +2.62 | % | $ | 12,126 | ||
| C | 2.74 | % | ||||||
| 1-Year | -19.32 | % | -20.08 | % | $ | 7,992 | ||
| 5-Year | -23.30 | % | -5.17 | % | $ | 7,670 | ||
| Since Inception (10/14/08) | +21.86 | % | +2.69 | % | $ | 12,186 | ||
| R | 2.24 | % | ||||||
| 1-Year | -18.89 | % | -18.89 | % | $ | 8,111 | ||
| 5-Year | -21.39 | % | -4.70 | % | $ | 7,861 | ||
| Since Inception (10/14/08) | +26.52 | % | +3.20 | % | $ | 12,652 | ||
| R6 | 1.60 | % | ||||||
| 1-Year | -18.29 | % | -18.29 | % | $ | 8,171 | ||
| Since Inception (5/1/13) | -28.15 | % | -10.72 | % | $ | 7,185 | ||
| Advisor | 1.74 | % | ||||||
| 1-Year | -18.53 | % | -18.53 | % | $ | 8,147 | ||
| 5-Year | -19.39 | % | -4.22 | % | $ | 8,061 | ||
| Since Inception (10/14/08) | +31.24 | % | +3.71 | % | $ | 13,124 |
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.
See page 11 for Performance Summary footnotes.
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TEMPLETON FRONTIER MARKETS FUND
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment2
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged indexes include reinvestment of any income or distributions. They differ from the Fund in composition and do not pay management fees or expenses. One cannot invest directly in an index.
See page 11 for Performance Summary footnotes.
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TEMPLETON FRONTIER MARKETS FUND
PERFORMANCE SUMMARY
See page 11 for Performance Summary footnotes.
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TEMPLETON FRONTIER MARKETS FUND
PERFORMANCE SUMMARY
All investments involve risks, including possible loss of principal. Special risks are associated with foreign investing, including currency fluctuations, economic
instability and political developments. Investments in emerging markets, of which frontier markets are a subset, involve heightened risks related to the same
factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to
support securities markets. Because these frameworks are typically even less developed in frontier markets, as well as various factors including the increased
potential for extreme price volatility, illiquidity, trade barriers and exchange controls, the risks associated with emerging markets are magnified in frontier markets.
The Fund’s ability to invest in smaller company securities that may have limited liquidity involves additional risks, such as relatively small revenues, limited
product lines and small market share. Historically, these stocks have exhibited greater price volatility than larger company stocks, especially over the short term.
All investments in the Fund should be thought of as long-term investments that could experience significant price volatility in any given year. The Fund is
designed for the aggressive portion of a well-diversified portfolio. The Fund is actively managed but there is no guarantee that the manager’s investment
decisions will produce the desired results. The Fund’s prospectus also includes a description of the main investment risks.
Class C: These shares have higher annual fees and expenses than Class A shares.
Class R: Shares are available to certain eligible investors as described in the prospectus. These shares have higher annual fees and expenses than Class A shares.
Class R6: Shares are available to certain eligible investors as described in the prospectus.
Advisor Class: Shares are available to certain eligible investors as described in the prospectus.
1. The distribution amount is the sum of the dividend payments to shareholders for the period shown and includes only estimated tax-basis net investment income.
2. The Fund has a fee waiver associated with any investment in a Franklin Templeton money fund, contractually guaranteed through at least its current fiscal year-end. Fund
investment results reflect the fee waiver, to the extent applicable; without this reduction, the results would have been lower.
3. Cumulative total return represents the change in value of an investment over the periods indicated.
4. Average annual total return represents the average annual change in value of an investment over the periods indicated. Return for less than one year, ifany,hasnotbeen
annualized.
5. These figures represent the value of a hypothetical $10,000 investment in the Fund over the periods indicated.
6. Figures are as stated in the Fund’s current prospectus. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to
become higher than the figures shown.
7. Source: Morningstar. The MSCI Frontier Markets Index is a free float-adjusted, market capitalization-weighted index designed to measure equity market performance in
frontier markets.
8. Copyright © 2016, S&P Dow Jones Indices LLC. All rights reserved. The S&P Frontier BMI is a free float-adjusted, market capitalization-weighted index designed to measure
equity performance of relatively small and illiquid frontier market securities. Due to data availability, performance for the S&P Frontier BMI is shown starting 11/3/08 using the
Fund’s value on that date.
See www.franklintempletondatasources.com for additional data provider information.
franklintempleton.com Annual Report 11
TEMPLETON FRONTIER MARKETS FUND
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs:
- Transaction costs, including sales charges (loads) on Fund purchases; and
- 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 following table 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 first line (Actual) for each share class listed in the table provides actual account values and expenses. The “Ending Account Value” is derived from the Fund’s actual return, which includes the effect of Fund expenses.
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:
| 1. | Divide your account value by $1,000. |
| If an account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6. | |
| 2. | Multiply the result by the number under the heading “Expenses Paid During Period.” |
| If Expenses Paid During Period were $7.50, then 8.6 x $7.50 = $64.50. |
In this illustration, the estimated expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Information in the second line (Hypothetical) for each class in the table can help you compare ongoing costs of investing in the Fund with those of other mutual funds. This information may not be used to estimate the actual ending account balance or expenses you paid during the period. The hypothetical “Ending Account Value” is based on the actual expense ratio for each class and an assumed 5% annual rate of return before expenses, which does not represent the Fund’s actual return. The figure under the heading “Expenses Paid During Period” shows the hypothetical expenses your account would have incurred under this scenario. You can compare this figure with the 5% hypothetical examples that appear in shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transaction costs, such as sales charges. Therefore, the second line for each class is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transaction costs were included, your total costs would have been higher. Please refer to the Fund prospectus for additional information on operating expenses.
12 Annual Report
franklintempleton.com
| TEMPLETON FRONTIER MARKETS FUND | ||||||
| YOUR FUND’S EXPENSES | ||||||
| Beginning Account | Ending Account | Expenses Paid During | ||||
| Share Class | Value 10/1/15 | Value 3/31/16 | Period* 10/1/15–3/31/16 | |||
| A | ||||||
| Actual | $ | 1,000 | $ | 904.50 | $ | 10.86 |
| Hypothetical (5% return before expenses) | $ | 1,000 | $ | 1,013.60 | $ | 11.48 |
| C | ||||||
| Actual | $ | 1,000 | $ | 901.20 | $ | 14.31 |
| Hypothetical (5% return before expenses) | $ | 1,000 | $ | 1,009.95 | $ | 15.12 |
| R | ||||||
| Actual | $ | 1,000 | $ | 903.50 | $ | 12.04 |
| Hypothetical (5% return before expenses) | $ | 1,000 | $ | 1,012.35 | $ | 12.73 |
| R6 | ||||||
| Actual | $ | 1,000 | $ | 907.10 | $ | 7.91 |
| Hypothetical (5% return before expenses) | $ | 1,000 | $ | 1,016.70 | $ | 8.37 |
| Advisor | ||||||
| Actual | $ | 1,000 | $ | 905.90 | $ | 9.72 |
| Hypothetical (5% return before expenses) | $ | 1,000 | $ | 1,014.80 | $ | 10.28 |
*Expenses are calculated using the most recent six-month expense ratio, net of expense waivers, annualized for each class (A: 2.28%;
C: 3.01%; R: 2.53%; R6: 1.66%; and Advisor: 2.04%), multiplied by the average account value over the period, multiplied by 183/366 to reflect
the one-half year period.
franklintempleton.com
Annual Report
13
TEMPLETON GLOBAL INVESTMENT TRUST
| Financial Highlights | |||||||||||||||
| Templeton Frontier Markets Fund | |||||||||||||||
| Year Ended March 31, | |||||||||||||||
| 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||
| Class A | |||||||||||||||
| Per share operating performance | |||||||||||||||
| (for a share outstanding throughout the year) | |||||||||||||||
| Net asset value, beginning of year | $ | 13.47 | $ | 18.10 | $ | 16.94 | $ | 14.79 | $ | 15.85 | |||||
| Income from investment operationsa: | |||||||||||||||
| Net investment incomeb | 0.27 | 0.37 | 0.42 | 0.27 | 0.30 | ||||||||||
| Net realized and unrealized gains (losses) | (2.77 | ) | (3.89 | ) | 1.21 | 2.07 | (0.96 | ) | |||||||
| Total from investment operations | (2.50 | ) | (3.52 | ) | 1.63 | 2.34 | (0.66 | ) | |||||||
| Less distributions from: | |||||||||||||||
| Net investment income | (0.78 | ) | (0.55 | ) | (0.32 | ) | (0.19 | ) | (0.21 | ) | |||||
| Net realized gains | — | (0.56 | ) | (0.15 | ) | — | (0.19 | ) | |||||||
| Total distributions | (0.78 | ) | (1.11 | ) | (0.47 | ) | (0.19 | ) | (0.40 | ) | |||||
| Net asset value, end of year. | $ | 10.19 | $ | 13.47 | $ | 18.10 | $ | 16.94 | $ | 14.79 | |||||
| Total returnc | (18.75 | )% | (19.91 | )% | 9.60 | % | 16.06 | % | (3.90 | )% | |||||
| Ratios to average net assets | |||||||||||||||
| Expenses before waiver and payments by affiliates | 2.15 | % | 1.98 | % | 1.99 | % | 2.10 | % | 2.20 | % | |||||
| Expenses net of waiver and payments by affiliates | 2.15 | %d | 1.98 | %d | 1.99 | %d | 2.10 | % | 2.15 | % | |||||
| Net investment income | 2.24 | % | 2.09 | % | 2.28 | % | 1.55 | % | 2.17 | % | |||||
| Supplemental data | |||||||||||||||
| Net assets, end of year (000’s) | $ | 58,720 | $ | 148,693 | $ | 248,218 | $ | 197,288 | $ | 113,854 | |||||
| Portfolio turnover rate | 19.12 | % | 19.14 | % | 12.65 | % | 5.86 | % | 23.70 | % | |||||
aThe 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.
bBased on average daily shares outstanding.
cTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable.
dBenefit of waiver and payments by affiliates rounds to less than 0.01%.
14 Annual Report | The accompanying notes are an integral part of these financial statements.
franklintempleton.com
TEMPLETON GLOBAL INVESTMENT TRUST
FINANCIAL HIGHLIGHTS
| Templeton Frontier Markets Fund (continued) | |||||||||||||||
| Year Ended March 31, | |||||||||||||||
| 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||
| Class C | |||||||||||||||
| Per share operating performance | |||||||||||||||
| (for a share outstanding throughout the year) | |||||||||||||||
| Net asset value, beginning of year | $ | 13.27 | $ | 17.82 | $ | 16.71 | $ | 14.60 | $ | 15.65 | |||||
| Income from investment operationsa: | |||||||||||||||
| Net investment incomeb | 0.18 | 0.23 | 0.26 | 0.16 | 0.20 | ||||||||||
| Net realized and unrealized gains (losses) | (2.72 | ) | (3.81 | ) | 1.21 | 2.04 | (0.95 | ) | |||||||
| Total from investment operations | (2.54 | ) | (3.58 | ) | 1.47 | 2.20 | (0.75 | ) | |||||||
| Less distributions from: | |||||||||||||||
| Net investment income | (0.68 | ) | (0.41 | ) | (0.21 | ) | (0.09 | ) | (0.11 | ) | |||||
| Net realized gains | — | (0.56 | ) | (0.15 | ) | — | (0.19 | ) | |||||||
| Total distributions | (0.68 | ) | (0.97 | ) | (0.36 | ) | (0.09 | ) | (0.30 | ) | |||||
| Net asset value, end of year. | $ | 10.05 | $ | 13.27 | $ | 17.82 | $ | 16.71 | $ | 14.60 | |||||
| Total returnc | (19.32 | )% | (20.53 | )% | 8.78 | % | 15.25 | % | (4.59 | )% | |||||
| Ratios to average net assets | |||||||||||||||
| Expenses before waiver and payments by affiliates | 2.88 | % | 2.74 | % | 2.74 | % | 2.80 | % | 2.90 | % | |||||
| Expenses net of waiver and payments by affiliates | 2.88 | %d | 2.74 | %d | 2.74 | %d | 2.80 | % | 2.85 | % | |||||
| Net investment income | 1.51 | % | 1.33 | % | 1.53 | % | 0.85 | % | 1.47 | % | |||||
| Supplemental data | |||||||||||||||
| Net assets, end of year (000’s) | $ | 22,466 | $ | 37,770 | $ | 60,182 | $ | 44,086 | $ | 25,691 | |||||
| Portfolio turnover rate | 19.12 | % | 19.14 | % | 12.65 | % | 5.86 | % | 23.70 | % | |||||
aThe 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.
bBased on average daily shares outstanding.
cTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable.
dBenefit of waiver and payments by affiliates rounds to less than 0.01%.
franklintempleton.com The accompanying notes are an integral part of these financial statements. | Annual Report 15
| TEMPLETON GLOBAL INVESTMENT TRUST | |||||||||||||||
| FINANCIAL HIGHLIGHTS | |||||||||||||||
| Templeton Frontier Markets Fund (continued) | |||||||||||||||
| Year Ended March 31, | |||||||||||||||
| 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||
| Class R | |||||||||||||||
| Per share operating performance | |||||||||||||||
| (for a share outstanding throughout the year) | |||||||||||||||
| Net asset value, beginning of year | $ | 13.40 | $ | 18.03 | $ | 16.88 | $ | 14.74 | $ | 15.86 | |||||
| Income from investment operationsa: | |||||||||||||||
| Net investment incomeb | 0.27 | 0.28 | 0.35 | 0.23 | 0.22 | ||||||||||
| Net realized and unrealized gains (losses) | (2.78 | ) | (3.84 | ) | 1.23 | 2.07 | (0.93 | ) | |||||||
| Total from investment operations | (2.51 | ) | (3.56 | ) | 1.58 | 2.30 | (0.71 | ) | |||||||
| Less distributions from: | |||||||||||||||
| Net investment income | (0.76 | ) | (0.51 | ) | (0.28 | ) | (0.16 | ) | (0.22 | ) | |||||
| Net realized gains | — | (0.56 | ) | (0.15 | ) | — | (0.19 | ) | |||||||
| Total distributions | (0.76 | ) | (1.07 | ) | (0.43 | ) | (0.16 | ) | (0.41 | ) | |||||
| Net asset value, end of year. | $ | 10.13 | $ | 13.40 | $ | 18.03 | $ | 16.88 | $ | 14.74 | |||||
| Total return | (18.89 | )% | (20.17 | )% | 9.30 | % | 15.91 | % | (4.17 | )% | |||||
| Ratios to average net assets | |||||||||||||||
| Expenses before waiver and payments by affiliates | 2.40 | % | 2.24 | % | 2.24 | % | 2.30 | % | 2.40 | % | |||||
| Expenses net of waiver and payments by affiliates | 2.40 | %c | 2.24 | %c | 2.24 | %c | 2.30 | % | 2.35 | % | |||||
| Net investment income | 2.00 | % | 1.83 | % | 2.03 | % | 1.35 | % | 1.97 | % | |||||
| Supplemental data | |||||||||||||||
| Net assets, end of year (000’s) | $ | 118 | $ | 302 | $ | 388 | $ | 307 | $ | 198 | |||||
| Portfolio turnover rate | 19.12 | % | 19.14 | % | 12.65 | % | 5.86 | % | 23.70 | % | |||||
aThe 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.
bBased on average daily shares outstanding.
cBenefit of waiver and payments by affiliates rounds to less than 0.01%.
16 Annual Report | The accompanying notes are an integral part of these financial statements.
franklintempleton.com
TEMPLETON GLOBAL INVESTMENT TRUST
FINANCIAL HIGHLIGHTS
| Templeton Frontier Markets Fund (continued) | |||||||||
| Year Ended March 31, | |||||||||
| 2016 | 2015 | 2014 | a | ||||||
| Class R6 | |||||||||
| Per share operating performance | |||||||||
| (for a share outstanding throughout the year) | |||||||||
| Net asset value, beginning of year | $ | 13.51 | $ | 18.18 | $ | 17.11 | |||
| Income from investment operationsb: | |||||||||
| Net investment incomec | 0.30 | 0.40 | 0.36 | ||||||
| Net realized and unrealized gains (losses) | (2.75 | ) | (3.88 | ) | 1.24 | ||||
| Total from investment operations. | (2.45 | ) | (3.48 | ) | 1.60 | ||||
| Less distributions from: | |||||||||
| Net investment income | (0.85 | ) | (0.63 | ) | (0.38 | ) | |||
| Net realized gains | — | (0.56 | ) | (0.15 | ) | ||||
| Total distributions | (0.85 | ) | (1.19 | ) | (0.53 | ) | |||
| Net asset value, end of year | $ | 10.21 | $ | 13.51 | $ | 18.18 | |||
| Total returnd | (18.29 | )% | (19.63 | )% | 9.41 | % | |||
| Ratios to average net assetse | |||||||||
| Expensesf | 1.65 | % | 1.60 | % | 1.61 | % | |||
| Net investment income. | 2.74 | % | 2.47 | % | 2.66 | % | |||
| Supplemental data | |||||||||
| Net assets, end of year (000’s) | $ | 62,640 | $ | 139,104 | $ | 161,459 | |||
| Portfolio turnover rate | 19.12 | % | 19.14 | % | 12.65 | % | |||
aFor the period May 1, 2013 (effective date) to March 31, 2014.
bThe 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.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year.
eRatios are annualized for periods less than one year.
fBenefit of waiver and payments by affiliates rounds to less than 0.01%.
franklintempleton.com The accompanying notes are an integral part of these financial statements. | Annual Report 17
| TEMPLETON GLOBAL INVESTMENT TRUST | |||||||||||||||
| FINANCIAL HIGHLIGHTS | |||||||||||||||
| Templeton Frontier Markets Fund (continued) | |||||||||||||||
| Year Ended March 31, | |||||||||||||||
| 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||
| Advisor Class | |||||||||||||||
| Per share operating performance | |||||||||||||||
| (for a share outstanding throughout the year) | |||||||||||||||
| Net asset value, beginning of year | $ | 13.51 | $ | 18.18 | $ | 17.01 | $ | 14.84 | $ | 15.91 | |||||
| Income from investment operationsa: | |||||||||||||||
| Net investment incomeb | 0.34 | 0.41 | 0.45 | 0.28 | 0.37 | ||||||||||
| Net realized and unrealized gains (losses) | (2.82 | ) | (3.92 | ) | 1.23 | 2.12 | (0.99 | ) | |||||||
| Total from investment operations | (2.48 | ) | (3.51 | ) | 1.68 | 2.40 | (0.62 | ) | |||||||
| Less distributions from: | |||||||||||||||
| Net investment income | (0.81 | ) | (0.60 | ) | (0.36 | ) | (0.23 | ) | (0.26 | ) | |||||
| Net realized gains | — | (0.56 | ) | (0.15 | ) | — | (0.19 | ) | |||||||
| Total distributions | (0.81 | ) | (1.16 | ) | (0.51 | ) | (0.23 | ) | (0.45 | ) | |||||
| Net asset value, end of year. | $ | 10.22 | $ | 13.51 | $ | 18.18 | $ | 17.01 | $ | 14.84 | |||||
| Total return | (18.53 | )% | (19.78 | )% | 9.90 | % | 16.44 | % | (3.61 | )% | |||||
| Ratios to average net assets | |||||||||||||||
| Expenses before waiver and payments by affiliates | 1.90 | % | 1.74 | % | 1.74 | % | 1.80 | % | 1.90 | % | |||||
| Expenses net of waiver and payments by affiliates | 1.90 | %c | 1.74 | %c | 1.74 | %c | 1.80 | % | 1.85 | % | |||||
| Net investment income | 2.49 | % | 2.33 | % | 2.53 | % | 1.85 | % | 2.47 | % | |||||
| Supplemental data | |||||||||||||||
| Net assets, end of year (000’s) | $ | 79,380 | $ | 523,037 | $ | 1,037,057 | $ | 846,037 | $ | 225,171 | |||||
| Portfolio turnover rate | 19.12 | % | 19.14 | % | 12.65 | % | 5.86 | % | 23.70 | % | |||||
aThe 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.
bBased on average daily shares outstanding.
cBenefit of waiver and payments by affiliates rounds to less than 0.01%.
18 Annual Report | The accompanying notes are an integral part of these financial statements.
franklintempleton.com
TEMPLETON GLOBAL INVESTMENT TRUST
| Statement of Investments, March 31, 2016 | ||||
| Templeton Frontier Markets Fund | ||||
| Industry | Shares | Value | ||
| Common Stocks 81.7% | ||||
| Argentina 2.6% | ||||
| Banco Macro SA, ADR | Banks | 17,386 | $ | 1,120,875 |
| Telecom Argentina SA, B, ADR | Diversified Telecommunication Services | 261,695 | 4,681,724 | |
| 5,802,599 | ||||
| Bangladesh 0.2% | ||||
| Islami Bank Bangladesh Ltd | Banks | 1,352,437 | 397,039 | |
| Botswana 1.1% | ||||
| Letshego Holdings Ltd | Consumer Finance | 10,497,551 | 2,435,432 | |
| Cambodia 0.7% | ||||
| NagaCorp Ltd | Hotels, Restaurants & Leisure | 2,623,611 | 1,674,138 | |
| Egypt 6.4% | ||||
| Eastern Tobacco | Tobacco | 131,546 | 2,888,695 | |
| Egyptian International Pharmaceutical Industries Co | Pharmaceuticals | 859,541 | 5,807,742 | |
| a,b Global Telecom Holding, GDR, Reg S | Wireless Telecommunication Services | 3,400,776 | 5,526,262 | |
| 14,222,699 | ||||
| Kazakhstan 0.6% | ||||
| a KazMunaiGas Exploration Production, GDR, Reg S | Oil, Gas & Consumable Fuels | 185,896 | 1,384,925 | |
| Kenya 5.9% | ||||
| East African Breweries Ltd | Beverages | 1,986,000 | 5,579,202 | |
| KCB Group Ltd | Banks | 18,304,442 | 7,577,985 | |
| 13,157,187 | ||||
| Kuwait 9.4% | ||||
| Kuwait Foods Americana | Hotels, Restaurants & Leisure | 1,582,405 | 12,896,194 | |
| Mobile Telecommunications Co | Wireless Telecommunication Services | 5,703,572 | 6,707,862 | |
| National Bank of Kuwait SAK | Banks | 598,638 | 1,328,764 | |
| 20,932,820 | ||||
| Nigeria 8.1% | ||||
| Guaranty Trust Bank PLC | Banks | 18,393,073 | 1,321,581 | |
| Nigerian Breweries PLC | Beverages | 6,928,605 | 3,725,056 | |
| c SEPLAT Petroleum Development Co. PLC, 144A | Oil, Gas & Consumable Fuels | 1,457,164 | 2,175,085 | |
| UAC of Nigeria PLC | Industrial Conglomerates | 30,424,948 | 3,088,051 | |
| Zenith Bank PLC | Banks | 143,579,232 | 7,762,600 | |
| 18,072,373 | ||||
| Oman 3.4% | ||||
| Bank Muscat SAOG | Banks | 7,585,070 | 7,524,988 | |
| Pakistan 6.4% | ||||
| Habib Bank Ltd | Banks | 1,715,800 | 2,804,711 | |
| Indus Motor Co. Ltd | Automobiles | 534,004 | 4,805,017 | |
| United Bank Ltd | Banks | 4,592,300 | 6,627,723 | |
| 14,237,451 | ||||
| Peru 0.5% | ||||
| a Intercorp Financial Services Inc., Reg S | Banks | 47,091 | 1,216,832 | |
| Romania 6.0% | ||||
| b Banca Transilvania | Banks | 2,806,421 | 1,922,867 | |
| d OMV Petrom SA | Oil, Gas & Consumable Fuels | 189,759,209 | 11,600,007 | |
| 13,522,874 | ||||
| Senegal 3.6% | ||||
| Sonatel | Diversified Telecommunication Services | 188,609 | 7,982,105 | |
franklintempleton.com
Annual Report
19
TEMPLETON GLOBAL INVESTMENT TRUST
STATEMENT OF INVESTMENTS
| Templeton Frontier Markets Fund (continued) | ||||
| Industry | Shares | Value | ||
| Common Stocks (continued) | ||||
| South Africa 1.8% | ||||
| MTN Group Ltd | Wireless Telecommunication Services | 448,451 | $ | 4,106,844 |
| Sri Lanka 1.9% | ||||
| Commercial Bank of Ceylon PLC | Banks | 1,785,000 | 1,535,589 | |
| Hatton National Bank PLC | Banks | 1,940,847 | 2,643,538 | |
| 4,179,127 | ||||
| Ukraine 2.9% | ||||
| a MHP SA, GDR, Reg S | Food Products | 772,827 | 6,569,030 | |
| United Arab Emirates 6.5% | ||||
| d Aramex Co | Air Freight & Logistics | 15,650,776 | 14,444,707 | |
| Vietnam 11.6% | ||||
| Binh Minh Plastics JSC. | Building Products | 644,382 | 4,184,018 | |
| d DHG Pharmaceutical JSC. | Pharmaceuticals | 1,484,439 | 5,583,721 | |
| Hoa Phat Group JSC | Metals & Mining | 1,872,583 | 2,473,690 | |
| Imexpharm Pharmaceutical JSC | Pharmaceuticals | 1,059,783 | 2,244,710 | |
| PetroVietnam Drilling and Well Services JSC | Energy Equipment & Services | 1,082,507 | 1,148,844 | |
| PetroVietnam Technical Services Corp | Energy Equipment & Services | 3,074,724 | 2,106,588 | |
| Vietnam Dairy Products JSC | Food Products | 1,348,588 | 8,092,192 | |
| 25,833,763 | ||||
| Zimbabwe 2.1% | ||||
| Delta Corp. Ltd | Beverages | 8,321,807 | 4,681,017 | |
| Total Common Stocks (Cost $200,052,815) . | 182,377,950 | |||
| e Participatory Notes 10.3% | ||||
| Saudi Arabia 10.3% | ||||
| c Deutsche Bank AG/London, Savola Al-Azizia United Co., | ||||
| 144A, 9/27/16 | Food Products | 197,551 | 2,159,689 | |
| c HSBC Bank PLC, | ||||
| Mouwasat Medical Services Co., 144A, 3/05/18 | Health Care Providers & Services | 152,732 | 4,642,620 | |
| Samba Financial Group, 144A, 6/29/17 | Banks | 1,179,297 | 6,414,777 | |
| Merrill Lynch International & Co. CV, | ||||
| Saudi British Bank, 3/02/17. | Banks | 61,585 | 373,581 | |
| cSaudi Dairy & Foodstuff Co., 144A, 4/02/18 | Food Products | 123,182 | 4,072,838 | |
| c Morgan Stanley BV, | ||||
| Saudi British Bank, 144A, 9/08/17 | Banks | 144,043 | 873,779 | |
| Savola Al-Azizia United Co., 144A, 8/21/17 | Food Products | 421,597 | 4,609,030 | |
| 23,146,314 | ||||
| Total Participatory Notes | ||||
| (Cost $24,915,690) | 23,146,314 | |||
| Total Investments (Cost $224,968,505) | ||||
| 92.0% | 205,524,264 | |||
| Other Assets, less Liabilities 8.0% | 17,799,722 | |||
| Net Assets 100.0% | $ | 223,323,986 | ||
20 Annual Report
franklintempleton.com
TEMPLETON GLOBAL INVESTMENT TRUST
STATEMENT OF INVESTMENTS
Templeton Frontier Markets Fund (continued)
See Abbreviations on page 33.
aSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States.
Such a security 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. These securities have been deemed liquid under guidelines approved by the Trust’s Board of Trustees. At March 31, 2016, the aggregate value of these
securities was $14,697,049, representing 6.58% of net assets.
bNon-income producing.
cSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and 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. These securities have been deemed liquid under guidelines approved by the Trust’s Board of Trustees. At
March 31, 2016, the aggregate value of these securities was $24,947,818, representing 11.17% of net assets.
dAt March 31, 2016, pursuant to the Fund’s policies and the requirements of applicable securities law, the Fund is restricted from trading these securities at year end.
eSee Note 1(c) regarding Participatory Notes.
franklintempleton.com The accompanying notes are an integral part of these financial statements. | Annual Report 21
TEMPLETON GLOBAL INVESTMENT TRUST
Financial Statements
Statement of Assets and Liabilities
March 31, 2016
| Templeton Frontier Markets Fund | |||
| Assets: | |||
| Investments in securities: | |||
| Cost | $ | 224,968,505 | |
| Value | $ | 205,524,264 | |
| Foreign currency, at value (cost $14,874,396) | 14,875,166 | ||
| Receivables: | |||
| Investment securities sold | 4,277,603 | ||
| Capital shares sold | 125,802 | ||
| Dividends | 4,225,471 | ||
| Other assets | 170 | ||
| Total assets | 229,028,476 | ||
| Liabilities: | |||
| Payables: | |||
| Investment securities purchased. | 108,853 | ||
| Capital shares redeemed. | 273,466 | ||
| Management fees. | 267,795 | ||
| Distribution fees | 59,047 | ||
| Transfer agent fees | 187,938 | ||
| Funds advanced by custodian | 2,394,316 | ||
| Deferred tax | 2,222,110 | ||
| Accrued expenses and other liabilities | 190,965 | ||
| Total liabilities | 5,704,490 | ||
| Net assets, at value | $ | 223,323,986 | |
| Net assets consist of: | |||
| Paid-in capital | $ | 523,742,263 | |
| Distributions in excess of net investment income | (3,604,416 | ) | |
| Net unrealized appreciation (depreciation) | (21,765,953 | ) | |
| Accumulated net realized gain (loss) | (275,047,908 | ) | |
| Net assets, at value | $ | 223,323,986 | |
22 Annual Report | The accompanying notes are an integral part of these financial statements.
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TEMPLETON GLOBAL INVESTMENT TRUST
FINANCIAL STATEMENTS
Statement of Assets and Liabilities (continued)
March 31, 2016
| Templeton Frontier Markets Fund | ||
| Class A: | ||
| Net assets, at value | $ | 58,719,820 |
| Shares outstanding | 5,761,837 | |
| Net asset value per sharea | $ | 10.19 |
| Maximum offering price per share (net asset value per share ÷ 94.25%) | $ | 10.81 |
| Class C: | ||
| Net assets, at value | $ | 22,465,627 |
| Shares outstanding | 2,234,727 | |
| Net asset value and maximum offering price per sharea | $ | 10.05 |
| Class R: | ||
| Net assets, at value | $ | 118,426 |
| Shares outstanding | 11,686 | |
| Net asset value and maximum offering price per share | $ | 10.13 |
| Class R6: | ||
| Net assets, at value | $ | 62,640,345 |
| Shares outstanding | 6,132,798 | |
| Net asset value and maximum offering price per share | $ | 10.21 |
| Advisor Class: | ||
| Net assets, at value | $ | 79,379,768 |
| Shares outstanding | 7,769,875 | |
| Net asset value and maximum offering price per share | $ | 10.22 |
aRedemption price is equal to net asset value less contingent deferred sales charges, if applicable.
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The accompanying notes are an integral part of these financial statements. | Annual Report 23
TEMPLETON GLOBAL INVESTMENT TRUST
FINANCIAL STATEMENTS
Statement of Operations
for the year ended March 31, 2016
| Templeton Frontier Markets Fund | |||
| Investment income: | |||
| Dividends (net of foreign taxes of $2,236,627) | $ | 24,983,443 | |
| Expenses: | |||
| Management fees (Note 3a) | 8,261,912 | ||
| Distribution fees: (Note 3c) | |||
| Class A | 266,624 | ||
| Class C | 297,562 | ||
| Class R | 626 | ||
| Transfer agent fees: (Note 3e) | |||
| Class A | 266,809 | ||
| Class C | 74,822 | ||
| Class R | 307 | ||
| Class R6 | 2,069 | ||
| Advisor Class | 762,619 | ||
| Custodian fees (Note 4) | 825,497 | ||
| Reports to shareholders | 56,967 | ||
| Registration and filing fees. | 119,884 | ||
| Professional fees | 132,046 | ||
| Trustees’ fees and expenses | 29,356 | ||
| Other | 23,983 | ||
| Total expenses | 11,121,083 | ||
| Expenses waived/paid by affiliates (Note 3f and 3g) | (33,247 | ) | |
| Net expenses | 11,087,836 | ||
| Net investment income. | 13,895,607 | ||
| Realized and unrealized gains (losses): | |||
| Net realized gain (loss) from: | |||
| Investments (net of foreign taxes of $185,296) | (181,952,678 | ) | |
| Foreign currency transactions. | (1,496,383 | ) | |
| Net realized gain (loss) | (183,449,061 | ) | |
| Net change in unrealized appreciation (depreciation) on: | |||
| Investments | 56,312,067 | ||
| Translation of other assets and liabilities | |||
| denominated in foreign currencies | 10,829 | ||
| Change in deferred taxes on unrealized appreciation | (291,873 | ) | |
| Net change in unrealized appreciation (depreciation) | 56,031,023 | ||
| Net realized and unrealized gain (loss) | (127,418,038 | ) | |
| Net increase (decrease) in net assets resulting from operations | $ | (113,522,431 | ) |
24 Annual Report | The accompanying notes are an integral part of these financial statements.
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| TEMPLETON GLOBAL INVESTMENT TRUST | ||||||
| FINANCIAL STATEMENTS | ||||||
| Statements of Changes in Net Assets | ||||||
| Templeton Frontier Markets Fund | ||||||
| Year Ended March 31, | ||||||
| 2016 | 2015 | |||||
| Increase (decrease) in net assets: | ||||||
| Operations: | ||||||
| Net investment income | $ | 13,895,607 | $ | 30,118,011 | ||
| Net realized gain (loss) | (183,449,061 | ) | (22,510,357 | ) | ||
| Net change in unrealized appreciation (depreciation) | 56,031,023 | (268,705,096 | ) | |||
| Net increase (decrease) in net assets resulting from operations | (113,522,431 | ) | (261,097,442 | ) | ||
| Distributions to shareholders from: | ||||||
| Net investment income: | ||||||
| Class A. | (6,050,613 | ) | (6,121,411 | ) | ||
| Class C | (1,593,511 | ) | (1,215,009 | ) | ||
| Class R | (9,520 | ) | (11,711 | ) | ||
| Class R6. | (7,897,925 | ) | (5,769,861 | ) | ||
| Advisor Class | (16,520,638 | ) | (30,273,314 | ) | ||
| Net realized gains: | ||||||
| Class A. | — | (6,228,554 | ) | |||
| Class C | — | (1,665,759 | ) | |||
| Class R | — | (12,681 | ) | |||
| Class R6. | — | (5,117,816 | ) | |||
| Advisor Class | — | (28,112,660 | ) | |||
| Total distributions to shareholders | (32,072,207 | ) | (84,528,776 | ) | ||
| Capital share transactions: (Note 2) | ||||||
| Class A. | (61,375,817 | ) | (49,048,287 | ) | ||
| Class C | (7,456,617 | ) | (8,822,652 | ) | ||
| Class R | (162,628 | ) | 20,950 | |||
| Class R6. | (42,115,640 | ) | 21,869,310 | |||
| Advisor Class | (368,876,208 | ) | (276,791,231 | ) | ||
| Total capital share transactions. | (479,986,910 | ) | (312,771,910 | ) | ||
| Net increase (decrease) in net assets | (625,581,548 | ) | (658,398,128 | ) | ||
| Net assets: | ||||||
| Beginning of year | 848,905,534 | 1,507,303,662 | ||||
| End of year | $ | 223,323,986 | $ | 848,905,534 | ||
| Distributions in excess of net investment income included in net assets: | ||||||
| End of year | $ | (3,604,416 | ) | $ | (1,191,924 | ) |
franklintempleton.com
The accompanying notes are an integral part of these financial statements. | Annual Report 25
TEMPLETON GLOBAL INVESTMENT TRUST
Notes to Financial Statements
Templeton Frontier Markets Fund
1. Organization and Significant Accounting Policies
Templeton Global Investment Trust (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company, consisting of six separate funds and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP). Templeton Frontier Markets Fund (Fund) is included in this report. The financial statements of the remaining funds in the Trust are presented separately. The Fund offers five classes of shares: Class A, Class C, Class R, Class R6, and Advisor Class. Each class of shares differs by its initial sales load, contingent deferred sales charges, voting rights on matters affecting a single class, its exchange privilege and fees primarily due to differing arrangements for distribution and transfer agent fees. The Fund was closed to new investors with limited exceptions effective at the close of market June 28, 2013.
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 as of 4 p.m. Eastern time each day the New York Stock Exchange (NYSE) is open for trading. 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 and Liquidity Oversight Committee (VLOC). The VLOC provides administration and oversight of the Fund’s valuation policies and procedures, which are approved annually by the Board. Among other things, these procedures allow the Fund to 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 4 p.m. Eastern time, whichever is earlier. The value is then
converted into its U.S. dollar equivalent at the foreign exchange rate in effect at 4 p.m. Eastern time on the day that the value of the security is determined. Over-the-counter (OTC) securities are valued within the range of the most recent quoted bid and ask prices. Securities that trade in multiple markets or on multiple exchanges are valued according to the broadest and most representative market. Certain equity securities are valued based upon fundamental characteristics or relationships to similar securities.
Investments in open-end mutual funds are valued at the closing NAV.
The Fund has procedures to determine the fair value of financial instruments for which market prices are not reliable or readily available. Under these procedures, the VLOC convenes on a regular basis to review such financial instruments and considers a number of factors, including significant unobservable valuation inputs, when arriving at fair value. The VLOC primarily employs a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. The VLOC employs various methods for calibrating these valuation approaches including a regular review of key inputs and assumptions, transactional back-testing or disposition analysis, and reviews of any related market activity.
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 NYSE business day. Occasionally, events occur between the time at which trading in a foreign security is completed and the close of the NYSE 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 the close of the NYSE. In order to minimize the potential for these differences, the VLOC monitors price movements following the
26 Annual Report
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TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
Templeton Frontier Markets Fund (continued)
close of trading in foreign stock markets through a series of country specific market proxies (such as baskets of American Depositary Receipts, futures contracts and exchange traded funds). These price movements are measured against established trigger thresholds for each specific market proxy to assist in determining if an event has occurred that may call into question the reliability of the values of the foreign securities held by the Fund. If such an event occurs, the securities may be valued using fair value procedures, which may include the use of independent pricing services.
When the last day of the reporting period is a non-business day, certain foreign markets may be open on those days that the NYSE is closed, 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 significant 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. Participatory Notes
The Fund invests in Participatory Notes (P-Notes). P-notes are promissory notes that are designed to offer a return linked to the performance of a particular underlying equity security or market. P-Notes are issued by banks or broker-dealers and allow the Fund to gain exposure to common stocks in markets where direct investment is not allowed. Income received from P-Notes is recorded as dividend income in the Statement of Operations. P-Notes may contain various risks including the potential inability of the counterparty to fulfill their obligations under the terms of the contract. These securities may be more volatile and less liquid than other investments held by the Fund.
d. Income and Deferred Taxes
It is the Fund’s policy to qualify as a regulated investment company under the Internal Revenue Code. The Fund intends to distribute to shareholders substantially all of its taxable income and net realized gains to relieve it from federal income and excise taxes. As a result, no provision for U.S. federal income taxes is required.
The Fund may be subject to foreign taxation related to income received, capital gains on the sale of securities and certain foreign currency transactions in the foreign jurisdictions in which it invests. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests. When a 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 March 31, 2016, the Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any open tax
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Annual Report
27
TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
Templeton Frontier Markets Fund (continued)
1. Organization and Significant Accounting
Policies (continued)
d. Income and Deferred Taxes (continued)
years (or expected to be taken on future tax returns). Open tax years are those that remain subject to examination and are based on each tax jurisdiction’s statute of limitation.
e. Security Transactions, Investment Income, Expenses and Distributions
Security transactions are accounted for on trade date. Realized gains and losses on security transactions are determined on a specific identification basis. Estimated expenses are accrued daily. Dividend income is recorded on the ex-dividend date except for certain dividends from foreign 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 and are determined according to income tax regulations (tax basis). Distributable earnings determined on a tax basis 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. Fund specific expenses are charged directly to the Fund that incurred the expense.
2. Shares of Beneficial Interest
Realized and unrealized gains and losses and net investment income, not including class specific expenses, are allocated daily to each class of shares based upon the relative proportion of net assets of each class. Differences in per share distributions, by class, are generally due to differences in class specific expenses.
f. Accounting Estimates
The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
g. Guarantees and Indemnifications
Under the Trust’s organizational documents, its officers and trustees are indemnified by the Trust against certain liabilities arising out of the performance of their duties to the Trust. 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.
At March 31, 2016, there were an unlimited number of shares authorized ($0.01 par value). Transactions in the Fund’s shares were as follows:
| Year Ended March 31, | ||||||||||
| 2016 | 2015 | |||||||||
| Shares | Amount | Shares | Amount | |||||||
| Class A Shares: | ||||||||||
| Shares sold | 1,140,504 | $ | 14,006,521 | 2,895,283 | $ | 47,392,679 | ||||
| Shares issued in reinvestment of distributions | 550,974 | 5,785,225 | 706,189 | 10,218,550 | ||||||
| Shares redeemed | (6,971,713 | ) | (81,167,563 | ) | (6,272,258 | ) | (106,659,516 | ) | ||
| Net increase (decrease) | (5,280,235 | ) | $ | (61,375,817 | ) | (2,670,786 | ) | $ | (49,048,287 | ) |
28 Annual Report
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| TEMPLETON GLOBAL INVESTMENT TRUST | ||||||||||||
| NOTES TO FINANCIAL STATEMENTS | ||||||||||||
| Templeton Frontier Markets Fund (continued) | ||||||||||||
| Year Ended March 31, | ||||||||||||
| 2016 | 2015 | |||||||||||
| Shares | Amount | Shares | Amount | |||||||||
| Class C Shares: | ||||||||||||
| Shares sold | 209,990 | $ | 2,379,268 | 304,998 | $ | 5,144,611 | ||||||
| Shares issued in reinvestment of distributions | 144,147 | 1,496,245 | 183,444 | 2,621,411 | ||||||||
| Shares redeemed | (965,975 | ) | (11,332,130 | ) | (1,018,580 | ) | (16,588,674 | ) | ||||
| Net increase (decrease) | (611,838 | ) | $ | (7,456,617 | ) | (530,138 | ) | $ | (8,822,652 | ) | ||
| Class R Shares: | ||||||||||||
| Shares sold | 5,488 | $ | 65,013 | 1,609 | $ | 28,997 | ||||||
| Shares issued in reinvestment of distributions | 912 | 9,520 | 1,692 | 24,392 | ||||||||
| Shares redeemed | (17,219 | ) | (237,161 | ) | (2,319 | ) | (32,439 | ) | ||||
| Net increase (decrease) | (10,819 | ) | $ | (162,628 | ) | 982 | $ | 20,950 | ||||
| Class R6 Shares: | ||||||||||||
| Shares sold | 498,603 | $ | 6,026,008 | 1,297,191 | $ | 21,641,051 | ||||||
| Shares issued in reinvestment of distributions | 724,298 | 7,605,137 | 727,527 | 10,549,145 | ||||||||
| Shares redeemed | (5,384,710 | ) | (55,746,785 | ) | (610,254 | ) | (10,320,886 | ) | ||||
| Net increase (decrease) | (4,161,809 | ) | $ | (42,115,640 | ) | 1,414,464 | $ | 21,869,310 | ||||
| Advisor Class Shares: | ||||||||||||
| Shares sold | 9,656,228 | $ | 121,506,571 | 13,009,497 | $ | 210,143,145 | ||||||
| Shares issued in reinvestment of distributions | 1,287,739 | 13,547,019 | 2,898,327 | 42,054,732 | ||||||||
| Shares redeemed | (41,883,967 | ) | (503,929,798 | ) | (34,255,878 | ) | (528,989,108 | ) | ||||
| Net increase (decrease) | (30,940,000 | ) | $ | (368,876,208 | ) | (18,348,054 | ) | $ | (276,791,231 | ) | ||
3. Transactions with Affiliates
Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton Investments. Certain officers and trustees of the Fund are also officers and/or directors of the following subsidiaries:
| Subsidiary | Affiliation |
| Templeton Asset Management Ltd. (TAML) | Investment manager |
| Franklin Templeton Services, LLC (FT Services) | Administrative manager |
| Franklin Templeton Distributors, Inc. (Distributors) | Principal underwriter |
| Franklin Templeton Investor Services, LLC (Investor Services) | Transfer agent |
| a. Management Fees | |
The Fund pays an investment management fee to TAML based on the average daily net assets of the Fund as follows:
| Annualized Fee Rate | Net Assets | |
| 1.450 | % | Up to and including $1 billion |
| 1.400 | % | Over $1 billion, up to and including $5 billion |
| 1.350 | % | Over $5 billion, up to and including $10 billion |
| 1.300 | % | Over $10 billion, up to and including $15 billion |
| 1.250 | % | Over $15 billion, up to and including $20 billion |
| 1.200 | % | In excess of $20 billion |
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Annual Report
29
TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
Templeton Frontier Markets Fund (continued)
| 3. | Transactions with Affiliates (continued) |
| a. | Management Fees (continued) |
For the year ended March 31, 2016, the effective investment management fee rate was 1.450% of the Fund’s average daily net assets.
b. Administrative Fees
Under an agreement with TAML, FT Services provides administrative services to the Fund. The fee is paid by TAML 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:
| Class A | 0.30 | % |
| Class C | 1.00 | % |
| Class R | 0.50 | % |
Effective August 1, 2015, 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 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 year:
| Sales charges retained net of commissions paid to unaffiliated | ||
| brokers/dealers | $ | 8,224 |
| CDSC retained | $ | 7,591 |
| e. Transfer Agent Fees | ||
Each class of shares, except for Class R6 pays transfer agent fees to Investor Services for its performance of shareholder servicing obligations and reimburses Investor Services for out of pocket expenses incurred, including shareholder servicing fees paid to third parties. These fees are allocated daily based upon their relative proportion of such classes’ aggregate net assets. Class R6 pays Investor Services transfer agent fees specific to that class.
For the year ended March 31, 2016, the Fund paid transfer agent fees of $1,106,626, of which $405,862 was retained by Investor Services.
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TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
Templeton Frontier Markets Fund (continued)
f. Investments in Affiliated Management Investment Companies
The Fund invests in an affiliated management investment company for purposes other than excercising a controlling influence over the management or policies. Management fees paid by the Fund are waived on assets invested in the affiliated management investment company, 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. Prior to April 1, 2013, the waiver was accounted for as a reduction to management fees.
| % of | |||||||||
| Affiliated | |||||||||
| Number of | Number of | Fund Shares | |||||||
| Shares Held | Shares | Value | Outstanding | ||||||
| at Beginning | Gross | Gross | Held at End | at End | Investment | Realized | Held at End | ||
| of Year | Additions | Reductions | of Year | of Year | Income | Gain (Loss) | of Year | ||
| Non-Controlled Affiliates | |||||||||
| Institutional Fiduciary Trust Money Market | |||||||||
| Portfolio | 14,806,941 | 314,660,906 | (329,467,846 | ) | - | $- | $- | $- | -% |
g. Waiver and Expense Reimbursements
Effective March 1, 2016, TAML has contractually agreed in advance to limit the investment management fees to 1.35% of the average daily net assets of the Fund until July 31, 2017.
Additionally, Investor Services has contractually agreed in advance to waive or limit its fees so that the Class R6 transfer agent fees do not exceed 0.01% until July 31, 2016. There were no Class R6 transfer agent fees waived during the year ended March 31, 2016.
h. Other Affiliated Transactions
At March 31, 2016, one or more of the funds in Franklin Fund Allocator Series owned 24.59% of the Fund’s outstanding shares.
i. Interfund Transactions
The Fund engaged in purchases and sales of investments with funds or other accounts that have a common investment manager (or affiliated investment managers), directors, trustees, or officers. During the year ended March 31, 2016, the purchase and sale transactions aggregated $0 and $4,453,638, respectively.
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 year ended March 31, 2016, there were no credits earned.
5. Income Taxes
For tax purposes, capital losses may be carried over to offset future capital gains. Capital loss carryforwards with no expiration, if any, must be fully utilized before those losses with expiration dates.
| At March 31, 2016, capital loss carryforwards were as follows: | ||
| Capital loss carryforwards not subject to expiration: | ||
| Short term | $ | 30,841,315 |
| Long term | 239,400,405 | |
| Total capital loss carryforwards | $ | 270,241,720 |
franklintempleton.com Annual Report 31
TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
Templeton Frontier Markets Fund (continued)
5. Income Taxes (continued)
For tax purposes, the Fund may elect to defer any portion of a late-year ordinary loss to the first day of the following fiscal year. At March 31, 2016, the Fund deferred late-year ordinary losses of $463,766.
The tax character of distributions paid during the years ended March 31, 2016 and 2015, was as follows:
| 2016 | 2015 | |||
| Distributions paid from: | ||||
| Ordinary income | $ | 32,072,207 | $ | 47,013,670 |
| Long term capital gain | - | 37,515,106 | ||
| $ | 32,072,207 | $ | 84,528,776 |
At March 31, 2016, the cost of investments and net unrealized appreciation (depreciation), for income tax purposes were as follows:
| Cost of investments | $ | 232,939,556 | |
| Unrealized appreciation | $ | 26,367,420 | |
| Unrealized depreciation | (53,782,712 | ) | |
| Net unrealized appreciation (depreciation) | $ | (27,415,292 | ) |
Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatments of corporate actions and wash sales.
In accordance with U.S. GAAP permanent differences are reclassified among capital accounts to reflect their tax character. At the year ended March 31, 2016, such reclassifications were as follows:
| Distributions in excess of net investment income | $ | 15,764,108 | |
| Accumulated net realized gain (loss) | $ | (15,764,108 | ) |
6. Investment Transactions
Purchases and sales of investments (excluding short term securities) for the year ended March 31, 2016, aggregated $104,047,198 and $599,437,850, respectively.
7. Concentration of Risk
Investing in foreign securities may include certain risks and considerations not typically associated with investing in U.S. securities, such as fluctuating currency values and changing local and regional economic, political and social conditions, which may result in greater market volatility. In addition, certain foreign securities may not be as liquid as U.S. securities.
8. Credit Facility
The Fund, together with other U.S. registered and foreign investment funds (collectively, Borrowers), managed by Franklin Templeton Investments, are borrowers in a joint syndicated senior unsecured credit facility totaling $2 billion (Global Credit Facility) which matures on February 10, 2017. 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.
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TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
Templeton Frontier Markets Fund (continued)
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 0.07% based upon the unused portion of the Global Credit Facility. Effective February 12, 2016, the annual commitment fee is 0.15%. These fees are reflected in other expenses in the Statement of Operations. During the year ended March 31, 2016, the Fund did not use the Global Credit Facility.
9. Fair Value Measurements
The Fund follows a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Fund’s own market assumptions (unobservable inputs). These inputs are used in determining the value of the Fund’s financial instruments and are summarized in the following fair value hierarchy:
- Level 1 – quoted prices in active markets for identical financial instruments
- Level 2 – other significant observable inputs (including quoted prices for similar financial instruments, interest rates, prepayment speed, credit risk, etc.)
- Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of financial instruments)
The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.
For movements between the levels within the fair value hierarchy, the Fund has adopted a policy of recognizing the transfers as of the date of the underlying event which caused the movement.
A summary of inputs used as of March 31, 2016, in valuing the Fund’s assets carried at fair value, is as follows:
| Level 1 | Level 2 | Level 3 | Total | |||||
| Assets: | ||||||||
| Investments in Securities: | ||||||||
| Equity Investmentsa,b | $ | 182,377,950 | $ | — | $ | — | $ | 182,377,950 |
| Participatory Notes | — | 23,146,314 | — | 23,146,314 | ||||
| Total Investments in Securities | $ | 182,377,950 | $ | 23,146,314 | $ | — | $ | 205,524,264 |
aIncludes common stocks.
bFor detailed categories, see the accompanying Statement of Investments.
10. Subsequent Events
The Fund has evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure.
| Abbreviations | |
| Selected Portfolio | |
| ADR | American Depositary Receipt |
| GDR | Global Depositary Receipt |
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TEMPLETON GLOBAL INVESTMENT TRUST
Report of Independent Registered Public Accounting Firm
To the Board of Trustees and Shareholders of Templeton Frontier Markets Fund
In our opinion, the accompanying statement of assets and liabilities, including the statement of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Templeton Frontier Markets Fund (the "Fund") at March 31, 2016, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at March 31, 2016 by correspondence with the custodian, transfer agent and brokers, provides a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
May 17, 2016
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TEMPLETON GLOBAL INVESTMENT TRUST
Tax Information (unaudited)
Templeton Frontier Markets Fund
Under Section 854(b)(1)(B) of the Internal Revenue Code (Code), the Fund hereby reports the maximum amount allowable but no less than $6,075,354 as qualified dividends for purposes of the maximum rate under Section 1(h)(11) of the Code for the fiscal year ended March 31, 2016. Distributions, including qualified dividend income, paid during calendar year 2016 will be reported to shareholders on Form 1099-DIV by mid-February 2017. Shareholders are advised to check with their tax advisors for information on the treatment of these amounts on their individual income tax returns.
At March 31, 2015, more than 50% of the Fund’s total assets were invested in securities of foreign issuers. In most instances, foreign taxes were withheld from income paid to the Fund on these investments. As shown in the table below, the Fund hereby reports to shareholders the foreign source income and foreign taxes paid, pursuant to Section 853 of the Code. This written statement will allow shareholders of record on December 9, 2015, to treat their proportionate share of foreign taxes paid by the Fund as having been paid directly by them. The shareholder shall consider these amounts as foreign taxes paid in the tax year in which they receive the Fund distribution.
The following table provides a detailed analysis of foreign tax paid, foreign source income, and foreign source qualified dividends as reported by the Fund, to Class A, Class C, Class R, and Class R6 and Advisor Class shareholders of record.
| Foreign Tax Paid | Foreign Source | Foreign Source Qualified | ||||
| Class | Per Share | Income Per Share | Dividends Per Share | |||
| Class A | $ | 0.1098 | $ | 1.2540 | $ | 0.2354 |
| Class C | $ | 0.1098 | $ | 1.1111 | $ | 0.2085 |
| Class R | $ | 0.1098 | $ | 1.1671 | $ | 0.2189 |
| Class R6 | $ | 0.1098 | $ | 1.3541 | $ | 0.2542 |
| Advisor Class | $ | 0.1098 | $ | 1.2941 | $ | 0.2430 |
Foreign Tax Paid Per Share (Column 1) is the amount per share available to you, as a tax credit (assuming you held your shares in the Fund for a minimum of 16 days during the 31-day period beginning 15 days before the ex-dividend date of the Fund’s distribution to which the foreign taxes relate), or, as a tax deduction.
Foreign Source Income Per Share (Column 2) is the amount per share of income dividends attributable to foreign securities held by the Fund, plus any foreign taxes withheld on these dividends. The amounts reported include foreign source qualified dividends that have not been adjusted for the rate differential applicable to such dividend income.1
Foreign Source Qualified Dividends Per Share (Column 3) is the amount per share of foreign source qualified dividends, plus any foreign taxes withheld on these dividends. These amounts represent the portion of the Foreign Source Income reported to you in column 2 that were derived from qualified foreign securities held by the Fund.1
By mid-February 2016, shareholders received Form 1099-DIV which included their share of taxes paid and foreign source income distributed during the calendar year 2015. The Foreign Source Income reported on Form 1099-DIV has not been adjusted for the rate differential on foreign source qualified dividend income. Shareholders are advised to check with their tax advisors for information on the treatment of these amounts on their 2015 individual income tax returns.
1Qualified dividends are taxed at reduced long term capital gains tax rates. In determining the amount of foreign tax credit that may be applied against the U.S. tax liability of individuals receiving foreign source qualified dividends, adjustments may be required to the foreign tax credit limitation calculation to reflect the rate differential applicable to such dividend income. The rules however permit certain individuals to elect not to apply the rate differential adjustments for capital gains and/or dividends for any taxable year. Please consult your tax advisor and the instructions to Form 1116 for more information.
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TEMPLETON GLOBAL INVESTMENT TRUST
TEMPLETON FRONTIER MARKETS FUND
Meeting of Shareholders
Special Meeting of Shareholders, June 30, 2015 (unaudited)
A Special Meeting of Shareholders of Templeton Frontier Markets Fund (the “Fund”) was held at the offices of Franklin Templeton Investments, 300 S.E. 2nd Street, Fort Lauderdale, Florida, on June 30, 2015. The purpose of the meeting was to approve an amendment to the current fundamental investment policy regarding industry concentration. No other business was transacted at the meeting with respect to the Fund.
The results of the voting at the meeting are as follows:
1. To approve an amendment to the current fundamental investment policy regarding industry concentration:
| % of | |||||
| Outstanding | % of Shares | ||||
| Shares | Shares | Present | |||
| For | 38,890,852.493 | 61.721 | % | 97.801 | % |
| Against | 494,703.755 | 0.785 | % | 1.244 | % |
| Abstain | 379,753.777 | 0.603 | % | 0.955 | % |
| Total | 39,765,310.025 | 63.109 | % | 100.000 | % |
| There were no broker non-votes received with respect to this item. | |||||
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| Board Members and Officers | |||||
| The name, year of birth and address of the officers and board members, as well as their affiliations, positions held with the Trust, | |||||
| principal occupations during at least the past five years and number of U.S. registered portfolios overseen in the Franklin Templeton | |||||
| Investments fund complex, are shown below. Generally, each board member serves until that person’s successor is elected and | |||||
| qualified. | |||||
| Independent Board Members | |||||
| Number of Portfolios in | |||||
| Name, Year of Birth | Length of | Fund Complex Overseen | Other Directorships Held | ||
| and Address | Position | Time Served | by Board Member* | During at Least the Past 5 Years | |
| Harris J. Ashton (1932) | Trustee | Since 1994 | 145 | Bar-S Foods (meat packing company) | |
| 300 S.E. 2nd Street | (1981-2010). | ||||
| Fort Lauderdale, FL 33301-1923 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Director of various companies; and formerly, Director, RBC Holdings, Inc. (bank holding company) (until 2002); and President, Chief Executive | |||||
| Officer and Chairman of the Board, General Host Corporation (nursery and craft centers) (until 1998). | |||||
| Ann Torre Bates (1958) | Trustee | Since 2008 | 40 | Navient Corporation (loan | |
| 300 S.E. 2nd Street | management, servicing and asset | ||||
| Fort Lauderdale, FL 33301-1923 | recovery) (2014-present), Ares Capital | ||||
| Corporation (specialty finance | |||||
| company) (2010-present), United | |||||
| Natural Foods, Inc. (distributor of | |||||
| natural, organic and specialty foods) | |||||
| (2013-present), Allied Capital | |||||
| Corporation (financial services) | |||||
| (2003-2010) and SLM Corporation | |||||
| (Sallie Mae) (1997-2014). | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Director of various companies; and formerly, Executive Vice President and Chief Financial Officer, NHP Incorporated (manager of multifamily | |||||
| housing) (1995-1997); and Vice President and Treasurer, US Airways, Inc. (until 1995). | |||||
| Frank J. Crothers (1944) | Trustee | Since 2001 | 24 | Fortis, Inc. (utility holding company) | |
| 300 S.E. 2nd Street | (2007-present) and AML Foods Limited | ||||
| Fort Lauderdale, FL 33301-1923 | (retail distributors) (1989-present). | ||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Director and Vice Chairman, Caribbean Utilities Company, Ltd.; director of various other private business and nonprofit organizations; and | |||||
| formerly, Chairman, Atlantic Equipment and Power Ltd. (1977-2003). | |||||
| Edith E. Holiday (1952) | Lead | Trustee since | 145 | Hess Corporation (exploration and | |
| 300 S.E. 2nd Street | Independent | 1996 and Lead | refining of oil and gas) (1993-present), | ||
| Fort Lauderdale, FL 33301-1923 | Trustee | Independent | Canadian National Railway (railroad) | ||
| Trustee since 2007 | (2001-present), White Mountains | ||||
| Insurance Group, Ltd. (holding | |||||
| company) (2004-present), RTI | |||||
| International Metals, Inc. (manufacture | |||||
| and distribution of titanium) | |||||
| (1999-2015) and H.J. Heinz Company | |||||
| (processed foods and allied products) | |||||
| (1994-2013). | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Director or Trustee of various companies and trusts; and formerly, Assistant to the President of the United States and Secretary of the | |||||
| Cabinet (1990-1993); General Counsel to the United States Treasury Department (1989-1990); and Counselor to the Secretary and Assistant | |||||
| Secretary for Public Affairs and Public Liaison – United States Treasury Department (1988-1989). | |||||
| J. Michael Luttig (1954) | Trustee | Since 2009 | 145 | Boeing Capital Corporation (aircraft | |
| 300 S.E. 2nd Street | financing) (2006-2013). | ||||
| Fort Lauderdale, FL 33301-1923 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Executive Vice President, General Counsel and member of the Executive Council, The Boeing Company (aerospace company) (2006-present); | |||||
| and formerly, Federal Appeals Court Judge, U.S. Court of Appeals for the Fourth Circuit (1991-2006). | |||||
| franklintempleton.com | Annual Report | 37 | |||
TEMPLETON GLOBAL INVESTMENT TRUST
| Independent Board Members (continued) | |||||
| Number of Portfolios in | |||||
| Name, Year of Birth | Length of | Fund Complex Overseen | Other Directorships Held | ||
| and Address | Position | Time Served | by Board Member* | During at Least the Past 5 Years | |
| David W. Niemiec (1949) | Trustee | Since 2006 | 40 | Emeritus Corporation (assisted living) | |
| 300 S.E. 2nd Street | (1999-2010) and OSI Pharmaceuticals, | ||||
| Fort Lauderdale, FL 33301-1923 | Inc. (pharmaceutical products) | ||||
| (2006-2010). | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Advisor, Saratoga Partners (private equity fund); and formerly, Managing Director, Saratoga Partners (1998-2001) and SBC Warburg Dillon | |||||
| Read (investment banking) (1997-1998); Vice Chairman, Dillon, Read & Co. Inc. (investment banking) (1991-1997); and Chief Financial Officer, | |||||
| Dillon, Read & Co. Inc. (1982-1997). | |||||
| Frank A. Olson (1932) | Trustee | Since 2003 | 145 | Hess Corporation (exploration and | |
| 300 S.E. 2nd Street | refining of oil and gas) (1998-2013). | ||||
| Fort Lauderdale, FL 33301-1923 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Director of various companies; and formerly, Chairman of the Board, The Hertz Corporation (car rental) (1980-2000) and Chief Executive | |||||
| Officer (1977-1999); and Chairman of the Board, President and Chief Executive Officer, UAL Corporation (airlines) (June-December 1987). | |||||
| Larry D. Thompson (1945) | Trustee | Since 2006 | 145 | The Southern Company (energy | |
| 300 S.E. 2nd Street | company) (2014-present; previously | ||||
| Fort Lauderdale, FL 33301-1923 | 2010-2012), Graham Holdings | ||||
| Company (education and media | |||||
| organization) (2011-present) and | |||||
| Cbeyond, Inc. (business | |||||
| communications provider) | |||||
| (2010-2012). | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Director of various companies; John A. Sibley Professor of Corporate and Business Law, University of Georgia School of Law (2015-present; | |||||
| previously 2011-2012); and formerly, Executive Vice President – Government Affairs, General Counsel and Corporate Secretary, PepsiCo, | |||||
| Inc. (consumer products) (2012-2014); Senior Vice President – Government Affairs, General Counsel and Secretary, PepsiCo, Inc. | |||||
| (2004-2011); Senior Fellow of The Brookings Institution (2003-2004); Visiting Professor, University of Georgia School of Law (2004); and | |||||
| Deputy Attorney General, U.S. Department of Justice (2001-2003). | |||||
| Constantine D. Tseretopoulos | Trustee | Since 2001 | 24 | None | |
| (1954 | ) | ||||
| 300 S.E. 2nd Street | |||||
| Fort Lauderdale, FL 33301-1923 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Physician, Chief of Staff, owner and operator of the Lyford Cay Hospital (1987-present); director of various nonprofit organizations; and | |||||
| formerly, Cardiology Fellow, University of Maryland (1985-1987); and Internal Medicine Resident, Greater Baltimore Medical Center | |||||
| (1982-1985). | |||||
| Robert E. Wade (1946) | Trustee | Since 2006 | 40 | El Oro Ltd (investments) | |
| 300 S.E. 2nd Street | (2003-present). | ||||
| Fort Lauderdale, FL 33301-1923 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Attorney at law engaged in private practice (1972-2008) and member of various boards. | |||||
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TEMPLETON GLOBAL INVESTMENT TRUST
| Interested Board Members and Officers | |||||
| Number of Portfolios in | |||||
| Name, Year of Birth | Length of | Fund Complex Overseen | Other Directorships Held | ||
| and Address | Position | Time Served | by Board Member* | During at Least the Past 5 Years | |
| **Gregory E. Johnson (1961) | Trustee | Since 2006 | 161 | None | |
| One Franklin Parkway | |||||
| San Mateo, CA 94403-1906 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Chairman of the Board, Member – Office of the Chairman, Director and Chief Executive Officer, Franklin Resources, Inc.; officer and/or | |||||
| director or trustee, as the case may be, of some of the other subsidiaries of Franklin Resources, Inc. and of 44 of the investment companies in | |||||
| Franklin Templeton Investments; Vice Chairman, Investment Company Institute; and formerly, President, Franklin Resources, Inc. | |||||
| (1994-2015). | |||||
| **Rupert H. Johnson, Jr. (1940) | Chairman of | Chairman of the | 145 | None | |
| One Franklin Parkway | the Board, | Board, Trustee | |||
| San Mateo, CA 94403-1906 | Trustee and | since 2013, | |||
| Vice President | and Vice President | ||||
| since 1996 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Vice Chairman, Member – Office of the Chairman and Director, Franklin Resources, Inc.; Director, Franklin Advisers, Inc.; Senior Vice | |||||
| President, Franklin Advisory Services, LLC; and officer and/or director or trustee, as the case may be, of some of the other subsidiaries of | |||||
| Franklin Resources, Inc. and of 42 of the investment companies in Franklin Templeton Investments. | |||||
| Alison E. Baur (1964) | Vice President | Since 2012 | Not Applicable | Not Applicable | |
| One Franklin Parkway | |||||
| San Mateo, CA 94403-1906 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Deputy General Counsel, Franklin Templeton Investments; and officer of some of the other subsidiaries of Franklin Resources, Inc. and of 44 | |||||
| of the investment companies in Franklin Templeton Investments. | |||||
| Norman J. Boersma (1957) | President and | Since 2012 | Not Applicable | Not Applicable | |
| Lyford Cay | Chief Executive | ||||
| Nassau, Bahamas | Officer – | ||||
| Investment | |||||
| Management | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Director, President and Chief Executive Officer, Templeton Global Adviors Ltd.; Chief Investment Officer of Templeton Global Equity Group; | |||||
| officer of six of the investment companies in Franklin Templeton Investments; and formerly, Executive Vice President, Franklin Templeton | |||||
| Investments Corp. (1993-2014). | |||||
| Laura F. Fergerson (1962) | Chief | Since 2009 | Not Applicable | Not Applicable | |
| One Franklin Parkway | Executive | ||||
| San Mateo, CA 94403-1906 | Officer – | ||||
| Finance and | |||||
| Administration | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Senior Vice President, Franklin Templeton Services, LLC; Vice President, Franklin Advisers, Inc. and Franklin Templeton Institutional, LLC; and | |||||
| officer of 44 of the investment companies in Franklin Templeton Investments. | |||||
| Aliya S. Gordon (1973) | Vice President | Since 2009 | Not Applicable | Not Applicable | |
| One Franklin Parkway | |||||
| San Mateo, CA 94403-1906 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Senior Associate General Counsel, Franklin Templeton Investments; and officer of 44 of the investment companies in Franklin Templeton | |||||
| Investments. | |||||
| Steven J. Gray (1955) | Vice President | Since 2009 | Not Applicable | Not Applicable | |
| One Franklin Parkway | |||||
| San Mateo, CA 94403-1906 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Senior Associate General Counsel, Franklin Templeton Investments; Vice President, Franklin Templeton Distributors, Inc. and Franklin | |||||
| Alternative Strategies Advisers, LLC; and officer of 44 of the investment companies in Franklin Templeton Investments. | |||||
| franklintempleton.com | Annual Report | 39 | |||
TEMPLETON GLOBAL INVESTMENT TRUST
| Interested Board Members and Officers (continued) | ||||
| Number of Portfolios in | ||||
| Name, Year of Birth | Length of | Fund Complex Overseen | Other Directorships Held | |
| and Address | Position | Time Served | by Board Member* | During at Least the Past 5 Years |
| Selena L. Holmes (1965) | Vice President | Since 2012 | Not Applicable | Not Applicable |
| 100 Fountain Parkway | – AML | |||
| St. Petersburg, FL 33716-1205 | Compliance | |||
| Principal Occupation During at Least the Past 5 Years: | ||||
| Director, Global Compliance Monitoring; Chief Compliance Officer, Franklin Alternative Strategies Advisers, LLC; Vice President, Franklin | ||||
| Templeton Companies, LLC; and officer of 44 of the investment companies in Franklin Templeton Investments. | ||||
| Kimberly H. Novotny (1972) | Vice President | Since 2013 | Not Applicable | Not Applicable |
| 300 S.E. 2nd Street | ||||
| Fort Lauderdale, FL 33301-1923 | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||
| Associate General Counsel, Franklin Templeton Investments; Vice President and Corporate Secretary, Fiduciary Trust International of the | ||||
| South; Vice President and Assistant Secretary, Templeton Investment Counsel, LLC; Assistant Secretary, Franklin Resources, Inc.; and officer | ||||
| of 44 of the investment companies in Franklin Templeton Investments. | ||||
| Mark H. Otani (1968) | Treasurer, | Since 2009 | Not Applicable | Not Applicable |
| One Franklin Parkway | Chief Financial | |||
| San Mateo, CA 94403-1906 | Officer and | |||
| Chief | ||||
| Accounting | ||||
| Officer | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||
| Treasurer, U.S. Fund Administration & Reporting, Franklin Templeton Investments; and officer of 13 of the investment companies in Franklin | ||||
| Templeton Investments. | ||||
| Robert C. Rosselot (1960) | Chief | Since 2013 | Not Applicable | Not Applicable |
| 300 S.E. 2nd Street | Compliance | |||
| Fort Lauderdale, FL 33301-1923 | Officer | |||
| Principal Occupation During at Least the Past 5 Years: | ||||
| Director, Global Compliance, Franklin Templeton Investments; Vice President, Franklin Templeton Companies, LLC; officer of 44 of the | ||||
| investment companies in Franklin Templeton Investments; and formerly, Senior Associate General Counsel, Franklin Templeton Investments | ||||
| (2007-2013); and Secretary and Vice President, Templeton Group of Funds (2004-2013). | ||||
| Karen L. Skidmore (1952) | Vice President | Since 2009 | Not Applicable | Not Applicable |
| One Franklin Parkway | ||||
| San Mateo, CA 94403-1906 | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||
| Senior Associate General Counsel, Franklin Templeton Investments; and officer of 44 of the investment companies in Franklin Templeton | ||||
| Investments. | ||||
| Navid Tofigh (1972) | Vice President | Since November | Not Applicable | Not Applicable |
| One Franklin Parkway | 2015 | |||
| San Mateo, CA 94403-1906 | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||
| Associate General Counsel, Franklin Templeton Investments; and officer of 44 of the investment companies in Franklin Templeton Investments. | ||||
| Craig S. Tyle (1960) | Vice President | Since 2005 | Not Applicable | Not Applicable |
| One Franklin Parkway | ||||
| San Mateo, CA 94403-1906 | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||
| General Counsel and Executive Vice President, Franklin Resources, Inc.; and officer of some of the other subsidiaries of Franklin Resources, | ||||
| Inc. and of 44 of the investment companies in Franklin Templeton Investments. | ||||
40 Annual Report franklintempleton.com
TEMPLETON GLOBAL INVESTMENT TRUST
| Interested Board Members and Officers (continued) | ||||
| Number of Portfolios in | ||||
| Name, Year of Birth | Length of | Fund Complex Overseen | Other Directorships Held | |
| and Address | Position | Time Served | by Board Member* | During at Least the Past 5 Years |
| Lori A. Weber (1964) | Secretary and | Secretary since | Not Applicable | Not Applicable |
| 300 S.E. 2nd Street | Vice President | 2013 and Vice | ||
| Fort Lauderdale, FL 33301-1923 | President since | |||
| 2011 | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||
| Senior Associate General Counsel, Franklin Templeton Investments; Assistant Secretary, Franklin Resources, Inc.; Vice President and | ||||
| Secretary, Templeton Investment Counsel, LLC; and officer of 44 of the investment companies in Franklin Templeton Investments. | ||||
| *We base the number of portfolios on each separate series of the U.S. registered investment companies within the Franklin Templeton Investments fund complex. These | ||||
| portfolios have a common investment manager or affiliated investment managers. | ||||
| **Gregory E. Johnson is considered to be an interested person of the Fund under the federal securities laws due to his position as an officer and director of Franklin | ||||
| Resources, Inc. (Resources), which is the parent company of the Fund’s investment manager and distributor. Rupert H. Johnson, Jr. is considered to be an interested person | ||||
| of the Fund under the federal securities laws due to his position as officer and director and major shareholder of Resources. | ||||
| Note 1: Rupert H. Johnson, Jr. is the uncle of Gregory E. Johnson. | ||||
| Note 2: Officer information is current as of the date of this report. It is possible that after this date, information about officers may change. | ||||
| The Sarbanes-Oxley Act of 2002 and Rules adopted by the U.S. Securities and Exchange Commission require the Fund to disclose whether the Fund’s Audit | ||||
| Committee includes at least one member who is an audit committee financial expert within the meaning of such Act and Rules. The Fund’s Board has determined | ||||
| that there is at least one such financial expert on the Audit Committee and has designated each of Ann Torre Bates and David W. Niemiec as an audit committee | ||||
| financial expert. The Board believes that Ms. Bates and Mr. Niemiec qualify as such an expert in view of their extensive business background and experience. Ms. | ||||
| Bates has served as a member of the Fund Audit Committee since 2008. She currently serves as a director of Navient Corporation (2014-present), Ares Capital | ||||
| Corporation (2010-present) and United Natural Foods, Inc. (2013-present) and was formerly a director of SLM Corporation from 1997 to 2014 and Allied Capital | ||||
| Corporation from 2003 to 2010, Executive Vice President and Chief Financial Officer of NHP Incorporated from 1995 to 1997 and Vice President and Treasurer of | ||||
| US Airways, Inc. until 1995. Mr. Niemiec has served as a member of the Fund Audit Committee since 2006, currently serves as an Advisor to Saratoga Partners | ||||
| and was formerly its Managing Director from 1998 to 2001. Mr. Niemiec was formerly a director of Emeritus Corporation from 1999 to 2010 and OSI Pharmaceu- | ||||
| ticals, Inc. from 2006 to 2010, Managing Director of SBC Warburg Dillon Read from 1997 to 1998, and was Vice Chairman from 1991 to 1997 and Chief Financial | ||||
| Officer from 1982 to 1997 of Dillon, Read & Co. Inc. As a result of such background and experience, the Board believes that Ms. Bates and Mr. Niemiec have each | ||||
| acquired an understanding of generally accepted accounting principles and financial statements, the general application of such principles in connection with | ||||
| the accounting estimates, accruals and reserves, and analyzing and evaluating financial statements that present a breadth and level of complexity of accounting | ||||
| issues generally comparable to those of the Fund, as well as an understanding of internal controls and procedures for financial reporting and an understanding | ||||
| of audit committee functions. Ms. Bates and Mr. Niemiec are independent Board members as that term is defined under the applicable U.S. Securities and | ||||
| Exchange Commission Rules and Releases. | ||||
| The Statement of Additional Information (SAI) includes additional information about the board members and is available, without charge, upon request. | ||||
| Shareholders may call (800) DIAL BEN/342-5236 to request the SAI. | ||||
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Shareholder Information
Board Review of Investment Management Agreement
At a meeting held February 23, 2016, the Board of Trustees (Board), including a majority of trustees that are not “interested persons” as such term is defined in section 2(a)(19) of the Investment Company Act of 1940 (hereinafter referred to as “non-interested Trustees” or “independent Trustees”), approved renewal of the investment management agreements for each of the separate funds comprising the Templeton Global Investment Trust, including Templeton Frontier Markets Fund (Fund(s)). In reaching this decision, the Board took into account information furnished throughout the year at regular Board meetings, as well as information prepared specifically in connection with the annual renewal review process. Information furnished and discussed throughout the year included investment performance reports and related financial information for each Fund, along with periodic reports on expenses, shareholder services, legal and compliance matters, risk control, pricing, brokerage commissions and execution and other services provided by the Investment Manager (Manager) and its affiliates, as well as marketing support payments made to financial intermediaries. Information furnished specifically in connection with the renewal process included a report for each Fund prepared by Broadridge Financial Solutions, Inc. (Broadridge), an independent organization, as well as additional material, including a Fund profitability analysis prepared by management. The Broadridge reports, which utilized data from Lipper, Inc. (Lipper), compared each Fund’s investment performance and expenses with those of other mutual funds deemed comparable to the Fund as selected by Lipper. The Fund profitability analysis discussed the profitability to Franklin Templeton Investments (FTI) from its overall U.S. fund operations, as well as on an individual fund-by-fund basis. Additional material accompanying such profitability analysis included information on a fund-by-fund basis listing portfolio managers and other accounts they manage, as well as information on management fees charged by the Manager and its affiliates to U.S. mutual funds and other accounts, including management’s explanation of differences where relevant. Such material also included a memorandum prepared by management describing project initiatives and capital investments relating to the services provided to the Funds by the FTI organization, as well as a memorandum relating to economies of scale and an analysis concerning transfer agent fees charged by an affiliate of the Manager. The Board also received a report on all marketing support payments made by FTI to financial intermediaries during the past year, as well as a memorandum relating to third-party servicing arrangements in response to a Guidance Update from the U.S. Securities and Exchange Commission (SEC) relating to mutual fund distribution and sub-accounting fees.
In considering such materials, the independent Trustees received assistance and advice from and met separately with independent counsel. While the investment management agreements for all Funds, and subadvisory agreements where applicable, were considered at the same Board meeting, the Board dealt with each Fund separately. In approving continuance of the investment management agreement for each Fund, the Board, including a majority of independent Trustees, determined that the existing management fee structure was fair and reasonable and that continuance of the investment management agreement was in the best interests of such Fund and its shareholders. While attention was given to all information furnished, the following discusses some primary factors relevant to the Board’s decision.
NATURE, EXTENT AND QUALITY OF SERVICES. The Board was satisfied with the nature and quality of the overall services provided by the Manager and its affiliates to the Fund and its shareholders, other than as noted below with respect to investment performance and expenses. The Board’s opinion was based, in part, upon periodic reports furnished to it showing that the investment policies and restrictions for the Fund were consistently complied with as well as other reports periodically furnished to the Board covering matters such as the compliance of portfolio managers and other management personnel with the code of ethics adopted throughout the Franklin Templeton fund complex, the adherence to fair value pricing procedures established by the Board, and the accuracy of net asset value calculations. The Board also noted the extent of benefits provided Fund shareholders from being part of the Franklin Templeton family of funds, including the right to exchange investments between the same class of shares of different funds without a sales charge, the ability to reinvest Fund dividends into other funds and the right to combine holdings in other funds to obtain a reduced sales charge. Favorable consideration was given to management’s continual efforts and expenditures in establishing effective business continuity plans and developing strategies to address cybersecurity threats. Additionally, the Board noted the Manager’s continued attention to pricing and valuation issues, particularly with respect to complex securities. Among other
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factors taken into account by the Board were the Manager’s best execution trading policies, including a favorable report by an independent portfolio trading analytical firm that also covered FOREX transactions. Consideration was also given to the experience of the Fund’s portfolio management team, the number of accounts managed and general method of compensation. In this latter respect, the Board noted that a primary factor in management’s determination of a portfolio manager’s bonus compensation was the relative investment performance of the funds he or she managed and that a portion of such bonus was required to be invested in a predesignated list of funds within such person’s fund management area so as to be aligned with the interests of shareholders. The Board also took into account the quality of transfer agent and shareholder services provided Fund shareholders by an affiliate of the Manager and steps taken by FTI to enhance analytical support to the investment management groups and provide additional oversight of liquidity risk and complex securities. The Board also took into account, among other things, management’s efforts in establishing a global credit facility for the benefit of the Fund and other accounts managed by FTI to provide a source of cash for temporary and emergency purposes or to meet unusual redemption requests as well as the strong financial position of the Manager’s parent company and its commitment to the mutual fund business as evidenced by its continued introduction of new funds and reassessment of the fund offerings in response to the market environment.
INVESTMENT PERFORMANCE. The Board placed significant emphasis on the investment performance of the Fund in view of its importance to shareholders. While consideration was given to performance reports and discussions with portfolio managers at Board meetings during the year, particular attention in assessing performance was given to the Broadridge reports furnished for the agreement renewal. The following summarizes the performance results for the Fund and the Board’s view of such performance.
The Lipper performance universe for this Fund consisted of all retail and institutional emerging markets funds as selected by Lipper. The Broadridge report showed the Fund’s total return for 2015 to be in the lowest performing quintile of such universe, and on an annualized basis to be in the second-lowest performing quintile of such universe for the previous three-year period, and the middle performing quintile for the previous five-year period. Management explained that the performance universe was broad and not limited to funds investing in “Frontier Markets.” Management also explained steps being
taken to restructure the Fund to ensure greater diversification and positioning in view of changes in Frontier Markets. In light of these discussions and management’s continued attention to the Fund’s underperformance, the Board found that immediate changes in portfolio management were not required.
COMPARATIVE EXPENSES. Consideration was given to the management fees and total expense ratio of the Fund compared with those of a group of other funds selected by Lipper as its appropriate Lipper expense group. Lipper expense data is based upon information taken from each fund’s most recent annual report, which reflects historical asset levels that may be quite different from those currently existing, particularly in a period of market volatility. While recognizing such inherent limitation and the fact that expense ratios generally increase as assets decline and decrease as assets grow, the Board believed the independent analysis conducted by Lipper to be an appropriate measure of comparative expenses. In reviewing comparative costs, Lipper provides information on the Fund’s contractual investment management fee in comparison with the contractual management fee that would have been charged by other funds within its Lipper expense group assuming they were similar in size to the Fund, as well as the actual total expense ratio of the Fund in comparison with those of its Lipper expense group. The Lipper contractual investment management fee analysis includes administrative charges as being part of the contractual investment management fee, and actual total expenses, for comparative consistency, are shown by Lipper for Fund Class A shares for funds having multiple share classes. The Broadridge report for the Fund showed its contractual management fee rate and actual total expense ratio to be the highest within its Lipper expense group. In response to a request from the Board, management agreed to a waiver of the management fee to reduce the rate from 1.45 basis points to 1.35 basis points. The Board noted that the Fund had been closed to new investors since June 28, 2013.
MANAGEMENT PROFITABILITY. The Board also considered the level of profits realized by the Manager and its affiliates in connection with the operation of the Fund. In this respect, the Board reviewed the Fund profitability analysis that addresses the overall profitability of Franklin Templeton’s U.S. fund business, as well as its profits in providing management and other services to each of the individual funds during the 12-month period ended September 30, 2015, being the most recent fiscal year-end for Franklin Resources, Inc., the Manager’s parent. In reviewing the analysis, the Board recognized that allocation methodologies are inherently
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Board Review of Investment Management Agreement (continued)
subjective and various allocation methodologies may be reasonable while producing different results. In this respect, the Board noted that while management continually makes refinements to its methodologies in response to organizational and product related changes, the overall approach as defined by the primary drivers and activity measurements has remained consistent with that used in the Fund profitability report presentations from prior years. Additionally, the Fund’s independent registered public accounting firm had been engaged by the Manager to periodically review the reasonableness of the allocation methodologies to be used solely by the Fund’s Board in reference to the profitability analysis. In reviewing and discussing such analysis, management discussed with the Board its belief that costs incurred in establishing the infrastructure necessary for the type of mutual fund operations conducted by the Manager and its affiliates may not be fully reflected in the expenses allocated to the Fund in determining its profitability, as well as the fact that the level of profits, to a certain extent, reflected operational cost savings and efficiencies initiated by management. The Board also took into account management’s expenditures in improving shareholder services provided to the Funds, as well as the need to implement systems to meet additional regulatory and compliance requirements resulting from statutes such as the Sarbanes-Oxley and Dodd-Frank Acts and recent SEC and other regulatory requirements. In addition, the Board considered a third-party study comparing the profitability of the Manager’s parent on an overall basis to other publicly held managers broken down to show profitability from management operations exclusive of distribution expenses, as well as profitability including distribution expenses. The Board also considered the extent to which the Manager and its affiliates might derive ancillary benefits from fund operations, including revenues generated from transfer agent services and potential benefits resulting from personnel and systems enhancements necessitated by fund growth, as well as increased leverage with the service providers and counterparties, allocation of fund
brokerage and the use of commission dollars to pay for research. Based upon its consideration of all these factors, the Board determined that the level of profits realized by the Manager and its affiliates from providing services to the Fund was not excessive in view of the nature, quality and extent of services provided.
ECONOMIES OF SCALE. The Board also considered whether economies of scale are realized by the Manager as the Fund grows larger and the extent to which this is reflected in the level of management fees charged. While recognizing that any precise determination is inherently subjective, the Board noted that based upon the Fund profitability analysis, it appears that as some funds get larger, at some point economies of scale do result in the Manager realizing a larger profit margin on management services provided such a fund. The Board also noted that economies of scale are shared with the Fund and its shareholders through management fee breakpoints so that as the Fund grows in size, its effective management fee rate declines.
The investment management advisory agreement for the Fund provides for breakpoints that are above the Fund’s existing asset size, and to the extent economies of scale may be realized by the Manager and its affiliates, the Board believes the schedule of fees for the Fund provides a sharing of benefits with the Fund and its shareholders.
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.
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SHAREHOLDER INFORMATION
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 on Form N-Q. Shareholders may view the filed Form N-Q by visiting the Commission’s website at sec.gov. The filed form may also be viewed and copied at the Commission’s Public Reference Room in Washington, DC. Information regarding the operations of the Public Reference Room may be obtained by calling (800) SEC-0330.
Householding of Reports and Prospectuses
You will receive each Fund’s financial reports every six months as well as an annual updated summary prospectus (prospectus available upon request). To reduce Fund expenses, we try to identify related shareholders in a household and send only one copy of the financial reports and summary prospectus. This process, called “householding,” will continue indefinitely unless you instruct us otherwise. If you prefer not to have these documents householded, please call us at (800) 632-2301. At any time you may view current prospectuses/summary prospectuses and financial reports on our website. If you choose, you may receive these documents through electronic delivery.
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Annual Report and Shareholder Letter
Templeton Frontier Markets Fund
Investment Manager
Templeton Asset Management Ltd.
Distributor
Franklin Templeton Distributors, Inc.
(800) DIAL BEN® / 342-5236
franklintempleton.com
Shareholder Services
(800) 632-2301
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.
| © 2016 Franklin Templeton Investments. All rights reserved. | 096 A 05/16 |
Annual Report and Shareholder Letter
March 31, 2016
Templeton Global Balanced Fund
A SERIES OF TEMPLETON GLOBAL INVESTMENT TRUST
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Annual Report
Templeton Global Balanced Fund
This annual report for Templeton Global Balanced Fund covers the fiscal year ended March 31, 2016.
Your Fund’s Goal and Main Investments
The Fund seeks both income and capital appreciation. Under normal market conditions, the Fund will invest in a diversified portfolio of debt and equity securities worldwide. The Fund normally invests at least 25% of its assets in fixed income senior securities and at least 25% of its assets in equity securities. The Fund’s equity component will generally consist of stocks of companies from a variety of industries located anywhere in the world, including developing markets, that offer or could offer the opportunity to realize capital appreciation and/or attractive dividend yields. The Fund’s fixed income component will primarily consist of developed and developing country government and agency bonds and investment-grade and below investment-grade corporate debt securities that offer the opportunity to realize income.
Performance Overview
For the 12 months under review, the Fund’s Class A shares had a -7.74% cumulative total return. In comparison, global equity and fixed income markets, as measured by the Fund’s benchmark, an equally weighted combination of the MSCI All Country World Index (ACWI) and the Barclays Multiverse Index, posted a +0.46% cumulative total return for the same period.1 You can find more of the Fund’s performance data in the Performance Summary beginning on page 10.
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 global economy expanded during the 12 months under review. For global stocks, concerns about China’s slowing
economy and tumbling stock market, declining commodity prices and ongoing uncertainty over the U.S. Federal Reserve’s (Fed’s) timing for raising interest rates contributed to market volatility. However, toward period-end, equity markets gained after the Fed decided to leave its federal funds target range unchanged after raising it for the first time in nine years in December, following the Bank of Japan’s (BOJ’s) decision to cut interest rates, and on hopes of additional stimulus measures by global central banks. For the reporting period, oil prices declined sharply, largely due to strong global supply, and gold and other commodity prices also witnessed a fall for most of the period but recovered toward period-end. The U.S. dollar declined against most currencies during the period, which increased the returns of many foreign assets in U.S. dollar terms. In this environment, global developed market stocks overall, as measured by the MSCI World Index, declined during the period.
The U.S. economy strengthened in the second quarter, but moderated in the third and fourth quarters of 2015 as exports slowed and state and local governments reduced their spending. After maintaining a near-zero interest rate for seven years to support the U.S. economy’s recovery, the Fed raised its target range for the federal funds rate to 0.25%–0.50% at its December meeting and maintained the rate through period-end. The Fed kept interest rates unchanged at its March meeting and indicated that it would monitor global economic and financial
1. Source: Morningstar. The Fund’s benchmark is currently weight 50% for the MSCI ACWI and 50% for the Barclays Multiverse Index and is rebalanced monthly. For the most
recent 12 months ended 3/31/16, the MSCI ACWI had a -3.81% total return and the Barclays Multiverse Index had a +4.36% total return.
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.
The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Consolidated Statement of
Investments (SOI). The Consolidated SOI begins on page 27.
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developments and their implications on the labor market and track their actual and expected progression toward its employment and inflation goal.
In Europe, U.K. fourth-quarter economic growth gained momentum from the services sector. In the eurozone, despite investor concerns about China’s moderating economy, geopolitical tensions between Russia and Turkey and the terror attacks in France, the region generally benefited during the period from lower oil prices and a weaker euro that supported exports. The eurozone also benefited from the European Central Bank’s (ECB’s) accommodative policy, an improved 2015 eurozone growth forecast, and expectations of further ECB stimulus. The eurozone’s annual inflation rate rose for most of the period but declined toward period-end due to a fall in energy prices. Toward period-end, the ECB reduced its benchmark interest rates and expanded its massive bond-buying program.
Japan’s economy contracted more than expected in the fourth quarter of 2015 after also contracting in the third quarter, as private consumption and housing investment declined. The BOJ took several actions during the period, including lowering its inflation forecasts, and reorganizing its stimulus program to increase exposure to long-term government bonds and exchange-traded funds. In January, the BOJ introduced a negative interest rate on excess reserves kept by financial institutions with the central bank in an effort to boost lending and support inflation.
In emerging markets, economic growth generally moderated. China’s economy grew in the fourth quarter of 2015 at an annual rate that was largely in line with the government’s target. Russia’s 2015 economic growth contracted because of declining oil prices and a weakening Russian ruble, while Brazil’s economy shrank amid weakness in the mining and services sectors. The People’s Bank of China (PBOC) cut its benchmark interest rate and the cash reserve requirement ratio for the country’s banks several times. In the recent global environment, emerging market stocks overall, as measured by the MSCI Emerging Markets Index, fell for the 12-month period.
Despite the return of market pessimism in early 2016, we continued to believe that fears of global deflation were unwarranted and that markets were overestimating the extent to which lower headline inflation reflected structurally weaker global demand. Underlying inflation in the U.S. was not adequately priced into bond yields during the period, in our assessment, and we were wary of the lack of inflation being priced into bond yields across the globe. In our view, there were more risks of inflation moving to the upside than to the
*Figures reflect certain derivatives held in the portfolio (or their underlying reference assets) and may not total 100% or may be negative due to rounding, use of derivatives, unsettled trades or other factors.
downside, yet markets appeared to price in deflation and downside risks. Additionally, markets seemed to regard emerging economies as being in near-crisis condition, reacting as if conditions were worse than the 2008 global financial crisis or the Asian financial crisis of 1997 and 1998. However, several emerging market economies were in far better shape, by our assessment, with larger foreign reserves and more diversified, growing economies. We were focused on the opportunity sets in specific emerging market currencies and believed that fears of a systemic crisis across the asset class were exaggerated. Over the final weeks of February, risk
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appetites returned and several local-currency markets rallied, creating a positive trend for global markets that largely carried through to the close of the period in March.
Investment Strategy
We search for undervalued or out-of-favor debt and equity securities and for equity securities that offer or may offer current income. When searching for equity securities, we use a bottom-up, value-oriented, long-term approach, focusing on the market price of a security relative to our evaluation of the company’s long-term earnings, asset value and cash flow potential, as reflected by various metrics, including the company’s price/earnings ratio, price/cash flow ratio, price/book value and discounted cash flow. Because this is a global fund, we analyze global economic trends to identify global macro trends (for example, regions with strong economic growth), and evaluate market inefficiencies to identify investment opportunities stemming from market mispricings.
When searching for debt securities, we perform an independent analysis of the securities being considered for the Fund’s portfolio, rather than relying principally on their ratings assigned by rating agencies. Among factors we consider are a company’s experience and managerial strength; responsiveness to changes in interest rates and business conditions; debt maturity schedules and borrowing requirements; a company’s changing financial condition and market recognition of the change; and a security’s relative value based on such factors as anticipated cash flow, interest or dividend coverage, asset coverage and earnings prospects. With respect to sovereign debt securities, we consider market, political and economic conditions, and evaluate interest and currency exchange rate changes and credit risks. We may regularly enter into currency-related transactions involving certain derivative instruments, principally currency and cross currency forward contracts, but we may also use currency and currency index futures contracts, to provide a hedge against risks associated with other securities held in the Fund or to implement a currency investment strategy.
| What is a currency forward contract? |
| A currency forward contract is an agreement between the Fund |
| and a counterparty to buy or sell a foreign currency in exchange |
| for another currency at a specific exchange rate on a future |
| date. |
| What is a futures contract? |
| A futures contract is an agreement between the Fund and a |
| counterparty made through a U.S. or foreign futures exchange |
| to buy or sell an asset at a specific price on a future date. |
Manager’s Discussion
We maintained the Fund’s asset allocation at roughly 70%/30% in favor of equities during the period given what we considered attractive valuation and yield opportunities in the equity markets. As stocks consolidated bull market gains and performance trends continued to diverge following a period of unusually high correlations, we believed the practice of bottom-up, fundamental security analysis could become increasingly helpful in identifying the best long-term opportunities. A long-term outlook may also prove valuable as the prevailing focus on short-term factors seemed to us to have left underscrutinized long-term opportunities. Ultimately, we believe the process of value recognition can take time when stocks trade on negative sentiment or near-term prospects. As we have written in the past, setbacks are to be expected and fortitude is required for practitioners of our approach. However, for the patient, disciplined investor, we believe this investment strategy is well suited to long-term capital preservation and appreciation.
Equity
Global equities declined during the 12 months under review as concerns surrounding China, credit and commodities, and the ability of central banks to further stimulate economic growth led to sharp selloffs in the third quarter of 2015 and first quarter of 2016. For most of the period, value stocks declined due to perceived investor risk, whereas growth stocks rose due to their generally strong revenue prospects and defensive earnings profiles. However, we were encouraged to see value stocks partially rebounding near period-end. We continued to believe current conditions were attractive for a sustainable recovery in low-valued equities. In particular, value stocks’ underperfor-mance versus growth stocks was at what we considered to be historical levels. In our analysis, the momentum and quality of value stocks have declined in recent years and cheap stocks traded at a wide discount relative to expensive stocks, with conditions similar to the height of the information technology bubble. Whenever these conditions have occurred in the past, patient investors have eventually been rewarded.
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Historically, value stocks generally doubled over the following 12-month period, tripled over the next three years, and more than quadrupled five years later, easily outperforming growth style stocks over those timeframes. Although we do not necessarily expect absolute and relative returns of this magnitude based on current conditions, we believe the current risk and reward component is compelling.
| Top Five Equity Holdings | ||
| 3/31/16 | ||
| Company | % of Total | |
| Sector/Industry, Country | Net Assets | |
| Samsung Electronics Co. Ltd. | 1.6 | % |
| Technology Hardware, Storage & Peripherals, South Korea | ||
| Roche Holding AG | 1.5 | % |
| Pharmaceuticals, Switzerland | ||
| Microsoft Corp. | 1.5 | % |
| Software, U.S. | ||
| BP PLC | 1.4 | % |
| Oil, Gas & Consumable Fuels, U.K. | ||
| Swiss Re AG | 1.4 | % |
| Insurance, Switzerland | ||
In the recent challenging environment, stock selection and an overweighting in the financials sector negatively impacted the Fund’s relative performance.2 Not only were value stocks out of favor, but low interest rates, weak economic growth and increasing regulatory uncertainty pressured the profit outlook for banks. European banks, in particular, bore the brunt of the sector-wide selloff, and comprised half of the Fund’s 10 biggest detractors. Swiss lender Credit Suisse was a major detractor after reporting rising costs and disappointing earnings in fixed income. Even when factoring in the recent global financial crisis and European debt crisis, Credit Suisse was significantly cheaper, and near period-end traded at a discount to tangible book value. However, in our analysis, these depressed levels failed to reflect the firm’s strong capital position, updated strategic plan and profitability targets and lower reliance on investment banking for profits.
Within the sector more broadly, banks were addressing their challenges by re-pricing loans and services and working to grow more attractive fee- and commission-based business lines. In markets where loan re-pricing was insufficient to counter margin pressure, banks were successfully cutting deposit
pricing, which we expect to be a continuing trend in markets where the Fund is currently exposed. Bloated cost structures were being addressed as companies exited cumbersome businesses and cut expenses organically and via consolidation, which had the added benefit of supporting pricing power. Legal expenditures and restructuring charges were also expected to decline as the regulatory and economic environment normalizes. Furthermore, declining rates have helped ease debt service burdens, lowering bank loan losses and helping to naturally offset the challenges otherwise posed by ultra-low or negative nominal interest rates. We believe these solutions could lead to progress among banks. In the European banking sector, return on tangible equity improved compared against the prior period and we anticipate this trend to continue in 2016, despite a dismal first quarter. European banks have also repaired balance sheets, doubling capital ratios since 2007 and achieving compliance with new, stricter capital requirements, while also growing dividend payouts nearly 130% over the past five years alone. Nonetheless, despite such achievements, the sector as a whole has shed its historic premium to book value, but we believe selective bank stocks in Europe and abroad remain undervalued.
Traditionally defensive consumer staples stocks benefited from investor uncertainty and risk aversion.3 Yet, as most of the sector’s stocks traded at their highest prices in the last decade, we continued to find few bargains. Despite the sector’s stable earnings and balance sheet profile, the richly valued companies selling commoditized products in a highly competitive industry generally results in relatively small profit margins. During the period, we found bargains primarily among special situations or restructuring stories, but stock selection and the Fund’s underweighting in consumer staples significantly detracted from relative performance during the review period. Stock selection in the telecommunications, consumer discretionary and industrials sectors also detracted from relative performance.4
Turning to contributors, stock selection in the materials sector, led by holdings in construction materials and metals and mining helped relative performance.5 A new position in U.K.-based commodities trader and diversified miner Glencore was a significant contributor. We believe a general misunderstanding of the firm’s trading business and funding
2. The financials sector comprises banks, capital markets, diversified financial services and insurance in the equity section of the Consolidated SOI.
3. The consumer staples sector comprises beverages and food and strapless retailing in the equity section of the Consolidated SOI.
4. The telecommunication services sector comprises diversified telecommunication services and wireless telecommunication services in the equity section of the Consolidated
SOI. The consumer discretionary sector comprises auto components; automobiles; hotels, restaurants and leisure; household durables; media; multiline retail and specialty
retail in the equity section of the Consolidated SOI. The industrials sector comprises aerospace and defense, air freight and logistics, airlines, building products, commercial
services and supplies, construction and engineering, electrical equipment and industrial conglomerates in the equity section of the Consolidated SOI.
5. The materials sector comprises construction materials, metals and mining, and paper and forest products in the equity section of the Consolidated SOI.
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TEMPLETON GLOBAL BALANCED FUND
model, combined with fears surrounding its balance sheet in an environment of falling commodity prices, weighed heavily on the stock, driving shares to nearly half of the firm’s 2011 price. Glencore has since responded decisively to market concerns by selling assets, cutting debt, improving liquidity, reducing receivables and gaining efficiencies across its industrial and marketing businesses. In our opinion, the successful renegotiation of a revolving credit along with recent strong earnings further enhanced Glencore’s credibility among investors. We believe more abundant value in the materials sector has, however, remained elusive. Construction materials firms have begun to reflect expected earnings improvements as major Western property markets recover. Chemicals stocks appeared generally overpriced, with margins near cyclical peaks and new capacity negatively impacting industry pricing. The mining industry also suffered from excess capacity following an unprecedented investment boom in China. Although some stocks look attractively valued, commodity cycles are long and low multiples often reflect unsustainable earnings.
Among resource sectors, we found more abundant bargains in the energy sector.6 Although stock selection in the energy sector contributed to relative performance, the negative impact of the Fund’s overweighted allocation led to overall underperformance. The Fund was hampered by declining oil prices, which hit a 12-year low during the period. Nevertheless, we believe the oil industry dynamics and corporate fundamentals in the energy sector continue to support long-term value. Regarding supply, Saudi Arabia’s interest in a coordinated production freeze suggests to us that the country is either unable to increase its output or is unwilling to further pressure pricing given the effect of cheap oil on its own finances. Consequently, we view either scenario as a positive sign that large producers may yet cooperate to help balance the oil market. Meanwhile, in North America, production of oil has generally and intentionally declined to help drive demand, leading to fewer oil and gas rigs operating in the U.S. compared to prior historical periods. Globally, oil demand has continued to grow since the global financial crisis, outpacing the growth rate from 2003–2008. However, despite these supportive fundamentals, large-cap energy stocks traded at a lower relative price-to-book multiple during the first quarter of 2016 than at any time in the past 88 years. Although near-term volatility is
to be expected, we believe the sector remains promising for bargain hunters with a long-term investment horizon.
Although the Fund’s underweighting in information technology (IT) detracted from relative performance, stock selection contributed to relative results and more than offset the underweighting’s negative effect.7 U.S. software giant Microsoft was among the portfolio’s top performers during the period under review . Microsoft continued to make encouraging progress to reposition itself to compete in mobile and cloud computing, key growth areas that should help the firm capture revenue and profit opportunities from other parts of the industry. Shares of Chinese travel technology firm TravelSky also significantly contributed after the firm beat earnings estimates and paid out a larger-than-expected dividend following robust demand in the Chinese aviation market. More broadly, every major technology component, such as computers, storage, networking, database and apps, were consistently disrupted by a new set of technologies. Our approach is to identify mature technology companies that offer what we consider value in their ability to adapt to change as well as new technology entrants that are likely to outpace competitors.
From a regional standpoint, an underweighting in Japan and an overweighting in China aided Fund performance. However, losses in South Korea and Taiwan, resulted in modest underperformance of the portfolio’s Asian holdings. Stock selection in continental Europe failed to overcome the negative impact of an overweighted allocation and broad-based weakness in the U.K, while the equity portfolio’s underweighting in U.S. holdings also notably detracted.
As this difficult review period came to a close, we maintained our conviction in Templeton’s time-tested investment discipline. We were particularly encouraged by the nascent recovery in value-oriented stocks in the final months of the period. In an environment of elevated uncertainty, our six decades of experience in global equity markets reminds us that long-term outperformance comes from maintaining discipline in difficult times. In our analysis, with value stocks trading near historical relative valuation lows and the dividend from global equities exceeding the coupon on even the longest-dated government securities, we expect opportunities to arise for long-term, income-oriented value investors.
6. The energy sector comprises energy equipment and services; and oil, gas and consumable fuels in the equity section of the Consolidated SOI.
7. The IT sector comprises communications equipment; electronic equipment, instruments and components; internet software and services; semiconductors and semiconductor
equipment; software; and technology hardware, storage and peripherals in the equity section of the Consolidated SOI.
See www.franklintempletondatasources.com for additional data provider information.
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Annual Report
7
TEMPLETON GLOBAL BALANCED FUND
| Top Five Fixed Income Holdings* | ||
| 3/31/16 | ||
| % of Total | ||
| Issue/Issuer | Net Assets | |
| Government of Mexico | 4.4 | % |
| Government of Malaysia | 4.2 | % |
| Government of Indonesia | 3.4 | % |
| Nota Do Tesouro Nacional | 3.1 | % |
| Government of Ukraine | 2.1 | % |
| *Excludes short-term investments. |
Fixed Income
On the whole, we continued to position our strategies for rising rates by maintaining low portfolio duration and aiming at a negative correlation with U.S. Treasury returns. We also continued to actively seek select duration exposures that we believe can offer positive real yields without taking undue interest-rate risk, favoring countries that we believe have solid underlying fundamentals and prudent fiscal, monetary and financial policies. When investing globally, investment opportunities may take time to materialize, which may require weathering short-term volatility as the longer term investing theses develop. During the period, we shifted out of markets that we were previously contrarian on in order to reallocate to positions that we believe have fundamentally attractive valuations for the medium term ahead. We also maintained our exposures to several of our strongest investment convictions and added to those types of positions as prices became cheaper during periods of heightened volatility. Despite the persistence of volatility during the period, we remained encouraged by the vast set of what we considered fundamentally attractive valuations across the global bond and currency markets. We were positioned for depreciation of the euro and yen, rising U.S. Treasury yields, and currency appreciation in select
emerging markets. During the period, we used currency forward contracts to actively manage exposure to currencies. We also used interest rate swaps to tactically manage duration exposures.
| What is duration? |
| Duration is a measure of a bond’s price sensitivity to interest |
| rate changes. In general, a portfolio of securities with a lower |
| duration can be expected to be less sensitive to interest rate |
| changes than a portfolio with a higher duration. |
| What is an interest rate swap? |
| An interest rate swap is an agreement between two parties to |
| exchange interest rate payment obligations, generally one |
| based on an interest rate fixed to maturity and the other based |
| on an interest rate that changes in accordance with changes in |
| a designated benchmark (for example, LIBOR, prime, |
| commercial paper or other benchmarks). |
During the period, interest rate strategies and overall credit exposures contributed to absolute performance. The Fund maintained a defensive approach regarding interest rates in developed and emerging markets. Select duration exposures in Latin America and Asia ex-Japan contributed to absolute return, as did negative duration exposure to U.S. Treasuries. Subinvestment-grade sovereign credit exposures also contributed to absolute performance.
Overall currency positions detracted from absolute performance. The Fund’s net-negative positions in the euro and the Japanese yen, achieved through currency forward contracts, detracted from absolute return, as did currency positions in Latin America. High yield corporate bonds also detracted from absolute performance.
8 Annual Report
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TEMPLETON GLOBAL BALANCED FUND
Thank you for your continued participation in Templeton Global Balanced Fund. We look forward to serving your future investment needs.
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2016, 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.
franklintempleton.com Annual Report 9
TEMPLETON GLOBAL BALANCED FUND
Performance Summary as of March 31, 2016
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. The performance tables and graphs do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares. Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses.
| Net Asset Value | ||||||
| Share Class (Symbol) | 3/31/16 | 3/31/15 | Change | |||
| A (TAGBX) | $ | 2.72 | $ | 3.13 | -$ | 0.41 |
| A1 (TINCX) | $ | 2.72 | $ | 3.13 | -$ | 0.41 |
| C (FCGBX) | $ | 2.70 | $ | 3.12 | -$ | 0.42 |
| C1 (TCINX) | $ | 2.72 | $ | 3.13 | -$ | 0.41 |
| R (N/A) | $ | 2.72 | $ | 3.14 | -$ | 0.42 |
| R6 (N/A) | $ | 2.73 | $ | 3.14 | -$ | 0.41 |
| Advisor (TZINX) | $ | 2.73 | $ | 3.14 | -$ | 0.41 |
| Distributions1 (4/1/15–3/31/16) | ||||||
| Dividend | Long-Term | |||||
| Share Class | Income | Capital Gain | Total | |||
| A | $ | 0.0937 | $ | 0.0790 | $ | 0.1727 |
| A1 | $ | 0.0936 | $ | 0.0790 | $ | 0.1726 |
| C | $ | 0.0753 | $ | 0.0790 | $ | 0.1543 |
| C1 | $ | 0.0831 | $ | 0.0790 | $ | 0.1621 |
| R | $ | 0.0877 | $ | 0.0790 | $ | 0.1667 |
| R6 | $ | 0.1027 | $ | 0.0790 | $ | 0.1817 |
| Advisor | $ | 0.1001 | $ | 0.0790 | $ | 0.1791 |
See page 17 for Performance Summary footnotes.
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TEMPLETON GLOBAL BALANCED FUND
PERFORMANCE SUMMARY
Performance as of 3/31/162
Cumulative total return excludes sales charges. Average annual total return and value of $10,000 investment include maximum sales charges. Class A: 5.75% maximum initial sales charge; Class A1: 4.25% maximum initial sales charge; Class C/C1: 1% contingent deferred sales charge in first year only; Class R/R6/Advisor Class: no sales charges.
| Total Annual Operating Expenses6 | ||||||||||
| Cumulative | Average Annual | Value of | ||||||||
| Share Class | Total Return3 | Total Return4 | $ | 10,000 Investment5 | (with waiver) | (without waiver) | ||||
| A7 | 1.11 | % | 1.11 | % | ||||||
| 1-Year | -7.74 | % | -13.02 | % | $ | 8,698 | ||||
| 5-Year | +19.99 | % | +2.47 | % | $ | 11,296 | ||||
| 10-Year | +69.40 | % | +4.80 | % | $ | 15,983 | ||||
| A1 | 1.11 | % | 1.11 | % | ||||||
| 1-Year | -7.76 | % | -11.71 | % | $ | 8,829 | ||||
| 5-Year | +19.79 | % | +2.77 | % | $ | 11,464 | ||||
| 10-Year | +69.12 | % | +4.93 | % | $ | 16,184 | ||||
| C | 1.83 | % | 1.83 | % | ||||||
| 1-Year | -8.68 | % | -9.54 | % | $ | 9,046 | ||||
| 3-Year | +4.16 | % | +1.37 | % | $ | 10,416 | ||||
| Since Inception (7/1/11) | +12.90 | % | +2.59 | % | $ | 11,290 | ||||
| C1 | 1.51 | % | 1.51 | % | ||||||
| 1-Year | -8.07 | % | -8.94 | % | $ | 9,106 | ||||
| 5-Year | +17.48 | % | +3.27 | % | $ | 11,748 | ||||
| 10-Year | +62.77 | % | +4.99 | % | $ | 16,277 | ||||
| R | 1.36 | % | 1.36 | % | ||||||
| 1-Year | -8.24 | % | -8.24 | % | $ | 9,176 | ||||
| 5-Year | +17.93 | % | +3.35 | % | $ | 11,793 | ||||
| 10-Year | +64.89 | % | +5.13 | % | $ | 16,489 | ||||
| R6 | 0.76 | % | 0.92 | % | ||||||
| 1-Year | -7.44 | % | -7.44 | % | $ | 9,256 | ||||
| Since Inception (5/1/13) | +5.03 | % | +1.70 | % | $ | 10,503 | ||||
| Advisor | 0.86 | % | 0.86 | % | ||||||
| 1-Year | -7.52 | % | -7.52 | % | $ | 9,248 | ||||
| 5-Year | +21.25 | % | +3.93 | % | $ | 12,125 | ||||
| 10-Year | +73.74 | % | +5.68 | % | $ | 17,374 | ||||
See page 17 for Performance Summary footnotes.
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Annual Report
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| TEMPLETON GLOBAL BALANCED FUND | ||||||
| PERFORMANCE SUMMARY | ||||||
| Performance as of 3/31/162 (continued) | ||||||
| 30-Day Standardized Yield9 | ||||||
| Distribution | ||||||
| Share Class | Rate8 | (with waiver) | (without waiver) | |||
| A | 4.82 | % | 2.83 | % | 2.83 | % |
| A1 | 4.92 | % | 2.89 | % | 2.89 | % |
| C | 4.06 | % | 2.29 | % | 2.29 | % |
| C1 | 4.53 | % | 2.56 | % | 2.55 | % |
| R | 4.79 | % | 2.76 | % | 2.76 | % |
| R6 | 5.61 | % | 3.39 | % | 3.38 | % |
| Advisor | 5.47 | % | 3.28 | % | 3.27 | % |
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.
See page 17 for Performance Summary footnotes.
12 Annual Report
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TEMPLETON GLOBAL BALANCED FUND
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment2
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged indexes include reinvestment of any income or distributions. They differ from the Fund in composition and do not pay management fees or expenses. One cannot invest directly in an index.
See page 17 for Performance Summary footnotes.
franklintempleton.com Annual Report 13
TEMPLETON GLOBAL BALANCED FUND
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment2 (continued)
See page 17 for Performance Summary footnotes.
14 Annual Report
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TEMPLETON GLOBAL BALANCED FUND
PERFORMANCE SUMMARY
See page 17 for Performance Summary footnotes.
franklintempleton.com Annual Report 15
TEMPLETON GLOBAL BALANCED FUND
PERFORMANCE SUMMARY
See page 17 for Performance Summary footnotes.
16 Annual Report franklintempleton.com
TEMPLETON GLOBAL BALANCED FUND
PERFORMANCE SUMMARY
All investments involve risks, including possible loss of principal. Special risks are associated with foreign investing including currency fluctuations, economic instability and political developments; investments in emerging markets involve heightened risks related to the same factors. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. 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. The risks associated with higher yielding, lower rated debt securities include higher risk of default and loss of principal. 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. The Fund’s investment in derivative securities, such as swaps, financial futures and option contracts, and 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. The markets for particular securities or types of securities are or may become relatively illiquid. Reduced liquidity will have an adverse impact on the security’s value and on the Fund’s ability to sell such securities when necessary to meet the Fund’s liquidity needs or in response toa specific market event. The Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results. The Fund’s prospectus also includes a description of the main investment risks.
| Class A: | The Fund began offering a new Class A share on 9/27/11. Beginning 7/1/11, the Fund’s existing Class A shares (renamed Class A1 on 9/27/11) were |
| available to new investors with a maximum initial sales charge of 5.75%. Prior to 7/1/11, the Fund offered Class A shares with a lower maximum initial | |
| sales charge. | |
| Class A1 | Effective 9/27/11, Class A shares were renamed Class A1. This share class is only available for shareholders who purchased prior to 7/1/11. A new |
| (formerly Class A): | Class A share is available for investors with an initial purchase date on or after 7/1/11. |
| Class C: | The Fund began offering a new Class C share on 7/1/11. Prior to that date, the Fund offered a Class C share (renamed Class C1) with lower Rule 12b-1 |
| expenses. These shares have higher annual fees and expenses than Class A shares. | |
| Class C1 | Effective 7/1/11, Class C closed to new investors and was renamed Class C1. These shares have higher annual fees and expenses than Class A shares. |
| (formerly Class C): | A new Class C share is now available. |
| Class R: | Shares are available to certain eligible investors as described in the prospectus. These shares have higher annual fees and expenses than Class A |
| shares. | |
| Class R6: | Shares are available to certain eligible investors as described in the prospectus. |
| Advisor Class: | Shares are available to certain eligible investors as described in the prospectus. |
1. The distribution amount is the sum of the dividend payments to shareholders for the period shown and includes only estimated tax-basis net investment income and capital
gain.
2. The Fund has a fee waiver associated with any investment in a Franklin Templeton money fund, contractually guaranteed through at least its current fiscal year-end. The
transfer agent has contractually agreed to cap transfer agency fees for Class R6 shares so that transfer agency fees for that class do not exceed 0.01% until at least 7/31/16.
Fund investment results reflect the fee waiver and fee cap, to the extent applicable; without these reductions, the results would have been lower.
3. Cumulative total return represents the change in value of an investment over the periods indicated.
4. Average annual total return represents the average annual change in value of an investment over the periods indicated. Return for less than one year, ifany,hasnotbeen
annualized.
5. These figures represent the value of a hypothetical $10,000 investment in the Fund over the periods indicated.
6. Figures are as stated in the Fund’s current prospectus. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to
become higher than the figures shown.
7. Total returns have been calculated based upon the returns for Class A1 shares prior to 7/1/11 and are restated to reflect the current, maximum 5.75% initial sales charge.
8. Distribution rate is based on an annualization of the respective class’s most recent quarterly dividend and the maximum offering price (NAV for Classes C, C1, R, R6 and
Advisor) per share on 3/31/16.
9. The 30-day standardized yield for the 30 days ended 3/31/16 reflects an estimated yield to maturity (assuming all portfolio securities are held to maturity). It should be
regarded as an estimate of the Fund’s rate of investment income, and it may not equal the Fund’s actual income distribution rate (which reflects the Fund’s past dividends paid
to shareholders) or the income reported in the Fund’s consolidated financial statements.
10. Source: Morningstar. The MSCI ACWI is a free float-adjusted, market capitalization-weighted index designed to measure equity market performance in global developed
and emerging markets. The Barclays Multiverse Index provides a broad-based measure of the global fixed income bond market. The index represents the union of the Global
Aggregate Index and the Global High Yield Index and captures investment-grade and high yield securities in all eligible currencies.
See www.franklintempletondatasources.com for additional data provider information.
franklintempleton.com Annual Report 17
TEMPLETON GLOBAL BALANCED FUND
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs:
- Transaction costs, including sales charges (loads) on Fund purchases; and
- 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 following table 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 first line (Actual) for each share class listed in the table provides actual account values and expenses. The “Ending Account Value” is derived from the Fund’s actual return, which includes the effect of Fund expenses.
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:
| 1. | Divide your account value by $1,000. |
| If an account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6. | |
| 2. | Multiply the result by the number under the heading “Expenses Paid During Period.” |
| If Expenses Paid During Period were $7.50, then 8.6 x $7.50 = $64.50. |
In this illustration, the estimated expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Information in the second line (Hypothetical) for each class in the table can help you compare ongoing costs of investing in the Fund with those of other mutual funds. This information may not be used to estimate the actual ending account balance or expenses you paid during the period. The hypothetical “Ending Account Value” is based on the actual expense ratio for each class and an assumed 5% annual rate of return before expenses, which does not represent the Fund’s actual return. The figure under the heading “Expenses Paid During Period” shows the hypothetical expenses your account would have incurred under this scenario. You can compare this figure with the 5% hypothetical examples that appear in shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transaction costs, such as sales charges. Therefore, the second line for each class is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transaction costs were included, your total costs would have been higher. Please refer to the Fund prospectus for additional information on operating expenses.
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| TEMPLETON GLOBAL BALANCED FUND | ||||||
| YOUR FUND’S EXPENSES | ||||||
| Beginning Account | Ending Account | Expenses Paid During | ||||
| Share Class | Value 10/1/15 | Value 3/31/16 | Period* 10/1/15–3/31/16 | |||
| A | ||||||
| Actual | $ | 1,000 | $ | 1,004.30 | $ | 5.56 |
| Hypothetical (5% return before expenses) | $ | 1,000 | $ | 1,019.45 | $ | 5.60 |
| A1 | ||||||
| Actual | $ | 1,000 | $ | 1,004.20 | $ | 5.56 |
| Hypothetical (5% return before expenses) | $ | 1,000 | $ | 1,019.45 | $ | 5.60 |
| C | ||||||
| Actual | $ | 1,000 | $ | 1,001.60 | $ | 9.31 |
| Hypothetical (5% return before expenses) | $ | 1,000 | $ | 1,015.70 | $ | 9.37 |
| C1 | ||||||
| Actual | $ | 1,000 | $ | 1,002.90 | $ | 7.56 |
| Hypothetical (5% return before expenses) | $ | 1,000 | $ | 1,017.45 | $ | 7.62 |
| R | ||||||
| Actual | $ | 1,000 | $ | 1,003.40 | $ | 6.81 |
| Hypothetical (5% return before expenses) | $ | 1,000 | $ | 1,018.20 | $ | 6.86 |
| R6 | ||||||
| Actual | $ | 1,000 | $ | 1,005.50 | $ | 3.76 |
| Hypothetical (5% return before expenses) | $ | 1,000 | $ | 1,021.25 | $ | 3.79 |
| Advisor | ||||||
| Actual | $ | 1,000 | $ | 1,005.20 | $ | 4.31 |
| Hypothetical (5% return before expenses) | $ | 1,000 | $ | 1,020.70 | $ | 4.34 |
*Expenses are calculated using the most recent six-month expense ratio, net of expense waivers, annualized for each class (A: 1.11%;
A1: 1.11%; C: 1.86%; C1: 1.51%; R: 1.36%; R6: 0.75%; and Advisor: 0.86%), multiplied by the average account value over the period,
multiplied by 183/366 to reflect the one-half year period.
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Annual Report
19
TEMPLETON GLOBAL INVESTMENT TRUST
| Consolidated Financial Highlights | |||||||||||||||
| Templeton Global Balanced Fund | |||||||||||||||
| Year Ended March 31, | |||||||||||||||
| 2016 | 2015 | 2014 | 2013 | 2012 | a | ||||||||||
| Class A | |||||||||||||||
| Per share operating performance | |||||||||||||||
| (for a share outstanding throughout the year) | |||||||||||||||
| Net asset value, beginning of year | $ | 3.13 | $ | 3.30 | $ | 2.94 | $ | 2.80 | $ | 2.50 | |||||
| Income from investment operationsb: | |||||||||||||||
| Net investment incomec | 0.08 | 0.08 | 0.09 | d | 0.07 | 0.04 | |||||||||
| Net realized and unrealized gains (losses) | (0.32 | ) | (0.07 | ) | 0.35 | 0.23 | 0.33 | ||||||||
| Total from investment operations | (0.24 | ) | 0.01 | 0.44 | 0.30 | 0.37 | |||||||||
| Less distributions from: | |||||||||||||||
| Net investment income | (0.09 | ) | (0.18 | ) | (0.08 | ) | (0.16 | ) | (0.07 | ) | |||||
| Net realized gains | (0.08 | ) | — | — | — | — | |||||||||
| Total distributions | (0.17 | ) | (0.18 | ) | (0.08 | ) | (0.16 | ) | (0.07 | ) | |||||
| Net asset value, end of year. | $ | 2.72 | $ | 3.13 | $ | 3.30 | $ | 2.94 | $ | 2.80 | |||||
| Total returne | (7.74 | )% | 0.38 | % | 15.06 | % | 11.31 | % | 14.99 | % | |||||
| Ratios to average net assetsf | |||||||||||||||
| Expenses before waiver and payments by affiliates | 1.11 | % | 1.11 | % | 1.13 | % | 1.21 | % | 1.24 | % | |||||
| Expenses net of waiver and payments by affiliates | 1.10 | %g | 1.11 | %g,h | 1.12 | %g | 1.20 | % | 1.20 | % | |||||
| Net investment income | 2.55 | % | 2.55 | % | 2.76 | %d | 2.84 | % | 3.27 | % | |||||
| Supplemental data | |||||||||||||||
| Net assets, end of year (000’s) | $ | 987,949 | $ | 1,117,109 | $ | 1,055,121 | $ | 238,319 | $ | 72,962 | |||||
| Portfolio turnover rate | 44.25 | % | 20.90 | % | 13.33 | % | 30.44 | % | 19.02 | % | |||||
aFor the period September 27, 2011 (effective date) to March 31, 2012.
bThe amount shown for a share outstanding throughout the period may not correlate with the Consolidated 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.
cBased on average daily shares outstanding.
dNet investment income per share includes approximately $0.02 per share received in the form of a special dividend paid in connection with certain Fund’s holdings.
Excluding this amount, the ratio of net investment income to average net assets would have been 2.24%.
eTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year.
fRatios are annualized for periods less than one year.
gBenefit of expense reduction rounds to less than 0.01%.
hBenefit of waiver and payments by affiliates rounds to less than 0.01%.
20 Annual Report | The accompanying notes are an integral part of these consolidated financial statements. franklintempleton.com
| TEMPLETON GLOBAL INVESTMENT TRUST | |||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS | |||||||||||||||
| Templeton Global Balanced Fund (continued) | |||||||||||||||
| Year Ended March 31, | |||||||||||||||
| 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||
| Class A1 | |||||||||||||||
| Per share operating performance | |||||||||||||||
| (for a share outstanding throughout the year) | |||||||||||||||
| Net asset value, beginning of year | $ | 3.13 | $ | 3.30 | $ | 2.94 | $ | 2.79 | $ | 2.89 | |||||
| Income from investment operationsa: | |||||||||||||||
| Net investment incomeb | 0.08 | 0.08 | 0.09 | c | 0.08 | 0.09 | |||||||||
| Net realized and unrealized gains (losses) | (0.32 | ) | (0.07 | ) | 0.34 | 0.23 | (0.08 | ) | |||||||
| Total from investment operations | (0.24 | ) | 0.01 | 0.43 | 0.31 | 0.01 | |||||||||
| Less distributions from: | |||||||||||||||
| Net investment income | (0.09 | ) | (0.18 | ) | (0.07 | ) | (0.16 | ) | (0.11 | ) | |||||
| Net realized gains | (0.08 | ) | — | — | — | — | |||||||||
| Total distributions | (0.17 | ) | (0.18 | ) | (0.07 | ) | (0.16 | ) | (0.11 | ) | |||||
| Net asset value, end of year. | $ | 2.72 | $ | 3.13 | $ | 3.30 | $ | 2.94 | $ | 2.79 | |||||
| Total returnd | (7.76 | )% | 0.36 | % | 14.98 | % | 11.67 | % | 0.78 | % | |||||
| Ratios to average net assets | |||||||||||||||
| Expenses before waiver and payments by affiliates | 1.11 | % | 1.11 | % | 1.13 | % | 1.21 | % | 1.24 | % | |||||
| Expenses net of waiver and payments by affiliates | 1.10 | %e | 1.11 | %e,f | 1.12 | %e | 1.20 | % | 1.20 | % | |||||
| Net investment income | 2.55 | % | 2.55 | % | 2.76 | %c | 2.84 | % | 3.27 | % | |||||
| Supplemental data | |||||||||||||||
| Net assets, end of year (000’s) | $ | 370,212 | $ | 467,765 | $ | 538,901 | $ | 533,538 | $ | 572,179 | |||||
| Portfolio turnover rate | 44.25 | % | 20.90 | % | 13.33 | % | 30.44 | % | 19.02 | % | |||||
aThe amount shown for a share outstanding throughout the period may not correlate with the Consolidated 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.
bBased on average daily shares outstanding.
cNet investment income per share includes approximately $0.02 per share received in the form of a special dividend paid in connection with certain Fund’s holdings.
Excluding this amount, the ratio of net investment income to average net assets would have been 2.24%.
dTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable.
eBenefit of expense reduction rounds to less than 0.01%.
fBenefit of waiver and payments by affiliates rounds to less than 0.01%.
franklintempleton.com The accompanying notes are an integral part of these consolidated financial statements. | Annual Report 21
| TEMPLETON GLOBAL INVESTMENT TRUST | |||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS | |||||||||||||||
| Templeton Global Balanced Fund (continued) | |||||||||||||||
| Year Ended March 31, | |||||||||||||||
| 2016 | 2015 | 2014 | 2013 | 2012 | a | ||||||||||
| Class C | |||||||||||||||
| Per share operating performance | |||||||||||||||
| (for a share outstanding throughout the year) | |||||||||||||||
| Net asset value, beginning of year | $ | 3.12 | $ | 3.28 | $ | 2.93 | $ | 2.79 | $ | 2.94 | |||||
| Income from investment operationsb: | |||||||||||||||
| Net investment incomec | 0.05 | 0.06 | 0.06 | d | 0.05 | 0.04 | |||||||||
| Net realized and unrealized gains (losses) | (0.31 | ) | (0.07 | ) | 0.35 | 0.23 | (0.11 | ) | |||||||
| Total from investment operations | (0.26 | ) | (0.01 | ) | 0.41 | 0.28 | (0.07 | ) | |||||||
| Less distributions from: | |||||||||||||||
| Net investment income | (0.08 | ) | (0.15 | ) | (0.06 | ) | (0.14 | ) | (0.08 | ) | |||||
| Net realized gains | (0.08 | ) | — | — | — | — | |||||||||
| Total distributions | (0.16 | ) | (0.15 | ) | (0.06 | ) | (0.14 | ) | (0.08 | ) | |||||
| Net asset value, end of year. | $ | 2.70 | $ | 3.12 | $ | 3.28 | $ | 2.93 | $ | 2.79 | |||||
| Total returne | (8.68 | )% | (0.04 | )% | 14.11 | % | 10.66 | % | (2.05 | )% | |||||
| Ratios to average net assetsf | |||||||||||||||
| Expenses before waiver and payments by affiliates | 1.86 | % | 1.83 | % | 1.88 | % | 1.96 | % | 1.99 | % | |||||
| Expenses net of waiver and payments by affiliates | 1.85 | %g | 1.83 | %g,h | 1.87 | %g | 1.95 | % | 1.95 | % | |||||
| Net investment income | 1.80 | % | 1.83 | % | 2.01 | %d | 2.09 | % | 2.52 | % | |||||
| Supplemental data | |||||||||||||||
| Net assets, end of year (000’s) | $ | 464,899 | $ | 507,888 | $ | 480,700 | $ | 88,988 | $ | 18,703 | |||||
| Portfolio turnover rate | 44.25 | % | 20.90 | % | 13.33 | % | 30.44 | % | 19.02 | % | |||||
aFor the period July 1, 2011 (effective date) to March 31, 2012.
bThe amount shown for a share outstanding throughout the period may not correlate with the Consolidated 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.
cBased on average daily shares outstanding.
dNet investment income per share includes approximately $0.02 per share received in the form of a special dividend paid in connection with certain Fund’s holdings.
Excluding this amount, the ratio of net investment income to average net assets would have been 1.49%.
eTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year.
fRatios are annualized for periods less than one year.
gBenefit of expense reduction rounds to less than 0.01%.
hBenefit of waiver and payments by affiliates rounds to less than 0.01%.
22 Annual Report | The accompanying notes are an integral part of these consolidated financial statements. franklintempleton.com
| TEMPLETON GLOBAL INVESTMENT TRUST | |||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS | |||||||||||||||
| Templeton Global Balanced Fund (continued) | |||||||||||||||
| Year Ended March 31, | |||||||||||||||
| 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||
| Class C1 | |||||||||||||||
| Per share operating performance | |||||||||||||||
| (for a share outstanding throughout the year) | |||||||||||||||
| Net asset value, beginning of year | $ | 3.13 | $ | 3.29 | $ | 2.93 | $ | 2.79 | $ | 2.89 | |||||
| Income from investment operationsa: | |||||||||||||||
| Net investment incomeb | 0.06 | 0.07 | 0.07 | c | 0.07 | 0.08 | |||||||||
| Net realized and unrealized gains (losses) | (0.31 | ) | (0.07 | ) | 0.35 | 0.22 | (0.08 | ) | |||||||
| Total from investment operations | (0.25 | ) | — | 0.42 | 0.29 | — | |||||||||
| Less distributions from: | |||||||||||||||
| Net investment income | (0.08 | ) | (0.16 | ) | (0.06 | ) | (0.15 | ) | (0.10 | ) | |||||
| Net realized gains | (0.08 | ) | — | — | — | — | |||||||||
| Total distributions | (0.16 | ) | (0.16 | ) | (0.06 | ) | (0.15 | ) | (0.10 | ) | |||||
| Net asset value, end of year. | $ | 2.72 | $ | 3.13 | $ | 3.29 | $ | 2.93 | $ | 2.79 | |||||
| Total returnd | (8.07 | )% | 0.26 | % | 14.57 | % | 10.86 | % | 0.36 | % | |||||
| Ratios to average net assets | |||||||||||||||
| Expenses before waiver and payments by affiliates | 1.51 | % | 1.51 | % | 1.53 | % | 1.61 | % | 1.64 | % | |||||
| Expenses net of waiver and payments by affiliates | 1.50 | %e | 1.51 | %e,f | 1.52 | %e | 1.60 | % | 1.60 | % | |||||
| Net investment income | 2.15 | % | 2.15 | % | 2.36 | %c | 2.44 | % | 2.87 | % | |||||
| Supplemental data | |||||||||||||||
| Net assets, end of year (000’s) | $ | 233,840 | $ | 296,672 | $ | 341,690 | $ | 322,243 | $ | 342,091 | |||||
| Portfolio turnover rate | 44.25 | % | 20.90 | % | 13.33 | % | 30.44 | % | 19.02 | % | |||||
aThe amount shown for a share outstanding throughout the period may not correlate with the Consolidated 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.
bBased on average daily shares outstanding.
cNet investment income per share includes approximately $0.02 per share received in the form of a special dividend paid in connection with certain Fund’s holdings.
Excluding this amount, the ratio of net investment income to average net assets would have been 1.84%.
dTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable.
eBenefit of expense reduction rounds to less than 0.01%.
fBenefit of waiver and payments by affiliates rounds to less than 0.01%.
franklintempleton.com The accompanying notes are an integral part of these consolidated financial statements. | Annual Report 23
| TEMPLETON GLOBAL INVESTMENT TRUST | |||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS | |||||||||||||||
| Templeton Global Balanced Fund (continued) | |||||||||||||||
| Year Ended March 31, | |||||||||||||||
| 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||
| Class R | |||||||||||||||
| Per share operating performance | |||||||||||||||
| (for a share outstanding throughout the year) | |||||||||||||||
| Net asset value, beginning of year | $ | 3.14 | $ | 3.30 | $ | 2.94 | $ | 2.80 | $ | 2.90 | |||||
| Income from investment operationsa: | |||||||||||||||
| Net investment incomeb | 0.07 | 0.07 | 0.08 | c | 0.07 | 0.08 | |||||||||
| Net realized and unrealized gains (losses) | (0.32 | ) | (0.06 | ) | 0.35 | 0.22 | (0.07 | ) | |||||||
| Total from investment operations | (0.25 | ) | 0.01 | 0.43 | 0.29 | 0.01 | |||||||||
| Less distributions from: | |||||||||||||||
| Net investment income | (0.09 | ) | (0.17 | ) | (0.07 | ) | (0.15 | ) | (0.11 | ) | |||||
| Net realized gains | (0.08 | ) | — | — | — | — | |||||||||
| Total distributions | (0.17 | ) | (0.17 | ) | (0.07 | ) | (0.15 | ) | (0.11 | ) | |||||
| Net asset value, end of year. | $ | 2.72 | $ | 3.14 | $ | 3.30 | $ | 2.94 | $ | 2.80 | |||||
| Total return | (8.24 | )% | 0.43 | % | 14.70 | % | 10.99 | % | 0.52 | % | |||||
| Ratios to average net assets | |||||||||||||||
| Expenses before waiver and payments by affiliates | 1.36 | % | 1.36 | % | 1.38 | % | 1.46 | % | 1.49 | % | |||||
| Expenses net of waiver and payments by affiliates | 1.35 | %d | 1.36 | %d,e | 1.37 | %d | 1.45 | % | 1.45 | % | |||||
| Net investment income | 2.30 | % | 2.30 | % | 2.51 | %c | 2.59 | % | 3.02 | % | |||||
| Supplemental data | |||||||||||||||
| Net assets, end of year (000’s) | $ | 6,498 | $ | 6,357 | $ | 5,757 | $ | 3,864 | $ | 3,426 | |||||
| Portfolio turnover rate | 44.25 | % | 20.90 | % | 13.33 | % | 30.44 | % | 19.02 | % | |||||
aThe amount shown for a share outstanding throughout the period may not correlate with the Consolidated 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.
bBased on average daily shares outstanding.
cNet investment income per share includes approximately $0.02 per share received in the form of a special dividend paid in connection with certain Fund’s holdings.
Excluding this amount, the ratio of net investment income to average net assets would have been 1.99%.
dBenefit of expense reduction rounds to less than 0.01%.
eBenefit of waiver and payments by affiliates rounds to less than 0.01%.
24 Annual Report | The accompanying notes are an integral part of these consolidated financial statements. franklintempleton.com
| TEMPLETON GLOBAL INVESTMENT TRUST | |||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS | |||||||||
| Templeton Global Balanced Fund (continued) | |||||||||
| Year Ended March 31, | |||||||||
| 2016 | 2015 | 2014 | a | ||||||
| Class R6 | |||||||||
| Per share operating performance | |||||||||
| (for a share outstanding throughout the year) | |||||||||
| Net asset value, beginning of year | $ | 3.14 | $ | 3.30 | $ | 3.02 | |||
| Income from investment operationsb: | |||||||||
| Net investment incomec | 0.08 | 0.07 | 0.09 | d | |||||
| Net realized and unrealized gains (losses) | (0.31 | ) | (0.04 | ) | 0.28 | ||||
| Total from investment operations. | (0.23 | ) | 0.03 | 0.37 | |||||
| Less distributions from: | |||||||||
| Net investment income | (0.10 | ) | (0.19 | ) | (0.09 | ) | |||
| Net realized gains | (0.08 | ) | — | — | |||||
| Total distributions | (0.18 | ) | (0.19 | ) | (0.09 | ) | |||
| Net asset value, end of year | $ | 2.73 | $ | 3.14 | $ | 3.30 | |||
| Total returne | (7.44 | )% | 1.02 | % | 12.32 | % | |||
| Ratios to average net assetsf | |||||||||
| Expenses before waiver and payments by affiliates | 0.81 | % | 0.92 | % | 2.31 | % | |||
| Expenses net of waiver and payments by affiliatesg | 0.75 | % | 0.76 | % | 0.77 | % | |||
| Net investment income. | 2.90 | % | 2.90 | % | 3.11 | %d | |||
| Supplemental data | |||||||||
| Net assets, end of year (000’s) | $ | 1,089 | $ | 660 | $ | 5 | |||
| Portfolio turnover rate | 44.25 | % | 20.90 | % | 13.33 | % | |||
aFor the period May 1, 2013 (effective date) to March 31, 2014.
bThe amount shown for a share outstanding throughout the period may not correlate with the Consolidated 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.
cBased on average daily shares outstanding.
dNet investment income per share includes approximately $0.02 per share received in the form of a special dividend paid in connection with certain Fund’s holdings.
Excluding this amount, the ratio of net investment income to average net assets would have been 2.59%.
eTotal return is not annualized for periods less than one year.
fRatios are annualized for periods less than one year.
gBenefit of expense reduction rounds to less than 0.01%.
franklintempleton.com The accompanying notes are an integral part of these consolidated financial statements. | Annual Report 25
| TEMPLETON GLOBAL INVESTMENT TRUST | |||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS | |||||||||||||||
| Templeton Global Balanced Fund (continued) | |||||||||||||||
| Year Ended March 31, | |||||||||||||||
| 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||
| Advisor Class | |||||||||||||||
| Per share operating performance | |||||||||||||||
| (for a share outstanding throughout the year) | |||||||||||||||
| Net asset value, beginning of year | $ | 3.14 | $ | 3.31 | $ | 2.95 | $ | 2.80 | $ | 2.90 | |||||
| Income from investment operationsa: | |||||||||||||||
| Net investment incomeb | 0.08 | 0.09 | 0.09 | c | 0.08 | 0.10 | |||||||||
| Net realized and unrealized gains (losses) | (0.31 | ) | (0.08 | ) | 0.35 | 0.24 | (0.08 | ) | |||||||
| Total from investment operations | (0.23 | ) | 0.01 | 0.44 | 0.32 | 0.02 | |||||||||
| Less distributions from: | |||||||||||||||
| Net investment income | (0.10 | ) | (0.18 | ) | (0.08 | ) | (0.17 | ) | (0.12 | ) | |||||
| Net realized gains | (0.08 | ) | — | — | — | — | |||||||||
| Total distributions | (0.18 | ) | (0.18 | ) | (0.08 | ) | (0.17 | ) | (0.12 | ) | |||||
| Net asset value, end of year. | $ | 2.73 | $ | 3.14 | $ | 3.31 | $ | 2.95 | $ | 2.80 | |||||
| Total return | (7.52 | )% | 0.62 | % | 15.23 | % | 11.92 | % | 1.04 | % | |||||
| Ratios to average net assets | |||||||||||||||
| Expenses before waiver and payments by affiliates | 0.86 | % | 0.86 | % | 0.88 | % | 0.96 | % | 0.99 | % | |||||
| Expenses net of waiver and payments by affiliates | 0.85 | %d | 0.86 | % d,e | 0.87 | %d | 0.95 | % | 0.95 | % | |||||
| Net investment income | 2.80 | % | 2.80 | % | 3.01 | %c | 3.09 | % | 3.52 | % | |||||
| Supplemental data | |||||||||||||||
| Net assets, end of year (000’s) | $ | 299,226 | $ | 405,877 | $ | 421,583 | $ | 146,013 | $ | 100,800 | |||||
| Portfolio turnover rate | 44.25 | % | 20.90 | % | 13.33 | % | 30.44 | % | 19.02 | % | |||||
aThe amount shown for a share outstanding throughout the period may not correlate with the Consolidated 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.
bBased on average daily shares outstanding.
cNet investment income per share includes approximately $0.02 per share received in the form of a special dividend paid in connection with certain Fund’s holdings.
Excluding this amount, the ratio of net investment income to average net assets would have been 2.49%.
dBenefit of expense reduction rounds to less than 0.01%.
eBenefit of waiver and payments by affiliates rounds to less than 0.01%.
26 Annual Report | The accompanying notes are an integral part of these consolidated financial statements. franklintempleton.com
TEMPLETON GLOBAL INVESTMENT TRUST
| Consolidated Statement of Investments, March 31, 2016 | ||||
| Templeton Global Balanced Fund | ||||
| Shares/ | ||||
| Industry | Warrants | Value | ||
| Common Stocks and Other Equity Interests 66.5% | ||||
| Austria 0.2% | ||||
| UNIQA Insurance Group AG | Insurance | 698,239 | $ | 4,909,298 |
| Belgium 0.6% | ||||
| UCB SA | Pharmaceuticals | 200,660 | 15,357,700 | |
| Brazil 0.5% | ||||
| BM&F BOVESPA SA | Diversified Financial Services | 2,530,300 | 10,810,304 | |
| Canada 0.3% | ||||
| Precision Drilling Corp | Energy Equipment & Services | 1,815,900 | 7,610,258 | |
| China 2.6% | ||||
| China Life Insurance Co. Ltd., H. | Insurance | 5,156,000 | 12,721,592 | |
| China Mobile Ltd | Wireless Telecommunication Services | 983,000 | 10,948,481 | |
| China Telecom Corp. Ltd., H | Diversified Telecommunication Services | 26,602,000 | 14,059,982 | |
| GCL-Poly Energy Holdings Ltd | Semiconductors & Semiconductor Equipment | 35,170,700 | 5,803,334 | |
| Haier Electronics Group Co. Ltd | Household Durables | 4,165,000 | 7,226,811 | |
| Shanghai Pharmaceuticals Holding Co. Ltd., | ||||
| H | Health Care Providers & Services | 5,765,200 | 11,445,156 | |
| 62,205,356 | ||||
| Denmark 0.8% | ||||
| a H. Lundbeck AS | Pharmaceuticals | 537,290 | 17,743,611 | |
| France 6.1% | ||||
| AXA SA | Insurance | 1,158,260 | 27,277,478 | |
| BNP Paribas SA. | Banks | 441,920 | 22,248,373 | |
| Cie Generale des Etablissements Michelin, | ||||
| B | Auto Components | 205,824 | 21,068,726 | |
| Compagnie de Saint-Gobain | Building Products | 397,507 | 17,523,867 | |
| Credit Agricole SA | Banks | 1,257,950 | 13,628,459 | |
| Sanofi | Pharmaceuticals | 100,270 | 8,087,417 | |
| Technip SA | Energy Equipment & Services | 322,037 | 17,855,071 | |
| Total SA, B | Oil, Gas & Consumable Fuels | 366,440 | 16,709,040 | |
| 144,398,431 | ||||
| Germany 3.5% | ||||
| Bayer AG | Pharmaceuticals | 157,350 | 18,501,406 | |
| a Deutsche Lufthansa AG | Airlines | 768,570 | 12,426,887 | |
| HeidelbergCement AG | Construction Materials | 151,350 | 12,963,629 | |
| Metro AG | Food & Staples Retailing | 342,670 | 10,620,902 | |
| Muenchener Rueckversicherungs- | ||||
| Gesellschaft AG | Insurance | 51,380 | 10,453,887 | |
| Siemens AG | Industrial Conglomerates | 156,850 | 16,630,490 | |
| 81,597,201 | ||||
| Hong Kong 0.4% | ||||
| CK Hutchison Holdings Ltd | Industrial Conglomerates | 737,352 | 9,552,731 | |
| Ireland 0.7% | ||||
| CRH PLC | Construction Materials | 574,232 | 16,229,374 | |
| Israel 1.2% | ||||
| Teva Pharmaceutical Industries Ltd., ADR | Pharmaceuticals | 523,801 | 28,028,592 | |
| Italy 1.5% | ||||
| Eni SpA | Oil, Gas & Consumable Fuels | 1,582,500 | 23,957,033 | |
| UniCredit SpA | Banks | 2,926,136 | 10,558,238 | |
| 34,515,271 | ||||
franklintempleton.com
Annual Report
27
| TEMPLETON GLOBAL INVESTMENT TRUST | ||||
| CONSOLIDATED STATEMENT OF INVESTMENTS | ||||
| Templeton Global Balanced Fund (continued) | ||||
| Shares/ | ||||
| Industry | Warrants | Value | ||
| Common Stocks and Other Equity Interests (continued) | ||||
| Japan 3.8% | ||||
| CANON Inc | Technology Hardware, Storage & Peripherals | 604,000 | $ | 18,005,420 |
| Nissan Motor Co. Ltd | Automobiles | 2,880,400 | 26,655,441 | |
| SoftBank Group Corp | Wireless Telecommunication Services | 245,900 | 11,724,194 | |
| Suntory Beverage & Food Ltd | Beverages | 513,800 | 23,145,995 | |
| a Toshiba Corp | Industrial Conglomerates | 5,177,000 | 10,073,864 | |
| 89,604,914 | ||||
| Netherlands 1.7% | ||||
| Aegon NV | Insurance | 2,992,912 | 16,467,901 | |
| ING Groep NV, IDR | Banks | 1,201,070 | 14,532,464 | |
| a QIAGEN NV | Life Sciences Tools & Services | 383,180 | 8,539,908 | |
| 39,540,273 | ||||
| Norway 0.9% | ||||
| Telenor ASA | Diversified Telecommunication Services | 1,325,350 | 21,467,896 | |
| Portugal 0.9% | ||||
| Galp Energia SGPS SA, B | Oil, Gas & Consumable Fuels | 1,600,398 | 20,129,266 | |
| Singapore 1.1% | ||||
| Singapore Telecommunications Ltd | Diversified Telecommunication Services | 4,426,299 | 12,548,955 | |
| United Overseas Bank Ltd | Banks | 894,000 | 12,520,247 | |
| 25,069,202 | ||||
| South Africa 0.0%† | ||||
| a,b,c Edcon Holdings Ltd., F wts., 2/20/49. | Specialty Retail | 4,441 | 51 | |
| a,b,c Edcon Holdings Ltd., F1 wts., 2/20/49 | Specialty Retail | 79,464,087 | 904,500 | |
| a,b,c Edcon Holdings Ltd., F2 wts., 2/20/49 | Specialty Retail | 6,435,002 | 73,246 | |
| 977,797 | ||||
| South Korea 2.6% | ||||
| d Hyundai Motor Co., GDR, Reg S | Automobiles | 301,840 | 13,673,352 | |
| KB Financial Group Inc | Banks | 313,845 | 8,726,174 | |
| Samsung Electronics Co. Ltd | Technology Hardware, Storage & Peripherals | 33,112 | 37,924,378 | |
| 60,323,904 | ||||
| Spain 0.7% | ||||
| Telefonica SA | Diversified Telecommunication Services | 1,520,951 | 17,056,004 | |
| Sweden 0.5% | ||||
| Getinge AB, B | Health Care Equipment & Supplies | 558,880 | 12,884,306 | |
| Switzerland 4.6% | ||||
| ABB Ltd | Electrical Equipment | 814,710 | 15,884,789 | |
| Credit Suisse Group AG | Capital Markets | 1,117,916 | 15,829,825 | |
| Glencore PLC | Metals & Mining | 4,748,520 | 10,733,560 | |
| Roche Holding AG | Pharmaceuticals | 146,010 | 35,957,517 | |
| Swiss Re AG | Insurance | 339,750 | 31,424,622 | |
| 109,830,313 | ||||
| Taiwan 0.9% | ||||
| Quanta Computer Inc | Technology Hardware, Storage & Peripherals | 12,073,000 | 21,066,275 | |
| Thailand 0.9% | ||||
| Bangkok Bank PCL, fgn | Banks | 4,178,800 | 21,649,348 | |
28 Annual Report
franklintempleton.com
TEMPLETON GLOBAL INVESTMENT TRUST
CONSOLIDATED STATEMENT OF INVESTMENTS
| Templeton Global Balanced Fund (continued) | ||||
| Shares/ | ||||
| Industry | Warrants | Value | ||
| Common Stocks and Other Equity Interests (continued) | ||||
| United Kingdom 13.2% | ||||
| Aberdeen Asset Management PLC | Capital Markets | 2,802,180 | $ | 11,170,157 |
| Aviva PLC | Insurance | 2,582,584 | 16,926,662 | |
| BAE Systems PLC | Aerospace & Defense | 2,822,060 | 20,641,479 | |
| Barclays PLC | Banks | 4,794,815 | 10,335,224 | |
| BP PLC | Oil, Gas & Consumable Fuels | 6,699,380 | 33,708,973 | |
| Carillion PLC | Construction & Engineering | 4,169,170 | 17,619,818 | |
| a,e CEVA Holdings LLC | Air Freight & Logistics | 247 | 98,684 | |
| GlaxoSmithKline PLC | Pharmaceuticals | 961,083 | 19,500,798 | |
| HSBC Holdings PLC | Banks | 4,927,392 | 30,743,201 | |
| Kingfisher PLC | Specialty Retail | 2,874,548 | 15,560,443 | |
| Marks & Spencer Group PLC. | Multiline Retail | 2,371,620 | 13,843,369 | |
| Petrofac Ltd | Energy Equipment & Services | 990,990 | 13,115,525 | |
| Royal Dutch Shell PLC, B | Oil, Gas & Consumable Fuels | 1,145,659 | 27,987,305 | |
| Sky PLC | Media | 1,363,300 | 20,060,797 | |
| Standard Chartered PLC | Banks | 1,405,926 | 9,547,002 | |
| a Tesco PLC. | Food & Staples Retailing | 8,258,780 | 22,762,643 | |
| Vodafone Group PLC | Wireless Telecommunication Services | 9,205,576 | 29,261,250 | |
| 312,883,330 | ||||
| United States 16.3% | ||||
| Allegheny Technologies Inc | Metals & Mining | 650,470 | 10,602,661 | |
| a Alphabet Inc., A | Internet Software & Services | 18,610 | 14,197,569 | |
| Amgen Inc | Biotechnology | 180,420 | 27,050,371 | |
| Baker Hughes Inc | Energy Equipment & Services | 244,230 | 10,704,601 | |
| Chesapeake Energy Corp | Oil, Gas & Consumable Fuels | 666,210 | 2,744,785 | |
| Chevron Corp | Oil, Gas & Consumable Fuels | 265,180 | 25,298,172 | |
| Cisco Systems Inc | Communications Equipment | 493,490 | 14,049,660 | |
| Citigroup Inc | Banks | 550,570 | 22,986,298 | |
| Comcast Corp., A | Media | 280,562 | 17,136,727 | |
| Devon Energy Corp | Oil, Gas & Consumable Fuels | 410,640 | 11,267,962 | |
| Eli Lilly & Co | Pharmaceuticals | 257,690 | 18,556,257 | |
| General Motors Co | Automobiles | 985,600 | 30,977,408 | |
| Gilead Sciences Inc | Biotechnology | 228,800 | 21,017,568 | |
| Halliburton Co | Energy Equipment & Services | 518,235 | 18,511,354 | |
| Hewlett Packard Enterprise Co | Technology Hardware, Storage & Peripherals | 625,210 | 11,084,973 | |
| HP Inc | Technology Hardware, Storage & Peripherals | 625,210 | 7,702,587 | |
| a Ionis Pharmaceuticals Inc | Biotechnology | 151,130 | 6,120,765 | |
| JPMorgan Chase & Co | Banks | 487,826 | 28,889,056 | |
| a Knowles Corp | Electronic Equipment, Instruments | |||
| & Components | 600,590 | 7,915,776 | ||
| Medtronic PLC | Health Care Equipment & Supplies | 231,690 | 17,376,750 | |
| Microsoft Corp | Software | 637,312 | 35,198,742 | |
| Pfizer Inc | Pharmaceuticals | 414,482 | 12,285,246 | |
| a,c,f Turtle Bay Resort | Hotels, Restaurants & Leisure | 1,587,888 | 4,128,508 | |
| Walgreens Boots Alliance Inc | Food & Staples Retailing | 116,720 | 9,832,493 | |
| 385,636,289 | ||||
| Total Common Stocks and Other | ||||
| Equity Interests | ||||
| (Cost $1,707,970,386) | 1,571,077,244 | |||
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TEMPLETON GLOBAL INVESTMENT TRUST
CONSOLIDATED STATEMENT OF INVESTMENTS
| Templeton Global Balanced Fund (continued) | |||||
| Shares/ | |||||
| Industry | Warrants | Value | |||
| g Equity-Linked Securities 3.3% | |||||
| United States 3.3% | |||||
| h The Goldman Sachs Group Inc. into Applied | |||||
| Materials Inc., 6.00%, 144A | Semiconductors & Semiconductor Equipment | 899,337 | $ | 18,404,302 | |
| h The Goldman Sachs Group Inc. into Best | |||||
| Buy Co. Inc., 5.40%, 144A | Specialty Retail | 634,950 | 20,748,515 | ||
| h The Goldman Sachs Group Inc. into | |||||
| Microsoft Corp., 4.70%, 144A | Software | 390,308 | 21,535,166 | ||
| h Royal Bank of Canada into Macy’s Inc., | |||||
| 4.20%, 144A | Multiline Retail | 386,111 | 17,143,830 | ||
| 77,831,813 | |||||
| Total Equity-Linked Securities | |||||
| (Cost $85,122,728) | 77,831,813 | ||||
| Convertible Preferred Stocks | |||||
| 0.0%† | |||||
| United Kingdom 0.0%† | |||||
| a,e CEVA Holdings LLC, cvt. pfd., A-1 | Air Freight & Logistics | 12 | 6,300 | ||
| a,e CEVA Holdings LLC, cvt. pfd., A-2 | Air Freight & Logistics | 534 | 213,624 | ||
| 219,924 | |||||
| Total Convertible Preferred | |||||
| Stocks (Cost $802,629) | 219,924 | ||||
| Preferred Stocks | |||||
| (Cost $16,346,286) 0.4% | |||||
| Germany 0.4% | |||||
| Draegerwerk AG & Co. KGAA, pfd | Health Care Equipment & Supplies | 129,100 | 8,772,800 | ||
| Principal | |||||
| Amount* | |||||
| Corporate Bonds and Notes 2.0% | |||||
| Australia 0.0%† | |||||
| h FMG Resources (August 2006) Pty. Ltd., | |||||
| senior secured note, 144A, 9.75%, 3/01/22 . | Metals & Mining | 900,000 | 894,600 | ||
| Bermuda 0.0%† | |||||
| h Digicel Group Ltd., senior note, 144A, 8.25%, | |||||
| 9/30/20 | Wireless Telecommunication Services | 600,000 | 515,901 | ||
| h Digicel Ltd., senior note, 144A, 6.00%, | |||||
| 4/15/21 | Wireless Telecommunication Services | 500,000 | 450,973 | ||
| 966,874 | |||||
| Brazil 0.0%† | |||||
| h JBS Investments GmbH, senior note, 144A, | |||||
| 7.25%, 4/03/24 | Food & Staples Retailing | 1,000,000 | 917,805 | ||
| Canada 0.1% | |||||
| CHC Helicopter SA, senior secured note, first | |||||
| lien, 9.25%, 10/15/20 | Energy Equipment & Services | 1,350,000 | 577,125 | ||
| h First Quantum Minerals Ltd., senior note, | |||||
| 144A, 7.00%, 2/15/21 | Metals & Mining | 1,500,000 | 1,012,500 | ||
| 1,589,625 | |||||
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TEMPLETON GLOBAL INVESTMENT TRUST
CONSOLIDATED STATEMENT OF INVESTMENTS
| Templeton Global Balanced Fund (continued) | |||||
| Principal | |||||
| Industry | Amount* | Value | |||
| Corporate Bonds and | |||||
| Notes (continued) | |||||
| Italy 0.1% | |||||
| h Wind Acquisition Finance SA, senior note, | |||||
| 144A, 7.375%, 4/23/21 | Diversified Telecommunication Services | 1,200,000 | $ | 1,101,000 | |
| Luxembourg 0.1% | |||||
| h Ardagh Packaging Finance PLC/Ardagh MP | |||||
| Holdings USA Inc., senior note, 144A, | |||||
| 6.75%, 1/31/21 | Containers & Packaging | 1,100,000 | 1,069,409 | ||
| Intelsat Jackson Holdings SA, | |||||
| senior bond, 5.50%, 8/01/23 | Diversified Telecommunication Services | 800,000 | 484,660 | ||
| senior note, 7.50%, 4/01/21. | Diversified Telecommunication Services | 400,000 | 256,000 | ||
| 1,810,069 | |||||
| Mexico 0.1% | |||||
| h Cemex Finance LLC, senior secured note, | |||||
| first lien, 144A, 6.00%, 4/01/24 | Construction Materials | 1,100,000 | 1,040,847 | ||
| Russia 0.1% | |||||
| h LUKOIL International Finance BV, 144A, | |||||
| 6.656%, 6/07/22 | Oil, Gas & Consumable Fuels | 2,000,000 | 2,134,990 | ||
| South Africa 0.1% | |||||
| c,h Edcon Ltd., | |||||
| secured note, 144A, 9.50%, 3/01/18. | Specialty Retail | 800,000 | EUR | 332,076 | |
| i senior secured note, 144A, PIK, 8.00%, | |||||
| 6/30/19 | Specialty Retail | 586,451 | EUR | 526,365 | |
| i senior secured note, 144A, PIK, 8.00%, | |||||
| 6/30/19 | Specialty Retail | 1,172,904 | EUR | 1,052,731 | |
| i senior secured note, 144A, PIK, 12.75%, | |||||
| 6/30/19 | Specialty Retail | 1,799,535 | EUR | 644,256 | |
| 2,555,428 | |||||
| Ukraine 0.1% | |||||
| h,j Ukreximbank (BIZ Finance PLC), loan | |||||
| participation, senior note, 144A, 9.75%, | |||||
| 1/22/25 | Diversified Financial Services | 3,880,000 | 3,336,800 | ||
| United States 1.3% | |||||
| h BMC Software Finance Inc., senior note, | |||||
| 144A, 8.125%, 7/15/21 | Internet Software & Services | 1,200,000 | 870,000 | ||
| BreitBurn Energy Partners LP/BreitBurn | |||||
| Finance Corp., senior bond, 7.875%, | |||||
| 4/15/22 | Oil, Gas & Consumable Fuels | 1,500,000 | 157,500 | ||
| Calpine Corp., | |||||
| senior bond, 5.75%, 1/15/25 | Independent Power & Renewable | ||||
| Electricity Producers | 500,000 | 481,875 | |||
| hsenior secured bond, first lien, 144A, | Independent Power & Renewable | ||||
| 7.875%, 1/15/23. | Electricity Producers | 784,000 | 834,960 | ||
| CCO Holdings LLC/CCO Holdings Capital | |||||
| Corp., senior bond, 5.25%, 9/30/22 | Media | 1,100,000 | 1,135,750 | ||
| CenturyLink Inc., senior bond, 6.75%, | |||||
| 12/01/23 | Diversified Telecommunication Services | 1,100,000 | 1,073,875 | ||
| h Chesapeake Energy Corp., secured note, | |||||
| second lien, 144A, 8.00%, 12/15/22 | Oil, Gas & Consumable Fuels | 820,000 | 401,800 | ||
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TEMPLETON GLOBAL INVESTMENT TRUST
CONSOLIDATED STATEMENT OF INVESTMENTS
| Templeton Global Balanced Fund (continued) | |||||
| Principal | |||||
| Industry | Amount* | Value | |||
| Corporate Bonds and | |||||
| Notes (continued) | |||||
| United States (continued) | |||||
| k Citigroup Inc., junior sub. bond, M, 6.30% to | |||||
| 5/15/24, FRN thereafter, Perpetual | Banks | 1,100,000 | $ | 1,057,906 | |
| DaVita HealthCare Partners Inc., senior | |||||
| bond, 5.125%, 7/15/24 | Health Care Providers & Services | 1,100,000 | 1,113,062 | ||
| Energy Transfer Equity LP, senior secured | |||||
| bond, first lien, 5.875%, 1/15/24 | Oil, Gas & Consumable Fuels | 1,100,000 | 946,000 | ||
| Equinix Inc., senior bond, 5.375%, 4/01/23 | Real Estate Investment Trusts (REITs) | 1,100,000 | 1,144,000 | ||
| h,l Fontainebleau Las Vegas, senior secured | |||||
| bond, first lien, 144A, 11.00%, 6/15/15 | Hotels, Restaurants & Leisure | 1,000,000 | 1,975 | ||
| Ford Motor Credit Co. LLC, | |||||
| senior note, 6.625%, 8/15/17 | Automobiles | 450,000 | 477,501 | ||
| senior note, 8.125%, 1/15/20 | Automobiles | 300,000 | 356,677 | ||
| Gannett Co. Inc., senior bond, 6.375%, | |||||
| 10/15/23 | Media | 1,100,000 | 1,186,625 | ||
| General Electric Co., senior note, A, 8.50%, | |||||
| 4/06/18 | Industrial Conglomerates | 59,000,000 | MXN | 3,651,773 | |
| Grifols Worldwide Operations Ltd., senior | |||||
| note, 5.25%, 4/01/22 | Pharmaceuticals | 1,400,000 | 1,445,500 | ||
| HCA Inc., | |||||
| senior bond, 5.875%, 2/15/26 | Health Care Providers & Services | 1,100,000 | 1,135,750 | ||
| senior secured bond, first lien, 5.875%, | |||||
| 3/15/22 | Health Care Providers & Services | 400,000 | 434,000 | ||
| c iHeartCommunications Inc., | |||||
| senior secured bond, first lien, 9.00%, | |||||
| 3/01/21 | Media | 800,000 | 560,000 | ||
| senior secured note, first lien, 9.00%, | |||||
| 9/15/22 | Media | 400,000 | 277,500 | ||
| KB Home, senior bond, 7.50%, 9/15/22. | Household Durables | 1,100,000 | 1,111,000 | ||
| c,h,l Linn Energy LLC/Finance Corp., senior | |||||
| secured note, second lien, 144A, 12.00%, | |||||
| 12/15/20 | Oil, Gas & Consumable Fuels | 500,000 | 71,250 | ||
| Navient Corp., | |||||
| senior note, 8.45%, 6/15/18. | Consumer Finance | 900,000 | 967,500 | ||
| senior note, 5.50%, 1/15/19. | Consumer Finance | 200,000 | 197,500 | ||
| c,h,l Peabody Energy Corp., secured note, second | |||||
| lien, 144A, 10.00%, 3/15/22 | Oil, Gas & Consumable Fuels | 500,000 | 40,000 | ||
| Regency Energy Partners LP/Regency | |||||
| Energy Finance Corp., senior note, 5.875%, | |||||
| 3/01/22 | Oil, Gas & Consumable Fuels | 1,100,000 | 1,070,468 | ||
| Reynolds Group Issuer Inc./LLC/SA, senior | |||||
| note, 8.25%, 2/15/21 | Containers & Packaging | 800,000 | 821,520 | ||
| Sabine Pass Liquefaction LLC, senior | |||||
| secured note, first lien, 5.75%, 5/15/24 | Oil, Gas & Consumable Fuels | 1,100,000 | 1,056,000 | ||
| h Sirius XM Radio Inc., senior bond, 144A, | |||||
| 6.00%, 7/15/24 | Media | 1,100,000 | 1,157,407 | ||
| Sprint Communications Inc., | |||||
| senior note, 6.00%, 11/15/22 | Diversified Telecommunication Services | 400,000 | 294,500 | ||
| hsenior note, 144A, 9.00%, 11/15/18 | Diversified Telecommunication Services | 1,100,000 | 1,157,750 | ||
| Tenet Healthcare Corp., | |||||
| senior note, 5.00%, 3/01/19. | Health Care Providers & Services | 900,000 | 894,375 | ||
| senior note, 8.125%, 4/01/22 | Health Care Providers & Services | 200,000 | 206,182 | ||
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TEMPLETON GLOBAL INVESTMENT TRUST
CONSOLIDATED STATEMENT OF INVESTMENTS
| Templeton Global Balanced Fund (continued) | |||||||
| Principal | |||||||
| Industry | Amount* | Value | |||||
| Corporate Bonds and | |||||||
| Notes (continued) | |||||||
| United States (continued) | |||||||
| h,l Texas Competitive Electric Holdings Co. | |||||||
| LLC/Texas Competitive Electric Holdings | |||||||
| Finance Inc., senior secured note, first lien, | Independent Power & Renewable | ||||||
| 144A, 11.50%, 10/01/20 | Electricity Producers | 1,200,000 | $ | 351,000 | |||
| T-Mobile USA Inc., senior bond, 6.375%, | |||||||
| 3/01/25 | Wireless Telecommunication Services | 1,200,000 | 1,233,000 | ||||
| h Valeant Pharmaceuticals International, | |||||||
| senior note, 144A, 6.375%, 10/15/20. | Pharmaceuticals | 1,000,000 | 835,000 | ||||
| l Verso Paper Holdings LLC/Inc., senior | |||||||
| secured note, first lien, 11.75%, 1/15/19 | Paper & Forest Products | 198,000 | 25,740 | ||||
| h,m Western Digital Corp., | |||||||
| senior note, 144A, 10.50%, 4/01/24 | Technology Hardware, Storage & Peripherals | 900,000 | 902,813 | ||||
| senior secured note, 144A, 7.375%, | |||||||
| 4/01/23 | Technology Hardware, Storage & Peripherals | 500,000 | 511,250 | ||||
| 31,648,284 | |||||||
| Total Corporate Bonds and Notes | |||||||
| (Cost $59,129,068) | 47,996,322 | ||||||
| n,o Senior Floating Rate Interests | |||||||
| 0.1% | |||||||
| United States 0.1% | |||||||
| AdvancePierre Foods Inc., Second Lien Term | |||||||
| Loans, 9.50%, 10/10/17. | Food Products | 427,610 | 426,274 | ||||
| e Erickson Air-Crane Inc., Purchase Price | |||||||
| Notes, 6.00%, 11/02/20 | Aerospace & Defense | 38,808 | 30,747 | ||||
| FRAM Group Holdings Inc. (Autoparts | |||||||
| Holdings), Second Lien Term Loan, 11.00%, | |||||||
| 1/29/18 | Auto Components | 129,582 | 89,736 | ||||
| Sensus USA Inc., Second Lien Term Loan, | |||||||
| 8.50%, 5/09/18 | Industrial Conglomerates | 252,801 | 251,537 | ||||
| c,i Turtle Bay Holdings LLC, Term Loan B, PIK, | |||||||
| 3.25%, 6/30/16 | Hotels, Restaurants & Leisure | 813,500 | 775,607 | ||||
| Vertafore Inc., Second Lien Term Loan, | |||||||
| 9.75%, 10/27/17 | Software | 444,000 | 444,777 | ||||
| 2,018,678 | |||||||
| Total Senior Floating Rate | |||||||
| Interests (Cost $2,087,844) | 2,018,678 | ||||||
| Foreign Government and Agency | |||||||
| Securities 23.8% | |||||||
| Brazil 4.1% | |||||||
| Letra Tesouro Nacional, | |||||||
| Strip, 7/01/16. | 230 | p | BRL | 61,833 | |||
| Strip, 10/01/16 | 5,280 | p | BRL | 1,372,790 | |||
| Strip, 1/01/17. | 13,620 | p | BRL | 3,432,761 | |||
| Strip, 1/01/18. | 6,870 | p | BRL | 1,527,603 | |||
| Strip, 1/01/19. | 37,430 | p | BRL | 7,302,915 | |||
| Strip, 7/01/19. | 67,460 | p | BRL | 12,331,572 | |||
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33
TEMPLETON GLOBAL INVESTMENT TRUST
CONSOLIDATED STATEMENT OF INVESTMENTS
| Templeton Global Balanced Fund (continued) | |||||
| Principal | |||||
| Amount* | Value | ||||
| Foreign Government and Agency | |||||
| Securities (continued) | |||||
| Brazil (continued) | |||||
| Nota Do Tesouro Nacional, | |||||
| 10.00%, 1/01/17 | 23,050 | p | BRL | $ | 6,241,234 |
| 10.00%, 1/01/21 | 98,935 | p | BRL | 24,124,134 | |
| 10.00%, 1/01/23 | 19,000 | p | BRL | 4,438,931 | |
| 10.00%, 1/01/25 | 61,720 | p | BRL | 13,930,972 | |
| 10.00%, 1/01/27 | 1,390 | p | BRL | 306,141 | |
| qIndex Linked, 6.00%, 8/15/16 | 3,120 | p | BRL | 2,452,090 | |
| qIndex Linked, 6.00%, 8/15/18 | 5,785 | p | BRL | 4,542,290 | |
| qIndex Linked, 6.00%, 8/15/22 | 3,450 | p | BRL | 2,650,670 | |
| qIndex Linked, 6.00%, 5/15/45 | 15,735 | p | BRL | 11,582,842 | |
| senior note, 10.00%, 1/01/19 | 5,490 | p | BRL | 1,408,224 | |
| 97,707,002 | |||||
| Colombia 0.0%† | |||||
| Government of Colombia, | |||||
| senior bond, 7.75%, 4/14/21 | 419,000,000 | COP | 142,440 | ||
| senior bond, 9.85%, 6/28/27 | 83,000,000 | COP | 32,146 | ||
| Titulos De Tesoreria B, | |||||
| 5.00%, 11/21/18 | 126,000,000 | COP | 39,918 | ||
| 7.75%, 9/18/30 | 1,013,000,000 | COP | 318,367 | ||
| senior bond, 7.00%, 5/04/22 | 287,000,000 | COP | 91,994 | ||
| senior bond, 10.00%, 7/24/24 | 813,000,000 | COP | 303,638 | ||
| senior bond, 7.50%, 8/26/26 | 483,000,000 | COP | 152,491 | ||
| senior bond, 6.00%, 4/28/28 | 55,000,000 | COP | 15,014 | ||
| senior note, 7.00%, 9/11/19. | 44,000,000 | COP | 14,474 | ||
| senior note, B, 11.00%, 7/24/20 | 279,000,000 | COP | 104,393 | ||
| 1,214,875 | |||||
| El Salvador 0.0%† | |||||
| h Government of El Salvador, 144A, 7.65%, | |||||
| 6/15/35 | 100,000 | 87,559 | |||
| Ghana 0.6% | |||||
| Government of Ghana, | |||||
| 19.24%, 5/30/16 | 3,615,000 | GHS | 935,964 | ||
| 26.00%, 6/05/17 | 2,070,000 | GHS | 552,455 | ||
| 23.00%, 8/21/17 | 29,760,000 | GHS | 7,711,888 | ||
| 22.49%, 4/23/18 | 50,000 | GHS | 12,765 | ||
| 23.47%, 5/21/18 | 5,050,000 | GHS | 1,315,090 | ||
| 19.04%, 9/24/18 | 3,220,000 | GHS | 772,359 | ||
| 24.50%, 10/22/18. | 6,021,000 | GHS | 1,588,984 | ||
| senior note, 24.00%, 11/23/20 | 7,760,000 | GHS | 2,027,312 | ||
| 14,916,817 | |||||
| Hungary 0.1% | |||||
| Government of Hungary, 5.375%, 2/21/23 | 1,510,000 | 1,675,949 | |||
| India 1.2% | |||||
| Government of India, | |||||
| senior bond, 7.80%, 5/03/20 | 302,000,000 | INR | 4,602,611 | ||
| senior bond, 8.35%, 5/14/22 | 89,100,000 | INR | 1,386,318 | ||
| senior bond, 8.28%, 9/21/27 | 91,200,000 | INR | 1,425,682 | ||
| senior bond, 8.60%, 6/02/28 | 313,200,000 | INR | 5,012,997 | ||
34 Annual Report
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TEMPLETON GLOBAL INVESTMENT TRUST
CONSOLIDATED STATEMENT OF INVESTMENTS
| Templeton Global Balanced Fund (continued) | |||||
| Principal | |||||
| Amount* | Value | ||||
| Foreign Government and Agency | |||||
| Securities (continued) | |||||
| India (continued) | |||||
| Government of India, (continued) | |||||
| senior note, 7.28%, 6/03/19. | 11,700,000 | INR | $ | 176,119 | |
| senior note, 8.12%, 12/10/20 | 226,800,000 | INR | 3,502,760 | ||
| senior note, 7.16%, 5/20/23. | 56,000,000 | INR | 818,008 | ||
| senior note, 8.83%, 11/25/23 | 756,500,000 | INR | 12,102,287 | ||
| 29,026,782 | |||||
| Indonesia 3.4% | |||||
| Government of Indonesia, | |||||
| 7.875%, 4/15/19 | 3,226,000,000 | IDR | 249,069 | ||
| FR28, 10.00%, 7/15/17. | 4,156,000,000 | IDR | 328,928 | ||
| FR31, 11.00%, 11/15/20 | 4,464,000,000 | IDR | 385,399 | ||
| FR34, 12.80%, 6/15/21. | 24,641,000,000 | IDR | 2,296,066 | ||
| FR35, 12.90%, 6/15/22. | 21,458,000,000 | IDR | 2,048,439 | ||
| FR36, 11.50%, 9/15/19. | 7,623,000,000 | IDR | 648,595 | ||
| FR39, 11.75%, 8/15/23. | 1,616,000,000 | IDR | 149,627 | ||
| FR42, 10.25%, 7/15/27. | 2,150,000,000 | IDR | 191,752 | ||
| FR43, 10.25%, 7/15/22. | 154,000,000 | IDR | 13,181 | ||
| FR44, 10.00%, 9/15/24. | 968,000,000 | IDR | 83,940 | ||
| FR46, 9.50%, 7/15/23 | 73,000,000,000 | IDR | 6,108,093 | ||
| FR48, 9.00%, 9/15/18 | 2,688,000,000 | IDR | 211,284 | ||
| FR61, 7.00%, 5/15/22 | 3,631,000,000 | IDR | 267,219 | ||
| senior bond, 5.625%, 5/15/23 | 2,150,000,000 | IDR | 145,756 | ||
| senior bond, 9.00%, 3/15/29 | 64,873,000,000 | IDR | 5,280,046 | ||
| senior bond, FR53, 8.25%, 7/15/21 | 243,142,000,000 | IDR | 19,194,553 | ||
| senior bond, FR56, 8.375%, 9/15/26 | 155,145,000,000 | IDR | 12,468,011 | ||
| senior bond, FR70, 8.375%, 3/15/24 | 380,674,000,000 | IDR | 30,215,885 | ||
| senior note, 8.50%, 10/15/16 | 616,000,000 | IDR | 47,474 | ||
| senior note, 5.25%, 5/15/18. | 3,226,000,000 | IDR | 236,186 | ||
| 80,569,503 | |||||
| Malaysia 4.2% | |||||
| Government of Malaysia, | |||||
| 3.314%, 10/31/17. | 4,460,000 | MYR | 1,150,666 | ||
| senior bond, 4.262%, 9/15/16 | 13,344,000 | MYR | 3,444,625 | ||
| senior bond, 3.814%, 2/15/17 | 2,570,000 | MYR | 664,836 | ||
| senior note, 3.172%, 7/15/16 | 262,164,000 | MYR | 67,284,955 | ||
| senior note, 3.394%, 3/15/17 | 17,952,000 | MYR | 4,629,124 | ||
| senior note, 4.012%, 9/15/17 | 81,620,000 | MYR | 21,261,968 | ||
| 98,436,174 | |||||
| Mexico 4.4% | |||||
| Government of Mexico, | |||||
| 7.25%, 12/15/16 | 8,540,820 | r | MXN | 50,546,045 | |
| 7.75%, 12/14/17 | 2,642,100 | r | MXN | 16,193,563 | |
| senior note, 8.50%, 12/13/18 | 5,970,000 | r | MXN | 37,818,270 | |
| 104,557,878 | |||||
| Peru 0.1% | |||||
| Government of Peru, senior bond, 7.84%, | |||||
| 8/12/20 | 6,988,000 | PEN | 2,267,275 | ||
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TEMPLETON GLOBAL INVESTMENT TRUST
CONSOLIDATED STATEMENT OF INVESTMENTS
| Templeton Global Balanced Fund (continued) | ||||
| Principal | ||||
| Amount* | Value | |||
| Foreign Government and Agency | ||||
| Securities (continued) | ||||
| Philippines 0.2% | ||||
| Government of the Philippines, | ||||
| senior note, 1.625%, 4/25/16 | 76,790,000 | PHP | $ | 1,671,448 |
| senior note, 2.875%, 5/22/17 | 12,380,000 | PHP | 270,925 | |
| senior note, 5.875%, 1/31/18 | 400,000 | PHP | 9,005 | |
| senior note, 3.875%, 11/22/19 | 49,950,000 | PHP | 1,106,669 | |
| senior note, 5-72, 2.125%, 5/23/18. | 27,240,000 | PHP | 587,318 | |
| 3,645,365 | ||||
| Poland 0.3% | ||||
| Government of Poland, | ||||
| 4.75%, 10/25/16 | 11,055,000 | PLN | 3,019,175 | |
| 5.75%, 9/23/22 | 12,900,000 | PLN | 4,162,720 | |
| 7,181,895 | ||||
| Portugal 0.8% | ||||
| h Government of Portugal, 144A, 5.125%, | ||||
| 10/15/24 | 18,670,000 | 18,951,450 | ||
| Republic of Montenegro 0.2% | ||||
| h Government of Montenegro, 144A, 5.375%, | ||||
| 5/20/19 | 3,320,000 | EUR | 3,874,410 | |
| Serbia 0.1% | ||||
| Serbia Treasury Note, | ||||
| 10.00%, 6/27/16 | 6,930,000 | RSD | 65,276 | |
| 10.00%, 8/15/16 | 2,800,000 | RSD | 26,590 | |
| 8.00%, 10/02/16 | 172,050,000 | RSD | 1,630,949 | |
| 10.00%, 10/17/16. | 1,600,000 | RSD | 15,347 | |
| 10.00%, 12/19/16. | 1,600,000 | RSD | 15,493 | |
| 10.00%, 11/21/18. | 1,430,000 | RSD | 14,721 | |
| 1,768,376 | ||||
| Slovenia 0.1% | ||||
| h Government of Slovenia, senior note, 144A, | ||||
| 5.50%, 10/26/22 | 2,920,000 | 3,310,068 | ||
| South Korea 1.1% | ||||
| Korea Monetary Stabilization Bond, | ||||
| senior note, 2.80%, 4/02/16. | 2,665,010,000 | KRW | 2,326,641 | |
| senior note, 2.79%, 6/02/16. | 2,136,900,000 | KRW | 1,869,592 | |
| senior note, 1.62%, 6/09/16. | 878,400,000 | KRW | 767,003 | |
| senior note, 1.61%, 11/09/16 | 1,557,200,000 | KRW | 1,360,443 | |
| senior note, 2.07%, 12/02/16 | 1,492,400,000 | KRW | 1,307,934 | |
| senior note, 1.96%, 2/02/17. | 2,775,300,000 | KRW | 2,433,069 | |
| senior note, 1.70%, 8/02/17. | 793,800,000 | KRW | 695,132 | |
| senior note, 1.56%, 10/02/17 | 3,729,000,000 | KRW | 3,260,073 | |
| senior note, 1.49%, 2/02/18. | 1,879,400,000 | KRW | 1,641,851 | |
| Korea Treasury Bond, | ||||
| senior note, 2.75%, 6/10/16. | 4,116,900,000 | KRW | 3,602,731 | |
| senior note, 3.00%, 12/10/16 | 3,696,560,000 | KRW | 3,260,552 | |
| senior note, 2.00%, 12/10/17 | 2,708,000,000 | KRW | 2,385,496 | |
| 24,910,517 | ||||
36 Annual Report
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TEMPLETON GLOBAL INVESTMENT TRUST
CONSOLIDATED STATEMENT OF INVESTMENTS
| Templeton Global Balanced Fund (continued) | |||||
| Principal | |||||
| Amount* | Value | ||||
| Foreign Government and Agency | |||||
| Securities (continued) | |||||
| Sri Lanka 0.1% | |||||
| Government of Sri Lanka, | |||||
| 8.00%, 6/15/17 | 740,000 | LKR | $ | 4,918 | |
| 10.60%, 7/01/19 | 24,210,000 | LKR | 158,772 | ||
| 10.60%, 9/15/19 | 9,170,000 | LKR | 59,890 | ||
| 8.00%, 11/01/19 | 740,000 | LKR | 4,477 | ||
| A, 7.50%, 8/15/18 | 5,920,000 | LKR | 37,091 | ||
| A, 8.00%, 11/15/18 | 22,960,000 | LKR | 144,334 | ||
| A, 9.00%, 5/01/21 | 220,400,000 | LKR | 1,305,198 | ||
| C, 8.50%, 4/01/18 | 249,010,000 | LKR | 1,614,386 | ||
| 3,329,066 | |||||
| s Supranational 0.2% | |||||
| Inter-American Development Bank, senior | |||||
| note, 7.50%, 12/05/24 | 60,000,000 | MXN | 3,960,609 | ||
| Ukraine 2.1% | |||||
| h Government of Ukraine, | |||||
| 144A, 7.75%, 9/01/19 | 1,614,000 | 1,526,239 | |||
| 144A, 7.75%, 9/01/20 | 6,017,000 | 5,655,378 | |||
| 144A, 7.75%, 9/01/21 | 5,992,000 | 5,568,965 | |||
| 144A, 7.75%, 9/01/22 | 5,992,000 | 5,525,373 | |||
| 144A, 7.75%, 9/01/23 | 5,992,000 | 5,443,283 | |||
| 144A, 7.75%, 9/01/24 | 5,992,000 | 5,384,891 | |||
| 144A, 7.75%, 9/01/25 | 5,992,000 | 5,332,580 | |||
| 144A, 7.75%, 9/01/26 | 5,992,000 | 5,316,252 | |||
| 144A, 7.75%, 9/01/27 | 5,890,000 | 5,209,116 | |||
| a,t 144A, VRI, GDP Linked Securities, | |||||
| 5/31/40 | 12,038,000 | 4,008,112 | |||
| 48,970,189 | |||||
| Uruguay 0.4% | |||||
| u Government of Uruguay, | |||||
| Index Linked, 4.25%, 4/05/27 | 18,661,556 | UYU | 544,700 | ||
| senior bond, Index Linked, 5.00%, | |||||
| 9/14/18 | 15,548,252 | UYU | 490,135 | ||
| senior bond, Index Linked, 4.375%, | |||||
| 12/15/28 | 42,089,560 | UYU | 1,230,478 | ||
| senior bond, Index Linked, 4.00%, | |||||
| 7/10/30 | 341,831 | UYU | 9,615 | ||
| senior bond, Index Linked, 3.70%, | |||||
| 6/26/37 | 5,389,918 | UYU | 142,212 | ||
| Uruguay Notas del Tesoro, | |||||
| 11.00%, 3/21/17 | 70,000 | UYU | 2,112 | ||
| 7, 13.25%, 4/08/18. | 10,830,000 | UYU | 329,008 | ||
| u10, Index Linked, 4.25%, 1/05/17 | 402,060 | UYU | 12,633 | ||
| u13, Index Linked, 4.00%, 5/25/25 | 301,545 | UYU | 9,041 | ||
| u18, Index Linked, 2.25%, 8/23/17 | 2,144,320 | UYU | 65,277 | ||
| senior note, 13.90%, 7/29/20 | 213,308,000 | UYU | 6,493,446 | ||
| Uruguay Treasury Bill, | |||||
| Strip, 4/21/16. | 2,470,000 | UYU | 77,267 | ||
| Strip, 6/09/16. | 4,073,000 | UYU | 124,913 | ||
| Strip, 7/28/16. | 164,000 | UYU | 4,930 | ||
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37
TEMPLETON GLOBAL INVESTMENT TRUST
CONSOLIDATED STATEMENT OF INVESTMENTS
| Templeton Global Balanced Fund (continued) | |||||||
| Principal | |||||||
| Amount* | Value | ||||||
| Foreign Government and Agency | |||||||
| Securities (continued) | |||||||
| Uruguay (continued) | |||||||
| Uruguay Treasury Bill, (continued) | |||||||
| Strip, 11/03/16 | 370,000 | UYU | $ | 10,722 | |||
| Strip, 4/03/17. | 230,000 | UYU | 6,306 | ||||
| Strip, 5/19/17. | 25,570,000 | UYU | 689,583 | ||||
| 10,242,378 | |||||||
| Zambia 0.1% | |||||||
| h Government of Zambia International Bond, | |||||||
| 144A, 8.50%, 4/14/24 | 3,100,000 | 2,581,448 | |||||
| Total Foreign Government and | |||||||
| Agency Securities | |||||||
| (Cost $615,126,381) | 563,185,585 | ||||||
| Shares | |||||||
| Escrows and Litigation Trusts | |||||||
| 0.0%† | |||||||
| United States 0.0%† | |||||||
| a,e Comfort Co. Inc., Escrow Account | Household Durables | 2,762 | 1,352 | ||||
| a,e NewPage Corp., Litigation Trust | Paper & Forest Products | 1,100,000 | — | ||||
| 1,352 | |||||||
| Total Escrows and Litigation | |||||||
| Trusts (Cost $—) | 1,352 | ||||||
| Total Investments before Short | |||||||
| Term Investments | |||||||
| (Cost $2,486,585,322) | 2,271,103,718 | ||||||
| Principal | |||||||
| Amount* | |||||||
| Short Term Investments 3.5% | |||||||
| Foreign Government and Agency | |||||||
| Securities 1.5% | |||||||
| Malaysia 0.4% | |||||||
| v Bank of Negara Monetary Note, 4/19/16 - | |||||||
| 10/18/16 | 33,576,000 | MYR | 8,513,760 | ||||
| v Malaysia Treasury Bill, 4/29/16 - 1/20/17 | 900,000 | MYR | 228,211 | ||||
| 8,741,971 | |||||||
| Mexico 0.8% | |||||||
| v Mexico Treasury Bill, 4/21/16 - 12/08/16 | 35,224,180 | w | MXN | 20,050,520 | |||
| Philippines 0.2% | |||||||
| v Philippine Treasury Bill, 5/04/16 - 3/15/17 | 210,030,000 | PHP | 4,532,609 | ||||
| South Korea 0.1% | |||||||
| Korea Monetary Stabilization Bond, | |||||||
| v4/19/16 | 20,100,000 | KRW | 17,534 | ||||
| senior note, 1.57%, 7/09/16. | 58,600,000 | KRW | 51,167 | ||||
| senior note, 1.56%, 8/09/16. | 1,864,900,000 | KRW | 1,628,395 | ||||
38 Annual Report
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TEMPLETON GLOBAL INVESTMENT TRUST
CONSOLIDATED STATEMENT OF INVESTMENTS
| Templeton Global Balanced Fund (continued) | |||||
| Principal | |||||
| Amount* | Value | ||||
| Foreign Government and Agency | |||||
| Securities (continued) | |||||
| South Korea (continued) | |||||
| Korea Monetary Stabilization | |||||
| Bond, (continued) | |||||
| senior note, 1.52%, 9/09/16. | 842,900,000 | KRW | $ | 735,918 | |
| senior note, 1.53%, 10/08/16 | 35,200,000 | KRW | 30,736 | ||
| senior note, 1.57%, 1/09/17. | 190,400,000 | KRW | 166,328 | ||
| 2,630,078 | |||||
| Uruguay 0.0%† | |||||
| v Uruguay Treasury Bill, 4/11/16 | 90,000 | UYU | 2,829 | ||
| Total Foreign Government and | |||||
| Agency Securities | |||||
| (Cost $35,666,760) | 35,958,007 | ||||
| Total Investments before Money | |||||
| Market Funds | |||||
| (Cost $2,522,252,082) | 2,307,061,725 | ||||
| Shares | |||||
| Money Market Funds (Cost $48,343,435) | |||||
| 2.0% | |||||
| United States 2.0% | |||||
| a,x Institutional Fiduciary Trust Money Market | |||||
| Portfolio. | 48,343,435 | 48,343,435 | |||
| Total Investments | |||||
| (Cost $2,570,595,517) 99.6% | 2,355,405,160 | ||||
| Other Assets, less Liabilities | |||||
| 0.4% | 8,307,222 | ||||
| Net Assets 100.0%. | $ | 2,363,712,382 | |||
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Annual Report
39
TEMPLETON GLOBAL INVESTMENT TRUST
CONSOLIDATED STATEMENT OF INVESTMENTS
Templeton Global Balanced Fund (continued)
†Rounds to less than 0.1% of net assets.
*The principal amount is stated in U.S. dollars unless otherwise indicated.
aNon-income producing.
bSee Note 9 regarding restricted securities.
cAt March 31, 2016, pursuant to the Fund’s policies and the requirements of applicable securities law, the Fund is restricted from trading these securities at year end.
dSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States.
Such a security 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. These securities have been deemed liquid under guidelines approved by the Trust’s Board of Trustees. At March 31, 2016, the aggregate value of these
securities was $13,673,352, representing 0.58% of net assets.
eSecurity has been deemed illiquid because it may not be able to be sold within seven days. At March 31, 2016, the aggregate value of these securities was $350,707,
representing 0.02% of net assets.
fThe security is owned by FT Holdings Corporation IV, a wholly-owned subsidiary of the Fund. See Note 1(h).
gSee Note 1(f) regarding equity-linked securities.
hSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and 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. These securities have been deemed liquid under guidelines approved by the Trust’s Board of Trustees. At
March 31, 2016, the aggregate value of these securities was $177,772,395, representing 7.52% of net assets.
iIncome may be received in additional securities and/or cash.
jSee Note 1(e) regarding loan participation notes.
kPerpetual security with no stated maturity date.
lSee Note 7 regarding defaulted securities.
mSecurity purchased on a when-issued basis. See Note 1(c).
nThe coupon rate shown represents the rate at period end.
oSee Note 1(i) regarding senior floating rate interests.
pPrincipal amount is stated in 1,000 Brazilian Real Units.
qRedemption price at maturity is adjusted for inflation. See Note 1(k).
rPrincipal amount is stated in 100 Mexican Peso units.
sA supranational organization is an entity formed by two or more central governments through international treaties.
tThe principal amount represents the notional amount. See Note 1(d) regarding value recovery instruments.
uPrincipal amount of security is adjusted for inflation. See Note 1(k).
vThe security is traded on a discount basis with no stated coupon rate.
wPrincipal amount is stated in 10 Mexican Peso Units.
xSee Note 3(f) regarding investments in affiliated management investment companies.
40 Annual Report franklintempleton.com
TEMPLETON GLOBAL INVESTMENT TRUST
CONSOLIDATED STATEMENT OF INVESTMENTS
Templeton Global Balanced Fund (continued)
At March 31, 2016, the Fund had the following forward exchange contracts outstanding. See Note 1(d).
| Forward Exchange Contracts | |||||||||||
| Contract | Settlement | Unrealized | Unrealized | ||||||||
| Currency | Counterpartya Type | Quantity | Amount | Date | Appreciation | Depreciation | |||||
| OTC Forward Exchange Contracts | |||||||||||
| Chilean Peso | MSCO | Buy | 679,390,000 | $ | 937,866 | 4/06/16 | $ | 75,753 | $ | — | |
| Chilean Peso | DBAB | Buy | 1,164,739,000 | 1,606,935 | 4/07/16 | 130,645 | — | ||||
| Japanese Yen | JPHQ | Sell | 304,225,000 | 2,539,822 | 4/07/16 | — | (163,901 | ) | |||
| Ghanaian Cedi | BZWS | Buy | 6,568 | 1,391 | 4/08/16 | 314 | — | ||||
| Chilean Peso | DBAB | Buy | 127,112,750 | 186,985 | 4/11/16 | 2,576 | — | ||||
| Chilean Peso | MSCO | Buy | 186,295,000 | 271,607 | 4/11/16 | 6,212 | — | ||||
| Indian Rupee | DBAB | Buy | 58,856,000 | 867,679 | 4/11/16 | 19,296 | — | ||||
| Chilean Peso | DBAB | Buy | 243,490,000 | 329,767 | 4/15/16 | 33,215 | — | ||||
| Euro | CITI | Sell | 38,305,000 | 43,705,813 | 4/15/16 | 85,887 | — | ||||
| Chilean Peso | DBAB | Buy | 374,920,000 | 547,408 | 4/18/16 | 11,351 | — | ||||
| Indian Rupee | JPHQ | Buy | 38,898,000 | 574,904 | 4/18/16 | 10,733 | — | ||||
| Euro | HSBK | Buy | 5,173,000 | 5,717,717 | 4/20/16 | 173,919 | — | ||||
| Euro | HSBK | Sell | 5,173,000 | 5,906,324 | 4/20/16 | 14,689 | — | ||||
| Indian Rupee | DBAB | Buy | 115,951,000 | 1,707,170 | 4/20/16 | 38,072 | — | ||||
| Chilean Peso | DBAB | Buy | 370,290,000 | 501,476 | 4/21/16 | 50,235 | — | ||||
| Euro | JPHQ | Sell | 278,551,367 | 304,377,814 | 4/21/16 | — | (12,879,396 | ) | |||
| Chilean Peso | MSCO | Buy | 758,240,000 | 1,029,798 | 4/22/16 | 99,835 | — | ||||
| Indian Rupee | DBAB | Buy | 18,126,000 | 262,240 | 4/25/16 | 10,397 | — | ||||
| South Korean Won | HSBK | Sell | 5,535,000,000 | 4,481,924 | 4/25/16 | — | (346,557 | ) | |||
| South Korean Won | HSBK | Sell | 1,542,000,000 | 1,246,700 | 4/26/16 | — | (98,432 | ) | |||
| Chilean Peso | JPHQ | Buy | 128,025,000 | 176,810 | 4/27/16 | 13,836 | — | ||||
| Indian Rupee | DBAB | Buy | 18,310,000 | 266,471 | 4/27/16 | 8,857 | — | ||||
| Chilean Peso | DBAB | Buy | 516,561,000 | 712,331 | 4/28/16 | 56,831 | — | ||||
| Euro | DBAB | Sell | 2,500,000 | 2,771,750 | 4/28/16 | — | (76,222 | ) | |||
| Indian Rupee | DBAB | Buy | 22,559,000 | 329,015 | 4/28/16 | 10,159 | — | ||||
| Euro | DBAB | Sell | 1,863,597 | 2,065,052 | 4/29/16 | — | (58,000 | ) | |||
| Euro | SCNY | Sell | 3,768,000 | 4,149,698 | 4/29/16 | — | (142,892 | ) | |||
| Indian Rupee | DBAB | Buy | 31,223,000 | 452,965 | 4/29/16 | 16,407 | — | ||||
| Indian Rupee | HSBK | Buy | 26,015,000 | 377,465 | 4/29/16 | 13,616 | — | ||||
| Indian Rupee | JPHQ | Buy | 93,886,000 | 1,362,635 | 4/29/16 | 48,742 | — | ||||
| South Korean Won | HSBK | Sell | 1,860,000,000 | 1,501,405 | 5/02/16 | — | (120,872 | ) | |||
| Chilean Peso | DBAB | Buy | 482,020,000 | 670,870 | 5/04/16 | 46,461 | — | ||||
| Euro | BZWS | Sell | 1,887,488 | 2,122,617 | 5/05/16 | — | (28,077 | ) | |||
| Indian Rupee | HSBK | Buy | 19,369,500 | 279,977 | 5/05/16 | 10,921 | — | ||||
| Japanese Yen | BZWS | Sell | 2,840,000,000 | 23,456,535 | 5/06/16 | — | (1,804,849 | ) | |||
| Chilean Peso | DBAB | Buy | 167,813,000 | 232,928 | 5/09/16 | 16,690 | — | ||||
| Euro | DBAB | Sell | 177,411 | 199,437 | 5/09/16 | — | (2,741 | ) | |||
| Indian Rupee | DBAB | Buy | 34,623,500 | 503,437 | 5/09/16 | 16,205 | — | ||||
| Indian Rupee | JPHQ | Buy | 13,818,000 | 201,586 | 5/09/16 | 5,800 | — | ||||
| Indian Rupee | DBAB | Buy | 9,032,000 | 130,728 | 5/10/16 | 4,805 | — | ||||
| Chilean Peso | MSCO | Buy | 373,360,000 | 519,421 | 5/12/16 | 35,786 | — | ||||
| Euro | GSCO | Sell | 4,960,000 | 5,334,232 | 5/12/16 | — | (318,762 | ) | |||
| Chilean Peso | DBAB | Buy | 579,802,750 | 805,763 | 5/16/16 | 56,111 | — | ||||
| Euro | BZWS | Sell | 2,176,000 | 2,461,295 | 5/16/16 | — | (19,062 | ) | |||
| Euro | GSCO | Sell | 15,040,000 | 16,272,227 | 5/16/16 | — | (871,420 | ) | |||
| Indian Rupee | DBAB | Buy | 62,182,000 | 895,265 | 5/16/16 | 36,900 | — | ||||
| Indian Rupee | HSBK | Buy | 91,720,000 | 1,320,634 | 5/16/16 | 54,333 | — | ||||
| Chilean Peso | DBAB | Buy | 401,200,000 | 560,672 | 5/18/16 | 35,598 | — | ||||
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Annual Report
41
TEMPLETON GLOBAL INVESTMENT TRUST
CONSOLIDATED STATEMENT OF INVESTMENTS
| Templeton Global Balanced Fund (continued) | |||||||||||
| Forward Exchange Contracts (continued) | |||||||||||
| Contract | Settlement | Unrealized | Unrealized | ||||||||
| Currency | Counterpartya Type | Quantity | Amount | Date | Appreciation | Depreciation | |||||
| OTC Forward Exchange Contracts (continued) | |||||||||||
| Euro | GSCO | Sell | 1,220,000 | $ | 1,400,828 | 5/18/16 | $ | 10,093 | $ | — | |
| Japanese Yen | BOFA | Sell | 540,647,250 | 4,417,089 | 5/18/16 | — | (393,305 | ) | |||
| Japanese Yen | CITI | Sell | 540,354,900 | 4,569,984 | 5/18/16 | — | (237,808 | ) | |||
| Euro | UBSW | Sell | 433,000 | 463,583 | 5/19/16 | — | (30,031 | ) | |||
| Japanese Yen | BOFA | Sell | 539,529,250 | 4,536,375 | 5/19/16 | — | (264,189 | ) | |||
| Japanese Yen | BZWS | Sell | 540,995,000 | 4,547,705 | 5/19/16 | — | (265,901 | ) | |||
| Japanese Yen | CITI | Sell | 205,908,000 | 1,679,922 | 5/19/16 | — | (152,184 | ) | |||
| Japanese Yen | HSBK | Sell | 541,429,400 | 4,573,463 | 5/19/16 | — | (244,008 | ) | |||
| Euro | JPHQ | Sell | 3,894,476 | 4,469,749 | 5/20/16 | 29,953 | — | ||||
| Japanese Yen | JPHQ | Sell | 149,426,000 | 1,258,149 | 5/20/16 | — | (71,429 | ) | |||
| Indian Rupee | JPHQ | Buy | 77,306,000 | 1,112,813 | 5/23/16 | 44,731 | — | ||||
| Chilean Peso | JPHQ | Buy | 236,445,000 | 337,249 | 5/24/16 | 13,961 | — | ||||
| Euro | GSCO | Sell | 292,956 | 314,875 | 5/24/16 | — | (19,147 | ) | |||
| South Korean Won | HSBK | Sell | 4,163,000,000 | 3,369,500 | 5/24/16 | — | (259,636 | ) | |||
| Japanese Yen | HSBK | Sell | 43,408,000 | 355,174 | 5/25/16 | — | (31,113 | ) | |||
| Chilean Peso | DBAB | Buy | 76,680,000 | 109,830 | 5/26/16 | 4,047 | — | ||||
| Japanese Yen | BZWS | Sell | 366,311,000 | 3,110,921 | 5/26/16 | — | (148,960 | ) | |||
| Japanese Yen | SCNY | Sell | 312,386,000 | 2,635,279 | 5/26/16 | — | (144,712 | ) | |||
| Chilean Peso | DBAB | Buy | 464,383,000 | 658,270 | 5/31/16 | 31,064 | — | ||||
| South Korean Won | HSBK | Sell | 1,306,000,000 | 1,054,964 | 5/31/16 | — | (83,370 | ) | |||
| Chilean Peso | CITI | Buy | 882,191,000 | 1,259,283 | 6/02/16 | 50,018 | — | ||||
| Chilean Peso | DBAB | Buy | 589,545,000 | 839,509 | 6/02/16 | 35,463 | — | ||||
| South Korean Won | HSBK | Sell | 3,718,000,000 | 3,002,302 | 6/02/16 | — | (238,201 | ) | |||
| Chilean Peso | DBAB | Buy | 472,678,000 | 676,220 | 6/03/16 | 25,242 | — | ||||
| Euro | CITI | Sell | 6,170,000 | 6,574,042 | 6/03/16 | — | (463,186 | ) | |||
| Indian Rupee | JPHQ | Buy | 39,418,000 | 569,970 | 6/03/16 | 19,225 | — | ||||
| South Korean Won | GSCO | Sell | 5,211,000,000 | 4,212,373 | 6/07/16 | — | (328,777 | ) | |||
| Euro | DBAB | Sell | 891,053 | 978,420 | 6/09/16 | — | (38,072 | ) | |||
| Chilean Peso | JPHQ | Buy | 186,609,000 | 271,953 | 6/10/16 | 4,807 | — | ||||
| Chilean Peso | MSCO | Buy | 186,295,000 | 269,973 | 6/10/16 | 6,322 | — | ||||
| Japanese Yen | BZWS | Sell | 86,450,000 | 696,189 | 6/10/16 | — | (73,543 | ) | |||
| Japanese Yen | CITI | Sell | 62,440,000 | 503,244 | 6/10/16 | — | (52,709 | ) | |||
| Japanese Yen | HSBK | Sell | 92,070,000 | 742,710 | 6/10/16 | — | (77,062 | ) | |||
| Chilean Peso | DBAB | Buy | 579,802,750 | 840,720 | 6/13/16 | 18,962 | — | ||||
| Indian Rupee | CITI | Buy | 15,811,000 | 230,807 | 6/13/16 | 5,178 | — | ||||
| Japanese Yen | DBAB | Sell | 30,500,000 | 247,673 | 6/13/16 | — | (23,923 | ) | |||
| Japanese Yen | JPHQ | Sell | 85,300,000 | 691,997 | 6/13/16 | — | (67,583 | ) | |||
| Australian Dollar | CITI | Sell | 6,685,000 | 4,784,187 | 6/14/16 | — | (323,433 | ) | |||
| Australian Dollar | JPHQ | Sell | 9,918,000 | 7,176,218 | 6/14/16 | — | (401,549 | ) | |||
| Chilean Peso | DBAB | Buy | 127,112,750 | 185,824 | 6/14/16 | 2,632 | — | ||||
| Chilean Peso | CITI | Buy | 866,360,000 | 1,264,722 | 6/15/16 | 19,618 | — | ||||
| Euro | BOFA | Sell | 7,619,000 | 8,396,595 | 6/15/16 | — | (296,672 | ) | |||
| Euro | DBAB | Sell | 79,650 | 87,711 | 6/16/16 | — | (3,173 | ) | |||
| Japanese Yen | CITI | Sell | 64,869,000 | 528,891 | 6/16/16 | — | (48,820 | ) | |||
| Japanese Yen | HSBK | Sell | 618,650,000 | 5,159,716 | 6/16/16 | — | (349,861 | ) | |||
| Japanese Yen | JPHQ | Sell | 36,000,000 | 293,381 | 6/16/16 | — | (27,228 | ) | |||
| Australian Dollar | CITI | Sell | 3,467,200 | 2,489,276 | 6/17/16 | — | (159,465 | ) | |||
| Euro | DBAB | Sell | 292,125 | 320,788 | 6/17/16 | — | (12,547 | ) | |||
| Japanese Yen | DBAB | Sell | 617,700,000 | 5,106,351 | 6/17/16 | — | (394,973 | ) | |||
42 Annual Report
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TEMPLETON GLOBAL INVESTMENT TRUST
CONSOLIDATED STATEMENT OF INVESTMENTS
| Templeton Global Balanced Fund (continued) | |||||||||||
| Forward Exchange Contracts (continued) | |||||||||||
| Contract | Settlement | Unrealized | Unrealized | ||||||||
| Currency | Counterpartya Type | Quantity | Amount | Date | Appreciation | Depreciation | |||||
| OTC Forward Exchange Contracts (continued) | |||||||||||
| Australian Dollar | CITI | Sell | 6,989,400 | $ | 5,317,256 | 6/20/16 | $ | — | $ | (21,549 | ) |
| Australian Dollar | JPHQ | Sell | 17,500,000 | 13,277,775 | 6/20/16 | — | (89,479 | ) | |||
| Chilean Peso | DBAB | Buy | 243,490,000 | 351,509 | 6/20/16 | 9,296 | — | ||||
| Chilean Peso | JPHQ | Buy | 430,475,000 | 618,410 | 6/20/16 | 19,470 | — | ||||
| Japanese Yen | CITI | Sell | 487,440,000 | 4,022,811 | 6/20/16 | — | (318,891 | ) | |||
| Australian Dollar | JPHQ | Sell | 29,027,000 | 22,011,174 | 6/22/16 | — | (158,976 | ) | |||
| Japanese Yen | DBAB | Sell | 618,770,000 | 5,063,584 | 6/22/16 | — | (448,311 | ) | |||
| Philippine Peso | DBAB | Buy | 85,018,660 | 1,853,349 | 6/30/16 | — | (9,688 | ) | |||
| Philippine Peso | JPHQ | Buy | 83,694,000 | 1,828,578 | 7/01/16 | — | (13,723 | ) | |||
| Japanese Yen | DBAB | Sell | 160,839,000 | 1,359,632 | 7/07/16 | — | (73,883 | ) | |||
| Japanese Yen | JPHQ | Sell | 304,225,000 | 2,545,795 | 7/07/16 | — | (165,681 | ) | |||
| Euro | JPHQ | Sell | 8,857,000 | 9,670,870 | 7/15/16 | — | (445,247 | ) | |||
| Euro | BZWS | Sell | 8,857,000 | 9,701,958 | 7/19/16 | — | (415,589 | ) | |||
| Japanese Yen | HSBK | Sell | 209,990,000 | 1,787,986 | 7/19/16 | — | (84,401 | ) | |||
| Japanese Yen | SCNY | Sell | 260,930,000 | 2,238,916 | 7/19/16 | — | (87,680 | ) | |||
| Euro | DBAB | Sell | 95,745 | 105,582 | 7/25/16 | — | (3,813 | ) | |||
| Euro | JPHQ | Sell | 8,901,000 | 9,690,875 | 7/25/16 | — | (479,090 | ) | |||
| Euro | DBAB | Sell | 95,542 | 104,155 | 7/27/16 | — | (5,015 | ) | |||
| Euro | DBAB | Sell | 9,284,114 | 10,194,224 | 7/29/16 | — | (414,973 | ) | |||
| Euro | JPHQ | Sell | 3,768,000 | 4,202,413 | 7/29/16 | — | (103,378 | ) | |||
| Japanese Yen | BZWS | Sell | 291,270,000 | 2,384,576 | 7/29/16 | — | (213,478 | ) | |||
| Japanese Yen | DBAB | Sell | 242,274,032 | 2,055,364 | 7/29/16 | — | (105,658 | ) | |||
| Euro | CITI | Sell | 3,767,000 | 4,166,867 | 8/05/16 | — | (138,846 | ) | |||
| Euro | HSBK | Sell | 3,767,000 | 4,158,391 | 8/05/16 | — | (147,322 | ) | |||
| Japanese Yen | CITI | Sell | 255,214,000 | 2,065,958 | 8/10/16 | — | (211,463 | ) | |||
| Euro | DBAB | Sell | 872,000 | 954,448 | 8/18/16 | — | (42,714 | ) | |||
| Japanese Yen | DBAB | Sell | 284,714,000 | 2,312,642 | 8/18/16 | — | (228,752 | ) | |||
| Japanese Yen | HSBK | Sell | 547,340,000 | 4,441,974 | 8/22/16 | — | (444,353 | ) | |||
| Japanese Yen | JPHQ | Sell | 385,615,000 | 3,129,065 | 8/22/16 | — | (313,477 | ) | |||
| Japanese Yen | BZWS | Sell | 127,736,000 | 1,042,062 | 8/24/16 | — | (98,371 | ) | |||
| Japanese Yen | DBAB | Sell | 126,234,000 | 1,124,078 | 8/24/16 | — | (2,945 | ) | |||
| Euro | SCNY | Sell | 2,984,696 | 3,476,753 | 8/26/16 | 62,686 | — | ||||
| Japanese Yen | JPHQ | Sell | 254,671,000 | 2,161,691 | 8/26/16 | — | (112,186 | ) | |||
| Euro | JPHQ | Sell | 1,685,713 | 1,938,907 | 8/29/16 | 10,487 | — | ||||
| Japanese Yen | DBAB | Sell | 228,669,000 | 1,922,396 | 8/29/16 | — | (119,537 | ) | |||
| Japanese Yen | JPHQ | Sell | 227,544,000 | 1,912,159 | 8/29/16 | — | (119,728 | ) | |||
| Euro | BZWS | Sell | 587,300 | 650,441 | 8/31/16 | — | (21,466 | ) | |||
| Euro | DBAB | Sell | 112,498 | 127,235 | 8/31/16 | — | (1,469 | ) | |||
| Japanese Yen | BZWS | Sell | 302,200,000 | 2,696,048 | 8/31/16 | — | (2,684 | ) | |||
| Japanese Yen | JPHQ | Sell | 126,519,000 | 1,058,723 | 8/31/16 | — | (71,128 | ) | |||
| Japanese Yen | HSBK | Sell | 420,281,000 | 3,732,513 | 9/01/16 | — | (20,850 | ) | |||
| Australian Dollar | CITI | Sell | 6,641,000 | 4,784,044 | 9/14/16 | — | (269,746 | ) | |||
| Japanese Yen | BZWS | Sell | 312,460,000 | 2,586,804 | 9/20/16 | — | (205,553 | ) | |||
| South Korean Won | HSBK | Sell | 4,145,000,000 | 3,562,986 | 9/26/16 | — | (42,401 | ) | |||
| South Korean Won | HSBK | Sell | 4,165,000,000 | 3,554,058 | 9/28/16 | — | (68,658 | ) | |||
| Philippine Peso | DBAB | Buy | 250,523,410 | 5,395,374 | 9/30/16 | 15,191 | — | ||||
| Euro | DBAB | Sell | 1,423,720 | 1,613,929 | 10/03/16 | — | (16,842 | ) | |||
| Japanese Yen | DBAB | Sell | 4,919,230,800 | 41,298,164 | 10/07/16 | — | (2,694,170 | ) | |||
| Japanese Yen | JPHQ | Sell | 304,225,000 | 2,553,380 | 10/07/16 | — | (167,283 | ) | |||
franklintempleton.com
Annual Report
43
TEMPLETON GLOBAL INVESTMENT TRUST
CONSOLIDATED STATEMENT OF INVESTMENTS
| Templeton Global Balanced Fund (continued) | ||||||||||||
| Forward Exchange Contracts (continued) | ||||||||||||
| Contract | Settlement | Unrealized | Unrealized | |||||||||
| Currency | Counterpartya Type | Quantity | Amount | Date | Appreciation | Depreciation | ||||||
| OTC Forward Exchange Contracts (continued) | ||||||||||||
| Japanese Yen | HSBK | Sell | 605,200,000 | $ | 5,092,776 | 10/11/16 | $ | — | $ | (320,455 | ) | |
| Japanese Yen | BZWS | Sell | 306,400,000 | 2,579,016 | 10/13/16 | — | (161,834 | ) | ||||
| Japanese Yen | DBAB | Sell | 302,200,000 | 2,544,414 | 10/13/16 | — | (158,866 | ) | ||||
| Euro | DBAB | Sell | 84,184 | 93,764 | 11/04/16 | — | (2,787 | ) | ||||
| Euro | DBAB | Sell | 4,349,000 | 4,810,211 | 11/07/16 | — | (178,273 | ) | ||||
| Euro | DBAB | Sell | 10,704,000 | 11,769,048 | 11/09/16 | — | (509,874 | ) | ||||
| Euro | JPHQ | Sell | 40,000,000 | 43,228,600 | 11/14/16 | — | (2,665,986 | ) | ||||
| Euro | BZWS | Sell | 10,571,000 | 11,462,770 | 11/16/16 | — | (666,998 | ) | ||||
| Japanese Yen | MSCO | Sell | 100,400,000 | 827,120 | 11/16/16 | — | (72,361 | ) | ||||
| Japanese Yen | DBAB | Sell | 166,350,000 | 1,369,846 | 11/18/16 | — | (120,613 | ) | ||||
| Euro | DBAB | Sell | 200,000 | 215,810 | 11/21/16 | — | (13,728 | ) | ||||
| Japanese Yen | CITI | Sell | 231,295,000 | 1,897,494 | 11/21/16 | — | (175,137 | ) | ||||
| Australian Dollar | JPHQ | Sell | 6,722,000 | 4,783,906 | 12/12/16 | — | (312,913 | ) | ||||
| Australian Dollar | JPHQ | Sell | 3,341,000 | 2,391,755 | 12/14/16 | — | (141,285 | ) | ||||
| Japanese Yen | GSCO | Sell | 228,991,000 | 1,954,582 | 1/10/17 | — | (102,009 | ) | ||||
| Japanese Yen | JPHQ | Sell | 304,225,000 | 2,587,145 | 1/10/17 | — | (145,130 | ) | ||||
| Euro | DBAB | Sell | 84,250 | 92,780 | 1/12/17 | — | (4,116 | ) | ||||
| Japanese Yen | CITI | Sell | 63,300,000 | 543,600 | 1/17/17 | — | (25,082 | ) | ||||
| Japanese Yen | SCNY | Sell | 189,880,000 | 1,625,699 | 1/17/17 | — | (80,167 | ) | ||||
| Euro | DBAB | Sell | 19,005,000 | 20,995,204 | 1/19/17 | — | (868,729 | ) | ||||
| Euro | JPHQ | Sell | 8,818,000 | 9,765,979 | 1/19/17 | — | (378,518 | ) | ||||
| Japanese Yen | DBAB | Sell | 63,500,000 | 550,141 | 1/23/17 | — | (20,491 | ) | ||||
| Japanese Yen | GSCO | Sell | 254,830,000 | 2,175,385 | 1/27/17 | — | (115,011 | ) | ||||
| Japanese Yen | HSBK | Sell | 313,645,839 | 2,678,444 | 1/31/17 | — | (141,090 | ) | ||||
| Philippine Peso | DBAB | Buy | 250,523,410 | 5,062,818 | 1/31/17 | 319,850 | — | |||||
| Euro | DBAB | Sell | 5,030,000 | 5,549,700 | 2/03/17 | — | (240,507 | ) | ||||
| Euro | BZWS | Sell | 1,882,000 | 2,132,541 | 2/08/17 | — | (34,336 | ) | ||||
| Japanese Yen | JPHQ | Sell | 209,300,000 | 1,808,496 | 2/08/17 | — | (73,690 | ) | ||||
| Japanese Yen | SCNY | Sell | 209,310,000 | 1,812,490 | 2/08/17 | — | (69,786 | ) | ||||
| Japanese Yen | BZWS | Sell | 209,340,000 | 1,815,218 | 2/09/17 | — | (67,413 | ) | ||||
| Japanese Yen | JPHQ | Sell | 209,790,000 | 1,814,730 | 2/09/17 | — | (71,948 | ) | ||||
| Euro | DBAB | Sell | 288,562 | 325,014 | 2/10/17 | — | (7,255 | ) | ||||
| Euro | DBAB | Sell | 16,570,000 | 18,636,279 | 2/23/17 | — | (453,595 | ) | ||||
| Japanese Yen | HSBK | Sell | 253,342,000 | 2,287,698 | 2/27/17 | 7,510 | — | |||||
| Mexican Peso | CITI | Buy | 197,094,000 | 10,793,757 | 3/09/17 | 273,067 | — | |||||
| Mexican Peso | CITI | Buy | 177,301,000 | 9,615,022 | 3/10/17 | 339,578 | — | |||||
| Japanese Yen | JPHQ | Sell | 59,426,000 | 530,608 | 3/31/17 | — | (5,020 | ) | ||||
| Total Forward Exchange Contracts | $ | 2,629,638 | $ | (40,283,203 | ) | |||||||
| Net unrealized appreciation (depreciation) | $ | (37,653,565 | ) | |||||||||
| aMay be comprised of multiple contracts with the same counterparty, currency and settlement date. | ||||||||||||
44 Annual Report
franklintempleton.com
TEMPLETON GLOBAL INVESTMENT TRUST
CONSOLIDATED STATEMENT OF INVESTMENTS
Templeton Global Balanced Fund (continued)
At March 31, 2016, the Fund had the following interest rate swap contracts outstanding. See Note 1(d).
| Interest Rate Swap Contracts | |||||||||
| Notional | Expiration | Unrealized | Unrealized | ||||||
| Description | Exchange | Amount | Date | Appreciation | Depreciation | ||||
| Centrally Cleared Swap Contracts | |||||||||
| Receive Floating rate 3-month USD BBA LIBOR | |||||||||
| Pay Fixed rate 0.926% | LCH | $ | 43,150,000 | 10/17/17 | $ | — | $ | (214,813 | ) |
| Receive Floating rate 3-month USD BBA LIBOR | |||||||||
| Pay Fixed rate 2.775% | CME | 1,690,000 | 10/04/23 | — | (182,801 | ) | |||
| Receive Floating rate 3-month USD BBA LIBOR | |||||||||
| Pay Fixed rate 2.795% | CME | 1,690,000 | 10/04/23 | — | (185,416 | ) | |||
| Receive Floating rate 3-month USD BBA LIBOR | |||||||||
| Pay Fixed rate 2.765% | CME | 1,690,000 | 10/07/23 | — | (181,430 | ) | |||
| Receive Floating rate 3-month USD BBA LIBOR | |||||||||
| Pay Fixed rate 1.914% | LCH | 21,800,000 | 1/22/25 | — | (707,636 | ) | |||
| Receive Floating rate 3-month USD BBA LIBOR | |||||||||
| Pay Fixed rate 1.970% | LCH | 27,250,000 | 1/23/25 | — | (1,011,132 | ) | |||
| Receive Floating rate 3-month USD BBA LIBOR | |||||||||
| Pay Fixed rate 1.973% | LCH | 16,080,000 | 1/27/25 | — | (599,787 | ) | |||
| Receive Floating rate 3-month USD BBA LIBOR | |||||||||
| Pay Fixed rate 1.937% | LCH | 4,020,000 | 1/29/25 | — | (137,187 | ) | |||
| Receive Floating rate 3-month USD BBA LIBOR | |||||||||
| Pay Fixed rate 1.942% | LCH | 3,400,000 | 1/30/25 | — | (116,835 | ) | |||
| Receive Floating rate 3-month USD BBA LIBOR | |||||||||
| Pay Fixed rate 1.817% | LCH | 5,360,000 | 2/03/25 | — | (126,211 | ) | |||
| Receive Floating rate 3-month USD BBA LIBOR | |||||||||
| Pay Fixed rate 1.982% | LCH | 46,520,000 | 10/20/25 | — | (1,897,674 | ) | |||
| Receive Floating rate 3-month USD BBA LIBOR | |||||||||
| Pay Fixed rate 3.668% | CME | 820,000 | 10/04/43 | — | (292,948 | ) | |||
| Receive Floating rate 3-month USD BBA LIBOR | |||||||||
| Pay Fixed rate 3.687% | CME | 820,000 | 10/04/43 | — | (296,408 | ) | |||
| Receive Floating rate 3-month USD BBA LIBOR | |||||||||
| Pay Fixed rate 3.675% | CME | 820,000 | 10/07/43 | — | (294,149 | ) | |||
| Net unrealized appreciation (depreciation) | $ | (6,244,427 | ) |
See Abbreviations on page 65.
franklintempleton.com The accompanying notes are an integral part of these consolidated financial statements. | Annual Report 45
| TEMPLETON GLOBAL INVESTMENT TRUST | |||
| Consolidated Financial Statements | |||
| Consolidated Statement of Assets and Liabilities | |||
| March 31, 2016 | |||
| Templeton Global Balanced Fund | |||
| Assets: | |||
| Investments in securities: | |||
| Cost - Unaffiliated issuers | $ | 2,522,252,082 | |
| Cost - Non-controlled affiliates (Note 3f) | 48,343,435 | ||
| Total cost of investments | $ | 2,570,595,517 | |
| Value - Unaffiliated issuers | $ | 2,307,061,725 | |
| Value - Non-controlled affiliates (Note 3f) | 48,343,435 | ||
| Total value of investments | 2,355,405,160 | ||
| Cash. | 572,770 | ||
| Foreign currency, at value (cost $3,606,765) | 3,613,141 | ||
| Receivables: | |||
| Investment securities sold | 31,337 | ||
| Capital shares sold | 1,312,047 | ||
| Dividends and interest | 15,897,864 | ||
| European Union tax reclaims | 41,607 | ||
| Due from brokers | 38,688,503 | ||
| Unrealized appreciation on OTC forward exchange contracts | 2,629,638 | ||
| Other assets | 1,590 | ||
| Total assets | 2,418,193,657 | ||
| Liabilities: | |||
| Payables: | |||
| Investment securities purchased | 1,561,581 | ||
| Capital shares redeemed | 7,822,466 | ||
| Management fees | 1,391,370 | ||
| Distribution fees | 1,541,795 | ||
| Transfer agent fees | 499,466 | ||
| Variation margin | 522,235 | ||
| Unrealized depreciation on OTC forward exchange contracts | 40,283,203 | ||
| Deferred tax. | 491,166 | ||
| Accrued expenses and other liabilities. | 367,993 | ||
| Total liabilities | 54,481,275 | ||
| Net assets, at value | $ | 2,363,712,382 | |
| Net assets consist of: | |||
| Paid-in capital | $ | 2,610,236,250 | |
| Undistributed net investment income | 36,109,664 | ||
| Net unrealized appreciation (depreciation) | (259,350,827 | ) | |
| Accumulated net realized gain (loss) | (23,282,705 | ) | |
| Net assets, at value | $ | 2,363,712,382 | |
46 Annual Report | The accompanying notes are an integral part of these consolidated financial statements. franklintempleton.com
TEMPLETON GLOBAL INVESTMENT TRUST
CONSOLIDATED FINANCIAL STATEMENTS
| Templeton Global Balanced Fund (continued) | ||
| Class A: | ||
| Net assets, at value | $ | 987,948,922 |
| Shares outstanding. | 363,593,236 | |
| Net asset value per sharea | $ | 2.72 |
| Maximum offering price per share (net asset value per share ÷ 94.25%) | $ | 2.89 |
| Class A1: | ||
| Net assets, at value | $ | 370,211,660 |
| Shares outstanding. | 136,096,487 | |
| Net asset value per sharea | $ | 2.72 |
| Maximum offering price per share (net asset value per share ÷ 95.75%) | $ | 2.84 |
| Class C: | ||
| Net assets, at value | $ | 464,898,505 |
| Shares outstanding. | 172,092,828 | |
| Net asset value and maximum offering price per sharea | $ | 2.70 |
| Class C1: | ||
| Net assets, at value | $ | 233,840,106 |
| Shares outstanding. | 86,095,398 | |
| Net asset value and maximum offering price per sharea | $ | 2.72 |
| Class R: | ||
| Net assets, at value | $ | 6,498,236 |
| Shares outstanding. | 2,386,398 | |
| Net asset value and maximum offering price per share | $ | 2.72 |
| Class R6: | ||
| Net assets, at value | $ | 1,088,689 |
| Shares outstanding. | 399,272 | |
| Net asset value and maximum offering price per share | $ | 2.73 |
| Advisor Class: | ||
| Net assets, at value | $ | 299,226,264 |
| Shares outstanding. | 109,565,430 | |
| Net asset value and maximum offering price per share | $ | 2.73 |
aRedemption price is equal to net asset value less contingent deferred sales charges, if applicable.
franklintempleton.com The accompanying notes are an integral part of these consolidated financial statements. | Annual Report 47
TEMPLETON GLOBAL INVESTMENT TRUST
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Statement of Operations
for the year ended March 31, 2016
| Templeton Global Balanced Fund | |||
| Investment income: | |||
| Dividends (net of foreign taxes of $4,067,038) | $ | 52,700,837 | |
| Interest (net of foreign taxes of $555,031) | 46,435,018 | ||
| Income from securities loaned (net of fees and rebates) | 12,129 | ||
| Other Income | 41,195 | ||
| Total investment income | 99,189,179 | ||
| Expenses: | |||
| Management fees (Note 3a) | 18,732,070 | ||
| Distribution fees: (Note 3c) | |||
| Class A | 2,768,157 | ||
| Class A1 | 1,059,122 | ||
| Class C | 5,206,639 | ||
| Class C1 | 1,755,096 | ||
| Class R | 33,182 | ||
| Transfer agent fees: (Note 3e) | |||
| Class A | 1,237,625 | ||
| Class A1 | 477,144 | ||
| Class C | 584,781 | ||
| Class C1 | 301,781 | ||
| Class R | 7,418 | ||
| Class R6 | 544 | ||
| Advisor Class | 433,159 | ||
| Custodian fees (Note 4) | 608,745 | ||
| Reports to shareholders | 263,868 | ||
| Registration and filing fees. | 228,614 | ||
| Professional fees | 197,210 | ||
| Trustees’ fees and expenses | 120,326 | ||
| Other | 183,279 | ||
| Total expenses | 34,198,760 | ||
| Expense reductions (Note 4) | (3,914 | ) | |
| Expenses waived/paid by affiliates (Note 3f and 3g) | (171,952 | ) | |
| Net expenses | 34,022,894 | ||
| Net investment income. | 65,166,285 | ||
| Realized and unrealized gains (losses): | |||
| Net realized gain (loss) from: | |||
| Investments (net of foreign taxes of $732,135) | 74,544,484 | ||
| Written options | 2,231,799 | ||
| Foreign currency transactions. | 66,521,450 | ||
| Swap contracts | (5,926,858 | ) | |
| Net realized gain (loss) | 137,370,875 | ||
| Net change in unrealized appreciation (depreciation) on: | |||
| Investments | (322,322,928 | ) | |
| Translation of other assets and liabilities | |||
| denominated in foreign currencies | (120,385,015 | ) | |
| Swap contracts | (2,112,815 | ) | |
| Change in deferred taxes on unrealized appreciation | 1,262,869 | ||
| Net change in unrealized appreciation (depreciation) | (443,557,889 | ) | |
| Net realized and unrealized gain (loss) | (306,187,014 | ) | |
| Net increase (decrease) in net assets resulting from operations | $ | (241,020,729 | ) |
48 Annual Report | The accompanying notes are an integral part of these consolidated financial statements. franklintempleton.com
| TEMPLETON GLOBAL INVESTMENT TRUST | |||||||
| CONSOLIDATED FINANCIAL STATEMENTS | |||||||
| Consolidated Statements of Changes in Net Assets | |||||||
| Templeton Global Balanced Fund | |||||||
| Year Ended March 31, | |||||||
| 2016 | 2015 | ||||||
| Increase (decrease) in net assets: | |||||||
| Operations: | |||||||
| Net investment income | $ | 65,166,285 | $ | 70,620,626 | |||
| Net realized gain (loss) | 137,370,875 | 54,333,868 | |||||
| Net change in unrealized appreciation (depreciation) | (443,557,889 | ) | (122,931,997 | ) | |||
| Net increase (decrease) in net assets resulting from operations | (241,020,729 | ) | 2,022,497 | ||||
| Distributions to shareholders from: | |||||||
| Net investment income: | |||||||
| Class A | (35,015,294 | ) | (62,075,671 | ) | |||
| Class A1 | (13,444,726 | ) | (26,874,604 | ) | |||
| Class C | (13,468,496 | ) | (25,080,050 | ) | |||
| Class C1 | (7,562,234 | ) | (15,702,596 | ) | |||
| Class R | (195,409 | ) | (309,971 | ) | |||
| Class R6 | (29,094 | ) | (7,279 | ) | |||
| Advisor Class. | (13,365,698 | ) | (25,386,535 | ) | |||
| Net realized gains: | |||||||
| Class A | (29,395,257 | ) | — | ||||
| Class A1 | (11,145,626 | ) | — | ||||
| Class C | (14,351,472 | ) | — | ||||
| Class C1 | (7,044,397 | ) | — | ||||
| Class R | (184,044 | ) | — | ||||
| Class R6 | (29,030 | ) | — | ||||
| Advisor Class. | (10,349,144 | ) | — | ||||
| Total distributions to shareholders | (155,579,921 | ) | (155,436,706 | ) | |||
| Capital share transactions: (Note 2) | |||||||
| Class A | 31,532,036 | 120,877,639 | |||||
| Class A1 | (37,675,817 | ) | (46,507,756 | ) | |||
| Class C | 35,379,162 | 55,073,603 | |||||
| Class C1 | (24,806,317 | ) | (29,511,751 | ) | |||
| Class R | 1,100,658 | 880,071 | |||||
| Class R6 | 559,968 | 651,010 | |||||
| Advisor Class. | (48,104,065 | ) | 10,520,977 | ||||
| Total capital share transactions | (42,014,375 | ) | 111,983,793 | ||||
| Net increase (decrease) in net assets | (438,615,025 | ) | (41,430,416 | ) | |||
| Net assets: | |||||||
| Beginning of year | 2,802,327,407 | 2,843,757,823 | |||||
| End of year | $ | 2,363,712,382 | $ | 2,802,327,407 | |||
| Undistributed net investment income included in net assets: | |||||||
| End of year | $ | 36,109,664 | $ | — | |||
| Distributions in excess of net investment income included in net assets: | |||||||
| End of year | $ | — | $ | (34,452,356 | ) | ||
franklintempleton.com The accompanying notes are an integral part of these consolidated financial statements. | Annual Report 49
TEMPLETON GLOBAL INVESTMENT TRUST
Notes to Consolidated Financial Statements
Templeton Global Balanced Fund
1. Organization and Significant Accounting Policies
Templeton Global Investment Trust (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company, consisting of six separate funds and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP). Templeton Global Balanced Fund (Fund) is included in this report. The financial statements of the remaining funds in the Trust are presented separately. The Fund offers seven classes of shares: Class A, Class A1, Class C, Class C1, Class R, Class R6, and Advisor Class. Each class of shares differs by its initial sales load, contingent deferred sales charges, voting rights on matters affecting a single class, its exchange privilege and fees primarily 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 as of 4 p.m. Eastern time each day the New York Stock Exchange (NYSE) is open for trading. Under compliance policies and procedures approved by the Fund’s Board of Trustees (the Board), the Fund’s administrator has responsibility for oversight of valuation, including leading the cross-functional Valuation and Liquidity Oversight Committee (VLOC). The VLOC provides administration and oversight of the Fund’s valuation policies and procedures, which are approved annually by the Board. Among other things, these procedures allow the Fund to 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 (derivatives) 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, whichever is earlier. 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.
Certain derivatives 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 VLOC convenes on a regular basis to review such financial instruments and considers a number of factors, including significant unobservable valuation inputs, when arriving at fair value. The VLOC 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
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TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Templeton Global Balanced Fund (continued)
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. The VLOC employs various methods for calibrating these valuation approaches including a regular review of key inputs and assumptions, transactional back-testing or disposition analysis, and reviews of any related market activity.
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 NYSE business day. Occasionally, events occur between the time at which trading in a foreign security is completed and the close of the NYSE 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 the close of the NYSE. In order to minimize the potential for these differences, the VLOC monitors price movements following the close of trading in foreign stock markets through a series of country specific market proxies (such as baskets of American Depositary Receipts, futures contracts and exchange traded funds). These price movements are measured against established trigger thresholds for each specific market proxy to assist in determining if an event has occurred that may call into question the reliability of the values of the foreign securities held by the Fund. If such an event occurs, the securities may be valued using fair value procedures, which may include the use of independent pricing services.
When the last day of the reporting period is a non-business day, certain foreign markets may be open on those days that the NYSE is closed, 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 significant 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 Consolidated Statement of Operations.
Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions and the difference between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period.
c. Securities Purchased on a When-Issued Basis
The Fund purchases securities on a when-issued 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. Sufficient assets have been segregated for these securities.
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TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Templeton Global Balanced Fund (continued)
1. Organization and Significant Accounting
Policies (continued)
d. Derivative Financial Instruments
The Fund invested in derivatives 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 Consolidated Statement of Assets and Liabilities. Realized gain and loss and unrealized appreciation and depreciation on these contracts for the period are included in the Consolidated Statement of Operations.
Derivative counterparty credit risk is managed through a formal evaluation of the creditworthiness of all potential counterparties The Fund attempts to reduce its exposure to counterparty credit risk on OTC derivatives, whenever possible, by entering into International Swaps and Derivatives Association (ISDA) master agreements with certain counterparties. These agreements contain various provisions, including but not limited to collateral requirements, events of default, or early termination. Termination events applicable to the counterparty include certain deteriorations in the credit quality of the counterparty. Termination events applicable to the Fund include failure of the Fund to maintain certain net asset levels and/or limit the decline in net assets over various periods of time. In the event of default or early termination, the ISDA master agreement gives the non-defaulting party the right to net and close-out all transactions traded, whether or not arising under the ISDA agreement, to one net amount payable by one counterparty to the other. However, absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Consolidated 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 the 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 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 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 interest rate swap contracts primarily to manage interest rate risk. An interest rate swap is an agreement between the Fund and a counterparty to exchange cash flows based on the difference between two interest rates, applied to a notional amount. These agreements may be privately negotiated in the over-the-counter market (OTC interest rate swaps) or may be executed on a registered exchange (centrally cleared interest rate swaps). For centrally cleared interest rate 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 Consolidated Statement of Assets and Liabilities. 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.
The Fund purchased or wrote OTC option contracts primarily to manage exposure to equity price risk. An option is a contract entitling the holder to purchase or sell a specific amount of shares or units of an asset or notional amount of a swap (swaption), at a specified price. When an option is purchased or written, an amount equal to the premium paid or received is
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TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Templeton Global Balanced Fund (continued)
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 growth risk. 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 Consolidated Statement of Operations. The risks of investing in VRI include growth risk, liquidity, and the potential loss of investment.
See Notes 6 and 10 regarding investment transactions and other derivative information, respectively.
e. 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.
f. Equity-Linked Securities
The Fund invests in equity-linked securities. Equity-linked securities are hybrid financial instruments that generally combine both debt and equity characteristics into a single note form. Income received from equity-linked securities is recorded as realized gains in the Consolidated Statement of Operations and may be based on the performance of an underlying equity security, an equity index, or an option position. The risks of investing in equity-linked securities include unfavorable price
movements in the underlying security and the credit risk of the issuing financial institution. There may be no guarantee of a return of principal with equity-linked securities and the appreciation potential may be limited. Equity-linked securities may be more volatile and less liquid than other investments held by the Fund.
g. Securities Lending
The Fund participates in an agency based securities lending program to earn additional income. The Fund receives cash collateral 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. The collateral 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. 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 Consolidated Statement of Operations. The Fund bears the market risk with respect to the collateral investment, securities loaned, and the risk that the agent may default on its obligations to the Fund. If the borrower defaults on its obligation to return the securities loaned, the Fund has the right to repurchase the securities in the open market using the collateral received. The securities lending agent has agreed to indemnify the Fund in the event of default by a third party borrower. At March 31, 2016, the Fund had no securities on loan.
h. Investments in FT Holdings Corporation IV (FT Subsidiary)
The Fund invests in certain financial instruments through its investment in the FT Subsidiary. The FT Subsidiary is a Delaware Corporation, is a wholly-owned subsidiary of the Fund, and is able to invest in certain financial instruments consistent with the investment objective of the Fund. At March 31, 2016, the FT Subsidiary’s investment, Turtle Bay Resort, as well as any other assets and liabilities of the FT Subsidiary are reflected in the Fund’s Consolidated Statement of Investments and Consolidated Statement of Assets and
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53
TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Templeton Global Balanced Fund (continued)
1. Organization and Significant Accounting
Policies (continued)
h. Investments in FT Holdings Corporation IV (FT Subsidiary) (continued)
Liabilities. The financial statements have been consolidated and include the accounts of the Fund and the FT Subsidiary. All intercompany transactions and balances have been eliminated.
At March 31, 2016, the net assets of the FT Subsidiary were $4,128,394,representing less than 1.0% of the Fund’s consolidated net assets. The Fund’s investment in the FT Subsidiary is limited to 25% of consolidated assets.
i. 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.
j. Income and Deferred Taxes
It is the Fund’s policy to qualify as a regulated investment company under the Internal Revenue Code. The Fund intends to distribute to shareholders substantially all of its taxable income and net realized gains to relieve it from federal income and excise taxes. As a result, no provision for U.S. federal income taxes is required.
The Fund may be subject to foreign taxation related to income received, capital gains on the sale of securities and certain foreign currency transactions in the foreign jurisdictions in which it invests. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests. When a capital gain tax is determined to apply, the Fund records an estimated deferred tax liability in an amount that would be payable if the securities were disposed of on the valuation date. As a result of several court cases, in certain countries across the European Union, the Fund filed additional tax reclaims for previously withheld taxes on dividends earned in those countries (EU reclaims). These
additional filings are subject to various administrative proceedings by the local jurisdictions’ tax authorities within the European Union, as well as a number of related judicial proceedings. Income recognized, if any, for EU reclaims is reflected as other income in the Consolidated Statement of Operations and any related receivable, if any, is reflected as European Union tax reclaims in the Consolidated Statement of Assets and Liabilities. When uncertainty exists as to the ultimate resolution of these proceedings, the likelihood of receipt of these EU reclaims, and the potential timing of payment, no amounts are reflected in the consolidated financial statements.
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 March 31, 2016, the Fund has determined that no tax liability is required in its consolidated financial statements related to uncertain tax positions for any open tax years (or expected to be taken on future tax returns). Open tax years are those that remain subject to examination and are based on each tax jurisdiction’s statute of limitation.
k. 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 foreign 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 and are determined according to income tax regulations (tax basis). Distributable earnings determined on a tax basis 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.
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TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Templeton Global Balanced Fund (continued)
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. Fund specific expenses are charged directly to the Fund that incurred the expense.
Realized and unrealized gains and losses and net investment income, not including 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 Consolidated Statement of Operations.
l. 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 consolidated financial statements and the amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
m. 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 March 31, 2016, there were an unlimited number of shares authorized ($0.01 par value). Transactions in the Fund’s shares were | ||||||||||||
| as follows: | ||||||||||||
| Year Ended March 31, | ||||||||||||
| 2016 | 2015 | |||||||||||
| Shares | Amount | Shares | Amount | |||||||||
| Class A Shares: | ||||||||||||
| Shares sold | 100,914,333 | $ | 301,467,863 | 109,538,970 | $ | 355,971,282 | ||||||
| Shares issued in reinvestment of distributions | 21,595,075 | 61,355,083 | 18,403,505 | 56,547,393 | ||||||||
| Shares redeemed | (115,694,596 | ) | (331,290,910 | ) | (91,361,636 | ) | (291,641,036 | ) | ||||
| Net increase (decrease) | 6,814,812 | $ | 31,532,036 | 36,580,839 | $ | 120,877,639 | ||||||
| Class A1 Shares: | ||||||||||||
| Shares sold | 4,966,226 | $ | 14,693,174 | 6,238,720 | $ | 20,032,228 | ||||||
| Shares issued in reinvestment of distributions | 8,180,308 | 23,324,987 | 8,116,785 | 24,983,022 | ||||||||
| Shares redeemed | (26,316,531 | ) | (75,693,978 | ) | (28,527,607 | ) | (91,523,006 | ) | ||||
| Net increase (decrease) | (13,169,997 | ) | $ | (37,675,817 | ) | (14,172,102 | ) | $ | (46,507,756 | ) | ||
| Class C Shares: | ||||||||||||
| Shares sold | 57,619,439 | $ | 173,369,154 | 48,938,455 | $ | 158,489,674 | ||||||
| Shares issued in reinvestment of distributions | 9,067,294 | 25,605,937 | 7,387,731 | 22,525,190 | ||||||||
| Shares redeemed | (57,524,663 | ) | (163,595,929 | ) | (39,895,633 | ) | (125,941,261 | ) | ||||
| Net increase (decrease) | 9,162,070 | $ | 35,379,162 | 16,430,553 | $ | 55,073,603 | ||||||
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TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| Templeton Global Balanced Fund (continued) | |||||||||||
| 2. Shares of Beneficial Interest (continued) | |||||||||||
| Year Ended March 31, | |||||||||||
| 2016 | 2015 | ||||||||||
| Shares | Amount | Shares | Amount | ||||||||
| Class C1 Shares: | |||||||||||
| Shares sold | 2,008,579 | $ | 5,961,461 | 2,124,207 | $ | 6,775,862 | |||||
| Shares issued in reinvestment of distributions | 4,653,334 | 13,219,451 | 4,581,281 | 14,057,216 | |||||||
| Shares redeemed | (15,322,615 | ) | (43,987,229 | ) | (15,676,169 | ) | (50,344,829 | ) | |||
| Net increase (decrease) | (8,660,702 | ) | $ | (24,806,317 | ) | (8,970,681 | ) | $ | (29,511,751 | ) | |
| Class R Shares: | |||||||||||
| Shares sold | 896,012 | $ | 2,680,383 | 868,343 | $ | 2,798,699 | |||||
| Shares issued in reinvestment of distributions | 84,872 | 241,607 | 70,404 | 216,177 | |||||||
| Shares redeemed | (619,684 | ) | (1,821,332 | ) | (656,876 | ) | (2,134,805 | ) | |||
| Net increase (decrease) | 361,200 | $ | 1,100,658 | 281,871 | $ | 880,071 | |||||
| Class R6 Shares: | |||||||||||
| Shares sold | 291,404 | $ | 850,215 | 209,563 | $ | 654,529 | |||||
| Shares issued in reinvestment of distributions | 20,526 | 58,124 | 2,276 | 6,969 | |||||||
| Shares redeemed | (122,823 | ) | (348,371 | ) | (3,330 | ) | (10,488 | ) | |||
| Net increase (decrease) | 189,107 | $ | 559,968 | 208,509 | $ | 651,010 | |||||
| Advisor Class Shares: | |||||||||||
| Shares sold | 40,587,714 | $ | 122,422,298 | 53,588,116 | $ | 175,920,538 | |||||
| Shares issued in reinvestment of distributions | 7,247,637 | 20,700,862 | 6,996,378 | 21,618,814 | |||||||
| Shares redeemed | (67,339,602 | ) | (191,227,225 | ) | (58,946,614 | ) | (187,018,375 | ) | |||
| Net increase (decrease) | (19,504,251 | ) | $ | (48,104,065 | ) | 1,637,880 | $ | 10,520,977 | |||
3. Transactions with Affiliates
Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton
Investments. Certain officers and trustees of the Trust are also officers and directors of the following subsidiaries:
| Subsidiary | Affiliation |
| Templeton Global Advisors Limited (TGAL) | Investment manager |
| Franklin Advisers, Inc. (Advisers) | Investment manager |
| Franklin Templeton Services, LLC (FT Services) | Administrative manager |
| Franklin Templeton Distributors, Inc. (Distributors) | Principal underwriter |
| Franklin Templeton Investor Services, LLC (Investor Services) | Transfer agent |
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TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Templeton Global Balanced Fund (continued)
a. Management Fees
The Fund pays an investment management fee to TGAL based on the average daily net assets of the Fund as follows:
| Annualized Fee Rate | Net Assets | |
| 0.825 | % | Up to and including $500 million |
| 0.725 | % | Over $500 million, up to and including $1 billion |
| 0.675 | % | Over $1 billion, up to and including $1.5 billion |
| 0.625 | % | Over $1.5 billion, up to and including $6.5 billion |
| 0.600 | % | Over $6.5 billion, up to and including $11.5 billion |
| 0.578 | % | Over $11.5 billion, up to and including $16.5 billion |
| 0.565 | % | Over $16.5 billion, up to and including $19.0 billion |
| 0.555 | % | Over $19.0 billion, up to and including $21.5 billion |
| 0.545 | % | In excess of $21.5 billion |
For the year ended March 31, 2016, the effective investment management fee rate was 0.690% of the Fund’s average daily net assets.
Under a subadvisory agreement, Advisers, an affiliate of TGAL, provides subadvisory services to the Fund. The subadvisory fee is paid by TGAL based on the Fund’s average daily net assets, and is not an additional expense of the Fund.
b. Administrative Fees
Under an agreement with TGAL, FT Services provides administrative services to the Fund. The fee is paid by TGAL 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 and A1 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, C1 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:
| Class A | 0.25 | % |
| Class A1 | 0.25 | % |
| Class C | 1.00 | % |
| Class C1 | 0.65 | % |
| Class R | 0.50 | % |
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TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Templeton Global Balanced Fund (continued)
| 3. | Transactions with Affiliates (continued) |
| d. | Sales Charges/Underwriting Agreements |
Front-end sales charges and contingent deferred sales charges (CDSC) do not represent expenses of the Fund. These charges are deducted from the proceeds of sales of Fund shares prior to investment or from redemption proceeds prior to remittance, as applicable. Distributors has advised the Fund of the following commission transactions related to the sales and redemptions of the Fund’s shares for the year:
| Sales charges retained net of commissions paid to | ||
| unaffiliated brokers/dealers | $ | 592,142 |
| CDSC retained | $ | 76,952 |
| e. Transfer Agent Fees | ||
Each class of shares, except for Class R6, pays transfer agent fees to Investor Services for its performance of shareholder servicing obligations and reimburses Investor Services for out of pocket expenses incurred, including shareholder servicing fees paid to third parties. These fees are allocated daily based upon their relative proportion of such classes’ aggregate net assets. Class R6 pays Investor Services transfer agent fees specific to that class.
For the year ended March 31, 2016, the Fund paid transfer agent fees of $3,042,452, of which $1,110,809 was retained by Investor Services.
f. Investments in Affiliated Management Investment Companies
The Fund invests in an affiliated management investment company for purposes other than 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 company, as noted in the Consolidated Statement of Operations, in an amount not to exceed the management and administrative fees paid directly or indirectly by each affiliate. Prior to April 1, 2013, the waiver was accounted for as a reduction to management fees.
| % of | |||||||||||
| Affiliated | |||||||||||
| Number of | Number of | Fund Shares | |||||||||
| Shares Held | Shares | Value | Outstanding | ||||||||
| at Beginning | Gross | Gross | Held at End | at End | Investment | Realized | Held at End | ||||
| of Year | Additions | Reductions | of Year | of Year | Income | Gain (Loss) | of Year | ||||
| Non-Controlled | |||||||||||
| Affiliates | |||||||||||
| Institutional Fiduciary | |||||||||||
| Trust Money Market | |||||||||||
| Portfolio | 40,584,543 | 740,430,203 | (732,671,311 | ) | 48,343,435 | $ | 48,343,435 | $- | $- | 0.22 | % |
| 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 0.01% until July 31, 2016.
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 year ended March 31, 2016, the custodian fees were reduced as noted in the Consolidated Statement of Operations.
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TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Templeton Global Balanced Fund (continued)
5. Income Taxes
For tax purposes, capital losses may be carried over to offset future capital gains. Capital loss carryforwards with no expiration, if any, must be fully utilized before those losses with expiration dates.
During the year ended March 31, 2016, the Fund utilized $59,832,310 of capital loss carryforwards.
For tax purposes, the Fund may elect to defer any portion of a post-October capital loss to the first day of the following fiscal year. At March 31, 2016, the Fund deferred post-October capital losses of $10,723,563.
The tax character of distributions paid during the years ended March 31, 2016 and 2015, was as follows:
| 2016 | 2015 | |||
| Distributions paid from: | ||||
| Ordinary income | $ | 83,080,951 | $ | 155,436,706 |
| Long term capital gain | 72,498,970 | — | ||
| $ | 155,579,921 | $ | 155,436,706 |
At March 31, 2016, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:
| Cost of investments. | $ | 2,584,849,611 | |
| Unrealized appreciation | $ | 157,843,154 | |
| Unrealized depreciation | (387,287,605 | ) | |
| Net unrealized appreciation (depreciation) | $ | (229,444,451 | ) |
Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatments of foreign currency transactions and passive foreign investment company shares.
6. Investment Transactions
Purchases and sales of investments (excluding short term securities) for the year ended March 31, 2016, aggregated $1,096,337,252 and $1,205,466,909, respectively.
| Transactions in options written during the year ended March 31, 2016, were as follows: | |||||
| Number of | Premiums | ||||
| Contracts | Received | ||||
| Options outstanding at March 31, 2015 | — | $ | — | ||
| Options written | 3,851,835 | 2,462,210 | |||
| Options expired | (3,200,608 | ) | (1,878,260 | ) | |
| Options exercised | — | — | |||
| Options closed | (651,227 | ) | (583,950 | ) | |
| Options outstanding at March 31, 2016 | — | $ | — | ||
| See Notes 1(d) and 10 regarding derivative financial instruments and other derivative information, respectively. | |||||
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TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Templeton Global Balanced Fund (continued)
7. Credit Risk and Defaulted Securities
At March 31, 2016, the Fund had 10.01% of its portfolio invested in high yield, senior secured floating rate notes, or other securities rated below investment grade. 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 March 31, 2016, the aggregate value of these securities represents less than 0.05% 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 Consolidated Statement of Investments.
8. 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 and regional economic, political and social conditions, which may result in greater market volatility. In addition, certain foreign securities may not be as liquid as U.S. securities.
9. Restricted Securities
The Fund invests in securities that are restricted under the Securities Act of 1933 (1933 Act) or which are subject to legal, contractual, or other agreed upon restrictions on resale. 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 March 31, 2016, the Fund held investments in restricted securities, excluding certain securities exempt from registration under | ||||||
| the 1933 Act deemed to be liquid, as follows: | ||||||
| Acquisition | ||||||
| Warrants | Issuer | Dates | Cost | Value | ||
| 4,441 | a Edcon Holdings Ltd., F wts., 2/20/49 | 11/27/15 | $ | 47 | $ | 51 |
| 79,464,087 | a Edcon Holdings Ltd., F1 wts., 2/20/49 | 11/27/15 | 841,962 | 904,500 | ||
| 6,435,002 | a Edcon Holdings Ltd., F2 wts., 2/20/49 | 11/27/15 | 68,182 | 73,246 | ||
| Total Restricted Securities (Value is 0.04% of Net Assets) | $ | 910,191 | $ | 977,797 | ||
| aThe Fund also invests in unrestricted securities of the issuer, valued at $2,555,428 as of March 31, 2016. | ||||||
10. Other Derivative Information
At March 31, 2016, the Fund’s investments in derivative contracts are reflected in the Consolidated Statement of Assets and Liabilities as follows:
| Asset Derivatives | Liability Derivatives | ||||||
| Derivative Contracts | Consolidated Statement of | Consolidated Statement of | |||||
| Not Accounted for as | Assets and Liabilities | Assets and Liabilities | |||||
| Hedging Instruments | Location | Fair Value | Location | Fair Value | |||
| Interest rate contracts | Variation margin | $ | — | Variation margin | $ | 6,244,427 | a |
| Foreign exchange contracts | Unrealized appreciation on OTC | 2,629,638 | Unrealized depreciation on OTC | 40,283,203 | |||
| swap contracts | swap contracts | ||||||
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TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| Templeton Global Balanced Fund (continued) | ||||||
| Asset Derivatives | Liability Derivatives | |||||
| Derivative Contracts | Consolidated Statement of | Consolidated Statement of | ||||
| Not Accounted for as | Assets and Liabilities | Assets and Liabilities | ||||
| Hedging Instruments | Location | Fair Value | Location | Fair Value | ||
| Value recovery instruments | Investments in securities, at value | 4,008,112 | ||||
| Totals | $ | 6,637,750 | $ | 46,527,630 | ||
| aThis amount reflects the cumulative appreciation (depreciation) of centrally cleared swaps contracts as reported in the Consolidated Statement of Investments. Only the | ||||||
| variation margin receivable/payable at year end is separately reported within the Consolidated Statement of Assets and Liabilities. Prior variation margin movements were | ||||||
| recorded to cash upon receipt or payment. | ||||||
For the year ended March 31, 2016, the effect of derivative contracts in the Fund’s Consolidated Statement of Operations was as follows:
| Net Change in | ||||||||
| Unrealized | ||||||||
| Derivative Contacts | Realized | Appreciation | ||||||
| Not Accounted for as | Consolidated Statement of | Gain (Loss) | Consolidated Statement of | (Depreciation) | ||||
| Hedging Instruments | Operations Locations | for the Period | Operations Locations | for the Period | ||||
| Net realized gain (loss) from: | Net change in unrealized | |||||||
| appreciation (depreciation) on: | ||||||||
| Interest rate contracts | Swap contracts | $ | (5,926,858 | ) | Swap contracts | $ | (2,112,815 | ) |
| Foreign exchange contracts | Foreign currency transactions | 71,182,900 | a | Translation of other assets and | (121,424,967 | )a | ||
| liabilities denominated in | ||||||||
| foreign currencies | ||||||||
| Equity contracts | Written options | 2,231,799 | ||||||
| Value recovery instruments | Investments | — | Investments | (746,898 | ) | |||
| Totals | $ | 67,487,841 | $ | (124,284,680 | ) | |||
| aForward exchange contracts are included in net realized gain (loss) from foreign currency transactions and net change in unrealized appreciation (depreciation) on | ||||||||
| translation of other assets and liabilities denominated in foreign currencies in the Consolidated Statement of Operations. | ||||||||
For the year ended March 31, 2016, the average month end fair value of derivatives represented 2.20% of average month end net assets. The average month end number of open derivatives contracts for the year was 219.
| Gross and Net Amounts of | ||||
| Assets and Liabilities Presented | ||||
| in the Consolidated Statement of Assets and Liabilities | ||||
| Assetsa | Liabilitiesa | |||
| Derivatives | ||||
| Forward exchange contracts | $ | 2,629,638 | $ | 40,283,203 |
| aAbsent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Consolidated Statement of Assets and | ||||
| Liabilities. | ||||
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TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Templeton Global Balanced Fund (continued)
10. Other Derivative Information (continued)
At March 31, 2016, the Fund’s OTC derivative assets, which may be offset against the Fund’s OTC derivative liabilities and collateral received from the counterparty, are as follows:
| Amounts Not Offset in the | ||||||||||||||
| Consolidated Statement of Assets and Liabilities | ||||||||||||||
| Gross and | ||||||||||||||
| Net Amounts of | Financial | Financial | ||||||||||||
| Assets Presented in the | Instruments | Instruments | Cash | Net Amount | ||||||||||
| Consolidated Statement of | Available for | Collateral | Collateral | (Not less | ||||||||||
| Assets and Liabilities | Offset | Receiveda | Received | than zero) | ||||||||||
| Counterparty | ||||||||||||||
| BOFA | $ | - | $ | - | $- | $ | - | $ | - | |||||
| BZWS | 314 | (314 | ) | - | - | - | ||||||||
| CITI | 773,346 | (773,346 | ) | - | - | - | ||||||||
| DBAB | 1,062,558 | (1,062,558 | ) | - | - | - | ||||||||
| GSCO | 10,093 | (10,093 | ) | - | - | - | ||||||||
| HSBK | 274,988 | (274,988 | ) | - | - | - | ||||||||
| JPHQ | 221,745 | (221,745 | ) | - | - | - | ||||||||
| MSCO | 223,908 | (72,361 | ) | - | - | 151,547 | ||||||||
| SCNY | 62,686 | (62,686 | ) | - | - | - | ||||||||
| UBSW | - | - | - | - | - | |||||||||
| Total | $ | 2,629,638 | $ | (2,478,091 | ) | $- | $ | - | $ | 151,547 | ||||
| aIn some instances, the collateral amounts disclosed in the table above was adjusted due to the requirement to limit collateral amount to avoid the effect of overcollateral- | ||||||||||||||
| ization. Actual collateral received and/or pledged may be more than the amounts disclosed herein. | ||||||||||||||
| At March 31, 2016, the Fund’s OTC derivative liabilities, which may be offset against the Fund’s OTC derivative assets and | ||||||||||||||
| collateral pledged to the counterparty, are as follows: | ||||||||||||||
| Amounts Not Offset in the | ||||||||||||||
| Consolidated Statement of Assets and Liabilities | ||||||||||||||
| Gross and | ||||||||||||||
| Net Amounts of | Financial | Financial | ||||||||||||
| Liabilities Presented in | Instruments | Instruments | Cash | Net Amount | ||||||||||
| the Consolidated Statement of | Available for | Collateral | Collateral | (Not less | ||||||||||
| Assets and Liabilities | Offset | Pledged | Pledgeda | than zero) | ||||||||||
| Counterparty | ||||||||||||||
| BOFA | $ | 954,166 | $ | - | $- | $ | (870,000 | ) | $ | 84,166 | ||||
| BZWS | 4,228,114 | (314 | ) | - | (4,227,800 | ) | - | |||||||
| CITI. | 2,598,319 | (773,346 | ) | - | (930,000 | ) | 894,973 | |||||||
| DBAB | 7,356,255 | (1,062,558 | ) | - | (4,730,000 | ) | 1,563,697 | |||||||
| GSCO | 1,755,126 | (10,093 | ) | - | (1,500,000 | ) | 245,033 | |||||||
| HSBK | 3,118,642 | (274,988 | ) | - | (2,785,000 | ) | 58,654 | |||||||
| JPHQ | 19,644,952 | (221,745 | ) | - | (16,035,000 | ) | 3,388,207 | |||||||
| MSCO | 72,361 | (72,361 | ) | - | - | - | ||||||||
| SCNY | 525,237 | (62,686 | ) | - | (462,551 | ) | - | |||||||
| UBSW | 30,031 | - | - | - | 30,031 | |||||||||
| Total | $ | 40,283,203 | $ | (2,478,091 | ) | $- | $ | (31,540,351 | ) | $ | 6,264,761 | |||
aIn some instances, the collateral amount disclosed in the table above was adjusted due to the requirement to limit collateral amount to avoid the effect of overcollateral-ization. Actual collateral received and/or pledged may be more than the amount disclosed herein.
See Notes 1(d) and 6 regarding derivative financial instruments and investment transactions, respectively.
See Abbreviations on page 63.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Templeton Global Balanced Fund (continued)
11. Credit Facility
The Fund, together with other U.S. registered and foreign investment funds (collectively, Borrowers), managed by Franklin Templeton Investments, are borrowers in a joint syndicated senior unsecured credit facility totaling $2 billion (Global Credit Facility) which matures on February 10, 2017. 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 0.07% based upon the unused portion of the Global Credit Facility. Effective February 12, 2016, the annual commitment fee is 0.15%. These fees are reflected in other expenses in the Consolidated Statement of Operations. During the year ended March 31, 2016, 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
- 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.
For movements between the levels within the fair value hierarchy, the Fund has adopted a policy of recognizing the transfers as of the date of the underlying event which caused the movement.
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TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Templeton Global Balanced Fund (continued)
12. Fair Value Measurements (continued)
A summary of inputs used as of March 31, 2016, in valuing the Fund’s assets and liabilities carried at fair value, is as follows:
| Level 1 | Level 2 | Level 3 | Total | |||||||
| Assets: | ||||||||||
| Investments in Securities: | ||||||||||
| Equity Investments:a | ||||||||||
| South Africa | $ | — | $ | — | $ | 977,797 | $ | 977,797 | ||
| United Kingdom | 312,784,646 | 98,684 | 219,924 | 313,103,254 | ||||||
| United States | 381,507,781 | — | 4,128,508 | 385,636,289 | ||||||
| All Other Equity Investmentsb | 880,352,628 | — | — | 880,352,628 | ||||||
| Equity-Linked Securities | — | 77,831,813 | — | 77,831,813 | ||||||
| Corporate Bonds and Notes | — | 47,996,322 | — | 47,996,322 | ||||||
| Senior Floating Rate Interests | — | 1,987,931 | 30,747 | 2,018,678 | ||||||
| Foreign Government and Agency Securities | — | 563,185,585 | — | 563,185,585 | ||||||
| Escrows and Litigation Trusts | — | — | 1,352 | c | 1,352 | |||||
| Short Term Investments | 48,343,435 | 35,958,007 | — | 84,301,442 | ||||||
| Total Investments in Securities | $ | 1,622,988,490 | $ | 727,058,342 | $ | 5,358,328 | $ | 2,355,405,160 | ||
| Other Financial Instruments | ||||||||||
| Forward Exchange Contracts | $ | — | $ | 2,629,638 | $ | — | $ | 2,629,638 | ||
| Liabilities: | ||||||||||
| Other Financial Instruments | ||||||||||
| Forward Exchange Contracts | $ | — | $ | 40,283,203 | $ | — | $ | 40,283,203 | ||
| Swap Contracts. | — | 6,244,427 | — | 6,244,427 | ||||||
| Total Other Financial Instruments | $ | — | $ | 46,527,630 | $ | — | $ | 46,527,630 | ||
| aIncludes common, preferred and convertible preferred stocks as well as other equity investments. | ||||||||||
| bFor detailed categories, see the accompanying Consolidated Statement of Investments. | ||||||||||
| cIncludes securities determined to have no value at March 31, 2016. | ||||||||||
A reconciliation of assets in which Level 3 inputs are used in determining fair value is presented when there are significant Level 3 financial instruments at the end of the year.
13. Subsequent Events
The Fund has evaluated subsequent events through the issuance of the consolidated financial statements and determined that no events have occurred that require disclosure.
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TEMPLETON GLOBAL INVESTMENT TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| Templeton Global Balanced Fund (continued) | |||||
| Abbreviations | |||||
| Counterparty/Exchange | Currency | Selected Portfolio | |||
| BOFA | Bank of America Corp. | BRL | Brazilian Real | ADR | American Depositary Receipt |
| BZWS | Barclays Bank PLC | COP | Colombian Peso | FRN | Floating Rate Note |
| CITI | Citigroup N.A. | EUR | Euro | GDP | Gross Domestic Product |
| CME | Chicago Mercentile Exchange | GHS | Ghanaian Cedi | GDR | Global Depositary Receipt |
| DBAB | Deutsche Bank AG | IDR | Indonesian Rupiah | IDR | International Depositary Receipt |
| GSCO | Goldman Sachs Group, Inc. | INR | Indian Rupee | PIK | Payment-In-Kind |
| HSBK | HSBC Bank PLC | KRW | South Korean Won | VRI | Value Recovery Instruments |
| JPHQ | JP Morgan Chase Bank, N.A. | LKR | Sri Lankan Rupee | ||
| LCH | LCH Clearnet LLC | MXN | Mexican Peso | ||
| MSCO | Morgan Stanley and Co., Inc. | MYR | Malaysian Ringgit | ||
| SCNY | Standard Chartered Bank | PEN | Peruvian Nuevo Sol | ||
| UBSW | UBS AG | PHP | Philippine Peso | ||
| PLN | Polish Zloty | ||||
| RSD | Serbian Dinar | ||||
| UYU | Uruguayan Peso | ||||
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TEMPLETON GLOBAL INVESTMENT TRUST
Report of Independent Registered Public Accounting Firm
To the Board of Trustees and Shareholders of Templeton Global Balanced Fund
In our opinion, the accompanying consolidated statement of assets and liabilities, including the consolidated statement of
investments, and the related consolidated statements of operations and of changes in net assets and the consolidated financial
highlights present fairly, in all material respects, the financial position of Templeton Global Balanced Fund (the "Fund") at
March 31, 2016, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the
period then ended and the consolidated financial highlights for the periods presented, in conformity with accounting principles
generally accepted in the United States of America. These consolidated financial statements and consolidated financial highlights
(hereafter referred to as "financial statements") are the responsibility of the Fund’s management. Our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with
the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and evaluating the overall financial statement
presentation. We believe that our audits, which included confirmation of securities at March 31, 2016 by correspondence with the
custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
May 17, 2016
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TEMPLETON GLOBAL INVESTMENT TRUST
Tax Information (unaudited)
Templeton Global Balanced Fund
Under Section 852(b)(3)(C) of the Internal Revenue Code (Code), the Fund hereby reports the maximum amount allowable but no less than $72,498,971 as a long term capital gain dividend for the fiscal year ended March 31, 2016.
Under Section 854(b)(1)(A) of the Code, the Fund hereby reports 11.80% of the ordinary income dividends as income qualifying for the dividends received deduction for the fiscal year ended March 31, 2016.
Under Section 854(b)(1)(B) of the Code, the Fund hereby reports the maximum amount allowable but no less than $43,706,951 as qualified dividends for purposes of the maximum rate under Section 1(h)(11) of the Code for the fiscal year ended March 31, 2016. Distributions, including qualified dividend income, paid during calendar year 2016 will be reported to shareholders on Form 1099-DIV by mid-February 2017. Shareholders are advised to check with their tax advisors for information on the treatment of these amounts on their individual income tax returns.
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TEMPLETON GLOBAL INVESTMENT TRUST
Board Members and Officers
The name, year of birth and address of the officers and board members, as well as their affiliations, positions held with the Trust, principal occupations during at least the past five years and number of U.S. registered portfolios overseen in the Franklin Templeton Investments fund complex, are shown below. Generally, each board member serves until that person’s successor is elected and qualified.
| Independent Board Members | |||||
| Number of Portfolios in | |||||
| Name, Year of Birth | Length of | Fund Complex Overseen | Other Directorships Held | ||
| and Address | Position | Time Served | by Board Member* | During at Least the Past 5 Years | |
| Harris J. Ashton (1932) | Trustee | Since 1994 | 145 | Bar-S Foods (meat packing company) | |
| 300 S.E. 2nd Street | (1981-2010). | ||||
| Fort Lauderdale, FL 33301-1923 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Director of various companies; and formerly, Director, RBC Holdings, Inc. (bank holding company) (until 2002); and President, Chief Executive | |||||
| Officer and Chairman of the Board, General Host Corporation (nursery and craft centers) (until 1998). | |||||
| Ann Torre Bates (1958) | Trustee | Since 2008 | 40 | Navient Corporation (loan | |
| 300 S.E. 2nd Street | management, servicing and asset | ||||
| Fort Lauderdale, FL 33301-1923 | recovery) (2014-present), Ares Capital | ||||
| Corporation (specialty finance | |||||
| company) (2010-present), United | |||||
| Natural Foods, Inc. (distributor of | |||||
| natural, organic and specialty foods) | |||||
| (2013-present), Allied Capital | |||||
| Corporation (financial services) | |||||
| (2003-2010) and SLM Corporation | |||||
| (Sallie Mae) (1997-2014). | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Director of various companies; and formerly, Executive Vice President and Chief Financial Officer, NHP Incorporated (manager of multifamily | |||||
| housing) (1995-1997); and Vice President and Treasurer, US Airways, Inc. (until 1995). | |||||
| Frank J. Crothers (1944) | Trustee | Since 2001 | 24 | Fortis, Inc. (utility holding company) | |
| 300 S.E. 2nd Street | (2007-present) and AML Foods Limited | ||||
| Fort Lauderdale, FL 33301-1923 | (retail distributors) (1989-present). | ||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Director and Vice Chairman, Caribbean Utilities Company, Ltd.; director of various other private business and nonprofit organizations; and | |||||
| formerly, Chairman, Atlantic Equipment and Power Ltd. (1977-2003). | |||||
| Edith E. Holiday (1952) | Lead | Trustee since | 145 | Hess Corporation (exploration and | |
| 300 S.E. 2nd Street | Independent | 1996 and Lead | refining of oil and gas) (1993-present), | ||
| Fort Lauderdale, FL 33301-1923 | Trustee | Independent | Canadian National Railway (railroad) | ||
| Trustee since 2007 | (2001-present), White Mountains | ||||
| Insurance Group, Ltd. (holding | |||||
| company) (2004-present), RTI | |||||
| International Metals, Inc. (manufacture | |||||
| and distribution of titanium) | |||||
| (1999-2015) and H.J. Heinz Company | |||||
| (processed foods and allied products) | |||||
| (1994-2013). | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Director or Trustee of various companies and trusts; and formerly, Assistant to the President of the United States and Secretary of the | |||||
| Cabinet (1990-1993); General Counsel to the United States Treasury Department (1989-1990); and Counselor to the Secretary and Assistant | |||||
| Secretary for Public Affairs and Public Liaison – United States Treasury Department (1988-1989). | |||||
| J. Michael Luttig (1954) | Trustee | Since 2009 | 145 | Boeing Capital Corporation (aircraft | |
| 300 S.E. 2nd Street | financing) (2006-2013). | ||||
| Fort Lauderdale, FL 33301-1923 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Executive Vice President, General Counsel and member of the Executive Council, The Boeing Company (aerospace company) (2006-present); | |||||
| and formerly, Federal Appeals Court Judge, U.S. Court of Appeals for the Fourth Circuit (1991-2006). | |||||
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TEMPLETON GLOBAL INVESTMENT TRUST
| Independent Board Members (continued) | |||||
| Number of Portfolios in | |||||
| Name, Year of Birth | Length of | Fund Complex Overseen | Other Directorships Held | ||
| and Address | Position | Time Served | by Board Member* | During at Least the Past 5 Years | |
| David W. Niemiec (1949) | Trustee | Since 2006 | 40 | Emeritus Corporation (assisted living) | |
| 300 S.E. 2nd Street | (1999-2010) and OSI Pharmaceuticals, | ||||
| Fort Lauderdale, FL 33301-1923 | Inc. (pharmaceutical products) | ||||
| (2006-2010). | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Advisor, Saratoga Partners (private equity fund); and formerly, Managing Director, Saratoga Partners (1998-2001) and SBC Warburg Dillon | |||||
| Read (investment banking) (1997-1998); Vice Chairman, Dillon, Read & Co. Inc. (investment banking) (1991-1997); and Chief Financial Officer, | |||||
| Dillon, Read & Co. Inc. (1982-1997). | |||||
| Frank A. Olson (1932) | Trustee | Since 2003 | 145 | Hess Corporation (exploration and | |
| 300 S.E. 2nd Street | refining of oil and gas) (1998-2013). | ||||
| Fort Lauderdale, FL 33301-1923 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Director of various companies; and formerly, Chairman of the Board, The Hertz Corporation (car rental) (1980-2000) and Chief Executive | |||||
| Officer (1977-1999); and Chairman of the Board, President and Chief Executive Officer, UAL Corporation (airlines) (June-December 1987). | |||||
| Larry D. Thompson (1945) | Trustee | Since 2006 | 145 | The Southern Company (energy | |
| 300 S.E. 2nd Street | company) (2014-present; previously | ||||
| Fort Lauderdale, FL 33301-1923 | 2010-2012), Graham Holdings | ||||
| Company (education and media | |||||
| organization) (2011-present) and | |||||
| Cbeyond, Inc. (business | |||||
| communications provider) | |||||
| (2010-2012). | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Director of various companies; John A. Sibley Professor of Corporate and Business Law, University of Georgia School of Law (2015-present; | |||||
| previously 2011-2012); and formerly, Executive Vice President – Government Affairs, General Counsel and Corporate Secretary, PepsiCo, | |||||
| Inc. (consumer products) (2012-2014); Senior Vice President – Government Affairs, General Counsel and Secretary, PepsiCo, Inc. | |||||
| (2004-2011); Senior Fellow of The Brookings Institution (2003-2004); Visiting Professor, University of Georgia School of Law (2004); and | |||||
| Deputy Attorney General, U.S. Department of Justice (2001-2003). | |||||
| Constantine D. Tseretopoulos | Trustee | Since 2001 | 24 | None | |
| (1954 | ) | ||||
| 300 S.E. 2nd Street | |||||
| Fort Lauderdale, FL 33301-1923 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Physician, Chief of Staff, owner and operator of the Lyford Cay Hospital (1987-present); director of various nonprofit organizations; and | |||||
| formerly, Cardiology Fellow, University of Maryland (1985-1987); and Internal Medicine Resident, Greater Baltimore Medical Center | |||||
| (1982-1985). | |||||
| Robert E. Wade (1946) | Trustee | Since 2006 | 40 | El Oro Ltd (investments) | |
| 300 S.E. 2nd Street | (2003-present). | ||||
| Fort Lauderdale, FL 33301-1923 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Attorney at law engaged in private practice (1972-2008) and member of various boards. | |||||
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TEMPLETON GLOBAL INVESTMENT TRUST
| Interested Board Members and Officers | |||||
| Number of Portfolios in | |||||
| Name, Year of Birth | Length of | Fund Complex Overseen | Other Directorships Held | ||
| and Address | Position | Time Served | by Board Member* | During at Least the Past 5 Years | |
| **Gregory E. Johnson (1961) | Trustee | Since 2006 | 161 | None | |
| One Franklin Parkway | |||||
| San Mateo, CA 94403-1906 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Chairman of the Board, Member – Office of the Chairman, Director and Chief Executive Officer, Franklin Resources, Inc.; officer and/or | |||||
| director or trustee, as the case may be, of some of the other subsidiaries of Franklin Resources, Inc. and of 44 of the investment companies in | |||||
| Franklin Templeton Investments; Vice Chairman, Investment Company Institute; and formerly, President, Franklin Resources, Inc. | |||||
| (1994-2015). | |||||
| **Rupert H. Johnson, Jr. (1940) | Chairman of | Chairman of the | 145 | None | |
| One Franklin Parkway | the Board, | Board, Trustee | |||
| San Mateo, CA 94403-1906 | Trustee and | since 2013, | |||
| Vice President | and Vice President | ||||
| since 1996 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Vice Chairman, Member – Office of the Chairman and Director, Franklin Resources, Inc.; Director, Franklin Advisers, Inc.; Senior Vice | |||||
| President, Franklin Advisory Services, LLC; and officer and/or director or trustee, as the case may be, of some of the other subsidiaries of | |||||
| Franklin Resources, Inc. and of 42 of the investment companies in Franklin Templeton Investments. | |||||
| Alison E. Baur (1964) | Vice President | Since 2012 | Not Applicable | Not Applicable | |
| One Franklin Parkway | |||||
| San Mateo, CA 94403-1906 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Deputy General Counsel, Franklin Templeton Investments; and officer of some of the other subsidiaries of Franklin Resources, Inc. and of 44 | |||||
| of the investment companies in Franklin Templeton Investments. | |||||
| Norman J. Boersma (1957) | President and | Since 2012 | Not Applicable | Not Applicable | |
| Lyford Cay | Chief Executive | ||||
| Nassau, Bahamas | Officer – | ||||
| Investment | |||||
| Management | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Director, President and Chief Executive Officer, Templeton Global Adviors Ltd.; Chief Investment Officer of Templeton Global Equity Group; | |||||
| officer of six of the investment companies in Franklin Templeton Investments; and formerly, Executive Vice President, Franklin Templeton | |||||
| Investments Corp. (1993-2014). | |||||
| Laura F. Fergerson (1962) | Chief | Since 2009 | Not Applicable | Not Applicable | |
| One Franklin Parkway | Executive | ||||
| San Mateo, CA 94403-1906 | Officer – | ||||
| Finance and | |||||
| Administration | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Senior Vice President, Franklin Templeton Services, LLC; Vice President, Franklin Advisers, Inc. and Franklin Templeton Institutional, LLC; and | |||||
| officer of 44 of the investment companies in Franklin Templeton Investments. | |||||
| Aliya S. Gordon (1973) | Vice President | Since 2009 | Not Applicable | Not Applicable | |
| One Franklin Parkway | |||||
| San Mateo, CA 94403-1906 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Senior Associate General Counsel, Franklin Templeton Investments; and officer of 44 of the investment companies in Franklin Templeton | |||||
| Investments. | |||||
| Steven J. Gray (1955) | Vice President | Since 2009 | Not Applicable | Not Applicable | |
| One Franklin Parkway | |||||
| San Mateo, CA 94403-1906 | |||||
| Principal Occupation During at Least the Past 5 Years: | |||||
| Senior Associate General Counsel, Franklin Templeton Investments; Vice President, Franklin Templeton Distributors, Inc. and Franklin | |||||
| Alternative Strategies Advisers, LLC; and officer of 44 of the investment companies in Franklin Templeton Investments. | |||||
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TEMPLETON GLOBAL INVESTMENT TRUST
| Interested Board Members and Officers (continued) | ||||
| Number of Portfolios in | ||||
| Name, Year of Birth | Length of | Fund Complex Overseen | Other Directorships Held | |
| and Address | Position | Time Served | by Board Member* | During at Least the Past 5 Years |
| Selena L. Holmes (1965) | Vice President | Since 2012 | Not Applicable | Not Applicable |
| 100 Fountain Parkway | – AML | |||
| St. Petersburg, FL 33716-1205 | Compliance | |||
| Principal Occupation During at Least the Past 5 Years: | ||||
| Director, Global Compliance Monitoring; Chief Compliance Officer, Franklin Alternative Strategies Advisers, LLC; Vice President, Franklin | ||||
| Templeton Companies, LLC; and officer of 44 of the investment companies in Franklin Templeton Investments. | ||||
| Kimberly H. Novotny (1972) | Vice President | Since 2013 | Not Applicable | Not Applicable |
| 300 S.E. 2nd Street | ||||
| Fort Lauderdale, FL 33301-1923 | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||
| Associate General Counsel, Franklin Templeton Investments; Vice President and Corporate Secretary, Fiduciary Trust International of the | ||||
| South; Vice President and Assistant Secretary, Templeton Investment Counsel, LLC; Assistant Secretary, Franklin Resources, Inc.; and officer | ||||
| of 44 of the investment companies in Franklin Templeton Investments. | ||||
| Mark H. Otani (1968) | Treasurer, | Since 2009 | Not Applicable | Not Applicable |
| One Franklin Parkway | Chief Financial | |||
| San Mateo, CA 94403-1906 | Officer and | |||
| Chief | ||||
| Accounting | ||||
| Officer | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||
| Treasurer, U.S. Fund Administration & Reporting, Franklin Templeton Investments; and officer of 13 of the investment companies in Franklin | ||||
| Templeton Investments. | ||||
| Robert C. Rosselot (1960) | Chief | Since 2013 | Not Applicable | Not Applicable |
| 300 S.E. 2nd Street | Compliance | |||
| Fort Lauderdale, FL 33301-1923 | Officer | |||
| Principal Occupation During at Least the Past 5 Years: | ||||
| Director, Global Compliance, Franklin Templeton Investments; Vice President, Franklin Templeton Companies, LLC; officer of 44 of the | ||||
| investment companies in Franklin Templeton Investments; and formerly, Senior Associate General Counsel, Franklin Templeton Investments | ||||
| (2007-2013); and Secretary and Vice President, Templeton Group of Funds (2004-2013). | ||||
| Karen L. Skidmore (1952) | Vice President | Since 2009 | Not Applicable | Not Applicable |
| One Franklin Parkway | ||||
| San Mateo, CA 94403-1906 | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||
| Senior Associate General Counsel, Franklin Templeton Investments; and officer of 44 of the investment companies in Franklin Templeton | ||||
| Investments. | ||||
| Navid Tofigh (1972) | Vice President | Since November | Not Applicable | Not Applicable |
| One Franklin Parkway | 2015 | |||
| San Mateo, CA 94403-1906 | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||
| Associate General Counsel, Franklin Templeton Investments; and officer of 44 of the investment companies in Franklin Templeton Investments. | ||||
| Craig S. Tyle (1960) | Vice President | Since 2005 | Not Applicable | Not Applicable |
| One Franklin Parkway | ||||
| San Mateo, CA 94403-1906 | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||
| General Counsel and Executive Vice President, Franklin Resources, Inc.; and officer of some of the other subsidiaries of Franklin Resources, | ||||
| Inc. and of 44 of the investment companies in Franklin Templeton Investments. | ||||
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TEMPLETON GLOBAL INVESTMENT TRUST
| Interested Board Members and Officers (continued) | ||||
| Number of Portfolios in | ||||
| Name, Year of Birth | Length of | Fund Complex Overseen | Other Directorships Held | |
| and Address | Position | Time Served | by Board Member* | During at Least the Past 5 Years |
| Lori A. Weber (1964) | Secretary and | Secretary since | Not Applicable | Not Applicable |
| 300 S.E. 2nd Street | Vice President | 2013 and Vice | ||
| Fort Lauderdale, FL 33301-1923 | President since | |||
| 2011 | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||
| Senior Associate General Counsel, Franklin Templeton Investments; Assistant Secretary, Franklin Resources, Inc.; Vice President and | ||||
| Secretary, Templeton Investment Counsel, LLC; and officer of 44 of the investment companies in Franklin Templeton Investments. | ||||
| *We base the number of portfolios on each separate series of the U.S. registered investment companies within the Franklin Templeton Investments fund complex. These | ||||
| portfolios have a common investment manager or affiliated investment managers. | ||||
| **Gregory E. Johnson is considered to be an interested person of the Fund under the federal securities laws due to his position as an officer and director of Franklin | ||||
| Resources, Inc. (Resources), which is the parent company of the Fund’s investment manager and distributor. Rupert H. Johnson, Jr. is considered to be an interested person | ||||
| of the Fund under the federal securities laws due to his position as officer and director and major shareholder of Resources. | ||||
| Note 1: Rupert H. Johnson, Jr. is the uncle of Gregory E. Johnson. | ||||
| Note 2: Officer information is current as of the date of this report. It is possible that after this date, information about officers may change. | ||||
| The Sarbanes-Oxley Act of 2002 and Rules adopted by the U.S. Securities and Exchange Commission require the Fund to disclose whether the Fund’s Audit | ||||
| Committee includes at least one member who is an audit committee financial expert within the meaning of such Act and Rules. The Fund’s Board has determined | ||||
| that there is at least one such financial expert on the Audit Committee and has designated each of Ann Torre Bates and David W. Niemiec as an audit committee | ||||
| financial expert. The Board believes that Ms. Bates and Mr. Niemiec qualify as such an expert in view of their extensive business background and experience. Ms. | ||||
| Bates has served as a member of the Fund Audit Committee since 2008. She currently serves as a director of Navient Corporation (2014-present), Ares Capital | ||||
| Corporation (2010-present) and United Natural Foods, Inc. (2013-present) and was formerly a director of SLM Corporation from 1997 to 2014 and Allied Capital | ||||
| Corporation from 2003 to 2010, Executive Vice President and Chief Financial Officer of NHP Incorporated from 1995 to 1997 and Vice President and Treasurer of | ||||
| US Airways, Inc. until 1995. Mr. Niemiec has served as a member of the Fund Audit Committee since 2006, currently serves as an Advisor to Saratoga Partners | ||||
| and was formerly its Managing Director from 1998 to 2001. Mr. Niemiec was formerly a director of Emeritus Corporation from 1999 to 2010 and OSI Pharmaceu- | ||||
| ticals, Inc. from 2006 to 2010, Managing Director of SBC Warburg Dillon Read from 1997 to 1998, and was Vice Chairman from 1991 to 1997 and Chief Financial | ||||
| Officer from 1982 to 1997 of Dillon, Read & Co. Inc. As a result of such background and experience, the Board believes that Ms. Bates and Mr. Niemiec have each | ||||
| acquired an understanding of generally accepted accounting principles and financial statements, the general application of such principles in connection with | ||||
| the accounting estimates, accruals and reserves, and analyzing and evaluating financial statements that present a breadth and level of complexity of accounting | ||||
| issues generally comparable to those of the Fund, as well as an understanding of internal controls and procedures for financial reporting and an understanding | ||||
| of audit committee functions. Ms. Bates and Mr. Niemiec are independent Board members as that term is defined under the applicable U.S. Securities and | ||||
| Exchange Commission Rules and Releases. | ||||
| The Statement of Additional Information (SAI) includes additional information about the board members and is available, without charge, upon request. | ||||
| Shareholders may call (800) DIAL BEN/342-5236 to request the SAI. | ||||
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TEMPLETON GLOBAL INVESTMENT TRUST
TEMPLETON GLOBAL BALANCED FUND
Shareholder Information
Board Review of Investment Management Agreement
At a meeting held February 23, 2016, the Board of Trustees (Board), including a majority of trustees that are not “interested persons” as such term is defined in section 2(a)(19) of the Investment Company Act of 1940 (hereinafter referred to as “non-interested Trustees” or “independent Trustees”), approved renewal of the investment management agreements for each of the separate funds comprising the Templeton Global Investment Trust, including Templeton Global Balanced Fund (Fund(s)). In reaching this decision, the Board took into account information furnished throughout the year at regular Board meetings, as well as information prepared specifically in connection with the annual renewal review process. Information furnished and discussed throughout the year included investment performance reports and related financial information for each Fund, along with periodic reports on expenses, shareholder services, legal and compliance matters, risk control, pricing, brokerage commissions and execution and other services provided by the Investment Manager (Manager) and its affiliates, as well as marketing support payments made to financial intermediaries. Information furnished specifically in connection with the renewal process included a report for each Fund prepared by Broadridge Financial Solutions, Inc. (Broadridge), an independent organization, as well as additional material, including a Fund profitability analysis prepared by management. The Broadridge reports, which utilized data from Lipper, Inc. (Lipper), compared each Fund’s investment performance and expenses with those of other mutual funds deemed comparable to the Fund as selected by Lipper. The Fund profitability analysis discussed the profitability to Franklin Templeton Investments (FTI) from its overall U.S. fund operations, as well as on an individual fund-by-fund basis. Additional material accompanying such profitability analysis included information on a fund-by-fund basis listing portfolio managers and other accounts they manage, as well as information on management fees charged by the Manager and its affiliates to U.S. mutual funds and other accounts, including management’s explanation of differences where relevant. Such material also included a memorandum prepared by management describing project initiatives and capital investments relating to the services provided to the Funds by the FTI organization, as well as a memorandum relating to economies of scale and an analysis concerning transfer agent fees charged by an affiliate of the Manager. The Board also received a report on all marketing support payments made by FTI to financial intermediaries during the past year, as well as a memorandum relating to third-party servicing arrangements in response to a Guidance Update from the U.S. Securities and Exchange Commission (SEC) relating to mutual fund distribution and sub-accounting fees.
In considering such materials, the independent Trustees received assistance and advice from and met separately with independent counsel. While the investment management agreements for all Funds, and subadvisory agreements where applicable, were considered at the same Board meeting, the Board dealt with each Fund separately. In approving continuance of the investment management agreement for each Fund, the Board, including a majority of independent Trustees, determined that the existing management fee structure was fair and reasonable and that continuance of the investment management agreement was in the best interests of such Fund and its shareholders. While attention was given to all information furnished, the following discusses some primary factors relevant to the Board’s decision.
NATURE, EXTENT AND QUALITY OF SERVICES. The Board was satisfied with the nature and quality of the overall services provided by the Manager and its affiliates to the Fund and its shareholders, other than as noted below with respect to investment performance and expenses. The Board’s opinion was based, in part, upon periodic reports furnished to it showing that the investment policies and restrictions for the Fund were consistently complied with as well as other reports periodically furnished to the Board covering matters such as the compliance of portfolio managers and other management personnel with the code of ethics adopted throughout the Franklin Templeton fund complex, the adherence to fair value pricing procedures established by the Board, and the accuracy of net asset value calculations. The Board also noted the extent of benefits provided Fund shareholders from being part of the Franklin Templeton family of funds, including the right to exchange investments between the same class of shares of different funds without a sales charge, the ability to reinvest Fund dividends into other funds and the right to combine holdings in other funds to obtain a reduced sales charge. Favorable consideration was given to management’s continual efforts and expenditures in establishing effective business continuity plans and developing strategies to address cybersecurity threats. Additionally, the Board noted the Manager’s continued attention to pricing and valuation issues, particularly with respect to complex securities. Among other
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TEMPLETON GLOBAL INVESTMENT TRUST
TEMPLETON GLOBAL BALANCED FUND
SHAREHOLDER INFORMATION
Board Review of Investment Management Agreement (continued)
factors taken into account by the Board were the Manager’s best execution trading policies, including a favorable report by an independent portfolio trading analytical firm that also covered FOREX transactions. Consideration was also given to the experience of the Fund’s portfolio management team, the number of accounts managed and general method of compensation. In this latter respect, the Board noted that a primary factor in management’s determination of a portfolio manager’s bonus compensation was the relative investment performance of the funds he or she managed and that a portion of such bonus was required to be invested in a predesignated list of funds within such person’s fund management area so as to be aligned with the interests of shareholders. The Board also took into account the quality of transfer agent and shareholder services provided Fund shareholders by an affiliate of the Manager and steps taken by FTI to enhance analytical support to the investment management groups and provide additional oversight of liquidity risk and complex securities. The Board also took into account, among other things, management’s efforts in establishing a global credit facility for the benefit of the Fund and other accounts managed by FTI to provide a source of cash for temporary and emergency purposes or to meet unusual redemption requests as well as the strong financial position of the Manager’s parent company and its commitment to the mutual fund business as evidenced by its continued introduction of new funds and reassessment of the fund offerings in response to the market environment.
INVESTMENT PERFORMANCE. The Board placed significant emphasis on the investment performance of the Fund in view of its importance to shareholders. While consideration was given to performance reports and discussions with portfolio managers at Board meetings during the year, particular attention in assessing performance was given to the Broadridge reports furnished for the agreement renewal. The Broadridge report for the Fund showed the investment performance of its Class A1 shares in comparison to a performance universe selected by Lipper, which have the same expense structure as the Fund’s Class A shares. Comparative performance for the Fund was shown for 2015 and for the previous 10 years ended December 31, 2015, or for a lesser period for Templeton Global Balanced Fund and for other funds, depending in when their operations commenced. The following summarizes the performance results for the Fund and the Board’s view of such performance.
The Lipper performance universe for this Fund consisted of all retail and institutional mixed-asset target allocation moderate funds as selected by Lipper. The Fund’s objective is to seek both income and capital appreciation. The Broadridge report showed the Fund’s income return during 2015 and each of the annualized previous three-, five- and 10-year periods to be in the highest quintile of such performance universe. The Broadridge report showed the Fund’s 2015 total return to be in the second-lowest performing quintile of its performance universe and on an annualized basis to be in the second-lowest performing quintile of such universe for the previous three- and five-year periods, and the highest performing quintile for the previous 10-year period. The Board was satisfied with the Fund’s comparative performance as shown in the Broadridge report and consistent with its objective of seeking both income and capital appreciation.
COMPARATIVE EXPENSES. Consideration was given to the management fees and total expense ratio of the Fund compared with those of a group of other funds selected by Lipper as its appropriate Lipper expense group. Lipper expense data is based upon information taken from each fund’s most recent annual report, which reflects historical asset levels that may be quite different from those currently existing, particularly in a period of market volatility. While recognizing such inherent limitation and the fact that expense ratios generally increase as assets decline and decrease as assets grow, the Board believed the independent analysis conducted by Lipper to be an appropriate measure of comparative expenses. In reviewing comparative costs, Lipper provides information on the Fund’s contractual investment management fee in comparison with the contractual management fee that would have been charged by other funds within its Lipper expense group assuming they were similar in size to the Fund, as well as the actual total expense ratio of the Fund in comparison with those of its Lipper expense group. The Lipper contractual investment management fee analysis includes administrative charges as being part of the contractual investment management fee, and actual total expenses, for comparative consistency, are shown by Lipper for Fund Class A shares for funds having multiple share classes. The Broadridge report for the Fund showed its contractual investment management fee rate was within 10 basis points of its Lipper expense group median, while its actual total expense ratio was within 13 basis points of the group’s median. The Board found such comparative expenses as shown in the Broadridge report to be acceptable.
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TEMPLETON GLOBAL INVESTMENT TRUST
TEMPLETON GLOBAL BALANCED FUND
SHAREHOLDER INFORMATION
MANAGEMENT PROFITABILITY. The Board also considered the level of profits realized by the Manager and its affiliates in connection with the operation of the Fund. In this respect, the Board reviewed the Fund profitability analysis that addresses the overall profitability of Franklin Templeton’s U.S. fund business, as well as its profits in providing management and other services to each of the individual funds during the 12-month period ended September 30, 2015, being the most recent fiscal year-end for Franklin Resources, Inc., the Manager’s parent. In reviewing the analysis, the Board recognized that allocation methodologies are inherently subjective and various allocation methodologies may be reasonable while producing different results. In this respect, the Board noted that while management continually makes refinements to its methodologies in response to organizational and product related changes, the overall approach as defined by the primary drivers and activity measurements has remained consistent with that used in the Fund profitability report presentations from prior years. Additionally, the Fund’s independent registered public accounting firm had been engaged by the Manager to periodically review the reasonableness of the allocation methodologies to be used solely by the Fund’s Board in reference to the profitability analysis. In reviewing and discussing such analysis, management discussed with the Board its belief that costs incurred in establishing the infrastructure necessary for the type of mutual fund operations conducted by the Manager and its affiliates may not be fully reflected in the expenses allocated to the Fund in determining its profitability, as well as the fact that the level of profits, to a certain extent, reflected operational cost savings and efficiencies initiated by management. The Board also took into account management’s expenditures in improving shareholder services provided to the Funds, as well as the need to implement systems to meet additional regulatory and compliance requirements resulting from statutes such as the Sarbanes-Oxley and Dodd-Frank Acts and recent SEC and other regulatory requirements. In addition, the Board considered a third-party study comparing the profitability of the Manager’s parent on an overall basis to other publicly held managers broken down to show profitability from management operations exclusive of distribution expenses, as well as profitability including distribution expenses. The Board also considered the extent to which the Manager and its affiliates might derive ancillary benefits from fund operations, including revenues generated from transfer agent services and potential benefits resulting from personnel and systems enhancements necessitated by fund growth, as well as increased leverage with the service providers and counterparties, allocation of fund brokerage and the use of commission dollars to pay for research. Based upon its consideration of all these factors, the Board determined that the level of profits realized by the Manager and its affiliates from providing services to the Fund was not excessive in view of the nature, quality and extent of services provided.
ECONOMIES OF SCALE. The Board also considered whether economies of scale are realized by the Manager as the Fund grows larger and the extent to which this is reflected in the level of management fees charged. While recognizing that any precise determination is inherently subjective, the Board noted that based upon the Fund profitability analysis, it appears that as some funds get larger, at some point economies of scale do result in the Manager realizing a larger profit margin on management services provided such a fund. The Board also noted that economies of scale are shared with the Fund and its shareholders through management fee breakpoints so that as the Fund grows in size, its effective management fee rate declines. The investment management advisory agreement for the Fund provides for breakpoints that are above the Fund’s existing asset size, and to the extent economies of scale may be realized by the Manager and its affiliates, the Board believes the schedule of fees for the Fund provides a sharing of benefits with the Fund and its shareholders.
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Annual Report
75
TEMPLETON GLOBAL INVESTMENT TRUST
TEMPLETON GLOBAL BALANCED FUND
SHAREHOLDER INFORMATION
Proxy Voting Policies and Procedures
The Fund’s investment manager has established Proxy Voting Policies and Procedures (Policies) that the Fund uses to determine how to vote proxies relating to portfolio securities. Shareholders may view the Fund’s complete Policies online at franklintempleton.com. Alternatively, shareholders may request copies of the Policies free of charge by calling the Proxy Group collect at (954) 527-7678 or by sending a written request to: Franklin Templeton Companies, LLC, 300 S.E. 2nd Street, Fort Lauderdale, FL 33301, Attention: Proxy Group. Copies of the Fund’s proxy voting records are also made available online at franklintempleton.com and posted on the U.S. Securities and Exchange Commission’s website at sec.gov and reflect the most recent 12-month period ended June 30.
Quarterly Consolidated Statement of Investments
The Trust, on behalf of the Fund, files a complete consolidated statement of investments with the U.S. Securities and Exchange Commission for the first and third quarters for each fiscal year on Form N-Q. Shareholders may view the filed Form N-Q 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 the Fund’s financial reports every six months as well as an annual updated summary prospectus (prospectus available upon request). To reduce Fund expenses, we try to identify related shareholders in a household and send only one copy of the financial reports and summary prospectus. This process, called “householding,” will continue indefinitely unless you instruct us otherwise. If you prefer not to have these documents householded, please call us at (800) 632-2301. At any time you may view current prospectuses/summary prospectuses and financial reports on our website. If you choose, you may receive these documents through electronic delivery.
76 Annual Report
franklintempleton.com
Annual Report and Shareholder Letter
Templeton Global Balanced Fund
Investment Manager
Templeton Global Advisors Limited
Subadvisor
Franklin Advisers, Inc.
Distributor
Franklin Templeton Distributors, Inc.
(800) DIAL BEN® / 342-5236
franklintempleton.com
Shareholder Services
(800) 632-2301
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.
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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 12(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 David W. Niemiec and he is "independent" as defined under the relevant Securities and Exchange Commission Rules and Releases.
Item 4. Principal Accountant Fees and Services.
(a) Audit Fees
The aggregate fees paid to the principal accountant for professional services rendered by the principal accountant for the audit of the registrant’s annual financial statements or for services that are normally provided by the principal accountant in connection with statutory and regulatory filings or engagements were $263,860 for the fiscal year ended March 31, 2016 and $245,836 for the fiscal year ended March 31, 2015.
(b) Audit-Related Fees
There were no fees paid to the principal accountant for assurance and related services rendered by the principal accountant to the registrant that are reasonably related to the performance of the audit of the registrant's financial statements and are not reported under paragraph (a) of Item 4.
There were no fees paid to the principal accountant for assurance and related services rendered by the principal accountant to the registrant's investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant that are reasonably related to the performance of the audit of their financial statements.
(c) Tax Fees
The aggregate fees paid to the principal accountant for professional services rendered by the principal accountant to the registrant for tax compliance, tax advice and tax planning were $4,590 the fiscal year ended March 31, 2016 and $4,500 for the fiscal year ended March 31, 2015. The services for which these fees were paid include consulting and preparation of tax returns.
There were no fees paid to the principal accountant for professional services rendered by the principal accountant to the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant for tax compliance, tax advice and tax planning.
(d) All Other Fees
There were no fees paid to the principal accountant for products and services rendered by the principal accountant to the registrant not reported in paragraphs (a)-(c) of Item 4.
The aggregate fees paid to the principal accountant for products and services rendered by the principal accountant to the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant other than services reported in paragraphs (a)-(c) of Item 4 were $672,151 for the fiscal year ended March 31, 2016 and $5,945 for the fiscal year ended March 31, 2015. The services for which these fees were paid included preparation and review of materials provided to the fund Board in connection with the investment management contract renewal process and derivative assessment, the review of system processes related to fixed income securities and certifying asset under management.
(e) (1) The registrant’s audit committee is directly responsible for approving the services to be provided by the auditors, including:
(i) pre-approval of all audit and audit related services;
(ii) pre-approval of all non-audit related services to be provided to the Fund by the auditors;
(iii) pre-approval of all non-audit related services to be provided to the registrant by the auditors to the registrant’s investment adviser or to any entity that controls, is controlled by or is under common control with the registrant’s investment adviser and that provides ongoing services to the registrant where the non-audit services relate directly to the operations or financial reporting of the registrant; and
(iv) establishment by the audit committee, if deemed necessary or appropriate, as an alternative to committee pre-approval of services to be provided by the auditors, as required by paragraphs (ii) and (iii) above, of policies and procedures to permit such services to be pre-approved by other means, such as through establishment of guidelines or by action of a designated member or members of the committee; provided the policies and procedures are detailed as to the particular service and the committee is informed of each service and such policies and procedures do not include delegation of audit committee responsibilities, as contemplated under the Securities Exchange Act of 1934, to management; subject, in the case of (ii) through (iv), to any waivers, exceptions or exemptions that may be available under applicable law or rules.
(e) (2) None of the services provided to the registrant described in paragraphs (b)-(d) of Item 4 were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of regulation S-X.
(f) No disclosures are required by this Item 4(f).
(g) The aggregate non-audit fees paid to the principal accountant for services rendered by the principal accountant to the registrant and the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant were $676,741 for the fiscal year ended March 31, 2016 and $10,445 for the fiscal year ended March 31, 2015.
(h) The registrant’s audit committee of the board has considered whether the provision of non-audit services that were rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.
Item 5. Audit Committee of Listed Registrants. N/A
Item 6. Schedule of Investments. N/A
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. N/A
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
N/A
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. N/A
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no changes to the procedures by which shareholders may recommend nominees to the Registrant's Board of Trustees that would require disclosure herein.
Item 11. Controls and Procedures.
(a) Evaluation of Disclosure Controls and Procedures. The Registrant maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Registrant’s filings under the Securities Exchange Act of 1934 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 controls or in other factors that could materially affect the internal controls over financial reporting subsequent to the date of their evaluation in connection with the preparation of this Shareholder Report on Form N-CSR.
Item 12. Exhibits.
(a)(1) Code of Ethics
(a)(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Laura F. Fergerson, Chief Executive Officer - Finance and Administration, and Mark H. Otani, Chief Financial Officer and Chief Accounting Officer
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Laura F. Fergerson, Chief Executive Officer - Finance and Administration, and Mark H. Otani, Chief Financial Officer and Chief Accounting Officer
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
TEMPLETON GLOBAL INVESTMENT TRUST
By /s/ LAURA F. FERGERSON
Laura F. Fergerson
Chief Executive Officer - Finance and
Administration
Date May 26, 2016
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/ LAURA F. FERGERSON
Laura F. Fergerson
Chief Executive Officer - Finance and
Administration
Date May 26, 2016
By /s/MARK H. OTANI
Mark H. Otani
Chief Financial Officer and
Chief Accounting Officer
Date May 26, 2016