FSMIX : Franklin Strategic Mortgage Fund Class A1

Fund Summary

The investment seeks a high total return relative to the performance of the general mortgage securities market. The fund invests at least 80% of its net assets in mortgage securities. It invests substantially in mortgage securities that are issued or guaranteed by the U.S. government, its agencies or instrumentalities, which include mortgage pass-through securities representing interests in "pools" of mortgage loans issued or guaranteed by the Government National Mortgage Association, Fannie Mae, and Freddie Mac. The fund may invest up to 15% of its net assets in foreign securities, which may include non-U.S. dollar denominated foreign mortgage securities.