Templeton Global Balanced Fund

should still keep an eye on it.

The benchmark of the Fund is composed of 60% MSCI World Index and 40% JP Morgan Global Government Bond index. Since 2005, the Fund has overweighed equities by 5% against its composite benchmark.

With holding approx. 140 items in its portfolio, the Fund is relatively concentrated compared to its peers, which hold 180 or more in general. Besides, the Fund seems to be more focused. As of 30th June 2006, the Fund held approx. 160 items and then reduced gradually to around 140 recently. On the equity front, the stock selection is based on bottom-up approach and the equity portfolio deviates greatly from the benchmark geographically. The Fund favors blend style equities.

On the fixed income front, Michael positions the portfolio based on a top-down approach in lieu of bottom-up. While other fixed income portfolios in balanced funds try to cushion the volatility from the equity tail, the Fund's one is managed actively to win total return. For instance, the Fund added weights to Sweden bonds from 4% to 7% in February this year, while the weighting of Sweden bonds was only 2% in February last year. Moreover, the Fund recently added exposure to some emerging markets, including Malaysia and Poland.

The Fund underperformed its peers in 1Q07, but its long-term performance is still evident by its outperformance in its trailing five-year return. Although it is a balanced fund, its aggressive style should earn some appeals from investors, who are ambitious but cautious.