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FRANKLIN TEMPLETON SHARIAH FUNDSsociété d’investissement à capital variableOctober 31, 2021

AUDITED ANNUAL REPORT

R.C.S. B 169 965

FRANKLIN TEMPLETON SHARIAH FUNDSsociété d’investissement à capital variable

AUDITED ANNUAL REPORTFor the year ended October 31, 2021

This report shall not constitute an offer or a solicitation of an offer to buy shares of Franklin Templeton Shariah Funds (the “Company”). Subscriptions are to be made on the basis of the current prospectus and its addendum as the case may be, where available the relevant Key Investor Information Documents (“KIIDs”), a copy of the latest available audited annual report and, if published thereafter, the latest unaudited semi-annual report. The auditor’s report refers only to the English version of the Annual Report and not to any translated versions.

www.franklintempleton.lu AUDITED ANNUAL REPORT 5

General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6Report of the Board of Directors . . . . . . . . . . . . . . . . . . 8Report of the Shariah Supervisory Board . . . . . . . . . . 9Report of the Investment Managers . . . . . . . . . . . . . . . 10Audit Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13Fund Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16Statement of Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . 17Statement of Operations and Changes in Net Assets 18Statistical Information . . . . . . . . . . . . . . . . . . . . . . . . . . . 19Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . 20Schedule of Investments . . . . . . . . . . . . . . . . . . . . . . . . 27Franklin Global Sukuk Fund ............................................ ...27Templeton Shariah Global Equity Fund ........................... ...29Additional Information - Unaudited . . . . . . . . . . . . . . . . 31

. . . . . . . . . . . . . . . 33

Contents

FRANKLIN TEMPLETON SHARIAH FUNDS

General InformationAs at October 31, 2021

www.franklintempleton.luAudited Annual Report6

société d’investissement à capital variable8A, rue Albert Borschette, L-1246 Luxembourg, Grand Duchy of Luxembourg(Registered with the registre de commerce et des sociétés, Luxembourg, under number B 169 965)

BOARD OF DIRECTORS:ChairwomanCaroline Carroll DirectorFRANKLIN TEMPLETON INVESTMENT MANAGEMENT LIMITEDCannon Place, 78 Cannon Street, London EC4N 6HLUnited Kingdom

DirectorsWilliam JacksonDirectorFRANKLIN TEMPLETON INVESTMENT MANAGEMENT LIMITED5 Morrison Street, Edinburgh EH3 8BH,Scotland

A. Craig BlairDirectorFRANKLIN TEMPLETON INTERNATIONAL SERVICESS.à r.l.8A, rue Albert Borschette, L-1246 Luxembourg,Grand Duchy of Luxembourg(Appointed on 14/10/2021)

Hans-J. WisserIndependent DirectorKälberstücksweg 37, 61350 Bad HomburgGermany

Michel TulleSenior Director Continental EuropeFRANKLIN TEMPLETON INTERNATIONAL SERVICES S.à r.l., French Branch20 rue de la Paix, F-75002 ParisFrance(Resigned on 13/07/2021)

MANAGEMENT COMPANY:FRANKLIN TEMPLETON INTERNATIONAL SERVICESS.à r.l.8A, rue Albert Borschette, L-1246 LuxembourgGrand Duchy of Luxembourg

SHARIAH SUPERVISORY BOARD:AMANIE ADVISORS SDN BHDLevel 13A-2Menara Tokio Marine Life189, Jalan Tun Razak50400 Kuala LumpurMalaysia– Dr. Mohamed Ali Elgari– Dr. Muhammad Amin Ali Qattan– Dr. Mohd Daud Bakar– Dr. Osama Al Dereai

SHARIAH STOCK SCREENING PROVIDER:IdealRatings, Inc.425 Market Street, Suite 2200San Francisco, CA, 94105United States of America

REGISTERED OFFICE:8A, rue Albert Borschette, L-1246 LuxembourgGrand Duchy of Luxembourg

PRINCIPAL DISTRIBUTOR:FRANKLIN TEMPLETON INTERNATIONAL SERVICESS.à r.l.8A, rue Albert Borschette, L-1246 LuxembourgGrand Duchy of Luxembourg

INVESTMENT MANAGERS:FRANKLIN TEMPLETON INVESTMENTS (ME) LIMITEDThe Gate, East Wing, Level 2Dubai International Financial CentreP.O. Box 506613, Dubai United Arab EmiratesFranklin Templeton Investments (ME) Limited manages Franklin Global Sukuk Fund.

TEMPLETON ASSET MANAGEMENT LTD7 Temasek Boulevard#38-03 Suntec Tower OneSingapore 038987Templeton Asset Management Ltd manages Templeton Shariah Global Equity Fund.

FRANKLIN TEMPLETON SHARIAH FUNDSGENERAL INFORMATION

www.franklintempleton.lu Audited Annual Report 7

SUB-ADVISERS:FRANKLIN TEMPLETON GSC ASSET MANAGEMENT Sdn. Bhd.Suite 31-02, 31st Floor, Menara Keck Seng203 Jalan Bukit Bintang55100 Kuala LumpurMalaysiaFranklin Templeton GSC Asset Management Sdn. Bhd. has been appointed as sub-adviser for the Franklin Global Sukuk Fund.

DEPOSITARY BANK:HSBC Continental Europe, Luxembourg Branch16, boulevard d’Avranches, L-1160 LuxembourgGrand Duchy of Luxembourg

CENTRAL ADMINISTRATIVE AGENT:FRANKLIN TEMPLETON INTERNATIONAL SERVICESS.à r.l.8A, rue Albert Borschette, L-1246 LuxembourgGrand Duchy of Luxembourg

ADMINISTRATIVE AGENT:J.P. MORGAN BANK LUXEMBOURG S.A.European Bank & Business Centre6C, route de TrèvesL-2633, SenningerbergGrand Duchy of Luxembourg

AUDITOR:PRICEWATERHOUSECOOPERS, Société coopérative2, rue Gerhard Mercator, L-2182 LuxembourgGrand Duchy of Luxembourg

LEGAL ADVISERS:ELVINGER HOSS PRUSSEN, société anonyme2, Place Winston Churchill, L-1340 LuxembourgGrand Duchy of Luxembourg



Report of the Board of Directors

At 31 October 2021, total assets of Franklin Templeton Shariah Funds (“FTSF,” or the “Company”) stood at US$454.90 million, higher than the US$320.04 million under management at 31 October 2020.

The size and depth of the Shariah-compliant investment universe has continued to increase over the past year, driven by a wide range of factors. Improving macroeconomic indicators in many emerging markets, outperformance in select stock

contributed to the growth of this sector.

With its specialised expertise and on-the-ground resources in key markets in the Middle East and Southeast Asia, Franklin Templeton stands ready to capture future opportunities amidst a dynamic and changing investment landscape. The ongoing progress of economic reforms across Asia and the Gulf Cooperation Council region, the continued development of emerging market nations and geopolitical events worldwide have all focused an increasing amount of investor attention on the Shariah-compliant space. With a long track record in these regions, we believe the Company is well-positioned to navigate this complex territory and also to look beyond the headlines and identify fundamentally sound value for our investors.

Corporate GovernanceThe Company is committed to high standards of corporate governance. The Board of Directors of the Company (the “Board”) adheres to the principles of the ALFI Code of Conduct (as revised – June 2013) and considers that it has been in compliance

Thank you for investing with Franklin Templeton. Please be advised that the prospectus, the Key Investor Information Documents (KIIDs) and all Funds and share classes of FTSF may not be available in your jurisdiction.

THE BOARD OF DIRECTORSLuxembourg, November 2021

The information stated in this report represents historical data and is not an indication of future results.

AMANIE ADVISORS SDN BHD 684050-HLevel 13A-2 * Menara Tokio Marine Life * 189 Jalan Tun Razak * 50400 Kuala Lumpur * Malaysia

Tel * +603 2161 0260 Fax * +603 2161 0262www.amanieadvisors.com

MALAYSIA | UNITED ARAB EMIRATES | KAZAKHSTAN

16 November 2021

Franklin Templeton International Services S.à r.l.8A, Rue Albert Borschette,L-1246 LuxembourgGrand Duchy of Luxembourg

Attn: The Conducting Officers

ANNUAL SHARIAH COMPLIANCE REPORT FOR FRANKLIN TEMPLETON SHARIAH FUNDS FOR THE PERIOD BETWEEN 1 NOVEMBER 2020 AND 31 OCTOBER 2021

Based on our view of the investments of Franklin Templeton Global Sukuk Fund, Templeton Shariah Asian Growth Fund and Templeton Shariah Global Equity Fund ("the sub-funds") and on theinformation provided to us by the representative of Franklin Templeton Shariah Funds, we hereby confirm that the Funds’ investments as well as their transactions during the financial year ended 31 October 2021 are in compliance with the Islamic investment guidelines as interpreted and issued by Amanie Shariah Supervisory Board Members.

Yours faithfully,

DATUK DR MOHD DAUD BAKAR(On behalf of the Amanie Advisors Shariah Supervisory Board)

Shariah Supervisory Board MembersDr. Mohamed Ali Elgari (Chairman)Dr. Mohd. Daud BakarDr. Muhammad Amin Ali QattanDr. Osama Al Dereai



Report of the Investment ManagersYear to October 31, 2021

Market Performance

During the 12-month period ended 31 October 2021, global equity markets overall rose strongly and most countries around the

the needs of their economies with the health of their citizens before higher vaccination rates and lower case levels enabled many regions to progressively reopen their economies in the second quarter of 2021. Later in the period, with improving global

As the reporting period drew to a close, most developed market central banks appear largely on hold with policy rates but are at various stages of tapering their asset purchase programmes. A number of emerging market countries are facing persistent

Monetary Fund (IMF) lowered its forecast for global economic growth in 2021 from 6.0% to 5.9%. The IMF stated the change

commodity exporters.

Global Sukuk markets, as represented by the Dow Jones Sukuk Index, advanced over the 12-month review period. Returns

Government Bond Index and the Barclays Global Aggregate Index. However, Sukuk markets lagged emerging market (EM)

EM government bonds), as accommodative monetary conditions around the world and attractive relative valuations supported

vaccination programme rollouts, economic optimism and the approval of a US stimulus package were key positive factors,

as new COVID-19 variants spread, although this was followed by a sharp rise in yields in September, caused by perceptions

markets, crude oil prices advanced strongly overall, in part on optimism over the global economic outlook, as well as supply restraint from key producers.

Fund Performance

Franklin Global Sukuk Fund

Franklin Global Sukuk Fund returned 3.4% on a gross basis and 1.9% on a net basis in the 12 months to 31 October 2021. On a net basis, it underperformed its benchmark, the Dow Jones Sukuk Index, which returned 2.3% over the same period, all in US dollars.

Security selection was also positive for relative performance. Selection among sovereigns, quasi-sovereigns and corporate

Exposure to the Egyptian rates also improved returns. Elsewhere, currency exposure modestly contributed as a result of exposure to the euro.



Templeton Shariah Global Equity Fund

For the year ended 31 October 2021, the fund underperformed its benchmark index. The fund returned 31.3% (net) in US-dollar terms, while the benchmark MSCI All Country World Islamic Index-NR posted a 34.41% total return, also in US-dollar terms. Although fully invested, holding cash in the strong market accounted for a good portion of the lag in performance.

Security selection in the health care sector weighed on relative results. Leading detractors included Fresenius Medical Care, Tsumura and Smith & Nephew. Shares of German dialysis specialist Fresenius have been weighed down by COVID-related challenges including cost and supply chain pressures and a higher mortality rate amongst medically vulnerable dialysis

China Telecom (CT) and China Mobile pressured relative performance in the communication services sector. CT is the

provinces and has the leading enterprise business franchise, which we view as a competitive advantage for the monetisation of cloud and 5G related opportunities. The mobile business has been a consistent market share gainer. CT’s shares rallied in June as the company materially raised its dividend pay-out policy and guided for double-digit earnings growth over the next few years.

In the utilities sector, shares of E.ON, one of the largest utilities in Europe, rose in value but lagged its peers in the benchmark.

the same time funding 5%-10% dividend growth. Longer term, we believe E.ON is well-positioned to take advantage of the energy transition, which can create steady growth at stable regulated returns.

In terms of contributors, stock selection in the information technology sector aided relative results. Within the sector, Applied Materials and Lenovo were the top contributors. Applied Materials (AMAT) is the leading manufacturer of front-end

to manufacture an integrated chip with leading market shares in most of its product categories. We think the company is

for chips across multiple industries drove the triple-digit increase in AMAT’s stock price.

An underweighting in the consumer staples sector supported relative performance. We think the staples sector trades

idiosyncratic.

In the materials sector, stock selection and an overweighting lifted relative returns. Positions in US copper-miner Freeport

demand dynamics in copper remain extremely favourable. It takes up to a decade to bring a new copper mine online and the world is running out of high-grade projects in “safe” jurisdictions. Copper also has favourable demand dynamics, including not least of all in green energy. Arcelor shares performed strongly during the period as economic activity gradually recovered and steel economics dramatically improved, a result of both recovering demand and tightened industry supply.

From a regional standpoint, security selection in Germany and Canada detracted from relative performance, as did an overweighting in Hong Kong. In contrast, China, Japan and the United States helped relative results, primarily due to stock selection

Outlook

Opportunities often exist in the space between what the market prices in and what eventually comes to pass. So, what is the market currently pricing in, and how likely will that come to pass? On a forward-looking price-to-sales multiple (a common valuation metric that compares a company’s current market capitalisation to Wall Street’s estimate of next year’s revenues), the MSCI All Country World Index has been trading at roughly three standard deviations above its historical average, its most expensive ever, in our analysis. And that lofty valuation assumes that companies globally are able to grow sales in line with

highs.



for the tens of trillions of dollars of bond purchases (known as quantitative easing) that have released a tidal wave of liquidity into risk markets. Yet, according to the policymakers who erected this formidable market backstop, that is all about to change.

about their diminishing purchasing power.

three quarters of 2021 than in the entire previous 20 years combined. And we expect policymakers will redouble support during future market wobbles, though ultimately currency markets may adjudicate the limits to their largesse. Nevertheless, many of the companies leading today’s market are genuinely good businesses, in our assessment, with recurring revenue

such companies is far too dear. The expectations being priced into equities generally are ebullient at a time when storm cloudsappear to be gathering on the horizon. How distant that horizon proves to be is anyone’s guess, but we believe it will pay to be

pro-cyclically positioned. But it does mean we are focusing intently on quality characteristics like balance sheet strength, corporate governance, growth potential and competitive advantage. Most importantly, we are focusing on the price we pay for those virtues. While that matters little today, one day—perhaps soon—we believe little else will matter.

In our Sukuk managers analysis, the global economy is in a cyclical recovery, a process that is likely to persist into 2022. This recovery has, however, entered a more advanced stage, with lower momentum now than the exceptional growth of early 2021. Risks to near-term growth include further weakness in China’s growth (which could be exacerbated by further regulatory change), the emergence of more virulent COVID-19 strains and disruptive monetary tightening.

Vaccine rollouts continue to help countries relax their restrictions, and hospitalisations have remained manageable despite new waves and new strains of COVID-19. The GCC (Gulf Cooperation Council) has executed a successful vaccine strategy,

A gradual re-opening to foreign travellers will, for example, boost events such as the ongoing Expo 2020 in Dubai and Qatar’s FIFA World Cup 2022. In Southeast Asia, the pace of vaccinations has picked up, and we are optimistic that this will boost

improving.

In recent months, investors’ concerns about the strength of the recovery have evolved into the belief that growth and

have bolstered these expectations, indicating that they will start to reduce the Fed’s monthly asset purchases later this year,with rate hikes possible from 2022. While the third-quarter slowdown has lowered expectations for US growth, it raises the

moved in tandem and could be at risk of rising, in our view.

positioning, with attention turning to real interest rates, which could move materially higher in two potential scenarios. Firstly,

remain stable while nominal rates rise. In credit risk, we have reduced our portfolios’ exposure to idiosyncratic corporate risk, because we consider valuations to be stretched in that segment, and we increasingly favour sovereign risk.

Higher oil prices, positive structural reform and a reduction in geopolitical risk support our credit allocations, particularly to GCC government issues. Coupled with increasing demand for issues from our markets, these improving fundamentals support our near-term return outlook that the strategy could outperform the broader EM universe. We do, however, expect higher volatility, particularly from benchmark rates, and we are using higher cash allocations and underweight duration positioning to give us optionality coming into year-end and early 2022.

THE INVESTMENT MANAGERSNovember 2021

The information stated in this report represents historical data and is not an indication of future results.

PricewaterhouseCoopers, Société coopérative, 2 rue Gerhard Mercator, B.P. 1443, L-1014 LuxembourgT : +352 494848 1, F : +352 494848 2900, www.pwc.lu

Cabinet de révision agréé. Expert-comptable (autorisation gouvernementale n°10028256)R.C.S. Luxembourg B 65 477 - TVA LU25482518

Audit report

To the Shareholders ofFranklin Templeton Shariah Funds

Our opinion

In our opinion, the accompanying financial statements give a true and fair view of the financial position of Franklin Templeton Shariah Funds (the “Fund”) and of each of its sub-funds as at 31 October 2021, and of the results of their operations and changes in their net assets for the year then ended in accordance with Luxembourg legal and regulatory requirements relating to the preparation and presentation of the financial statements.

What we have audited

The Fund’s financial statements comprise:

the statement of net assets as at 31 October 2021; the statement of operations and changes in net assets for the year then ended; the schedule of investments as at 31 October 2021; and the notes to the financial statements, which include a summary of significant accounting policies.

Basis for opinion

We conducted our audit in accordance with the Law of 23 July 2016 on the audit profession (Law of 23 July 2016) and with International Standards on Auditing (ISAs) as adopted for Luxembourg by the “Commission de Surveillance du Secteur Financier” (CSSF). Our responsibilities under the Law of 23 July 2016 and ISAs as adopted for Luxembourg by the CSSF are further described in the “Responsibilities of the “Réviseur d’entreprises agréé” for the audit of the financial statements” section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

We are independent of the Fund in accordance with the International Code of Ethics for Professional Accountants, including International Independence Standards, issued by the International Ethics Standards Board for Accountants (IESBA Code) as adopted for Luxembourg by the CSSF together with the ethical requirements that are relevant to our audit of the financial statements. We have fulfilled our other ethical responsibilities under those ethical requirements.

Other information

The Board of Directors of the Fund is responsible for the other information. The other information comprises the information stated in the annual report but does not include the financial statements and our audit report thereon.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

14

In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Board of Directors of the Fund for the financial statements

The Board of Directors of the Fund is responsible for the preparation and fair presentation of the financial statements in accordance with Luxembourg legal and regulatory requirements relating to the preparation and presentation of the financial statements, and for such internal control as the Board of Directors of the Fund determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Board of Directors of the Fund is responsible for assessing the Fund’s and each of its sub-funds' ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors of the Fund either intends to liquidate the Fund or close any of its sub-funds or to cease operations, or has no realistic alternative but to do so.

Responsibilities of the “Réviseur d’entreprises agréé” for the audit of the financial statements

The objectives of our audit are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an audit report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Law of 23 July 2016 and with ISAs as adopted for Luxembourg by the CSSF will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with the Law of 23 July 2016 and with ISAs as adopted for Luxembourg by the CSSF, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;

obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control;

evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Directors of the Fund;

15

conclude on the appropriateness of the Board of Directors of the Fund’s use of the going concernbasis of accounting and, based on the audit evidence obtained, whether a material uncertainty existsrelated to events or conditions that may cast significant doubt on the Fund’s or any of its sub-funds'ability to continue as a going concern. If we conclude that a material uncertainty exists, we arerequired to draw attention in our audit report to the related disclosures in the financial statements or,if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our audit report. However, future events or conditions may causethe Fund or any of its sub-funds to cease to continue as a going concern;

evaluate the overall presentation, structure and content of the financial statements, including thedisclosures, and whether the financial statements represent the underlying transactions and eventsin a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

PricewaterhouseCoopers, Société coopérativeRepresented by@esig

@esigSteven Libby

Luxembourg, 28 January 2022

Fund Performance



Percentage change to October 31, 2021

ReferenceShareClass

LaunchDateof Fund

6 Months

%

1Year

%

3Years

%

5Years

%

Since Launch

%Franklin Global Sukuk Fund A (acc) USD 10 Sep 12 (0.5) 1.9 18.7 20.4 31.3Templeton Shariah Global Equity Fund A (acc) USD 10 Sep 12 (0.9) 31.3 22.2 37.7 51.6

The Fund Performance disclosed in this table is the performance of the reference share class in base currency of the Fund.

Information on other share classes is available on request. This report shall not constitute an offer or a solicitation of an offer to buy shares. Subscriptions are to be made on the basis of the current prospectus, where available the relevant Key Investor Information Documents (“KIIDs”), a copy of the latest available audited annual report and, if published thereafter, the latest unaudited semi-annual report. The price of shares and income from them can go down as well as up and you may not get back the full amount

The investment activities will be undertaken in accordance with the Shariah Guidelines. As a consequence, the performance of a fund may possibly be lower than other in-vestment funds that do not seek to strictly adhere to the Islamic investment criteria. The requirement to “purify” cash holdings or dividend income will likely result in payments being made to charities. The return to investors will be reduced by the amount of such payments.

Data source: Performance – Franklin Templeton and JPMorgan


Statement of Net AssetsAs at October 31, 2021


Total

Franklin Global

Sukuk Fund

Templeton Shariah

Global Equity Fund

(USD) (USD) (USD)ASSETSInvestments in securities at market value (note 2(b)) 416,028,239 333,998,144 82,030,095Cash at bank and at brokers 36,797,755 29,801,640 6,996,115Amounts receivable on subscriptions 5,353,518 5,259,663 93,855

Sukuk and dividends receivable, net 2,802,068 2,670,451 131,617Unrealised Shariah compliant forward foreign exchange contracts (notes 2(c), 3) 631 631 –Unrealised Shariah 796 796 –Other receivables 136,111 79,700 56,411TOTAL ASSETS 461,119,118 371,811,025 89,308,093

LIABILITIESAmounts payable on purchases of investments 5,184,800 5,184,800 –Amounts payable on redemptions 244,473 210,159 34,314Investment management fees payable (note 5) 342,994 268,762 74,232Payable to charity 12,733 – 12,733Taxes and expenses payable 432,088 319,669 112,419TOTAL LIABILITIES 6,217,088 5,983,390 233,698

TOTAL NET ASSETS 454,902,030 365,827,635 89,074,395

THREE YEAR ASSET SUMMARYOctober 31, 2020 320,040,118 252,618,055 67,422,063October 31, 2019 245,401,107 167,839,276 77,561,831October 31, 2018 225,319,834 141,168,336 84,151,498


Statement of Operations and Changes in Net AssetsFor the year ended October 31, 2021

www.franklintempleton.luAudited Annual Report 18

Total

Franklin Global

Sukuk Fund

Templeton Shariah

Global Equity Fund

(USD) (USD) (USD)NET ASSETS AT THE BEGINNING OF THE YEAR 320,040,118 252,618,055 67,422,063INCOMEDividends (net of withholding taxes) (note 2(f) 2,129,110 – 2,129,110

Sukuk (net of withholding taxes) (note 2(f)) 11,232,250 11,232,250 –Sundry income 15,706 – 15,706TOTAL INCOME 13,377,066 11,232,250 2,144,816EXPENSESInvestment management fees (note 5) 3,644,109 2,790,230 853,879Administration and transfer agency fees 885,983 694,621 191,362Directors fees 18,499 14,809 3,690Subscription tax (note 8) 207,851 160,971 46,880Depository fees 177,523 113,700 63,823Audit fees 49,858 30,038 19,820Printing and publishing expenses 64,749 51,809 12,940Shariah compliance fees 197,785 107,208 90,577Net expenses on swaps 81 81 –Maintenance and service charges (note 9) 949,554 582,513 367,041Other charges 348,258 272,493 75,765TOTAL EXPENSES 6,544,250 4,818,473 1,725,777Expense reimbursement (note 10) (1,018,788) (836,766) (182,022)NET EXPENSES 5,525,462 3,981,707 1,543,755NET PROFIT/(LOSS) FROM INVESTMENTS 7,851,604 7,250,543 601,061Net realised 9,831,105 2,642,410 7,188,695Net realised Shariah compliant forward foreign exchange contracts (35,531) (35,531) –Net realised (30,893) (12,710) (18,183)NET REALISED PROFIT/(LOSS) FOR THE YEAR 17,616,285 9,844,712 7,771,573Change in net unrealised appreciation/(depreciation) on:

Investments 9,160,432 (4,546,218) 13,706,650Shariah compliant forward foreign exchange contracts 2,473 2,473 –Foreign exchange transactions (3,198) (709) (2,489)Shariah 796 796 –

NET INCREASE/(DECREASE) IN NET ASSETS AS A RESULT OF OPERATIONS 26,776,788 5,301,054 21,475,734DONATION TO CHARITY

Shariah compliant income (note 16) (17,380) – (17,380)realised shariah (260,643) – (260,643)

NET DECREASE IN NET ASSETS AS A RESULT OF DONATION TO CHARITY (278,023) – (278,023)MOVEMENT OF CAPITALIssue of shares 258,666,581 240,697,708 17,968,873Redemption of shares (144,392,417) (126,878,976) (17,513,441)Equalisation (note 13) 493,305 494,001 (696)

114,767,469 114,312,733 454,736Dividends paid (6,404,322) (6,404,207) (115)NET INCREASE/(DECREASE) IN NET ASSETS AS A RESULT OF MOVEMENT IN CAPITAL 108,363,147 107,908,526 454,621NET ASSETS AT THE END OF THE YEAR 454,902,030 365,827,635 89,074,395Portfolio Turnover Ratio (note 14) (15.76)% 80.39%


Statistical InformationFor the year ended October 31, 2021


Total Expense Ratio

October 31, 2021

(See note 15)

Shares Outstanding

as atOctober 31, 2021

Net Asset Value per share

as atOctober 31,

2021


as atOctober 31,

2020


as atOctober 31,

2019Franklin Global Sukuk Fund - USDA (acc) EUR 1.50% 134,992.329 13.80 13.42 13.42A (acc) USD 1.50% 5,491,791.047 13.13 12.89 12.36A (Mdis) SGD 1.50% 5,945,884.951 9.74 10.04 9.99A (Mdis) USD 1.50% 9,870,934.216 9.33 9.48 9.48C (Mdis) USD1 2.28% 500.000 9.65 – –I (acc) USD 0.86% 4,376,324.719 13.74 13.40 12.76M (acc) USD2 1.88% 59,413.370 9.93 – –N (acc) EUR 2.45% 40,677.699 12.67 12.43 12.56N (acc) USD – – – 10.33 –W (acc) USD 0.90% 1,150,596.776 11.85 11.56 11.01W (Qdis) EUR-H1 (hedged) 0.90% 120,674.724 8.87 9.05 9.15W (Qdis) USD 0.90% 8,351,492.313 9.61 9.71 9.65X (Qdis) USD 0.37% 500.000 9.88 9.93 9.99

Templeton Shariah Global Equity Fund - USDA (acc) SGD 1.90% 516,951.642 15.51 11.98 12.68A (acc) USD 1.90% 2,321,651.663 15.16 11.55 12.29AS (acc) SGD 1.75% 4,138,246.901 13.58 10.47 11.07I (acc) USD 1.05% 380,491.111 16.41 12.40 13.08X (Ydis) USD 0.35% 500.000 12.51 9.61 10.321This share class was launched on January 6, 20212This share class was launched on April 19, 2021This Fund / share class was closed during the year


Notes to Financial StatementsFor the year ended October 31, 2021


Note 1 - The CompanyFranklin Templeton Shariah Funds (“FTSF” or the “Company”) is a collective investment undertaking pursuant to Part I of

d’investissement à capital variable. The Company was incorporated in Luxembourg on July 3, 2012, for an undetermined

The Company aims to provide Investors with a choice of Funds which invest in a wide range of Shariah-compliant transferable securities and other Shariah-compliant eligible assets on a worldwide basis and which feature a diverse array of investment objectives including capital growth and income. The overall objective of the Company is to seek to minimise investment

Templeton according to its successful time-tested investment selection methods.

(a) General

investment funds under the going concern basis of accounting.

(b) Investment in securitiesSecurities which are listed on a stock exchange or traded on any other organised market are valued at the last available price on such exchange or market which is normally the principal market for each security, and those securities dealt in on an over-the-counter market are valued in a manner as near as possible to that for quoted securities.

Securities not listed on any stock exchange nor traded on any organised market are valued at the last available price, or if such price is not representative of their fair value, they are valued prudently and in good faith on the basis of their reasonably foreseeable sales prices.

In accordance with the provisions of the current prospectus, Market Level Fair Valuation may be implemented to protect the interests of the Company’s shareholders against market timing practices, as market timers may seek to exploit possible delays between the change in the value of a Fund’s portfolio holdings and the Net Asset Value of the Fund’s Shares in Funds that hold

The Management Company and/or the Administrative Agent has procedures to determine the fair value of individual securities and other assets for which market prices are not readily available or which may not be reliably priced. In such circumstances, the price of such investment shall be adjusted in accordance with the procedures adopted, as determined by or under the direction of the Board of Directors.

During the accounting year under review, gains and losses on investment securities sold were computed on the average cost basis for all Funds.

During the accounting year under review, discounts and premiums were amortised to income over the period to maturity, or date sold, if earlier.

(c) Shariah compliant forward foreign exchange contractsShariah compliant forward foreign exchange contracts are valued at the foreign exchange currency rate applicable at the “Statement of Net Assets” date for the remaining period, until maturity. Gains or losses resulting from Shariah compliant forward exchange contracts are recognised in the “Statement of Operations and Changes in Net Assets”.

FRANKLIN TEMPLETON SHARIAH FUNDSNOTES TO FINANCIAL STATEMENTS


from a supplier (at the cost price) and then on-sells them to a counterparty at a deferred price that is marked-up to include the

Operations and Changes in Net Assets”.

(e) Foreign exchange transactionsTransactions expressed in currencies other than each Fund’s currency are translated into each Fund’s currency at the exchange rates applicable on the transaction dates.

Assets and liabilities designated in currencies other than each Fund’s currency are translated into each Fund’s currency at theappropriate exchange rates ruling at the period-end. Gains and losses on foreign exchange transactions are recognised in the “Statement of Operations and Changes in Net Assets” in determining the results for the accounting year.

applied as at October 31, 2021, are as follows:

EUR 0.8651SGD 1.3485

The list of the currency abbreviations is available in note 18.

(f) Income

on a daily basis.

(g) Swing pricing

To counter this dilution impact and to protect Shareholders’ interests, a swing pricing mechanism may be adopted by the Company as part of its valuation policy.

for the Valuation Day. Funds can operate a full swing pricing mechanism where the threshold is set to zero or a partial swing pricing mechanism where the threshold is greater than zero.

portfolio performance as a consequence of the application of swing pricing.

The size of the adjustment impact is determined by factors such as the volume of transactions, the purchase or sale prices of the underlying investments and the valuation method adopted to calculate the value of such underlying investments of the Fund.

(continued)



The swing pricing mechanism may be applied across all Funds of the Company. The extent of the price adjustment will be

vary from Fund to Fund and under normal market conditions will not exceed 2% of the original Net Asset Value per Share. The Board of Directors can approve an increase of this limit in case of exceptional circumstances, unusually large Shareholders trading activitives, and if it is deemed to be in the best interest of Shareholders.

The Franklin Templeton International Services S.à r.l. (“FTIS”), as UCITS licensed management company (the “Management Company”) mandates authority to the Swing Pricing Oversight Committee to implement and on a periodic basis review, the operational decisions associated with swing pricing. This committee is responsible for decisions relating to swing pricing and the ongoing approval of swing factors which form the basis of pre-determined standing instructions.

Fund.

- Franklin Global Sukuk Fund

Note 3 - Shariah compliant forward foreign exchange contractsAs at October 31, 2021, the Company had entered into the following outstanding contract:


Purchases Sales Maturity Date

Unrealised

USDForward foreign exchange contracts used for share class hedging:EUR 1,074,033 USD 1,241,158 15-Nov-21 631

631

The above contracts were opened with the below counterparties:J.P. Morgan 631

631

As at October 31, 2021, the Company had entered into the following outstanding contract:


Nominalamount

Description Counterparty Maturity date Tradingcurrency

Unrealised/(loss)

USD1,000,000 J.P. Morgan 31-Aug-22 USD 796

796

Note 5 - Investment management feesThe Management Company receives from the Company a monthly investment management fee equivalent to a certain percentage per annum (as detailed below) of each Fund’s average daily net assets during the accounting year. The following

The Investment Managers, as noted on page 6, will be remunerated by the Management Company out of the investment management fee received from the Company.

(continued)

(g) Swing pricing (continued)



No management fee is payable by an investor on the acquisition of Class X shares, instead a fee is paid to the Investment

Class A, AS, C, N* Class I Class M Class W

Franklin Global Sukuk Fund 1.00% 0.70% USD 0 to 100 M - 0.45% USD 100 M to 250 M - 0.40% Above USD 250 M - 0.35%

0.70%

Templeton Shariah Global Equity Fund 1.00% 0.70% NA NA

* This share class was closed during the year.

Note 6 - Soft commissionConsistent with obtaining best execution, brokerage commissions on portfolio transactions for the Company may be directed by the Investment Managers to broker-dealers in recognition of research services furnished by them as well as for services rendered in the execution of orders by such broker-dealers.

The receipt of investment research and information and related services permits the Investment Managers to supplement their

equipment or premises, membership fees, employee salaries or direct money payment, which are paid for directly by the Investment Managers.

Note 7 - Connected party transactions

Domiciliary Agent, Franklin Templeton International Services S.à r.l. All transactions with connected parties were entered into in the ordinary course of business and under normal commercial terms.

The investment management fees that are accrued by the Company in respect of the Management Company are detailed in

There are no connected brokers in Franklin Templeton, and no transactions were entered into with connected brokers during the year ended October 31, 2021.

During the year ended October 31, 2021, the Company accrued fees in respect of Franklin Templeton International Services S.à r.l. as Management Company and Principal Distributor of the Funds.

Note 8 - Taxation

The Company, however, is liable in the Grand Duchy of Luxembourg to a tax of 0.05% per annum of its NAV, such tax being payable quarterly on the basis of the value of the net assets of the Company at the end of the relevant calendar quarter. This tax is not applicable for the portion of the assets of a Fund invested in other undertakings for collective investment which have been already subject to such tax. Class I and Class X Shares may qualify for the reduced tax rate of 0.01% if all the Investorsof these Share Classes are respectively Institutional Investors.

No stamp duty or other tax is payable in the Grand Duchy of Luxembourg on the issue of the Shares in the Company. A EUR 75 registration duty is to be paid upon incorporation and each time the Articles are amended.

Under current laws and practice, no capital gains tax is payable in the Grand Duchy of Luxembourg on the realised or unrealised capital appreciation of the assets of the Company.

Note 5 - Investment management fees (continued)



The Company is registered for Value Added Tax in the Grand Duchy of Luxembourg and subject to account for Value Added Tax in accordance with applicable laws.

Investment income received or capital gains realised by the Company may be subject to tax in the countries of origin at varying

has concluded with other countries.

Note 9 - Share classesClass A shares: SukukFund and up to 5.75% for Templeton Shariah Global Equity Fund of the total amount invested varying per asset class. In addition, a maintenance charge of up to 0.30% per annum for Franklin Global Sukuk Fund and up to 0.50% for Templeton Shariah Global Equity Fund of the applicable average net asset value is deducted and paid to the Principal Distributor. This charge is accrued daily and is deducted and paid monthly to the Principal Distributor. A contingent deferred sales charge of up

within 18 months after repurchase.

Class AS shares:

subject to an entry charge.

Class C shares:Purchases of Class C shares are not subject to an entry charge but are subject to a maintenance or serving charge of 1.08%. However, Class C Shares are subject to a CDSC of 1.00% if an Investor sells Shares within one year of purchase.

Class I shares:Purchases of Class I shares are not subject to an entry charge, nor a contingent deferred sales charge or any maintenance or servicing charges.

Class M shares: are not subject to an entry charge, contingent deferred sales charge nor servicing charge. Maintenance charge of up to 1.23% per annum of the applicable average net asset value is deducted and paid to the Principal Distributor.

Company.

Class N shares: are subject to an entry charge of up to 3% of the total amount invested. In addition, a maintenance charge of up to 1.25% per annum of the applicable average net asset value is accrued daily and is deducted and paid monthly to the

prospectus of the Company.

Class W shares: are not subject to an entry charge, contingent deferred sales charge nor any maintenance or servicing

the Company.

Class X shares: are not subject to an entry charge and no management fees will be payable by an investor on the acquisition

described in the current prospectus of the Company.

Distributing shares: Mdis) share classes distribute monthly, (Qdis) share classes distribute quarterly and (Ydis) share classes distribute annually.

Accumulating shares (acc):shares. All other terms and conditions are the same as those which apply to distributing share classes.

Hedged share classes:

Note 8 - Taxation (continued)



Note 10 - Expense reimbursementOn a daily basis, for share classes where the expenses are capped, the level of expenses is calculated and compared to the

fees”). On a monthly basis the waiver fees are deducted from the fees received by the management company.

The amount of waiver fees is disclosed as “Expenses reimbursement” in the “Statement of Operations and Changes in Net Assets”.

Note 11 - Statement of changes in the investment portfolioA list, specifying for each Fund total purchases and sales transacted during the year under review, may be obtained, upon

Note 12 - Transaction costs

paid to agents, brokers and dealers. During the year ended October 31, 2021, the Company incurred the following transaction costs:

Fund Name Currency AmountFranklin Global Sukuk Fund USD –*Templeton Shariah Global Equity Fund USD 152,822

Note 13 - EqualisationThe Funds use an accounting practice known as equalisation, by which a portion of the proceeds from issue and costs of redemption of shares, equivalent on a per share basis to the amount of undistributed investment income on the date of the transaction, is credited or charged to undistributed income which is disclosed as equalisation in the “Statement of Operations

shares.

Note 14 - Portfolio Turnover RatioThe Portfolio Turnover Ratio (“PTR”), expressed as a percentage, is equal to the total of purchases and sales of securities

a measure of how frequently a Fund buys or sells securities.

Note 15 - Total Expense Ratio The Total Expense Ratio (“TER”), expressed as a percentage, represents how the total annualised expenses of each share class relate to the average net assets of each share class for the year ended October 31, 2021. The total expenses comprise the investment management fees, the administration and transfer agency fees, the custodian fees and other expenses as summarised in the “Statement of Operations and Changes in Net Assets”. For share classes launched during the year, the TER is annualised.

The Shariah Supervisory Board from time to time issues guidelines to quantify the annual amount of income of a Fund that should be donated to charity, being derived from eligible securities for investment pursuant to the investment objective, policy and restrictions set out in the prospectus, but that are engaged in an activity or activities of a marginal nature which are not Shariah-compliant and which are not screened out by the Shariah restrictions. Such amount is calculated on each relevant



value (price of the security on the day it was discovered to be non-compliant).

determination and no anticipated accrual thereof is made. For the year ended October 31, 2021, the amount was donated to the United Kingdom Committee for the United Nations Children’s Fund (UNICEF).

Note 17 - Audited annual reports and unaudited semi-annual reportsThe audited annual reports and unaudited semi-annual reports are available on the following Franklin Templeton website,

only distributed to registered Shareholders in those countries where local regulation so requires.

Note 18 - AbbreviationsCountriesARE United Arab Emirates GBR United Kingdom KWT Kuwait QAT QatarBHR Bahrain HKG Hong Kong LUX Luxembourg SAU Saudi ArabiaBRL Brazil IDN Indonesia MDV Maldives SP Supranational CHE Switzerland IND India MYS Malaysia THA ThailandCHN China IRL Ireland NLD Netherlands TUR TurkeyDEU Germany ITA Italy NOR Norway TWN TaiwanEGY Egypt JPN Japan OMN Oman USA United States of AmericaFRA France KOR South Korea PAK Pakistan

CurrenciesCAD Canadian Dollar EUR Euro JPY Japanese Yen THB Thai BahtCHF Swiss Franc GBP Pound Sterling KRW South Korean Won TWD Taiwan DollarEGP Egyptian Pound HKD Hong Kong Dollar NOK Norwegian Krone USD US Dollar

Note 19 - Subsequent eventsThere have been no subsequent events since the year end.

(continued)


Schedule of Investments, October 31, 2021Franklin Global Sukuk Fund

www.franklintempleton.lu 27 Audited Annual Report

(Currency - USD)

Number of shares or face value Description

Countrycode

Trading currency

Market value

% of netassets

TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTINGSUKUKCorporate Sukuk

12,008,000 SA Global Sukuk Ltd., Reg. S 2.694% 06/17/2031 SAU USD 12,048,827 3.2910,285,000 DAE Sukuk DIFC Ltd., Reg. S 3.75% 02/15/2026 ARE USD 10,808,033 2.95

9,300,000 Arab National Bank, Reg. S, FRN 3.326% 10/28/2030 SAU USD 9,526,762 2.607,210,000 Saudi Electricity Global Sukuk Co. 2, Reg. S 5.06% 04/08/2043 SAU USD 8,755,716 2.397,750,000 NCB Tier 1 Sukuk Ltd., Reg. S, FRN 3.5% 07/26/2170 SAU USD 7,726,223 2.116,845,000 DP World Salaam, Reg. S, FRN 6% Perpetual ARE USD 7,496,199 2.057,075,000 KIB Sukuk Ltd., Reg. S, FRN 2.375% 11/30/2030 KWT USD 6,864,590 1.886,600,000 SA Global Sukuk Ltd., Reg. S 1.602% 06/17/2026 SAU USD 6,523,216 1.786,235,000 Boubyan Tier 1 Sukuk Ltd., Reg. S, FRN 3.95% 10/01/2170 KWT USD 6,280,721 1.725,820,000 Riyad Sukuk Ltd., Reg. S, FRN 3.174% 02/25/2030 SAU USD 5,978,898 1.645,025,000 MAF Sukuk Ltd., Reg. S 4.638% 05/14/2029 ARE USD 5,665,687 1.555,242,000 Equate Sukuk Spc Ltd., Reg. S 3.944% 02/21/2024 KWT USD 5,568,183 1.524,670,000 QIB Sukuk Ltd., Reg. S 3.982% 03/26/2024 QAT USD 4,977,926 1.364,920,000 Unity 1 Sukuk Ltd., Reg. S 3.86% 11/30/2021 ARE USD 4,935,006 1.354,265,000 MAR Sukuk Ltd., Reg. S 2.21% 09/02/2025 QAT USD 4,344,819 1.194,190,000 DIB Sukuk Ltd., Reg. S 2.95% 01/16/2026 ARE USD 4,344,117 1.193,438,000 Tabreed Sukuk Spc Ltd., Reg. S 5.5% 10/31/2025 ARE USD 3,920,795 1.073,700,000 SIB Sukuk Co. III Ltd., Reg. S 2.85% 06/23/2025 ARE USD 3,828,608 1.053,440,000 Aldar Sukuk Ltd., Reg. S 4.75% 09/29/2025 ARE USD 3,794,750 1.043,350,000 Senaat Sukuk Ltd., Reg. S 4.76% 12/05/2025 ARE USD 3,783,393 1.033,365,000 MAF Sukuk Ltd., Reg. S 4.5% 11/03/2025 ARE USD 3,697,879 1.013,700,000 SA Global Sukuk Ltd., Reg. S 0.946% 06/17/2024 SAU USD 3,663,777 1.003,315,000 Alpha Star Holding V Ltd., Reg. S 6.625% 04/18/2023 ARE USD 3,398,969 0.933,170,000 Dar Al-Arkan Sukuk Co. Ltd., Reg. S 6.75% 02/15/2025 SAU USD 3,354,256 0.922,900,000 Saudi Telecom Co., Reg. S 3.89% 05/13/2029 SAU USD 3,218,840 0.883,000,000 EI Sukuk Co. Ltd., Reg. S 2.082% 11/02/2026 ARE USD 3,003,750 0.822,815,000 Fab Sukuk Co. Ltd., Reg. S 2.5% 01/21/2025 ARE USD 2,923,206 0.802,910,000 Saudi Electricity Global Sukuk Co. 5, Reg. S 1.74% 09/17/2025 SAU USD 2,917,741 0.802,750,000 Unity 1 Sukuk Ltd., Reg. S 2.394% 11/03/2025 ARE USD 2,816,083 0.771,880,000 Saudi Electricity Global Sukuk Co. 3, Reg. S 5.5% 04/08/2044 SAU USD 2,410,228 0.662,000,000 Saudi Electricity Global Sukuk Co. 4, Reg. S 4.723% 09/27/2028 SAU USD 2,325,970 0.642,200,000 Axiata SPV2 Bhd., Reg. S 2.163% 08/19/2030 MYS USD 2,131,546 0.588,140,000 SD International Sukuk II Ltd., Reg. S 6.997% 03/12/2025 MYS USD 2,054,023 0.561,790,000 DIB Tier 1 Sukuk 4 Ltd., Reg. S, FRN 4.625% 05/19/2170 ARE USD 1,828,592 0.501,750,000 QIB Sukuk Ltd., Reg. S 3.251% 05/23/2022 QAT USD 1,773,576 0.481,690,000 Noor Sukuk Co. Ltd., Reg. S 4.471% 04/24/2023 ARE USD 1,773,109 0.481,645,000 QIIB Senior Sukuk Ltd., Reg. S 4.264% 03/05/2024 QAT USD 1,759,558 0.481,600,000 ADIB Capital Invest 2 Ltd., Reg. S, FRN 7.125% Perpetual ARE USD 1,702,800 0.461,634,265 Medjool Ltd., Reg. S 3.875% 03/19/2023 ARE USD 1,650,608 0.455,813,000 NMC Healthcare Sukuk Ltd., Reg S 5.95% 11/21/2023 ARE USD 1,598,575 0.441,540,000 Fab Sukuk Co. Ltd., Reg. S 1.411% 01/14/2026 ARE USD 1,535,187 0.421,445,000 Warba Sukuk Ltd., Reg. S 2.982% 09/24/2024 KWT USD 1,513,083 0.411,330,000 Boubyan Sukuk Ltd., Reg. S 2.593% 02/18/2025 KWT USD 1,377,184 0.381,210,000 MAF Sukuk Ltd., Reg. S 3.933% 02/28/2030 ARE USD 1,309,994 0.361,225,000 SIB Sukuk Co. III Ltd., Reg. S 4.231% 04/18/2023 ARE USD 1,282,624 0.351,100,000 Saudi Electricity Global Sukuk Co. 4, Reg. S 4.222% 01/27/2024 SAU USD 1,174,746 0.321,000,000 MAR Sukuk Ltd., Reg. S 3.025% 11/13/2024 QAT USD 1,047,681 0.291,000,000 Saudi Electricity Global Sukuk Co. 2, Reg. S 3.473% 04/08/2023 SAU USD 1,037,090 0.281,000,000 DIB Sukuk Ltd., Reg. S 3.664% 02/14/2022 ARE USD 1,008,918 0.288,820,000 Asya Sukuk Co. Ltd., Reg. S, FRN 0.004% 03/28/2023§ TUR USD 749,700 0.20

340,356 Khadrawy Ltd., Reg. S 2.471% 03/31/2025 ARE USD 350,567 0.10300,000 Dar Al-Arkan Sukuk Co. Ltd., Reg. S 6.875% 03/21/2023 SAU USD 312,864 0.09300,000 SD International Sukuk Ltd., Reg. S 6.3% 05/09/2022 MYS USD 96,877 0.03

189,972,070 51.93Government and Municipal Sukuk

9,690,000 KSA Sukuk Ltd., Reg. S 4.303% 01/19/2029 SAU USD 11,048,247 3.029,510,000 KSA Sukuk Ltd., Reg. S 3.628% 04/20/2027 SAU USD 10,340,984 2.838,545,000 Perusahaan Penerbit SBSN Indonesia III, Reg. S 4.4% 03/01/2028 IDN USD 9,684,134 2.657,750,000 Perusahaan Penerbit SBSN Indonesia III, Reg. S 2.8% 06/23/2030 IDN USD 7,914,997 2.165,550,000 Perusahaan Penerbit SBSN Indonesia III, Reg. S 4.15% 03/29/2027 IDN USD 6,179,537 1.695,755,000 Oman Sovereign Sukuk Co., Reg. S 4.875% 06/15/2030 OMN USD 6,136,902 1.686,048,000 Malaysia Wakala Sukuk Bhd., Reg. S 2.07% 04/28/2031 MYS USD 6,007,154 1.645,590,000 Maldives Sukuk Issuance Ltd., Reg. S 9.875% 04/08/2026 MDV USD 5,664,228 1.55

FRANKLIN TEMPLETON SHARIAH FUNDSSCHEDULE OF INVESTMENTS

Franklin Global Sukuk Fund (continued)

www.franklintempleton.lu28 Audited Annual Report

(Currency - USD)


Countrycode

Trading currency

Market value

% of net assets

4,705,000 Perusahaan Penerbit SBSN Indonesia III, Reg. S 4.325% 05/28/2025 IDN USD 5,194,085 1.424,900,000 Hazine Mustesarligi Varlik Kiralama A/S, Reg. S 5.125% 06/22/2026 TUR USD 4,821,478 1.324,662,000 Sharjah Sukuk Program Ltd., Reg. S 2.942% 06/10/2027 ARE USD 4,720,275 1.293,950,000 Perusahaan Penerbit SBSN Indonesia III, Reg. S 3.9% 08/20/2024 IDN USD 4,265,388 1.173,800,000 Perusahaan Penerbit SBSN Indonesia III, Reg. S 3.55% 06/09/2051 IDN USD 3,810,184 1.04

3,250,000CBB International Sukuk Programme Co. WLL, Reg. S 6.25% 11/14/2024 BHR USD 3,523,728 0.96

3,235,000 Hong Kong Sukuk 2017 Ltd., Reg. S 3.132% 02/28/2027 HKG USD 3,485,078 0.953,310,000 Malaysia Wakala Sukuk Bhd., Reg. S 3.075% 04/28/2051 MYS USD 3,449,863 0.952,815,000 Perusahaan Penerbit SBSN Indonesia III, Reg. S 4.55% 03/29/2026 IDN USD 3,165,214 0.862,665,000 Sharjah Sukuk Program Ltd., Reg. S 3.2% 07/13/2031 ARE USD 2,674,962 0.732,325,000 Perusahaan Penerbit SBSN Indonesia III, Reg. S 4.35% 09/10/2024 IDN USD 2,537,272 0.692,435,000 Perusahaan Penerbit SBSN Indonesia III, Reg. S 3.8% 06/23/2050 IDN USD 2,512,652 0.691,800,000 Sharjah Sukuk Program Ltd., Reg. S 4.226% 03/14/2028 ARE USD 1,941,052 0.531,550,000 Malaysia Sovereign Sukuk Bhd., Reg. S 3.043% 04/22/2025 MYS USD 1,637,645 0.45

1,390,000Third Pakistan International Sukuk Co. Ltd. (The), Reg. S 5.625% 12/05/2022 PAK USD 1,425,991 0.39

1,300,000 RAK Capital, Reg. S 3.094% 03/31/2025 ARE USD 1,369,610 0.37113,510,660 31.03

Supranational7,025,000 ICDPS Sukuk Ltd., Reg. S 1.81% 10/15/2025 SP USD 7,062,162 1.931,330,000 APICORP Sukuk Ltd., Reg. S 3.141% 11/01/2022 SP USD 1,366,675 0.37

345,000 IDB Trust Services Ltd., Reg. S 2.261% 09/26/2022 SP USD 350,822 0.108,779,659 2.40

TOTAL SUKUK 312,262,389 85.36TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 312,262,389 85.36TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKETSUKUKCorporate Sukuk

3,500,000 Pure Harvest Smart Farms Sukuk Ltd., Reg. S 8% 03/31/2024 ARE USD 3,635,726 0.993,350,000 Ahli United Sukuk Ltd., Reg. S, FRN 3.875% 12/31/2164 KWT USD 3,324,523 0.912,000,000 Virgin Mobile Middle East & Africa Sukuk Ltd. 12% 03/31/2023 ARE USD 2,050,000 0.56

9,010,249 2.46Supranational

4,400,000International Islamic Liquidity Management 2 SA, Reg. S 0.35% 03/16/2022 SP USD 4,399,477 1.20

1,700,000International Islamic Liquidity Management 2 SA, Reg. S 0.3% 11/17/2021 SP USD 1,699,677 0.47

6,099,154 1.67TOTAL SUKUK 15,109,403 4.13TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 15,109,403 4.13TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKETSUKUKCorporate Sukuk

100,000,000Egyptian Financial Group-Hermes Holding Co., FRN 13.799% 12/31/2024** EGY EGP 6,626,352 1.81

6,626,352 1.81TOTAL SUKUK 6,626,352 1.81TOTAL TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET 6,626,352 1.81

TOTAL INVESTMENTS 333,998,144 91.30

a§ This Sukuk is currently in default** These securities are submitted to a Fair Valuation


Schedule of Investments, October 31, 2021Templeton Shariah Global Equity Fund

www.franklintempleton.lu 29 Audited Annual Report

(Currency - USD)


Countrycode

Trading currency

Market value

% of netassets

TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTINGSHARESAirlines

423,847 International Consolidated Airlines Group SA GBR GBP 949,231 1.07949,231 1.07

Auto Components18,464 Toyota Industries Corp. JPN JPY 1,569,673 1.76

655,367 Johnson Electric Holdings Ltd. HKG HKD 1,450,629 1.638,800 Continental AG DEU EUR 1,034,540 1.16

4,054,842 4.55Automobiles

81,700 Isuzu Motors Ltd. JPN JPY 1,099,094 1.231,099,094 1.23

Beverages25,400 Keurig Dr Pepper, Inc. USA USD 916,686 1.03

916,686 1.03Biotechnology

11,440 BioMarin Pharmaceutical, Inc. USA USD 906,391 1.02906,391 1.02

Chemicals2,801 LG Chem Ltd. KOR KRW 1,999,536 2.246,042 Albemarle Corp. USA USD 1,513,340 1.70

17,800 DuPont de Nemours, Inc. USA USD 1,238,880 1.394,751,756 5.33

Communications Equipment8,880 F5 Networks, Inc. USA USD 1,875,012 2.11

21,007 Ciena Corp. USA USD 1,140,470 1.283,015,482 3.39

Containers & Packaging2,240,000 Greatview Aseptic Packaging Co. Ltd. CHN HKD 921,277 1.03

921,277 1.03Food & Staples Retailing

41,900 Sundrug Co. Ltd. JPN JPY 1,226,249 1.381,226,249 1.38

Health Care Equipment & Supplies14,050 Medtronic plc USA USD 1,684,033 1.8910,792 Zimmer Biomet Holdings, Inc. USA USD 1,544,551 1.7366,288 Smith & Nephew plc GBR GBP 1,144,757 1.29

4,373,341 4.91Health Care Providers & Services

18,649 Fresenius Medical Care AG & Co. KGaA DEU EUR 1,238,729 1.391,238,729 1.39

Household Products270,000 Vinda International Holdings Ltd. HKG HKD 744,361 0.84

744,361 0.84Industrial Conglomerates

38,731 Hitachi Ltd. JPN JPY 2,231,857 2.512,231,857 2.51

Life Sciences Tools & Services6,500 ICON plc IRL USD 1,864,005 2.09

1,864,005 2.09Machinery

25,200 Westinghouse Air Brake Technologies Corp. USA USD 2,286,396 2.56295,400 AutoStore Holdings Ltd. NOR NOK 1,164,180 1.31

3,450,576 3.87Metals & Mining

59,200 Sumitomo Metal Mining Co. Ltd. JPN JPY 2,296,504 2.5846,625 Wheaton Precious Metals Corp. BRL CAD 1,881,723 2.11

FRANKLIN TEMPLETON SHARIAH FUNDSSCHEDULE OF INVESTMENTS

Templeton Shariah Global Equity Fund (continued)

www.franklintempleton.lu30 Audited Annual Report

(Currency - USD)


Countrycode

Trading currency

Market value

% of net assets

26,100 ArcelorMittal SA LUX EUR 882,630 0.995,060,857 5.68

Multiline Retail16,700 Dollar Tree, Inc. USA USD 1,799,592 2.02

1,799,592 2.02Oil, Gas & Consumable Fuels

663,531 BP plc GBR GBP 3,178,796 3.5751,933 TotalEnergies SE FRA EUR 2,600,318 2.9298,878 Equinor ASA NOR NOK 2,505,286 2.81

106,746 NLD GBP 2,449,594 2.75106,186 Eni SpA ITA EUR 1,521,773 1.71

1,215,800 PTT PCL THA THB 1,385,062 1.5515,845 Reliance Industries Ltd., GDR, 144A IND USD 1,077,460 1.2115,060 Exxon Mobil Corp. USA USD 970,918 1.09

15,689,207 17.61Pharmaceuticals

22,095 AstraZeneca plc GBR GBP 2,764,013 3.106,929 Roche Holding AG CHE CHF 2,683,668 3.01

14,030 Johnson & Johnson USA USD 2,285,207 2.5753,078 Tsumura & Co. JPN JPY 1,654,198 1.8659,661 GlaxoSmithKline plc GBR GBP 1,238,567 1.3912,947 Novartis AG CHE CHF 1,070,648 1.20

11,696,301 13.13Semiconductors & Semiconductor Equipment

153,600 Taiwan Semiconductor Manufacturing Co. Ltd. TWN TWD 3,255,284 3.653,900 Tokyo Electron Ltd. JPN JPY 1,817,529 2.049,370 Applied Materials, Inc. USA USD 1,280,411 1.44

16,400 Micron Technology, Inc. USA USD 1,133,240 1.279,546 SK Hynix, Inc. KOR KRW 837,159 0.94

8,323,623 9.34Specialty Retail

20,180 TJX Cos., Inc. USA USD 1,321,588 1.481,321,588 1.48

Technology Hardware, Storage & Peripherals49,311 Samsung Electronics Co. Ltd. KOR KRW 2,937,222 3.30

651,852 Lenovo Group Ltd. CHN HKD 707,891 0.803,645,113 4.10

Textiles, Apparel & Luxury Goods39,240 Skechers USA USD 1,813,281 2.042,862 adidas AG DEU EUR 936,656 1.05

2,749,937 3.09TOTAL SHARES 82,030,095 92.09TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 82,030,095 92.09

TOTAL INVESTMENTS 82,030,095 92.09



Additional Information - Unaudited

economic activities.

Calculation Method of the Risk ExposureThe Commitment Approach* is used for measuring the Global Exposure** for:

Franklin Global Sukuk FundTempleton Shariah Global Equity Fund

*Commitment Approach is an approach for measuring risk or “global exposure” that factors in the market risk of the

“notional exposure”), after netting and hedging arrangements where the market value of underlying security positions may be

** Global Exposure refers to a measure of the risk exposure for a UCITS sub-fund that factors in the market risk exposure

derivative instruments held in the portfolio.

FRANKLIN TEMPLETON SHARIAH FUNDSADDITIONAL INFORMATION - UNAUDITED


UCITS Remuneration DisclosureFranklin Templeton International Services S.à r.l. (“FTIS”), as UCITS licensed management company (the “Management Company”) has a remuneration policy (the “Policy”) in place which applies to all UCITS funds (each a “UCITS” and together the “UCITS”) under its management. The Policy has been designed to discourage excessive risk taking, integrating in its

and implementation of the Policy. Senior Management, Human Resources, Compliance and other functions are all involved in this process and the Policy is approved by Senior Management and the Board of managers of the Management Company.

of responsibility, performance and market benchmarking data. These levels are reviewed on a regular basis.

payments. Levels of variable remuneration are set with reference to overall corporate and business unit performance as well as individual performance.

Franklin Templeton Shariah Funds is outlined below.

€ 142,387 Total amount of variable remuneration paid by FTIS and its delegates during the year ended September 30, 2021*,**,*** € 72,163

480 Total amount of compensation paid by FTIS and its delegates to Senior managers during the year ended September 30 2021*,**,*** € 94,484

year ended September 30 2021*,**,*** € 39,907

*The total amount of compensation paid by FTIS has been allocated to FTSF based on its pro rata share of the average month end total netassets of the funds under management of FTIS for the year ended September 30, 2021.

**The total amount of compensation paid by the FTIS delegates has been allocated to FTSF based on its pro rata share of the average month end total net assets of the funds under management of the FTIS delegates for the year ended September 30, 2021.

Article 69(3)(a) of the UCITS Directive.



EUROPE

FranceFranklin Templeton International Services S.à r.l.French Branch55, avenue Hoche F-75008 Paris, FranceTel: +33 (0)1 40 73 86 00 Fax: +33 (0)1 40 73 86 10www.franklintempleton.fr

LuxembourgFranklin Templeton International Services S.à r.l.8A, rue Albert Borschette, L-1246 LuxembourgB.P. 169, L-2011 LuxembourgGrand Duchy of LuxembourgTel: +352 46 66 67 1 Fax: +352 46 66 76www.franklintempleton.lu

SpainFranklin Templeton Investment Management LimitedSucursal en EspañaJosé Ortega y Gasset, 29-6º28006 Madrid, SpainTel: +34 91 426 3600 Fax: +34 91 577 1857www.franklintempleton.com.es

SwitzerlandFranklin Templeton Switzerland LtdStockerstrasse 38CH-8002 Zurich, SwitzerlandTel: +41 (0) 44 217 81 81 Fax: +41 (0) 44 217 81 82www.franklintempleton.ch

UNITED KINGDOM

LondonFranklin Templeton Investment Management LimitedCannon Place, 78 Cannon StreetLondon EC4N 6HL, United KingdomTel: +44 (0) 20 7073 8500 Fax: +44 (0) 20 7073 8700UK Freefone: 0800 305 306www.franklintempleton.co.uk

ASIA

SingaporeTempleton Asset Management Ltd7 Temasek Boulevard#38-03 Suntec Tower OneSingapore 038987Tel: +65 6241 2662 Fax: +65 6332 2295www.franklintempleton.com.sg

MIDDLE EAST AND AFRICA

South AfricaFranklin Templeton Investments SA (PTY) LtdKildare HouseThe Oval, 1 Oakdale RoadNewlands, Cape Town, 7700South AfricaTel: +27 11 341 2300 Fax: +27 11 484 2301www.franklintempleton.co.za

United Arab EmiratesFranklin Templeton Investments (ME) LimitedGate Building EastWing, 2nd FloorDubai International Financial CentreP.O. Box 506613Dubai, United Arab EmiratesTel: +971 (4) 428 4100 Fax: +971 (4) 428 4140www.franklintempletongem.com

Please note that the websites mentioned above are directed at residents within the country stated on these websites. (Please refer to the website disclaimers).

Franklin Templeton International Services S.à r.l.8A, rue Albert BorschetteL-1246 LuxembourgGrand Duchy of LuxembourgTel: +352 (46) 66-67-1Fax: +352 (46) 66-76