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 811-21357

Franklin Limited Duration Income Trust

(Exact name of registrant as specified in charter)

One Franklin Parkway, San Mateo, CA 94403-1906

(Address of principal executive offices) (Zip code)

Craig S. Tyle, One Franklin Parkway, San Mateo, CA 94403-1906

(Name and address of agent for service)

Registrant’s telephone number, including area code: (650) 312-2000

Date of fiscal year end: 12/31

Date of reporting period: 12/31/19

Item 1. Reports to Stockholders.

Internet Delivery of Fund Reports Unless You Request Paper Copies: Effective January 1, 2021, as permitted by the SEC, paper copies of the Fund’s shareholder reports will no longer be sent by mail, unless you specifically request them from the Fund or your financial intermediary. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.

If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. If you have not signed up for electronic delivery, we would encourage you to join fellow shareholders who have. You may elect to receive shareholder reports and other communications electronically from the Fund by calling (800) 416-5585 or by contacting your financial intermediary.

You may elect to continue to receive paper copies of all your future shareholder reports free of charge by contacting your financial intermediary or, if you invest directly with a Fund, calling (800) 416-5585 to let the Fund know of your request. Your election to receive reports in paper will apply to all funds held in your account.

FRANKLIN TEMPLETON

Successful investing begins with ambition. And achievement only comes when you reach for it. That’s why we continually strive to deliver better outcomes for investors. No matter what your goals are, our deep, global investment expertise allows us to offer solutions that can help.

During our more than 70 years of experience, we’ve managed through all kinds of markets—up, down and those in between. We’re always preparing for what may come next. It’s because of this, combined with our strength as one of the world’s largest asset managers that we’ve earned the trust of millions of investors around the world.

Contents
Annual Report
Franklin Limited Duration Income Trust	2
Performance Summary	6
Important Notice to Shareholders	8
Financial Highlights and Statement of Investments	9
Financial Statements	27
Notes to Financial Statements	31
Report of Independent Registered Public Accounting Firm	44
Tax Information	45
Annual Meeting of Shareholders	46
Dividend Reinvestment and Cash Purchase Plan	47
Board Members and Officers	49
Shareholder Information	53

Visit www.franklintempleton.com/investor/
investments-and-solutions/investment-
options/closed-end-funds/ for fund

updates, to access your account, or to find helpful financial planning tools.

  Not FDIC Insured  |  May Lose Value  |   No Bank Guarantee  

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ANNUAL REPORT

Franklin Limited Duration Income Trust

Dear Shareholder:

This annual report for Franklin Limited Duration Income Trust covers the fiscal year ended December 31, 2019.

Your Fund’s Goal and Main Investments

The Fund seeks to provide high, current income, with a secondary objective of capital appreciation to the extent possible and consistent with the Fund’s primary objective, through a portfolio consisting primarily of high-yield corporate bonds, floating rate corporate loans and mortgage-and other asset-backed securities.

Performance Overview

For the 12 months under review, the Fund posted cumulative total returns of +9.33% based on net asset value and +18.34% based on market price. Net asset value decreased from $10.11 per share on December 31, 2018, to $10.00 at period-end, and the market price increased from $9.02 to $9.59 over the same period. You can find the Fund’s long-term performance data in the Performance Summary 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.

Economic and Market Overview

Bond prices rose sharply during the reporting period, as interest-rate cuts and many investors’ search for income pushed down yields on most bond categories. Notably, U.S. bonds, as measured by the Bloomberg Barclays U.S. Aggregate Bond Index, performed well alongside high returns from U.S. equities, as measured by the Standard & Poor’s^® 500 Index.

The primary driver of U.S. bond performance was a shift in the U.S. Federal Reserve’s (Fed’s) monetary policy. After a period of tightening in 2018, the Fed shifted course, announcing in January 2019 that it would not be raising interest rates in the near future. Three interest-rate cuts followed thereafter, with the Fed lowering the federal funds rate to a range of 1.50%–1.75%. Falling interest rates

Portfolio Composition*

Based on Total Investments as of 12/31/19

*Total investments include long-term and short-term investments. **Includes collateralized loan obligations.

***Rounds to less than 0.1% of total investments.

typically increase the value of existing bonds, since their relatively higher yields become more attractive to investors.

Both long-term and short-term U.S. bonds, as measured by subindexes of the Bloomberg Barclays U.S. Aggregate Bond Index, gained during the period, with long-term bonds posting stronger returns due to their higher sensitivity to interest-rate changes. Interest rates on long-term U.S. Treasuries initially fell more than interest rates on short-term U.S. Treasuries, leading to a flattening of the yield curve, which charts the yields of U.S. Treasuries at varying maturity dates. In August 2019, the yield on 10-year U.S. Treasuries fell below the yield on two-year U.S. Treasuries. While some investors considered this inversion a sign that the economy was moving toward a recession, the two-year and 10-year U.S. Treasury yield curve steepened again shortly thereafter amid positive economic signals.

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 11.

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U.S. Treasury bonds, as measured by the Bloomberg Barclays U.S. Treasury Index, gained during the period, which was characterized by high levels of Treasury issuance due to the government’s deficit spending. A strong U.S. dollar during most of the period and comparatively higher Treasury yields relative to sovereign debt issued by other developed market countries made Treasuries attractive to foreign investors.

Corporate bonds also posted noteworthy returns, driven by the combination of a relatively strong economy and lower interest rates. Both investment-grade and high-yield corporate bonds gained significantly, as measured by the Bloomberg Barclays U.S. Corporate Bond Index and Bloomberg Barclays U.S. Corporate High Yield Bond Index, respectively, as solid corporate profits and steady economic growth helped strengthen investors’ confidence in corporate creditworthiness. The positive environment for debt extended to mortgage-backed securities, as prepayments due to homeowner refinancing declined after hitting a three-year high in August 2019.

Investment Strategy

We invest in a diversified mix of fixed income securities, primarily high-yield corporate bonds, senior secured floating rate corporate loans, and mortgage-and other asset-backed securities. The Fund may also invest a small portion in marketplace loans. Our top-down analysis of macroeconomic trends combined with a bottom-up analysis of market sectors, industries and issuers drives our investment process. We seek to maintain a limited duration, or interest-rate sensitivity, to moderate the impact that fluctuating interest rates might have on the Fund’s fixed income portfolio. Within the corporate bond and corporate loan sectors, we seek securities trading at reasonable valuations from issuers with characteristics such as strong market positions, stable cash flows, reasonable capital structures, supportive asset values, strong sponsorship and improving credit fundamentals. In the mortgage- and other asset-backed securities sector, we look to capture an attractive income stream and total return through our

Dividend Distributions*
1/1/19–12/31/19
Month	Dividend per Common Share (cents)
January		8.75
February		8.57
March		8.63
April		8.71
May		8.70
June		8.73
July		8.68
August		8.63
September		8.58
October		8.52
November		8.48
December		8.39
Total		103.37

*The distribution amount is the sum of all net investment income distributions and tax return of capital for the period shown. All Fund distributions will vary depending upon current market conditions, and past distributions are not indicative of future trends.

analysis of security prepayment assumptions, potential pricing inefficiencies and underlying collateral characteristics.

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.

Manager’s Discussion

High-Yield Corporate Bonds

Benefiting from one of its strongest starts to a calendar year on record, high-yield corporate bonds, as measured by the Credit Suisse (CS) High Yield Index returned +14.00% during the 12-month period ended December 31, 2019.1 Despite heightened volatility amid concerns for the global economy and ongoing geopolitical tensions, the high-yield market fared particularly well, and the yield spread of the CS High Yield Index narrowed from 575 basis points (bps) to 414 (bps) during the period. In our view, such strong results were attributable to several factors, including the Fed’s pivot to a more dovish stance at the start of the year, continued

1. Source: Credit Suisse Group.

See www.franklintempletondatasources.com for additional data provider information.

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FRANKLIN LIMITED DURATION INCOME TRUST

strength for corporate fundamentals, and favorable market conditions.

U.S. Treasury yields generally declined across the curve and globally, lower government bond yields likely helped to support demand for high-yield corporate bonds during the period, particularly for higher-rated segments of the market, which notably outperformed. Based on the Bloomberg Barclays High Yield Indexes, BB rated bonds led the way with a return of +15.51%, which compared to returns of +14.80% and +9.52% for the B and CCC rated segments, respectively. All high-yield industries generated positive total returns for the period under review, with the retail, food and drug and financial services industries leading the way. Despite a strong rally in December 2019, which did lift full year results into positive territory, the energy industry represented the most notable underperformer for the period. The metals and mining, diversified media, and chemicals industries also underperformed relative to the broader market despite posting double digit returns for the year. Although default activity was higher compared to the previous year, the increase was due largely to select issuers in commodity-related industries. Overall, corporate fundamentals remained strong throughout the year, which helped to keep the high-yield default rate below its long-term average.

Floating Rate Corporate Loans

For the one-year period ended December 31, 2019, the corporate loan asset class posted a +8.17% total return, as measured by the CS Leveraged Loan Index.¹ After technical conditions in the loan market significantly weakened toward the end of 2018, improved investor sentiment early in 2019 and demand from new collateralized-loan obligations (CLOs) led to a sharp rebound.

Outflows from retail investors continued throughout the period as the Fed cut its benchmark rate three times, prompting investors to shift away from low-duration assets. However, outflows moderated to a more manageable pace and CLOs, which have been the majority holder of institutional leveraged loans, gained shares as retail investor demand shrunk. Issuance of new CLOs helped to support loan prices and overcome challenges in loan supply and arbitrage over the period.

Although the proportion of deals related to merger and acquisition transactions picked up, the pace of total issuance continued to lag due to an increase in paydowns, especially among larger tranche names. Relatively low net new issuance in the loan market helped to balance technical

conditions as investor sentiment improved. However, the lack of new issuance eventually led to an increase in repricing and refinancing transactions toward the end of the 2019.

The default rate by principal amount declined during the period and continued to remain below the historical average, after reaching a three year high earlier in 2018. The default outlook remained generally benign even with higher leverage levels, especially among first-lien loans, as well as a higher proportion of B rated loans in the market and more loans trading at distressed levels. However, amid uncertainty about the pace of economic growth and increasing concern over potential downgrades, higher-rated loans outperformed for the entire year, despite lower-rated loans rallying towards the end of 2019.

Although upper tier loans outperformed during the period, performance was primarily driven by loan selection, with a few issuers that faced operational challenges and industry headwinds. Within our loan portfolio, General Nutrition Centers, a specialty retailer of nutritional supplements, was the top contributor to performance after an equity investment from a Chinese pharmaceutical company helped clear regulatory hurdles and reduced leverage. However, Ascena Retail Group, a specialty apparel retailer with multiple core brands, detracted from performance after the company reported worse-than-expected results and weak guidance for the remainder of 2019, which resulted in major management changes and a material change in strategy. Additionally, the term loan of Foresight Energy, a thermal coal producer, declined as company results were weaker due to low coal prices and competition from natural gas, as well as flooding conditions that prevented delivery of shipments, which led to a credit rating downgrade during the period.

Mortgage-Backed Securities (MBS) and Securitized Sectors

Securitized sectors provided positive total returns during the period but could not keep pace with the strong performance of corporate credit markets. All the securitized sectors that the portfolio invests in, non-agency residential MBSs (RMBS), commercial MBS (CMBS) and MBS, lagged the strong total returns posted by high-yield corporate credit and senior secured floating rate loans on a total-return basis.

MBS fundamentals remained supportive although low expected returns, poor carry-on mortgage dollar rolls, elevated prepayment levels and historically tight spreads led us to remain cautious over the period. With the Fed reducing reinvestment in the MBS market as part of its balance sheet normalization plan, it is expected that there will be an additional supply of $500 billion to be absorbed by the

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FRANKLIN LIMITED DURATION INCOME TRUST

market in 2020. We expect this excess supply to cause modest spread widening in the coming year. However, we believe MBS spreads will continue to trade in a relatively tight range in 2020.

We have a favorable view of the RMBS sector, which is backed by healthy housing and consumer credit fundamentals. Fundamentally we remain cautious on commercial real estate as we are later in the credit cycle, many major metro city prices have far surpassed pre-crisis levels, effective rents are slowing, and vacancies are on the rise.

The portfolio’s allocation in securitized sectors was heavily weighted to agency MBS, with the largest allocation in conventional Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation) MBS, mainly in 4.0% and 3.5% coupon securities. We added to our RMBS exposure and prefer to remain allocated to the seasoned credit risk transfer and re-performing loan sectors, where fundamental and technical forces remain positive. As we have decreased our CMBS allocation, we maintained our exposure to the top of the capital structure as slowing rent growth and the rise in commercial real estate values over the past few years might be difficult to sustain in the latter stages of an expansionary business cycle, in our view.

Thank you for your continued participation in Franklin Limited Duration Income Trust. We look forward to serving your future investment needs.

Sincerely,

	David Yuen, CFA, FRM Co-Lead Portfolio Manager
	Sonal Desai, Ph.D. Co-Lead Portfolio Manager

	Glenn I. Voyles, CFA Co-Lead Porfolio Manager
	Justin Ma, CFA Co-Lead Portfolio Manager

The foregoing information reflects our analysis, opinions and portfolio holdings as of December 31, 2019, 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.

CFA^® is a trademark owned by CFA Institute.

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FRANKLIN LIMITED DURATION INCOME TRUST

Performance Summary as of December 31, 2019

Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not reflect any sales charges paid at inception or brokerage commissions paid on secondary market purchases. The performance table does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares. Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.

Performance^1,2

	Cumulative Total Return3		Average Annual Total Return3
	Based on      NAV4	Based on        market price5	Based on      NAV4	Based on      market price5
1-Year	+9.33%	+18.34%	+9.33%	+18.34%
5-Year	+10.65%	+24.13%	+2.04%	+4.42%
10-Year	+63.86%	+81.46%	+5.06%	+6.14%

Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown.

Share Prices

Symbol: FTF	12/31/19		12/31/18		Change
Net Asset Value (NAV)		$10.00		$10.11		-$0.11
Market Price (NYSE)		$  9.59		$  9.02		+$0.57

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FRANKLIN LIMITED DURATION INCOME TRUST

PERFORMANCE SUMMARY

Distributions (1/1/19–12/31/19)

Net Investment Income	Tax Return of Capital		Total
$0.5810		$0.4484		$1.0294

All investments involve risks, including possible loss of principal. Interest-rate movements and mortgage prepayments will affect the Fund’s share price and yield. Bond prices generally move in the opposite direction of interest rates. As prices of bonds in the Fund adjust to a rise in interest rates, the Fund’s share price may decline. Investments in lower-rated bonds include higher risk of default and loss of principal. The Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results.

1. Figures are for common shares. As of 12/31/19, the Fund had leverage in the amount of 26.22% of the Fund’s total portfolio. The Fund employs leverage through participation in a Credit Facility, reverse repurchase agreements and purchase of Mortgage Dollar Rolls. The use of financial leverage creates an opportunity for increased income but, at the same time, creates special risks (including the likelihood of greater volatility of net asset value and market price of common shares). The cost of leverage rises and falls with changes in short-term interest rates. Such increases/decreases in the cost of the Fund’s leverage may be offset by increased/decreased income from the Fund’s floating rate investments.

2. The Fund has an expense reduction and a fee waiver associated with any investments it makes in a Franklin Templeton money fund and/or other Franklin Templeton fund, contractually guaranteed through 2/28/21. Fund investment results reflect the expense reduction and fee waiver; without these reductions, the results would have been lower.

3. Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.

4. Assumes reinvestment of distributions based on net asset value.

5. Assumes reinvestment of distributions based on the dividend reinvestment and cash purchase plan.

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FRANKLIN LIMITED DURATION INCOME TRUST

Important Notice to Shareholders

Effective October 15, 2019, the Fund Portfolio Managers shifted to a team-based approach with David Yuen, CFA^® joining the Fund’s portfolio management team and serving as a co-lead portfolio manager alongside Sonal Desai, Ph.D., Glenn Voyles, CFA^® and Justin Ma, CFA^®, who are current members of the Fund’s portfolio management team. The Fund’s current lead portfolio manager Roger Bayston, CFA^®, come off the Fund’s portfolio management team effective October 15, 2019.

Managed Distribution Plan

The Fund adopted a managed distribution plan (the “Plan”) under which the Fund makes monthly distributions to common shareholders at an annual minimum fixed rate of 10% based on average monthly net asset value (“NAV”) of the Fund’s common shares. The primary purpose of the Plan is to provide the Fund’s shareholders with a constant, but not guaranteed, fixed minimum rate of distribution each month. The plan is intended to narrow the discount between the market price and the NAV of the Fund’s common shares, but there is no assurance that the plan will be successful in doing so.

Under Plan, to the extent that sufficient investment income is not available on a monthly basis, the Fund will distribute long-term capital gains and/or return of capital in order to maintain its managed distribution level. No conclusions should be drawn about the Fund’s investment performance from the amount of the Fund’s distributions or from the terms of the Plan. The Board may amend the terms of the Plan or terminate the Plan at any time without prior notice to the Fund’s shareholders. The amendment or termination of the Plan could have an adverse effect on the market price of the Fund’s common shares. The Plan is subject to periodic review by the Board, including a yearly review of the annual minimum fixed rate to determine if an adjustment should be made.

The Fund calculates the average NAV from the previous month based on the number of business days in that month on which the NAV is calculated. The distribution is calculated as 10% of the previous month’s average NAV, divided by 12. Typically, distributions will be declared by press release 10 days before the last business day of each month, with the record date on the last business day of the month. The payment date for the distribution will typically be during the middle of the next month.

With each distribution that does not consist solely of net investment income, the Fund will issue a notice to shareholders and an accompanying press release that will provide detailed information regarding the amount and composition of the distribution and other related information. The amounts and sources of distributions reported in the notice to shareholders are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Fund’s investment experience during its full fiscal year and may be subject to changes based on tax regulations. The Fund will send shareholders a Form 1099-DIV for the calendar year that will tell them how to report these distributions for federal income tax purposes.

The Fund may at times distribute more than its net investment income and net realized capital gains; therefore, a portion of the distribution may result in a return of capital. A return of capital occurs when some or all of the money that shareholders invested in the Fund is paid back to them. A return of capital does not necessarily reflect the Fund’s investment performance and should not be confused with ‘yield’ or ‘income’. Any such returns of capital will decrease the Fund’s total assets and, therefore, could have the effect of increasing the Fund’s expense ratio. In addition, in order to make the level of distributions called for under its plan, the Fund may have to sell portfolio securities at a less than opportune time.

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FRANKLIN LIMITED DURATION INCOME TRUST

Financial Highlights

	Year Ended December 31,									Year Ended March 31,
	2019			2018			2017a			2017			2016			2015
Per common share operating performance (for a common share outstanding throughout the year)
Net asset value, beginning of year		$10.11			$12.32			$12.91			$12.38			$13.87			$14.36
Income from investment operations:
Net investment incomeb		0.53			0.57			0.48			0.62			0.72			0.73
Net realized and unrealized gains (losses)		0.39			(0.79	)		(0.03	)		0.85			(1.41	)		(0.33	)
Dividends to preferred shareholders from net investment income		—			(0.06	)		(0.08	)		(0.07	)		(0.06	)		(0.06	)
Total from investment operations		0.92			(0.28	)		0.37			1.40			(0.75	)		0.34
Less distributions to common shareholders from:
Net investment income		(0.58	)		(0.49	)		(0.43	)		(0.57	)		(0.74	)		(0.83	)
Tax return of capital		(0.45	)		(0.68	)		(0.53	)		(0.36	)		—			—
Total distributions		(1.03	)		(1.17	)		(0.96	)		(0.93	)		(0.74	)		(0.83	)
Repurchase of shares		—			—			—			0.06			—			—
Dilution effect of rights offering		—			(0.76	)c		—			—			—			—
Net asset value, end of year		$10.00			$10.11			$12.32			$12.91			$12.38			$13.87
Market value, end of yeard		$ 9.59			$ 9.02			$11.83			$11.97			$11.34			$12.17
Total return (based on market value per share)e		18.34%			(14.86)%			7.08%			14.07%			(0.44)%			(0.35)%
Ratios to average net assets applicable to common sharesf,g
Expenses before waiver and payments by affiliates		2.16%			1.73%			1.25%			1.35%			1.16%			1.14%
Expenses net of waiver and payments by affiliatesh		2.15%			1.71%			1.23%			1.32%			1.16%	i		1.14%i
Net investment income		5.15%			4.97%			5.04%			4.83%			5.52%			5.14%
Supplemental data
Net assets applicable to common shares, end of period (000’s)		$301,452			$304,804			$278,489			$291,875			$332,132			$372,080
Portfolio turnover rate		113.49%			198.44%			168.28%			265.00%			270.16%			289.67%
Portfolio turnover rate excluding mortgage dollar rollsj		57.50%			63.84%			46.49%			93.00%			81.78%			92.15%
Total credit facility and reverse repurchase agreements outstanding at end of year (000’s)		$107,117			$90,000k			$—			$—			$—			$—
Asset coverage per preferred share		$ —			$—	l		$72,311			$74,809			$75,991			$76,665
Liquidation preference per preferred share		$ —			$—	l		$25,000			$25,000			$25,000			$25,000
Asset coverage per $1,000 of debt		$3,814			$4,387	k		$—			$—			$—			$—

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FRANKLIN LIMITED DURATION INCOME TRUST

FINANCIAL HIGHLIGHTS

^aFor the period April 1, 2017 to December 31, 2017.

^bBased on average daily shares outstanding.

^cRepresents the impact of Fund’s rights offering of 7,534,709 common shares in October 2018 as a subscription price per share based on a formula. See Note 2.

^dBased on the last sale on the NYSE American.

^eTotal return is not annualized for periods less than one year.

^fBased on income and expenses applicable to both common and preferred shares.

^gRatios are annualized for periods less than one year.

^hBenefit of expense reduction rounds to less than 0.01%.

ⁱBenefit of waiver and payments by affiliates rounds to less than 0.01%.

^jSee Note 1(e) regarding mortgage dollar rolls.

^kEffective August 15, 2018, the Fund began participating in a credit facility.

^lEffective August 15, 2018, the Fund’s preferred shares were liquidated.

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FRANKLIN LIMITED DURATION INCOME TRUST

Statement of Investments, December 31, 2019

	Country		Shares/ Warrants		Value
Common Stocks and Other Equity Interests 0.5%
Commercial & Professional Services 0.0%†
a,b Remington Outdoor Co. Inc.		United States		39,306	$	24,566
Energy 0.5%
Amplify Energy Corp.		United States		281		1,857
a,b Amplify Energy Corp., wts., 4/21/20		United States		2,703		—
a Birch Permian Holdings Inc.		United States		2,309		23,090
a Birch Permian Holdings Inc.		United States		17,998		177,730
a Halcon Resources Corp.		United States		156		2,098
a,b Halcon Resources Corp., wts., 9/09/20		United States		6,408		—
a,b Halcon Resources Corp., wts., A, 10/08/22		United States		752		688
a,b Halcon Resources Corp., wts., B, 10/08/22		United States		940		605
a,b Halcon Resources Corp., wts., C, 10/08/22		United States		1,209		481
a,b,c Nine Point Energy LLC		United States		21,663		33,012
Riviera Resources Inc.		United States		6,305		50,314
a Samson Resources II LLC		United States		31,225		653,774
a Weatherford International PLC		United States		16,810		469,840
						1,413,489
Materials 0.0%†
a Verso Corp., A		United States		4,163		75,059
a Verso Corp., wts., 7/25/23		United States		438		1,533
						76,592
Total Common Stocks and Other Equity Interests (Cost $6,212,798)						1,514,647
Convertible Preferred Stocks (Cost $377,604) 0.1%
Energy 0.1%
a,b,c Nine Point Energy Holdings Inc., cvt. pfd		United States		404		306,975
			Principal  Amount*
Corporate Bonds 46.9%
Automobiles & Components 0.6%
d,e Adient U.S. LLC, senior secured note, 144A, 7.00%, 5/15/26		United States	$	1,300,000		1,419,436
e The Goodyear Tire & Rubber Co., senior note, 5.125%, 11/15/23		United States		300,000		305,880
						1,725,316
Banks 0.9%
e,f JPMorgan Chase & Co., junior sub. bond, R, 6.00% to 8/01/23, FRN thereafter, Perpetual		United States		1,500,000		1,611,698
e Royal Bank of Scotland Group PLC, sub. note, 6.125%, 12/15/22		United Kingdom		1,000,000		1,094,619
						2,706,317
Capital Goods 4.1%
d,e Beacon Roofing Supply Inc., senior note, 144A, 4.875%, 11/01/25		United States		1,200,000		1,208,502
e H&E Equipment Services Inc., senior note, 5.625%, 9/01/25		United States		1,500,000		1,575,622
d,e Harsco Corp., senior note, 144A, 5.75%, 7/31/27		United States		1,400,000		1,496,313
d,e Jeld-Wen Inc., senior note, 144A, 4.625%, 12/15/25		United States		1,600,000		1,651,864
d,e The Manitowoc Co. Inc., secured note, second lien, 144A, 9.00%, 4/01/26		United States		1,000,000		1,049,872

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STATEMENT OF INVESTMENTS

	Country		Principal  Amount*		Value
Corporate Bonds (continued)
Capital Goods (continued)
g Onsite Rental Group Operations Pty. Ltd., secured note, PIK, 6.10%, 10/26/23		Australia	$	952,561	$	873,975
d,e Signature Aviation US Holdings Inc. senior note, 144A, 5.375%, 5/01/26		United States		400,000		421,973
e Tennant Co., senior note, 5.625%, 5/01/25		United States		800,000		838,332
d,e TransDigm Inc., senior secured note, 144A, 6.25%, 3/15/26		United States		1,400,000		1,518,278
d,e Vertiv Group Corp., senior note, 144A, 9.25%, 10/15/24		United States		1,600,000		1,723,336
						12,358,067
Commercial & Professional Services 1.3%
d,e GFL Environmental Inc., senior note, 144A, 5.125%, 12/15/26		Canada		1,200,000		1,264,656
d,e Intrado Corp., senior note, 144A, 8.50%, 10/15/25		United States		1,700,000		1,364,250
e United Rentals North America Inc.,
senior bond, 5.875%, 9/15/26		United States		600,000		645,165
senior note, second lien, 3.875%, 11/15/27		United States		600,000		613,680
						3,887,751
Consumer Durables & Apparel 1.5%
d,e Ashton Woods USA LLC/Ashton Woods Finance Co., senior note, 144A, 9.875%, 4/01/27		United States		1,000,000		1,127,847
d,e Hanesbrands Inc., senior note, 144A, 4.625%, 5/15/24		United States		1,000,000		1,056,665
e KB Home, senior note, 7.00%, 12/15/21		United States		1,100,000		1,182,940
d,e Taylor Morrison Communities Inc./Taylor Morrison Holdings II Inc., senior note, 144A, 5.875%,   4/15/23		United States		1,000,000		1,080,415
						4,447,867
Consumer Services 3.1%
d,e 1011778 BC ULC/New Red Finance Inc., senior secured note, first lien, 144A, 4.25%, 5/15/24		Canada		800,000		821,668
d,e 24 Hour Holdings III LLC, senior note, 144A, 8.00%, 6/01/22		United States		1,500,000		694,218
d,e Downstream Development Authority of the Quapaw Tribe of Oklahoma, secured note, 144A,   10.50%, 2/15/23		United States		1,400,000		1,474,081
d,e Golden Nugget Inc., senior note, 144A, 8.75%, 10/01/25		United States		1,200,000		1,286,238
d,e KFC Holding Co./Pizza Hut Holdings LLC/Taco Bell of America LLC, senior note, 144A, 5.00%,   6/01/24		United States		1,400,000		1,453,669
d,e Stars Group Holdings BV/Stars Group U.S. Co-Borrower LLC, senior note, 144A, 7.00%, 7/15/26		Canada		500,000		542,800
d,e Studio City Finance Ltd., senior note, 144A, 7.25%, 2/11/24		Macau		1,100,000		1,165,543
d,e Wynn Las Vegas LLC/Wynn Las Vegas Capital Corp., senior bond, 144A, 5.50%, 3/01/25		United States		1,700,000		1,825,358
						9,263,575
Diversified Financials 1.4%
d,e FirstCash Inc., senior note, 144A, 5.375%, 6/01/24		United States		900,000		934,123
d,e HAT Holdings I LLC/HAT Holdings II LLC, senior note, 144A, 5.25%, 7/15/24		United States		600,000		632,001
e Navient Corp.,
senior note, 5.00%, 10/26/20		United States		200,000		203,170
senior note, 5.875%, 3/25/21		United States		200,000		207,050
senior note, 6.625%, 7/26/21		United States		400,000		423,900
senior note, 6.50%, 6/15/22		United States		200,000		217,250
senior note, 7.25%, 9/25/23		United States		400,000		453,008

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STATEMENT OF INVESTMENTS

	Country		Principal  Amount*		Value
Corporate Bonds (continued)
Diversified Financials (continued)
e Springleaf Finance Corp.,
senior bond, 5.375%, 11/15/29		United States	$	500,000	$	522,825
senior note, 6.625%, 1/15/28		United States		600,000		678,390
						4,271,717
Energy 5.1%
d Aker BP ASA,
senior note, 144A, 4.75%, 6/15/24		Norway		500,000		519,995
e senior note, 144A, 5.875%, 3/31/25		Norway		500,000		532,500
d,e Archrock Partners LP/Archrock Partners Finance Corp., senior note, 144A, 6.25%, 4/01/28		United States		700,000		722,750
e California Resources Corp.,
d secured note, second lien, 144A, 8.00%, 12/15/22		United States		824,000		366,680
senior note, 5.50%, 9/15/21		United States		37,000		17,604
e Calumet Specialty Products Partners LP/Calumet Finance Corp., senior note, 7.75%, 4/15/23		United States		1,000,000		1,000,415
e Cheniere Corpus Christi Holdings LLC,
senior secured note, first lien, 7.00%, 6/30/24		United States		700,000		808,132
senior secured note, first lien, 5.875%, 3/31/25		United States		600,000		675,927
e Cheniere Energy Partners LP,
d senior bond, 144A, 4.50%, 10/01/29		United States		900,000		926,505
senior note, 5.625%, 10/01/26		United States		400,000		423,750
senior secured note, first lien, 5.25%, 10/01/25		United States		1,000,000		1,044,580
e Crestwood Midstream Partners LP/Crestwood Midstream Finance Corp., senior note, 6.25%, 4/01/23		United States		1,500,000		1,533,127
e CSI Compressco LP/CSI Compressco Finance Inc., senior note, 7.25%, 8/15/22		United States		1,400,000		1,291,937
d,e Endeavor Energy Resources LP/EER Finance Inc., senior bond, 144A, 5.75%, 1/30/28		United States		1,000,000		1,053,100
d,g EnQuest PLC, senior note, 144A, PIK, 7.00%, 4/15/22		United Kingdom		947,777		821,006
e Martin Midstream Partners LP/Martin Midstream Finance Corp., senior note, 7.25%, 2/15/21		United States		1,100,000		1,004,190
b,d,g,h Murray Energy Corp., secured note, 1.5 lien, 144A, PIK, 12.00% (incl. cash 9.00%), 4/15/24		United States		606,187		759
e QEP Resources Inc., senior bond, 5.25%, 5/01/23		United States		500,000		496,250
h Sanchez Energy Corp.,
senior note, 7.75%, 6/15/21		United States		900,000		45,000
senior note, 6.125%, 1/15/23		United States		300,000		15,000
e Sunoco LP/Sunoco Finance Corp., senior note, 4.875%, 1/15/23		United States		700,000		717,805
d,e Viper Energy Partners LP, senior note, 144A, 5.375%, 11/01/27		United States		400,000		416,740
d Weatherford International Ltd., senior note, 144A, 11.00%, 12/01/24		United States		916,000		992,715
						15,426,467
Food & Staples Retailing 0.2%
d,e Performance Food Group Inc., senior note, 144A, 5.50%, 10/15/27		United States		600,000		642,765
Food, Beverage & Tobacco 0.9%
e B&G Foods Inc.,
senior note, 5.25%, 4/01/25		United States		1,000,000		1,030,415
senior note, 5.25%, 9/15/27		United States		400,000		404,500

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STATEMENT OF INVESTMENTS

	Country		Principal  Amount*		Value
Corporate Bonds (continued)
Food, Beverage & Tobacco (continued)
d,e Lamb Weston Holdings Inc., senior note, 144A, 4.625%, 11/01/24		United States	$	1,100,000		$    1,169,669
						2,604,584
Health Care Equipment & Services 3.4%
d,e Catalent Pharma Solutions Inc., senior note, 144A, 4.875%, 1/15/26		United States		1,200,000		1,245,417
d,e Centene Corp.,
senior note, 144A, 5.375%, 6/01/26		United States		1,000,000		1,063,100
senior note, 144A, 4.25%, 12/15/27		United States		400,000		412,240
CHS/Community Health Systems Inc.,
d senior note, 144A, 8.125%, 6/30/24		United States		900,000		740,241
e senior secured note, first lien, 6.25%, 3/31/23		United States		700,000		712,250
e HCA Inc., senior note, 7.50%, 2/15/22		United States		500,000		553,390
d,e MEDNAX Inc., senior note, 144A, 6.25%, 1/15/27		United States		1,400,000		1,438,535
d,e MPH Acquisition Holdings LLC, senior note, 144A, 7.125%, 6/01/24		United States		1,300,000		1,260,987
d,e Tenet Healthcare Corp.,
senior note, second lien, 144A, 6.25%, 2/01/27		United States		1,200,000		1,293,000
senior secured note, 144A, 4.875%, 1/01/26		United States		500,000		524,325
d,e WellCare Health Plans Inc., senior note, 144A, 5.375%, 8/15/26		United States		1,000,000		1,066,850
						10,310,335
Household & Personal Products 0.2%
d,e Prestige Brands Inc., senior note, 144A, 5.125%, 1/15/28		United States		500,000		525,000
Insurance 0.5%
d,e Alliant Holdings Intermediate LLC/Alliant Holdings Co-Issuer, senior note, 144A, 6.75%, 10/15/27		United States		1,500,000		1,609,200
Materials 7.7%
d,e Ardagh Packaging Finance PLC/Ardagh MP Holdings USA Inc., senior note, 144A, 6.00%, 2/15/25		Luxembourg		500,000		525,625
e Crown Americas LLC/Crown Americas Capital Corp. VI, senior note, 4.75%, 2/01/26		United States		500,000		529,549
d First Quantum Minerals Ltd.,
senior note, 144A, 7.00%, 2/15/21		Zambia		257,000		258,124
e senior note, 144A, 7.25%, 4/01/23		Zambia		500,000		518,682
d,e FMG Resources (August 2006) Pty. Ltd.,
senior note, 144A, 4.75%, 5/15/22		Australia		700,000		723,996
senior note, 144A, 5.125%, 3/15/23		Australia		600,000		635,244
d,e Grinding Media Inc./MC Grinding Media Canada Inc., senior secured note, 144A, 7.375%, 12/15/23		United States		800,000		816,992
d,e HudBay Minerals Inc., senior note, 144A, 7.25%, 1/15/23		Canada		400,000		415,916
d,e Kaiser Aluminum Corp., senior note, 144A, 4.625%, 3/01/28		United States		500,000		513,925
d,e Mauser Packaging Solutions Holding Co., senior note, 144A, 7.25%, 4/15/25		United States		1,500,000		1,484,985
d,e Neon Holdings Inc., senior note, 144A, 10.125%, 4/01/26		United States		1,500,000		1,496,059
d,e New Enterprise Stone & Lime Co., senior note, 144A, 6.25%, 3/15/26		United States		1,500,000		1,575,521
d,e New Gold Inc., senior note, 144A, 6.375%, 5/15/25		Canada		600,000		556,635
d,e Novelis Corp., senior note, 144A, 6.25%, 8/15/24		United States		1,300,000		1,366,612
d,e OCI NV, senior note, 144A, 6.625%, 4/15/23		Netherlands		400,000		417,000
d,e Owens-Brockway Glass Container Inc.,
senior note, 144A, 5.00%, 1/15/22		United States		900,000		935,793
senior note, 144A, 5.875%, 8/15/23		United States		400,000		427,834

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STATEMENT OF INVESTMENTS

	Country		Principal  Amount*		Value
Corporate Bonds (continued)
Materials (continued)
d,e Petra Diamonds U.S. Treasury PLC, secured note, second lien, 144A, 7.25%, 5/01/22		South Africa	$	1,200,000	$	760,492
d,e Plastipak Holdings Inc., senior note, 144A, 6.25%, 10/15/25		United States		1,500,000		1,297,440
d,e Rain CII Carbon LLC/CII Carbon Corp., senior note, second lien, 144A, 7.25%, 4/01/25		United States		800,000		779,528
d Reynolds Group Issuer Inc./Reynolds Group Issuer LLC/Reynolds Group Issuer Luxembourg SA,
e senior note, 144A, 7.00%, 7/15/24		United States		100,000		103,563
e senior secured note, first lien, 144A, 5.125%, 7/15/23		United States		400,000		410,334
i senior secured note, first lien, 144A, FRN, 5.501%, (3-month USD LIBOR + 3.50%), 7/15/21		United States		400,000		401,400
d,e Sealed Air Corp.,
senior bond, 144A, 5.125%, 12/01/24		United States		500,000		540,000
senior bond, 144A, 5.50%, 9/15/25		United States		600,000		661,749
e Steel Dynamics Inc., senior note, 5.125%, 10/01/21		United States		1,500,000		1,500,908
d,e SunCoke Energy Partners LP/SunCoke Energy Partners Finance Corp., senior note, 144A, 7.50%,   6/15/25		United States		1,500,000		1,446,240
d,e TPC Group Inc., secured note, 144A, 10.50%, 8/01/24		United States		600,000		605,751
d,e Trivium Packaging Finance BV, senior note, 144A, 8.50%, 8/15/27		Netherlands		800,000		890,000
d,e Univar Solutions USA Inc., senior note, 144A, 5.125%, 12/01/27		United States		500,000		522,815
						23,118,712
Media & Entertainment 4.7%
d,e Altice Luxembourg SA, first lien, 144A, 10.50%, 5/15/27		Luxembourg		1,400,000		1,604,750
e CCO Holdings LLC/CCO Holdings Capital Corp.,
senior bond, 5.25%, 9/30/22		United States		1,500,000		1,519,545
d senior note, 144A, 5.125%, 5/01/23		United States		500,000		511,358
d,e Clear Channel Worldwide Holdings Inc.,
senior secured note, first lien, 144A, 5.125%, 8/15/27		United States		600,000		625,890
senior sub. note, 144A, 9.25%, 2/15/24		United States		596,000		661,313
e CSC Holdings LLC,
senior bond, 5.25%, 6/01/24		United States		500,000		539,792
senior note, 6.75%, 11/15/21		United States		1,000,000		1,078,500
d senior secured note, first lien, 144A, 5.50%, 5/15/26		United States		1,000,000		1,061,062
d,e Diamond Sports Group LLC/Diamond Sports Finance Co.,
first lien, 144A, 5.375%, 8/15/26		United States		500,000		506,713
senior note, 144A, 6.625%, 8/15/27		United States		500,000		487,175
d,e Gray Escrow Inc., senior note, 144A, 7.00%, 5/15/27		United States		400,000		445,240
d,e iHeartCommunications Inc., senior secured note, first lien, 144A, 5.25%, 8/15/27		United States		700,000		733,705
d,e LCPR Senior Secured Financing DAC, senior secured note, first lien, 144A, 6.75%, 10/15/27		United States		700,000		743,295
d,e Live Nation Entertainment Inc., senior note, 144A, 4.75%, 10/15/27		United States		500,000		518,425
d,e Nexstar Broadcasting Inc.,
senior note, 144A, 5.625%, 8/01/24		United States		500,000		522,292
senior note, 144A, 5.625%, 7/15/27		United States		1,000,000		1,055,650

franklintempleton.com Annual Report       15

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STATEMENT OF INVESTMENTS

	Country		Principal  Amount*		Value
Corporate Bonds (continued)
Media & Entertainment (continued)
d,e Scripps Escrow Inc., senior note, 144A, 5.875%, 7/15/27		United States	$	500,000	$	524,675
d,e Sirius XM Radio Inc., senior note, 144A, 4.625%, 7/15/24		United States		600,000		631,251
d,e Virgin Media Secured Finance PLC, senior secured bond, first lien, 144A, 5.50%, 8/15/26		United Kingdom		400,000		420,929
d,e WMG Acquisition Corp., secured note, first lien, 144A, 5.00%, 8/01/23		United States		100,000		102,542
						14,294,102
Pharmaceuticals, Biotechnology & Life Sciences 2.7%
d,e Avantor Inc., senior secured note, first lien, 144A, 6.00%, 10/01/24		United States		1,100,000		1,175,146
d,e Bausch Health Americas Inc., senior note, 144A, 9.25%, 4/01/26		United States		1,500,000		1,725,675
d,e Bausch Health Cos. Inc.,
senior bond, 144A, 6.125%, 4/15/25		United States		300,000		310,595
senior secured note, first lien, 144A, 6.50%, 3/15/22		United States		200,000		204,750
d,e Endo DAC/Endo Finance LLC/Endo Finco Inc.,
senior bond, 144A, 6.00%, 2/01/25		United States		1,000,000		677,190
senior note, 144A, 6.00%, 7/15/23		United States		410,000		297,246
d,e Horizon Therapeutics USA Inc. senior note, 144A, 5.50%, 8/01/27		United States		1,500,000		1,622,925
d,e Jaguar Holding Co. II/Pharmaceutical Product Development LLC, senior note, 144A, 6.375%,   8/01/23		United States		1,200,000		1,241,613
d,e Teva Pharmaceutical Finance Netherlands III BV, senior note, 144A, 7.125%, 1/31/25		Israel		900,000		923,625
						8,178,765
Real Estate 0.7%
d,e Five Point Operating Co. LP/Five Point Capital Corp., senior note, 144A, 7.875%, 11/15/25		United States		1,000,000		1,009,800
e MPT Operating Partnership LP/MPT Finance Corp.,
senior bond, 5.25%, 8/01/26		United States		300,000		317,629
senior note, 6.375%, 3/01/24		United States		700,000		728,854
						2,056,283
Retailing 0.4%
d,e Lithia Motors Inc., senior note, 144A, 4.625%, 12/15/27		United States		400,000		412,144
d,e Party City Holdings Inc., senior note, 144A, 6.625%, 8/01/26		United States		1,100,000		778,055
						1,190,199
Semiconductors & Semiconductor Equipment 0.1%
e Qorvo Inc., senior note, 5.50%, 7/15/26		United States		300,000		320,062
Software & Services 0.8%
d,e Camelot Finance SA, senior note, 144A, 4.50%, 11/01/26		United States		700,000		720,562
e Infor (U.S.) Inc., senior note, 6.50%, 5/15/22		United States		1,800,000		1,830,204
						2,550,766
Technology Hardware & Equipment 1.0%
d,e Blackboard Inc., secured note, second lien, 144A, 10.375%, 11/15/24		United States		1,600,000		1,604,000
d,e Tempo Acquisition LLC/Tempo Acquisition Finance Corp., senior note, 144A, 6.75%, 6/01/25		United States		1,500,000		1,552,485
						3,156,485

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STATEMENT OF INVESTMENTS

	Country		Principal  Amount*		Value
Corporate Bonds (continued)
Telecommunication Services 2.2%
d,e Block Communications Inc., senior note, 144A, 6.875%, 2/15/25		United States	$	300,000	$	311,997
d Digicel Group One Ltd., senior secured note, first lien, 144A, 8.25%, 12/30/22		Jamaica		617,000		350,662
d Digicel Group Two Ltd., senior note, 144A, 8.25%, 9/30/22		Bermuda		583,000		141,826
d Digicel Ltd., senior note, 144A, 6.00%, 4/15/21		Bermuda		700,000		546,000
d,e DKT Finance ApS, senior secured note, first lien, 144A, 9.375%, 6/17/23		Denmark		1,500,000		1,600,425
d,e Sprint Communications Inc., senior note, 144A, 7.00%, 3/01/20		United States		600,000		603,906
e Sprint Corp.,
senior bond, 7.875%, 9/15/23		United States		1,000,000		1,105,415
senior bond, 7.125%, 6/15/24		United States		300,000		324,251
senior note, 7.25%, 9/15/21		United States		500,000		529,660
e T-Mobile USA Inc.,
senior bond, 6.50%, 1/15/24		United States		500,000		515,630
senior note, 4.00%, 4/15/22		United States		700,000		718,370
						6,748,142
Transportation 1.0%
d,e Avolon Holdings Funding Ltd.,
senior note, 144A, 5.125%, 10/01/23		Ireland		1,000,000		1,080,795
senior note, 144A, 5.25%, 5/15/24		Ireland		400,000		437,798
d,e DAE Funding LLC,
senior note, 144A, 4.00%, 8/01/20		United Arab Emirates		800,000		806,000
senior note, 144A, 4.50%, 8/01/22		United Arab Emirates		400,000		406,997
senior note, 144A, 5.75%, 11/15/23		United Arab Emirates		200,000		210,333
						2,941,923
Utilities 2.4%
d Calpine Corp., senior note, 144A, 5.125%, 3/15/28		United States		1,500,000		1,534,800
Clearway Energy Operating LLC,
e senior bond, 5.00%, 9/15/26		United States		1,000,000		1,035,347
senior note, 5.75%, 10/15/25		United States		300,000		316,376
d,e senior note, 144A, 4.75%, 3/15/28		United States		300,000		304,500
e Ferrellgas LP/Ferrellgas Finance Corp., senior note, 6.75%, 6/15/23		United States		800,000		678,332
d,e InterGen NV, secured bond, 144A, 7.00%, 6/30/23		Netherlands		500,000		488,750
Talen Energy Supply LLC, senior note, 6.50%, 6/01/25		United States		1,600,000		1,370,152
d,e Vistra Operations Co. LLC, senior note, 144A, 5.625%, 2/15/27		United States		1,300,000		1,372,280
						7,100,537
Total Corporate Bonds (Cost $142,003,549)						141,434,937
i,j Senior Floating Rate Interests 38.4%
Automobiles & Components 1.8%
Adient U.S. LLC, Initial Term Loans, 6.144% - 6.195%, (3-month USD LIBOR + 4.25%), 5/06/24		United States		2,155,020		2,170,734
Panther BF Aggregator 2 LP, Initial Dollar Term Loan, 5.305%, (1-month USD LIBOR + 3.50%), 4/30/26		United States		1,814,307		1,825,253
Thor Industries Inc., Initial USD Term Loans, 5.50%, (1-month USD LIBOR + 3.75%), 2/01/26		United States		1,313,533		1,319,691
						5,315,678

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STATEMENT OF INVESTMENTS

	Country		Principal  Amount*		Value
i,j Senior Floating Rate Interests (continued)
Capital Goods 2.3%
Altra Industrial Motion Corp., Term Loan, 3.799%, (1-month USD LIBOR + 2.00%), 10/01/25		United States	$	945,978	$	949,919
Doncasters U.S. Finance LLC, Term B Loans, 5.445%, (3-month USD LIBOR + 3.50%), 4/09/20		United States		1,388,285		1,121,040
Harsco Corp., Term Loan B-2, 4.063%, (1-month USD LIBOR + 2.25%), 12/10/24		United States		1,159,780		1,167,029
Navistar Inc., Tranche B Term Loan, 5.24%, (1-month USD LIBOR + 3.50%), 11/06/24		United States		3,100,700		3,096,825
Onsite Rental Group Operations Pty. Ltd., Term Loan, 6.292%, (1-month USD LIBOR + 4.50%), 10/25/22		Australia		696,716		680,459
						7,015,272
Commercial & Professional Services 0.9%
k,l Pitney Bowes Inc., Term Loan B, TBD, 1/15/25		United States		900,000		891,844
Ventia Pty Ltd., Term B Loans, 5.445%, (3-month USD LIBOR + 3.50%), 5/21/26		Australia		1,517,880		1,521,675
West Corp., Term B Loans, 5.927%, (3-month USD LIBOR + 4.00%), 10/10/24		United States		514,235		437,375
						2,850,894
Consumer Durables & Apparel 0.3%
k,l Playtika Holding Corp., Term Loan B, TBD, 12/10/24		United States		930,000		941,625
Consumer Services 4.9%
24 Hour Fitness Worldwide Inc., Term Loan, 5.299%, (1-month USD LIBOR + 3.50%), 5/30/25		United States		2,218,776		1,691,420
Aristocrat Technologies Inc., Term B-3 Loans, 3.716%, (3-month USD LIBOR + 1.75%), 10/19/24		United States		820,014		824,860
Avis Budget Car Rental LLC, Tranche B Term Loans, 3.80%, (1-month USD LIBOR + 2.00%), 2/13/25		United States		2,369,692		2,386,353
Caesars Resort Collection LLC, Term B Loans, 4.549%, (1-month USD LIBOR + 2.75%), 12/22/24		United States		1,711,942		1,716,698
Eldorado Resorts Inc., Initial Term Loan, 4.00% - 4.063%, (1-month USD LIBOR + 2.25%), 4/17/24		United States		995,633		996,411
Equinox Holdings Inc., Term B-1 Loans, 4.799%, (1-month USD LIBOR + 3.00%), 3/08/24		United States		989,874		995,850
KFC Holding Co./Pizza Hut Holdings LLC/Taco Bell of America LLC (Yum Brands), Term Loan B, 3.495%, (1-month USD LIBOR + 1.75%), 4/03/25		United States		1,686,604		1,694,510
Kingpin Intermediate Holdings LLC, Amendment No. 2 Term Loans, 5.30%, (1-month USD LIBOR + 3.50%), 7/03/24		United States		1,975,000		1,980,743
NASCAR Holdings Inc., Initial Term Loans, 4.495%, (1-month USD LIBOR + 2.75%), 10/18/26		United States		760,571		769,721
Sabre GLBL Inc., 2017 Other Term A Loans, 4.049%, (1-month USD LIBOR + 2.25%), 7/01/22		United States		841,045		843,148
Station Casinos LLC, Term B Facility Loans, 4.30%, (1-month USD LIBOR + 2.50%), 6/08/23		United States		986,182		991,671
						14,891,385
Diversified Financials 0.8%
Asurion LLC,
AM No. 14 Replacement B-4 Term Loans, 4.799%, (1-month USD LIBOR + 3.00%), 8/04/22		United States		1,637,233		1,649,103
Replacement B-6 Term Loans, 4.799%, (1-month USD LIBOR + 3.00%), 11/03/23		United States		329,864		332,304

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FRANKLIN LIMITED DURATION INCOME TRUST

STATEMENT OF INVESTMENTS

	Country		Principal  Amount*		Value
i,j Senior Floating Rate Interests (continued)
Diversified Financials (continued)
Blackstone Mortgage Trust Inc., New Term Loans, 4.049%, (1-month USD LIBOR + 2.25%), 4/23/26		United States	$	380,110	$	382,010
						2,363,417
Energy 0.3%
Buckeye Partners LP, Initial Term Loans, 4.441%, (1-month USD LIBOR + 2.75%), 11/01/26		United States		761,332		768,787
Food & Staples Retailing 0.1%
Whatabrands LLC (Whataburger), Term Loan B, 4.944%, (1-month USD LIBOR + 3.25%), 8/02/26		United States		427,836		430,456
Food, Beverage & Tobacco 1.3%
B&G Foods Inc., Term Loan B, 4.299%, (1-month USD LIBOR + 2.50%), 10/10/26		United States		319,152		322,343
CSM Bakery Supplies LLC, Term Loans, 6.03%, (3-month USD LIBOR + 4.00%), 7/03/20		United States		2,000,000		1,945,000
JBS USA Lux SA, New Term Loans, 3.799%, (1-month USD LIBOR + 2.00%), 5/01/26		United States		1,750,506		1,765,043
						4,032,386
Health Care Equipment & Services 2.0%
Air Medical Group Holdings Inc., 2018 New Term Loans, 6.049%, (1-month USD LIBOR + 4.25%), 3/14/25		United States		1,579,849		1,536,403
Catalent Pharma Solutions Inc., Dollar Term B-2 Loan, 4.049%, (1-month USD LIBOR + 2.25%), 5/17/26		United States		166,127		167,165
DaVita Inc., Term Loan B, 4.049%, (1-month USD LIBOR + 2.25%), 8/12/26		United States		955,308		963,318
IQVIA Inc.,
Term B-1 Dollar Loans, 3.695%, (3-month USD LIBOR + 1.75%), 3/07/24		United States		898,405		904,020
Term B-3 Dollar Loans, 3.695%, (3-month USD LIBOR + 1.75%), 6/11/25		United States		689,500		693,551
Mallinckrodt International Finance SA & Mallinckrodt CB LLC, 2017 Term B Loans, 4.695%, (3-month USD LIBOR + 2.75%), 9/24/24		Luxembourg		586,188		480,124
National Mentor Holdings Inc.,
Initial Term C Loans, 5.80%, (1-month USD LIBOR + 4.00%), 3/08/26		United States		61,331		61,944
Initial Term Loans, 5.80%, (1-month USD LIBOR + 4.00%), 3/08/26		United States		1,099,718		1,110,716
						5,917,241
Materials 2.6%
Axalta Coating Systems U.S. Holdings Inc., Term B-3 Dollar Loan, 3.695%, (3-month USD LIBOR + 1.75%), 6/01/24		United States		2,511,443		2,520,547
Berry Global Inc.,
Term U Loans, 4.215%, (1-month USD LIBOR + 2.50%), 7/01/26		United States		773,257		776,748
Term W Loans, 3.715%, (1-month USD LIBOR + 2.00%), 10/01/22		United States		1,090,516		1,096,261
Ineos U.S. Finance LLC, 2024 Dollar Term Loan, 3.799%, (1-month USD LIBOR + 2.00%), 3/31/24		United States		957,382		959,236
Oxbow Carbon LLC, Tranche B Term Loan, 5.549%, (1-month USD LIBOR + 3.75%), 1/04/23		United States		1,944,000		1,948,860
Univar USA Inc., Term B-3 Loans, 4.049%, (1-month USD LIBOR + 2.25%), 7/01/24		United States		612,491		616,128
						7,917,780

franklintempleton.com Annual Report       19

FRANKLIN LIMITED DURATION INCOME TRUST

STATEMENT OF INVESTMENTS

	Country		Principal  Amount*		Value
i,j Senior Floating Rate Interests (continued)
Media & Entertainment 5.2%
Ancestry.com Operations Inc., Non-Extended Term Loans, 5.55%, (1-month USD LIBOR + 3.75%), 10/19/23		United States	$	1,979,799	$	1,952,577
Charter Communications Operating LLC (CCO Safari), Term B-2 Loan, 3.55%, (1-month USD LIBOR + 1.75%), 2/01/27		United States		982,500		989,945
CSC Holdings LLC, March 2017 Incremental Term Loans, 3.99%, (1-month USD LIBOR + 2.25%), 7/17/25		United States		2,540,510		2,546,862
Diamond Sports Group LLC, Term Loan, 5.03%, (1-month USD LIBOR + 3.25%), 8/24/26		United States		924,126		924,126
Gray Television Inc., Term B-2 Loan, 3.947%, (1-month USD LIBOR + 2.25%), 2/07/24		United States		2,568,789		2,578,622
Lions Gate Capital Holdings LLC, Term A Loan, 3.549%, (1-month USD LIBOR + 1.75%), 3/22/23		Canada		1,373,544		1,364,387
MCC Iowa LLC (Mediacom Broadband), Tranche M Term Loan, 3.63%, (1-week USD LIBOR + 2.00%), 1/25/25		United States		1,709,725		1,721,469
Mediacom Illinois LLC, Tranche N Term Loan, 3.38%, (1-week USD LIBOR + 1.75%), 2/15/24		United States		824,877		830,548
Mission Broadcasting Inc., Term B-3 Loan, 3.941%, (1-month USD LIBOR + 2.25%), 1/17/24		United States		111,781		112,281
Nexstar Broadcasting Inc., Term B-3 Loan, 4.055%, (1-month USD LIBOR + 2.25%), 10/26/25		United States		562,544		565,064
Sinclair Television Group Inc., Tranche B Term Loans, 4.05%, (1-month USD LIBOR + 2.25%), 1/03/24		United States		1,945,868		1,949,906
						15,535,787
Pharmaceuticals, Biotechnology & Life Sciences 1.9%
Endo Luxembourg Finance Co. I S.A.R.L. and Endo LLC, Initial Term Loans, 6.063%, (1-month USD LIBOR + 4.25%), 4/29/24		United States		407,908		390,937
Grifols Worldwide Operations USA Inc., Dollar Tranche B Term Loan, 3.74%, (1-month USD LIBOR + 2.00%), 11/15/27		United States		1,457,821		1,472,919
Horizon Pharma Inc., Term Loan, 4.00%, (3-month USD LIBOR + 2.25%), 5/22/26		United States		1,057,049		1,063,490
Syneos Health Inc., Initial Term B Loans, 3.799%, (1-month USD LIBOR + 2.00%), 8/01/24		United States		934,061		938,731
Valeant Pharmaceuticals International, Initial Term Loans, 4.74%, (1-month USD LIBOR + 3.00%), 6/02/25		United States		1,933,046		1,947,243
						5,813,320
Retailing 3.1%
Ascena Retail Group Inc., Tranche B Term Loan, 6.313%, (1-month USD LIBOR + 4.50%), 8/21/22		United States		1,358,445		931,893
General Nutrition Centers Inc., FILO Term Loan (ABL), 8.80%, (1-month USD LIBOR + 7.00%), 12/31/22		United States		2,700,000		2,703,375
General Nutrition Centers, Inc.,
Tranche B-2 Term Loans, 10.55%, (1-month USD LIBOR + 8.75%), 3/04/21		United States		117,067		110,677
Tranche B-2 Term Loans, 10.60%, (2-month USD LIBOR + 8.75%), 3/04/21		United States		182,933		172,948

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FRANKLIN LIMITED DURATION INCOME TRUST

STATEMENT OF INVESTMENTS

	Country		Principal  Amount*		Value
i,j Senior Floating Rate Interests (continued)
Retailing (continued)
Harbor Freight Tools USA Inc., Refinancing Loans, 4.299%, (1-month USD LIBOR + 2.50%), 8/19/23		United States	$	1,424,524	$	1,419,627
Jo-Ann Stores Inc., Initial Loans, 6.934%, (3-month USD LIBOR + 5.00%), 10/23/23		United States		1,421,794		1,007,341
Michaels Stores Inc., 2018 New Replacement Term B Loan, 4.292% - 4.305%, (1-month USD LIBOR + 2.50%), 1/28/23		United States		1,986,108		1,926,525
Wand NewCo. 3 Inc. (Caliber Collision), Initial Term Loan, 5.299%, (1-month USD LIBOR + 3.50%), 2/05/26		United States		995,000		1,005,261
						9,277,647
Semiconductors & Semiconductor Equipment 0.8%
ON Semiconductor Corp., 2019 Replacement Term B-4 Loans, 3.799%, (1-month USD LIBOR + 2.00%), 9/18/26		United States		2,317,063		2,336,686
Software & Services 4.1%
Dcert Buyer Inc., First Lien Term Loan, 5.799%, (1-month USD LIBOR + 4.00%), 10/16/26		United States		420,330		421,842
k Finastra USA Inc., Dollar Term Loan, 6/13/24		United States		1,110,000		1,104,913
Go Daddy Operating Co. LLC, Tranche B-2 Term Loan, 3.549%, (1-month USD LIBOR + 1.75%), 2/15/24		United States		1,550,391		1,560,727
Iron Mountain Information Management LLC, Term B Loan, 3.549%, (1-month USD LIBOR + 1.75%), 1/26/26		United States		655,587		654,768
LegalZoom.com Inc., 2018 Term Loans, 6.299%, (1-month USD LIBOR + 4.50%), 11/21/24		United States		1,980,000		1,984,950
Neustar Inc., TLB5, 6.299%, (1-month USD LIBOR + 4.50%), 8/08/24		United States		1,874,722		1,788,798
SS&C Technologies Inc., Term B-5 Loan, 4.049%, (1-month USD LIBOR + 2.25%), 4/16/25		United States		987,364		997,237
TIBCO Software Inc., Term B-2 Loans, 5.71%, (1-month USD LIBOR + 4.00%), 6/30/26		United States		1,979,770		1,992,128
WEX Inc., Term B-3 Loan, 4.049%, (1-month USD LIBOR + 2.25%), 5/17/26		United States		1,915,935		1,930,902
						12,436,265
Technology Hardware & Equipment 1.8%
Ciena Corp., 2018 Term Loan, 3.765%, (1-month USD LIBOR + 2.00%), 9/28/25		United States		2,046,000		2,058,362
CommScope Inc., Initial Term Loans, 5.049%, (1-month USD LIBOR + 3.25%), 4/04/26		United States		1,950,041		1,965,144
Western Digital Corp., U.S. Term B-4 Loan, 3.452%, (1-month USD LIBOR + 1.75%), 4/29/23		United States		1,256,565		1,264,675
						5,288,181
Telecommunication Services 1.1%
Global Tel*Link Corp., First Lien Term Loan, 6.049%, (1-month USD LIBOR + 4.25%), 11/29/25		United States		1,980,000		1,809,225
Securus Technologies Holdings Inc., Initial Term Loan, 6.299%, (1-month USD LIBOR + 4.50%), 11/01/24		United States		1,982,230		1,476,761
						3,285,986

franklintempleton.com Annual Report       21

FRANKLIN LIMITED DURATION INCOME TRUST

STATEMENT OF INVESTMENTS

	Country		Principal  Amount*		Value
i,j Senior Floating Rate Interests (continued)
Transportation 2.4%
Air Canada, New Term Loans, 3.514%, (1-month USD LIBOR + 1.75%), 10/06/23		Canada	$	2,220,165	$	2,236,790
Allegiant Travel Co., Class B Term Loans, 6.394%, (3-month USD LIBOR + 4.50%), 2/05/24		United States		1,985,000		1,997,406
Hertz Corp., Tranche B-1 Term Loan, 4.55%, (1-month USD LIBOR + 2.75%), 6/30/23		United States		2,182,532		2,195,492
k,l Kestrel Bidco Inc & WestJet, Term Loan B, TBD, 12/11/26		Canada		860,623		869,075
						7,298,763
Utilities 0.7%
EFS Cogen Holdings I LLC (Linden),
Term B Advance, 5.05%, (1-month USD LIBOR + 3.25%), 6/28/23		United States		636,476		639,818
Term B Advance, 5.20%, (3-month USD LIBOR + 3.25%), 6/28/23		United States		1,544,850		1,552,960
						2,192,778
Total Senior Floating Rate Interests (Cost $117,939,258)						115,910,334
m Marketplace Loans 3.1%
Diversified Financials 3.1%
b Lending Club, 6.00% - 26.31%, 10/31/21 - 12/30/24		United States		9,709,285		9,051,498
b Upgrade, 21.38% - 30.51%, 11/12/22 - 12/23/24		United States		184,265		182,753
Total Marketplace Loans (Cost $9,893,550)						9,234,251
Asset-Backed Securities and Commercial Mortgage-Backed Securities 17.0%
Banks 2.0%
Citigroup Commercial Mortgage Trust, 2015-GC27, A5, 3.137%, 2/10/48		United States		1,520,000		1,572,015
n Commercial Mortgage Trust, 2006-GG7, AJ, FRN, 5.619%, 7/10/38		United States		445,000		412,276
CSAIL Commercial Mortgage Trust, 2015-C1, A4, 3.505%, 4/15/50		United States		1,410,000		1,480,662
JPMBB Commercial Mortgage Securities Trust, 2015-C28, A4, 3.227%, 10/15/48		United States		1,410,000		1,464,730
o Merrill Lynch Mortgage Investors Trust,
2003-OPT1, B2, FRN, 5.917%, (1-month USD LIBOR + 4.125%), 7/25/34		United States		33,301		12,608
2005-A6, 2A3, FRN, 2.172%, (1-month USD LIBOR + 0.38%), 8/25/35		United States		87,295		87,861
o Morgan Stanley ABS Capital I Inc. Trust, 2003-NC10, B1, FRN, 6.742%, (1-month USD LIBOR + 4.95%), 10/25/33		United States		350,442		379,855
Wells Fargo Commercial Mortgage Trust, 2014-LC16, A4, 3.548%, 8/15/50		United States		550,000		574,989
						5,984,996
Diversified Financials 15.0%
o Argent Securities Inc., 2003-W5, M4, FRN, 4.196%, (1-month USD LIBOR + 5.625%), 10/25/33		United States		93,151		106,862
d,n Carlyle Global Market Strategies CLO 2014-1 Ltd., 2014-1A, DR, 144A, FRN, 4.602%, 4/17/31		United States		2,300,000		2,173,519
d,o,p Carlyle U.S. CLO Ltd., 2017-4A, C, 144A, FRN, 4.801%, (3-month USD LIBOR + 2.80%), 1/15/30		United States		1,000,000		942,530
d,n Consumer Loan Underlying Bond Certificate Issue, 2019-S7, PT, 144A, FRN, 11.506%, 12/15/44		United States		704,776		646,953
d,n Consumer Loan Underlying Bond CLUB Certificate Issuer Trust, 2019-52, PT, 144A, FRN,   11.118%, 1/15/45		United States		974,085		954,095

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FRANKLIN LIMITED DURATION INCOME TRUST

STATEMENT OF INVESTMENTS

	Country		Principal  Amount*		Value
Asset-Backed Securities and Commercial Mortgage-Backed Securities (continued)
Diversified Financials (continued)
d,n Consumer Loan Underlying Bond CLUB Certificate Issuer Trust I,
2018-29, PT, 144A, FRN, 22.754%, 12/15/43		United States	$	353,128	$	289,504
2019-26, PT, 144A, FRN, 18.609%, 8/15/44		United States		1,000,532		915,581
2019-31, PT, 144A, FRN, 22.58%, 9/15/44		United States		911,609		829,395
2019-37, PT, 144A, FRN, 17.767%, 10/17/44		United States		937,103		881,153
2019-42, PT, 144A, FRN, 17.575%, 11/15/44		United States		881,007		826,265
2019-51, PT, 144A, FRN, 16.852%, 1/15/45		United States		1,053,641		1,016,973
2019-S1, PT, 144A, FRN, 12.812%, 4/15/44		United States		1,075,998		933,686
2019-S2, PT, 144A, FRN, 13.469%, 5/16/44		United States		686,872		614,486
2019-S3, PT, 144A, FRN, 13.293%, 6/15/44		United States		1,679,577		1,509,707
2019-S4, PT, 144A, FRN, 10.18%, 8/15/44		United States		912,925		851,029
2019-S5, PT, 144A, FRN, 18.85%, 9/15/44		United States		864,334		781,606
2019-S6, PT, 144A, FRN, 10.817%, 10/17/44		United States		811,691		746,647
2019-S8, PT, 144A, FRN, 11.541%, 1/15/45		United States		795,174		742,566
d,o Dorchester Park CLO Ltd., 2015-1A, CR, 144A, FRN, 3.716%, (3-month USD LIBOR + 1.75%),   4/20/28		United States		1,000,000		981,270
d,n,p Dryden 38 Senior Loan Fund, 2015-38A, DR, 144A, FRN, 5.001%, 7/15/30		United States		2,500,000		2,442,450
d,o Dryden 42 Senior Loan Fund, 2016-42A, CR, 144A, FRN, 4.051%, (3-month USD LIBOR + 2.05%),   7/15/30		United States		2,400,000		2,331,768
d,o,p Dryden 58 CLO Ltd., 2018-58A, C, 144A, FRN, 3.802%, (3-month USD LIBOR + 1.80%), 7/17/31		United States		3,000,000		2,884,950
o,p FHLMC Structured Agency Credit Risk Debt Notes,
2014-DN1, M2, FRN, 3.992%, (1-month USD LIBOR + 2.20%), 2/25/24		United States		926,850		937,159
2014-HQ2, M2, FRN, 3.992%, (1-month USD LIBOR + 2.20%), 9/25/24		United States		380,489		385,087
n,p FNMA Connecticut Avenue Securities,
2017-C03, 1M2, FRN, 4.792%, 10/25/29		United States		2,101,000		2,196,777
2017-C05, 1M2, FRN, 3.992%, 1/25/30		United States		2,000,000		2,036,022
d,n,p Madison Park Funding XXIII Ltd., 2017-23A, D, 144A, FRN, 5.386%, 7/27/30		United States		3,000,000		3,000,558
d,n,p Madison Park Funding XXXI Ltd., 2018-31A, D, 144A, FRN, 4.934%, 1/23/31		United States		1,250,000		1,229,688
o MortgageIT Trust, 2004-1, A2, FRN, 2.692%, (1-month USD LIBOR + 0.90%), 11/25/34		United States		170,320		171,897
d,o,p Octagon Investment Partners XXII Ltd., 2014-1A, CRR, 144A, FRN, 3.853%, (3-month USD LIBOR       + 1.90%), 1/22/30		United States		6,050,000		5,820,402
o Opteum Mortgage Acceptance Corp. Trust, 2005-4, 1APT, FRN, 2.102%, (1-month USD LIBOR +   0.31%), 11/25/35		United States		181,393		182,495
o Structured Asset Investment Loan Trust, 2003-BC2, M3, FRN, 6.667%, (1-month USD LIBOR +   4.875%), 4/25/33		United States		13,987		14,327
o Structured Asset Securities Corp., 2005-2XS, 2A2, FRN, 3.191%, (1-month USD LIBOR + 1.50%),   2/25/35		United States		202,078		204,459
n Thornburg Mortgage Securities Trust, 2005-1, A3, FRN, 4.459%, 4/25/45		United States		356,960		358,743
d Upgrade Master Pass-Thru Trust, 2019-PT2, A, 144A, 4.846%, 2/15/26		United States		604,538		607,509

franklintempleton.com Annual Report       23

FRANKLIN LIMITED DURATION INCOME TRUST

STATEMENT OF INVESTMENTS

	Country		Principal  Amount*		Value
Asset-Backed Securities and Commercial Mortgage-Backed Securities (continued)
Diversified Financials (continued)
d Voya CLO Ltd.,
o 2014-1A, BR2, 144A, FRN, 3.903%, (3-month USD LIBOR + 1.90%), 4/18/31		United States	$	1,300,000	$	1,249,534
o 2014-1A, CR2, 144A, FRN, 4.803%, (3-month USD LIBOR + 2.80%), 4/18/31		United States		500,000		473,245
n,p 2016-3A, CR, 144A, FRN, 5.253%, 10/18/31		United States		2,000,000		1,905,140
						45,176,037
Total Asset-Backed Securities and Commercial Mortgage-Backed Securities (Cost $51,497,708)						51,161,033
Mortgage-Backed Securities 30.5%
Federal Home Loan Mortgage Corp. (FHLMC) Fixed Rate 16.2%
q FHLMC 30 Year, 2.50%, 12/01/49		United States		3,000,000		2,964,815
q FHLMC 30 Year, 3.00%, 12/01/49		United States		14,250,000		14,444,230
FHLMC 30 Year, 3.50%, 10/01/47		United States		4,714,548		4,904,428
e FHLMC Gold 15 Year, 5.00%, 12/01/23		United States		214,560		223,186
e FHLMC Gold 30 Year, 3.50%, 3/01/45		United States		34,473		36,008
FHLMC Gold 30 Year, 3.50%, 11/01/48		United States		1,372,543		1,411,630
FHLMC Gold 30 Year, 3.50%, 11/01/48		United States		11,195,909		11,544,018
FHLMC Gold 30 Year, 4.00%, 4/01/48		United States		3,468,386		3,646,175
FHLMC Gold 30 Year, 4.00%, 5/01/48		United States		8,384,981		8,776,365
e FHLMC Gold 30 Year, 6.00%, 7/01/28 - 11/01/36		United States		402,179		456,795
e FHLMC Gold 30 Year, 6.50%, 8/01/27 - 3/01/38		United States		179,480		199,951
e FHLMC Gold 30 Year, 7.00%, 9/01/27		United States		51,826		55,829
e FHLMC Gold 30 Year, 8.50%, 7/01/31		United States		176,256		201,412
						48,864,842
r Federal National Mortgage Association (FNMA) Adjustable Rate 0.1%
e FNMA, 3.29% - 3.505%, (6-month USD LIBOR +/- MBS Margin), 6/01/32 -7/01/34		United States		234,729		242,963
Federal National Mortgage Association (FNMA) Fixed Rate 10.4%
e FNMA 15 Year, 3.00%, 8/01/27		United States		7,250		7,438
e FNMA 15 Year, 3.50%, 1/01/21 - 1/01/26		United States		18,636		19,311
e FNMA 15 Year, 5.50%, 7/01/20		United States		84		84
FNMA 30 Year, 3.50%, 11/01/47		United States		2,074,029		2,156,669
FNMA 30 Year, 3.50%, 3/01/48		United States		3,948,561		4,099,826
FNMA 30 Year, 3.50%, 4/01/48		United States		1,896,165		1,967,320
FNMA 30 Year, 3.50%, 6/01/45 - 10/01/48		United States		1,864,513		1,929,574
e FNMA 30 Year, 3.50%, 1/01/45 - 7/01/56		United States		1,162,895		1,220,414
e FNMA 30 Year, 4.00%, 11/01/44 - 1/01/45		United States		760,580		806,063
FNMA 30 Year, 4.00%, 10/01/47		United States		9,052,748		9,533,478
FNMA 30 Year, 4.00%, 1/01/48		United States		1,616,659		1,697,201
FNMA 30 Year, 4.00%, 4/01/48		United States		2,993,363		3,138,769
FNMA 30 Year, 4.00%, 9/01/48		United States		3,279,252		3,413,187
e FNMA 30 Year, 4.50%, 5/01/24 - 3/01/44		United States		41,519		44,262
e FNMA 30 Year, 5.00%, 5/01/38 - 7/01/39		United States		307,640		339,368
e FNMA 30 Year, 5.50%, 6/01/37		United States		226,799		254,149
e FNMA 30 Year, 6.00%, 4/01/33 - 6/01/38		United States		582,847		667,661

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FRANKLIN LIMITED DURATION INCOME TRUST

STATEMENT OF INVESTMENTS

	Country		Principal  Amount*		Value
Mortgage-Backed Securities (continued)
Federal National Mortgage Association (FNMA) Fixed Rate (continued)
e FNMA 30 Year, 6.50%, 8/01/32		United States	$	88,039	$	99,346
e FNMA 30 Year, 8.00%, 10/01/29		United States		3,922		3,928
						31,398,048
Government National Mortgage Association (GNMA) Fixed Rate 3.8%
e GNMA I SF 30 Year, 6.50%, 6/15/31 - 9/15/32		United States		274,379		303,891
GNMA I SF 30 Year, 6.50%, 12/15/33		United States		40,105		44,257
q GNMA II SF 30 Year, 3.50%, 12/01/49		United States		2,000,000		2,061,029
GNMA II SF 30 Year, 3.50%, 12/20/49		United States		4,000,000		4,144,688
GNMA II SF 30 Year, 4.50%, 7/20/49		United States		4,546,751		4,778,215
e GNMA II SF 30 Year, 7.00%, 1/20/24 - 1/20/29		United States		26,495		29,305
e GNMA II SF 30 Year, 8.00%, 1/20/28 - 10/20/31		United States		75,514		88,857
						11,450,242
Total Mortgage-Backed Securities (Cost $90,127,079)						91,956,095
			Shares
Escrows and Litigation Trusts 0.0%†
a,b,c Remington Outdoor Co. Inc., Litigation Trust		United States		3,700		—
a,b T-Mobile USA Inc., Litigation Trust		United States		1,200,000		—
a Vistra Energy Corp., Litigation Trust		United States		2,000,000		4,000
Total Escrows and Litigation Trusts (Cost $52,910)						4,000
Total Investments before Short Term Investments (Cost $418,104,456)						411,522,272
Short Term Investments (Cost $18,870,657) 6.3%
Money Market Funds 6.3%
s,t Institutional Fiduciary Trust Money Market Portfolio, 1.26%		United States		18,870,657		18,870,657
Total Investments (Cost $436,975,113) 142.8%						430,392,929
Reverse Repurchase Agreements (5.7)%						(17,169,028	)
Notes Payable (29.9)%						(90,000,000	)
Other Assets, less Liabilities (7.2)%						(21,771,992	)
Net Assets 100.0%					$	301,451,909
			Amount Borrowed		Payable
u Reverse Repurchase Agreements (5.7)%
Counterparty UBS, 2.509%, 2/07/20		Switzerland		937,247		(940,317	)
Counterparty UBS, 2.509%, 2/07/20		Switzerland		386,401		(387,667	)
Counterparty UBS, 2.644%, 2/07/20		Switzerland		1,862,642		(1,864,147	)
Counterparty UBS, 2.644%, 2/07/20		Switzerland		1,725,500		(1,726,894	)
Counterparty UBS, 2.709%, 2/07/20		Switzerland		2,462,875		(2,471,586	)
Counterparty UBS, 2.709%, 2/07/20		Switzerland		2,416,125		(2,424,670	)
Counterparty UBS, 2.859%, 2/07/20		Switzerland		2,304,000		(2,312,600	)

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FRANKLIN LIMITED DURATION INCOME TRUST

STATEMENT OF INVESTMENTS

		Amount     Borrowed		Payable
u Reverse Repurchase Agreements (continued)
Counterparty UBS, 2.859%, 2/07/20	Switzerland		1,870,000	$	(1,876,980	)
Counterparty UBS, 2.859%, 2/07/20	Switzerland		1,490,400		(1,495,963	)
Counterparty UBS, 2.859%, 2/07/20	Switzerland		950,000		(953,546	)
Counterparty UBS, 2.859%, 2/07/20	Switzerland		712,000		(714,658	)
Total Reverse Repurchase Agreements (Proceeds $17,117,190)				$	(17,169,028	)

See Abbreviations on page 42.

^†Rounds to less than 0.1% of net assets.

*The principal amount is stated in U.S. dollars unless otherwise indicated.

^aNon-income producing.

^bFair valued using significant unobservable inputs. See Note 13 regarding fair value measurements.

^cSee Note 11 regarding restricted securities.

^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. At December 31, 2019, the aggregate value of these securities was $141,836,794, representing 47.1% of net assets.

^eA portion or all of the security is pledged as collateral in connection with the Fund’s revolving credit facility. See Note 3.

^fPerpetual security with no stated maturity date.

^gIncome may be received in additional securities and/or cash.

^hSee Note 10 regarding defaulted securities.

ⁱThe coupon rate shown represents the rate at period end.

^jSee Note 1(f) regarding senior floating rate interests.

^kSecurity purchased on a delayed delivery basis. See Note 1(c).

^lA portion or all of the security represents an unsettled loan commitment. The coupon rate is to-be determined (TBD) at the time of settlement and will be based upon a reference index/floor plus a spread.

^mSee Note 1(g) regarding Marketplace lending.

ⁿAdjustable rate security with an interest rate that is not based on a published reference index and spread. The rate is based on the structure of the agreement and current market conditions. The coupon rate shown represents the rate at period end.

^oThe coupon rate shown represents the rate inclusive of any caps or floors, if applicable, in effect at period end.

^pA portion or all of the security is designated as collateral for reverse repurchase agreement. See Note 4.

^qSecurity purchased on a to-be-announced (TBA) basis. See Note 1(c).

^rAdjustable Rate Mortgage-Backed Security (ARM); the rate shown is the effective rate at period end. ARM rates are not based on a published reference rate and spread, but instead pass-through weighted average interest income inclusive of any caps or floors, if applicable, from the underlying mortgage loans in which the majority of mortgages pay interest based on the index shown at their designated reset dates plus a spread, less the applicable servicing and guaranty fee (MBS margin).

^sSee Note 6(c) regarding investments in affiliated management investment companies.

^tThe rate shown is the annualized seven-day effective yield at period end.

^uSee Note 4 regarding reverse repurchase agreements.

26       Annual Report  |  The accompanying notes are an integral part of these financial statements. franklintempleton.com

FRANKLIN LIMITED DURATION INCOME TRUST

FINANCIAL STATEMENTS

Statement of Assets and Liabilities

December 31, 2019

Assets:
Investments in securities:
Cost - Unaffiliated issuers	$418,104,456
Cost - Non-controlled affiliates (Note 6c)	18,870,657
Value - Unaffiliated issuers	$411,522,272
Value - Non-controlled affiliates (Note 6c)	18,870,657
Cash	1,369,531
Receivables:
Investment securities sold	4,175,099
Interest	3,172,252
Total assets	439,109,811
Liabilities:
Payables:
Investment securities purchased	27,283,888
Credit facility	90,000,000
Management fees	241,763
Distributions to shareholders	2,507,551
Accrued interest	227,402
Reverse repurchase agreements	17,169,028
Accrued expenses and other liabilities	228,270
Total liabilities	137,657,902
Net assets applicable to common shares	$301,451,909
Net assets applicable to common shares consist of:
Paid-in capital	$331,928,821
Total distributable earnings (losses)	(30,476,912	)
Net assets applicable to common shares	$301,451,909
Common shares outstanding	30,138,835
Net asset value per common share	$10.00

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FRANKLIN LIMITED DURATION INCOME TRUST

FINANCIAL STATEMENTS

Statement of Operations

for the year ended December 31, 2019

Investment income:
Dividends:
Unaffiliated issuers	$	110,202
Non-controlled affiliates (Note 6c)		227,553
Interest:
Unaffiliated issuers		22,270,342
Total investment income		22,608,097
Expenses:
Management fees (Note 6a)		2,963,548
Interest expense (Note 3 and 4)		3,130,723
Transfer agent fees		41,866
Custodian fees (Note 7)		4,643
Reports to shareholders		36,696
Registration and filing fees		1,040
Professional fees		227,327
Trustees’ fees and expenses		17,788
Marketplace lending fees (Note 1g)		212,745
Other		77,629
Total expenses		6,714,005
Expense reductions (Note 7)		(3,811	)
Expenses waived/paid by affiliates (Note 6c)		(44,913	)
Net expenses		6,665,281
Net investment income		15,942,816
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:
Unaffiliated issuers		(2,173,138	)
Foreign currency transactions		(603	)
Swap contracts		405,927
Net realized gain (loss)		(1,767,814	)
Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		13,371,101
Translation of other assets and liabilities denominated in foreign currencies		(16	)
Swap contracts		122,103
Net change in unrealized appreciation (depreciation)		13,493,188
Net realized and unrealized gain (loss)		11,725,374
Net increase (decrease) in net assets applicable to common shares resulting from operations	$	27,668,190

28         Annual Report  |  The accompanying notes are an integral part of these financial statements. franklintempleton.com

FRANKLIN LIMITED DURATION INCOME TRUST

FINANCIAL STATEMENTS

Statements of Changes in Net Assets

	Year Ended December 31,
	2019			2018
Increase (decrease) in net assets:
Operations:
Net investment income		$  15,942,816			$  13,742,117
Net realized gain (loss)		(1,767,814	)		(4,224,820	)
Net change in unrealized appreciation (depreciation)		13,493,188			(17,031,633	)
Distributions to preferred shareholders from net investment income		—			(1,923,424	)
Net increase (decrease) in net assets applicable to common shares resulting from operations		27,668,190			(9,437,760	)
Distributions to common shareholders		(17,181,094	)		(12,216,777	)
Distributions to common shareholders from tax return of capital		(13,839,271	)		(16,302,096	)
Total distributions to common shareholders		(31,020,365	)		(28,518,873	)
Capital share transactions: (Note 2)
Proceeds from issuance of shares in connection with exercising a rights offering		—			64,271,944
Net increase (decrease) in net assets		(3,352,175	)		26,315,311
Net assets applicable to common shares:
Beginning of year		304,804,084			278,488,773
End of year		$301,451,909			$304,804,084

franklintempleton.com The accompanying notes are an integral part of these financial statements.  |  Annual Report       29

FRANKLIN LIMITED DURATION INCOME TRUST

FINANCIAL STATEMENTS

Statement of Cash Flows

for the year ended December 31, 2019

Cash flow from operating activities:
Dividends, interest and other income received	$	21,641,666
Operating expenses paid		(3,494,560	)
Interest expense paid		(2,851,483	)
Purchases of long-term investments		(468,660,611	)
Sales and maturities of long-term investments		480,139,004
Maturities of swap contracts		405,927
Net purchases of short-term investments		(13,962,370	)
Cash provided - operating activities		13,217,573
Cash flow from financing activities:
Proceeds from reverse repurchase agreements		17,117,190
Cash distributions to shareholders		(31,149,962	)
Cash used - financing activities		(14,032,772	)
Net increase (decrease) in cash		(815,199	)
Cash at beginning of year		2,184,730	a
Cash at end of year	$	1,369,531
Reconciliation of Net Increase (Decrease) in Net Assets resulting from Operating Activities to Net Cash Provided by Operating Activities
for the year ended December 31, 2019
Net increase (decrease) in net assets resulting from operating activities	$	27,668,190
Adjustments to reconcile net increase (decrease) in net assets resulting from operating activities to net cash provided by operating activities:
Net amortization income		(305,998	)
Reinvested dividends from non-controlled affiliates		(227,553	)
Interest received in the form of securities		(3,628	)
Increase in dividends and interest receivable		(425,624	)
Increase in interest payable		227,402
Increase in management fees, accrued expenses, and other liabilities		91,836
Increase in receivable for investments sold		(3,140,185	)
Increase in payable for investments purchased		1,310,011
Decrease in cost of investments		1,516,310
Increase in unrealized appreciation on investments		(13,493,188	)
Net cash provided by operating activities	$	13,217,573

^aIncludes cash held of $160,000 as Deposits with brokers for OTC derivative contracts.

30         Annual Report  |  The accompanying notes are an integral part of these financial statements. franklintempleton.com

FRANKLIN LIMITED DURATION INCOME TRUST

Notes to Financial Statements

1.   Organization and Significant Accounting Policies

Franklin Limited Duration Income Trust (Fund) is registered under the Investment Company Act of 1940 (1940 Act) as a closed-end management investment company and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP).

The following summarizes the Fund’s significant accounting policies.

a.   Financial Instrument Valuation

The Fund’s investments in financial instruments are carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Fund calculates the net asset value (NAV) per share each business day as of 4 p.m. Eastern time or the regularly scheduled close of the New York Stock Exchange (NYSE), whichever is earlier. Under compliance policies and procedures approved by the Fund’s Board of Trustees (the Board), the Fund’s administrator has responsibility for oversight of valuation, including leading the cross-functional Valuation Committee (VC). The Fund may utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.

Equity securities 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. 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 derivative financial instruments trade in the OTC market. The Fund’s pricing services use various techniques including industry standard option pricing models and proprietary discounted cash flow models to determine the fair value of those instruments. The Fund’s net benefit or obligation under the derivative contract, as measured by the fair value of the contract, is included in net assets.

The Fund has procedures to determine the fair value of financial instruments for which market prices are not reliable or readily available. Under these procedures, the Fund primarily employs a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future 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.

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,

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FRANKLIN LIMITED DURATION INCOME TRUST

NOTES TO FINANCIAL STATEMENTS

1.   Organization and Significant Accounting Policies (continued)

b.   Foreign Currency Translation (continued)

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.   Securities Purchased on a Delayed Delivery and TBA Basis

The Fund purchases securities on a delayed delivery and to-be-announced (TBA) basis, with payment and delivery scheduled for a future date. These transactions are subject to market fluctuations and are subject to the risk that the value at delivery may be more or less than the trade date purchase price. Although the Fund will generally purchase these securities with the intention of holding the securities, it may sell the securities before the settlement date. Sufficient assets have been segregated for these securities and collateral has been pledged and/or received for open TBA trades.

d.   Derivative Financial Instruments

The Fund invested in derivative financial instruments in order to manage risk or gain exposure to various other investments or markets. Derivatives are financial contracts based on an underlying or notional amount, require no initial investment or an initial net investment that is smaller than would normally be required to have a similar response to changes in market

factors, and require or permit net settlement. Derivatives contain various risks including the potential inability of the counterparty to fulfill their obligations under the terms of the contract, the potential for an illiquid secondary market, and/or the potential for market movements which expose the Fund to gains or losses in excess of the amounts shown in the Statement of Assets and Liabilities. Realized gain and loss and unrealized appreciation and depreciation on these contracts for the period are included in the Statement of Operations.

The Fund entered into OTC total return swap contracts primarily to manage and/or gain exposure to interest rate risk of an underlying instrument such as a stock, bond, index or basket of securities or indices. A total return swap is an agreement between the Fund and a counterparty to exchange a return linked to an underlying instrument for a floating or fixed rate payment, both based upon a notional amount. Over the term of the contract, contractually required payments to be paid or received are accrued daily and recorded as unrealized appreciation or depreciation until the payments are made, at which time they are recognized as realized gain or loss.

See Note 12 regarding other derivative information.

e.   Mortgage Dollar Rolls

The Fund enters into mortgage dollar rolls, typically on a TBA basis. Mortgage dollar rolls are agreements between the Fund and a financial institution where the Fund sells (or buys) mortgage-backed securities for delivery on a specified date and simultaneously contracts to repurchase (or sell) substantially similar (same type, coupon, and maturity) securities at a future date and at a predetermined price. Gains or losses are realized on the initial sale, and the difference between the repurchase price and the sale price is recorded as an unrealized gain or loss to the Fund upon entering into the mortgage dollar roll. In addition, the Fund may invest the cash proceeds that are received from the initial sale. During the period between the sale and repurchase, the Fund is not entitled to principal and interest paid on the mortgage backed securities. Transactions in mortgage dollar rolls are accounted for as purchases and sales and may result in an increase to the Fund’s portfolio turnover rate. The risks of mortgage dollar roll transactions include the potential inability of the counterparty to fulfill its obligations.

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FRANKLIN LIMITED DURATION INCOME TRUST

NOTES TO FINANCIAL STATEMENTS

The Fund is investing in mortgage dollar rolls as an alternate form of leverage.

f.   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. On July 27, 2017, the United Kingdom’s Financial Conduct Authority announced its intention to cease sustaining LIBOR after 2021. There remains uncertainty regarding the future utilization of LIBOR and the nature of any replacement rate. As such, the potential effect of a transition away from LIBOR on the Fund or the Fund’s investments that use or may use a floating rate based on LIBOR cannot yet be determined.

g.   Marketplace Lending

The Fund invests in loans obtained through marketplace lending. Marketplace lending, sometimes referred to as peer-to-peer lending, is a method of financing in which a platform facilitates the borrowing and lending of money. It is considered an alternative to more traditional forms of debt financing. Prospective borrowers are required to provide certain financial information to the platform, including, but not limited to, the intended purpose of the loan, income, employment information, credit score, debt-to-income ratio, credit history (including defaults and delinquencies) and home ownership status. Based on this and other information, the platform assigns its own credit rating to the borrower and sets the interest rate for the requested loan. The platform then posts the borrowing requests online, giving investors the opportunity to purchase the loans based on factors such as the interest rates and expected yields of the loans, the borrower background data, and the credit rating assigned by the platform.

When the Fund invests in these loans, it usually purchase all rights, title and interest in the loans pursuant to a loan purchase agreement directly from the platform. The platform or a third-party servicer typically continues to service the loans, collecting payments and distributing them to the Fund,

less any servicing fees assessed. The servicer is typically responsible for taking actions against a borrower in the event of a default on the loan. Servicing fees, along with other administration fees, are included in marketplace lending fees in the Statement of Operations. The Fund, as an investor in a loan, would be entitled to receive payment only from the borrower and would not be able to recover any deficiency from the platform, except under very narrow circumstances. The loans in which the Fund may invest are unsecured.

h.   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 December 31, 2019, the Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any open tax years (or expected to be taken in future tax years). Open tax years are those that remain subject to examination and are based on the statute of limitations in each jurisdiction in which the Fund invests.

i.   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

franklintempleton.com Annual Report       33

FRANKLIN LIMITED DURATION INCOME TRUST

NOTES TO FINANCIAL STATEMENTS

1.   Organization and Significant Accounting Policies (continued)

i.   Security Transactions, Investment Income, Expenses and Distributions (continued)

included in interest income. Paydown gains and losses are recorded as an adjustment to interest income. Facility fees are recognized as income over the expected term of the loan. Dividend income is recorded on the ex-dividend date except for certain dividends from securities where the dividend rate is not available. In such cases, the dividend is recorded as soon as the information is received by the Fund. Distributions to shareholders are recorded on the ex-dividend date. The Fund employs a managed distribution policy whereby the Fund will make monthly distributions to common shareholders at an annual minimum fixed rate of 10%, based on the average monthly NAV of the Fund’s common shares. Under the policy, the Fund is managed with a goal of generating as much of the distribution as possible from net investment income and short-term capital gains. The balance of the distribution will then come from long-term capital gains to the extent permitted and, if necessary, a return of capital. Distributable earnings are determined according to income tax regulations (tax basis) and may differ from earnings recorded in accordance with U.S. GAAP. These differences may be permanent or temporary. Permanent differences are

reclassified among capital accounts to reflect their tax character. These reclassifications have no impact on net assets or the results of operations. Temporary differences are not reclassified, as they may reverse in subsequent periods.

j.   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.

k.   Guarantees and Indemnifications

Under the Fund’s organizational documents, its officers and trustees are indemnified by the Fund against certain liabilities arising out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts with service providers that contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. Currently, the Fund expects the risk of loss to be remote.

2.   Shares of Beneficial Interest

At December 31, 2019, there were an unlimited number of shares authorized (without par value). During the year ended December 31, 2019 there were no shares issued; all reinvested distributions were satisfied with previously issued shares purchased in the open market.

Under the Board approved open-market share repurchase program, the Fund may purchase, from time to time, Fund shares in open-market transactions, at the discretion of management. Since the inception of the program, the Fund has repurchased a total of 242,561 shares. Transactions in the Fund’s shares were as follows:

	Year Ended December 31, 2019		Year Ended December 31, 2018
	Shares	Amount	Shares		Amount
Shares issued	—	—		7,534,709	$	64,271,944

On September 20, 2018, the Fund commenced a transferrable rights offering to common shareholders of record to subscribe for up to an aggregate of 7,534,709 of the Fund’s common shares. The offering expired on October 18, 2018. Each record date shareholder received one right for each outstanding whole common share held, which entitled their holders to purchase one new Fund common share for every three rights held. In addition, record date shareholders who fully exercised their rights (other than those rights that could not be exercised because they represented the right to acquire less than one common share) were entitled to subscribe for additional common shares of the Fund that remained unsubscribed as a result of any

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unexercised rights. The subscription price per common share was determined based upon a formula equal to 92.5% of the average of the last reported sales price of the Fund’s common shares on the NYSE American Stock Exchange on the offering expiration date, and each of the four preceding trading days, subject to a minimum subscription price of 80% of the Fund’s net asset value per common share on the offering expiration date. The rights holders subscribed for all 7,534,709 common shares at an average price per share of $9.00. Proceeds from the offering were $67,828,884. The Fund received the proceeds of the offering minus the dealer manager fee and other expenses of the offering totaling $3,556,940.

3.   Credit Facility

The Fund has entered into a credit facility agreement (“Credit Facility”) with BNP Paribas Prime Brokerage International Ltd. (“BNPP”) pursuant to which the Fund may borrow up to a maximum commitment amount of $100,000,000. The Fund will pay interest in the amount of 0.90% plus the 3-month U.S. Dollar London Interbank Offered Rate on the amount outstanding. The Fund is required to fully collateralize its outstanding loan balance as determined by BNPP by pledging assets, which are held in a segregated account, and are indicated in the Statement of Investments. If the Fund fails to meet certain requirements or maintain other financial covenants required under the Credit Facility, the Fund may be required to repay immediately, in part or in full, the loan balance outstanding.

The Fund had outstanding borrowings of $90,000,000 as of December 31, 2019 and incurred $2,992,472 of interest expense during the year. Average borrowings and the average interest rate for the days outstanding during the year ended December 31, 2019, were $90,009,876 and 3.23%, respectively.

The Credit Facility also permits, subject to certain conditions, BNPP to rehypothecate portfolio securities pledged by the Fund up to the amount of the loan balance outstanding. The Fund continues to receive dividends and interest on rehypothecated securities. The Fund also has the right under the Credit Facility to recall any securities pledged as collateral from BNPP on demand. If BNPP fails to deliver the recalled security in a timely manner, the Fund will be compensated for any fees or losses related to the failed delivery or, in the event a recalled security is not be returned, the Fund, upon notice to BNPP, may reduce the loan balance outstanding by the market value of the recalled security. The Fund will receive a portion of the fees earned by BNPP in connection with the rehypothecation of portfolio securities. Rehypothecated securities are included among the portfolio securities pledged by the Fund as collateral for the Credit Facility. As of December 31, 2019, there were no rehypothecated securities.

4.   Reverse Repurchase Agreements

The Fund enters into reverse repurchase agreements, under which the Fund sells securities in exchange for cash to counterparties, with a simultaneous agreement to repurchase the same or substantially the same security at a mutually agreed-upon date and price. Such a transaction is accounted for as a secured borrowing by the Fund, collateralized by securities for which the Fund retains possession. The gross amount of cash received in exchange for securities sold plus accrued interest payments to be made by the Fund to counterparties are reflected as a payable for Reverse repurchase agreements on the Statement of Assets and Liabilities. Interest payments made on reverse repurchase agreements are recorded as a component of interest expense on the Statement of Operations. Reverse repurchase agreements are subject to the terms of Master Repurchase Agreements (MRAs) with approved counterparties (buyers). The MRAs contain various provisions, including but not limited to events of default and maintenance of collateral for reverse repurchase agreements. In the event of default by either the buyer or the Fund, certain MRAs may permit the non-defaulting party to net and close-out all transactions, if any, traded under such agreements. The buyer may sell securities the Fund pledged as collateral and apply the proceeds towards the reverse repurchase price and any other amounts owed by the Fund in the event of default by the Fund. This could involve costs or delays in addition to a loss on the securities if their value falls below the reverse repurchase price owed by the Fund. The Fund monitors collateral fair value for the reverse repurchase agreement, including accrued interest, over the life of the agreement, and when necessary, delivers or receives cash or securities in order to manage credit exposure and liquidity.

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4. Reverse Repurchase Agreements (continued)

The remaining contractual maturity of the repurchase agreements totaling $17,218,607, which includes interest due at maturity, are 31-90 days.

The Fund pledged asset-backed securities and commercial mortgage-backed securities as the collateral valued at $20,894,614 which has been identified on the Statement of Investments.

For the year ended December 31, 2019, the average borrowings and the average interest rate were $4,461,365 and 2.9%, respectively.

5. Auction Rate Preferred Shares

Effective August 15, 2018, the Fund’s Preferred Shares were liquidated. Prior to August 15, 2018, the Fund had outstanding 1,200 Preferred Shares Series M, 1,200 Preferred Shares Series W and 1,200 Preferred Shares Series F, each with a $25,000 liquidation preference totaling $90,000,000. Preferred Shares were senior to common shares and the Fund did not declare or pay any dividend on the common shares unless the Fund had declared or paid full cumulative dividends on the Preferred Shares through the most recent dividend date. Dividends to preferred shareholders were cumulative and were declared weekly, at rates established through an auction process.

6.   Transactions with Affiliates

Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton. Certain officers and trustees of the Fund are also officers and/or directors of the following subsidiaries:

Subsidiary	Affiliation
Franklin Advisers, Inc. (Advisers)	Investment manager
Franklin Templeton Services, LLC (FT Services)	Administrative manager

a.   Management Fees

The Fund pays an investment management fee to Advisers of 0.70% per year of the average daily managed assets. Managed assets are defined as the Fund’s gross asset value minus the sum of accrued liabilities, other than the principal amount of the Credit Facility and other financial leverage.

b.   Administrative Fees

Under an agreement with Advisers, FT Services provides administrative services to the Fund. The fee is paid by Advisers based on the Fund’s average daily net assets, and is not an additional expense of the Fund.

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c.   Investments in Affiliated Management Investment Companies

The Fund invests in one or more affiliated management investment companies 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 companies, as noted in the Statement of Operations, in an amount not to exceed the management and administrative fees paid directly or indirectly by each affiliate. During the year ended December 31, 2019, the Fund held investments in affiliated management investment companies as follows:

	Value at Beginning of Year		Purchases		Sales			Realized Gain (Loss)		Net Change in Unrealized Appreciation (Depreciation)		Value at End of Year		Number of Shares Held at End of Year		Dividend Income
Non-Controlled Affiliates
Institutional Fiduciary Trust Money Market Portfolio, 1.26%	$	5,086,661	$	132,164,851	$	(118,380,855	)	$	—	$	—		$18,870,657		18,870,657		$227,553

7.   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 December 31, 2019, the custodian fees were reduced as noted in the Statement of Operations.

8.   Income Taxes

For tax purposes, capital losses may be carried over to offset future capital gains.

At December 31, 2019, the capital loss carryforwards were as follows:

Capital loss carryforwards not subject to expiration:
Short term	$	2,849,863
Long term		18,021,632
Total capital loss carryforwards	$	20,871,495

The tax character of distributions paid during the years ended December 31, 2019 and 2018, was as follows:

	2019		2018
Distributions paid from:
Ordinary income	$	17,185,646	$	14,140,201
Return of capital		13,839,271		16,302,096
	$	31,024,917	$	30,442,297

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8. Income Taxes (continued)

At December 31, 2019, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:

Cost of investments	$	437,528,116
Unrealized appreciation	$	9,972,337
Unrealized depreciation		(17,107,524)
Net unrealized appreciation (depreciation)	$	(7,135,187)

Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatments of total return swaps, paydown losses and bond discounts and premiums.

9.   Investment Transactions

Purchases and sales of investments (excluding short term securities) for the year ended December 31, 2019, aggregated $469,970,622 and $483,551,356, respectively.

10.   Credit Risk and Defaulted Securities

At December 31, 2019, the Fund had 60.7% of its portfolio invested in high yield securities, senior secured floating rate loans, or other securities rated below investment grade and unrated securities, if any. 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 December 31, 2019, the aggregate value of these securities represents less than 0.1% of the Fund’s net assets. The Fund discontinues accruing income on securities for which income has been deemed uncollectible and provides an estimate for losses on interest receivable. The securities have been identified in the accompanying Statement of Investments.

11.   Restricted Securities

The Fund invests in securities that are restricted under the Securities Act of 1933 (1933 Act). Restricted securities are often purchased in private placement transactions, and cannot be sold without prior registration unless the sale is pursuant to an exemption under the 1933 Act. Disposal of these securities may require greater effort and expense, and prompt sale at an acceptable price may be difficult. The Fund may have registration rights for restricted securities. The issuer generally incurs all registration costs.

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NOTES TO FINANCIAL STATEMENTS

At December 31, 2019, investments in restricted securities, excluding securities exempt from registration under the 1933 Act, were as follows:

Shares		Issuer	Acquisition   Date	Cost		Value
	404	Nine Point Energy Holdings Inc., cvt. pfd.	3/24/17	$	377,604	$	306,975
	21,663	Nine Point Energy LLC	7/15/14 - 2/01/18		830,630		33,012
	3,700	a Remington Outdoor Co. Inc., Litigation Trust	5/16/18		—		—
		Total Restricted Securities (Value is 0.1% of Net Assets)		$	1,208,234	$	339,987

^aThe Fund also invests in unrestricted securities of the issuer, valued at $24,566 as of December 31, 2019.

12.   Other Derivative Information

For the year ended December 31, 2019, the effect of derivative contracts in the Statement of Operations was as follows:

Derivative Contracts Not Accounted for as Hedging Instruments	Statement of Operations Location	Net Realized Gain (Loss) for the Year		Statement of Operations Location	Net Change in Unrealized Appreciation (Depreciation) for the Year
	Net realized gain (loss) from:			Net change in unrealized appreciation (depreciation) on:
Interest rate contracts	Swap contracts		$405,927	Swap contracts	$122,103

For the year ended December 31, 2019, the average month end notional amount of swap contracts represented $1,846,154.

See Note 1(d) regarding derivative financial instruments.

13.   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.

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13. Fair Value Measurements (continued)

A summary of inputs used as of December 31, 2019, 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:a
Equity Investments:b
Commercial & Professional Services	$	—	$	—	$	24,566		$	24,566
Energy		524,109		854,594		341,761	c		1,720,464
All Other Equity Investments		76,592		—		—			76,592
Corporate Bonds:
Energy		—		15,425,708		759			15,426,467
All Other Corporate Bonds		—		126,008,470		—			126,008,470
Senior Floating Rate Interests		—		115,910,334		—			115,910,334
Marketplace Loans		—		—		9,234,251			9,234,251
Asset-Backed Securities and Commercial Mortgage-Backed Securities		—		51,161,033		—			51,161,033
Mortgage-Backed Securities		—		91,956,095		—			91,956,095
Escrows and Litigation Trusts		—		4,000		—	c		4,000
Short Term Investments		18,870,657		—		—			18,870,657
Total Investments in Securities	$	19,471,358	$	401,320,234	$	9,601,337		$	430,392,929
Liabilities:
Other Financial Instruments:
Reverse Repurchase Agreements	$	—	$	17,169,028	$	—		$	17,169,028

^aFor detailed categories, see the accompanying Statement of Investments.

^bIncludes common and convertible preferred stocks as well as other equity interests.

^cIncludes securities determined to have no value at December 31, 2019.

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NOTES TO FINANCIAL STATEMENTS

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 beginning and/or end of the year. At December 31, 2019, the reconciliation of assets and liabilities, is as follows:

	Balance at Beginning of Year		Purchases		Sales		Transfer Into Level 3a		Transfer Out of Level 3		Cost Basis Adjustments		Net Realized Gain (Loss)		Net Unrealized Appreciation (Depreciation)			Balance at End of Year		Net Change in Unrealized Appreciation (Depreciation) on Assets Held at Year End
Assets:
Investments in Securities:
Equity Investments:b
Commercial & Professional Services		$  415,172c		$            —		$—		$—		$—		$—		$—		$   (390,606	)		$     24,566		$   (390,606	)
Energy		385,059		—		—		—		—		—		—		(43,298	)		341,761c		(43,298	)
Corporate Bonds		—		—		—		754		—		—		—		5			759		5
Marketplace Loans		3,609,189		6,267,366		—		—		—		—		—		(642,304	)		9,234,251		(642,304	)
Escrows and Litigation Trusts		—c		—		—		—		—		—		—		—			—c		—
Total Investments in Securities		$4,409,420		$6,267,366		$—		$754		$—		$—		$—		$(1,076,203	)		$9,601,337		$(1,076,203	)

^aThe investment was transferred into Level 3 as a result of the unavailability of a quoted market price in an active market for identical securities and other significant observable valuation inputs.

^bIncludes common stocks and convertible preferred stocks as well as other equity interests.

^cIncludes securities determined to have no value.

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NOTES TO FINANCIAL STATEMENTS

13. Fair Value Measurements (continued)

Significant unobservable valuation inputs for material Level 3 financial instruments and impact to fair value as a result of changes in unobservable valuation inputs as of December 31, 2019, are as follows:

Description	Fair Value at End of Year			Valuation Technique	Unobservable Input	Amount/(Weighted Averagea)	Impact to Fair Value if Input Increasesb
Assets:
Investments in Securities:
Equity Investmentsc:
Energy	$	306,975		Market comparables	Discount for lack of marketability	19.4%		Decrease	d
					EV / revenue multiple	3.5x		Increase	d
Marketplace Loans – Lending Club		9,051,498		Discounted Cash Flow	Loss-Adjusted Discount Rate	9.6%		Decrease	d
					Projected Loss Rate	15.5%		Decrease	d
Marketplace Loans – Upgrade		182,753		Discounted Cash Flow	Loss-Adjusted Discount Rate	14.3%		Decrease	d
					Projected Loss Rate	21.2%		Decrease	d
All other investmentse		60,111	f
Total	$	9,601,337

^aWeighted based on the relative fair value of the financial instruments.

^bRepresents the directional change in the fair value of the Level 3 financial instruments that would result from a significant and reasonable increase in the corresponding input. A significant and reasonable decrease in the input would have the opposite effect. Significant impacts, if any, to fair value and/or net assets have been indicated.

^cIncludes convertible preferrred stocks.

^dRepresents a significant impact to fair value but not net assets.

^eIncludes financial instruments with values derived using private transaction prices or non-public third party pricing information which is unobservable. May also include fair value of immaterial financial instruments and developed using various valuation techniques and unobservable inputs.

^fIncludes securities determined to have no value at December 31, 2019.

Abbreviations List

EV Enterprise value

14.   Subsequent Events

The Fund has evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure.

Abbreviations

Counterparty
UBS	Union Bank of Switzerland

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NOTES TO FINANCIAL STATEMENTS

Selected Portfolio
FHLMC	Federal Home Loan Mortgage Corp.
FNMA	Federal National Mortgage Association
FRN	Floating Rate Note
GNMA	Government National Mortgage Association
LIBOR	London InterBank Offered Rate
MBS	Mortgage-Backed Security
PIK	Payment-In-Kind
SF	Single Family
USD	United States Dollar

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FRANKLIN LIMITED DURATION INCOME TRUST

Report of Independent Registered Public Accounting Firm

To the Board of Trustees and Shareholders of Franklin Limited Duration Income Trust

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities, including the statement of investments, of Franklin Limited Duration Income Trust (the “Fund”) as of December 31, 2019, the related statements of operations and cash flows for the year ended December 31, 2019, the statement of changes in net assets for each of the two years in the period ended December 31, 2019, including the related notes, and the financial highlights for each of the periods indicated therein (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of December 31, 2019, the results of its operations and its cash flows for the year then ended, the changes in its net assets for each of the two years in the period ended December 31, 2019 and the financial highlights for each of the periods indicated therein in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of December 31, 2019 by correspondence with the custodian, transfer agent and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

San Francisco, California

February 20, 2020

We have served as the auditor of one or more investment companies in the Franklin Templeton Group of Funds since 1948.

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Tax Information (unaudited)

Under Section 854(b)(1)(B) of the Internal Revenue Code, the Fund hereby reports the maximum amount allowable but no less than $89,357 as qualified dividends for purposes of the maximum rate under Section 1(h)(11) of the Internal Revenue Code for the fiscal year ended December 31, 2019. Distributions, including qualified dividend income, paid during calendar year 2019 will be reported to shareholders on Form 1099-DIV by mid-February 2020. Shareholders are advised to check with their tax advisors for information on the treatment of these amounts on their individual income tax returns.

Under Section 871(k)(1)(C) of the Internal Revenue Code, the Fund hereby reports the maximum amount allowable but no less than $15,154,838 as interest related dividends for purposes of the tax imposed under Section 871(a)(1)(A) of the Internal Revenue Code for the fiscal year ended December 31, 2019.

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Annual Meeting of Shareholders

The Annual Meeting of Shareholders (the “Meeting”) for Franklin Limited Duration Income Trust (Fund) was held on October 3, 2019. At the Meeting, shareholders elected Harris J. Ashton and Edith E. Holiday as Trustees of the Fund to hold office for a three year term, set to expire at the 2022 Annual Meeting of Shareholders. These terms continue, however, until their successors are duly elected and qualified or until a Trustee’s resignation, retirement, death or removal, whichever is earlier.

The results of the voting were as follows:

Trustee Nominees	Shares For		Shares Withheld
Harris J. Ashton		25,208,043		711,227
Edith E. Holiday		25,024,176		895,094

Note: Terrence J. Checki, Mary C. Choksi, Gregory E. Johnson, Rupert H. Johnson, J. Michael Luttig and Larry D. Thompson are Trustees of the Fund who are currently serving and whose terms of office continued after the meeting.

Note: Effective as of March 13, 2019, the Fund’s Board was reduced from nine to eight Trustees and John B. Wilson was removed as a Trustee.

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Dividend Reinvestment and Cash Purchase Plan

The Fund’s Dividend Reinvestment Plan (Plan) offers you a prompt and simple way to reinvest dividends and capital gain distributions (Distributions) in shares of the Fund. American Stock Transfer & Trust Company, LLC (Plan Agent), P.O. Box 922, Wall Street Station, New York, NY 10269-0560, acts as your Plan Agent in administering the Plan. The Agent will open an account for you under the Plan in the same name as your outstanding shares are registered.

You are automatically enrolled in the Plan unless you elect to receive Distributions in cash. If you own shares in your own name, you should notify the Agent, in writing, if you wish to receive Distributions in cash.

If the Fund declares a Distribution, you, as a participant in the Plan, will automatically receive an equivalent amount of shares of the Fund purchased on your behalf by the Agent. If on the payment date for a Distribution, the net asset value per share is equal to or less than the market price per share plus estimated brokerage commissions, the Agent shall receive newly issued shares, including fractions, from the Fund for your account. The number of additional shares to be credited shall be determined by dividing the dollar amount of the Distribution by the greater of the net asset value per share on the payment date, or 95% of the then current market price per share.

If the net asset value per share exceeds the market price plus estimated brokerage commissions on the payment date for a Distribution, the Agent (or a broker-dealer selected by the Agent) shall try, for a purchase period of 30 days, to apply the amount of such Distribution on your shares (less your pro rata share of brokerage commissions incurred) to purchase shares on the open market. The weighted average price (including brokerage commissions) of all shares it purchases shall be your allocated price per share. If, before the Agent has completed its purchases, the market price plus estimated brokerage commissions exceeds the net asset value of the shares as of the payment date, the purchase price the Agent paid may exceed the net asset value of the shares, resulting in the acquisition of fewer shares than if such Distribution had been paid in shares issued by the Fund. Participants should note that they will not be able to instruct the Agent to purchase shares at a specific time or at a specific price. The Agent may make open-market purchases on any securities exchange where shares are traded, in the over-the-counter market or in negotiated transactions, and may be on such terms as to price, delivery and otherwise as the Agent shall determine.

The market price of shares on a particular date shall be the last sales price on NYSE MKT, or, if there is no sale on the exchange on that date, then the mean between the closing bid and asked quotations on the exchange on such date. The net asset value per share on a particular date shall be the amount most recently calculated by or on behalf of the Fund as required by law.

The Agent shall at all times act in good faith and agree to use its best efforts within reasonable limits to ensure the accuracy of all services performed under this agreement and to comply with applicable law, but assumes no responsibility and shall not be liable for loss or damage due to errors unless such error is caused by the Agent’s negligence, bad faith, or willful misconduct or that of its employees. Your uninvested funds held by the Agent will not bear interest. The Agent shall have no responsibility for the value of shares acquired. For the purpose of cash investments, the Agent may commingle your funds with those of other participants in the same Fund.

There is no direct charge to participants for reinvesting Distributions, since the Agent’s fees are paid by the Fund. However, when shares are purchased in the open market, each participant will pay a pro rata portion of any brokerage commissions incurred. If you elect by notice to the Agent to have it sell part or all of your shares and remit the proceeds, the Agent will deduct brokerage commissions from the proceeds.

The automatic reinvestment of Distributions does not relieve you of any taxes that may be payable on Distributions. In connection with the reinvestment of Distributions, shareholders generally will be treated as having received a Distribution equal to the cash Distribution that would have been paid.

The Agent will forward to you any proxy solicitation material and will vote any shares so held for you first in accordance with the instructions set forth on proxies you return to the Fund, and then with respect to any proxies you do not return to the Fund in the same portion as the Agent votes proxies the participants return to the Fund.

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DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN

As long as you participate in the Plan, the Agent will hold the shares it has acquired for you in safekeeping, in its name or in the name of its nominee. This convenience provides added protection against loss, theft or inadvertent destruction of certificates. However, you may request that a certificate representing your Plan shares be issued to you. Upon your written request, the Agent will deliver to you, without charge, a certificate or certificates for the full shares. The Agent will send you a confirmation of each acquisition made for your account as soon as practicable, but not later than 60 days after the acquisition date. Although from time to time you may have an undivided fractional interest in a share of the Fund, no certificates for a fractional share will be issued. Distributions on fractional shares will be credited to your account. If you terminate your account under the Plan, the Agent will adjust for any such undivided fractional interest in cash at the market value of shares at the time of termination.

You may withdraw from the Plan at any time, without penalty, by notifying the Agent in writing at the address above or by telephone at (800) 416-5585. Such termination will be effective with respect to a Distribution if the Agent receives your notice prior to the Distribution record date. The Agent or the Fund may terminate the Plan upon notice to you in writing mailed at least 30 days prior to any record date for the payment of any Distribution. Upon any termination, the Agent will issue, without charge, stock certificates for all full shares you own and will convert any fractional shares you hold at the time of termination to cash at current market price and send you a check for the proceeds.

The Fund or the Agent may amend the Plan. You will receive written notice at least 30 days before the effective date of any amendment.

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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 fund complex, are shown below. Generally, each board member serves until that person’s successor is elected and qualified.

Independent Board Members

Name, Year of Birth and Address	Position	Length of Time Served	Number of Portfolios in Fund Complex Overseen by Board Member*	Other Directorships Held During at Least the Past 5 Years
Harris J. Ashton (1932) One Franklin Parkway San Mateo, CA 94403-1906	Trustee	Since 2003	132	Bar-S Foods (meat packing company) (1981-2010).
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).
Terrence J. Checki (1945) One Franklin Parkway San Mateo, CA 94403-1906	Trustee	Since 2017	111	Hess Corporation (exploration of oil and gas) (2014-present).
Principal Occupation During at Least the Past 5 Years:
Member of the Council on Foreign Relations (1996-present); Member of the National Committee on U.S.-China Relations (1999-present); member of the Board of Trustees of the Economic Club of New York (2013-present); member of the Board of Trustees of the Foreign Policy Association (2005-present) and member of various other boards of trustees and advisory boards; and formerly, Executive Vice President of the Federal Reserve Bank of New York and Head of its Emerging Markets and Internal Affairs Group and Member of Management Committee (1995-2014); and Visiting Fellow at the Council on Foreign Relations (2014).
Mary C. Choksi (1950) One Franklin Parkway San Mateo, CA 94403-1906	Trustee	Since 2014	132	Avis Budget Group Inc. (car rental) (2007-present), Omnicom Group Inc. (advertising and marketing communications services) (2011-present) and White Mountains Insurance Group, Ltd. (holding company) (2017-present).
Principal Occupation During at Least the Past 5 Years:
Director of various companies; and formerly, Founder and Senior Advisor, Strategic Investment Group (investment management group) (2015-2017); Founding Partner and Senior Managing Director, Strategic Investment Group (1987-2015); Founding Partner and Managing Director, Emerging Markets Management LLC (investment management firm) (1987-2011); and Loan Officer/Senior Loan Officer/Senior Pension Investment Officer, World Bank Group (international financial institution) (1977-1987).
Edith E. Holiday (1952) One Franklin Parkway San Mateo, CA 94403-1906	Lead Independent Trustee	Trustee since 2005 and Lead Independent Trustee since March 2019	132	Hess Corporation (exploration of oil and gas) (1993-present), Canadian National Railway (railroad) (2001-present), White Mountains Insurance Group, Ltd. (holding company) (2004-present), Santander Consumer USA Holdings, Inc. (consumer finance) (2016-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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Independent Board Members (continued)

Name, Year of Birth and Address	Position	Length of Time Served	Number of Portfolios in Fund Complex Overseen by Board Member*	Other Directorships Held During at Least the Past 5 Years
J. Michael Luttig (1954) One Franklin Parkway San Mateo, CA 94403-1906	Trustee	Since 2009	132	Boeing Capital Corporation (aircraft financing) (2006-2010).
Principal Occupation During at Least the Past 5 Years:
Private investor; and formerly, Counselor and Senior Advisor to the Chairman, CEO, and Board of Directors, of The Boeing Company (aerospace company), and member of the Executive Council (May 2019-January 1, 2020); Executive Vice President, General Counsel and member of the Executive Council, The Boeing Company (2006-2019); and Federal Appeals Court Judge, United States Court of Appeals for the Fourth Circuit (1991-2006).
Larry D. Thompson (1945) One Franklin Parkway San Mateo, CA 94403-1906	Trustee	Since 2007	132	The Southern Company (energy company) (2014-present; previously 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; Counsel, Finch McCranie, LLP (law firm) (2015-present); Independent Compliance Monitor and Auditor, Volkswagen AG (manufacturer of automobiles and commercial vehicles) (2017-present); 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).
Interested Board Members and Officers
Name, Year of Birth and Address	Position	Length of Time Served	Number of Portfolios in Fund Complex Overseen by Board Member*	Other Directorships Held During at Least the Past 5 Years
**Gregory E. Johnson (1961) One Franklin Parkway San Mateo, CA 94403-1906	Trustee and Vice President	Trustee since 2013 and Vice President since 2003	144	None
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 39 of the investment companies in Franklin Templeton; Vice Chairman, Investment Company Institute; and formerly, President, Franklin Resources, Inc. (1994-2015).
**Rupert H. Johnson, Jr. (1940) One Franklin Parkway San Mateo, CA 94403-1906	Chairman of the Board, Trustee and Senior Vice President	Chairman of the Board since 2013, Trustee and Senior Vice President since 2003	132	None
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.; and officer and/or director or trustee, as the case may be, of some of the other subsidiaries of Franklin Resources, Inc. and of 37 of the investment companies in Franklin Templeton.

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Interested Board Members and Officers (continued)

Name, Year of Birth and Address	Position	Length of Time Served	Number of Portfolios in Fund Complex Overseen by Board Member*	Other Directorships Held During at Least the Past 5 Years
Alison E. Baur (1964) One Franklin Parkway San Mateo, CA 94403-1906	Vice President	Since 2012	Not Applicable	Not Applicable
Principal Occupation During at Least the Past 5 Years:
Deputy General Counsel, Franklin Templeton; and officer of some of the other subsidiaries of Franklin Resources, Inc. and of 41 of the investment companies in Franklin Templeton.
Breda M. Beckerle (1958) 280 Park Avenue New York, NY 10017	Interim Chief Compliance Officer	Since Janary 2020	Not Applicable	Not Applicable
Principal Occupation During at Least the Past 5 Years:
Chief Compliance Officer, Fiduciary Investment Management International, Inc., Franklin Advisers, Inc., Franklin Advisory Services, LLC, Franklin Mutual Advisers, LLC, Franklin Templeton Institutional, LLC; and officer of 41 of the investment companies in Franklin Templeton.
Sonal Desai, Ph.D. (1963) One Franklin Parkway San Mateo, CA 94403-1906	President and Chief Executive Officer – Investment Management	Since 2018	Not Applicable	Not Applicable
Principal Occupation During at Least the Past 5 Years:
Director and Executive Vice President, Franklin Advisers, Inc.; Executive Vice President, Franklin Templeton Institutional, LLC; and officer of 17 of the investment companies in Franklin Templeton.
Gaston Gardey (1967) One Franklin Parkway San Mateo, CA 94403-1906	Vice President	Since 2009	Not Applicable	Not Applicable
Principal Occupation During at Least the Past 5 Years:
Treasurer, U.S. Fund Administration & Reporting, Franklin Templeton; and officer of 24 of the investment companies in Franklin Templeton.
Steven J. Gray (1955) One Franklin Parkway San Mateo, CA 94403-1906	Vice President and Co- Secretary	Vice President since 2009 and Co-Secretary since 2019	Not Applicable	Not Applicable
Principal Occupation During at Least the Past 5 Years:
Senior Associate General Counsel, Franklin Templeton; Vice President, Franklin Templeton Distributors, Inc. and FASA, LLC; and officer of 41 of the investment companies in Franklin Templeton.
Matthew T. Hinkle (1971) One Franklin Parkway San Mateo, CA 94403-1906	Chief Executive Officer – Finance and Administration	Since 2017	Not Applicable	Not Applicable
Principal Occupation During at Least the Past 5 Years:
Senior Vice President, Franklin Templeton Services, LLC; officer of 41 of the investment companies in Franklin Templeton; and formerly, Vice President, Global Tax (2012-April 2017) and Treasurer/Assistant Treasurer, Franklin Templeton (2009-2017).
Robert Lim (1948) One Franklin Parkway San Mateo, CA 94403-1906	Vice President –AML Compliance	Since 2016	Not Applicable	Not Applicable
Principal Occupation During at Least the Past 5 Years:
Vice President, Franklin Templeton Companies, LLC; Chief Compliance Officer, Franklin Templeton Distributors, Inc. and Franklin Templeton Investor Services, LLC; and officer of 41 of the investment companies in Franklin Templeton.

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Interested Board Members and Officers (continued)

Name, Year of Birth and Address	Position	Length of Time Served	Number of Portfolios in Fund Complex Overseen by Board Member*	Other Directorships Held During at Least the Past 5 Years
Navid J. Tofigh (1972) One Franklin Parkway San Mateo, CA 94403-1906	Vice President	Since 2015	Not Applicable	Not Applicable
Principal Occupation During at Least the Past 5 Years:
Associate General Counsel and officer of 41 of the investment companies in Franklin Templeton.
Craig S. Tyle (1960) One Franklin Parkway San Mateo, CA 94403-1906	Vice President	Since 2005	Not Applicable	Not Applicable
Principal Occupation During at Least the Past 5 Years:
General Counsel, Executive Vice President, Franklin Resources, Inc.; and officer of some of the other subsidiaries of Franklin Resources, Inc. and of 41 of the investment companies in Franklin Templeton.
Lori A. Weber (1964) 300 S.E. 2nd Street Fort Lauderdale, FL 33301-1923	Vice President and Co-Secretary	Vice President since 2011 and Co-Secretary since 2019	Not Applicable	Not Applicable
Principal Occupation During at Least the Past 5 Years:
Senior Associate General Counsel, Franklin Templeton; Assistant Secretary, Franklin Resources, Inc.; Vice President and Secretary, Templeton Investment Counsel, LLC; and officer of 41 of the investment companies in Franklin Templeton.

*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 an officer and director and major shareholder of Resources.

Note 1: Rupert H. Johnson, Jr. is the uncle of Gregory E. Johnson.

Note 2: Effective March 12, 2019, John B. Wilson ceased to be a trustee of the Trust.

Note 3: 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 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 Mary C. Choksi as its audit committee financial expert. The Board believes that Ms. Choksi qualifies as such an expert in view of her extensive business background and experience. She currently serves as a director of Avis Budget Group, Inc. (2007-present) and formerly, Founder and Senior Advisor, Strategic Investment Group (1987 to 2017). Ms. Choksi has been a Member of the Fund’s Audit Committee since 2014. As a result of such background and experience, the Board believes that Ms. Choksi has 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. Choksi is an independent Board member as that term is defined under the relevant Securities and Exchange Commission Rules and Releases.

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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 Statement of Investments

The Fund files a complete statement of investments with the U.S. Securities and Exchange Commission for the first and third quarters for each fiscal year as an exhibit to its report on Form N-PORT. Shareholders may view the filed Form N-PORT by visiting the Commission’s website at sec.gov. The filed form may also be viewed and copied at the Commission’s Public Reference Room in Washington, DC. Information regarding the operations of the Public Reference Room may be obtained by calling (800) SEC-0330.

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 © 2020 Franklin Templeton Investments. All rights reserved. FTF A 02/20

Item 2. Code of Ethics.

(a) The Registrant has adopted a code of ethics that applies to its principal executive officers and principal financial and accounting officer.

(c) N/A

(d) N/A

(f) Pursuant to Item 13(a)(1), the Registrant is attaching as an exhibit a copy of its code of ethics that applies to its principal executive officers and principal financial and accounting officer.

Item 3. Audit Committee Financial Expert.

(a)(1) The Registrant has an audit committee financial expert serving on its audit committee.

(2) The audit committee financial expert is Mary C. Choksi and she is “independent” as defined under the relevant Securities and Exchange Commission Rules and Releases.

Item 4. Principal Accountant Fees and Services.

(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 $81,800 for the fiscal year ended December 31, 2019 and $78,081 for the fiscal year ended December 31, 2018.

(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

There were no 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.

The aggregate 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 were $20,000 for the fiscal year ended December 31, 2019 and $5,000 for the fiscal year ended December 31, 2018. The services for which these fees were paid included professional fees in connection with tax treatment of equipment lease transactions, Professional fees in connection with an Indonesia withholding tax refund claim, and tax consulting services related to the operating agreement and term sheet for the launch of a new fund.

(d) All Other Fees

The aggregate 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 were $0 for the fiscal year ended December 31, 2019 and $45,100 for the fiscal year ended December 31, 2018. The services for which these fees were paid included review of materials provided to the fund Board in connection with the investment management contract renewal process and a comfort letter for rights issuance.

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 not reported in paragraphs (a)-(c) of Item 4 were $145,644 for the fiscal year ended December 31, 2019 and $16,500 for the fiscal year ended December 31, 2018. The services for which these fees were paid included valuation Services related to Fair Value engagement, the issuance of an Auditor’s Certificate for South Korean regulatory shareholders disclosures, and assets under management

certification.

(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 $165,644 for the fiscal year ended December 31, 2019 and $66,600 for the fiscal year ended December 31, 2018.

(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.

Members of the Audit Committee are: Mary C. Choksi, Michael Luttig and Larry D. Thompson.

Item 6. Schedule of Investments.             N/A

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

The board of trustees of the Fund has delegated the authority to vote proxies related to the portfolio securities held by the Fund to the Fund’s investment manager Franklin Advisers, Inc. in accordance with the Proxy Voting Policies and Procedures (Policies) adopted by the investment manager.

The investment manager has delegated its administrative duties with respect to the voting of proxies for securities to the Proxy Group within Franklin Templeton Companies, LLC (Proxy Group), an affiliate and wholly owned subsidiary of Franklin Resources, Inc. All proxies received by the Proxy Group will be voted based upon the investment manager’s instructions and/or policies. The investment manager votes proxies solely in the best interests of the Fund and its shareholders.

To assist it in analyzing proxies of equity securities, the investment manager subscribes to Institutional Shareholder Services, Inc. (ISS), an unaffiliated third-party corporate governance research service that provides in-depth analyses of shareholder meeting agendas, vote recommendations, vote execution services, ballot reconciliation services, recordkeeping and vote disclosure services. In addition, the investment manager subscribes to Glass, Lewis & Co., LLC (Glass Lewis), an unaffiliated third-party analytical research firm, to receive analyses and vote recommendations on the shareholder meetings of publicly held U.S. companies, as well as a limited subscription to its international research. Also, the investment manager has a supplemental subscription to Egan-Jones Proxy Services (Egan-Jones), an unaffiliated third party proxy advisory firm, to receive analyses and vote recommendations. Although analyses provided by ISS, Glass Lewis, Egan-Jones, and/or another independent third party proxy service provider (each a “Proxy Service”) are thoroughly reviewed and considered in making a final voting decision, the investment manager does not consider recommendations from a Proxy Service or any third party to be determinative of the investment manager’s ultimate decision. Rather, the investment manager exercises its independent judgment in making voting decisions. For most proxy proposals, the investment manager’s evaluation should result in the same position being taken for all Funds. In some cases, however, the evaluation may result in a Fund voting differently, depending upon the nature and objective of the Fund, the composition of its portfolio and other factors. As a matter of policy, the officers, directors/trustees and employees of the investment manager and the Proxy Group will not be influenced by outside sources whose interests conflict with the interests of the Fund and its shareholders. Efforts are made to resolve all conflicts in the best interests of the investment manager’s clients. Material conflicts of interest are identified by the Proxy Group based upon analyses of client, distributor, broker-dealer and vendor lists, information periodically gathered from directors and officers, and information derived from other sources, including public filings. In situations where a material conflict of interest is identified, the Proxy Group may vote consistent with the voting

recommendation of a Proxy Service; or send the proxy directly to the Fund’s board or a committee of the board with the investment manager’s recommendation regarding the vote for approval.

Where a material conflict of interest has been identified, but the items on which the investment manager’s vote recommendations differ from a Proxy Service and relate specifically to (1) shareholder proposals regarding social or environmental issues, (2) “Other Business” without describing the matters that might be considered, or (3) items the investment manager wishes to vote in opposition to the recommendations of an issuer’s management, the Proxy Group may defer to the vote recommendations of the investment manager rather than sending the proxy directly to the Fund’s board or a board committee for approval.

To avoid certain potential conflicts of interest, the investment manager will employ echo voting or pass-through voting, if possible, in the following instances: (1) when the Fund invests in an underlying fund in reliance on any one of Sections 12(d)(1)(F) or (G) of the 1940 Act, the rules thereunder, or pursuant to a SEC exemptive order thereunder; (2) when the Fund invests uninvested cash in affiliated money market funds pursuant to the rules under the 1940 Act or any exemptive orders thereunder (“cash sweep arrangement”); or (3) when required pursuant to the Fund’s governing documents or applicable law. Echo voting means that the investment manager will vote the shares in the same proportion as the vote of all of the other holders of the underlying fund’s shares. With respect to instances when a Franklin Templeton U.S. registered investment company invests in an underlying fund in reliance on any one of Sections 12(d)(1)(F) or (G) of the 1940 Act, the rules thereunder, or pursuant to an SEC exemptive order thereunder, and there are no other unaffiliated shareholders also invested in the underlying fund, the investment manager will vote in accordance with the recommendation of such investment company’s board of trustees or directors. In addition, to avoid certain potential conflicts of interest, and where required under a fund’s governing documents or applicable law, the investment manager will employ pass-through voting when a Franklin Templeton U.S. registered investment company invests in an underlying fund in reliance on Section 12(d)(1)(E) of the 1940 Act, the rules thereunder, or pursuant to an SEC exemptive order thereunder. In “pass-through voting,” a feeder fund will solicit voting instructions from its shareholders as to how to vote on the master fund’s proposals.

The recommendation of management on any issue is a factor that the investment manager considers in determining how proxies should be voted. However, the investment manager does not consider recommendations from management to be determinative of the investment manager’s ultimate decision. As a matter of practice, the votes with respect to most issues are cast in accordance with the position of the company’s management. Each issue, however, is considered on its own merits, and the investment manager will not support the position of the company’s management in any situation where it deems that the ratification of management’s position would adversely affect the investment merits of owning that company’s shares.

Engagement with issuers. The investment manager believes that engagement with issuers is important to good corporate governance and to assist in making proxy voting decisions. The investment manager may engage with issuers to discuss specific ballot items to be voted on in advance of an annual or special meeting to obtain further information or clarification on the proposals. The investment manager may also engage with management on a range of environmental, social or corporate governance issues throughout the year.

Investment manager’s proxy voting policies and principles The investment manager has adopted general proxy voting guidelines, which are summarized below. These guidelines are not an exhaustive list of all the issues that may arise and the investment manager cannot anticipate all future situations. In all cases, each proxy and proposal (including both management and shareholder proposals) will be considered based on the relevant facts and circumstances on a case-by-case basis.

Board of directors. The investment manager supports an independent, diverse board of directors, and prefers that key committees such as audit, nominating, and compensation committees be comprised of independent directors. The investment manager supports boards with strong risk management oversight. The investment manager will generally vote against management efforts to classify a board and will generally support proposals to declassify the board of directors. The investment manager will consider withholding votes from directors who have attended less than 75% of meetings without a valid reason. While generally in favor of separating Chairman and CEO positions, the investment manager will review this issue as well as proposals to restore or provide for cumulative voting on a case-by-case basis, taking into consideration factors such as the company’s corporate governance guidelines or provisions and performance. The investment manager generally will support non-binding shareholder proposals to require a majority vote standard for the election of directors; however, if these proposals are binding, the investment manager will give careful review on a case-by-case basis of the potential ramifications of such implementation.

In the event of a contested election, the investment manager will review a number of factors in making a decision including management’s track record, the company’s financial performance, qualifications of candidates on both slates, and the strategic plan of the dissidents and/or shareholder nominees.

Ratification of auditors of portfolio companies. The investment manager will closely scrutinize the independence, role and performance of auditors. On a case-by-case basis, the investment manager will examine proposals relating to non-audit relationships and non-audit fees. The investment manager will also consider, on a case-by-case basis, proposals to rotate auditors, and will vote against the ratification of auditors when there is clear and compelling evidence of a lack of independence, accounting irregularities or negligence. The investment manager may also consider whether the ratification of auditors has been approved by an appropriate audit committee that meets applicable composition and independence requirements.

Management and director compensation. A company’s equity-based compensation plan should be in alignment with the shareholders’ long-term interests. The investment manager believes that executive compensation should be directly linked to the performance of the company. The investment manager evaluates plans on a case-by-case basis by considering several factors to determine whether the plan is fair and reasonable, including the ISS quantitative model utilized to assess such plans and/or the Glass Lewis evaluation of the plans. The investment manager will generally oppose plans that have the potential to be excessively dilutive, and will almost always oppose plans that are structured to allow the repricing of underwater options, or plans that have an automatic share replenishment “evergreen” feature. The investment manager will generally support employee stock option plans in which the purchase price is at least 85% of fair market value, and when potential dilution is 10% or less.

Severance compensation arrangements will be reviewed on a case-by-case basis, although the investment manager will generally oppose “golden parachutes” that are considered to be excessive. The investment manager will normally support proposals that require a percentage of directors’ compensation to be in the form of common stock, as it aligns their interests with those of shareholders.

The investment manager will review non-binding say-on-pay proposals on a case-by-case basis, and will generally vote in favor of such proposals unless compensation is misaligned with performance and/or shareholders’ interests, the company has not provided reasonably clear disclosure regarding its compensation practices, or there are concerns with the company’s remuneration practices.

Anti-takeover mechanisms and related issues. The investment manager generally opposes anti-takeover measures since they tend to reduce shareholder rights. However, as with all proxy issues, the investment manager conducts an independent review of each anti-takeover proposal. On occasion, the investment manager may vote with management when the research analyst has concluded that the proposal is not onerous and would not harm the Fund or its shareholders’ interests. The investment manager generally supports proposals that require shareholder rights’ plans (“poison pills”) to be subject to a shareholder vote and will closely evaluate such plans on a case-by-case basis to determine whether or not they warrant support. In addition, the investment manager will generally vote against any proposal to issue stock that has unequal or subordinate voting rights. The investment manager generally opposes any supermajority voting requirements as well as the payment of “greenmail.” The investment manager generally supports “fair price” provisions and confidential voting. The investment manager will review a company’s proposal to reincorporate to a different state or country on a case-by-case basis taking into consideration financial benefits such as tax treatment as well as comparing corporate governance provisions and general business laws that may result from the change in domicile.

Changes to capital structure. The investment manager realizes that a company’s financing decisions have a significant impact on its shareholders, particularly when they involve the issuance of additional shares of common or preferred stock or the assumption of additional debt. The investment manager will review, on a case-by-case basis, proposals by companies to increase authorized shares and the purpose for the increase. The investment manager will generally not vote in favor of dual-class capital structures to increase the number of authorized shares where that class of stock would have superior voting rights. The investment manager will generally vote in favor of the issuance of preferred stock in cases where the company specifies the voting, dividend, conversion and other rights of such stock and the terms of the preferred stock issuance are deemed reasonable. The investment manager will review proposals seeking preemptive rights on a case-by-case basis.

Mergers and corporate restructuring. Mergers and acquisitions will be subject to careful review by the research analyst to determine whether they would be beneficial to shareholders. The investment manager will analyze various economic and strategic factors in making the final decision on a merger or acquisition. Corporate restructuring proposals are also subject to a thorough examination on a case-by-case basis.

Environmental and social issues. The investment manager considers environmental and social issues alongside traditional financial measures to provide a more comprehensive view of the value, risk and return potential of an investment. Companies may face significant financial, legal and reputational

risks resulting from poor environmental and social practices, or negligent oversight of environmental or social issues. Franklin Templeton’s “Responsible Investment Principles and Policies” describes the investment manager’s approach to consideration of environmental, social and governance issues within the investment manager’s processes and ownership practices.

The investment manager will review shareholder proposals on a case-by-case basis and may support those that serve to enhance value or mitigate risk, are drafted appropriately, and do not disrupt the course of business or require a disproportionate or inappropriate use of company resources. In the investment manager’s experience, those companies that are managed well are often effective in dealing with the relevant environmental and social issues that pertain to their business. As such, the investment manager will generally give management discretion with regard to environmental and social issues. However, in cases where management and the board have not demonstrated adequate efforts to mitigate material environmental or social risks, have engaged in inappropriate or illegal conduct, or have failed to adequately address current or emergent risks that threaten shareholder value, the investment manager may choose to support well-crafted shareholder proposals that serve to promote or protect shareholder value. This may include seeking appropriate disclosure regarding material environmental and social issues.

The investment manager will consider supporting a shareholder proposal seeking disclosure and greater board oversight of lobbying and corporate political contributions if the investment manager believes that there is evidence of inadequate oversight by the company’s board, if the company’s current disclosure is significantly deficient, or if the disclosure is notably lacking in comparison to the company’s peers.

Governance matters. The investment manager generally supports the right of shareholders to call special meetings and act by written consent. However, the investment manager will review such shareholder proposals on a case-by-case basis in an effort to ensure that such proposals do not disrupt the course of business or require a disproportionate or inappropriate use of company resources.

Proxy access. In cases where the investment manager is satisfied with company performance and the responsiveness of management, it will generally vote against shareholder proxy access proposals not supported by management. In other instances, the investment manager will consider such proposals on a case-by-case basis, taking into account factors such as the size of the company, ownership thresholds and holding periods, nomination limits (e.g., number of candidates that can be nominated), the intentions of the shareholder proponent, and shareholder base.

Global corporate governance. Many of the tenets discussed above are applied to the investment manager’s proxy voting decisions for international investments. However, the investment manager must be flexible in these worldwide markets. Principles of good corporate governance may vary by country, given the constraints of a country’s laws and acceptable practices in the markets. As a result, it is on occasion difficult to apply a consistent set of governance practices to all issuers. As experienced money managers, the investment manager’s analysts are skilled in understanding the complexities of the regions in which they specialize and are trained to analyze proxy issues germane to their regions.

The investment manager will generally attempt to process every proxy it receives for all domestic and foreign securities. However, there may be situations in which the investment manager may be unable to successfully vote a proxy, or may choose not to vote a proxy, such as where: (i) a proxy ballot was not received from the custodian bank; (ii) a meeting notice was received too late; (iii) there are fees imposed upon the exercise of a vote and it is determined that such fees outweigh the benefit of voting; (iv) there are legal encumbrances to voting, including blocking restrictions in certain markets that preclude the ability to dispose of a security if the investment manager votes a proxy or where the investment manager is prohibited from voting by applicable law, economic or other sanctions, or other regulatory or market requirements, including but not limited to, effective Powers of Attorney; (v) additional documentation or the disclosure of beneficial owner details is required; (vi) the investment manager held shares on the record date but has sold them prior to the meeting date; (vii) a proxy voting service is not offered by the custodian in the market; (viii) due to either system error or human error, the investment manager’s intended vote is not correctly submitted; (ix) the investment manager believes it is not in the best interest of the Fund or its shareholders to vote the proxy for any other reason not enumerated herein; or (x) a security is subject to a securities lending or similar program that has transferred legal title to the security to another person.

In some non-U.S. jurisdictions, even if the investment manager uses reasonable efforts to vote a proxy on behalf of the Fund, such vote or proxy may be rejected because of (a) operational or procedural issues experienced by one or more third parties involved in voting proxies in such jurisdictions; (b) changes in the process or agenda for the meeting by the issuer for which the investment manager does not have sufficient notice; or (c) the exercise by the issuer of its discretion to reject the vote of the investment manager. In addition, despite the best efforts of the Proxy Group and its agents, there may be situations where the investment manager’s votes are not received, or properly tabulated, by an issuer or the issuer’s agent.

The investment manager or its affiliates may, on behalf of one or more of the proprietary registered investment companies advised by the investment manager or its affiliates, determine to use its best efforts to recall any security on loan where the investment manager or its affiliates (a) learn of a vote on a material event that may affect a security on loan and (b) determine that it is in the best interests of such proprietary registered investment companies to recall the security for voting purposes.

Procedures for meetings involving fixed income securities & privately held issuers. From time to time, certain custodians may process events for fixed income securities through their proxy voting channels rather than corporate action channels for administrative convenience. In such cases, the Proxy Group will receive ballots for such events on the ISS voting platform. The Proxy Group will solicit voting instructions from the investment manager for each Fund involved. If the Proxy Group does not receive voting instructions from the investment manager, the Proxy Group will take no action on the event. The investment manager may be unable to vote a proxy for a fixed income security, or may choose not to vote a proxy, for the reasons described above.

In the rare instance where there is a vote for a privately held issuer, the decision will generally be made by the relevant portfolio managers or research analysts.

The Proxy Group will monitor such meetings involving fixed income securities or privately held issuers for conflicts of interest in accordance with these procedures. If a fixed income or privately held issuer is flagged as a potential conflict of interest, the investment manager may nonetheless vote as it deems in the best interests of the Fund. The investment manager will report such decisions on an annual basis to the Fund board as may be required.

Shareholders may view the 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 33301-1923, Attention: Proxy Group. Copies of the Fund’s proxy voting records are available online at franklintempleton.com and posted on the SEC website at www.sec.gov. The proxy voting records are updated each year by August 31 to reflect the most recent 12-month period ended June 30.

Item 8. Portfolio Managers of Closed-End Management Investment Companies.

(a)(1) As of February 28, 2020, the portfolio managers of the Fund are as follows:

Sonal Desai, Ph.D, Glenn I. Voyles, CFA, Justin G. MA, CFA and David Yuen, CFA, serve as the portfolio management team responsible for managing the Fund’s portfolio investment. Each of them has experience managing Franklin mutual funds and private accounts

Ms. Desai has been a portfolio manager of the Fund since December 2018. She joined Franklin Templeton in 2009.

Mr. Voyles has been a portfolio manager of the Fund since 2006. He joined Franklin Templeton in 1993.

Mr. Ma has been a portfolio manager of the Fund since 2013. He joined Franklin Templeton in 2006.

Mr. Yuen has been a portfolio manager of the Fund since 2019. He joined Franklin Templeton in 1988.

Name	Number of Other Registered Investment Companies Managed1		Assets of Other Registered Investment Companies Managed (x $1 million)1		Number of Other Pooled Investment Vehicles Managed1		Assets of Other Pooled Investment Vehicles Managed (x $1 million)1		Number of Other Accounts Managed1		Assets of Other Accounts Managed (x $1 million)1
Sonal Desai		12		1,5711.7		12		3249.1		N/A		N/A
Glenn Voyles		4		3825.5		5		1714.1		7		692.1
Justin G. Ma		5		3134.9		3		191.7		N/A		N/A
David Yuen		17		1,5766.1		6		2127.58		4		937.5

1. The various pooled investment vehicles and accounts listed are managed by a team of investment professionals. Accordingly, the individual managers listed would not be solely responsible for managing such listed amounts.

Portfolio managers that provide investment services to the Fund may also provide services to a variety of other investment products, including other funds, institutional accounts and private accounts. The advisory fees for some of such other products and accounts may be different than that charged to the Fund and may include performance based compensation (as noted in the chart above, if any). This may result in fees that are higher (or lower) than the advisory fees paid by the Fund. As a matter of policy, each fund or account is managed solely for the benefit of the beneficial owners thereof. As discussed below, the separation of the trading execution function from the portfolio management function and the application of objectively based trade allocation procedures help to mitigate potential conflicts of interest that may arise as a result of the portfolio managers managing accounts with different advisory fees.

Conflicts. The management of multiple funds, including the Fund, and accounts may also give rise to potential conflicts of interest if the funds and other accounts have different objectives, benchmarks, time horizons, and fees as the portfolio manager must allocate his or her time and investment ideas across multiple funds and accounts. The investment manager seeks to manage such competing interests for the time and attention of portfolio managers by having portfolio managers focus on a particular investment discipline. Most other accounts managed by a portfolio manager are managed using the same investment strategies that are used in connection with the management of the Fund. Accordingly, portfolio holdings, position sizes, and industry and sector exposures tend to be similar across similar portfolios, which may minimize the potential for conflicts of interest. As noted above, the separate management of the trade execution and valuation functions from the portfolio management process also helps to reduce potential conflicts of interest. However, securities selected for funds or accounts other than the Fund may outperform the securities selected for the Fund. Moreover, if a portfolio manager identifies a limited investment opportunity that may be suitable for more than one fund or other account, the Fund may not be able to take full advantage of that opportunity due to an allocation of that opportunity across all eligible funds and other accounts. The investment manager seeks to manage such potential conflicts by using procedures intended to provide a fair allocation of buy and sell opportunities among funds and other accounts.

The structure of a portfolio manager’s compensation may give rise to potential

conflicts of interest. A portfolio manager’s base pay and bonus tend to increase with additional and more complex responsibilities that include increased assets under management. As such, there may be an indirect relationship between a portfolio manager’s marketing or sales efforts and his or her bonus.

Finally, the management of personal accounts by a portfolio manager may give rise to potential conflicts of interest. While the funds and the investment manager have adopted a code of ethics which they believe contains provisions designed to prevent a wide range of prohibited activities by portfolio managers and others with respect to their personal trading activities, there can be no assurance that the code of ethics addresses all individual conduct that could result in conflicts of interest.

The investment manager and the Fund have adopted certain compliance procedures that are designed to address these, and other, types of conflicts. However, there is no guarantee that such procedures will detect each and every situation where a conflict arises.

Compensation. The investment manager seeks to maintain a compensation program that is competitively positioned to attract, retain and motivate top-quality investment professionals. Portfolio managers receive a base salary, a cash incentive bonus opportunity, an equity compensation opportunity, and a benefits package. Portfolio manager compensation is reviewed annually and the level of compensation is based on individual performance, the salary range for a portfolio manager’s level of responsibility and Franklin Templeton guidelines. Portfolio managers are provided no financial incentive to favor one fund or account over another. Each portfolio manager’s compensation consists of the following three elements:

Base salary Each portfolio manager is paid a base salary.

Annual bonus Annual bonuses are structured to align the interests of the portfolio manager with those of the Fund’s shareholders. Each portfolio manager is eligible to receive an annual bonus. Bonuses generally are split between cash (50% to 65%) and restricted shares of Resources stock (17.5% to 25%) and mutual fund shares (17.5% to 25%). The deferred equity-based compensation is intended to build a vested interest of the portfolio manager in the financial performance of both Resources and mutual funds advised by the investment manager. The bonus plan is intended to provide a competitive level of annual bonus compensation that is tied to the portfolio manager achieving consistently strong investment performance, which aligns the financial incentives of the portfolio manager and Fund shareholders. The Chief Investment Officer of the investment manager and/or other officers of the investment manager, with responsibility for the Fund, have discretion in the granting of annual bonuses to portfolio managers in accordance with Franklin Templeton guidelines. The following factors are generally used in determining bonuses under the plan:

• Investment performance. Primary consideration is given to the historic investment performance of all accounts managed by the portfolio manager over the 1, 3 and 5 preceding years measured against risk benchmarks developed by the fixed income management team. The pre-tax performance of each fund managed is measured relative to a relevant peer group and/or applicable benchmark as appropriate.

• Non-investment performance. The more qualitative contributions of the portfolio manager to the investment manager’s business and the investment management team, including business knowledge, productivity, customer service, creativity, and contribution to team goals, are evaluated in determining the amount of any bonus award.

• Responsibilities. The characteristics and complexity of funds managed by the portfolio manager are factored in the investment manager’s appraisal.

Additional long-term equity-based compensation Portfolio managers may also be awarded restricted shares or units of Resources stock or restricted shares or units of one or more mutual funds. Awards of such deferred equity-based compensation typically vest over time, so as to create incentives to retain key talent.

Portfolio managers also participate in benefit plans and programs available generally to all employees of the investment manager.

Ownership of Fund shares. The investment manager has a policy of encouraging portfolio managers to invest in the funds they manage. Exceptions arise when, for example, a fund is closed to new investors or when tax considerations or jurisdictional constraints cause such an investment to be inappropriate for the portfolio manager. The following is the dollar range of Fund shares beneficially owned by each portfolio manager (such amounts may change from time to time):

Portfolio Manager	Dollar Range of Fund Shares Beneficially Owned
Sonal Desai	None
David Yuen	None
Justin G. Ma	None
Glenn I. Voyles	None

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.   N/A

Item 10. Submission of Matters to a Vote of Security Holders.

There have been no changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Trustees that would require disclosure herein.

Item 11. Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures. The Registrant maintains disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in the Registrant’s filings under the Securities Exchange Act of 1934, as amended, and the Investment Company Act of 1940 is recorded, processed, summarized and reported within the

periods specified in the rules and forms of the Securities and Exchange Commission. Such information is accumulated and communicated to the Registrant’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Registrant’s management, including the principal executive officer and the principal financial officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

Within 90 days prior to the filing date of this Shareholder Report on Form N-CSR, the Registrant had carried out an evaluation, under the supervision and with the participation of the Registrant’s management, including the Registrant’s principal executive officer and the Registrant’s principal financial officer, of the effectiveness of the design and operation of the Registrant’s disclosure controls and procedures. Based on such evaluation, the Registrant’s principal executive officer and principal financial officer concluded that the Registrant’s disclosure controls and procedures are effective.

(b) Changes in Internal Controls. There have been no changes in the Registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect the internal control over financial reporting.

Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Company.             N/A

Item 13. Exhibits.

(a) (1) Code of Ethics

(a) (2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle , Chief Executive Officer - Finance and Administration, and Gaston Gardey, Chief Financial Officer and Chief Accounting Officer

(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer - Finance and Administration, and Gaston Gardey, 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.

Franklin Limited Duration Income Trust

By	S\MATTHEW T. HINKLE
	Matthew T. Hinkle

 Chief Executive Officer – Finance and Administration

Date February 28, 2020

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By	S\MATTHEW T. HINKLE
	Matthew T. Hinkle

 Chief Executive Officer – Finance and Administration

Date February 28, 2020

By	S\GASTON GARDEY
	Gaston Gardey

 Chief Financial Officer and Chief Accounting Officer

Date February 28, 2020