UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSRS

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number          811-22641                

Franklin Alternative Strategies Funds

(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 94403-1096    

(Name and address of agent for service)

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

Date of fiscal year end:  May 31

Date of reporting period:  November 30, 2021

Item 1. Reports to Stockholders.

The Report to Shareholders is attached herewith.

(b) Not applicable.

SEMIANNUAL REPORT AND SHAREHOLDER LETTER

FRANKLIN K2 ALTERNATIVE STRATEGIES FUND

A Series of Franklin Alternative Strategies Funds

November 30, 2021

Sign up for electronic delivery at franklintempleton.com/edelivery

SHAREHOLDER LETTER

Dear Fellow Shareholder:

During the six months ended November 30, 2021, the global economy benefited from continued monetary and fiscal stimulus measures, improved global trade, easing COVID-19 pandemic restrictions and the progress of vaccination programs. During parts of the period, geopolitical tensions, the Chinese government’s regulatory changes, surges of COVID-19 cases in certain regions and the emergence of the Omicron variant pressured global stock and bond prices. Conversely, investor sentiment was boosted by economic growth in the U.S. and China and accommodative monetary policies by some central banks, including the U.S. Federal Reserve and the European Central Bank.

In this environment, global developed market stocks, as measured by the MSCI World Index (USD), posted a +5.08% total return for the period.¹ In contrast, global emerging market stocks, as measured by the MSCI Emerging Markets Index (USD), posted a -10.65% total return, while global government bonds, as measured by the FTSE World Government Bond Index (USD), posted a -2.76% total return.¹

We are committed to our long-term perspective and disciplined investment approach as we continue to conduct a rigorous analysis of Fund subadvisors and markets with a strong emphasis on investment risk management.

We believe active, professional investment management serves investors well. We also recognize the important role of

financial professionals in today’s markets and encourage investors to continue to seek their advice. Amid changing markets and economic conditions, we are confident investors with a well-diversified portfolio and a patient, long-term outlook should be well-positioned for the years ahead.

On the following pages, the Fund’s portfolio management team reviews investment decisions that pertain to performance during the past six months in light of the economic environment and other factors. Please remember all securities markets fluctuate, as do mutual fund share prices.

We thank you for investing with Franklin Templeton, welcome your questions and comments, and look forward to continuing to serve your investment needs in the future.

Sincerely,

Brooks Ritchey

President and Chief Executive Officer –

Investment Management

Franklin Alternative Strategies Funds

This letter reflects our analysis and opinions as of November 30, 2021, unless otherwise indicated. The information is not a complete analysis of every aspect of any market, country, industry, security or fund. Statements of fact are from sources considered reliable.

1. Source: Morningstar.

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

Not FDIC Insured | May Lose Value | No Bank Guarantee

franklintempleton.com Semiannual Report 1

Contents
Semiannual Report
Franklin K2 Alternative Strategies Fund	3
Performance Summary	7
Your Fund’s Expenses	9
Consolidated Financial Highlights and Consolidated Statement of Investments	10
Consolidated Financial Statements	83
Notes to Consolidated Financial Statements	87
Shareholder Information	105

Visit franklintempleton.com for fund updates, to access your account, or to find helpful financial planning tools.

2 Semiannual Report franklintempleton.com

SEMIANNUAL REPORT

Franklin K2 Alternative Strategies Fund

This semiannual report for Franklin K2 Alternative Strategies Fund covers the period ended November 30, 2021.

Your Fund’s Goal and Main Investments

The Fund seeks capital appreciation with lower volatility relative to the broad equity markets. The Fund seeks to achieve its investment goal by allocating its assets across multiple non-traditional or alternative strategies, including, but not limited to, some or all of the following strategies: long short equity, relative value, event driven and global macro. The Fund is structured as a multi-manager fund, meaning the Fund’s assets are managed by multiple subadvisors, and the Fund’s investment manager has overall responsibility for the Fund’s investments. The investment manager principally allocates the Fund’s assets among multiple subadvisors who are implementing one or more non-traditional or alternative investment strategies. The Fund may invest in a wide range of securities and other investments including, but not limited to: equity securities, including common stocks, preferred stocks, convertible securities, rights and warrants, private and registered investment vehicles and exchange-traded funds (ETFs); debt securities, including bonds, notes, debentures, banker’s acceptances and commercial paper; loans and loan participations; and mortgage-backed or asset-backed securities, including collateralized debt obligations; as well as derivatives, commodities and currencies.

Performance Overview

The Fund’s Class A shares posted a +0.32% cumulative total return for the six months under review. For comparison, the Fund’s primary benchmark, the HFRX Global Hedge Fund Index, which is designed to be representative of the overall composition of the hedge fund universe, posted a -0.17% cumulative total return for the same period.¹ Also for comparison, the Fund’s secondary benchmark, the ICE BofA U.S. 3-Month Treasury Bill Index, which tracks the performance of short-term U.S. government securities with a remaining term to final maturity of less than three months, posted a +0.01%

cumulative total return for the same period.² You can find more of the Fund’s performance data in the Performance Summary beginning on page 7.

Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.

Economic and Market Overview

Global developed and emerging market equities, as measured by the MSCI All Country World Index (USD), posted a +3.03% total return for the six months ended November 30, 2021.² Global equities benefited from the continued progress of vaccination programs for COVID-19, solid economic growth and a rebound in global trade. However, the Chinese government’s imposition of additional restrictions on some businesses pressured Asian and global emerging market stocks. The combination of increased consumer demand and persistent supply-chain disruptions contributed to higher inflation in many countries. Additionally, the spread of the highly contagious Delta variant pressured global stocks, and the emergence of the Omicron variant late in the six-month period injected further uncertainty into equity markets.

In the U.S., the economy continued to recover amid declining unemployment, solid wage growth and high business confidence. Gross domestic product (GDP) growth continued, as strong consumer spending supported the economy. A rebound in corporate earnings and the passage of a bipartisan infrastructure bill further bolstered investor sentiment. The U.S. Federal Reserve (Fed) kept the federal funds target rate at a record-low range of 0.00%–0.25% and continued its program of open-ended U.S. Treasury and mortgage bond purchases to help keep markets functioning. However, in its November 2021 meeting statement, the Fed detailed plans to reduce its purchases of U.S. Treasury and mortgage-backed securities beginning in November. The Fed also noted that it

1. Source: FactSet. Hedge Fund Research, Inc. – www.hedgefundresearch.com. The HFRX Global Hedge Fund Index is being used under license from Hedge Fund Research, Inc., which does not endorse or approve of any of the contents of this report.

2. Source: Morningstar.

The indexes are unmanaged and include reinvestment of any income or distributions. They do not reflect any fees, expenses or sales charges. One cannot invest directly in an index, and an index is not representative of the Fund’s portfolio. Unlike most asset class indexes, HFR Index returns reflect fees and expenses.

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

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Consolidated Statement of Investments (SOI). The Consolidated SOI begins on page 15.

franklintempleton.com Semiannual Report 3

FRANKLIN K2 ALTERNATIVE STRATEGIES FUND

views inflation as partially transitory, and that further employment progress was needed before the Fed would consider raising the range for the federal funds target rate.

The eurozone economy showed signs of recovery, as quarter-over-quarter GDP increased in the second and third quarters of 2021 after contracting for the previous two quarters. Most of the eurozone’s largest economies posted solid growth rates, as increased vaccination rates helped consumer activity return to pre-pandemic levels. Strong corporate earnings growth also helped European developed market equities. However, in November 2021, the annual inflation rate in the eurozone reached the highest level since 1997, two years before the introduction of the euro, and the prospect of energy shortages as winter approached tempered investor optimism. Consequently, European developed market equities, as measured by the MSCI Europe Index (USD), posted a -3.58% total return for the six months under review.²

Asian developed and emerging market equities, as measured by the MSCI All Country Asia Index (USD), posted a -8.18% total return for the six-month period.² Although China’s economy continued to grow, it was pressured by higher commodity prices, increased fuel costs and production disruption caused by government-mandated suspensions of power use. Asian equity markets experienced heightened volatility due to inflation concerns and rising COVID-19 infection rates in some countries. Unexpected regulatory changes by the Chinese government, which negatively impacted education- and technology-related businesses, and concerns about a Chinese large property developer’s solvency further pressured Asian stocks during the six-month period.

Global emerging market stocks, as measured by the MSCI Emerging Markets Index (USD), posted a -10.65% total return for the six months under review.² Higher COVID-19 cases in some countries, limited vaccine rollouts and concerns about rising interest rates and elevated inflation dampened investor enthusiasm in global emerging market equities. Interest-rate increases by several central banks, including Brazil, Russia and Mexico, to counter inflation raised investor concerns about a slowdown in economic growth.

Investment Strategy

We manage the Fund using a multi-manager approach. While we have overall responsibility for the Fund’s investments, we principally allocate assets to multiple subadvisors, each of whom independently manages a separate portion of the Fund’s portfolio in accordance with some or all of the following strategies: long short equity, relative value, event driven and global macro. We allocate the Fund’s assets

among these strategies utilizing a top-down approach, generating the Fund’s strategy weightings by taking into account market conditions, risk factors, diversification, liquidity, transparency, and availability of various subadvisors and other investment options, among other things. We allocate the Fund’s assets to specific subadvisors utilizing a bottom-up approach, selecting subadvisors and their weighting within the Fund’s portfolio by taking into account their correlations to various markets and to each other, their risk profiles and their return expectations. Long short equity strategies generally seek to produce returns from investments in the equity markets by taking long and short positions in stocks and stock indexes (through the use of derivatives or through a position in an ETF). Relative value strategies encompass a wide range of investment techniques that are intended to profit from pricing inefficiencies. Event driven strategies generally invest in securities of companies undergoing significant corporate events. Global macro strategies generally focus on macroeconomic opportunities across numerous markets and investments. In addition, the debt securities in which the Fund may invest may have variable or fixed interest rates, may be of any maturity or credit rating, and may include sovereign debt, high yield (“junk”) bonds and distressed debt securities (securities of companies that are, or are about to be, involved in reorganizations, financial restructurings, or bankruptcy) and securities that are in default.

The Fund may take long and/or short positions in a wide range of asset classes, including equities, fixed income, commodities and currencies, among others. Long positions benefit from an increase in the price of the underlying instrument or asset class, while short positions benefit from a decrease in that price. The Fund may use derivatives for hedging and non-hedging (investment) purposes, although no subadvisor is required to hedge any of the Fund’s positions or to use derivatives. Such derivative investments may include futures contracts, swaps, options and currency forward contracts. As a result of the Fund’s use of derivatives, the Fund may have economic leverage, which means the sum of the Fund’s investment exposures through its use of derivatives may significantly exceed the amount of assets invested in the Fund, although these exposures may vary over time. The Fund may engage in active and frequent trading as part of its investment strategies.

4 Semiannual Report franklintempleton.com

FRANKLIN K2 ALTERNATIVE STRATEGIES FUND

Strategy Allocation*
Based on Total Net Assets as of 11/30/21
Strategy	Long Positions		Short Positions
Event Driven		16.1%		-8.0%
Global Macro		35.1%		-37.9%
Long Short Equity		34.8%		-20.4%
Relative Value		27.8%		-9.7%
Total		113.8%		-76.0%

*Figures include the effect of gross notional exposure of derivatives.

Subadvisors

11/30/21

Long Short Equity

Chilton Investment Company, LLC

Electron Capital Partners, LLC

Jennison Associates, LLC

Portland Hill Asset Management Limited

Wellington Management Company, LLP

Relative Value    

Apollo Credit Management LLC

Benefit Street Partners, L.L.C.

Ellington Global Asset Management, LLC

Lazard Asset Management, LLC

Loomis Sayles & Company, L.P.

One River Asset Management, LLC

Event Driven    

Bardin Hill Arbitrage IC Management LP

P. Schoenfeld Asset Management L.P.

Global Macro    

BlueBay Asset Management LLP

Emso Asset Management Limited

Graham Capital Management, L.P.

RV Capital Management Private Ltd

Manager’s Discussion

Three of the Fund’s four underlying strategies in which assets were allocated contributed to the Fund’s positive performance for the six-month period—in order of contribution, long short equity, relative value and event driven. The global macro strategy detracted from the Fund’s performance. Meanwhile, 10 of the Fund’s 17 subadvisors delivered absolute gains. The conditional risk overlay (CRO) was not implemented during the period. The allocation percentages for each strategy are listed in the Strategy Allocation table on this page. The subadvisors with assets allocated at period-end are also listed in the Subadvisors table on this page.

We implemented a position in new relative value subadvisor Benefit Street Partners, or BSP, in September 2021. The subadvisor pursues an active high-yield-bond trading strategy with an opportunistic hedge and fits with our overall favorable outlook for more active strategies in the current environment.

Chilton Investment, Electron Capital Partners, Jennison Associates, Portland Hill Asset Management and Wellington Management were the Fund’s long short equity strategy subadvisors during the period. Chilton, Wellington and Electron were leading overall positive contributors, while Portland Hill was a significant detractor. Positive performance was driven by the strategy’s equity exposure. Currency positioning also contributed positively. In terms of sectors, information technology, industrials and utilities were leading positive contributors to returns, followed by currency hedges. In contrast, equity index hedges hindered returns.

Apollo Credit Management, Benefit Street Partners, Ellington Global Asset Management, Lazard Asset Management, Loomis Sayles & Company and One River Asset Management were the Fund’s relative value strategy subadvisors during the period. Lazard and Ellington were responsible for the bulk of positive contribution, benefiting from a corporate fixed income health care sector allocation and currency positioning (Lazard) as well as asset-backed securities and mortgage securities (Ellington) exposures. Strategy gains were partially offset by detraction from interest-rate weightings. On a sector level, currency, information technology and health care exposures were leading positive contributors. Utilities also contributed meaningfully. In contrast, short exposure to U.S. government bonds negatively affected returns. During the reporting period, no Fund assets were allocated to Brigade Capital Management or Elementum Advisors, two other relative value subadvisors.

Bardin Hill Arbitrage IC Management and P. Schoenfeld Asset Management (PSAM) represented the event driven strategy. Both subadvisors benefited performance, bolstered by long equity positioning and currency hedges, with credit exposures adding to performance modestly. The idiosyncratic nature of performance drivers helped to partially isolate the strategy during periods of broader equity market weakness. Bardin Hill’s long equity position in an American technology company was a key positive contributor, with shares moving higher after the company reported better-than-expected revenue and earnings. PSAM’s long position in a global rental car company also bolstered returns, gaining in the wake of the company’s announcement that it ordered 100,000 electric vehicles for purchase by the end of 2022.

franklintempleton.com Semiannual Report 5

FRANKLIN K2 ALTERNATIVE STRATEGIES FUND

BlueBay Asset Management, Emso Asset Management, Graham Capital Management and RV Capital Management were the global macro strategy subadvisors. RV Capital positively contributed to performance, while negative performance from BlueBay, Graham and Emso more than offset RV Capital’s positive contribution during the period. Interest-rate exposure was a notable detractor, due to bond futures and emerging market government bonds. Commodities and credit positioning slightly bolstered returns. On a sector level, long exposure to emerging market government bonds and real estate (credit) and equity index hedges hindered returns, partially offset by long exposure to financials.

During the six-month period, in addition to adding BSP as a new subadvisor within the relative value strategy, the team increased allocations to global macro subadvisor BlueBay; long short equity subadvisors Chilton, Portland Hill, and Electron; and relative value subadvisors One River and Lazard. An additional allocation was also made to event driven subadvisor PSAM. Exposure was reduced to global macro subadvisors Graham and Emso.

Thank you for your participation in Franklin K2 Alternative Strategies Fund. We look forward to continuing to serve your investment needs.

Brooks Ritchey

Co-Lead Portfolio Manager

Robert Christian

Co-Lead Portfolio Manager

Anthony Zanolla, CFA

Portfolio Manager

The foregoing information reflects our analysis, opinions and portfolio holdings as of November 30, 2021, 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.

6 Semiannual Report franklintempleton.com

FRANKLIN K2 ALTERNATIVE STRATEGIES FUND

Performance Summary as of November 30, 2021

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. Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses of each class. Capital gain distributions are net profits realized from the sale of portfolio securities.

Performance as of 11/30/21¹

Cumulative total return excludes sales charges. Average annual total return includes maximum sales charges. Sales charges will vary depending on the size of the investment and the class of share purchased. The maximum is 5.50% and the minimum is 0%. Class A: 5.50% maximum initial sales charge; Advisor Class: no sales charges. For other share classes, visit franklintempleton.com.

Share Class	Cumulative Total Return2		Average Annual Total Return3
A4
6-Month		+0.32%		-5.23%
1-Year		+4.48%		-1.25%
5-Year		+22.86%		+3.02%
Since Inception (10/11/13)		+35.63%		+3.10%
Advisor
6-Month		+0.40%		+0.40%
1-Year		+4.71%		+4.71%
5-Year		+24.39%		+4.46%
Since Inception (10/11/13)		+38.46%		+4.08%

Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.

See page 8 for Performance Summary footnotes.

franklintempleton.com Semiannual Report 7

FRANKLIN K2 ALTERNATIVE STRATEGIES FUND

PERFORMANCE SUMMARY

Total Annual Operating Expenses5
Share Class	With Fee Waiver		Without Fee Waiver
A		2.66%		2.87%
Advisor		2.41%		2.62%

Each class of shares is available to certain eligible investors and has different annual fees and expenses, as described in the prospectus.

All investments involve risks, including possible loss of principal. The market values of securities owned by the Fund will go up or down, sometimes rapidly or unpredictably. The Fund’s performance depends on the manager’s skill in selecting, overseeing and allocating Fund assets to the subadvisors. The Fund is actively managed and could experience losses if the investment manager’s and subadvisors’ judgment about particular investments made for the Fund’s portfolio prove to be incorrect. Some subadvisors may have little or no experience managing the assets of a registered investment company. Foreign investments are subject to greater investment risk such as political, economic, credit and information risks as well as risk of currency fluctuations. Investments in derivatives involve costs and create economic leverage, which may result in significant volatility and cause the Fund to participate in losses (as well as gains) that significantly exceed the Fund’s initial investment. Lower-rated or high-yield debt securities involve greater credit risk, including the possibility of default or bankruptcy. Currency management strategies could result in losses to the Fund if currencies do not perform as the investment manager or subadvisor expects. The Fund may make short sales of securities, which involves the risk that losses may exceed the original amount invested. Merger arbitrage investments risk loss if a proposed reorganization in which the Fund invests is renegotiated or terminated. Liquidity risk exists when securities have become more difficult to sell, or are unable to be sold, at the price at which they have been valued. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a description of the main investment risks.

1. The Fund has an expense reduction contractually guaranteed through 9/30/22 and a fee waiver related to the management fee paid by a subsidiary. Fund investment results reflect the expense reduction and fee waiver; without these reductions, the results would have been lower.

2. Cumulative total return represents the change in value of an investment over the periods indicated.

3. Average annual total return represents the average annual change in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.

4. Prior to 9/10/18, these shares were offered at a higher initial sales charge of 5.75%, thus actual returns (with sales charges) would have differed. Average annual total returns (with sales charges) have been restated to reflect the current maximum initial sales charge of 5.50%.

5. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Consolidated Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.

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

8 Semiannual Report franklintempleton.com

FRANKLIN K2 ALTERNATIVE STRATEGIES FUND

Your Fund’s Expenses

As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including sales charges (loads) on Fund purchases and redemptions; and (2) ongoing Fund costs, including management fees, distribution and service (12b-1) fees, and other Fund expenses. All mutual funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other mutual funds. The table assumes a $1,000 investment held for the six months indicated.

Actual Fund Expenses

The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value” for each class of shares. You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row for your class of shares under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 x $7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.

Hypothetical Example for Comparison with Other Funds

Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example for the class of shares you hold with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.

			Actual (actual return after expenses)				Hypothetical (5% annual return before expenses)
Share Class	Beginning Account Value 6/1/21		Ending Account Value 11/30/21		Expenses Paid During Period 6/1/21–11/30/211,2		Ending Account Value 11/30/21		Expenses Paid During Period 6/1/21–11/30/211,2		Net Annualized Expense Ratio2
A	$	1,000	$	1,003.20	$	12.81	$	1,012.28	$	12.86		2.55	%
C	$	1,000	$	999.20	$	16.54	$	1,008.52	$	16.62		3.30	%
R	$	1,000	$	1,002.40	$	14.06	$	1,011.03	$	14.12		2.80	%
R6	$	1,000	$	1,004.80	$	11.26	$	1,013.84	$	11.31		2.24	%
Advisor	$	1,000	$	1,004.00	$	11.55	$	1,013.54	$	11.61		2.30	%

1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/365 to reflect the one-half year period.

2. Reflects expenses after fee waivers and expense reimbursements. Does not include acquired fund fees and expenses.

franklintempleton.com Semiannual Report 9

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

Consolidated Financial Highlights

Franklin K2 Alternative Strategies Fund

	Six Months Ended November 30, 2021 (unaudited)			Year Ended May 31,
				2021			2020			2019			2018			2017
Class A
Per share operating performance (for a share outstanding throughout the period)
Net asset value, beginning of period		$12.46			$11.19			$11.28			$11.38			$11.14			$10.55
Income from investment operationsa:
Net investment income (loss)b		(0.04	)		(0.08	)		(0.03	)		0.04			0.01			0.03
Net realized and unrealized gains (losses)		0.08			1.45			0.02			0.11			0.38			0.61
Total from investment operations		0.04			1.37			(0.01	)		0.15			0.39			0.64
Less distributions from:
Net investment income		—			—			(0.07	)		—			(0.15	)		(0.05	)
Net realized gains		—			(0.10	)		(0.01	)		(0.25	)		—			—
Total distributions		—			(0.10	)		(0.08	)		(0.25	)		(0.15	)		(0.05	)
Net asset value, end of period	$	12.50		$	12.46		$	11.19		$	11.28		$	11.38		$	11.14
Total returnc		0.32%			12.25%			(0.15)%			1.35%			3.57%			6.07%
Ratios to average net assetsd
Expenses before waiver, payments by affiliates and expense reductione		2.71%			2.82%			2.58%			2.73%			2.81%			3.07%
Expenses net of waiver, payments by affiliates and expense reductione		2.55%	f		2.64%			2.40%			2.56%			2.59%			2.73%
Expenses incurred in connection with securities sold short		0.36%			0.44%			0.20%			0.36%			0.39%			0.53%
Net investment income (loss)		(0.59)%			(0.67)%			(0.25)%			0.36%			0.06%			0.10%
Supplemental data
Net assets, end of period (000’s)		$104,373			$102,138			$90,205			$104,452			$119,214			$119,385
Portfolio turnover rate		77.08%			236.64%			271.51%			235.47%			234.77%			209.45%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Consolidated Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year.

^dRatios are annualized for periods less than one year.

^eIncludes dividend and/or interest expense on securities sold short and security borrowing fees, if any. See below for the ratios of such expenses to average net assets for the periods presented. See Note 1(i).

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

10 Semiannual Report    |   The accompanying notes are an integral part of these consolidated financial statements. franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED FINANCIAL HIGHLIGHTS

Franklin K2 Alternative Strategies Fund (continued)

	Six Months Ended November 30, 2021 (unaudited)			Year Ended May 31,
				2021			2020			2019			2018			2017
Class C
Per share operating performance (for a share outstanding throughout the period)
Net asset value, beginning of period	$	12.11		$	10.95		$	11.05		$	11.25		$	11.00		$	10.45
Income from investment operationsa:
Net investment income (loss)b		(0.08	)		(0.15	)		(0.11	)		(0.05	)		(0.08	)		(0.04	)
Net realized and unrealized gains (losses)		0.07			1.41			0.02			0.10			0.39			0.59
Total from investment operations		(0.01	)		1.26			(0.09	)		0.05			0.31			0.55
Less distributions from:
Net investment income		—			—			—			—			(0.06	)		—
Net realized gains		—			(0.10	)		(0.01	)		(0.25	)		—			—
Total distributions		—			(0.10	)		(0.01	)		(0.25	)		(0.06	)		—
Net asset value, end of period	$	12.10		$	12.11		$	10.95		$	11.05		$	11.25		$	11.00
Total returnc		(0.08)%			11.51%			(0.85)%			0.56%			2.82%			5.26%
Ratios to average net assetsd
Expenses before waiver, payments by affiliates and expense reductione		3.46%			3.54%			3.33%			3.48%			3.56%			3.79%
Expenses net of waiver, payments by affiliates and expense reductione		3.30%	f		3.36%			3.15%			3.31%			3.34%			3.45%
Expenses incurred in connection with securities sold short		0.36%			0.44%			0.20%			0.36%			0.39%			0.53%
Net investment income (loss)		(1.34)%			(1.39)%			(1.00)%			(0.39)%			(0.69)%			(0.62)%
Supplemental data
Net assets, end of period (000’s)		$29,196			$31,541			$36,043			$44,897			$53,196			$55,496
Portfolio turnover rate		77.08%			236.64%			271.51%			235.47%			234.77%			209.45%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Consolidated Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year.

^dRatios are annualized for periods less than one year.

^eIncludes dividend and/or interest expense on securities sold short and security borrowing fees, if any. See below for the ratios of such expenses to average net assets for the periods presented. See Note 1(i).

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

franklintempleton.com The accompanying notes are an integral part of these consolidated financial statements.    |   Semiannual Report 11

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED FINANCIAL HIGHLIGHTS

Franklin K2 Alternative Strategies Fund (continued)

	Six Months Ended November 30, 2021 (unaudited)			Year Ended May 31,
				2021			2020			2019			2018			2017
Class R
Per share operating performance (for a share outstanding throughout the period)
Net asset value, beginning of period	$	12.44		$	11.20		$	11.28		$	11.42		$	11.17		$	10.61
Income from investment operationsa:
Net investment income (loss)b		(0.05	)		(0.11	)		(0.06	)		0.02			(0.02	)		(0.25	)
Net realized and unrealized gains (losses)		0.08			1.45			0.02			0.09			0.39			0.86
Total from investment operations		0.03			1.34			(0.04	)		0.11			0.37			0.61
Less distributions from:
Net investment income		—			—			(0.03	)		—			(0.12	)		(0.05	)
Net realized gains		—			(0.10	)		(0.01	)		(0.25	)		—			—
Total distributions		—			(0.10	)		(0.04	)		(0.25	)		(0.12	)		(0.05	)
Net asset value, end of period	$	12.47		$	12.44		$	11.20		$	11.28		$	11.42		$	11.17
Total returnc		0.24%			11.97%			(0.39)%			1.08%			3.28%			5.79%
Ratios to average net assetsd
Expenses before waiver, payments by affiliates and expense reductione		2.96%			3.06%			2.83%			2.98%			3.06%			3.32%
Expenses net of waiver, payments by affiliates and expense reductione		2.80%	f		2.88%			2.65%			2.81%			2.84%			2.98%
Expenses incurred in connection with securities sold short		0.36%			0.44%			0.20%			0.36%			0.39%			0.53%
Net investment income (loss)		(0.84)%			(0.91)%			(0.50)%			0.11%			(0.19)%			(0.15)%
Supplemental data
Net assets, end of period (000’s)		$1,139			$840			$884			$844			$648			$597
Portfolio turnover rate		77.08%			236.64%			271.51%			235.47%			234.77%			209.45%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Consolidated Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

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

^dRatios are annualized for periods less than one year.

^eIncludes dividend and/or interest expense on securities sold short and security borrowing fees, if any. See below for the ratios of such expenses to average net assets for the periods presented. See Note 1(i).

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

12 Semiannual Report    |   The accompanying notes are an integral part of these consolidated financial statements. franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED FINANCIAL HIGHLIGHTS

Franklin K2 Alternative Strategies Fund (continued)

	Six Months Ended November 30, 2021 (unaudited)			Year Ended May 31,
				2021			2020			2019			2018			2017
Class R6
Per share operating performance (for a share outstanding throughout the period)
Net asset value, beginning of period	$	12.58		$	11.25		$	11.34		$	11.41		$	11.17		$	10.59
Income from investment operationsa:
Net investment income (loss)b		(0.02	)		(0.04	)		0.01			0.08			0.03			0.02
Net realized and unrealized gains (losses)		0.08			1.47			0.02			0.10			0.40			0.65
Total from investment operations		0.06			1.43			0.03			0.18			0.43			0.67
Less distributions from:
Net investment income		—			—			(0.11	)		—			(0.19	)		(0.09	)
Net realized gains		—			(0.10	)		(0.01	)		(0.25	)		—			—
Total distributions		—			(0.10	)		(0.12	)		(0.25	)		(0.19	)		(0.09	)
Net asset value, end of period	$	12.64		$	12.58		$	11.25		$	11.34		$	11.41		$	11.17
Total returnc		0.48%			12.61%			0.27%			1.70%			3.83%			6.40%
Ratios to average net assetsd
Expenses before waiver, payments by affiliates and expense reductione		2.40%			2.50%			2.26%			2.41%			2.46%			2.73%
Expenses net of waiver, payments by affiliates and expense reductione		2.24%	f		2.32%			2.07%			2.23%			2.24%			2.39%
Expenses incurred in connection with securities sold short		0.37%			0.44%			0.20%			0.36%			0.39%			0.53%
Net investment income (loss)		(0.28)%			(0.35)%			0.08%			0.69%			0.41%			0.44%
Supplemental data
Net assets, end of period (000’s)		$53,365			$27,471			$15,537			$42,842			$31,805			$265,247
Portfolio turnover rate		77.08%			236.64%			271.51%			235.47%			234.77%			209.45%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Consolidated Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

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

^dRatios are annualized for periods less than one year.

^eIncludes dividend and/or interest expense on securities sold short and security borrowing fees, if any. See below for the ratios of such expenses to average net assets for the periods presented. See Note 1(i).

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

franklintempleton.com The accompanying notes are an integral part of these consolidated financial statements.    |   Semiannual Report 13

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED FINANCIAL HIGHLIGHTS

Franklin K2 Alternative Strategies Fund (continued)

	Six Months Ended November 30, 2021 (unaudited)			Year Ended May 31,
				2021			2020			2019			2018			2017
Advisor Class
Per share operating performance (for a share outstanding throughout the period)
Net asset value, beginning of period	$	12.55		$	11.23		$	11.33		$	11.40		$	11.16		$	10.58
Income from investment operationsa:
Net investment income (loss)b		(0.02	)		(0.05	)		—	c		0.07			0.04			0.04
Net realized and unrealized gains (losses)		0.07			1.47			0.01			0.11			0.38			0.62
Total from investment operations		0.05			1.42			0.01			0.18			0.42			0.66
Less distributions from:
Net investment income		—			—			(0.10	)		—			(0.18	)		(0.08	)
Net realized gains		—			(0.10	)		(0.01	)		(0.25	)		—			—
Total distributions		—			(0.10	)		(0.11	)		(0.25	)		(0.18	)		(0.08	)
Net asset value, end of period	$	12.60		$	12.55		$	11.23		$	11.33		$	11.40		$	11.16
Total returnd		0.40%			12.55%			0.19%			1.61%			3.75%			6.29%
Ratios to average net assetse
Expenses before waiver, payments by affiliates and expense reductionf		2.46%			2.57%			2.33%			2.48%			2.56%			2.82%
Expenses net of waiver, payments by affiliates and expense reductionf		2.30%	g		2.39%			2.15%			2.31%			2.34%			2.48%
Expenses incurred in connection with securities sold short		0.36%			0.44%			0.20%			0.36%			0.39%			0.53%
Net investment income (loss)		(0.34)%			(0.42)%			—	h		0.61%			0.31%			0.35%
Supplemental data
Net assets, end of period (000’s)		$1,245,036			$1,152,105			$977,094			$1,046,252			$896,278			$674,828
Portfolio turnover rate		77.08%			236.64%			271.51%			235.47%			234.77%			209.45%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Consolidated Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cAmount rounds to less than $0.01.

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

^eRatios are annualized for periods less than one year.

^fIncludes dividend and/or interest expense on securities sold short and security borrowing fees, if any. See below for the ratios of such expenses to average net assets for the periods presented. See Note 1(i).

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

^hAmount rounds to less than 0.01%.

14 Semiannual Report    |   The accompanying notes are an integral part of these consolidated financial statements. franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

Consolidated Statement of Investments, November 30, 2021 (unaudited)

Franklin K2 Alternative Strategies Fund

		Country		Shares/ Warrants/ Rights		Value
	Common Stocks and Other Equity Interests 41.7%
	Aerospace & Defense 0.1%
a	Bombardier Inc., A		Canada		49,428	$	68,486
a	Bombardier Inc., B		Canada		1,042,990		1,412,480
							1,480,966
	Air Freight & Logistics 0.3%
	Expeditors International of Washington Inc.		United States		1,117		135,850
a	GXO Logistics Inc.		United States		17,210		1,653,020
	United Parcel Service Inc., B		United States		342		67,843
a	XPO Logistics Inc.		United States		37,296		2,701,722
							4,558,435
	Airlines 0.1%
a,b	Controladora Vuela Cia de Aviacion SAB de CV, ADR		Mexico		30,418		450,795
a	Japan Airlines Co. Ltd.		Japan		27,791		500,963
							951,758
	Automobiles 0.1%
a,f	Arrival SA		Luxembourg		71,867		674,831
a	General Motors Co.		United States		8,800		509,256
							1,184,087
	Banks 0.1%
	Banco Santander Mexico SA Institucion de Banca Multiple Grupo Financiero Santand, ADR		Mexico		693,005		886,644
	Barclays PLC		United Kingdom		108,406		264,692
c	Citigroup Inc.		United States		894		56,948
c	JPMorgan Chase & Co.		United States		411		65,279
c	Wells Fargo & Co.		United States		1,455		69,520
							1,343,083
	Beverages 0.4%
	The Coca-Cola Co.		United States		4,092		214,625
	Davide Campari-Milano NV		Italy		279,710		4,076,953
d	Nongfu Spring Co. Ltd., H, 144A		China		3,790		21,750
	PepsiCo Inc.		United States		397		63,433
	Primo Water Corp.		United States		110,251		1,832,371
	Tsingtao Brewery Co. Ltd., H		China		2,000		16,167
							6,225,299
	Biotechnology 1.5%
b	AbbVie Inc.		United States		20,807		2,398,631
a,e,f	Alder Biopharmaceuticals Inc., Contingent Value, rts., 12/31/24		United States		50,624		44,549
a	Allakos Inc.		United States		3,561		279,004
a	Amicus Therapeutics Inc.		United States		51,566		552,272
a,b	Apellis Pharmaceuticals Inc.		United States		28,759		1,210,179
a	Argenx SE, ADR		Netherlands		4,046		1,129,684
a	BioMarin Pharmaceutical Inc.		United States		10,900		940,561
a,b	BioNTech SE, ADR		Germany		3,719		1,308,121
a,b	Blueprint Medicines Corp.		United States		8,030		772,486
a	CRISPR Therapeutics AG		Switzerland		8,743		698,566
a	CytoDyn Inc.		United States		2,742		3,428
a	Denali Therapeutics Inc.		United States		4,940		228,524
a	Dicerna Pharmaceuticals Inc.		United States		12,087		459,427
a	Genetron Holdings Ltd., ADR		China		17,200		155,488
a	I-Mab, ADR		China		3,466		209,554
a,b	Intellia Therapeutics Inc.		United States		14,214		1,634,752

franklintempleton.com Semiannual Report 15

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Shares/ Warrants/ Rights		Value
	Common Stocks and Other Equity Interests (continued)
	Biotechnology (continued)
a,f	Karuna Therapeutics Inc.		United States		1,897	$	242,626
a	Karyopharm Therapeutics Inc.		United States		1,000		6,950
a	Kymera Therapeutics Inc.		United States		4,162		231,074
a	Mirati Therapeutics Inc.		United States		5,301		725,018
a,f	Monte Rosa Therapeutics Inc.		United States		6,745		130,786
a	Natera Inc.		United States		13,824		1,264,343
a	Nurix Therapeutics Inc.		United States		7,354		211,942
a	ORIC Pharmaceuticals Inc.		United States		10,440		144,490
a	PMV Pharmaceuticals Inc.		United States		7,999		173,978
a	Praxis Precision Medicines Inc.		United States		4,250		72,717
a	ProQR Therapeutics NV		Netherlands		37,313		263,430
a	Sarepta Therapeutics Inc.		United States		6,244		504,578
a	Seagen Inc.		United States		8,201		1,312,160
a	SpringWorks Therapeutics Inc.		United States		10,600		761,610
a	Swedish Orphan Biovitrum AB		Sweden		51,864		1,265,311
a	Vertex Pharmaceuticals Inc.		United States		9,090		1,699,285
a,f	Verve Therapeutics Inc.		United States		8,505		289,850
a	Zai Lab Ltd., ADR		China		7,846		543,335
							21,868,709
	Building Products 0.1%
	Carrier Global Corp.		United States		30,251		1,637,184
	Owens Corning		United States		392		33,257
							1,670,441
	Capital Markets 0.6%
d	Amundi SA, 144A		France		26,558		2,209,445
d	Anima Holding SpA, 144A		Italy		102,616		483,013
c	The Blackstone Group Inc., A		United States		569		80,485
a,b	Capstar Special Purpose Acquisition Corp., A		United States		10,190		101,391
a	Capstar Special Purpose Acquisition Corp., A, 7/9/27, wts.		United States		6,891		7,580
a	Coinbase Global Inc., A		United States		5,320		1,675,800
a,b	E.Merge Technology Acquisition Corp., A		United States		6,534		64,229
c	The Goldman Sachs Group Inc.		United States		160		60,958
b	Moody’s Corp.		United States		9,381		3,664,594
c	Morgan Stanley		United States		202		19,154
a,f	SCVX Corp., A		United States		6,585		65,718
							8,432,367
	Chemicals 1.1%
a	Ferro Corp.		United States		129,107		2,726,740
	Huntsman Corp.		United States		2,298		72,824
b	International Flavors & Fragrances Inc.		United States		7,575		1,076,938
a,c	Kraton Corp.		United States		8,000		368,480
	LyondellBasell Industries NV, A		United States		664		57,854
b	The Sherwin-Williams Co.		United States		32,164		10,654,003
	Sociedad Quimica y Minera de Chile SA, ADR		Chile		17,133		1,066,700
a	Tronox Holdings PLC		United States		13,536		297,657
							16,321,196
	Commercial Services & Supplies 1.0%
a	468 SPAC I SE, A, 4/30/26, wts.		Germany		41,605		117,960
a	7GC & Co. Holdings Inc., A, 12/31/26, wts.		United States		3,244		2,531
a,b	Atlas Crest Investment Corp. II, A		United States		20,011		195,708
a	Atlas Crest Investment Corp. II, A, 2/28/26, wts.		United States		8,969		9,328
a,b	CIIG Capital Partners II Inc.		United States		10,448		107,092

16 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Shares/ Warrants/ Rights		Value
	Common Stocks and Other Equity Interests (continued)
	Commercial Services & Supplies (continued)
	Cintas Corp.		United States		13,912	$	5,873,507
a,b	Class Acceleration Corp., A		United States		13,473		131,497
a	Class Acceleration Corp., A, 3/31/28, wts.		United States		4,133		2,521
a	CM Life Sciences III Inc.		United States		8,817		91,520
a,b	CM Life Sciences III Inc., A		United States		13,400		133,464
a	Digital Transformation Opportunities Corp.		United States		39,182		388,490
a,b	dMY Technology Group Inc. IV, A		United States		4,695		46,950
a	dMY Technology Group Inc. IV, A, 12/31/27, wts.		United States		13,565		46,121
a,b	dMY Technology Group Inc. VI		United States		26,930		292,460
a	Executive Network Partnering Corp., A		United States		19,832		195,147
a	Executive Network Partnering Corp., A, 9/25/28, wts.		United States		2,901		2,047
a,b	Gores Guggenheim Inc., A		United States		205		2,759
a	Gores Metropoulos II Inc.		United States		110		1,137
a,f	Gores Metropoulos II Inc., A		United States		509		5,054
a	Gores Metropoulos II Inc., A, 1/31/28, wts.		United States		4,212		8,003
a,b	Gores Technology Partners II Inc.		United States		12,807		130,311
a	Gores Technology Partners II Inc., A		United States		3,133		30,923
a,b	Gores Technology Partners Inc.		United States		11,237		113,887
a	Hedosophia European Growth		United Kingdom		35,835		407,598
a	Hedosophia European Growth, 5/13/27, wts.		United Kingdom		11,638		10,229
	Iron Spark I Inc., A		United States		5,353		53,798
a	Juniper II Corp.		United States		11,402		115,502
a	Kins Technology Group Inc., A, 12/31/25, wts.		United States		1,892		1,230
a	Landcadia Holdings IV Inc.		United States		4,686		47,446
a	Northern Star Investment Corp. II, A, 1/31/28, wts.		United States		4,249		4,674
a,b	Novus Capital Corp. II, A		United States		19,008		189,700
a	Novus Capital Corp. II, A, 12/31/27, wts.		United States		6,336		8,237
a	One Equity Partners Open Water I Corp., A		United States		2,269		22,123
a	One Equity Partners Open Water I Corp., A, 12/31/27, wts.		United States		2,933		1,994
b	Republic Services Inc., A		United States		40,305		5,330,739
a	Shapeways Holdings Inc., 10/31/26, wts.		United States		13,286		9,299
a	Tech And Energy Transition Corp.		United States		8,501		84,755
a,b	Thunder Bridge Capital Partners IV Inc.		United States		12,385		122,240
a	Tishman Speyer Innovation Corp. II		United States		1,534		15,286
a	Tishman Speyer Innovation Corp. II, A		United States		509		4,983
a,b	Twelve Seas Investment Co. II, A		United States		15,317		149,187
a	Twelve Seas Investment Co. II, A, 3/2/28, wts.		United States		5,105		3,298
							14,510,735
	Communications Equipment 0.0%†
	Cisco Systems Inc.		United States		1,108		60,763
a	Commscope Holding Co. Inc.		United States		6,524		64,979
							125,742
	Construction & Engineering 0.5%
a	AECOM		United States		18,821		1,297,520
a	Mastec Inc.		United States		27,598		2,543,708
	Quanta Services Inc.		United States		31,335		3,565,296
							7,406,524
	Construction Materials 0.3%
a	Cemex SAB de CV, ADR		Mexico		69,523		427,567
	LafargeHolcim Ltd., B		Switzerland		69,827		3,363,836
							3,791,403

franklintempleton.com Semiannual Report 17

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Shares/ Warrants/ Rights		Value
	Common Stocks and Other Equity Interests (continued)
	Consumer Finance 0.0%†
a,f	Katapult Holdings Inc.		United States		9,358	$	36,777
c	OneMain Holdings Inc., A		United States		1,061		52,827
							89,604
	Containers & Packaging 0.8%
a	Ardagh Metal Packaging SA		United States		110,998		1,037,831
	Ball Corp.		United States		118,073		11,033,922
							12,071,753
	Distributors 0.3%
	Pool Corp.		United States		7,544		4,180,281
	Diversified Consumer Services 0.1%
a,f	Mister Car Wash Inc.		United States		54,593		876,764
	Diversified Financial Services 1.8%
a	2MX Organic SA, 11/16/25, wts.		France		3,920		1,085
a	Acropolis Infrastructure Acquisition Corp., A, 3/31/26, wts.		United States		12,094		12,034
a	Adit EdTech Acquisition Corp., 12/31/27, wts.		United States		276		312
a	AEA-Bridges Impact Corp., 12/31/25, wts.		Cayman Islands		1,407		1,126
a	AEA-Bridges Impact Corp., A		Cayman Islands		28,592		281,059
a	Aequi Acquisition Corp.		United States		1,470		14,641
a	Aequi Acquisition Corp., A		United States		11,885		116,116
a	African Gold Acquisition Corp., A		United States		6,518		63,485
a	African Gold Acquisition Corp., A, 3/13/28, wts.		United States		4,888		2,758
a	Agile Growth Corp.		United States		3,910		39,374
a,b	Altitude Acquisition Corp., A		United States		10,922		107,909
a	Altitude Acquisition Corp., A, 11/30/27, wts.		United States		24,529		18,524
a	Angel Pond Holdings Corp.		United States		7,260		72,716
a	Apollo Strategic Growth Capital, 10/29/27, wts.		United States		16,271		15,132
a	Apollo Strategic Growth Capital, A		United States		8,654		85,155
a	Apollo Strategic Growth Capital, A, 12/31/27, wts.		United States		3,636		3,818
a	Apollo Strategic Growth Capital II		United States		8,845		88,539
a	ArcLight Clean Transition Corp. II, A, 2/4/23, wts.		Cayman Islands		3,265		5,093
a,f	Ares Acquisition Corp., A		United States		13,000		127,270
a	Ares Acquisition Corp., A, 12/30/21, wts.		United States		11,095		11,650
a	Ascendant Digital Acquisition Corp. III		United States		4,732		47,793
a	Athena Consumer Acquisition Corp.		United States		26,389		267,848
a	Athena Technology Acquisition Corp., A, 3/31/28, wts.		United States		4,454		7,884
a	Athlon Acquisition Corp., A, 3/5/26, wts.		United States		4,234		2,667
a,b	Atlantic Avenue Acquisition Corp., A		United States		8,680		85,672
a	Atlantic Avenue Acquisition Corp., A, 10/6/27, wts.		United States		4,340		2,734
a,b	Atlantic Coastal Acquisition Corp., A		United States		16,329		159,861
a	Atlantic Coastal Acquisition Corp., A, 12/31/27, wts.		United States		5,443		4,570
a	Austerlitz Acquisition Corp. I, 2/19/26, wts.		United States		17,237		21,374
a	Austerlitz Acquisition Corp. I, 12/31/27, wts.		United States		34,516		39,003
a	Austerlitz Acquisition Corp. I, A		United States		21,841		214,479
a	Austerlitz Acquisition Corp. II, A		United States		33,691		329,161
a	Authentic Equity Acquisition Corp. I, 12/31/27, wts.		Cayman Islands		9,239		5,858
a	B Riley Principal 250 Merger Corp., A, 12/31/27, wts.		United States		2,651		3,022
a	Biotech Acquisition Co., 11/30/27, wts.		United States		4,353		3,277
a	Blue Whale Acquisition Corp. I		United Arab Emirates		12,829		127,584
a	Bridgetown Holdings Ltd., A		Hong Kong		3,261		32,088
a,b	Broadscale Acquisition Corp., A		United States		6,216		60,855
a	Broadscale Acquisition Corp., A, 2/2/26, wts.		United States		1,554		1,632
a	Broadstone Acquisition Corp., 9/15/28, wts.		United States		25,789		28,884

18 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Shares/ Warrants/ Rights		Value
	Common Stocks and Other Equity Interests (continued)
	Diversified Financial Services (continued)
a	Burgundy Technology Acquisition Corp.		United States		8,583	$	85,744
a,b	Carney Technology Acquisition Corp. II, A		United States		12,636		124,212
a	Carney Technology Acquisition Corp. II, A, 11/30/27, wts.		United States		5,876		5,053
a	Cartesian Growth Corp., 12/31/27, wts.		United States		23,214		27,044
a,f	CBRE Acquisition Holdings Inc., A, 12/31/27, wts.		United States		1		2
a	CC Neuberger Principal Holdings II		United States		12,116		119,827
a	CC Neuberger Principal Holdings II, 7/29/25, wts.		United States		11,692		13,213
a	CC Neuberger Principal Holdings III		United States		558		5,588
a	CC Neuberger Principal Holdings III, 12/31/27, wts.		United States		6,916		8,230
a	CF Acquisition Corp. V, A		United States		6,004		59,800
a	CF Acquisition Corp. V, A, 12/31/27, wts.		United States		24,745		24,745
a,b	Churchill Capital Corp. V, A		United States		6,430		63,335
a	Churchill Capital Corp. VI		United States		1,080		10,886
a,b	Churchill Capital Corp. VII		United States		9,560		95,701
a	Clarim Acquisition Corp., A		United States		50,724		497,095
a	Clarim Acquisition Corp., A, 12/31/27, wts.		United States		16,908		11,329
a	Climate Real Impact Solutions II Acquisition Corp., A		United States		563		5,574
a	Climate Real Impact Solutions II Acquisition Corp., A, 12/31/27, wts.		United States		112		123
a,b	Colicity Inc.		United States		37,960		379,600
a	Colicity Inc., A, 12/31/27, wts.		United States		34		36
a	Colonnade Acquisition Corp. II, 12/31/27, wts.		United States		13,654		10,657
a,b	Concord Acquisition Corp. II		United States		79,080		799,499
a	Concord Acquisition Corp. III		United States		9,774		99,695
a,b	Conyers Park III Acquisition Corp., A		United States		18,746		183,711
a	Conyers Park III Acquisition Corp., A, 8/12/28, wts.		United States		2,812		3,726
a	Corner Growth Acquisition Corp.		United States		17,211		175,036
a	Corner Growth Acquisition Corp., 12/31/27, wts.		United States		7,606		6,845
a	Corner Growth Acquisition Corp., A		United States		22,818		223,616
a	Corsair Partnering Corp.		United States		3,898		38,961
a	Crown PropTech Acquisitions, 12/31/27, wts.		United States		12,844		10,264
a,b	Crucible Acquisition Corp.		United States		4,437		44,521
a	Crystal Peak Acquisition		Netherlands		6,767		66,418
a	Crystal Peak Acquisition, 6/22/26, wts.		Netherlands		2,725		—
a,b,f	Decarbonization Plus Acquisition Corp. II, A		United States		16,370		165,010
a	Decarbonization Plus Acquisition Corp. II, A, 10/2/25, wts.		United States		7,390		15,149
a	Decarbonization Plus Acquisition Corp. III, A, 12/08/26, wts.		United States		10,297		43,041
a	Decarbonization Plus Acquisition Corp. IV, A, 12/31/28, wts.		United States		5,594		5,986
a	DHC Acquisition Corp., A		United States		6,265		61,209
a	DHC Acquisition Corp., A, 12/31/27, wts.		United States		2,088		1,587
a	Disruptive Acquisition Corp. I		United States		6,844		68,200
a,f	Dragoneer Growth Opportunities Corp. II, A		United States		12,994		129,550
a	Dragoneer Growth Opportunities Corp. III, A		United States		26,406		263,532
a	ECP Environmental Growth Opportunities Corp.		United States		5,532		56,343
a	ECP Environmental Growth Opportunities Corp., A		United States		5,180		51,437
a	ECP Environmental Growth Opportunities Corp., A, 2/11/28, wts.		United States		1,757		1,845
a	EJF Acquisition Corp.		United States		63,265		630,119
a	EJF Acquisition Corp., 2/28/27, wts.		United States		6,521		10,564
a	Elliott Opportunity II Corp.		United States		36,158		374,959
a	Elliott Opportunity II Corp., A		United States		24,718		243,472
a	Energy Transition Partners BV		Netherlands		3,372		37,458
a	Energy Transition Partners BV, 7/16/26, wts.		Netherlands		1,124		612
a	Enterprise 4.0 Technology Acquisition Corp.		United States		16,406		166,111
a	ESM Acquisition Corp.		United States		8,367		83,293
a	European Biotech Acquisition Corp.		Netherlands		1,230		12,214
a	Far Peak Acquisition Corp.		United States		25,821		264,923

franklintempleton.com Semiannual Report 19

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Shares/ Warrants/ Rights		Value
	Common Stocks and Other Equity Interests (continued)
	Diversified Financial Services (continued)
a	Far Peak Acquisition Corp., 12/7/25, wts.		United States		3,156	$	9,468
a,b	Fast Acquisition Corp. II		United States		14,427		144,775
a	Fifth Wall Acquisition Corp. III		United States		5,283		52,249
a	Figure Acquisition Corp. I, A		United States		1,393		13,763
a	Figure Acquisition Corp. I, A, 12/31/27, wts.		United States		1,176		1,423
a,b	Fintech Acquisition Corp. VI		United States		39,608		409,151
a	Fintech Evolution Acquisition Group		United States		17,597		175,970
a,f	First Reserve Sustainable Growth Corp., A		United States		32,362		321,031
a	First Reserve Sustainable Growth Corp., A, 12/31/27, wts.		United States		8,090		10,274
a	Focus Impact Acquisition Corp.		United States		13,236		133,551
a	Foresight Acquisition Corp., A, 11/19/26, wts.		United States		1,814		2,231
a	Fortress Capital Acquisition Corp., 12/31/27, wts.		United States		12,102		10,892
a	Fortress Capital Acquisition Corp., A		United States		9,805		96,187
a,b	Fortress Value Acquisition Corp. III, A		United States		10,335		101,386
a	Fortress Value Acquisition Corp. III, A, 12/31/27, wts.		United States		3,261		3,327
a,b	Fortress Value Acquisition Corp. IV		United States		8,256		82,147
a	Fortress Value Acquisition Corp. IV, A, 3/18/28, wts.		United States		9,655		9,445
a	Forum Merger IV Corp.		United States		2,892		29,108
a	Forum Merger IV Corp., A		United States		5,283		51,721
a	Forum Merger IV Corp., A, 12/31/27, wts.		United States		2,568		3,210
a	Freedom Acquisition I Corp., A		United States		1,955		19,061
a	FTAC Athena Acquisition Corp., A		United States		28,460		283,177
a	FTAC Athena Acquisition Corp., A, 3/1/26, wts.		United States		15,965		21,553
a	FTAC Hera Acquisition Corp., 12/31/27, wts.		United States		8,945		9,303
a	FTAC Hera Acquisition Corp., A		United States		41,936		411,812
a,b	FTAC Parnassus Acquisition Corp., A		United States		49,016		482,808
a	FTAC Parnassus Acquisition Corp., A, 3/10/26, wts.		United States		12,254		14,153
a	FTAC Zeus Acquisition Corp.		United States		6,342		63,801
a,b	Fusion Acquisition Corp. II		United States		12,633		126,835
a	Fusion Acquisition Corp. II, A		United States		3,259		31,775
a	Fusion Acquisition Corp. II, A, 12/31/27, wts.		United States		1,086		820
a	G Squared Ascend I Inc.		United States		5,572		55,386
a	G Squared Ascend I Inc., A, 12/31/27, wts.		United States		3,753		4,841
a	Glenfarne Merger Corp.		United States		1,231		12,267
a	Global Partner Acquisition Corp II, 12/31/27, wts.		United States		2,950		2,744
a	Global Partner Acquisition Corp. II, A		United States		17,700		172,664
a	Gores Holdings VII Inc.		United States		38,284		386,285
a	Gores Holdings VII Inc., A		United States		3,841		37,834
a,b	Gores Holdings VIII Inc.		United States		8,934		90,234
a	Gores Holdings VIII Inc., A		United States		1,583		15,814
a	Group Nine Acquisition Corp., A		United States		22,173		215,522
a	Group Nine Acquisition Corp., A, 1/14/26, wts.		United States		7,391		5,011
a,b	Healthcare Services Acquisition Corp., A		United States		3,074		30,064
a	Healthcare Services Acquisition Corp., A, 12/31/27, wts.		United States		4,019		2,755
a	HealthCor Catalio Acquisition Corp., A		United States		4,875		48,653
a	Innovative International Acquisition Corp.		United States		13,172		133,037
a	Investindustrial Acquisition Corp., 10/30/27, wts.		United States		2,150		4,085
a	ION Acquisition Corp. II Ltd., 12/31/27, wts.		Israel		956		1,315
a	ION Acquisition Corp. II Ltd., A		Israel		555		4,412
a	ION Acquisition Corp. III Ltd., A		Israel		11,154		109,030
a	Isos Acquisition Corp., 3/1/26, wts.		United States		4,326		7,268
a	Ivanhoe Capital Acquisition Corp., A, 12/31/27, wts.		United States		8,067		23,959
a	Jack Creek Investment Corp., 12/31/27, wts.		United States		5,880		3,763
a	Jaws Hurricane Acquisition Corp., A, 2/23/23, wts.		United States		3,747		3,972
a	Jaws Juggernaut Acquisition Corp., A		United States		6,381		62,853

20 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Shares/ Warrants/ Rights		Value
	Common Stocks and Other Equity Interests (continued)
	Diversified Financial Services (continued)
a	Jaws Juggernaut Acquisition Corp., A, 2/12/26, wts.		United States		4,284	$	4,584
a	Jaws Mustang Acquisition Corp.		United States		6,135		62,148
a	Jaws Mustang Acquisition Corp., 1/30/27, wts.		United States		6,663		8,262
a	Jaws Mustang Acquisition Corp., A		United States		7,860		77,342
a	Joff Fintech Acquisition Corp., A		United States		5,277		51,504
a	Joff Fintech Acquisition Corp., A, 12/31/27, wts.		United States		1,759		1,407
a	Kairos Acquisition Corp., 12/31/27, wts.		Cayman Islands		4,433		2,784
a,b	Khosla Ventures Acquisition Co., A		United States		27,304		269,217
a,b	Khosla Ventures Acquisition Co. III, A		United States		19,619		194,816
a,b	KKR Acquisition Holdings I Corp.		United States		10,052		100,621
a	L Catterton Asia Acquisition Corp.		Singapore		2,279		22,950
a	L&F Acquisition Corp., A, 5/23/27, wts.		Cayman Islands		6,615		5,156
a	Lakestar SPAC I SE, 12/31/25, wts.		Luxembourg		716		731
a	Lazard Growth Acquisition Corp. I		United States		6,383		63,105
a	Lazard Growth Acquisition Corp. I, 12/31/27, wts.		United States		2,101		1,744
a	LDH Growth Corp. I		United States		615		6,119
a	Lead Edge Growth Opportunities Ltd.		United States		4,701		46,681
a	Learn CW Investment Corp.		United States		19,726		199,233
a	Legato Merger Corp. II		United States		3,958		39,778
a	Lerer Hippeau Acquisition Corp., A		United States		20,644		201,899
a	LF Capital Acquisition Corp. II		United States		13,246		133,785
a	Live Oak Crestview Climate Acquisition Corp., A, 3/12/26, wts.		United States		452		773
a	Live Oak Mobility Acquisition Corp., A		United States		3,947		38,641
a	Live Oak Mobility Acquisition Corp., A, 3/4/28, wts.		United States		6,090		7,309
a,b	Longview Acquisition Corp. II, A		United States		14,811		146,925
a	Longview Acquisition Corp. II, A, 5/10/26, wts.		United States		12,250		14,088
a	M3-Brigade Acquisition II Corp., A, 12/31/27, wts.		United States		7,608		9,890
a	Marlin Technology Corp., 3/5/26, wts.		United States		3,305		2,644
a	Marlin Technology Corp., A		United States		9,915		96,870
a	MDH Acquisition Corp., A		United States		4,587		45,320
a	MDH Acquisition Corp., A, 2/2/28, wts.		United States		2,293		1,422
a	Motive Capital Corp., 12/9/25, wts.		United States		18,590		25,840
a	Motive Capital Corp., A		United States		17,457		173,173
a	The Music Acquisition Corp., A		United States		5,363		52,397
a	The Music Acquisition Corp., A, 2/5/28, wts.		United States		2,681		1,796
a	NextGen Acquisition Corp. II, A, 3/31/27, wts.		United States		3,287		7,889
a	Nightdragon Acquisition Corp.		United States		21,996		220,400
a	Nightdragon Acquisition Corp., A		United States		1,253		12,298
a	North Atlantic Acquisition Corp., 10/20/25, wts.		United States		2,165		1,797
a	North Atlantic Acquisition Corp., A		United States		6,495		63,521
a	Oaktree Acquisition Corp. II, 9/15/27, wts.		United States		12,899		15,350
a	Oaktree Acquisition Corp. II, A		United States		17,512		173,544
a	Obotech Acquisition SE, A		Luxembourg		4,205		46,497
a	Obotech Acquisition SE, A, 4/30/26, wts.		Luxembourg		1,401		1,112
a	Orion Biotech Opportunities Corp.		United States		16,960		168,498
a	Pathfinder Acquisition Corp., 12/31/27, wts.		United States		7,163		7,665
a	Pathfinder Acquisition Corp., A		United States		39,072		387,985
a	Pegasus Acquisition Co. Europe BV		Netherlands		118,076		1,325,704
a	Pegasus Acquisition Co. Europe BV, A		Netherlands		1,736		19,373
a	Pegasus Acquisition Co. Europe BV, A, 4/27/26, wts.		Netherlands		579		821
a	Pegasus Digital Mobility Acquisition Corp.		Cayman Islands		5,616		56,441
a	Peridot Acquisition Corp. II		United States		2,506		25,073
a,b	Periphas Capital Partnering Corp., A		United States		10,736		264,857
a	Pershing Square Tontine Holdings Ltd., A		United States		5,107		102,957
a	Pioneer Merger Corp., A		United States		2,043		20,307

franklintempleton.com Semiannual Report 21

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Shares/ Warrants/ Rights		Value
	Common Stocks and Other Equity Interests (continued)
	Diversified Financial Services (continued)
a	Pioneer Merger Corp., A, 12/31/27, wts.		United States		16,710	$	20,219
a	PMV Consumer Acquisition Corp., A, 8/31/27, wts.		United States		2,466		1,874
a	Poema Global Holdings Corp., 12/31/27, wts.		United States		4,433		7,979
a	Poema Global Holdings Corp., A		United States		8,866		88,483
a	Pontem Corp., 12/31/27, wts.		United States		5,482		4,284
a	Pontem Corp., A		United States		16,446		161,171
a	Population Health Investment Co. Inc., A		United States		1,144		11,200
a,b	Post Holdings Partnering Corp., A		United States		12,717		124,037
a	Post Holdings Partnering Corp., A, 2/9/23, wts.		United States		12,973		13,753
a	Power & Digital Infrastructure Acquisition Corp., A		United States		4,426		56,564
a	Power & Digital Infrastructure Acquisition Corp., A, 2/12/28, wts.		United States		1,383		6,085
a	Powered Brands, A		United States		3,648		35,604
a	Primavera Capital Acquisition Corp., 1/19/26, wts.		Hong Kong		1,524		1,509
a	Primavera Capital Acquisition Corp., A		Hong Kong		3,048		29,718
a	PWP Forward Acquisition Corp. I		United States		6,157		60,954
a	PWP Forward Acquisition Corp. I, A, 3/9/26, wts.		United States		2,959		2,471
a	RCF Acquisition Corp.		United States		12,616		127,295
a	RedBall Acquisition Corp.		United States		8,172		81,883
a	Rice Acquisition Corp. II		United States		13,176		142,037
a	Rigel Resource Acquisition Corp.		United States		8,142		82,397
a	RMG Acquisition Corp. III		United States		2,786		27,721
a	RMG Acquisition Corp. III, 12/31/27, wts.		United States		4,311		3,966
a	RMG Acquisition Corp. III, A		United States		21,555		211,023
a	Rosecliff Acquisition Corp. I, A		United States		59,628		589,721
a	Rosecliff Acquisition Corp. I, A, 12/31/27, wts.		United States		29,338		27,871
a,b	RXR Acquisition Corp.		United States		9,640		95,629
a	Sarissa Capital Acquisition Corp., A		United States		13,243		130,179
a,b	Science Strategic Acquisition Corp. Alpha		United States		5,442		54,502
a	ScION Tech Growth I, 11/1/25, wts.		United Kingdom		1,102		826
a	ScION Tech Growth I, A		United Kingdom		3,306		32,333
a	ScION Tech Growth II		United Kingdom		2,073		20,709
a	SCP & Co. Healthcare Acquisition Co., A, 1/27/28, wts.		United States		5,434		3,097
a	Silver Crest Acquisition Corp., A		United States		2,931		28,782
a	Silver Crest Acquisition Corp., A, 12/15/25, wts.		United States		1,465		1,040
a	Silverbox Engaged Merger Corp. I, A, 12/31/27, wts.		United States		8,429		13,992
a,b	Simon Property Group Acquisition Holdings Inc.		United States		31,634		316,340
a	Slam Corp.		United States		5,816		57,869
a	Slam Corp., A, 12/31/27, wts.		United States		6,474		5,124
a	Social Capital Hedosophia Holdings Corp., A		United States		17,956		184,408
a,f	Social Capital Hedosophia Holdings Corp. VI, A		United States		39,558		414,172
a	Social Capital Suvretta Holdings Corp. I, A		United States		6,651		66,111
a	Social Capital Suvretta Holdings Corp. II, A		United States		14,142		140,713
a	Social Capital Suvretta Holdings Corp. III, A		United States		27,104		267,516
a	Social Capital Suvretta Holdings Corp. IV, A		United States		27,104		267,788
a	Social Leverage Acquisition Corp. I		United States		13,866		138,521
a,b	Social Leverage Acquisition Corp. I, A		United States		3,470		33,867
a,b	Spartan Acquisition Corp. III, A		United States		32,665		324,363
a	Spartan Acquisition Corp. III, A, 2/4/26, wts.		United States		13,124		20,080
a	Spindletop Health Acquisition Corp.		United States		11,406		114,972
a	StoneBridge Acquisition Corp.		United States		3,244		33,137
a	Supernova Partners Acquisition Co. II Ltd., A		United States		3,756		40,565
a	Supernova Partners Acquisition Co. II Ltd., A, 12/31/27, wts.		United States		1,482		4,313
a	Supernova Partners Acquisition Co. III Ltd., A		United States		8,623		85,799
a	Supernova Partners Acquisition Co. III Ltd., A, 3/31/27, wts.		United States		6,587		6,458
a	Sustainable Development Acquisition I Corp.		United States		8,363		84,257

22 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Shares/ Warrants/ Rights		Value
	Common Stocks and Other Equity Interests (continued)
	Diversified Financial Services (continued)
a,f	SVF Investment Corp., A		United States		16,643	$	167,595
a	SVF Investment Corp. 2, A		United States		10,063		100,429
a	SVF Investment Corp. 3, A		United States		40,808		408,080
a	Tailwind Acquisition Corp., A, 9/7/27, wts.		United States		11,194		7,108
a	TB SA Acquisition Corp.		Cayman Islands		22,005		219,170
a	TCV Acquisition Corp., A		United States		1,698		16,895
a	TCW Special Purpose Acquisition Corp., A		United States		6,265		61,146
a	TCW Special Purpose Acquisition Corp., A, 12/31/28, wts.		United States		2,088		1,587
a	Tekkorp Digital Acquisition Corp., 9/29/27, wts.		United States		1,328		1,135
a	Thimble Point Acquisition Corp., A, 11/19/26, wts.		United States		18,602		22,322
a	TLG Acquisition One Corp., A		United States		9,876		96,587
a	TLG Acquisition One Corp., A, 1/25/28, wts.		United States		3,292		2,140
a	TPG Pace Beneficial II Corp., A		United States		17,023		170,230
a	TPG Pace Solutions Corp.		United States		912		9,029
a	Trebia Acquisition Corp., A, 12/31/25, wts.		Cayman Islands		21,418		31,484
a	Twin Ridge Capital Acquisition Corp., A		United States		7,511		73,157
a	Twin Ridge Capital Acquisition Corp., A, 3/7/28, wts.		United States		2,503		1,877
a	two, A		United States		9,851		96,737
a	USHG Acquisition Corp., A		United States		28,448		295,006
a	USHG Acquisition Corp., A, 12/31/28, wts.		United States		12,571		25,771
a	Vahanna Tech Edge Acquisition I Corp.		United States		7,916		79,714
a	Valor Latitude Acquisition Corp.		United States		16,723		165,892
a	Vector Acquisition Corp. II, A		United States		8,707		85,764
a	Velocity Acquisition Corp., A		United States		6,445		62,903
a	Virgin Group Acquisition Corp. II		United States		10,835		108,350
a	Virgin Group Acquisition Corp. II, A, 3/13/26, wts.		United States		9,762		10,543
a	Viveon Health Acquisition Corp., 12/31/27, wts.		United States		45,618		12,089
a	VMG Consumer Acquisition Corp.		United States		2,210		22,409
a	VPC Impact Acquisition Holdings II Inc., A		United States		6,544		64,655
a,b	VPC Impact Acquisition Holdings III Inc., A		United States		10,252		102,520
a	VPC Impact Acquisition Holdings III Inc., A, 12/31/27, wts.		United States		4,604		7,186
a	Vy Global Growth		Cayman Islands		13,775		135,822
a	Waldencast Acquisition Corp.		United States		279		2,879
a	Warburg Pincus Capital Corp. I-A, 12/31/27, wts.		Cayman Islands		249		237
a	Warburg Pincus Capital Corp. I-B, 2/17/22, wts.		Cayman Islands		3,090		3,059
a	Wejo Group Ltd., 11/18/26, wts.		United States		22,480		26,751
a	Zimmer Energy Transition Acquisition Corp.		United States		7,144		71,833
							25,671,332
	Diversified Telecommunication Services 0.0%†
a	BT Group PLC, A		United Kingdom		90,814		191,172
	Verizon Communications Inc.		United States		1,263		63,491
							254,663
	Electric Utilities 2.1%
	Ausnet Services Ltd.		Australia		1,571,963		2,839,172
	Duke Energy Corp.		United States		2,117		205,370
	Edison International		United States		27,210		1,776,269
a	Energy Harbor Corp.		United States		76,664		3,756,536
	Exelon Corp.		United States		260,267		13,723,879
b	FirstEnergy Corp.		United States		32,457		1,222,331
a	PG&E Corp.		United States		404,146		4,801,254
	The Southern Co.		United States		947		57,862
e	Spark Infrastructure Group		Australia		1,242,526		2,451,270
							30,833,943

franklintempleton.com Semiannual Report 23

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Shares/ Warrants/ Rights		Value
	Common Stocks and Other Equity Interests (continued)
	Electrical Equipment 0.8%
a	Array Technologies Inc.		United States		47,179	$	849,930
a	Ballard Power Systems Inc.		Canada		12,264		185,922
a	Chargepoint Holdings Inc.		United States		29,912		763,354
a	Enovix Corp.		United States		92,698		3,244,430
a	Fluence Energy Inc., A		United States		67,662		2,144,209
a	Fuelcell Energy Inc.		United States		99,794		866,212
a	Generac Holdings Inc.		United States		3,138		1,321,851
a	Plug Power Inc.		United States		52,515		2,092,723
a	Stem Inc.		United States		1,209		25,655
a	Sunrun Inc.		United States		2,717		125,090
							11,619,376
	Electronic Equipment, Instruments & Components 0.3%
a	Coherent Inc.		United States		3,675		951,568
a	Hollysys Automation Technologies Ltd.		China		63,729		985,250
a,f	II-VI Inc.		United States		12,423		776,810
a	Rogers Corp.		United States		3,428		934,542
							3,648,170
	Entertainment 0.3%
	Activision Blizzard Inc.		United States		855		50,103
a	Bilibili Inc., Z		China		246		16,183
a	Roblox Corp., A		United States		16,178		2,040,046
a	SciPlay Corp., A		United States		117,660		1,889,620
							3,995,952
	Equity Real Estate Investment Trusts (REITs) 0.2%
	American Tower Corp.		United States		245		64,308
a	Braemar Hotels & Resorts Inc.		United States		47		205
	Crown Castle International Corp.		United States		376		68,301
	Cyrusone Inc.		United States		25,704		2,288,170
	Public Storage		United States		203		66,458
	VICI Properties Inc.		United States		31,567		858,622
							3,346,064
	Food & Staples Retailing 0.5%
b	Costco Wholesale Corp.		United States		13,506		7,284,866
	Walmart Inc.		United States		747		105,051
							7,389,917
	Food Products 0.5%
a	Benson Hill Inc., 12/24/25, wts.		United States		18,066		23,305
	Nestle SA		Switzerland		36,068		4,622,900
a	Pilgrim’s Pride Corp.		United States		74,041		2,079,071
	Tyson Foods Inc., A		United States		795		62,773
							6,788,049
	Gas Utilities 0.1%
	Hong Kong & China Gas Co. Ltd.		Hong Kong		565,396		842,772
	Health Care Equipment & Supplies 1.2%
c	Abbott Laboratories		United States		558		70,180
a	Align Technology Inc.		United States		2,836		1,734,299
a	Alphatec Holdings Inc.		United States		123		1,365
a	Axonics Inc.		United States		6,496		353,447
a	Biolife Solutions Inc.		United States		6,964		265,746
	CONMED Corp.		United States		2,996		393,854

24 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Shares/ Warrants/ Rights		Value
	Common Stocks and Other Equity Interests (continued)
	Health Care Equipment & Supplies (continued)
a,f	Cryoport Inc.		United States		4,634	$	307,883
a,b	DexCom Inc.		United States		3,392		1,908,305
	Hill-Rom Holdings Inc.		United States		26,470		4,116,085
a	Hologic Inc.		United States		12,469		931,808
a	Inari Medical Inc.		United States		3,951		326,116
a	Intuitive Surgical Inc.		United States		3,300		1,070,322
a	LivaNova PLC		United States		7,807		625,809
a	Nevro Corp.		United States		3,527		307,131
a	NuVasive Inc.		United States		8,385		402,983
a,f	Outset Medical Inc.		United States		11,122		527,183
a	Shockwave Medical Inc.		United States		4,760		857,943
a,f	Sight Sciences Inc.		United States		872		18,269
	Stryker Corp.		United States		5,570		1,318,029
a	Tandem Diabetes Care Inc.		United States		5,353		687,968
	Zimmer Biomet Holdings Inc.		United States		6,347		759,101
							16,983,826
	Health Care Providers & Services 1.3%
a	Agilon Health Inc.		United States		14,632		321,904
	CVS Health Corp.		United States		42,359		3,772,493
a	Guardant Health Inc.		United States		3,669		385,685
	Humana Inc.		United States		10,122		4,248,305
a	New Frontier Health Corp.		Hong Kong		129,738		1,416,739
	UnitedHealth Group Inc.		United States		19,651		8,729,367
							18,874,493
	Health Care Technology 0.1%
a	Definitive Healthcare Corp., A		United States		2,062		60,437
a	Phreesia Inc.		United States		12,944		746,610
							807,047
	Hotels, Restaurants & Leisure 0.7%
a	Airbnb Inc., A		United States		10,016		1,728,160
a	Carnival Corp.		United States		1,409		24,827
a	Chipotle Mexican Grill Inc., A		United States		2,107		3,462,665
a	Crown Resorts Ltd.		Australia		150,382		1,175,031
	Domino’s Pizza Inc.		United States		5,812		3,046,302
a	Entain PLC		United Kingdom		15,241		338,763
f	International Game Technology PLC		United States		4,042		109,215
	McDonald’s Corp.		United States		832		203,507
a	Norwegian Cruise Line Holdings Ltd.		United States		1,314		25,636
a	Royal Caribbean Cruises Ltd.		United States		896		62,559
	Starbucks Corp.		United States		1,624		178,055
a	Trip.Com Group Ltd.		China		574		15,542
a	Wynn Resorts Ltd.		United States		604		48,930
	Yum China Holdings Inc.		China		306		15,331
							10,434,523
	Household Durables 0.1%
	Panasonic Corp.		Japan		67,700		738,101
a	Skyline Champion Corp.		United States		13,011		1,018,111
							1,756,212
	Household Products 0.0%†
	The Procter & Gamble Co.		United States		1,827		264,148

franklintempleton.com Semiannual Report 25

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Shares/ Warrants/ Rights		Value
	Common Stocks and Other Equity Interests (continued)
	Independent Power & Renewable Electricity Producers 1.0%
	The AES Corp.		United States		290,602	$	6,794,275
	Clearway Energy Inc., C		United States		32,188		1,201,256
	NextEra Energy Partners LP		United States		35,922		3,055,166
a	Sunnova Energy International Inc.		United States		51,145		1,890,830
	Vistra Corp.		United States		36,844		732,459
							13,673,986
	Industrial Conglomerates 0.0%
	Smiths Group PLC		United Kingdom		17,888		341,646
	Toshiba Corp.		Japan		9,747		389,042
							730,688
	Insurance 0.8%
a	Athene Holding Ltd., A		United States		72,778		5,961,974
	Fidelity National Financial Inc.		United States		1,367		66,860
c	MetLife Inc.		United States		1,005		58,953
	Old Republic International Corp.		United States		2,684		64,309
a	Societa Cattolica DI Assicurazione SpA		Italy		84,879		515,477
a	Trupanion Inc.		United States		16,806		2,072,516
a	Willis Towers Watson PLC		United States		14,132		3,191,571
							11,931,660
	Interactive Media & Services 1.4%
a,b	Alphabet Inc., A		United States		2,254		6,396,739
a	Alphabet Inc., C		United States		731		2,082,648
a	CarGurus Inc., A		United States		34,729		1,302,338
a,d	Kuaishou Technology, B, 144A		China		1,600		17,370
a	Match Group Inc.		United States		9,525		1,238,155
a,b	Meta Platforms Inc., A		United States		16,178		5,249,113
a	Snap Inc., A		United States		16,939		806,466
	Tencent Holdings Ltd.		China		56,672		3,305,059
							20,397,888
	Internet & Direct Marketing Retail 0.9%
a,b	Alibaba Group Holding Ltd., ADR		China		23,106		2,853,554
a	Amazon.com Inc.		United States		1,547		5,425,438
a	Booking Holdings Inc.		United States		50		105,092
a,d	Deliveroo PLC, A, 144A		United Kingdom		144,586		575,144
b	eBay Inc.		United States		38,325		2,585,404
a	JD.Com Inc., A		China		459		19,383
a,d	Meituan, B, 144A		China		500		15,197
a	MercadoLibre Inc.		Argentina		107		127,160
a	Pinduoduo Inc., ADR		China		191		12,701
a	THG PLC, B		United Kingdom		51,299		120,622
a	Zooplus AG		Germany		867		474,021
							12,313,716
	IT Services 1.8%
c	Accenture PLC, A		United States		194		69,336
a	Afterpay Ltd.		Australia		17,086		1,308,458
a	FleetCor Technologies Inc.		United States		2,464		510,368
	Genpact Ltd.		United States		48,101		2,321,835
	Global Payments Inc.		United States		28,349		3,374,665
	MasterCard Inc., A		United States		19,120		6,021,271
a,f	MongoDB Inc., A		United States		4,583		2,282,792
a,d	Nuvei Corp., 144A		Canada		14,951		1,473,571

26 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Shares/ Warrants/ Rights		Value
	Common Stocks and Other Equity Interests (continued)
	IT Services (continued)
a,b	PayPal Holdings Inc.		United States		16,147	$	2,985,418
a,f	Repay Holdings Corp., A		United States		15,666		256,296
a	Shopify Inc., A		Canada		1,298		1,975,283
a	Twilio Inc., A		United States		8,778		2,511,825
f	Visa Inc., A		United States		731		141,646
							25,232,764
	Leisure Products 0.1%
a,b,c	Callaway Golf Co.		United States		55,500		1,496,280
	Life Sciences Tools & Services 2.3%
a	10x Genomics Inc., A		United States		2,345		358,339
a	Avantor Inc.		United States		18,358		724,774
a,b	BIO-RAD Laboratories Inc., A		United States		451		339,693
	Danaher Corp., W		United States		27,513		8,849,281
	Eurofins Scientific SE		Luxembourg		26,856		3,435,667
	Gerresheimer AG		Germany		9,835		902,186
a	IQVIA Holdings Inc.		United States		5,100		1,321,563
	Lonza Group AG		Switzerland		484		390,272
a	Mettler-Toledo International Inc.		United States		5,046		7,640,300
a,f	Olink Holding AB, ADR		Sweden		3,494		73,234
a,d	Polypeptide Group AG, 144A		United States		2,088		283,122
a	QIAGEN NV		United States		5,448		300,348
a	Rapid Micro Biosystems Inc., A		United States		2,803		34,533
a	Repligen Corp.		United States		2,054		588,471
	Sartorius Stedim Biotech		France		4,133		2,440,010
	Thermo Fisher Scientific Inc.		United States		8,125		5,141,744
a,d	Wuxi Biologics Cayman Inc., 144A		China		1,000		13,490
							32,837,027
	Machinery 0.4%
a	Berkshire Grey Inc., 7/21/26, wts.		United States		23,782		29,489
	Caterpillar Inc.		United States		296		57,231
a	CNH Industrial NV		United Kingdom		15,619		255,527
	Cummins Inc.		United States		261		54,745
	Deere & Co.		United States		8,105		2,800,602
	Fanuc Corp.		Japan		4,007		785,542
a	Kornit Digital Ltd.		Israel		4,423		685,167
a	Markforged Holding Corp., A, 7/14/26, wts.		United States		7,162		8,809
a,f	Nikola Corp.		United States		6,863		70,140
	Otis Worldwide Corp.		United States		792		63,677
b,c	SPX Flow Inc.		United States		7,898		659,562
a	Velo3d Inc., 12/1/25, wts.		United States		20,455		60,342
							5,530,833
	Media 0.4%
a,b	Altice USA Inc., A		United States		49,796		788,769
a,f	Cardlytics Inc.		United States		11,618		785,144
	Comcast Corp., A		United States		1,147		57,327
c	Fox Corp.		United States		1,639		58,529
	The Interpublic Group of Cos. Inc.		United States		1,727		57,319
a	ITV PLC		United Kingdom		293,248		430,871
c	Nexstar Media Group Inc., A		United States		172		25,714
	Shaw Communications Inc., B		Canada		135,622		3,928,149
	Stroeer SE & Co. KGaA		Germany		1,613		124,484
	Tegna Inc.		United States		2,608		51,508
							6,307,814

franklintempleton.com Semiannual Report 27

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Shares/ Warrants/ Rights		Value
	Common Stocks and Other Equity Interests (continued)
	Metals & Mining 0.1%
a	Hitachi Metals Ltd.		Japan		49,017	$	910,060
	Newmont Corp.		United States		1,110		60,961
	Nucor Corp.		United States		641		68,113
a	ThyssenKrupp AG		Germany		31,533		345,751
							1,384,885
	Multiline Retail 0.3%
b	Kohl’s Corp.		United States		17,744		909,025
c	Target Corp.		United States		15,448		3,766,840
							4,675,865
	Multi-Utilities 0.3%
	Consolidated Edison Inc.		United States		54,242		4,211,349
	Oil, Gas & Consumable Fuels 0.1%
a,f	Battalion Oil Corp.		United States		3,790		43,395
	California Resources Corp.		United States		5,609		219,144
	Chevron Corp.		United States		602		67,948
c	ConocoPhillips		United States		895		62,766
c	EOG Resources Inc.		United States		738		64,206
	Gazprom PJSC, ADR		Russia		51,831		463,887
c	Marathon Petroleum Corp.		United States		154		9,371
c	MPLX LP		United States		1,736		50,882
a	Ranger Oil Corp., A		United States		280		7,538
a	Whiting Petroleum Corp.		United States		419		27,105
							1,016,242
	Personal Products 0.2%
	The Estee Lauder Cos. Inc., A		United States		406		134,820
a	Unilever PLC		United Kingdom		44,866		2,310,821
							2,445,641
	Pharmaceuticals 1.1%
a	Arvinas Inc.		United States		3,611		273,028
a	Bausch Health Cos. Inc.		United States		15,079		359,484
	Bristol-Myers Squibb Co.		United States		32,174		1,725,492
a	Catalent Inc.		United States		2,601		334,645
c	Eli Lilly & Co., W		United States		18,363		4,554,758
	Hikma Pharmaceuticals PLC		Jordan		19,075		560,681
a	Horizon Therapeutics PLC		United States		7,479		776,021
	Johnson & Johnson		United States		1,588		247,617
c	Merck & Co. Inc.		United States		830		62,175
	Novo Nordisk AS, ADR		Denmark		12,001		1,282,067
	Pfizer Inc.		United States		1,565		84,087
a,f	Revance Therapeutics Inc.		United States		19,987		273,422
	Roche Holding AG		Switzerland		13,876		5,417,334
							15,950,811
	Professional Services 1.2%
a	51job Inc., ADR		China		9,765		563,440
a	Clarivate PLC		United States		92		2,147
a	IHS Markit Ltd.		United States		50,569		6,463,730
a,d	Intertrust NV, 144A		Netherlands		385,196		8,911,720
	SGS SA		Switzerland		208		627,489
							16,568,526

28 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Shares/ Warrants/ Rights		Value
	Common Stocks and Other Equity Interests (continued)
	Road & Rail 2.1%
f	Canadian Pacific Railway Ltd.		Canada		45,054	$	3,155,132
	CSX Corp.		United States		36,628		1,269,526
a,b	Hertz Global Holdings Inc.		United States		136,656		3,160,170
	Kansas City Southern		United States		44,952		13,074,289
a	Tusimple Holdings Inc., A		United States		24,047		961,640
a	Uber Technologies Inc.		United States		41,899		1,592,162
b	Union Pacific Corp.		United States		30,099		7,092,528
							30,305,447
	Semiconductors & Semiconductor Equipment 1.9%
a	Advanced Micro Devices Inc.		United States		18,897		2,992,718
	Analog Devices Inc.		United States		52		9,373
c	Applied Materials Inc.		United States		1,234		181,633
	ASML Holding NV, G		Netherlands		3,026		2,395,109
	Azenta Inc.		United States		3,346		378,433
	KLA Corp.		United States		5,531		2,257,367
	LAM Research Corp.		United States		116		78,863
	Marvell Technology Inc.		United States		64,049		4,558,367
	Micron Technology Inc.		United States		26,593		2,233,812
c	NVIDIA Corp.		United States		6,468		2,113,483
	NXP Semiconductors NV		China		348		77,729
	QUALCOMM Inc.		United States		1,374		248,089
a	SolarEdge Technologies Inc.		United States		1,843		604,062
a	Sunpower Corp., A		United States		921		26,387
	Taiwan Semiconductor Manufacturing Co. Ltd., ADR		Taiwan		160		18,744
c	Texas Instruments Inc.		United States		13,046		2,509,659
	Xilinx Inc.		United States		26,948		6,156,271
							26,840,099
	Software 4.7%
a	Adobe Inc.		United States		8,892		5,956,306
a	Atlassian Corp. PLC, A		United States		3,736		1,405,931
a	Autodesk Inc.		United States		272		69,140
a	Avalara Inc.		United States		14,659		2,047,569
a	Blackberry Ltd.		Canada		25,332		241,161
a,b,c	Box Inc., A		United States		33,842		792,241
a	Ceridian HCM Holding Inc.		United States		23,060		2,522,764
a	Dynatrace Inc.		United States		62,296		3,915,304
a	Embark Technology Inc., 12/31/27, wts.		United States		1,040		1,477
a	Five9 Inc.		United States		33,702		4,796,806
a	HubSpot Inc.		United States		3,129		2,524,821
a	Informatica Inc., A		United States		12,909		415,541
b	Intuit Inc.		United States		7,596		4,954,871
a	IronSource Ltd.		Israel		12,605		108,151
a	Livevox Holdings Inc., 6/18/26, wts.		United States		23,891		15,051
	McAfee Corp., A		United States		101,969		2,635,899
b,c	Microsoft Corp.		United States		25,687		8,491,865
a	Nextnav Inc., 10/31/27, wts.		United States		8,747		13,120
a,b	Nuance Communications Inc.		United States		157,272		8,727,023
c	Oracle Corp.		United States		711		64,516
a	Palo Alto Networks Inc.		United States		5,804		3,174,440
a	Salesforce.com Inc.		United States		12,570		3,581,947
	SAP SE		Germany		52,910		6,780,454
a	ServiceNow Inc.		United States		3,185		2,062,924
a	Vonage Holdings Corp.		United States		48,259		995,101

franklintempleton.com Semiannual Report 29

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Shares/ Warrants/ Rights		Value
	Common Stocks and Other Equity Interests (continued)
	Software (continued)
a	Zix Corp.		United States		54,106	$	458,278
							66,752,701
	Specialty Retail 1.6%
b,c	Bath & Body Works Inc.		United States		20,576		1,545,875
a	Cazoo Group Ltd., 8/26/26, wts.		Cayman Islands		19,178		29,183
a	Enjoy Technology Inc., 12/1/25, wts.		United States		2,085		1,459
a	Five Below Inc.		United States		16,866		3,431,219
a	Floor & Decor Holdings Inc., A		United States		14,115		1,819,565
a	Frasers Group PLC		United Kingdom		180,900		1,640,910
	The Home Depot Inc.		United States		20,256		8,114,756
	Lowe’s Cos. Inc.		United States		116		28,372
	Ross Stores Inc.		United States		605		65,999
	The TJX Cos. Inc.		United States		1,028		71,343
	Tractor Supply Co.		United States		12,509		2,818,653
a,b	Victoria’s Secret & Co.		United States		5,452		295,935
a,d	Watches of Switzerland Group PLC, 144A		United Kingdom		167,853		2,995,425
							22,858,694
	Technology Hardware, Storage & Peripherals 0.0%†
	Apple Inc.		United States		1,686		278,696
	HP Inc.		United States		2,168		76,487
c	NetApp Inc.		United States		800		71,104
a,d	Xiaomi Corp., B, 144A		China		6,400		15,920
							442,207
	Textiles, Apparel & Luxury Goods 0.6%
	Adidas AG		Germany		15,140		4,378,737
a	Capri Holdings Ltd.		United States		46,992		2,782,866
	LVMH Moet Hennessy Louis Vuitton SE		France		174		135,301
	Nike Inc., B		United States		825		139,623
a,d	Samsonite International SA, 144A		United States		35,674		66,712
b	Tapestry Inc.		United States		43,737		1,754,729
							9,257,968
	Trading Companies & Distributors 0.5%
	Brenntag SE		Germany		42,109		3,606,639
	Herc Holdings Inc.		United States		15,007		2,557,943
	IMCD Group NV		Netherlands		2,228		494,882
							6,659,464
	Transportation Infrastructure 0.3%
a	Atlantia SpA		Italy		75,597		1,380,523
a	Sydney Airport		Australia		436,123		2,568,631
							3,949,154
	Water Utilities 0.1%
	Guangdong Investment Ltd.		China		1,272,652		1,694,041
	Wireless Telecommunication Services 0.1%
a	T-Mobile USA Inc.		United States		5,665		616,408
b	Vodafone Group PLC, ADR		United Kingdom		49,788		730,888
							1,347,296
	Total Common Stocks and Other Equity Interests (Cost $442,042,167)						597,412,680

30 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Shares/ Warrants/ Rights		Value
	Exchange Traded Funds (Cost $613,561) 0.1%
	Vaneck Oil Services ETF		United States		3,165	$	564,509
	Convertible Preferred Stocks 0.1%
	Banks 0.1%
	Bank of America Corp., 7.25%, cvt. pfd., L		United States		206		292,108
	Wells Fargo & Co., 7.50%, cvt. pfd., L		United States		268		392,893
							685,001
	Diversified Telecommunication Services 0.0%†
d	2020 Cash Mandatory Exchangeable Trust, 5.25%, cvt. pfd., 144A		United States		250		249,320
	Food Products 0.0%†
	Bunge Ltd., 4.875%, cvt. pfd.		United States		1,270		154,788
	Gas Utilities 0.0%†
	El Paso Energy Capital Trust I, 4.75%, cvt. pfd.		United States		114		5,748
	Health Care Equipment & Supplies 0.0%†
	Boston Scientific Corp., 5.50%, cvt. pfd., A		United States		368		38,640
	Media 0.0%†
	Viacomcbs Inc., 5.75%, cvt. pfd., A		United States		7,640		394,682
	Total Convertible Preferred Stocks (Cost $1,630,588)						1,528,179
	Preferred Stocks 0.0%†
	Diversified Financial Services 0.0%†
a	2MX Organic SA, pfd.		France		3,964		44,542
	Electric Utilities 0.0%†
	SCE Trust VI, 5.00%, pfd.		United States		1,425		35,340
	Professional Services 0.0%†
	Clarivate PLC, 5.25%, pfd.		United Kingdom		2,010		180,317
	Thrifts & Mortgage Finance 0.0%†
	FHLMC, pfd.,
	O, 5.81%		United States		17,150		85,407
	Z, 8.375%		United States		8,177		30,010
	FNMA, pfd.,
	a O		United States		16,250		86,125
	S, 8.25%		United States		15,150		59,085
							260,627
	Total Preferred Stocks (Cost $539,053)						520,826
				Principal Amount*
	Convertible Bonds 12.3%
	Aerospace & Defense 0.2%
	Kaman Corp., senior note, 3.25%, 5/01/24		United States		1,430,000		1,439,295
b	Parsons Corp., senior note, 0.25%, 8/15/25		United States		1,160,000		1,144,920
							2,584,215
	Air Freight & Logistics 0.2%
	Air Transport Services Group Inc., senior note, 1.125%, 10/15/24		United States		797,000		829,499
	Atlas Air Worldwide Holdings Inc., senior note,
	2.25%, 6/01/22		United States		1,706,000		2,091,983
	1.875%, 6/01/24		United States		246,000		380,685
							3,302,167

franklintempleton.com Semiannual Report 31

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Principal Amount*			Value
	Convertible Bonds (continued)
	Airlines 0.2%
d	Air France-KLM, senior note, Reg S, 0.125%, 3/25/26		France		37,947	EUR	$	690,914
d	GOL Equity Finance SA, senior note, 144A, 3.75%, 7/15/24		Brazil		1,190,000			1,016,101
d,f	Jetblue Airways Corp., senior note, 144A, 0.50%, 4/01/26		United States		446,000			421,916
	Southwest Airlines Co., senior note, 1.25%, 5/01/25		United States		320,000			431,000
f	Spirit Airlines Inc., senior note, 1.00%, 5/15/26		United States		697,000			618,936
								3,178,867
	Auto Components 0.1%
	Patrick Industries Inc., senior note, 1.00%, 2/01/23		United States		1,049,000			1,167,668
	Automobiles 0.4%
d	Fisker Inc., senior note, 144A, 2.50%, 9/15/26		United States		1,233,000			1,562,555
d	Li Auto Inc., senior note, 144A, 0.25%, 5/01/28		China		1,045,000			1,484,423
	NFI Group Inc., 5.00%, 1/15/27		Canada		912,000	CAD		713,922
d	NIO Inc., senior note, 144A, zero cpn., 2/01/26		China		1,612,000			1,434,841
							5,195,741
	Banks 0.3%
	Hope Bancorp Inc., senior bond, 2.00%, 5/15/38		United States		2,536,000			2,452,467
d	JPMorgan Chase Bank NA, senior note, Reg S, zero cpn., 12/28/23		United States		1,200,000			1,195,200
								3,647,667
	Biotechnology 1.0%
d	Avid SPV LLC, senior note, 144A, 1.25%, 3/15/26		United States		953,000			1,538,160
	BioMarin Pharmaceutical Inc., senior sub. note, 1.25%, 5/15/27		United States		1,633,000			1,701,268
	Coherus Biosciences Inc., senior sub. note, 1.50%, 4/15/26		United States		1,158,000			1,401,180
d	Dynavax Technologies Corp., 144A, 2.50%, 5/15/26		United States		795,000			1,426,528
	Gossamer Bio Inc., senior note, 5.00%, 6/01/27		United States		820,000			800,320
	Insmed Inc., senior note, 0.75%, 6/01/28		United States		1,249,000			1,378,584
d,f	Intercept Pharmaceuticals Inc., senior secured note, 144A, 3.50%, 2/15/26		United States		1,213,000			1,361,843
d	Ionis Pharmaceuticals Inc., senior note, 144A, zero cpn., 4/01/26		United States		1,031,000			879,134
	Karyopharm Therapeutics Inc., senior note, 3.00%, 10/15/25		United States		745,000			602,053
	Ligand Pharmaceuticals Inc., senior note, 0.75%, 5/15/23		United States		1,093,000			1,120,325
d	Mannkind Corp., senior note, 144A, 2.50%, 3/01/26		United States		1,207,000			1,397,423
d	Pharming Group NV, senior note, Reg S, 3.00%, 1/21/25		Netherlands		800,000	EUR		756,668
								14,363,486
	Capital Markets 0.1%
d	SGX Treasury I Pte Ltd., senior note, Reg S, zero cpn., 3/01/24		Singapore		1,200,000	EUR		1,369,080
	Chemicals 0.1%
d	Amyris Inc., senior note, 144A, 1.50%, 11/15/26		United States		1,201,000			1,152,960
	Consumer Finance 0.7%
	Encore Capital Group Inc., senior note,
	3.25%, 3/15/22		United States		2,309,000			2,949,747
	3.25%, 10/01/25		United States		947,000			1,482,647
	EZCORP Inc., senior note, 2.875%, 7/01/24		United States		1,003,000			1,037,478
	PRA Group Inc., senior note, 3.50%, 6/01/23		United States		1,672,000			1,836,065
d	SoFi Technologies Inc., senior note, 144A, zero cpn., 10/15/26		United States		624,000			700,284
d	Upstart Holdings Inc., senior note, 144A, 0.25%, 8/15/26		United States		986,000			1,071,763
d	Zip Co. Ltd., senior note, Reg S, zero cpn., 4/23/28		Australia		800,000	AUD		487,569
								9,565,553
	Diversified Consumer Services 0.2%
	Chegg Inc., senior note,
	0.125%, 3/15/25		United States		276,000			265,788
	zero cpn., 9/01/26		United States		2,433,000			2,003,575

32 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Principal Amount*		Value
	Convertible Bonds (continued)
	Diversified Consumer Services (continued)
	Stride Inc., senior note, 1.125%, 9/01/27		United States		1,048,000	$	1,034,481
							3,303,844
	Diversified Financial Services 0.1%
	Lendingtree Inc., senior note, 0.50%, 7/15/25		United States		1,262,000		1,030,477
	Diversified Telecommunication Services 0.1%
d	Radius Global Infrastructure Inc., senior note, 144A, 2.50%, 9/15/26		United States		1,016,000		1,030,605
	Electrical Equipment 0.0%†
d	Stem Inc., senior note, 144A, 0.50%, 12/01/28		United States		364,000		366,730
	Electronic Equipment, Instruments & Components 0.3%
	OSI Systems Inc., senior note, 1.25%, 9/01/22		United States		1,614,000		1,648,224
	PAR Technology Corp., senior note, 1.50%, 10/15/27		United States		801,000		801,501
	Vishay Intertechnology Inc., senior note, 2.25%, 6/15/25		United States		1,366,000		1,396,042
							3,845,767
	Energy Equipment & Services 0.1%
f	Helix Energy Solutions Group Inc., senior note, 6.75%, 2/15/26		United States		1,563,000		1,506,278
	Entertainment 0.3%
	Cinemark Holdings Inc., senior note, 4.50%, 8/15/25		United States		1,123,000		1,571,498
	Live Nation Entertainment Inc., senior note, 2.00%, 2/15/25		United States		370,000		456,950
d	The Marcus Corp., senior note, 144A, 5.00%, 9/15/25		United States		750,000		1,354,688
	Sea Ltd., senior note, 0.25%, 9/15/26		Taiwan		1,190,000		1,166,795
d	Zynga Inc., senior note, 144A, zero cpn., 12/15/26		United States		230,000		210,737
							4,760,668
	Equity Real Estate Investment Trusts (REITs) 0.3%
d	Braemar Hotels & Resorts Inc., senior note, 144A, 4.50%, 6/01/26		United States		485,000		514,110
d	IIP Operating Partnership LP, senior note, 144A, 3.75%, 2/21/24		United States		470,000		1,838,875
	Pebblebrook Hotel Trust, senior note, 1.75%, 12/15/26		United States		1,440,000		1,531,440
	Summit Hotel Properties Inc., senior note, 1.50%, 2/15/26		United States		1,137,000		1,145,124
							5,029,549
	Food & Staples Retailing 0.2%
	The Chefs’ Warehouse Inc., senior note, 1.875%, 12/01/24		United States		2,405,000		2,522,391
	Food Products 0.0%†
d	Beyond Meat Inc., senior note, 144A, zero cpn., 3/15/27		United States		986,000		698,827
	Health Care Equipment & Supplies 0.5%
d	Alphatec Holdings Inc., senior note, 144A, 0.75%, 8/01/26		United States		969,000		926,001
d	Cutera Inc., senior note, 144A, 2.25%, 3/15/26		United States		1,007,000		1,303,199
	Mesa Laboratories Inc., senior note, 1.375%, 8/15/25		United States		595,000		733,537
	NuVasive Inc., senior note,
	1.00%, 6/01/23		United States		2,056,000		2,041,865
	0.375%, 3/15/25		United States		600,000		566,250
d	SmileDirectClub Inc., senior note, 144A, zero cpn., 2/01/26		United States		1,177,000		501,510
	Varex Imaging Corp., senior note, 4.00%, 6/01/25		United States		1,165,000		1,814,487
							7,886,849
	Health Care Providers & Services 0.1%
	1life Healthcare Inc., senior note, 3.00%, 6/15/25		United States		985,000		893,514
d	Brookdale Senior Living Inc., senior note, 144A, 2.00%, 10/15/26		United States		253,000		270,356
	Guardant Health Inc., senior note, zero cpn., 11/15/27		United States		70,000		72,931
	Petiq Inc., senior note, 4.00%, 6/01/26		United States		678,000		744,472
							1,981,273

franklintempleton.com Semiannual Report 33

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Principal Amount*			Value
	Convertible Bonds (continued)
	Health Care Technology 0.1%
d	Bilibili Inc., senior note, 144A, 0.50%, 12/01/26		China		95,000		$	92,910
	Livongo Health Inc., senior note, 0.875%, 6/01/25		United States		105,000			122,522
	Tabula Rasa Healthcare Inc., senior sub. note, 1.75%, 2/15/26		United States		713,000			558,603
	Teladoc Health Inc., senior note, 1.25%, 6/01/27		United States		430,000			393,089
								1,167,124
	Hotels, Restaurants & Leisure 0.2%
d	Airbnb Inc., senior note, 144A, zero cpn., 3/15/26		United States		768,000			762,240
d	Draftkings Inc., senior note, 144A, zero cpn., 3/15/28		United States		123,000			95,908
d	Marriott Vacations Worldwide Corp., senior note, 144A, zero cpn., 1/15/26		United States		246,000			270,293
	Penn National Gaming Inc., senior note, 2.75%, 5/15/26		United States		40,000			93,952
	Royal Caribbean Cruises Ltd., senior note, 2.875%, 11/15/23		United States		1,576,000			1,773,157
								2,995,550
	Independent Power & Renewable Electricity Producers 0.1%
d	Sunnova Energy International Inc., senior note, 144A, 0.25%, 12/01/26		United States		1,111,000			1,386,806
	Interactive Media & Services 0.0%†
d	Twitter Inc., senior note, 144A, zero cpn., 3/15/26		United States		130,000			116,168
	Internet & Direct Marketing Retail 0.6%
d	Cornwall Jersey Ltd., senior note, Reg S, 0.75%, 4/16/26		United Kingdom		200,000	GBP		236,163
d	Delivery Hero AG, senior note, Reg S, 1.50%, 1/15/28		Saudi Arabia		1,100,000	EUR		1,315,893
d,f	Expedia Group Inc., senior note, 144A, zero cpn., 2/15/26		United States		85,000			91,545
	Fiverr International Ltd., senior note, zero cpn., 11/01/25		United States		713,000			721,912
d	Groupon Inc., senior note, 144A, 1.125%, 3/15/26		United States		1,298,000			1,022,175
d	Just Eat Takeaway.Com NV, B, senior note, Reg S, 0.625%, 2/09/28		United Kingdom		600,000	EUR		589,746
	Pinduoduo Inc., senior note, zero cpn., 12/01/25		China		186,000			166,098
d	Porch Group Inc., senior note, 144A, 0.75%, 9/15/26		United States		919,000			1,012,049
d	The Realreal Inc., senior note, 144A, 1.00%, 3/01/28		United States		339,000			302,524
d	Takeaway.com NV, senior note, Reg S, 1.25%, 4/30/26		United Kingdom		900,000	EUR		969,254
	Wayfair Inc., senior note,
	0.625%, 10/01/25		United States		1,129,000			1,116,016
	1.00%, 8/15/26		United States		325,000			593,612
	Zillow Group Inc., senior note, 1.375%, 9/01/26		United States		25,000			35,906
								8,172,893
	IT Services 0.3%
d	Affirm Holdings Inc., senior note, 144A, zero cpn., 11/15/26		United States		728,000			717,850
f	CSG Systems International Inc., senior bond, 4.25%, 3/15/36		United States		2,217,000			2,286,281
d	Digitalocean Holdings Inc., senior note, 144A, zero cpn., 12/01/26		United States		297,000			291,617
d	Fastly Inc., senior note, 144A, zero cpn., 3/15/26		United States		1,551,000			1,308,656
								4,604,404
	Leisure Products 0.2%
d	NCL Corp. Ltd., senior note, 144A, 1.125%, 2/15/27		United States		1,873,000			1,725,033
d	Peloton Interactive Inc., senior note, 144A, zero cpn., 2/15/26		United States		695,000			582,062
								2,307,095
	Life Sciences Tools & Services 0.1%
d	Inotiv Inc., senior note, 144A, 3.25%, 10/15/27		United States		790,000			1,083,536
	Machinery 0.2%
f	Fortive Corp., senior note, 0.875%, 2/15/22		United States		1,517,000			1,525,343
d	The Greenbrier Cos. Inc., senior note, 144A, 2.875%, 4/15/28		United States		1,294,000			1,339,290
								2,864,633

34 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Principal Amount*			Value
	Convertible Bonds (continued)
	Media 1.1%
	Dish Network Corp.,
	senior bond, 3.375%, 8/15/26		United States		3,035,000		$	2,805,105
	d senior note, 144A, zero cpn., 12/15/25		United States		80,000			77,400
d	Liberty Broadband Corp., 144A,
	senior bond, 1.25%, 9/30/50		United States		1,934,000			1,926,264
	senior bond, 2.75%, 9/30/50		United States		2,256,000			2,309,991
	Liberty Interactive LLC,
	senior bond, 4.00%, 11/15/29		United States		1,326,000			1,014,390
	senior note, 3.75%, 2/15/30		United States		1,784,000			1,371,450
d	Liberty Media Corp., senior bond, 144A,
	2.125%, 3/31/48		United States		1,958,000			2,021,635
	2.75%, 12/01/49		United States		1,720,000			1,782,780
b,d	Magnite Inc., senior note, 144A, 0.25%, 3/15/26		United States		1,813,000			1,420,109
d	Techtarget Inc., senior note, 144A, 0.125%, 12/15/25		United States		867,000			1,286,678
								16,015,802
	Metals & Mining 0.3%
d	Century Aluminum Co., senior note, 144A, 2.75%, 5/01/28		United States		571,000			582,420
d	Ivanhoe Mines Ltd., senior note, 144A, 2.50%, 4/15/26		Canada		776,000			1,022,747
d	MP Materials Corp., senior note, 144A, 0.25%, 4/01/26		United States		1,362,000			1,632,782
	Osisko Gold Royalties Ltd., senior note, 4.00%, 12/31/22		Canada		383,000	CAD		306,562
	Pretium Resources Inc., senior sub. note, 2.25%, 3/15/22		Canada		476,000			477,047
								4,021,558
	Mortgage Real Estate Investment Trusts (REITs) 0.8%
	Apollo Commercial Real Estate Finance Inc., senior note, 4.75%, 8/23/22		United States		1,240,000			1,252,227
	Arbor Realty Trust Inc., senior note, 4.75%, 11/01/22		United States		1,861,000			2,041,284
	KKR Real Estate Finance Trust Inc., senior note, 6.125%, 5/15/23		United States		715,000			755,693
	PennyMac Corp., senior note,
	5.50%, 11/01/24		United States		1,840,000			1,841,150
	d144A, 5.50%, 3/15/26		United States		1,338,000			1,286,858
	Redwood Trust Inc., senior note, 4.75%, 8/15/23		United States		2,286,000			2,356,009
	Starwood Property Trust Inc., senior note, 4.375%, 4/01/23		United States		987,000			1,050,633
	Two Harbors Investment Corp., senior note, 6.25%, 1/15/26		United States		1,070,000			1,091,104
								11,674,958
	Personal Products 0.2%
d	The Beauty Health Co., senior note, 144A, 1.25%, 10/01/26		United States		1,120,000			1,240,400
	Herbalife Nutrition Ltd., senior note, 2.625%, 3/15/24		United States		2,030,000			1,997,012
								3,237,412
	Pharmaceuticals 0.8%
	Aerie Pharmaceuticals Inc., senior note, 1.50%, 10/01/24		United States		713,000			636,798
	Aurora Cannabis Inc., senior note, 5.50%, 2/28/24		Canada		1,473,000			1,253,228
d	Avadel Finance Cayman Ltd., senior note, 144A, 4.50%, 2/01/23		United States		1,459,000			1,640,393
d	Canopy Growth Corp., senior note, 144A, 4.25%, 7/15/23		Canada		1,058,000	CAD		795,084
	Collegium Pharmaceutical Inc., senior note, 2.625%, 2/15/26		United States		1,009,000			956,658
	Innoviva Inc., sub. note, 2.125%, 1/15/23		United States		2,356,000			2,547,425
	Omeros Corp., senior note, 5.25%, 2/15/26		United States		972,000			722,487
b	Revance Therapeutics Inc., senior note, 1.75%, 2/15/27		United States		1,451,000			1,169,869
	Zogenix Inc., senior note, 2.75%, 10/01/27		United States		1,314,000			1,120,448
								10,842,390
	Photography 0.1%
	Pacira Biosciences Inc., senior note, 0.75%, 8/01/25		United States		867,000			908,724
	Professional Services 0.0%†
d	Upwork Inc., senior note, 144A, 0.25%, 8/15/26		United States		476,000			460,027

franklintempleton.com Semiannual Report 35

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Principal Amount*			Value
	Convertible Bonds (continued)
	Real Estate Management & Development 0.2%
d	Opendoor Technologies Inc., senior note, 144A, 0.25%, 8/15/26		United States		1,357,000		$	1,449,563
d	Realogy Group LLC / Realogy Co.-Issuer Corp., senior note, 144A, 0.25%, 6/15/26		United States		862,000			823,210
d	Redfin Corp., senior note, 144A, 0.50%, 4/01/27		United States		1,250,000			1,032,500
								3,305,273
	Road & Rail 0.0%†
d	Uber Technologies Inc., senior note, 144A, zero cpn., 12/15/25		United States		125,000			116,625
	Semiconductors & Semiconductor Equipment 0.2%
d	ams AG, senior note, Reg S, 2.125%, 11/03/27		Austria		1,300,000	EUR		1,449,710
d	Camtek Ltd., senior note, 144A, zero cpn., 12/01/26		Israel		237,000			252,287
d	Impinj Inc., senior note, 144A, 1.125%, 5/15/27		United States		279,000			279,142
	Sunpower Corp., senior note, 4.00%, 1/15/23		United States		859,000			1,160,187
								3,141,326
	Software 1.0%
	Alteryx Inc., senior note, 0.50%, 8/01/24		United States		1,297,000			1,234,938
	Avaya Holdings Corp., senior note, 2.25%, 6/15/23		United States		1,337,000			1,411,203
d	Bentley Systems Inc., senior note, 144A, 0.375%, 7/01/27		United States		382,000			353,292
d	Blackline Inc., senior note, 144A, zero cpn., 3/15/26		United States		1,250,000			1,206,250
d	Dye & Durham Ltd., senior note, 144A, 3.75%, 3/01/26		Canada		888,000	CAD		677,756
b,d	fuboTV Inc., senior note, 144A, 3.25%, 2/15/26		United States		1,257,000			1,087,561
b	i3 Verticals LLC, senior note, 1.00%, 2/15/25		United States		842,000			750,825
d	Kaleyra Inc., senior note, 144A, 6.125%, 6/01/26		Italy		696,000			712,602
	Mandiant Inc., senior note, 0.875%, 6/01/24		United States		1,182,000			1,227,064
d	Microstrategy Inc., senior note, 144A, zero cpn., 2/15/27		United States		594,000			479,358
d	Mitek Systems Inc., senior note, 144A, 0.75%, 2/01/26		United States		1,019,000			1,110,408
d	Nutanix Inc., senior note, 144A, 0.25%, 10/01/27		United States		1,146,000			1,086,551
	Palo Alto Networks Inc., senior note, 0.375%, 6/01/25		United States		190,000			354,825
d	Rapid7 Inc., senior note, 144A, 0.25%, 3/15/27		United States		1,100,000			1,471,230
	Splunk Inc., senior note, 1.125%, 6/15/27		United States		1,054,000			1,001,959
d	Veritone Inc., senior note, 144A, 1.75%, 11/15/26		United States		546,000			553,849
								14,719,671
	Specialty Retail 0.3%
d	Dufry One BV, senior note, Reg S, 0.75%, 3/30/26		Switzerland		600,000	CHF		618,385
b	Guess? Inc., senior note, 2.00%, 4/15/24		United States		1,111,000			1,274,178
d	Shift Technologies Inc., senior note, 144A, 4.75%, 5/15/26		United States		981,000			899,813
d	Vroom Inc., senior note, 144A, 0.75%, 7/01/26		United States		1,188,000			818,819
								3,611,195
	Technology Hardware, Storage & Peripherals 0.0%†
	Pure Storage Inc., senior note, 0.125%, 4/15/23		United States		319,000			411,574
	Total Convertible Bonds (Cost $172,266,165)							176,655,406
	Corporate Bonds and Notes 10.8%
	Aerospace & Defense 0.2%
	The Boeing Co.,
	senior bond, 2.25%, 6/15/26		United States		115,000			115,425
	senior bond, 2.95%, 2/01/30		United States		50,000			50,486
	senior bond, 3.375%, 6/15/46		United States		90,000			88,821
	senior bond, 3.625%, 3/01/48		United States		25,000			25,209
	senior bond, 3.90%, 5/01/49		United States		100,000			105,081
	senior bond, 3.75%, 2/01/50		United States		130,000			135,093
	senior bond, 5.805%, 5/01/50		United States		125,000			168,849
	senior bond, 3.825%, 3/01/59		United States		25,000			25,414
	senior bond, 3.95%, 8/01/59		United States		30,000			31,374
	senior note, 2.196%, 2/04/26		United States		435,000			434,338
	senior note, 5.15%, 5/01/30		United States		140,000			162,610

36 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Principal Amount*			Value
	Corporate Bonds and Notes (continued)
	Aerospace & Defense (continued)
d	Bombardier Inc., senior note, 144A, 7.50%, 12/01/24		Canada		822,000		$	853,988
	Embraer Netherlands Finance BV, senior bond, 5.05%, 6/15/25		Brazil		55,000			56,505
d	Leonardo US Holdings Inc., senior bond, 144A, 6.25%, 1/15/40		Italy		236,000			277,300
	Spirit Aerosystems Inc.,
	senior bond, 4.60%, 6/15/28		United States		20,000			18,970
	d senior secured note, 144A, 5.50%, 1/15/25		United States		376,000			388,051
								2,937,514
	Airlines 0.2%
	American Airlines 2015-2 Class Aa Pass-Through Trust, 3.60%, 9/22/27		United States		1,021,220			1,059,644
	American Airlines 2016-1 Class Aa Pass-Through Trust, AA, 3.575%, 1/15/28		United States		411,411			430,651
d	American Airlines Group Inc., senior note, 144A, 3.75%, 3/01/25		United States		700,000			624,603
	United Airlines 2020-1 Class B Pass-Through Trust, 4.875%, 1/15/26		United States		44,900			47,120
d	United Airlines Inc., senior secured note, 144A,
	4.375%, 4/15/26		United States		40,000			40,237
	4.625%, 4/15/29		United States		55,000			54,808
	United Airlines Pass-Through Trust, 2019-2, B, 3.50%, 5/01/28		United States		342,590			340,889
								2,597,952
	Auto Components 0.0%†
	Aptiv PLC, senior bond, 3.10%, 12/01/51		United States		470,000			456,811
	Automobiles 0.2%
d	Aston Martin Capital Holdings Ltd., senior secured note, 144A, 10.50%, 11/30/25		United Kingdom		700,000			759,066
	Ford Motor Co., senior bond, 3.25%, 2/12/32		United States		420,000			420,689
	Ford Motor Credit Co. LLC, senior note, 3.625%, 6/17/31		United States		700,000			715,344
	General Motors Co., senior bond,
	5.20%, 4/01/45		United States		30,000			37,106
	5.40%, 4/01/48		United States		140,000			179,793
	f 5.95%, 4/01/49		United States		190,000			260,690
	General Motors Financial Co. Inc.,
	g junior sub. note, A, 5.75% to 9/30/27, FRN thereafter, Perpetual		United States		100,000			106,975
	f,g junior sub. note, B, 6.50% to 3/30/28, FRN thereafter, Perpetual		United States		75,000			84,037
	f,g junior sub. note, C, 5.70% to 9/30/30, FRN thereafter, Perpetual		United States		35,000			39,681
	senior note, 1.20%, 10/15/24		United States		85,000			84,804
								2,688,185
	Banks 0.6%
d	Axis Bank Ltd., senior note, Reg S, 3.00%, 8/08/22		India		400,000			404,857
d,h	Banco Hipotecario SA, senior note, 144A, FRN, 38.167%, (ARS BADLAR + 4.00%), 11/07/22		Argentina		3,160,000	ARS		13,554
d	Banco Macro SA, senior note, 144A, 17.50%, 5/08/22		Argentina		1,740,000	ARS		7,472
d	Bank of Communications Hong Kong Ltd., sub. bond, Reg S, 2.304% to 7/08/26, FRN thereafter, 7/08/31		Hong Kong		400,000			391,776
	Barclays PLC,
	sub. bond, 3.564% to 9/23/30, FRN thereafter, 9/23/35		United Kingdom		325,000			334,671
	g junior sub. note, 4.375% to 3/15/28, FRN thereafter, Perpetual		United Kingdom		210,000			201,986
d	Canara Bank, E, senior note, Reg S, 3.875%, 3/28/24		India		466,000			485,711
	Citigroup Inc., senior note, 1.281% to 11/3/24, FRN thereafter, 11/03/25		United States		450,000			449,006
	Deutsche Bank AG,
	senior bond, 3.547% to 9/18/30, FRN thereafter, 9/18/31		Germany		150,000			158,451
	sub. bond, 3.729% to 1/14/31, FRN thereafter, 1/14/32		Germany		400,000			408,048
g	HSBC Holdings PLC, junior sub. note, 6.25% to 3/23/23, FRN thereafter, Perpetual		United Kingdom		1,400,000			1,449,000

franklintempleton.com Semiannual Report 37

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Principal Amount*		Value
	Corporate Bonds and Notes (continued)
	Banks (continued)
d	ICICI Bank Ltd., E, senior note, Reg S, 3.25%, 9/09/22		India		600,000	$	609,522
d	Indusind Bank Ltd., E, senior note, Reg S, 3.875%, 4/15/22		India		1,200,000		1,204,788
	Keybank NA, senior note, 0.433% to 6/14/23, FRN thereafter, 6/14/24		United States		465,000		462,210
d	Societe Generale SA, sub. bond, 144A, 3.653% to 7/08/30, FRN thereafter, 7/08/35		France		200,000		206,743
d	Standard Chartered PLC, sub. bond, 144A, 3.265% to 11/18/30, FRN thereafter, 2/18/36		United Kingdom		255,000		251,941
d	State Bank of India, E, senior note, Reg S, 4.50%, 9/28/23		India		600,000		634,953
d,g	TMB Bank PCL, E, junior sub. note, Reg S, 4.90% to 12/02/24, FRN thereafter, Perpetual		Thailand		400,000		401,471
d,i	VTB Bank OJSC Via VTB Capital SA, senior note, loan participation, Reg S, 6.95%, 10/17/22		Russia		959,000		985,772
							9,061,932
	Beverages 0.0%†
d	Becle SAB de CV, senior bond, 144A, 2.50%, 10/14/31		Mexico		235,000		230,605
	Fomento Economico Mexicano SAB de CV, senior bond, 3.50%, 1/16/50		Mexico		244,000		261,999
							492,604
	Capital Markets 0.5%
	Ares Capital Corp.,
	senior bond, 3.20%, 11/15/31		United States		235,000		230,344
	senior note, 2.875%, 6/15/28		United States		245,000		244,323
d	Barings BDC Inc., senior note, 144A, 3.30%, 11/23/26		United States		125,000		123,852
d	Coinbase Global Inc., senior bond, 144A, 3.625%, 10/01/31		United States		800,000		743,332
	FS KKR Capital Corp., senior note,
	3.40%, 1/15/26		United States		365,000		372,480
	3.125%, 10/12/28		United States		155,000		152,817
	The Goldman Sachs Group Inc., senior note, 0.925% to 10/21/23, FRN thereafter, 10/21/24		United States		465,000		463,396
d	Huarong Finance 2017 Co. Ltd., Reg S,
	senior bond, 4.75%, 4/27/27		China		200,000		203,500
	g senior note, 4.50% to 1/24/22, FRN thereafter, Perpetual		China		1,200,000		1,198,500
d	Huarong Finance 2019 Co. Ltd., Reg S,
	senior bond, E, 4.50%, 5/29/29		China		600,000		598,500
	senior bond, E, 3.875%, 11/13/29		China		200,000		191,500
	senior bond, E, 3.625%, 9/30/30		China		200,000		188,000
	g senior note, G, 4.25% to 9/30/25, FRN thereafter, Perpetual		China		200,000		183,000
	senior note, E, 3.25%, 11/13/24		China		200,000		196,500
d	Huarong Finance II Co. Ltd., senior bond, Reg S,
	5.00%, 11/19/25		China		500,000		512,500
	EMTN, 4.875%, 11/22/26		China		200,000		204,750
	Morgan Stanley, senior note, 1.164% to 9/21/25, FRN thereafter, 10/21/25		United States		465,000		461,477
	Oaktree Specialty Lending Corp., senior note, 2.70%, 1/15/27		United States		75,000		74,336
	Owl Rock Capital Corp., senior note,
	3.40%, 7/15/26		United States		290,000		295,187
	2.875%, 6/11/28		United States		180,000		175,995
	Owl Rock Technology Finance Corp., senior note, 2.50%, 1/15/27		United States		90,000		88,542
							6,902,831
	Chemicals 0.2%
d	Ashland LLC, senior bond, 144A, 3.375%, 9/01/31		United States		140,000		137,085
d,g	Bluestar Finance Holdings Ltd., senior note, Reg s, 3.10% to 7/12/24, FRN thereafter, Perpetual		China		200,000		200,361
d	Braskem Idesa SAPI, senior secured bond, 144A, 6.99%, 2/20/32		Mexico		1,297,000		1,273,304
d	Braskem Netherlands Finance BV, senior bond, 144A, 4.50%, 1/31/30		Brazil		200,000		200,341

38 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Principal Amount*			Value
	Corporate Bonds and Notes (continued)
	Chemicals (continued)
d,g	CNAC HK Finbridge Co. Ltd., senior note, Reg S, 3.35% to 9/22/23, FRN thereafter, Perpetual		China		600,000		$	608,200
d	Orbia Advance Corp. SAB de CV, senior bond, 144A, 2.875%, 5/11/31		Mexico		200,000			195,336
								2,614,627
	Communications Equipment 0.1%
d	Audacy Capital Corp., secured note, 144A, 6.75%, 3/31/29		United States		600,000			588,435
d	CommScope Inc., 144A,
	senior note, 7.125%, 7/01/28		United States		430,000			400,697
	senior secured note, 4.75%, 9/01/29		United States		60,000			58,149
d	CommScope Technologies LLC, senior bond, 144A, 5.00%, 3/15/27		United States		180,000			162,037
d	HTA Group Ltd., senior note, 144A, 7.00%, 12/18/25		Democratic Rep of the Congo		435,000			450,225
j	Riverbed Technology Inc., senior note, 6.00%, 1/13/22		United States		54,708			54,161
								1,713,704
	Construction & Engineering 0.1%
d	GMR Hyderabad International Airport Ltd.,
	senior secured bond, Reg S, 4.25%, 10/27/27		India		200,000			192,561
	senior secured note, Reg S, 5.375%, 4/10/24		India		200,000			205,211
	senior secured note, 144A, 4.75%, 2/02/26		India		200,000			199,225
d	India Airport Infra, senior secured note, Reg S, 6.25%, 10/25/25		India		200,000			197,260
								794,257
	Construction Materials 0.0%†
d	Cemex SAB de CV, senior secured bond, 144A,
	5.45%, 11/19/29		Mexico		200,000			209,808
	5.20%, 9/17/30		Mexico		245,000			258,963
	3.875%, 7/11/31		Mexico		200,000			194,996
								663,767
	Consumer Finance 0.1%
g	Ally Financial Inc., C, junior sub. note, 4.70% to 5/15/28, FRN thereafter, Perpetual		United States		305,000			307,288
d	Muthoot Finance Ltd., senior secured note, Reg S,
	6.125%, 10/31/22		India		600,000			615,000
	4.40%, 9/02/23		India		200,000			203,750
d	PROG Holdings Inc., senior note, 144A, 6.00%, 11/15/29		United States		192,000			189,958
d	Shriram Transport Finance Co. Ltd., Reg S,
	senior note, 5.95%, 10/24/22		India		200,000			202,293
	senior secured note, E, 5.70%, 2/27/22		India		600,000			601,500
								2,119,789
	Containers & Packaging 0.0%†
d	Mauser Packaging Solutions Holding Co., senior note, 144A, 7.25%, 4/15/25		United States		700,000			688,170
	Diversified Consumer Services 0.3%
d,g	CMHI Finance BVI Co. Ltd., senior note, Reg S, 3.50% to 10/09/23, FRN thereafter, Perpetual		China		200,000			204,986
d	The Hertz Corp., senior note, 144A,
	4.625%, 12/01/26		United States		598,000			590,154
	5.00%, 12/01/29		United States		1,292,000			1,268,331
d	Loxam SAS, senior secured note, Reg S, 3.25%, 1/14/25		France		100,000	EUR		113,408

franklintempleton.com Semiannual Report 39

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Principal Amount*			Value
	Corporate Bonds and Notes (continued)
	Diversified Consumer Services (continued)
d	MPH Acquisition Holdings LLC, senior note, 144A, 5.75%, 11/01/28		United States		700,000		$	626,500
d	Paysafe Finance PLC / Paysafe Holdings US Corp., senior secured note, 144A, 4.00%, 6/15/29		United States		700,000			647,370
d	Sotheby’s/Bidfair Holdings Inc., senior secured note, 144A, 5.875%, 6/01/29		United States		700,000			703,712
								4,154,461
	Diversified Financial Services 0.7%
d	Advisor Group Holdings Inc., senior note, 144A, 10.75%, 8/01/27		United States		656,000			715,142
	AerCap Ireland Capital DAC / AerCap Global Aviation Trust,
	senior bond, 3.30%, 1/30/32		Ireland		150,000			151,259
	senior note, 6.50%, 7/15/25		Ireland		150,000			171,706
	senior note, 3.00%, 10/29/28		Ireland		150,000			151,160
d	Azure Orbit IV International Finance Ltd., E, senior note, Reg S, 3.75%, 1/25/23		China		700,000			718,378
d	Blackstone Secured Lending Fund, senior note, 144A, 2.125%, 2/15/27		United States		405,000			392,985
d	Bocom Leasing Management Hong Kong Co. Ltd., senior note, Reg S,
	E, 1.75%, 7/14/23		Hong Kong		200,000			201,312
	E, 1.125%, 6/18/24		Hong Kong		800,000			793,666
d	CDBL Funding 2, senior note, Reg S,
	E, 3.00%, 8/01/22		China		200,000			202,173
	E, 1.375%, 3/04/24		China		800,000			796,762
	CDW LLC / CDW Finance Corp., senior bond, 3.569%, 12/01/31		United States		175,000			179,316
d	CICC Hong Kong Finance 2016 MTN Ltd., senior note, Reg S,
	E, 1.75%, 8/10/23		China		400,000			401,541
	E, 1.625%, 1/26/24		China		300,000			299,699
d	Constellation Automotive Financing PLC, senior note, 144A, 4.875%, 7/15/27		United Kingdom		100,000			129,530
d	Finance of America Funding LLC, senior note, 144A, 7.875%, 11/15/25		United States		700,000			680,530
d	Financiera de Desarrollo Territorial SA Findeter, senior bond, 144A, 7.875%, 8/12/24		Colombia		393,000,000	COP		99,415
d	Indian Railway Finance Corp. Ltd., senior bond, 144A, 2.80%, 2/10/31		India		200,000			194,830
d	Jane Street Group / JSG Finance Inc., senior secured note, 144A, 4.50%, 11/15/29		United States		126,000			125,996
d	MDC-GMTN BV, senior bond, Reg S, 4.50%, 11/07/28		United Arab Emirates		261,000			300,464
d	Rec Ltd., senior note, Reg S,
	4.75%, 5/19/23		India		1,000,000			1,044,219
	5.25%, 11/13/23		India		400,000			427,272
	G, 3.375%, 7/25/24		India		300,000			310,952
d	Rocket Mortgage LLC / Rocket Mortgage Co.-Issuer Inc., 144A,
	senior bond, 3.875%, 3/01/31		United States		420,000			415,401
	senior bond, 4.00%, 10/15/33		United States		350,000			343,605
	senior note, 2.875%, 10/15/26		United States		520,000			507,733
	senior note, 3.625%, 3/01/29		United States		385,000			377,098
								10,132,144
	Diversified Telecommunication Services 0.3%
d	Bharti Airtel International Netherlands BV, senior bond, Reg S, 5.125%, 3/11/23		India		500,000			522,099
	Frontier Communications Holdings LLC,
	secured note, 5.875%, 11/01/29		United States		113,478			111,741
	d senior secured note, 144A, 5.875%, 10/15/27		United States		465,000			480,940
	d senior secured note, 144A, 5.00%, 5/01/28		United States		219,000			220,018

40 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Principal Amount*		Value
	Corporate Bonds and Notes (continued)
	Diversified Telecommunication Services (continued)
d	IHS Holding Ltd., senior note, 144A,
	5.625%, 11/29/26		Nigeria		200,000	$	199,550
	6.25%, 11/29/28		Nigeria		760,000		757,625
d	Kenbourne Invest SA, senior note, 144A, 6.875%, 11/26/24		Chile		200,000		208,943
d,k	Ligado Networks LLC, 144A, PIK,
	secured note, 17.50%, 5/01/24		United States		54,603		35,690
	senior secured note, 15.50%, 11/01/23		United States		1,092,309		933,728
d	Oi Movel SA, senior secured note, Reg S, 8.75%, 7/30/26		Brazil		615,000		632,995
d	Telesat Canada / Telesat LLC, senior secured note, 144A, 4.875%, 6/01/27		Canada		183,000		160,318
d	Tower Bersama Infrastructure TBK PT, senior note, Reg S, 2.80%, 5/02/27		Indonesia		200,000		196,995
							4,460,642
	Electric Utilities 0.4%
b,e	Bruce Mansfield Escrow, senior bond, zero cpn., 6/01/34		United States		6,394,000		23,978
d,g	China Huaneng Group Hong Kong Treasury Management Holding Ltd., Reg S, senior note,
	2.85% to 12/09/23, FRN thereafter, Perpetual		China		200,000		201,715
	3.08% to 12/09/25, FRN thereafter, Perpetual		China		400,000		405,654
g	Edison International, junior sub. note,
	A, 5.375% to 3/15/26, FRN thereafter, A, Perpetual		United States		135,000		139,050
	B, 5.00% to 12/15/26, FRN thereafter, B, Perpetual		United States		20,000		20,090
d	Eskom Holdings SOC Ltd., senior bond, Reg S, 8.45%, 8/10/28		South Africa		1,134,000		1,207,132
d	Greenko Investment Co., senior secured note, Reg S, 4.875%, 8/16/23		India		200,000		202,344
d	Oryx Funding Ltd., senior bond, 144A, 5.80%, 2/03/31		Oman		283,000		295,547
	Pacific Gas and Electric Co.,
	secured bond, 4.50%, 7/01/40		United States		1,106,000		1,159,981
	secured bond, 4.95%, 7/01/50		United States		55,000		61,830
	secured bond, 3.50%, 8/01/50		United States		200,000		190,796
	senior bond, 4.30%, 3/15/45		United States		95,000		97,771
	PG&E Corp., senior secured bond, 5.25%, 7/01/30		United States		700,000		718,669
d,g	SMC Global Power Holdings Corp., senior note, Reg S, 5.45% to 5/31/26, FRN thereafter, Perpetual		Philippines		200,000		196,000
	Southern California Edison Co.,
	secured bond, 3.65%, 2/01/50		United States		40,000		43,029
	senior bond, 4.00%, 4/01/47		United States		10,000		11,159
	senior bond, C, 4.125%, 3/01/48		United States		15,000		17,100
	Talen Energy Supply LLC,
	b senior note, 6.50%, 6/01/25		United States		254,000		142,798
	d senior secured note, 144A, 7.25%, 5/15/27		United States		306,000		284,653
							5,419,296
	Entertainment 0.2%
d	AMC Entertainment Holdings Inc., 144A,
	b,k secured note, PIK, 12.00%, 6/15/26		United States		1,342,000		1,366,317
	f senior secured note, 10.50%, 4/15/25		United States		761,000		800,952
	Netflix Inc., senior bond,
	4.875%, 4/15/28		United States		80,000		90,622
	5.875%, 11/15/28		United States		70,000		83,891
	6.375%, 5/15/29		United States		75,000		93,165
	d 144A, 5.375%, 11/15/29		United States		20,000		23,691
	d 144A, 4.875%, 6/15/30		United States		215,000		249,319
d	Roblox Corp., senior note, 144A, 3.875%, 5/01/30		United States		750,000		753,128
							3,461,085

franklintempleton.com Semiannual Report 41

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Principal Amount*			Value
	Corporate Bonds and Notes (continued)
	Equity Real Estate Investment Trusts (REITs) 0.1%
d	Brookfield Property REIT Inc. / BPR Cumulus LLC / BPR Nimbus LLC / GGSI Sellco LL, senior secured note, 144A, 4.50%, 4/01/27		United States		700,000		$	666,204
	National Health Investors Inc., senior bond, 3.00%, 2/01/31		United States		30,000			29,060
d	SBA Communications Corp., senior note, 144A, 3.125%, 2/01/29		United States		700,000			665,892
								1,361,156
	Food & Staples Retailing 0.1%
d	Casino Guichard Perrachon SA, Reg S,
	senior bond, E, 4.498%, 3/07/24		France		200,000	EUR		224,372
	g junior sub. note, E, 3.992% to 1/31/24, FRN thereafter, Perpetual		France		200,000	EUR		148,713
d	JBS USA/Food/Finance, senior bond, 144A, 3.75%, 12/01/31		United States		80,000			80,958
d	Marb Bondco PLC, senior bond, 144A, 3.95%, 1/29/31		Brazil		425,000			401,474
d	Rite AID Corp., senior secured note, 144A, 7.50%, 7/01/25		United States		700,000			699,780
d	Smithfield Foods Inc., senior bond, 144A, 3.00%, 10/15/30		United States		30,000			30,172
								1,585,469
	Food Products 0.1%
	Kraft Heinz Foods Co., senior bond,
	5.00%, 6/04/42		United States		45,000			55,018
	4.375%, 6/01/46		United States		95,000			110,090
	4.875%, 10/01/49		United States		150,000			187,272
d	Pilgrim’s Pride Corp., senior bond, 144A,
	4.25%, 4/15/31		United States		10,000			10,493
	3.50%, 3/01/32		United States		210,000			211,401
d	Post Holdings Inc., senior bond, 144A, 4.50%, 9/15/31		United States		190,000			183,706
								757,980
	Health Care Equipment & Supplies 0.0%†
d	Avantor Funding Inc., senior note, 144A, 3.875%, 11/01/29		United States		175,000			175,038
	Health Care Providers & Services 0.2%
	Centene Corp.,
	senior bond, 3.00%, 10/15/30		United States		85,000			84,974
	senior bond, 2.50%, 3/01/31		United States		350,000			336,000
	senior note, 2.625%, 8/01/31		United States		120,000			115,906
d	Chrome Holdco SASU, senior note, Reg S, 5.00%, 5/31/29		France		140,000	EUR		158,108
	Encompass Health Corp., senior bond, 4.625%, 4/01/31		United States		1,433,000			1,425,387
	HCA Inc., senior bond, 3.50%, 9/01/30		United States		130,000			135,529
d	LifePoint Health Inc., senior note, 144A, 5.375%, 1/15/29		United States		749,000			722,560
d	Molina Healthcare Inc., senior bond, 144A, 3.875%, 5/15/32		United States		80,000			78,335
								3,056,799
	Hotels, Restaurants & Leisure 0.4%
d	1011778 BC ULC / New Red Finance Inc., secured note, 144A, 4.375%, 1/15/28		Canada		225,000			224,353
d	Carnival Corp., senior note, 144A,
	5.75%, 3/01/27		United States		295,000			288,960
	6.00%, 5/01/29		United States		853,000			830,609
d	GENM Capital Labuan Ltd., senior bond, 144A, 3.882%, 4/19/31		Malaysia		200,000			197,268
b,d	Golden Nugget Inc., senior note, 144A, 6.75%, 10/15/24		United States		1,098,000			1,104,917
d	Haidilao International Holding Ltd., senior note, Reg S, 2.15%, 1/14/26		China		420,000			397,076
d	Hilton Grand Vacations Borrower Escrow LLC, 144A,
	senior bond, 4.875%, 7/01/31		United States		50,000			49,576
	senior note, 5.00%, 6/01/29		United States		155,000			154,177
	Hyatt Hotels Corp., senior note, 5.375%, 4/23/25		United States		50,000			55,595
d	Lions Gate Capital Holdings LLC, senior note, 144A, 5.50%, 4/15/29		United States		700,000			709,975
	Marriott International Inc., FF, senior bond, 4.625%, 6/15/30		United States		75,000			84,530
d	Marriott Ownership Resorts Inc., senior note, 144A, 4.50%, 6/15/29		United States		70,000			68,824
d,f	Penn National Gaming Inc., senior note, 144A, 4.125%, 7/01/29		United States		55,000			51,975

42 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Principal Amount*		Value
	Corporate Bonds and Notes (continued)
	Hotels, Restaurants & Leisure (continued)
d	Royal Caribbean Cruises Ltd., senior note, 144A,
	4.25%, 7/01/26		United States		45,000	$	42,541
	5.50%, 4/01/28		United States		310,000		302,182
d	Scientific Games International Inc., senior note, 144A,
	7.00%, 5/15/28		United States		200,000		212,750
	f 7.25%, 11/15/29		United States		70,000		77,310
	Travel + Leisure Co.,
	senior secured bond, 6.00%, 4/01/27		United States		10,000		10,578
	d senior secured bond, 144A, 4.625%, 3/01/30		United States		95,000		94,044
	d senior secured note, 144A, 6.625%, 7/31/26		United States		125,000		135,500
	d senior secured note, 144A, 4.50%, 12/01/29		United States		215,000		209,969
							5,302,709
	Household Durables 0.2%
d	K. Hovnanian Enterprises Inc., 144A,
	senior secured note, 7.75%, 2/15/26		United States		1,628,000		1,712,819
	senior secured note, 10.50%, 2/15/26		United States		850,000		907,090
d	Topbuild Corp., senior bond, 144A, 4.125%, 2/15/32		United States		70,000		70,233
							2,690,142
	Independent Power & Renewable Electricity Producers 0.1%
d	Calpine Corp., senior secured bond, 144A, 3.75%, 3/01/31		United States		690,000		658,578
d	NTPC Ltd., E, senior bond, Reg S, 4.75%, 10/03/22		India		200,000		205,614
							864,192
	Industrial Conglomerates 0.1%
	General Electric Co., senior bond, 3.625%, 5/01/30		United States		110,000		124,084
	Icahn Enterprises LP / Icahn Enterprises Finance Corp., senior note,
	6.25%, 5/15/26		United States		85,000		87,454
	5.25%, 5/15/27		United States		265,000		269,179
	4.375%, 2/01/29		United States		235,000		227,824
							708,541
	Insurance 0.1%
	Athene Holding Ltd., senior bond, 3.50%, 1/15/31		United States		110,000		116,744
h	Genworth Holdings Inc., senior bond, FRN, 2.159%, (3-Month USD LIBOR + 2.00%), 11/15/36		United States		1,643,000		994,204
d	Global Atlantic Finance Co., senior bond, 144A, 4.40%, 10/15/29		United States		165,000		180,447
d,g	KDB Life Insurance Co. Ltd., sub. note, Reg S, 7.50% to 5/21/23, FRN thereafter, Perpetual		South Korea		200,000		203,033
d,g	Tongyang Life Insurance Co. Ltd., sub. note, Reg S, 5.25% to 9/22/25, FRN thereafter, Perpetual		South Korea		200,000		210,197
							1,704,625
	Interactive Media & Services 0.1%
d	Tencent Holdings Ltd., senior bond, Reg S,
	3.84%, 4/22/51		China		200,000		216,720
	3.94%, 4/22/61		China		500,000		543,008
							759,728
	Internet & Direct Marketing Retail 0.1%
d	Arches Buyer Inc., senior note, 144A, 6.125%, 12/01/28		United States		700,000		708,407
	Expedia Group Inc., senior note, 3.25%, 2/15/30		United States		225,000		232,151
d	Match Group Holdings II LLC, senior note, 144A, 3.625%, 10/01/31		United States		148,000		139,750
d	Meituan, senior bond, Reg S, 3.05%, 10/28/30		China		400,000		373,234
							1,453,542
	IT Services 0.1%
d	Austin Bidco Inc., senior note, 144A, 7.125%, 12/15/28		United States		700,000		719,660

franklintempleton.com Semiannual Report 43

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Principal Amount*		Value
	Corporate Bonds and Notes (continued)
	Leisure Products 0.0%†
d	NCL Corp. Ltd., senior note, 144A, 5.875%, 3/15/26		United States		195,000	$	190,369
d	NCL Finance Ltd., senior note, 144A, 6.125%, 3/15/28		United States		65,000		63,512
							253,881
	Marine 0.0%†
d	Stena International SA, senior secured bond, 144A, 5.75%, 3/01/24		Sweden		299,000		308,405
	Media 0.8%
	AMC Networks Inc., senior note, 4.25%, 2/15/29		United States		618,000		604,302
d	CCO Holdings LLC / CCO Holdings Capital Corp., senior bond, 144A,
	4.25%, 2/01/31		United States		1,065,000		1,051,070
	4.25%, 1/15/34		United States		695,000		669,761
	Charter Communications Operating LLC / Charter Communications Operating Capital, senior secured bond, 4.40%, 12/01/61		United States		920,000		961,033
d	Clear Channel Outdoor Holdings Inc., senior note, 144A, 7.75%, 4/15/28		United States		700,000		731,281
d	CSC Holdings LLC, senior bond, 144A, 4.625%, 12/01/30		United States		610,000		568,371
d	Diamond Sports Group LLC / Diamond Sports Finance Co., senior note, 144A, 6.625%, 8/15/27		United States		304,000		64,410
d	DIRECTV Holdings LLC / DIRECTV Financing Co. Inc., senior secured note, 144A, 5.875%, 8/15/27		United States		257,000		261,979
	Dish DBS Corp.,
	senior note, 5.125%, 6/01/29		United States		554,000		487,575
	d,f senior secured note, 144A, 5.25%, 12/01/26		United States		850,000		843,442
	d senior secured note, 144A, 5.75%, 12/01/28		United States		625,000		617,003
d	Gannett Holdings LLC, senior secured note, 144A, 6.00%, 11/01/26		United States		694,000		696,009
d	iHeartCommunications Inc., senior secured note, 144A,
	5.25%, 8/15/27		United States		90,000		91,519
	4.75%, 1/15/28		United States		175,000		174,032
	Liberty Interactive LLC, senior bond, 8.25%, 2/01/30		United States		840,000		900,547
d	Outfront Media Capital LLC / Outfront Media Capital Corp., senior bond, 144A, 4.625%, 3/15/30		United States		65,000		64,230
d	Spanish Broadcasting System Inc., senior secured note, 144A, 9.75%, 3/01/26		United States		700,000		724,395
d	Urban One Inc., senior secured note, 144A, 7.375%, 2/01/28		United States		800,000		816,112
d,f	Wolverine Escrow LLC, senior secured note, 144A,
	8.50%, 11/15/24		United States		332,000		311,169
	9.00%, 11/15/26		United States		302,000		285,337
							10,923,577
	Metals & Mining 0.3%
d	Abja Investment Co. Pte. Ltd., senior note, Reg S, 4.45%, 7/24/23		India		200,000		207,444
d	First Quantum Minerals Ltd., senior note, 144A,
	6.875%, 3/01/26		Zambia		200,000		207,437
	6.875%, 10/15/27		Zambia		620,000		656,419
d	FMG Resources August 2006 Pty Ltd., senior bond, 144A, 4.375%, 4/01/31		Australia		155,000		157,353
	Freeport-McMoRan Inc., senior bond,
	4.625%, 8/01/30		United States		95,000		100,479
	5.40%, 11/14/34		United States		145,000		172,861
	5.45%, 3/15/43		United States		20,000		24,688
d,f	Glencore Funding LLC, senior bond, 144A, 2.85%, 4/27/31		Australia		390,000		388,362
d	Indonesia Asahan Aluminium Persero PT, senior bond, Reg S, 5.80%, 5/15/50		Indonesia		400,000		462,060
d,g	MCC Holding Hong Kong Corp. Ltd., senior note, Reg S, 3.50% to 1/16/23, FRN thereafter, Perpetual		China		200,000		203,000
d	Novelis Corp., senior bond, 144A, 4.75%, 1/30/30		United States		90,000		90,998
d	Taseko Mines Ltd., senior secured note, 144A, 7.00%, 2/15/26		Canada		672,000		683,709
d	Vedanta Resources Ltd., senior note, Reg S, 6.375%, 7/30/22		India		300,000		293,952

44 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Principal Amount*		Value
	Corporate Bonds and Notes (continued)
	Metals & Mining (continued)
d	Volcan Cia Minera SAA, senior note, 144A, 4.375%, 2/11/26		Peru		30,000	$	28,725
							3,677,487
	Mortgage Real Estate Investment Trusts (REITs) 0.1%
d	Apollo Commercial Real Estate Finance Inc., senior secured note, 144A, 4.625%, 6/15/29		United States		690,000		656,380
d	New Residential Investment Corp., senior note, 144A, 6.25%, 10/15/25		United States		700,000		691,806
							1,348,186
	Multiline Retail 0.0%†
	Kohl’s Corp., senior bond, 5.55%, 7/17/45		United States		338,000		408,433
	Oil, Gas & Consumable Fuels 1.6%
d	Aker BP ASA, senior bond, 144A,
	3.75%, 1/15/30		Norway		350,000		371,532
	4.00%, 1/15/31		Norway		150,000		163,442
d	Continental Resources Inc., senior bond, 144A, 5.75%, 1/15/31		United States		195,000		227,519
	DCP Midstream Operating LP, senior bond,
	5.125%, 5/15/29		United States		25,000		27,767
	3.25%, 2/15/32		United States		195,000		195,061
d	DT Midstream Inc., senior bond, 144A, 4.375%, 6/15/31		United States		700,000		696,864
	Ecopetrol SA, senior bond,
	4.625%, 11/02/31		Colombia		1,220,000		1,168,772
	5.875%, 11/02/51		Colombia		970,000		885,794
d	Energean Israel Finance Ltd., 144A, Reg S,
	senior secured bond, 5.875%, 3/30/31		Israel		130,000		126,588
	senior secured note, 5.375%, 3/30/28		Israel		105,000		102,966
g	Energy Transfer LP, H, junior sub. note, 6.50% to 11/15/26, FRN thereafter, Perpetual		United States		514,000		526,850
	Equities Corp., senior note,
	3.90%, 10/01/27		United States		25,000		26,094
	5.00%, 1/15/29		United States		35,000		38,390
	d 144A, 3.125%, 5/15/26		United States		15,000		15,014
	d,f 144A, 3.625%, 5/15/31		United States		130,000		132,691
d	Gray Oak Pipeline LLC, senior note, 144A, 3.45%, 10/15/27		United States		20,000		20,872
d	Hurricane Finance PLC, senior note, 144A, 8.00%, 10/15/25		United Kingdom		158,000		221,379
d	Laredo Petroleum Inc., senior note, 144A, 7.75%, 7/31/29		United States		700,000		663,548
d	Leviathan Bond Ltd., senior note, 144A, Reg S, 6.50%, 6/30/27		Israel		100,000		105,824
d	MC Brazil Downstream Trading SARL, senior secured note, Reg S, 7.25%, 6/30/31		Brazil		1,012,000		973,367
d	Moss Creek Resources Holdings Inc., senior note, 144A,
	7.50%, 1/15/26		United States		268,000		236,660
	10.50%, 5/15/27		United States		295,000		277,984
d	Northern Oil And Gas Inc., senior note, 144A, 8.125%, 3/01/28		United States		856,000		888,596
	Occidental Petroleum Corp., senior bond,
	4.50%, 7/15/44		United States		15,000		15,038
	4.20%, 3/15/48		United States		5,000		4,811
	4.40%, 8/15/49		United States		10,000		9,840
d	OQ SAOC, senior note, 144A, 5.125%, 5/06/28		Oman		224,000		225,863
	Ovintiv Inc., senior bond,
	8.125%, 9/15/30		United States		25,000		32,944
	7.20%, 11/01/31		United States		5,000		6,405
	7.375%, 11/01/31		United States		5,000		6,395
	6.50%, 8/15/34		United States		20,000		25,551
	6.625%, 8/15/37		United States		45,000		57,323
	6.50%, 2/01/38		United States		10,000		12,760
d	Petrofac Ltd., senior secured note, 144A, 9.75%, 11/15/26		United Kingdom		563,000		564,430

franklintempleton.com Semiannual Report 45

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Principal Amount*			Value
	Corporate Bonds and Notes (continued)
	Oil, Gas & Consumable Fuels (continued)
	Petroleos Mexicanos,
	f senior bond, 5.95%, 1/28/31		Mexico		924,000		$	869,392
	senior bond, 6.625%, 6/15/35		Mexico		380,000			349,165
	senior bond, 6.375%, 1/23/45		Mexico		1,018,000			824,046
	senior bond, 5.625%, 1/23/46		Mexico		775,000			584,090
	senior bond, 6.75%, 9/21/47		Mexico		798,000			657,005
	senior bond, 6.35%, 2/12/48		Mexico		1,738,000			1,376,765
	senior bond, 6.95%, 1/28/60		Mexico		2,172,000			1,790,412
	senior note, 3.50%, 1/30/23		Mexico		959,000			962,591
	d senior note, 144A, 6.875%, 10/16/25		Mexico		297,000			317,420
	senior note, 4.50%, 1/23/26		Mexico		288,000			282,555
d	Qatar Petroleum, senior bond, Reg S, 3.30%, 7/12/51		Qatar		300,000			307,368
d	Saudi Arabian Oil Co., senior bond, 144A, 3.25%, 11/24/50		Saudi Arabia		285,000			273,539
b	Talos Production Inc., secured note, 12.00%, 1/15/26		United States		518,000			542,483
d	Thai Oil PCL, senior bond, Reg S, 3.625%, 1/23/23		Thailand		200,000			204,399
d	Tullow Oil PLC, senior secured note, 144A, 10.25%, 5/15/26		Ghana		2,278,000			2,269,788
	Western Midstream Operating LP, senior bond,
	5.30%, 2/01/30		United States		30,000			32,334
	5.30%, 3/01/48		United States		45,000			52,197
	5.50%, 8/15/48		United States		10,000			11,576
	6.50%, 2/01/50		United States		45,000			51,486
d	YPF Sociedad Anonima,
	senior bond, Reg S, 8.50%, 7/28/25		Argentina		331,000			252,387
	senior bond, 144A, 6.95%, 7/21/27		Argentina		105,000			69,692
	senior note, Reg S, 8.75%, 4/04/24		Argentina		1,267,000			1,081,505
	senior note, Reg S, 8.50%, 3/23/25		Argentina		1,008,000			880,075
								23,097,204
	Paper & Forest Products 0.0%†
	Suzano Austria GMBH, senior bond, 3.75%, 1/15/31		Brazil		160,000			156,403
	Pharmaceuticals 0.3%
d	Bausch Health Cos. Inc., 144A,
	senior bond, 5.25%, 1/30/30		United States		35,000			30,073
	senior bond, 5.25%, 2/15/31		United States		100,000			86,000
	senior note, 5.00%, 1/30/28		United States		150,000			133,769
d,f	ENDO Dac / ENDO Finance LLC / ENDO Finco Inc., 144A,
	secured note, 9.50%, 7/31/27		United States		1,598,000			1,611,327
	b senior note, 6.00%, 6/30/28		United States		475,000			364,560
d	Par Pharmaceutical Inc., senior secured note, 144A, 7.50%, 4/01/27		United States		639,000			645,198
	Teva Pharmaceutical Finance Co. LLC, senior bond, 6.15%, 2/01/36		Israel		10,000			10,459
	Teva Pharmaceutical Finance Netherlands II BV, senior note, 6.00%, 1/31/25		Israel		335,000	EUR		405,179
	Teva Pharmaceutical Finance Netherlands III BV, senior bond, 3.15%, 10/01/26		Israel		220,000			206,252
	4.10%, 10/01/46		Israel		1,170,000			975,037
								4,467,854
	Pipelines 0.0%†
d	Galaxy Pipeline Assets Bidco Ltd., senior secured bond, 144A, 2.94%, 9/30/40		United Arab Emirates		200,000			197,867
	Real Estate Management & Development 0.8%
d	Agile Group Holdings Ltd., Reg S,
	g senior note, 8.375% to 12/04/23, FRN thereafter, Perpetual		China		300,000			162,000
	g senior note, 7.875% to 7/31/24, FRN thereafter, Perpetual		China		230,000			124,200
	g senior note, 7.75% to 5/25/25, FRN thereafter, Perpetual		China		230,000			124,200

46 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Principal Amount*		Value
	Corporate Bonds and Notes (continued)
	Real Estate Management & Development (continued)
d	Agile Group Holdings Ltd., Reg S, (continued)
	senior secured note, 6.70%, 3/07/22		China		632,000	$	504,020
	senior secured note, 4.85%, 8/31/22		China		330,000		230,340
	senior secured note, 6.05%, 10/13/25		China		200,000		125,500
d	CFLD Cayman Investment Ltd., senior note, Reg S, 8.60%, 4/08/24		China		200,000		64,176
d	China Evergrande Group, Reg S,
	senior note, 8.75%, 6/28/25		China		1,668,000		410,745
	senior secured note, 11.50%, 1/22/23		China		200,000		50,000
d	CIFI Holdings Group Co. Ltd., senior note, Reg S,
	5.50%, 1/23/22		China		200,000		198,500
	5.95%, 10/20/25		China		200,000		191,509
	4.45%, 8/17/26		China		200,000		181,987
d	Country Garden Holdings Co. Ltd., senior secured note, Reg S,
	7.125%, 1/27/22		China		200,000		199,990
	4.75%, 7/25/22		China		400,000		392,000
	4.75%, 1/17/23		China		2,000,000		1,934,994
d	Easy Tactic Ltd., senior secured note, Reg S, 8.125%, 2/27/23		China		200,000		116,884
d	Expand Lead Ltd., senior note, Reg S, 4.95%, 7/22/26		China		200,000		199,039
d	Gemdale Ever Prosperity Investment Ltd., E, senior note, Reg S, 4.95%, 8/12/24		China		300,000		298,765
d	Greenland Global Investment Ltd., senior bond, Reg S, 5.875%, 7/03/24		China		200,000		172,000
d	Hunt Cos. Inc., senior secured note, 144A, 5.25%, 4/15/29		United States		700,000		682,511
d	Kaisa Group Holdings Ltd., senior secured note, Reg S,
	8.50%, 6/30/22		China		692,000		231,820
	11.95%, 11/12/23		China		200,000		65,000
	11.25%, 4/16/25		China		994,000		326,777
	11.70%, 11/11/25		China		200,000		65,000
	11.65%, 6/01/26		China		200,000		66,500
d	Leading Affluence Ltd., senior bond, Reg S, 4.50%, 1/24/23		China		500,000		509,153
d	Logan Group Co. Ltd., senior note, Reg S,
	6.50%, 7/16/23		China		200,000		189,930
	4.70%, 7/06/26		China		300,000		265,500
d	New Metro Global Ltd., senior note, Reg S, 4.625%, 10/15/25		China		200,000		174,937
d,g	Overseas Chinese Town Asia Holdings Ltd., senior note, Reg S, 4.50% to 7/15/23, FRN thereafter, Perpetual		China		200,000		203,500
d	Perfect Point Ventures Ltd., senior note, Reg S, 5.20%, 9/20/25		Hong Kong		400,000		394,394
d	Powerlong Real Estate Holdings Ltd., senior note, Reg S,
	4.00%, 7/25/22		China		200,000		185,000
	4.90%, 5/13/26		China		200,000		165,900
d	Shimao Group Holdings Ltd., senior secured note, Reg S, 4.75%, 7/03/22		China		200,000		164,509
d	Sunac China Holdings Ltd., Reg S, senior note, 6.80%, 10/20/24		China		300,000		208,500
	senior secured note, 7.25%, 6/14/22		China		420,000		354,900
	senior secured note, 6.65%, 8/03/24		China		200,000		138,250
	senior secured note, 6.50%, 1/26/26		China		400,000		275,000
d	Times China Holdings Ltd., senior secured note, Reg S, 5.55%, 6/04/24		China		200,000		143,972
d	Yuzhou Group Holdings Co. Ltd., senior secured note, Reg S, 8.375%, 10/30/24		China		200,000		67,000
	7.70%, 2/20/25		China		200,000		63,000
	6.35%, 1/13/27		China		400,000		122,000
d	Zhenro Properties Group Ltd., senior note, Reg S, 6.63%, 1/07/26		China		200,000		128,000
							10,871,902
	Road & Rail 0.2%
d	Uber Technologies Inc., senior note, 144A, 8.00%, 11/01/26		United States		1,085,000		1,156,632
	7.50%, 9/15/27		United States		455,000		494,150

franklintempleton.com Semiannual Report 47

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Principal Amount*			Value
	Corporate Bonds and Notes (continued)
	Road & Rail (continued)
	Uber Technologies Inc., senior note, 144A, (continued)
	6.25%, 1/15/28		United States		200,000		$	214,807
	4.50%, 8/15/29		United States		1,145,000			1,135,697
								3,001,286
	Semiconductors & Semiconductor Equipment 0.1%
	Broadcom Inc., senior bond, 4.30%, 11/15/32		United States		415,000			463,525
	Marvell Technology Inc., senior note, 2.95%, 4/15/31		United States		95,000			97,187
d	Microchip Technology Inc., senior secured note, 144A, 0.983%, 9/01/24		United States		85,000			83,804
d	TSMC Global Ltd., senior bond, Reg S, 2.25%, 4/23/31		Taiwan		1,000,000			998,611
								1,643,127
	Specialty Retail 0.4%
d	Carvana Co., senior note, 144A, 5.625%, 10/01/25		United States		180,000			180,508
	5.50%, 4/15/27		United States		95,000			95,025
	5.875%, 10/01/28		United States		353,000			354,887
	4.875%, 9/01/29		United States		603,000			573,345
d	China Grand Automotive Services Ltd., E, senior note, Reg S, 9.125%, 1/30/24		China		333,000			249,464
d	Douglas GMBH, senior secured note, 144A, 6.00%, 4/08/26		Germany		1,714,000	EUR		1,894,029
d	Guitar Center Inc., senior secured note, 144A, 8.50%, 1/15/26		United States		754,000			800,955
d,k	Kirk Beauty Sun GMBH, senior note, 144A, PIK, 8.25%, 10/01/26		Germany		399,858	EUR		429,692
d	LS Finance 2017 Ltd., senior note, Reg S, 4.80%, 6/18/26		Hong Kong		200,000			185,940
	E, 4.875%, 7/15/24		Hong Kong		200,000			190,684
	Macy’s Retail Holdings LLC, senior bond, 5.125%, 1/15/42		United States		700,000			673,313
d	Punch Finance PLC, senior secured note, Reg S, 6.125%, 6/30/26		United Kingdom		140,000	GBP		186,762
d	Staples Inc., 144A, senior note, 10.75%, 4/15/27		United States		300,000			273,726
	senior secured note, 7.50%, 4/15/26		United States		300,000			298,314
								6,386,644
	Thrifts & Mortgage Finance 0.1%
d	IIFL Finance Ltd., E, senior secured note, Reg S, 5.875%, 4/20/23		India		400,000			387,988
d	Indiabulls Housing Finance Ltd., E, senior secured note, Reg S, 6.375%, 5/28/22		India		600,000			586,812
d	Nationstar Mortgage Holdings Inc., senior bond, 144A, 5.75%, 11/15/31		United States		140,000			136,874
								1,111,674
	Tobacco 0.1%
b,d	Vector Group Ltd., senior note, 144A, 10.50%, 11/01/26		United States		1,266,000			1,305,233
	Trading Companies & Distributors 0.1%
	Air Lease Corp., senior bond, 3.125%, 12/01/30		United States		360,000			367,106
	f,g junior sub. note, B, 4.65% to 6/15/26, FRN thereafter, Perpetual		United States		180,000			184,500
	Aircastle Ltd.,
	d,g junior sub. note, 144A, 5.25% to 6/15/26, FRN thereafter, Perpetual		United States		55,000			56,512
	senior note, 4.25%, 6/15/26		United States		310,000			334,472
d	BOC Aviation Ltd., G, senior note, Reg S, 3.00%, 5/23/22		Singapore		200,000			201,458
								1,144,048

48 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Principal Amount*		Value
	Corporate Bonds and Notes (continued)
	Transportation Infrastructure 0.0%†
d	Adani Ports & Special Economic Zone Ltd., senior bond, Reg S, 3.828%, 2/02/32		India		500,000	$	498,389
	senior note, 144A, 4.20%, 8/04/27		India		200,000		207,670
							706,059
	Wireless Telecommunication Services 0.1%
d	Bharti Airtel Ltd., senior bond, senior note, Reg S, 4.375%, 6/10/25		India		700,000		747,911
	144A, 3.25%, 6/03/31		India		200,000		204,784
d	Softbank Group Corp., senior bond, Reg S, 5.25%, 7/06/31		Japan		200,000		195,675
	T-Mobile USA Inc., senior bond, 3.50%, 4/15/31		United States		220,000		224,000
	senior note, 3.375%, 4/15/29		United States		455,000		458,519
							1,830,889
	Total Corporate Bonds and Notes (Cost $156,465,214)						155,339,511
	Corporate Bonds and Notes in Reorganization 0.2%
	Airlines 0.1%
d,l	Aerovias de Mexico SA de CV, senior note, 144A, 7.00%, 2/05/25		Mexico		200,000		195,358
d,l	LATAM Finance Ltd., senior note, 144A, 6.875%, 4/11/24		Chile		400,000		383,294
	7.00%, 3/01/26		Chile		1,200,000		1,152,864
							1,731,516
	Metals & Mining 0.1%
d,l	Samarco Mineracao SA, senior bond, Reg S, 4.125%, 11/01/22		Brazil		925,000		587,375
	5.75%, 10/24/23		Brazil		184,000		127,267
							714,642
	Road & Rail 0.0%†
b,e,l	Hertz Corp. Escrow, senior note, zero cpn., 1/15/28		United States		1,584,000		—
	Total Corporate Bonds and Notes in Reorganization (Cost $2,521,129)						2,446,158
h,m	Senior Floating Rate Interests 0.5%
	Airlines 0.0%†
	United Airlines Inc., Term Loan B, 4.50%, (1-Month USD LIBOR + 3.75%), 4/21/28		United States		99,500		99,528
	Communications Equipment 0.0%†
	Riverbed Technology Inc., Term Loan B, 7.00%, (3-Month USD LIBOR + 6.00%), 12/31/25		United States		170,651		155,212
	Consumer Discretionary Services 0.1%
	Motel 6, Term Loan B, 5.75%, 1-Month USD LIBOR + 5.00%), 9/09/26		United States		40,000		40,250
	Travel Leaders Group LLC, Term Loan B, 4.087%, (1-Month USD LIBOR + 4.00%), 1/25/24		United States		482,183		452,047
							492,297
	Diversified Financial Services 0.1%
	MPH Acquisition Holdings LLC, Term Loan B, 4.75%, (3-Month USD LIBOR + 4.25%), 9/01/28		United States		815,060		779,401
	Ziggo BV, Term Loan H, 3.00%, (3-Month EURIBOR + 3.00%), 1/31/29		United States		115,000		129,001
							908,402

franklintempleton.com Semiannual Report 49

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Principal Amount*			Value
h,m	Senior Floating Rate Interests (continued)
	Diversified Telecommunication Services 0.2%
	Frontier Communications Corp., Term Loan DIP, 4.50%, (1-Month USD LIBOR + 3.75%), 12/31/21		United States		259,079		$	259,144
	Intelsat Jackson Holdings SA, Term Loan B4, 8.75%, (1-Month USD LIBOR + 4.50%), 1/02/24		United States		2,467,032			2,478,134
	n Term Loan DIP, 5.75%, (3-Month USD LIBOR + 4.75%), 7/13/22		United States		144,653			145,309
								2,882,587
	Entertainment 0.0%†
	Playtika Holding Corp., Term Loan B, 2.84%, (1-Month USD LIBOR + 2.75%), 3/13/28		United States		218,900			217,806
	Equity Real Estate Investment Trusts (REITs) 0.0%†
	The GEO Group Inc., Term Loan B, 2.75%, (3-Month USD LIBOR + 2.00%), 3/22/24		United States		267,917			251,842
	McCarthy & Stone PLC, Term Loan B, 7.00%, 12/16/25		United Kingdom		170,938	GBP		226,344
								478,186
	Health Care Equipment & Supplies 0.0%†
	Medline, Term Loan B, 3.75%, (1-Month USD LIBOR + 3.25%), 10/23/28		United States		85,000			84,806
	Hotels, Restaurants & Leisure 0.0%†
	Hilton Grand Vacations, Term Loan B, 3.50%, (1-Month USD LIBOR + 3.00%), 8/02/28		United States		105,000			104,295
	Household Durables 0.0%†
	Weber-Stephen Products LLC, Term Loan B, 4.00%, (1-Month USD LIBOR + 3.25%), 10/30/27		United States		69,396			69,352
	Insurance 0.0%†
	AmWINS Group Inc., Term Loan B, 3.00%, (1-Month USD LIBOR + 2.25%), 2/19/28		United States		42,705			42,171
	Media 0.1%
	Advantage Sales & Marketing Inc., Term Loan B1, 5.25%, (3-Month USD LIBOR + 4.50%), 10/28/27		United States		670,417			672,515
	Pharmaceuticals 0.0%†
	Jazz Pharmaceuticals PLC, Term Loan B, 4.00%, (1-Month USD LIBOR + 3.50%), 5/05/28		United States		84,788			84,735
	Professional Services 0.0%†
	CoreLogic Inc., Term Loan B, 4.00%, (1-Month USD LIBOR + 3.50%), 6/02/28		United States		170,000			168,300
	Total Senior Floating Rate Interests (Cost $6,514,157)							6,460,192
h,m	Senior Floating Rate Interests in Reorganization (Cost $203,530) 0.0%†
	Communications Equipment 0.0%†
l	Riverbed Technology Inc., Term Loan B, 7.50%, (3-Month USD LIBOR + 6.50%), 12/31/26		United States		388,549			109,959
o	Credit-Linked Notes 0.4%
d	Citigroup Global Markets Holdings Inc., (Egypt), E, senior note, 144A, zero cpn., 12/16/21		Egypt		11,472,817	EGP		725,003
d	Citigroup Global Markets Holdings Inc., (Egypt), EMTN, senior note, 144A, zero cpn., 3/31/22		Egypt		11,771,928	EGP		720,704
d	HSBC Bank PLC, (Egypt), senior note, 144A, zero cpn., 12/23/21		Egypt		7,925,000	EGP		499,568
d	HSBC Bank PLC, (Egypt), senior note, 144A, zero cpn., 2/10/22		Egypt		12,425,000	EGP		769,743
e	ICBC Standard Bank PLC, (Egypt), EMTN, zero cpn., 12/30/21		Egypt		39,754,711	EGP		2,501,698

50 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Principal Amount*				Value
o	Credit-Linked Notes (continued)
d	JPMorgan Chase Bank NA, (Egypt), senior note, 144A, zero cpn., 3/17/22		Egypt		12,389,000		EGP	$	759,663
	Total Credit-Linked Notes (Cost $5,989,294)								5,976,379
	Foreign Government and Agency Securities 4.2%
d	Banque Centrale de Tunisie International Bond, senior note, Reg S, 6.75%, 10/31/23		Tunisia		469,000		EUR		436,150
	5.625%, 2/17/24		Tunisia		796,000		EUR		699,696
	Brazil Notas Do Tesouro Nacional Serie F, NTNF, senior bond, 10.00%, 1/01/25		Brazil		2,332,000		BRL		399,725
d	CBB International Sukuk Programme Co. Wll, senior note, 144A, 3.875%, 5/18/29		Bahrain		1,702,000				1,641,298
d	Export-Import Bank of Korea, senior note, 144A, 4.89%, 8/09/23		South Korea		35,800,000		INR		471,558
	Reg S, 6.75%, 8/09/22		South Korea		7,100,000		INR		95,653
d	Government of Angola, senior bond, Reg S, 8.00%, 11/26/29		Angola		2,588,000				2,395,919
	9.375%, 5/08/48		Angola		376,000				343,505
	9.125%, 11/26/49		Angola		2,083,000				1,863,010
	Government of Argentina, senior bond, 2.00%, 1/09/38		Argentina		7,560,916				2,524,741
	2.50%, 7/09/41		Argentina		2,480,073				769,393
d	Government of Bahrain, senior bond, Reg S, 7.00%, 1/26/26		Bahrain		467,000				513,781
	Government of Colombia, senior bond, 5.20%, 5/15/49		Colombia		1,449,000				1,352,584
d	Government of Dominican Republic, senior bond, Reg S, 4.875%, 9/23/32		Dominican Republic		601,000				599,504
	5.875%, 1/30/60		Dominican Republic		619,000				577,217
d	Government of Ecuador, Reg S, senior bond, 1.00%, 7/31/35		Ecuador		3,854,113				2,505,173
	senior note, 5.00%, 7/31/30		Ecuador		325,960				270,143
	Government of Egypt, 364D, zero cpn., 12/21/21		Egypt		23,719,000		EGP		1,502,163
	d senior bond, Reg S, 7.50%, 1/31/27		Egypt		1,046,000				1,051,826
	d senior bond, Reg S, 7.60%, 3/01/29		Egypt		789,000				754,192
	d senior bond, 144A, 5.875%, 2/16/31		Egypt		487,000				413,429
	d senior note, Reg S, 5.80%, 9/30/27		Egypt		2,870,000				2,677,997
d	Government of El Salvador, senior bond, Reg S, 7.75%, 1/24/23		El Salvador		1,166,000				921,140
d	Government of Ghana, Reg S, 10.75%, 10/14/30		Ghana		1,048,000				1,146,302
	senior note, 144A, zero cpn., 4/07/25		Ghana		278,000				187,475
	senior note, 144A, 7.75%, 4/07/29		Ghana		372,000				303,180
	senior note, Reg S, 7.75%, 4/07/29		Ghana		200,000				163,000
	Government of Italy, senior note, 2.375%, 10/17/24		Italy		350,000				360,237
d	Government of Jordan, 144A, senior bond, 5.85%, 7/07/30		Jordan		386,000				380,924
	senior note, 4.95%, 7/07/25		Jordan		578,000				593,895
d	Government of Malaysia, senior bond, Reg S, 3.075%, 4/28/51		Malaysia		500,000				534,190
	Government of Mexico, senior bond, 4.28%, 8/14/41		Mexico		350,000				361,155
	senior bond, 3.771%, 5/24/61		Mexico		455,000				415,185
	senior bond, M, 7.75%, 5/29/31		Mexico		13,950,000	p	MXN		659,861
	senior bond, M 30, 8.50%, 11/18/38		Mexico		4,770,400	p	MXN		232,651
	senior note, M, 6.75%, 3/09/23		Mexico		9,060,800	p	MXN		424,773
d	Government of Nigeria, senior bond, 144A, 7.375%, 9/28/33		Nigeria		368,000				337,419
	senior bond, Reg S, 8.25%, 9/28/51		Nigeria		617,000				558,225
	senior note, Reg S, 7.625%, 11/21/25		Nigeria		1,531,000				1,609,701
	senior note, Reg S, 6.125%, 9/28/28		Nigeria		2,958,000				2,789,276

franklintempleton.com Semiannual Report 51

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country			Principal Amount*			Value
	Foreign Government and Agency Securities (continued)
d	Government of Oman, senior bond, Reg S, 6.25%, 1/25/31		Oman			418,000		$	438,892
	senior bond, Reg S, 6.75%, 1/17/48		Oman			412,000			397,423
	senior bond, Reg S, 7.00%, 1/25/51		Oman			1,726,000			1,715,374
	senior note, 144A, 4.875%, 6/15/30		Oman			221,000			232,900
d	Government of Paraguay, senior bond, Reg S, 4.625%, 1/25/23		Paraguay			2,414,000			2,498,514
	Government of Peru, senior bond, 6.15%, 8/12/32		Peru			894,000	PEN		220,535
	Government of Russia, senior bond, 6233, 6.10%, 7/18/35		Russia			111,039,000	RUB		1,246,449
	senior note, 6227, 7.40%, 7/17/24		Russia			6,132,000	RUB		80,615
	senior note, 6229, 7.15%, 11/12/25		Russia			74,375,000	RUB		959,986
d	Government of Saudi Arabia, senior bond, 144A, 2.75%, 2/03/32		Saudi Arabia			910,000			930,384
	144A, 3.75%, 1/21/55		Saudi Arabia			354,000			372,056
	Reg S, 2.75%, 2/03/32		Saudi Arabia			302,000			308,765
	Government of South Africa, senior bond, 2030, 8.00%, 1/31/30		South Africa			28,482,503	ZAR		1,617,323
	2032, 8.25%, 3/31/32		South Africa			14,921,596	ZAR		822,302
	2035, 8.875%, 2/28/35		South Africa			7,186,144	ZAR		395,998
	2037, 8.50%, 1/31/37		South Africa			24,425,000	ZAR		1,273,864
d	Government of Sri Lanka, senior bond, Reg S, 7.55%, 3/28/30		Sri Lanka			955,000			529,433
	Government of Turkey, senior bond, 6.50%, 9/20/33		Turkey			479,000			442,053
	senior note, 6.375%, 10/14/25		Turkey			875,000			870,760
d	Government of Ukraine, senior bond, Reg S, 7.375%, 9/25/32		Ukraine			751,000			709,166
	senior bond, Reg S, 1.258%, 5/31/40		Ukraine			4,955,000			4,509,297
	senior note, 144A, 6.876%, 5/21/29		Ukraine			302,000			281,940
	senior note, Reg S, 6.876%, 5/21/29		Ukraine			966,000			901,835
d	Government of Zambia, senior bond, Reg S, 8.50%, 4/14/24		Zambia			418,000			322,905
	8.97%, 7/30/27		Zambia			512,000			390,800
	International Finance Corp., senior note, 5.85%, 11/25/22		Supranational	q		8,120,000	INR		109,206
	Provincia de Buenos Aires, h FRN, 37.996%, (ARS BADLAR + 3.83%), 5/31/22		Argentina			18,295,000	ARS		81,150
	d,h 144A, FRN, Reg S, 37.909%, (ARS BADLAR + 3.75%), 4/12/25		Argentina			3,670,000	ARS		12,690
	d senior bond, 144A,		Argentina			3,300,000	ARS		1,292,148
	Total Foreign Government and Agency Securities (Cost $65,644,565)								59,802,009
	Foreign Government and Agency Securities in Reorganization (Cost $193,035) 0.0%†
l	Government of Lebanon, G, senior bond, 6.375%, 3/09/20		Lebanon			1,443,000			167,749
	U.S. Government and Agency Securities 0.1%
	U.S. Treasury Bond,
	1.875%, 2/15/41		United States			2,000			2,007
	1.75%, 8/15/41		United States			2,000			1,964
	1.625%, 11/15/50		United States			556,000			533,304
	1.875%, 2/15/51		United States			367,000			373,250
	U.S. Treasury Note,
	1.625%, 5/15/31		United States			738,000			752,472
	1.375%, 11/15/31		United States			130,700			129,924
	Total U.S. Government and Agency Securities (Cost $1,703,302)								1,792,921

52 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Principal Amount*		Value
	Asset-Backed Securities and Commercial Mortgage-Backed Securities 6.6%
	Diversified Financial Services 5.0%
d	AASET Trust, 144A,
	e 2021-1A, A, 2.95%, 11/16/41		United States		247,747	$	245,202
	2021-1A, B, 3.80%, 11/16/41		United States		1,287,741		1,230,437
d	Accelerated Assets LLC, 2018-1, B, 144A, 4.51%, 12/02/33		United States		45,570		46,641
r	ACE Securities Corp. Home Equity Loan Trust, 2003-FM1, M1, FRN, 1.382%, (1-Month USD LIBOR + 1.29%), 11/25/32		United States		1,261,281		1,284,708
d	Adams Outdoor Advertising LP, 2018-1, A, 144A, 4.81%, 11/15/48		United States		175,457		182,865
d,r	AGL CLO 3 Ltd., 2020-3A, C, 144A, FRN, 2.274%, (3-Month USD LIBOR + 2.15%), 1/15/33		United States		285,000		285,376
d	AIM Aviation Finance Ltd., 2015-1A, B1, 144A, 5.072%, 2/15/40		United States		170,624		68,686
d,r	Allegro CLO VI Ltd., 2018-2A, D, 144A, FRN, 2.872%, (3-Month USD LIBOR + 2.75%), 1/17/31		United States		250,000		244,095
d	American Credit Acceptance Receivables Trust, 144A, 2020-3, D, 2.40%, 6/15/26		United States		200,000		203,227
	2020-4, D, 1.77%, 12/14/26		United States		185,000		186,055
d,r	Apex Credit CLO Ltd., 2018-1A, DR, 144A, FRN, 3.535%, (3-Month USD LIBOR + 3.40%), 10/27/28		United States		1,000,000		994,492
d	Arbys Funding LLC, 2020-1A, A2, 144A, 3.237%, 7/30/50		United States		98,750		102,285
r	Argent Securities Inc., 2004-W3, M4, FRN, 3.479%, (1-Month USD LIBOR + 4.58%), 2/25/34		United States		188,909		210,942
d	Ascentium Equipment Receivables Trust, 2017-2A, C, 144A, 2.87%, 8/10/22		United States		25,000		25,014
d	Avis Budget Rental Car Funding AESOP LLC, 144A, 2020-2A, B, 2.96%, 2/20/27		United States		100,000		104,110
	2020-2A, C, 4.25%, 2/20/27		United States		100,000		106,962
d,r	Barings CLO Ltd., 2019-4A, C, 144A, FRN, 2.924%, (3-Month USD LIBOR + 2.80%), 1/15/33		United States		400,000		400,577
d,r	Barings Euro CLO BV, 2014-1, 144A, FRN, 1.90%, (3-Month EURIBOR + 1.90%), 7/15/31		Netherlands		500,000		567,999
s	Bear Stearns ALT-A Trust, 2006-3, 21A1, FRN, 2.655%, 5/25/36		United States		1,142,007		965,683
d	Blackbird Capital Aircraft Lease Securitization Ltd., 2016-1A, A, 144A, 4.213%, 12/16/41		United States		179,038		179,558
d,r	BNPP IP CLO Ltd., 2017-2A, DR, 144A, FRN, 3.632%, (3-Month USD LIBOR + 3.50%), 10/30/25		United States		1,250,000		1,242,569
d,r	BSPRT Issuer Ltd., 2019-FL5, E, 144A, FRN, 2.94%, (1-Month USD LIBOR + 2.85%), 5/15/29		United States		1,000,000		999,764
d,r	BX Commercial Mortgage Trust, 2019-XL, E, 144A, FRN, 1.89%, (1-Month USD LIBOR + 1.80%), 10/15/36		United States		1,105,000		1,102,005
	California Republic Auto Receivables Trust, 2018-1, D, 4.33%, 4/15/25		United States		115,000		117,715
d,r	Carlyle US CLO Ltd., 2017-4A, C, 144A, FRN, 2.924%, (3-Month USD LIBOR + 2.80%), 1/15/30		United States		250,000		241,235
	Carmax Auto Owner Trust, 2018-4, D, 4.15%, 4/15/25		United States		60,000		61,842
d	Castlelake Aircraft Structured Trust, 2021-1A, A, 144A, 3.474%, 1/15/46		United States		345,001		352,657
d,r	Catamaran CLO Ltd., 144A, FRN, 2014-2, C, 3.622%, (3-Month USD LIBOR + 3.50%), 10/18/26		United States		2,030,000		2,038,232
	2014-2A, D, 4.972%, (3-Month USD LIBOR + 4.85%), 10/18/26		United States		1,000,000		988,476
	2017-1A, CR, 1.935%, (3-Month USD LIBOR + 1.80%), 1/27/28		United States		250,000		249,569
d,r	CHCP Ltd., 2021-FL1, C, 144A, FRN, 2.262%, (1-Month USD LIBOR + 2.21%), 2/15/38		United States		1,000,000		1,000,500
	CHL Mortgage Pass-Through Trust,
	r 2003-15, 1A1, FRN, 0.592%, (1-Month USD LIBOR + 0.50%), 6/25/42		United States		97,857		97,613
	2004-4, M, 5.50%, 5/25/34		United States		858,371		579,616
	2006-21, A8, 5.75%, 2/25/37		United States		340,014		234,636
	s,t 2006-HYB1, 2A2C, FRN, 2.667%, 3/20/36		United States		1,288,861		1,254,920
	s 2006-HYB4, 3B, FRN, 3.669%, 6/20/36		United States		1,597,977		1,357,337

franklintempleton.com Semiannual Report 53

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Principal Amount*		Value
	Asset-Backed Securities and Commercial Mortgage-Backed Securities (continued)
	Diversified Financial Services (continued)
d,r	CIFC Funding Ltd., 2021-7A, D, 144A, FRN, 3.128%, (3-Month USD LIBOR + 3.00%), 1/23/35		United States		315,000	$	314,609
d	CLI Funding VIII LLC, 2021-1A, A, 144A, 1.64%, 2/18/46		United States		370,086		362,788
d,r	Connecticut Avenue Securities Trust, 144A, FRN, 2020-R01, 1M2, 2.142%, (1-Month USD LIBOR + 2.05%), 1/25/40		United States		45,148		45,359
	2021-R01, 1B1, 3.15%, (SOFR + 3.10%), 10/25/41		United States		100,000		100,530
d	CoreVest American Finance Trust, 144A,
	2019-2, B, 3.424%, 6/15/52		United States		100,000		105,894
	2020-4, C, 2.25%, 12/15/52		United States		100,000		97,582
d	CSMC Trust, 144A,
	s 2019-RP10, A1, FRN, 2.971%, 12/26/59		United States		139,180		139,721
	s 2020-RPL3, A1, FRN, 2.691%, 3/25/60		United States		108,282		108,993
	2021-RPL1, A2, 3.937%, 9/27/60		United States		155,000		154,200
d,r	Cutwater Ltd., 2017-1A, CR, 144A, FRN, 3.724%, (3-Month USD LIBOR + 3.60%), 7/15/26		United States		1,000,000		1,001,879
d	DB Master Finance LLC, 144A, 2019-1A, A23, 4.352%, 5/20/49		United States		146,625		158,184
	2021-1A, A2II, 2.493%, 11/20/51		United States		55,000		54,808
d,s	DBUBS Mortgage Trust, 2017-BRBK, D, 144A, FRN, 3.648%, 10/10/34		United States		100,000		101,845
d	Domino’s Pizza Master Issuer LLC, 144A,
	2017-1A, A23, 4.118%, 7/25/47		United States		163,625		173,968
	2018-1A, A2II, 4.328%, 7/25/48		United States		174,600		185,080
	2019-1A, A2, 3.668%, 10/25/49		United States		167,025		177,485
	2021-1A, A2I, 2.662%, 4/25/51		United States		223,875		226,073
	Drive Auto Receivables Trust, 2018-3, D, 4.30%, 9/16/24		United States		12,936		13,128
d	DT Auto Owner Trust, 144A,
	2020-3A, D, 1.84%, 6/15/26		United States		80,000		80,392
	2021-4A, D, 1.99%, 9/15/27		United States		105,000		104,885
d	Education Funding Trust Trust, 2020-A, A, 144A, 2.79%, 7/25/41		United States		106,406		107,989
	Exeter Automobile Receivables Trust, d 2020-2A, D, 144A, 4.73%, 4/15/26		United States		90,000		94,789
	2020-3A, C, 1.32%, 7/15/25		United States		145,000		145,845
s	Fannie Mae Grantor Trust, 2004-T5, AB7, FRN, 0.586%, 5/28/35		United States		312,585		303,735
d	First Investors Auto Owner Trust, 2019-2A, D, 144A, 2.80%, 12/15/25		United States		40,000		40,747
d	FirstKey Homes Trust, 144A,
	2020-SFR1, F1, 3.638%, 8/17/37		United States		225,000		229,614
	2020-SFR2, F1, 3.017%, 10/19/37		United States		320,000		321,004
d	Flagship Credit Auto Trust, 2019-4, D, 144A, 3.12%, 1/15/26		United States		90,000		92,983
d,r	FREMF Mortgage Trust, 2021-KF112, D, 144A, FRN, 3.04%, (1-Month USD LIBOR + 2.95%), 5/15/28		United States		1,600,000		1,601,170
d,r	Galaxy XXVI CLO Ltd., 2018-26A, E, 144A, FRN, 6.01%, (3-Month USD LIBOR + 5.85%), 11/22/31		United States		260,000		254,811
d,r	Generate CLO 6 Ltd., 2019-1A, D, 144A, FRN, 4.128%, (3-Month USD LIBOR + 4.00%), 7/22/32		United States		455,000		456,330
d	GLS Auto Receivables Trust, 144A, 2020-1A, C, 2.72%, 11/17/25		United States		150,000		152,939
	2020-3A, C, 1.92%, 5/15/25		United States		330,000		333,780
d,r	GPMT Ltd., 144A, FRN,
	2018-FL1, C, 2.239%, (1-Month USD LIBOR + 2.15%), 11/19/35		United States		1,127,063		1,127,404
	2019-FL2, D, 3.039%, (1-Month USD LIBOR + 2.95%), 2/22/36		United States		950,000		945,868
d,r	Grand Avenue CRE, 2019-FL1, D, 144A, FRN, 2.889%, (1-Month USD LIBOR + 2.80%), 6/15/37		United States		1,250,000		1,249,866
d,r,t	Greystone CRE Notes Ltd., 2021-HC2, A, 144A, FRN, 1.89%, (1-Month USD LIBOR + 1.80%), 12/15/39		United States		105,000		105,000
d,r	Grosvenor Place CLO BV, 2015-1X, FRN, Reg S, 7.25%, (3-Month EURIBOR + 7.25%), 10/30/29		Netherlands		398,000		451,190
d,r	GSRPM Mortgage Loan Trust, 2002-1A, M1, 144A, FRN, 2.042%, (1-Month USD LIBOR + 1.95%), 11/25/31		United States		872,553		876,287
d,r	Halcyon Loan Advisors Funding Ltd., 2014-1A, D, 144A, FRN, 3.622%, (3-Month USD LIBOR + 3.50%), 4/18/26		United States		1,490,000		1,488,703

54 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Principal Amount*		Value
	Asset-Backed Securities and Commercial Mortgage-Backed Securities (continued)
	Diversified Financial Services (continued)
d	HPEFS Equipment Trust, 2020-2A, D, 144A, 2.79%, 7/22/30		United States		325,000	$	333,684
d	Kestrel Aircraft Funding Ltd., 2018-1A, A, 144A, 4.25%, 12/15/38		United States		210,238		207,836
	Legacy Mortgage Asset Trust,
	d 2019-GS3, A1, 144A, 3.75%, 4/25/59		United States		87,956		88,397
	d 2019-GS4, A1, 144A, 3.438%, 5/25/59		United States		139,767		140,002
	2019-PR1, A2, 4.50%, 9/25/59		United States		1,600,000		1,600,533
	d 2020-GS1, A1, 144A, 2.882%, 10/25/59		United States		220,346		221,027
d,r	Marathon CLO V Ltd., 2017-5A, CR, 144A, FRN, 2.91%, (3-Month USD LIBOR + 2.75%), 11/21/27		United States		2,200,000		2,142,930
d,r	Marathon CLO VI Ltd., 2018-6A, CR2, 144A, FRN, 3.656%, (3-Month USD LIBOR + 3.50%), 5/13/28		United States		1,000,000		986,420
d	Marlette Funding Trust, 2019-4A, B, 144A, 2.95%, 12/17/29		United States		290,000		292,492
r	Merrill Lynch Mortgage Investors Trust Series, 2007-MLN1, A2D, FRN, 0.412%, (1-Month USD LIBOR + 0.32%), 3/25/37		United States		854,807		808,102
d,s	Mill City Mortgage Loan Trust, 2021-NMR1, M3, 144A, FRN, 2.50%, 11/25/60		United States		100,000		98,412
r	MortgageIT Mortgage Loan Trust, FRN, 2006-1, 2A1A, 0.512%, (1-Month USD LIBOR + 0.42%), 4/25/36		United States		1,847,613		1,702,321
	2006-1, 2A1B, 0.652%, (1-Month USD LIBOR + 0.56%), 4/25/36		United States		605,331		248,289
d,r	Mountain View CLO Ltd., 2018-1A, DRR, 144A, FRN, 3.774%, (3-Month USD LIBOR + 3.65%), 10/15/26		United States		2,000,000		2,010,128
d	MVW LLC, 2020-1A, C, 144A, 4.21%, 10/20/37		United States		190,376		195,967
d	MVW Owner Trust, 2019-1A, C, 144A, 3.33%, 11/20/36		United States		54,366		54,982
d	Navient Private Education Refi Loan Trust, 144A,
	2019-FA, B, 3.12%, 8/15/68		United States		210,000		216,095
	2019-GA, B, 3.08%, 10/15/68		United States		140,000		143,898
d,r	Neuberger Berman CLO XIV Ltd., 2020-14A, CR2, 144A, FRN, 2.036%, (3-Month USD LIBOR + 1.90%), 1/28/30		United States		410,000		410,802
d,r	Neuberger Berman Loan Advisers CLO Ltd., 2018-27A, E, 144A, FRN, 5.324%, (3-Month USD LIBOR + 5.20%), 1/15/30		United States		350,000		341,588
r	Nomura Home Equity Loan Inc. Home Equity Loan Trust Series, 2006-WF1, M4, FRN, 0.647%, (1-Month USD LIBOR + 0.56%), 3/25/36		United States		1,328,910		1,342,506
d,r	Octagon Investment Partners XXII Ltd., 2018-1A, CRR, 144A, FRN, 2.028%, (3-Month USD LIBOR + 1.90%), 1/22/30		United States		250,000		249,250
d,r	OHA Credit Funding 2 Ltd., 2021-2A, DR, 144A, FRN, 3.43%, (3-Month USD LIBOR + 3.30%), 4/21/34		United States		335,000		332,906
d,r	OHA Credit Funding 4 Ltd., 2021-4A, ER, 144A, FRN, 6.528%, (3-Month USD LIBOR + 6.40%), 10/22/36		United States		310,000		307,210
d	OneMain Financial Issuance Trust, 144A,
	2015-3A, B, 4.16%, 11/20/28		United States		155,000		155,230
	2020-2A, C, 2.76%, 9/14/35		United States		100,000		102,223
d,r	Pikes Peak CLO, 2021-4A, ER, 144A, FRN, 6.734%, (3-Month USD LIBOR + 6.61%), 7/15/34		United States		250,000		245,378
d	Planet Fitness Master Issuer LLC, 2019-1A, A2, 144A, 3.858%, 12/05/49		United States		147,375		153,174
d	Prestige Auto Receivables Trust, 144A,
	2019-1A, E, 3.90%, 5/15/26		United States		100,000		101,926
	2020-1A, E, 3.67%, 2/15/28		United States		100,000		102,626
d	Progress Residential Trust, 144A,
	2019-SFR1, E, 4.466%, 8/17/35		United States		115,000		115,358
	2019-SFR2, E, 4.142%, 5/17/36		United States		175,000		175,944
	2020-SFR3, F, 2.796%, 10/17/27		United States		100,000		99,048
	2021-SFR2, E2, 2.647%, 4/19/38		United States		100,000		99,461
	2021-SFR4, F, 3.407%, 5/17/38		United States		230,000		228,569
	2021-SFR7, F, 3.834%, 8/17/40		United States		260,000		256,236
r	Ramp Series Trust, 2003-RS9, MII3, FRN, 3.317%, (1-Month USD LIBOR + 2.15%), 10/25/33		United States		1,140,907		1,153,145

franklintempleton.com Semiannual Report 55

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Principal Amount*		Value
	Asset-Backed Securities and Commercial Mortgage-Backed Securities (continued)
	Diversified Financial Services (continued)
d,s	RBSSP Resecuritization Trust, 2009-12, 17A2, 144A, FRN, 2.128%, 10/25/35		United States		308,960	$	306,330
	Santander Drive Auto Receivables Trust,
	2020-1, D, 5.35%, 3/15/28		United States		240,000		256,510
	2020-2, D, 2.22%, 9/15/26		United States		100,000		101,678
r	Saxon Asset Securities Trust, 2002-3, M2, FRN, 2.679%, (1-Month USD LIBOR + 2.59%), 12/25/32		United States		1,133,472		1,149,060
d	SCF Equipment Leasing LLC, 2021-1A, E, 144A, 3.56%, 8/20/32		United States		100,000		97,612
d,s	Security National Mortgage Loan Trust, 2004-1A, AF3, 144A, FRN, 6.42%, 6/25/32		United States		1,710,689		1,502,118
d	Sierra Timeshare Receivables Funding LLC, 2021-1A, C, 144A, 1.79%, 11/20/37		United States		187,575		186,004
d,r	Silvermore CLO Ltd., 2014-1A, C, 144A, FRN, 3.606%, (3-Month USD LIBOR + 3.45%), 5/15/26		United States		1,250,000		1,251,840
d	S-Jets Ltd., 2017-1, A, 144A, 3.967%, 8/15/42		Bermuda		386,522		385,926
r	SLM Private Credit Student Loan Trust, 2003-B, A3, FRN, 2.806%, (28-Day T-Bill + 1.00%), 3/15/33		United States		200,000		194,916
d,r	SMB Private Education Loan Trust, 2017-B, A2B, 144A, FRN, 0.839%, (1-Month USD LIBOR + 0.75%), 10/15/35		United States		52,911		53,113
d	SoFi Consumer Loan Program Trust, 144A,
	2018-1, B, 3.65%, 2/25/27		United States		30,473		30,694
	2019-4, C, 2.84%, 8/25/28		United States		130,000		132,165
d	SoFi Professional Loan Program LLC, 2016-A, B, 144A, 3.57%, 1/26/38		United States		27,840		27,999
r	Soundview Home Loan Trust, 2006-WF2, M3, FRN, 0.767%, (1-Month USD LIBOR + 0.68%), 12/25/36		United States		1,747,858		2,399,154
d	SpringCastle America Funding LLC, 2020-AA, A, 144A, 1.97%, 9/25/37		United States		197,457		197,350
d	Sprite Ltd., 2017-1, B, 144A, 5.75%, 12/15/37		United States		164,302		146,826
d	Stack Infrastructure Issuer LLC, 2019-1A, A2, 144A, 4.54%, 2/25/44		United States		121,563		126,410
d,r	Staniford Street CLO Ltd., 2014-1A, D, 144A, FRN, 3.616%, (3-Month USD LIBOR + 3.50%), 6/15/25		United States		1,266,287		1,268,898
d,r	Starwood Retail Property Trust, 2014-STAR, E, 144A, FRN, 4.49%, (1-Month USD LIBOR + 4.40%), 11/15/27		United States		200,000		2,375
d	Textainer Marine Containers VII Ltd., 2021-1A, A, 144A, 1.68%, 2/20/46		Bermuda		178,600		174,591
d	Towd Point Mortgage Trust, 144A, FRN,
	s 2018-5, M1, 3.25%, 7/25/58		United States		100,000		103,196
	s 2019-2, M1, 3.75%, 12/25/58		United States		200,000		208,685
	s 2019-4, A1, 2.90%, 10/25/59		United States		296,601		305,946
	r 2019-HE1, M2, 1.842%, (1-Month USD LIBOR + 1.75%), 4/25/48		United States		1,481,000		1,493,247
d,r	TPG Real Estate Finance Issuer Ltd., 2018-FL2, C, 144A, FRN, 2.389%, (1-Month USD LIBOR + 2.30%), 11/15/37		United States		1,000,000		1,000,728
d	Tricon American Homes Trust, 2020-SFR2, E1, 144A, 2.73%, 11/17/39		United States		100,000		98,372
d	VCAT LLC, 144A,
	2021-NPL1, A1, 2.289%, 12/26/50		United States		78,836		78,944
	2021-NPL5, A1, 1.868%, 8/25/51		United States		97,445		96,942
d,r	VMC Finance LLC, 144A, FRN,
	2019-FL3, C, 2.139%, (1-Month USD LIBOR + 2.05%), 9/15/36		United States		880,961		877,657
	2021-FL4, C, 2.339%, (1-Month USD LIBOR + 2.25%), 6/16/36		United States		1,000,000		999,805
d,r	Voya CLO Ltd., 2014-3A, D, 144A, FRN, 5.124%, (3-Month USD LIBOR + 5.00%), 7/25/26		United States		2,100,000		2,098,137
d,s	WaMu Commercial Mortgage Securities Trust, 2007-SL2, G, 144A, FRN, 2.355%, 12/27/49		United States		2,866,082		2,337,166
d	Wave Trust, 2017-1A, A, 144A, 3.844%, 11/15/42		United States		180,569		177,677
s	Wells Fargo Mortgage Backed Securities Trust, 2007-AR6, A2, FRN, 2.595%, 10/25/37		United States		145,360		142,307
d	Wendy’s Funding LLC, 2018-1A, A2II, 144A, 3.884%, 3/15/48		United States		211,750		221,585

56 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Principal Amount*		Value
	Asset-Backed Securities and Commercial Mortgage-Backed Securities (continued)
	Diversified Financial Services (continued)
d	Westlake Automobile Receivables Trust, 2020-3A, D, 144A, 1.65%, 2/17/26		United States		120,000	$	120,618
							71,457,733
	Equity Real Estate Investment Trusts (REITs) 0.0%†
d	American Homes 4 Rent, 144A, 2014-SFR2, E, 6.231%, 10/17/36		United States		250,000		270,475
	2014-SFR3, E, 6.418%, 12/17/36		United States		100,000		109,019
	2015-SFR1, E, 5.639%, 4/17/52		United States		210,000		226,838
d	Diamond Resorts Owner Trust, 144A,
	2017-1A, C, 6.07%, 10/22/29		United States		16,686		16,834
	2018-1, C, 4.53%, 1/21/31		United States		40,747		41,590
	2019-1A, B, 3.53%, 2/20/32		United States		39,067		39,811
							704,567
	Mortgage Real Estate Investment Trusts (REITs) 1.6%
d	510 Asset Backed Trust, 2021-NPL1, A1, 144A, 2.24%, 6/25/61		United States		145,459		144,905
	Alternative Loan Trust, 2007-6, A4, 5.75%, 4/25/47		United States		1,128,568		931,199
r	American Home Mortgage Investment Trust, 2006-1, 11A1, FRN, 0.372%, (1-Month USD LIBOR + 0.28%), 3/25/46		United States		148,507		143,779
	Banc of America Alternative Loan Trust, 2003-8, 1CB1, 5.50%, 10/25/33		United States		3,656		3,793
	Banc of America Funding Trust,
	e 2003-1, B2, 6.00%, 5/20/33		United States		170,304		115,484
	2005-8, 1A1, 5.50%, 1/25/36		United States		400,399		390,689
	2007-4, 5A1, 5.50%, 11/25/34		United States		40,895		41,310
s	Banc of America Mortgage Trust, 2005-A, 2A1, FRN, 2.502%, 2/25/35		United States		2,855		2,949
d,r	BBCMS Mortgage Trust, 2020-BID, B, 144A, FRN, 2.63%, (1-Month USD LIBOR + 2.54%), 10/15/37		United States		210,000		210,606
d,r	BCAP LLC Trust, 2012-RR4, 9A7, 144A, FRN, 0.249%, (1-Month USD LIBOR + 0.08%), 11/26/36		United States		388,374		399,877
s	Bear Stearns ARM Trust, 2007-4, 12A1, FRN, 3.007%, 5/25/37		United States		1,229,562		1,214,571
d,r	BXMT Ltd., 2021-FL4, C, 144A, FRN, 1.84%, (1-Month USD LIBOR + 1.75%), 5/15/38		United States		2,500,000		2,495,146
d	CIM Trust, 2021-NR2, A1, 144A, 2.568%, 7/25/59		United States		175,232		175,363
d,s	Citigroup Commercial Mortgage Trust, 2014-GC21, D, 144A, FRN, 5.107%, 5/10/47		United States		330,000		307,869
	Citigroup Mortgage Loan Trust,
	2006-WF1, A2C, 4.831%, 3/25/36		United States		474,250		287,060
	d,s 2009-10, 6A2, 144A, FRN, 2.167%, 9/25/34		United States		27,260		28,529
	d 2019-E, A1, 144A, 3.228%, 11/25/70		United States		205,652		206,000
	Countrywide Alternative Loan Trust,
	2003-22CB, 1A1, 5.75%, 12/25/33		United States		28,505		29,686
	2004-16CB, 1A1, 5.50%, 7/25/34		United States		13,685		14,046
	2004-16CB, 3A1, 5.50%, 8/25/34		United States		13,711		14,063
	2004-3T1, M, 6.00%, 5/25/34		United States		250,846		200,284
	2004-J10, 2CB1, 6.00%, 9/25/34		United States		45,880		47,759
	2005-J1, 2A1, 5.50%, 2/25/25		United States		2,140		2,164
r	Countrywide Asset-Backed Certificates, 2005-15, M3, FRN, 0.612%, (1-Month USD LIBOR + 0.52%), 4/25/36		United States		2,340,000		2,262,889
s	Countrywide Home Loans Mortgage Pass-Through Trust, 2004-HYB4, 2A1, FRN, 2.603%, 9/20/34		United States		39,696		40,012
d,r	Credit Suisse Commercial Mortgage Securities Corp., 2019-SKLZ, D, 144A, FRN, 3.69%, (1-Month USD LIBOR + 3.60%), 1/15/34		United States		84,000		83,335
	Credit Suisse First Boston Mortgage Securities Corp.,
	2002-10, 1B, 7.50%, 5/25/32		United States		149,864		141,436
	2003-27, 4A4, 5.75%, 11/25/33		United States		12,934		13,880
	2005-8, 1A3, 5.25%, 9/25/35		United States		89,766		88,025

franklintempleton.com Semiannual Report 57

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Principal Amount*		Value
	Asset-Backed Securities and Commercial Mortgage-Backed Securities (continued)
	Mortgage Real Estate Investment Trusts (REITs) (continued)
d	CSMC OA LLC, 144A,
	2014-USA, A2, 3.953%, 9/15/37		United States		150,000	$	158,660
	2014-USA, E, 4.373%, 9/15/37		United States		400,000		359,669
r	DSLA Mortgage Loan Trust, 2005-AR5, 2A1A, FRN, 0.749%, (1-Month USD LIBOR + 0.66%), 9/19/45		United States		31,789		24,072
d,r	FHLMC, 2021-DNA7, M2, 144A, FRN, 1.848%, (SOFR + 1.80%), 11/25/41		United States		100,000		100,312
r	FHLMC Structured Agency Credit Risk Debt Notes, 2015-DNA1, M3, FRN, 3.392%, (1-Month USD LIBOR + 3.30%), 10/25/27		United States		88,769		90,154
s	GS Mortgage Securities Trust,
	d 2011-GC5, C, 144A, FRN, 5.302%, 8/10/44		United States		100,000		85,987
	d 2011-GC5, D, 144A, FRN, 5.302%, 8/10/44		United States		195,000		96,525
	2014-GC18, B, FRN, 4.885%, 1/10/47		United States		100,000		99,365
	GSR Mortgage Loan Trust,
	2005-4F, 6A1, 6.50%, 2/25/35		United States		7,786		7,917
	s 2005-AR6, 4A5, FRN, 2.71%, 9/25/35		United States		23,642		23,810
r	Harborview Mortgage Loan Trust, 2004-11, 2A2A, FRN, 0.729%, (1-Month USD LIBOR + 0.64%), 1/19/35		United States		71,474		66,474
	IndyMac INDX Mortgage Loan Trust, FRN,
	s 2004-AR15, B1, 2.674%, 2/25/35		United States		1,606,419		1,394,209
	r 2004-AR7, A5, 1.312%, (1-Month USD LIBOR + 1.22%), 9/25/34		United States		34,477		33,108
	s 2005-AR11, A3, 2.956%, 8/25/35		United States		38,943		35,656
	r 2006-AR2, 2A1, 0.512%, (1-Month USD LIBOR + 0.42%), 2/25/46		United States		173,590		139,542
	s 2006-AR3, 3A1A, 3.07%, 4/25/36		United States		1,860,909		1,895,579
s	JPMorgan Alternative Loan Trust, 2006-A2, 2A2, FRN, 2.922%, 5/25/36		United States		1,323,765		1,010,368
d,s	JPMorgan Chase Commercial Mortgage Securities Trust, 144A, FRN,
	2012-C8, C, 4.779%, 10/15/45		United States		100,000		100,822
	2012-LC9, C, 4.508%, 12/15/47		United States		100,000		101,130
	2012-LC9, D, 4.508%, 12/15/47		United States		120,000		118,248
	JPMorgan Mortgage Trust,
	2004-S1, 2A1, 6.00%, 9/25/34		United States		62,733		66,217
	s 2006-A3, 2B1, FRN, 2.665%, 4/25/35		United States		1,877,673		1,269,232
	s 2007-A1, 4A2, FRN, 2.307%, 7/25/35		United States		1,251		1,256
	d,s 2020-2, B4, 144A, FRN, 3.862%, 7/25/50		United States		984,501		1,009,931
r	Lehman XS Trust Series, 2006-2N, 1A1, FRN, 0.612%, (1-Month USD LIBOR + 0.52%), 2/25/46		United States		29,781		27,598
	MASTR Alternative Loan Trust,
	2004-2, 8A4, 5.50%, 3/25/34		United States		122,266		126,413
	2004-8, 2A1, 6.00%, 9/25/34		United States		26,776		27,857
s	Merrill Lynch Mortgage Investors MLCC, 2006-2, 2A, FRN, 2.021%, 5/25/36		United States		1,694		1,728
s	Morgan Stanley Bank of America Merrill Lynch Trust, 2013-C11, B, FRN, 4.496%, 8/15/46		United States		200,000		145,291
d,s	Morgan Stanley Capital I Trust, 2011-C2, E, 144A, FRN, 5.385%, 6/15/44		United States		150,000		127,820
d,s	MSBAM Commercial Mortgage Securities Trust, 2012-CKSV, C, 144A, FRN, 4.425%, 10/15/30		United States		340,000		293,120
d	PRPM LLC, 144A,
	s 2021-2, A2, FRN, 3.77%, 3/25/26		United States		130,000		129,088
	2021-3, A1, 1.867%, 4/25/26		United States		178,598		178,082
	s 2021-9, A1, FRN, 2.363%, 10/25/26		United States		137,645		136,987
s	RFMSI Trust, 2005-SA1, 1A1, FRN, 3.623%, 3/25/35		United States		87,663		52,896
s	Structured Adjustable Rate Mortgage Loan Trust Series, 2006-8, 1A2, FRN, 3.101%, 9/25/36		United States		195,014		170,917
r	Structured ARM Loan Trust, 2005-14, A1, FRN, 0.402%, (1-Month USD LIBOR + 0.31%), 7/25/35		United States		184,323		131,926
d	Toorak Mortgage Corp. Ltd., 2021-1, A1, 144A, 2.24%, 6/25/24		United States		190,000		189,481

58 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Principal Amount*		Value
	Asset-Backed Securities and Commercial Mortgage-Backed Securities (continued)
	Mortgage Real Estate Investment Trusts (REITs) (continued)
d	VOLT XCII LLC, 2021-NPL1, A1, 144A, 1.893%, 2/27/51		United States		93,422	$	93,322
d	VOLT XCII LLC, 2021-NPL2, A1, 144A, 1.893%, 2/27/51		United States		232,595		231,427
d	VOLT XCIV LLC, 2021-NPL3, A2, 144A, 4.949%, 2/27/51		United States		215,000		213,188
	Wells Fargo Commercial Mortgage Trust,
	s 2013-LC12, B, FRN, 4.441%, 7/15/46		United States		190,000		189,369
	2014-LC16, C, 4.458%, 8/15/50		United States		215,000		134,375
	s 2016-C36, B, FRN, 3.671%, 11/15/59		United States		100,000		98,328
	s 2016-C36, C, FRN, 4.311%, 11/15/59		United States		100,000		88,333
	d,s 2019-JWDR, C, 144A, FRN, 3.139%, 9/15/31		United States		290,000		286,997
	WFRBS Commercial Mortgage Trust,
	d,s 2011-C3, D, 144A, FRN, 5.513%, 3/15/44		United States		243,673		121,154
	d,s 2011-C4, E, 144A, FRN, 5.024%, 6/15/44		United States		120,000		92,077
	s 2012-C10, C, FRN, 4.494%, 12/15/45		United States		320,000		286,053
	d,s 2012-C6, D, 144A, FRN, 5.982%, 4/15/45		United States		150,000		150,530
	s 2012-C7, C, FRN, 4.946%, 6/15/45		United States		25,000		19,362
	d,s 2012-C7, D, 144A, FRN, 4.946%, 6/15/45		United States		130,000		72,686
	d,s 2012-C7, E, 144A, FRN, 4.946%, 6/15/45		United States		75,000		13,978
	2014-C20, B, 4.378%, 5/15/47		United States		100,000		102,220
	s 2014-C24, B, FRN, 4.204%, 11/15/47		United States		100,000		100,111
							22,357,665
	Total Asset-Backed Securities and Commercial Mortgage-Backed Securities (Cost $93,483,079)						94,519,965
	Municipal Bonds in Reorganization 0.5%
	Puerto Rico 0.5%
l	Commonwealth of Puerto Rico,
	8.00%, 7/01/35		United States		6,335,000		5,558,963
	5.50%, 7/01/39		United States		715,000		673,887
	5.00%, 7/01/41		United States		1,000,000		900,000
	Total Municipal Bonds in Reorganization (Cost $4,164,941)						7,132,850
		Number of Contracts		Notional Amount#
	Options Purchased 0.1%
	Calls – Exchange-Traded 0.0%†
	Aerojet Rocketdyne Holdings Inc., February Strike Price $45.00, Expires 2/18/22		26		2,600		4,810
	The AES Corp., January Strike Price $27.00, Expires 1/21/22		1,199		119,900		15,587
	Amyris Inc., March Strike Price $10.00, Expires 3/18/22		91		9,100		4,004
	Avaya Holdings Corp., January Strike Price $22.50, Expires 1/21/22		18		1,800		1,368
	Carnival Corp., January Strike Price $30.00, Expires 1/21/22		20		2,000		180
	Casino Guichard Perrachon SA, December Strike Price 26.00 EUR, Expires 12/17/21		86		8,600		98
	CBOE Volatility Index, December Strike Price $21.00, Expires 12/22/21		152		15,200		84,512
	CBOE Volatility Index, December Strike Price $22.00, Expires 12/22/21		124		12,400		66,464
	CBOE Volatility Index, December Strike Price $23.00, Expires 12/22/21		121		12,100		56,870
	CBOE Volatility Index, January Strike Price $24.00, Expires 1/19/22		134		13,400		74,102
	CBOE Volatility Index, January Strike Price $25.00, Expires 1/19/22		227		22,700		115,770
	CBOE Volatility Index, January Strike Price $30.00, Expires 1/19/22		74		7,400		27,380
	CBOE Volatility Index, February Strike Price $30.00, Expires 2/16/22		69		6,900		30,360
	Cinemark Holdings Inc., January Strike Price $25.00, Expires 1/21/22		40		4,000		1,000
	GOL Linhas Aereas Inteligentes SA, January Strike Price $9.00, Expires 1/21/22		59		5,900		472

franklintempleton.com Semiannual Report 59

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

	Number of Contracts		Notional Amount#		Value
Options Purchased (continued)
Calls – Exchange-Traded† (continued)
Helix Energy Solutions Group Inc., December Strike Price $5.00, Expires 12/17/21		82		8,200	$	410
Intel Corp., January Strike Price $70.00, Expires 1/21/22		100		10,000		400
Nikola Corp., January Strike Price $12.50, Expires 1/21/22		196		19,600		16,268
Nikola Corp., January Strike Price $14.00, Expires 1/21/22		95		9,500		5,510
Norwegian Cruise Line Holdings Ltd., January Strike Price $32.50, Expires 1/21/22		73		7,300		730
Norwegian Cruise Line Holdings Ltd., February Strike Price $27.50, Expires 2/18/22		73		7,300		3,139
NuVasive Inc., December Strike Price $70.00, Expires 12/17/21		14		1,400		350
Pebblebrook Hotel Trust, December Strike Price $30.00, Expires 12/17/21		20		2,000		300
S&P 500 Index, December Strike Price $4,600.00, Expires 12/31/21		7		700		65,800
SPDR Gold Shares ETF, June Strike Price $200.00, Expires 6/17/22		147		14,700		18,228
Spirit Airlines Inc., January Strike Price $30.00, Expires 1/21/22		20		2,000		360
Tronox Holdings PLC, December Strike Price $27.00, Expires 12/17/21		38		3,800		380
Tronox Holdings PLC, February Strike Price $27.00, Expires 2/18/22		38		3,800		1,140
Vodafone Group PLC, December Strike Price 1.25 GBP, Expires 12/17/21		64		64,000		—
Vodafone Group PLC, March Strike Price 1.20 GBP, Expires 3/18/22		65		65,000		2,377
Vroom Inc., December Strike Price $35.00, Expires 12/17/21		10		1,000		50
Willis Towers Watson PLC, December Strike Price $250.00, Expires 12/17/21		23		2,300		1,092
Zogenix Inc., December Strike Price $19.00, Expires 12/17/21		12		1,200		120
						599,631
Calls – Over-the-Counter 0.0%†
Currency Options 0.0%†
USD/RUB, Counterparty BZWS, December Strike Price 82.00 RUB, Expires 12/23/21		1		130,000		200
Puts – Exchange-Traded 0.1%
Advanced Micro Devices Inc., January Strike Price $135.00, Expires 1/21/22		306		30,600		119,952
Alcon Inc., May Strike Price $70.00, Expires 5/20/22		14		1,400		3,080
American Airlines Group Inc., January Strike Price $10.00, Expires 1/20/23		40		4,000		2,920
Arbor Realty Trust Inc., December Strike Price $17.50, Expires 12/17/21		37		3,700		1,480
Avis Budget Group Inc., January Strike Price $270.00, Expires 1/21/22		17		1,700		55,046
Bath & Body Works Inc., January Strike Price $70.00, Expires 1/21/22		62		6,200		18,104
Box Inc., December Strike Price $22.00, Expires 12/17/21		300		30,000		24,900
Box Inc., December Strike Price $23.00, Expires 12/17/21		17		1,700		2,006
Callaway Golf Co., January Strike Price $26.00, Expires 1/21/22		824		82,400		111,240
Callaway Golf Co., January Strike Price $28.00, Expires 1/21/22		16		1,600		3,800
CBOE Volatility Index, December Strike Price $21.00, Expires 12/22/21		280		28,000		36,400
CBOE Volatility Index, December Strike Price $22.00, Expires 12/22/21		241		24,100		42,175
CBOE Volatility Index, December Strike Price $23.00, Expires 12/22/21		222		22,200		48,840
CBOE Volatility Index, January Strike Price $30.00, Expires 1/19/22		142		14,200		110,334
Cinemark Holdings Inc., January Strike Price $10.00, Expires 1/21/22		90		9,000		1,800
Coinbase Global Inc., March Strike Price $200.00, Expires 3/18/22		18		1,800		9,918
The Cooper Cos Inc., May Strike Price $360.00, Expires 5/20/22		3		300		7,080
Crown Holdings Inc., January Strike Price $100.00, Expires 1/21/22		111		11,100		24,420
Fluor Corp., January Strike Price $15.00, Expires 1/21/22		30		3,000		675
Fluor Corp., January Strike Price $17.50, Expires 1/21/22		30		3,000		1,500
Fluor Corp., January Strike Price $20.00, Expires 1/21/22		30		3,000		2,850
Iron Mountain Inc., January Strike Price $40.00, Expires 1/21/22		24		2,400		960
Iron Mountain Inc., March Strike Price $42.50, Expires 3/18/22		34		3,400		5,508
iShares MSCI Emerging Markets ETF, December Strike Price $47.50, Expires 12/31/21		431		43,100		51,720
The Marcus Corp., December Strike Price $10.00, Expires 12/17/21		37		3,700		1,388

60 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Number of Contracts		Notional Amount#		Value
	Options Purchased (continued)
	Puts – Exchange-Traded (continued)
	Owens & Minor Inc., March Strike Price $30.00, Expires 3/18/22		96		9,600	$	13,680
	S&P 500 Index, February Strike Price $4,500.00, Expires 2/18/22		29		2,900		430,940
	Shift Technologies Inc., December Strike Price $5.00, Expires 12/17/21		56		5,600		3,080
	SPDR S&P Retail ETF, December Strike Price $92.00, Expires 12/17/21		25		2,500		4,750
	SPDR S&P Retail ETF, January Strike Price $75.00, Expires 1/21/22		64		6,400		4,224
	SPDR S&P Retail ETF, January Strike Price $85.00, Expires 1/21/22		58		5,800		10,556
							1,155,326
	Puts – Over-the-Counter 0.0%†
	The Western Union Co., Counterparty BOFA, May Strike Price $14.00, Expires 5/20/22		124		12,400		11,160
	Total Options Purchased (Cost $2,507,834)						1,766,317
	Total Investments before Short Term Investments (Cost $956,481,614)						1,112,195,610
		Country		Shares
	Short Term Investments 15.8%
	Money Market Funds 14.0%
u,v	Dreyfus Government Cash Management, Institutional, 0.03%		United States		17,573,076		17,573,076
u	Fidelity Investments Money Market Government Portfolio, Institutional, 0.01%		United States		183,354,689		183,354,689
	Total Money Market Funds (Cost $200,927,765)						200,927,765
w	Investments from Cash Collateral Received for Loaned Securities 0.5%
	Money Market Funds 0.4%
u,x	Institutional Fiduciary Trust Money Market Portfolio, 0.01%		United States		5,752,000		5,752,000
				Principal Amount*
	Repurchase Agreements 0.1%
y	Joint Repurchase Agreement, 0.05%, 12/01/21 (Maturity Value $1,439,227)		United States		1,439,225		1,439,225
	J.P. Morgan Securities LLC Collateralized by zU.S. Government Agency Obligations, 12/14/21-2/08/22 (valued at $1,468,011)
	Total Investments from Cash Collateral Received for Loaned Securities (Cost $7,191,225)						7,191,225
	U.S. Government and Agency Securities 1.3%
z	Federal Home Loan Bank Discount Notes, 12/01/21		United States		5,805,000		5,805,000
	z U.S. Treasury Bill,
	4/21/22		United States		12,000,000		11,996,827
	8/11/22		United States		940,000		939,150
	Total U.S. Government and Agency Securities (Cost $18,742,681)						18,740,977
	Total Investments (Cost $1,183,343,285) 93.4%						1,339,055,577
	Options Written (0.0)%†						(434,251	)
	Securities Sold Short (17.5)%						(250,220,336	)
	Other Assets, less Liabilities 24.1%						344,709,462
	Net Assets 100.0%					$	1,433,110,452

franklintempleton.com Semiannual Report 61

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Number of Contracts		Notional Amount#		Value
aa	Options Written (0.0)%†
	Calls – Exchange-Traded (0.0)%†
	Abbott Laboratories, December Strike Price $130.00, Expires 12/17/21		4		400	$	(484	)
	Accenture PLC, A, December Strike Price $360.00, Expires 12/17/21		1		100		(1,150	)
	Applied Materials Inc., December Strike Price $150.00, Expires 12/17/21		3		300		(1,230	)
	Bath & Body Works Inc., January Strike Price $80.00, Expires 1/21/22		15		1,500		(4,335	)
	Bath & Body Works Inc., January Strike Price $85.00, Expires 1/21/22		46		4,600		(7,268	)
	The Blackstone Group Inc., A, December Strike Price $135.00, Expires 12/17/21		3		300		(3,000	)
	Box Inc., A, December Strike Price $27.00, Expires 12/17/21		118		11,800		(3,540	)
	Box Inc., A, December Strike Price $29.00, Expires 12/17/21		130		13,000		(1,950	)
	Callaway Golf Co., January Strike Price $31.00, Expires 1/21/22		350		35,000		(15,750	)
	Casino Guichard Perrachon SA, December Strike Price 30.00 EUR, Expires 12/17/21		43		4,300		(49	)
	Casino Guichard Perrachon SA, December Strike Price 34.00 EUR, Expires 12/17/21		43		4,300		(49	)
	Citigroup Inc., December Strike Price $75.00, Expires 12/17/21		5		500		(40	)
	ConocoPhillips, December Strike Price $80.00, Expires 12/17/21		7		700		(196	)
	Eli Lilly & Co., W, December Strike Price $260.00, Expires 12/17/21		2		200		(630	)
	EOG Resources Inc., December Strike Price $100.00, Expires 12/17/21		4		400		(200	)
	Fox Corp., December Strike Price $46.00, Expires 12/17/21		11		1,100		(192	)
	The Goldman Sachs Group Inc., December Strike Price $440.00, Expires 12/17/21		1		100		(39	)
	Hertz Global Holdings Inc., December Strike Price $30.00, Expires 12/17/21		14		1,400		(630	)
	Hertz Global Holdings Inc., February Strike Price $25.00, Expires 2/18/22		37		3,700		(13,320	)
	JPMorgan Chase & Co., December Strike Price $175.00, Expires 12/17/21		2		200		(52	)
	Kraton Corp., December Strike Price $50.00, Expires 12/17/21		80		8,000		(400	)
	Marathon Petroleum Corp., December Strike Price $72.50, Expires 12/17/21		1		100		(13	)
	Merck & Co. Inc., December Strike Price $82.50, Expires 12/17/21		4		400		(180	)
	MetLife Inc., December Strike Price $70.00, Expires 12/17/21		7		700		(28	)
	Microsoft Corp., December Strike Price $320.00, Expires 12/17/21		1		100		(1,518	)
	Morgan Stanley, December Strike Price $110.00, Expires 12/17/21		1		100		(10	)
	MPLX LP, December Strike Price $31.43, Expires 12/17/21		12		1,200		(144	)
	NetApp Inc., December Strike Price $100.00, Expires 12/17/21		4		400		(280	)
	Nexstar Media Group Inc., December Strike Price $165.00, Expires 12/17/21		1		100		(65	)
	NVIDIA Corp., December Strike Price $247.50, Expires 12/17/21		1		100		(7,689	)
	OneMain Holdings Inc., A, December Strike Price $65.00, Expires 12/17/21		7		700		(56	)
	Oracle Corp., December Strike Price $105.00, Expires 12/17/21		5		500		(110	)
	S&P 500 Index, December Strike Price $4,800.00, Expires 12/31/21		7		700		(8,610	)
	SPX FLOW Inc., December Strike Price $85.00, Expires 12/17/21		13		1,300		(4,290	)
	SPX FLOW Inc., March Strike Price $85.00, Expires 3/18/22		9		900		(5,355	)
	Target Corp., December Strike Price $270.00, Expires 12/17/21		1		100		(42	)
	Texas Instruments Inc., December Strike Price $210.00, Expires 12/17/21		1		100		(38	)
	Wells Fargo & Co., December Strike Price $52.50, Expires 12/17/21		7		700		(175	)
	Willis Towers Watson PLC, December Strike Price $260.00, Expires 12/17/21		16		1,600		(240	)
	Willis Towers Watson PLC, December Strike Price $270.00, Expires 12/17/21		7		700		(1,662	)
							(85,009	)
	Puts – Exchange-Traded (0.0)%†
	Amyris Inc., March Strike Price $6.00, Expires 3/18/22		76		7,600		(6,840	)
	Avaya Holdings Corp., January Strike Price $17.50, Expires 1/21/22		8		800		(608	)
	Avis Budget Group Inc., January Strike Price $200.00, Expires 1/21/22		17		1,700		(14,246	)
	Bath & Body Works Inc., January Strike Price $60.00, Expires 1/21/22		30		3,000		(2,310	)
	Carnival Corp., January Strike Price $22.50, Expires 1/21/22		20		2,000		(10,560	)

62 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Number of Contracts		Notional Amount#		Value
aa	Options Written† (continued)
	Puts – Exchange-Traded† (continued)
	Cinemark Holdings Inc., January Strike Price $15.00, Expires 1/21/22		40		4,000	$	(5,800	)
	Crown Holdings Inc., January Strike Price $87.50, Expires 1/21/22		111		11,100		(10,545	)
	GOL Linhas Aereas Inteligentes SA, January Strike Price $7.00, Expires 1/21/22		59		5,900		(8,998	)
	Nikola Corp., January Strike Price $7.50, Expires 1/21/22		67		6,700		(3,015	)
	Nikola Corp., January Strike Price $10.00, Expires 1/21/22		129		12,900		(18,963	)
	Nikola Corp., January Strike Price $11.00, Expires 1/21/22		33		3,300		(7,095	)
	Nikola Corp., January Strike Price $12.50, Expires 1/21/22		65		6,500		(21,450	)
	Norwegian Cruise Line Holdings Ltd., January Strike Price $25.00, Expires 1/21/22		40		4,000		(24,560	)
	Norwegian Cruise Line Holdings Ltd., February Strike Price $20.00, Expires 2/18/22		73		7,300		(20,075	)
	NuVasive Inc., December Strike Price $60.00, Expires 12/17/21		14		1,400		(16,660	)
	Owens & Minor Inc., March Strike Price $20.00, Expires 3/18/22		96		9,600		(2,880	)
	S&P 500 Index, December Strike Price $3,700.00, Expires 12/31/21		7		700		(8,190	)
	S&P 500 Index, February Strike Price $3,900.00, Expires 2/18/22		29		2,900		(151,293	)
	Spirit Airlines Inc., January Strike Price $22.50, Expires 1/21/22		20		2,000		(5,720	)
	SunPower Corp., January Strike Price $23.00, Expires 1/21/22		77		7,700		(5,544	)
	Vodafone Group PLC, March Strike Price 1.05 GBP, Expires 3/18/22		65		65,000		(3,890	)
							(349,242	)
	Total Options Written (Premiums Received $724,467)						(434,251	)
		Country		Shares
bb	Securities Sold Short (17.5)%
	Common Stocks (7.6)%
	Aerospace & Defense (0.0)%†
	Parsons Corp.		United States		12,523		(415,638	)
	Air Freight & Logistics (0.4)%
	Air Transport Services Group Inc.		United States		11,629		(287,120	)
	Atlas Air Worldwide Holdings Inc.		United States		23,051		(2,019,498	)
	C.H. Robinson Worldwide Inc.		United States		8,898		(846,111	)
	United Parcel Service Inc., B		United States		9,277		(1,840,278	)
							(4,993,007	)
	Airlines (0.0)%†
	GOL Linhas Aereas Inteligentes SA, ADR		Brazil		12,002		(67,571	)
	Jetblue Airways Corp.		United States		4,303		(57,746	)
	Spirit Airlines Inc.		United States		6,112		(127,802	)
							(253,119	)
	Auto Components (0.1)%
	Patrick Industries Inc.		United States		6,254		(498,882	)
	Quantumscape Corp., A		United States		17,167		(495,096	)
	Veoneer Inc.		Sweden		10,769		(383,376	)
							(1,377,354	)
	Automobiles (0.2)%
	Fisker Inc.		United States		59,995		(1,283,293	)
	Li Auto Inc., ADR		China		30,872		(1,094,104	)
	NIO Inc., ADR		China		6,978		(273,049	)
							(2,650,446	)
	Banks (0.0)%†
	Hope Bancorp Inc.		United States		11,470		(164,594	)

franklintempleton.com Semiannual Report 63

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Shares		Value
bb	Securities Sold Short (continued)
	Common Stocks (continued)
	Biotechnology (0.5)%
	Avid Bioservices Inc.		United States		38,749	$	(1,184,169	)
	BioMarin Pharmaceutical Inc.		United States		1,852		(159,809	)
	Coherus Biosciences Inc.		United States		46,342		(860,571	)
	Dynavax Technologies Corp.		United States		66,558		(1,074,912	)
	Gossamer Bio Inc.		United States		47,102		(510,586	)
	Insmed Inc.		United States		29,179		(803,006	)
	Intercept Pharmaceuticals Inc.		United States		42,421		(730,065	)
	Ionis Pharmaceuticals Inc.		United States		5,582		(147,923	)
	Karyopharm Therapeutics Inc.		United States		30,543		(212,274	)
	Ligand Pharmaceuticals Inc.		United States		1,161		(187,989	)
	Mannkind Corp.		United States		177,201		(820,441	)
	Pharming Group NV		Netherlands		48,818		(39,009	)
							(6,730,754	)
	Capital Markets (0.9)%
	Apollo Global Management Inc., A		United States		83,620		(5,918,624	)
	S&P Global Inc.		United States		14,351		(6,540,181	)
							(12,458,805	)
	Chemicals (0.0)%†
	Amyris Inc.		United States		55,747		(382,424	)
	Consumer Finance (0.4)%
	Encore Capital Group Inc.		United States		69,822		(4,073,415	)
	EZCORP Inc., A		United States		53,647		(396,988	)
	LendingTree Inc.		United States		680		(77,098	)
	PRA Group Inc.		United States		19,165		(813,746	)
	SoFi Technologies Inc.		United States		19,673		(338,376	)
	Upstart Holdings Inc.		United States		2,510		(514,274	)
	Zip Co. Ltd.		Australia		23,000		(82,760	)
							(6,296,657	)
	Diversified Consumer Services (0.0)%†
	Chegg Inc.		United States		1,295		(36,066	)
	Stride Inc.		United States		12,983		(443,110	)
							(479,176	)
	Diversified Telecommunication Services (0.0)%†
	Radius Global Infrastructure Inc., A		United States		29,267		(482,906	)
	Electric Utilities (0.6)%
	Duke Energy Corp.		United States		26,597		(2,580,175	)
	Eversource Energy		United States		21,351		(1,756,547	)
	The Southern Co.		United States		41,665		(2,545,732	)
	Terna Rete Elettrica Nazionale SpA		Italy		218,902		(1,627,829	)
							(8,510,283	)
	Electrical Equipment (0.1)%
	Array Technologies Inc.		United States		12,598		(226,953	)
	Blink Charging Co.		United States		11,845		(455,203	)
	Stem Inc.		United States		8,886		(188,561	)
							(870,717	)
	Electronic Equipment, Instruments & Components (0.1)%
	II-VI Inc.		United States		3,346		(209,225	)
	Itron Inc.		United States		10,915		(675,748	)
	OSI Systems Inc.		United States		4,211		(382,906	)

64 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Shares		Value
bb	Securities Sold Short (continued)
	Common Stocks (continued)
	Electronic Equipment, Instruments & Components (continued)
	PAR Technology Corp.		United States		7,349	$	(384,867	)
	Vishay Intertechnology Inc.		United States		7,558		(153,957	)
							(1,806,703	)
	Energy Equipment & Services (0.0)%†
	Helix Energy Solutions Group Inc.		United States		148,590		(451,714	)
	Entertainment (0.2)%
	Cinemark Holdings Inc.		United States		62,092		(963,668	)
	Live Nation Entertainment Inc.		United States		2,460		(262,359	)
	The Marcus Corp.		United States		60,556		(1,057,913	)
	Sea Ltd., ADR		Taiwan		1,245		(358,647	)
							(2,642,587	)
	Equity Real Estate Investment Trusts (REITs) (0.2)%
	Braemar Hotels & Resorts Inc.		United States		46,226		(201,546	)
	Innovative Industrial Properties Inc., A		United States		7,076		(1,817,329	)
	Pebblebrook Hotel Trust		United States		38,063		(797,420	)
	Summit Hotel Properties Inc.		United States		54,453		(487,354	)
							(3,303,649	)
	Food & Staples Retailing (0.1)%
	The Chefs’ Warehouse Inc.		United States		31,079		(965,625	)
	Food Products (0.1)%
	Beyond Meat Inc.		United States		2,516		(176,774	)
	Kellogg Co.		United States		12,215		(747,314	)
							(924,088	)
	Gas Utilities (0.4)%
	Atmos Energy Corp.		United States		27,619		(2,494,548	)
	Snam SpA		Italy		85,169		(479,953	)
	South Jersey Industries Inc.		United States		69,636		(1,636,446	)
	UGI Corp.		United States		28,746		(1,185,772	)
							(5,796,719	)
	Health Care Equipment & Supplies (0.2)%
	Alphatec Holdings Inc.		United States		32,211		(357,542	)
	Cutera Inc.		United States		23,916		(833,712	)
	Mesa Laboratories Inc.		United States		1,643		(507,342	)
	NuVasive Inc.		United States		5,592		(268,751	)
	SmileDirectClub Inc., A		United States		65,172		(200,078	)
	Varex Imaging Corp.		United States		47,874		(1,366,803	)
							(3,534,228	)
	Health Care Providers & Services (0.0)%†
	1Life Healthcare Inc.		United States		6,029		(96,042	)
	Brookdale Senior Living Inc.		United States		21,664		(126,951	)
	PetIQ Inc., A		United States		14,379		(287,149	)
							(510,142	)
	Health Care Technology (0.0)%†
	Tabula Rasa HealthCare Inc.		United States		3,556		(40,432	)
	Hotels, Restaurants & Leisure (0.2)%
	Airbnb Inc., A		United States		808		(139,412	)
	Draftkings Inc., A		United States		728		(25,153	)
	Marriott Vacations Worldwide Corp.		United States		905		(138,148	)
	Norwegian Cruise Line Holdings Ltd.		United States		30,275		(590,665	)

franklintempleton.com Semiannual Report 65

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Shares		Value
bb	Securities Sold Short (continued)
	Common Stocks (continued)
	Hotels, Restaurants & Leisure (continued)
	Royal Caribbean Cruises Ltd.		United States		10,859	$	(758,176	)
	Scientific Games Corp.		United States		29,413		(1,880,079	)
							(3,531,633	)
	Independent Power & Renewable Electricity Producers (0.1)%
	Sunnova Energy International Inc.		United States		26,697		(986,988	)
	Industrial Conglomerates (0.1)%
	3M Co.		United States		4,478		(761,439	)
	Internet & Direct Marketing Retail (0.2)%
d	Delivery Hero SE, 144A		Saudi Arabia		4,668		(619,492	)
	Fiverr International Ltd.		Israel		2,137		(302,642	)
	Groupon Inc., A		United States		8,085		(167,036	)
	Porch Group Inc.		United States		27,336		(575,149	)
d	Takeaway.com NV, 144A		United Kingdom		2,057		(128,809	)
	Wayfair Inc., A		United States		3,609		(894,455	)
							(2,687,583	)
	IT Services (0.1)%
	Affirm Holdings Inc., A		United States		2,098		(265,774	)
	CSG Systems International Inc.		United States		9,734		(513,079	)
	Digitalocean Holdings Inc.		United States		1,075		(108,371	)
	Fastly Inc., A		United States		6,739		(274,682	)
	i3 Verticals Inc., A		United States		8,365		(156,007	)
							(1,317,913	)
	Leisure Products (0.0)%†
	Peloton Interactive Inc., A		United States		78		(3,432	)
	Life Sciences Tools & Services (0.1)%
	Inotiv Inc.		United States		14,481		(753,012	)
	Machinery (0.1)%
	Fortive Corp.		United States		839		(61,977	)
	The Greenbrier Cos. Inc.		United States		15,091		(603,489	)
	NFI Group Inc.		Canada		12,380		(199,638	)
							(865,104	)
	Marine (0.1)%
	A.P. Moeller-Maersk AS, B		Denmark		162		(487,746	)
	ZIM Integrated Shipping Services Ltd.		Israel		4,808		(265,786	)
							(753,532	)
	Media (0.2)%
	Charter Communications Inc., A		United States		1,115		(720,602	)
	Dish Network Corp., A		United States		11,834		(369,813	)
	Magnite Inc.		United States		10,319		(181,924	)
	Sirius XM Holdings Inc.		United States		141,508		(863,199	)
	Techtarget Inc.		United States		10,553		(1,019,736	)
							(3,155,274	)
	Metals & Mining (0.1)%
	Century Aluminum Co.		United States		23,767		(314,437	)
	Ivanhoe Mines Ltd., A		Canada		79,335		(629,737	)
	MP Materials Corp.		United States		24,807		(1,090,020	)
	Osisko Gold Royalties Ltd.		Canada		1,673		(20,443	)
	Pretium Resources Inc.		Canada		2,905		(39,188	)
							(2,093,825	)

66 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Shares		Value
bb	Securities Sold Short (continued)
	Common Stocks (continued)
	Mortgage Real Estate Investment Trusts (REITs) (0.2)%
	Apollo Commercial Real Estate Finance Inc.		United States		3,522	$	(47,653	)
	Arbor Realty Trust Inc.		United States		64,962		(1,140,083	)
	KKR Real Estate Finance Trust Inc.		United States		10,828		(223,382	)
	PennyMac Mortgage Investment Trust		United States		29,326		(509,392	)
	Redwood Trust Inc.		United States		22,574		(289,399	)
	Starwood Property Trust Inc.		United States		15,037		(375,323	)
	Two Harbors Investment Corp.		United States		46,868		(275,584	)
							(2,860,816	)
	Personal Products (0.1)%
	The Beauty Health Co.		United States		25,975		(674,311	)
	Herbalife Nutrition Ltd.		United States		7,097		(265,144	)
							(939,455	)
	Pharmaceuticals (0.2)%
	Aerie Pharmaceuticals Inc.		United States		8,666		(87,527	)
	Avadel Pharmaceuticals PLC, ADR		United States		67,719		(606,762	)
	Canopy Growth Corp.		Canada		2,363		(25,379	)
	Collegium Pharmaceutical Inc.		United States		20,935		(368,037	)
	Innoviva Inc.		United States		48,753		(815,150	)
	Omeros Corp.		United States		38,906		(280,123	)
	Revance Therapeutics Inc.		United States		29,052		(397,432	)
	Zogenix Inc.		United States		31,927		(359,179	)
							(2,939,589	)
	Photography (0.0)%†
	Pacira Biosciences Inc.		United States		6,795		(357,553	)
	Professional Services (0.0)%†
	Upwork Inc.		United States		4,530		(168,788	)
	Real Estate Management & Development (0.1)%
	Opendoor Technologies Inc.		United States		50,685		(802,850	)
	Realogy Holdings Corp.		United States		21,397		(325,021	)
	Redfin Corp.		United States		6,871		(279,581	)
							(1,407,452	)
	Road & Rail (0.4)%
	Canadian Pacific Railway Ltd.		Canada		65,250		(4,569,457	)
	Hertz Global Holdings Inc.		United States		49,487		(1,195,606	)
							(5,765,063	)
	Semiconductors & Semiconductor Equipment (0.3)%
	Advanced Micro Devices Inc.		United States		15,820		(2,505,413	)
	ams AG		Austria		21,966		(390,578	)
	Camtek Ltd.		Israel		2,772		(127,845	)
	Daqo New Energy Corp., ADR		China		4,443		(254,762	)
	Impinj Inc.		United States		1,786		(133,896	)
	Sunpower Corp., A		United States		24,517		(702,412	)
							(4,114,906	)
	Software (0.3)%
	Alteryx Inc., A		United States		964		(64,077	)
	Avaya Holdings Corp.		United States		18,591		(361,967	)
	Bentley Systems Inc., B		United States		2,239		(107,450	)
	Blackline Inc.		United States		3,577		(393,649	)
	Dye & Durham Ltd.		Canada		4,423		(144,866	)
	fuboTV Inc.		United States		11,555		(226,709	)

franklintempleton.com Semiannual Report 67

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Shares			Value
bb	Securities Sold Short (continued)
	Common Stocks (continued)
	Software (continued)
	Kaleyra Inc.		Italy		20,742		$	(217,376	)
	Mandiant Inc.		United States		22,388			(379,924	)
	Microstrategy Inc., A		United States		319			(230,136	)
	Mitek Systems Inc.		United States		34,692			(594,274	)
	NortonLifeLock Inc.		United States		14,314			(355,703	)
	Nutanix Inc., A		United States		10,133			(336,618	)
	Rapid7 Inc.		United States		8,704			(1,079,818	)
	Splunk Inc.		United States		701			(84,821	)
	Veritone Inc.		United States		10,099			(258,938	)
								(4,836,326	)
	Specialty Retail (0.1)%
	Guess? Inc.		United States		27,243			(614,330	)
	Shift Technologies Inc.		United States		81,561			(375,996	)
	Vroom Inc.		United States		9,345			(129,241	)
								(1,119,567	)
	Technology Hardware, Storage & Peripherals (0.0)%†
	Pure Storage Inc., A		United States		8,030			(248,689	)
	Trading Companies & Distributors (0.1)%
	United Rentals Inc.		United States		2,486			(842,108	)
	Total Common Stocks (Proceeds $112,856,813)							(108,551,814	)
	Exchange Traded Funds (9.0)%
	Health Care Select Sector SPDR Fund		United States		55,708			(7,226,999	)
	Invesco QQQ Series 1 ETF		United States		2,498			(983,762	)
	Invesco Solar ETF		United States		41,666			(3,728,690	)
	iShares Nasdaq Biotechnology ETF		United States		34,711			(5,353,131	)
	iShares North American Tech-Software ETF		United States		38,431			(15,945,022	)
	iShares Russell 2000 Growth ETF		United States		70,526			(20,599,939	)
	iShares Russell Mid-Cap Growth ETF		United States		57,501			(6,607,440	)
	SPDR S&P 500 ETF Trust		United States		151,457			(68,997,751	)
	Total Exchange Traded Funds (Proceeds $125,644,513)							(129,442,734	)
				Principal Amount*
	Corporate Bonds and Notes (0.7)%
	Aerospace & Defense (0.0)%†
d	Spirit Aerosystems Inc., secured note, 144A, 7.50%, 4/15/25		United States		273,000			(285,939	)
	Airlines (0.0)%†
d	Air France-KLM, senior note, Reg S, 3.00%, 7/01/24		France		200,000	EUR		(217,922	)
	Auto Components (0.0)%†
	American Axle & Manufacturing Inc., senior note, 6.875%, 7/01/28		United States		166,000			(177,570	)
d	Wheel Pros Inc., senior note, 144A, 6.50%, 5/15/29		United States		115,000			(112,233	)
								(289,803	)
	Capital Markets (0.0)%†
d	Coinbase Global Inc., senior note, 144A, 3.375%, 10/01/28		United States		142,000			(133,709	)
	Communications Equipment (0.1)%
d	Audacy Capital Corp., secured note, 144A, 6.50%, 5/01/27		United States		462,000			(452,418	)
	6.75%, 3/31/29		United States		144,000			(141,225	)
d	CommScope Technologies LLC, senior bond, 144A, 5.00%, 3/15/27		United States		274,000			(246,656	)
								(840,299	)

68 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Principal Amount*			Value
bb	Securities Sold Short (continued)
	Corporate Bonds and Notes (continued)
	Construction & Engineering (0.1)%
	Fluor Corp., senior bond, 4.25%, 9/15/28		United States		194,000		$	(198,191	)
d	Sydney Airport Finance Co. Pty Ltd., senior secured bond, 144A, 3.375%, 4/30/25		Australia		146,000			(153,819	)
	3.625%, 4/28/26		Australia		73,000			(77,638	)
d	Tutor Perini Corp., senior note, 144A, 6.875%, 5/01/25		United States		646,000			(647,357	)
								(1,077,005	)
	Diversified Consumer Services (0.1)%
d	MPH Acquisition Holdings LLC, senior note, 144A, 5.75%, 11/01/28		United States		540,000			(483,300	)
	Diversified Telecommunication Services (0.0)%†
d	British Telecommunications PLC, senior bond, Reg S, 1.874% to 5/18/25, FRN thereafter, 8/18/80		United Kingdom		280,000	EUR		(309,065	)
d	Telesat Canada / Telesat LLC, senior note, 144A, 6.50%, 10/15/27		Canada		131,000			(102,423	)
								(411,488	)
	Equity Real Estate Investment Trusts (REITs) (0.0)%†
	The GEO Group Inc., senior note, 6.00%, 4/15/26		United States		133,000			(114,701	)
	Simon Property Group LP, senior bond, 2.65%, 7/15/30		United States		350,000			(357,604	)
								(472,305	)
	Food & Staples Retailing (0.1)%
	Koninklijke Ahold Delhaize NV, senior bond, 5.70%, 10/01/40		Netherlands		603,000			(836,479	)
	The Kroger Co., senior bond, 5.40%, 1/15/49		United States		241,000			(338,187	)
	3.95%, 1/15/50		United States		15,000			(17,383	)
d	SEG Holding LLC / SEG Finance Corp., senior secured note, 144A, 5.625%, 10/15/28		United States		473,000			(497,222	)
d	Sigma Holdco BV, senior note, Reg S, 5.75%, 5/15/26		Netherlands		200,000	EUR		(209,743	)
								(1,899,014	)
	Food Products (0.1)%
	B&G Foods Inc., senior note, 5.25%, 9/15/27		United States		617,000			(627,181	)
	Health Care Providers & Services (0.0)%†
d	Air Methods Corp., senior note, 144A, 8.00%, 5/15/25		United States		450,000			(350,413	)
	Media (0.1)%
d	Dish DBS Corp., senior secured note, 144A, 5.75%, 12/01/28		United States		213,000			(210,274	)
d	Wolverine Escrow LLC, senior secured note, 144A, 9.00%, 11/15/26		United States		287,000			(271,165	)
								(481,439	)
	Oil, Gas & Consumable Fuels (0.0)%†
	Apache Corp., senior bond, 4.375%, 10/15/28		United States		75,000			(79,177	)
d	SM Energy Co., secured note, 144A, 10.00%, 1/15/25		United States		172,000			(188,417	)
								(267,594	)
	Road & Rail (0.0)%†
d	The Go-Ahead Group PLC, senior note, Reg S, 2.50%, 7/06/24		United Kingdom		309,000	GBP		(413,506	)
	Specialty Retail (0.1)%
d	Ambience Merger Sub Inc., senior note, 144A, 7.125%, 7/15/29		United States		245,000			(237,445	)
d	Dufry One BV, senior note, Reg S, 2.00%, 2/15/27		Switzerland		528,000	EUR		(548,458	)
d	Macy’s Retail Holdings LLC, senior note, 144A, 5.875%, 4/01/29		United States		291,000			(310,643	)
d	Matalan Finance PLC, senior secured note, Reg S, 6.75%, 1/31/23		United Kingdom		128,000	GBP		(158,189	)
								(1,254,735	)
	Total Corporate Bonds and Notes (Proceeds $9,690,638)							(9,505,652	)

franklintempleton.com Semiannual Report 69

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

		Country		Principal Amount*		Value
bb	Securities Sold Short (continued)
	U.S. Government and Agency Securities (0.2)%
	U.S. Treasury Bond, 2.25%, 5/15/41		United States		78,000	$	(83,070	)
	1.375%, 8/15/50		United States		1,049,000		(947,009	)
	U.S. Treasury Note, 1.25%, 9/30/28		United States		5,600		(5,560	)
	0.875%, 11/15/30		United States		472,000		(451,369	)
	1.25%, 8/15/31		United States		1,253,000		(1,233,128	)
	Total U.S. Government and Agency Securities (Proceeds $2,784,826)						(2,720,136	)
	Total Securities Sold Short (Proceeds $250,976,790)					$	(250,220,336	)

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

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

^#Notional amount is the number of units specified in the contract, and can include currency units, bushels, shares, pounds, barrels or other units. Currency units are stated in U.S. dollars unless otherwise indicated.

^aNon-income producing.

^bA portion or all of the security has been segregated as collateral for securities sold short, open swap contracts, open forward exchange contracts, open futures contracts and/or open written option contracts. At November 30, 2021, the aggregate value of these securities and/or cash pledged amounted to $148,769,005, representing 10.4% of net assets.

^cA portion or all of the security is held in connection with written option contracts open at period end.

^dSecurity was purchased pursuant to Rule 144A or Regulation S under the Securities Act of 1933. 144A securities may be sold in transactions exempt from registration only to qualified institutional buyers or in public offering registered under the Securities Act of 1933. Regulation S securities cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At November 30, 2021, the net value of these securities was $317,528,192, representing 22.2% of net assets.

^eFair valued using significant unobservable inputs. See Note 14 regarding fair value measurements.

^fA portion or all of the security is on loan at November 30, 2021. See Note 1(j).

^gPerpetual security with no stated maturity date.

^hThe coupon rate shown represents the rate at period end.

ⁱSee Note 1(g) regarding loan participation notes.

^jSee Note 10 regarding restricted securities.

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

^lSee Note 7 regarding defaulted securities.

^mSee Note 1(l) regarding senior floating rate interests.

ⁿSee Note 11 regarding unfunded loan commitments.

^oSee Note 1(h) regarding credit-linked notes.

^pPrincipal amount is stated in 100 Mexican Peso Units.

^qA supranational organization is an entity formed by two or more central governments through international treaties.

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

^sAdjustable 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.

^tA portion or all of the security purchased on a delayed delivery basis. See Note 1(d).

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

^vA portion or all of the security is owned by K2 Holdings Investment Corp., a wholly-owned subsidiary of the Fund. See Note 1(k).

^wSee Note 1(j) regarding securities on loan.

^xSee Note 3(f) regarding investments in affiliated management investment companies.

^ySee Note 1(c) regarding joint repurchase agreement.

^zThe security was issued on a discount basis with no stated coupon rate.

^aaSee Note 1(e) regarding written options.

^bbSee Note 1(i) regarding securities sold short.

70 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

At November 30, 2021, the Fund had the following futures contracts outstanding. See Note 1(e).

Futures Contracts
Description	Type		Number of Contracts		Notional Amount*		Expiration Date		Value/Unrealized Appreciation (Depreciation)
Commodity Contractsa
Aluminum		Long		22	$	1,452,275		12/13/21	$	(22,058	)
Aluminum		Short		22		1,452,275		12/13/21		21,507
Aluminum		Long		8		525,300		3/14/22		(793	)
Aluminum		Short		2		131,325		3/14/22		(2,881	)
Brent Crude Oil		Long		18		1,246,140		12/30/21		(212,077	)
Cocoa		Long		8		174,063		3/16/22		(5,279	)
Coffee		Long		10		871,125		3/21/22		87,347
Copper		Long		11		2,618,687		12/13/21		867
Copper		Short		11		2,618,688		12/13/21		(36,253	)
Copper		Long		3		707,812		3/14/22		(15,322	)
Copper		Short		1		235,937		3/14/22		697
Corn		Long		47		1,333,625		3/14/22		(11,600	)
Cotton		Long		8		425,640		3/09/22		(31,442	)
Gasoline		Long		14		1,140,779		12/31/21		(189,611	)
Gold 100 Oz		Short		8		1,421,200		2/24/22		15,161
Hard Red Winter Wheat		Long		15		616,687		3/14/22		8,973
Low Sulphur Gas Oil		Long		15		896,625		1/12/22		(152,798	)
Natural Gas		Long		16		730,720		12/29/21		(97,586	)
NY Harbor		Long		14		1,211,456		12/31/21		(214,756	)
Silver		Short		14		1,597,050		3/29/22		64,118
Soybean Meal		Short		9		306,990		3/14/22		3,895
Soybean Oil		Short		2		66,384		3/14/22		3,907
Soybeans		Short		2		122,650		3/14/22		3,895
Sugar		Long		24		499,968		2/28/22		(26,612	)
Wheat		Long		21		826,613		3/14/22		(31,019	)
WTI Crude Oil		Long		11		727,980		12/20/21		(151,924	)
Zinc		Long		14		1,126,563		12/13/21		73,984
Zinc		Short		14		1,126,563		12/13/21		(6,778	)
Zinc		Long		8		639,600		3/14/22		(15,593	)
Zinc		Short		1		79,950		3/14/22		947
										(939,084	)
Currency Contractsa
U.S. Dollar Index		Long		7		672,049		12/13/21		20,168
Equity Contracts
CAC 40 10 Euro Indexa		Long		7		533,161		12/17/21		(33,905	)
CBOE Volatility Index		Long		52		1,335,698		12/22/21		97,246
CBOE Volatility Index		Long		30		794,331		1/19/22		51,700
CBOE Volatility Index		Long		26		699,564		3/15/22		68,890
CBOE Volatility Index		Long		23		621,350		4/20/22		56,080
DAX Indexa		Long		1		429,340		12/17/21		(22,030	)
DJ EURO STOXX 50 Indexa		Long		27		1,248,401		12/17/21		(34,998	)
DJ EURO STOXX 50 Index		Short		704		32,550,898		12/17/21		632,169
DJIA Mini E-CBOT Indexa		Long		18		3,101,130		12/17/21		(51,826	)
E-Mini Russell 2000a		Long		7		769,055		12/17/21		(51,379	)
E-Mini Russell 2000		Short		11		1,208,515		12/17/21		88,413
FTSE 100 Indexa		Long		19		1,788,918		12/17/21		22,079
FTSE 100 Index		Short		88		8,285,513		12/17/21		(92,224	)
FTSE/MIB Index		Short		3		438,929		12/17/21		(4,435	)
Hang Seng Indexa		Short		13		1,956,752		12/30/21		96,311
Micro E-Mini Russell 2000		Short		238		2,614,787		12/17/21		271,397
NASDAQ 100 E-Mini Indexa		Long		13		4,199,130		12/17/21		274,194
NASDAQ 100 E-Mini Index		Short		4		1,292,040		12/17/21		(30,281	)
NASDAQ 100 E-Mini Index		Short		1		323,110		3/18/22		4,615

franklintempleton.com Semiannual Report 71

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

Futures Contracts (continued)
Description	Type		Number of Contracts		Notional Amount*		Expiration Date		Value/Unrealized Appreciation (Depreciation)
Equity Contracts (continued)
Nikkei 225 Indexa		Long		3	$	729,066		12/09/21	$	(38,329	)
S&P 500 E-Mini Indexa		Long		3		684,937		12/17/21		34,507
S&P 500 E-Mini Index		Short		63		14,383,687		12/17/21		(197,593	)
SGX Nifty 50		Short		1		34,127		12/30/21		114
STOXX 600 Banks Index		Short		123		956,230		12/17/21		(27,751	)
STOXX Europe 600		Short		6		157,764		12/17/21		2,910
TOPIX Indexa		Long		4		670,943		12/09/21		(42,390	)
TOPIX Index		Short		2		335,471		12/09/21		27,531
VSTOXX		Long		46		137,203		12/22/21		21,807
VSTOXX		Long		42		124,796		1/19/22		13,436
										1,136,258
Interest Rate Contracts
3 Month EURIBORa		Short		75		21,345,094		12/19/22		(20,857	)
10 Yr. Mini JGBa		Long		16		2,151,687		12/10/21		5,600
90 Day Eurodollara		Short		194		48,051,375		12/19/22		164,076
ASX 90 Day Bank Accepted Bill		Long		150		106,843,171		6/09/22		11,725
ASX 90 Day Bank Accepted Bill		Long		58		41,276,082		9/08/22		(47,365	)
Australian 10 Yr. Bonda		Long		38		3,777,914		12/15/21		(104,265	)
Canadian 10 Yr. Bonda		Short		6		663,008		3/22/22		(9,818	)
Euro-BOBLa		Long		48		7,376,157		12/08/21		11,460
Euro-Bunda		Long		10		1,954,840		12/08/21		15,623
Euro-Buxl		Short		3		742,107		12/08/21		(50,244	)
Euro-SCHATZa		Long		71		9,052,146		12/08/21		9,596
Japan 10 Yr. Bonda		Long		3		4,032,556		12/13/21		5,569
Long Gilta		Long		4		671,783		3/29/22		8,586
U.S. Treasury 2 Yr. Notea		Long		52		11,374,188		3/31/22		15,072
U.S. Treasury 5 Yr. Notea		Short		216		26,222,063		3/31/22		(139,846	)
U.S. Treasury 10 Yr. Notea		Short		31		4,055,187		3/22/22		(43,814	)
U.S. Treasury 10 Yr. Ultra		Short		106		15,570,406		3/22/22		(198,198	)
U.S. Treasury Long Bonda		Long		7		1,134,875		3/22/22		27,325
U.S. Treasury Long Bond		Short		61		9,889,625		3/22/22		(199,146	)
U.S. Treasury Ultra Bond		Short		39		7,821,937		3/22/22		(227,007	)
										(765,928	)
Total Futures Contracts									$	(548,586	)

*As of period end.

^aA portion or all of the contracts are owned by K2 Holdings Investment Corp., a wholly-owned subsidiary of the Fund. See Note 1(k).

At November 30, 2021, the Fund had the following forward exchange contracts outstanding. See Note 1(e).

Forward Exchange Contracts
Currency	Counterpartya		Type		Quantity		Contract Amount*			Settlement Date		Unrealized Appreciation		Unrealized Depreciation
OTC Forward Exchange Contracts
Brazilian Real		BOFA		Buy		1,192,000		211,535			12/02/21	$	495	$	—
Brazilian Real		BOFA		Sell		1,192,000		223,401			12/02/21		11,371		—
Australian Dollar		JPHQ		Buy		1,500,000		1,105,838			12/15/21		—		(36,289	)
Japanese Yen		JPHQ		Sell		64,268,188		750,000	AUD		12/15/21		—		(34,009	)
Singapore Dollar		JPHQ		Sell		739,779		750,000	AUD		12/15/21		7,265		(14,597	)
Australian Dollar		JPHQ		Sell		1,000,000		746,308			12/15/21		33,276		—
British Pound		BNYM		Buy		237,408		327,502			12/15/21		—		(11,627	)
British Pound		BNYM		Sell		2,590,507		3,540,681			12/15/21		94,049		(71	)
British Pound		JPHQ		Buy		1,000,000		1,384,332			12/15/21		—		(53,819	)
British Pound		JPHQ		Sell		500,000		689,569			12/15/21		24,313		—
Canadian Dollar		JPHQ		Buy		1,886,746		1,500,000			12/15/21		—		(22,678	)

72 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

Forward Exchange Contracts (continued)
Currency	Counterpartya		Type		Quantity		Contract Amount*			Settlement Date		Unrealized Appreciation		Unrealized Depreciation
OTC Forward Exchange Contracts (continued)
Canadian Dollar		JPHQ		Sell		1,235,937		1,000,000			12/15/21	$	32,262	$	—
Chinese Yuan		JPHQ		Buy		31,210,664		4,802,357			12/15/21		93,941		—
Chinese Yuan		JPHQ		Sell		31,210,664		4,839,717			12/15/21		—		(56,580	)
Chinese Yuan		MSCO		Buy		7,324,161		1,128,000			12/15/21		19,838		—
Chinese Yuan		MSCO		Sell		31,594,871		4,858,105			12/15/21		—		(93,421	)
Colombian Peso		JPHQ		Buy		4,295,968,381		1,138,880			12/15/21		—		(65,455	)
Colombian Peso		JPHQ		Sell		4,295,968,381		1,108,923			12/15/21		35,498		—
Czech Koruna		JPHQ		Buy		22,956,706		1,063,358			12/15/21		—		(42,780	)
Czech Koruna		JPHQ		Sell		22,956,706		1,016,853			12/15/21		—		(3,725	)
Euro		BNYM		Buy		387,957		457,215			12/15/21		—		(16,915	)
Euro		BNYM		Sell		4,103,891		4,813,981			12/15/21		157,006		(612	)
Chinese Yuan		JPHQ		Sell		1,928,465		250,000	EUR		12/15/21		—		(18,806	)
Euro		JPHQ		Buy		1,000,000		1,184,450			12/15/21		—		(49,530	)
Euro		JPHQ		Sell		500,000		584,330			12/15/21		16,870		—
Euro		MSCO		Sell		1,462,764		1,731,430			12/15/21		71,310		—
Indian Rupee		JPHQ		Buy		37,657,850		500,000			12/15/21		790		(469	)
Indian Rupee		JPHQ		Sell		37,484,650		500,000			12/15/21		1,980		—
Indonesian Rupiah		JPHQ		Buy		51,441,487,384		3,592,468			12/15/21		8,024		(14,403	)
Indonesian Rupiah		JPHQ		Sell		51,424,407,384		3,574,906			12/15/21		6,885		(16,877	)
Australian Dollar		JPHQ		Sell		500,000		42,723,050	JPY		12/15/21		21,588		—
New Zealand Dollar		JPHQ		Sell		750,000		61,118,198	JPY		12/15/21		29,104		—
South Korean Won		JPHQ		Sell		1,046,277,500		100,000,000	JPY		12/15/21		9,403		(5,002	)
Japanese Yen		JPHQ		Sell		244,890		2,156			12/15/21		—		(11	)
Mexican Peso		JPHQ		Buy		28,929,477		1,427,323			12/15/21		—		(82,530	)
Mexican Peso		JPHQ		Sell		28,929,477		1,390,409			12/15/21		45,616		—
Japanese Yen		JPHQ		Sell		81,074,358		1,000,000	NZD		12/15/21		—		(35,119	)
New Zealand Dollar		JPHQ		Buy		800,000		557,650			12/15/21		—		(11,730	)
New Zealand Dollar		JPHQ		Sell		800,000		560,842			12/15/21		14,922		—
Swedish Krona		JPHQ		Sell		4,015,992		4,000,000	NOK		12/15/21		24,372		(27,958	)
Peruvian Nuevo Sol		JPHQ		Buy		5,121,168		1,249,827			12/15/21		8,284		—
Peruvian Nuevo Sol		JPHQ		Sell		5,121,168		1,295,678			12/15/21		37,567		—
Russian Ruble		JPHQ		Buy		395,588,968		5,334,317			12/15/21		16,608		(29,871	)
Russian Ruble		JPHQ		Sell		395,588,968		5,309,071			12/15/21		—		(11,983	)
Australian Dollar		JPHQ		Sell		250,000		248,689	SGD		12/15/21		5,368		(1,387	)
Singapore Dollar		JPHQ		Buy		2,837,211		2,100,000			12/15/21		—		(20,909	)
Singapore Dollar		JPHQ		Sell		3,717,071		2,752,498			12/15/21		29,623		(973	)
South African Rand		JPHQ		Buy		31,739,886		2,023,763			12/15/21		—		(32,684	)
South African Rand		JPHQ		Sell		31,739,886		2,174,101			12/15/21		183,021		—
Japanese Yen		JPHQ		Sell		100,000,000		1,052,112,500	KRW		12/15/21		4,165		(3,655	)
South Korean Won		JPHQ		Buy		4,265,825,450		3,650,000			12/15/21		—		(59,616	)
South Korean Won		JPHQ		Sell		1,057,562,850		900,000			12/15/21		10,012		(122	)
Norwegian Krone		JPHQ		Sell		4,000,000		4,053,094	SEK		12/15/21		31,858		(24,155	)
Taiwan Dollar		JPHQ		Buy		164,643,800		5,952,183			12/15/21		10		(31,032	)
Taiwan Dollar		JPHQ		Sell		199,184,875		7,220,810			12/15/21		57,432		—
Thai Baht		JPHQ		Buy		70,896,830		2,150,000			12/15/21		—		(45,831	)
Australian Dollar		BZWS		Buy		1,357,000		998,965			12/17/21		—		(31,344	)
Australian Dollar		BZWS		Sell		14,604,000		10,673,912			12/17/21		260,766		(340	)
Australian Dollarb		MSCO		Buy		6,684,000		4,893,150			12/17/21		—		(127,072	)
Australian Dollarb		MSCO		Sell		15,411,000		11,309,257			12/17/21		320,345		(12	)
British Pound		BNYM		Sell		2,810,486		3,784,348			12/17/21		44,748		—
British Pound		BZWS		Buy		3,689,000		5,046,965			12/17/21		2		(138,427	)
British Pound		BZWS		Sell		1,675,000		2,278,762			12/17/21		50,049		(26	)
British Poundb		MSCO		Buy		4,549,000		6,268,155			12/17/21		—		(215,309	)
British Poundb		MSCO		Sell		8,396,000		11,369,668			12/17/21		198,263		(213	)
Canadian Dollar		BZWS		Buy		2,860,000		2,262,406			12/17/21		—		(22,955	)
Canadian Dollar		BZWS		Sell		3,496,000		2,763,435			12/17/21		25,980		—
Canadian Dollarb		MSCO		Buy		6,830,000		5,473,135			12/17/21		—		(125,075	)
Canadian Dollarb		MSCO		Sell		6,078,000		4,778,621			12/17/21		23,093		(3,696	)
Euro		BNYM		Sell		31,791,080		35,977,171			12/17/21		—		(106,649	)
Euro		BZWS		Buy		3,486,000		4,042,863			12/17/21		4,627		(90,784	)

franklintempleton.com Semiannual Report 73

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

Forward Exchange Contracts (continued)
Currency	Counterpartya		Type		Quantity		Contract Amount*			Settlement Date		Unrealized Appreciation		Unrealized Depreciation
OTC Forward Exchange Contracts (continued)
Euro		BZWS		Sell		9,404,000		11,009,090			12/17/21	$	341,747	$	(6,470	)
Eurob		MSCO		Buy		10,374,000		12,089,122			12/17/21		11,147		(325,473	)
Eurob		MSCO		Sell		18,372,000		21,621,215			12/17/21		771,640		(3,192	)
Hong Kong Dollar		BNYM		Buy		2,570,563		329,640			12/17/21		7		—
Hong Kong Dollar		BNYM		Sell		28,733,348		3,688,515			12/17/21		3,770		—
Japanese Yen		BZWS		Sell		106,906,000		945,420			12/17/21		—		(760	)
Japanese Yenb		MSCO		Buy		1,887,084,000		16,902,612			12/17/21		50,800		(251,626	)
Japanese Yenb		MSCO		Sell		2,629,816,000		23,695,269			12/17/21		447,567		(27,692	)
Mexican Peso		BZWS		Sell		19,117,000		925,285			12/17/21		37,013		—
Mexican Pesob		MSCO		Buy		89,898,000		4,417,023			12/17/21		—		(239,908	)
Mexican Peso		MSCO		Sell		59,318,000		2,913,903			12/17/21		158,896		(1,207	)
New Zealand Dollarb		MSCO		Buy		6,704,000		4,755,187			12/17/21		—		(180,463	)
New Zealand Dollarb		MSCO		Sell		4,060,000		2,823,900			12/17/21		54,383		(976	)
Swedish Krona		BZWS		Buy		1,000		115			12/17/21		—		(4	)
Swedish Krona		BZWS		Sell		12,189,000		1,391,649			12/17/21		38,418		—
Swiss Franc		BNYM		Sell		13,512,627		14,537,991			12/17/21		—		(193,319	)
Swiss Francb		MSCO		Buy		2,492,000		2,708,205			12/17/21		9,161		(617	)
Swiss Francb		MSCO		Sell		7,030,000		7,634,604			12/17/21		714		(30,136	)
Australian Dollar		BNYM		Sell		989,000		716,671			12/22/21		11,397		—
Canadian Dollar		BNYM		Sell		8,399,000		6,601,941			12/22/21		28,422		(3,640	)
Euro		BNYM		Sell		6,067,000		7,124,934			12/22/21		237,041		—
Japanese Yen		BNYM		Sell		44,888,525		402,851			12/22/21		5,512		—
Kazakhstan Tenge		JPHQ		Buy		271,096,800		624,000			12/22/21		—		(11,286	)
Kazakhstan Tenge		JPHQ		Sell		271,096,800		622,521			12/22/21		9,806		—
Colombian Peso		MSCS		Sell		424,857,000		111,548			1/11/22		5,699		—
Chilean Peso		JPHQ		Buy		1,653,560,948		2,011,670			1/25/22		2,984		(28,275	)
Chilean Peso		JPHQ		Sell		1,670,840,614		2,005,074			1/25/22		2,608		(4,671	)
Colombian Peso		JPHQ		Buy		14,443,841,331		3,669,866			1/25/22		8,943		(85,066	)
Colombian Peso		JPHQ		Sell		14,927,212,705		3,763,621			1/25/22		56,188		(6,577	)
Hungarian Forint		JPHQ		Sell		380,733,808		1,050,000	EUR		1/25/22		33,471		(22,174	)
Euro		JPHQ		Sell		1,081,000		1,249,906			1/25/22		21,465		—
Euro		JPHQ		Sell		1,210,000		442,281,015	HUF		1/25/22		30,262		(32,318	)
Indian Rupee		JPHQ		Buy		322,171,500		4,270,000			1/25/22		—		(7,932	)
Indian Rupee		JPHQ		Sell		320,410,911		4,251,460			1/25/22		24,670		(11,987	)
Indonesian Rupiah		JPHQ		Buy		41,346,631,631		2,879,925			1/25/22		421		(9,980	)
Indonesian Rupiah		JPHQ		Sell		42,927,794,406		3,022,871			1/25/22		42,738		—
Mexican Peso		JPHQ		Buy		87,452,413		4,120,256			1/25/22		31,932		(119,114	)
Mexican Peso		JPHQ		Sell		109,829,917		5,051,274			1/25/22		58,266		(72,057	)
Peruvian Nuevo Sol		JPHQ		Buy		4,265,771		1,067,891			1/25/22		—		(22,249	)
Peruvian Nuevo Sol		JPHQ		Sell		5,511,289		1,397,917			1/25/22		46,969		—
Philippine Peso		JPHQ		Buy		94,060,200		1,860,000			1/25/22		3,485		—
Philippine Peso		JPHQ		Sell		94,497,182		1,850,000			1/25/22		—		(22,142	)
Russian Ruble		JPHQ		Buy		512,023,443		7,036,790			1/25/22		—		(206,678	)
Russian Ruble		JPHQ		Sell		518,152,584		7,176,870			1/25/22		264,998		—
South African Rand		JPHQ		Buy		29,212,721		1,782,196			1/25/22		41,280		(1,306	)
South African Rand		JPHQ		Sell		83,049,758		5,384,066			1/25/22		244,213		(40,450	)
Thai Baht		JPHQ		Buy		61,060,400		1,840,000			1/25/22		—		(27,461	)
Thai Baht		JPHQ		Sell		60,978,952		1,870,001			1/25/22		59,880		—
Turkish Lira		JPHQ		Buy		20,662,195		2,030,000			1/25/22		—		(559,992	)
Turkish Lira		JPHQ		Sell		20,557,525		2,136,454			1/25/22		673,891		—
Euro		BOFA		Sell		370,000		431,627			1/26/22		11,152		—
Euro		BZWS		Sell		115,000		134,129			1/26/22		3,441		—
British Pound		MSCO		Sell		580,000		802,590			1/28/22		30,554		—
British Pound		DBAB		Sell		166,000		227,634			1/31/22		6,674		—
British Pound		JPHQ		Sell		1,120,000		1,531,370			1/31/22		40,555		—
Euro		JPHQ		Sell		3,730,000		4,389,464			1/31/22		150,179		—
Hong Kong Dollar		JPHQ		Sell		520,000		66,797			1/31/22		112		—
Swiss Franc		JPHQ		Sell		390,000		424,150			1/31/22		—		(1,690	)
Brazilian Real		JPHQ		Buy		1,687,080		297,061			2/02/22		197		(1,393	)
South Korean Won		MSCO		Buy		1,605,851,629		1,360,395			2/08/22		—		(9,768	)

74 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

Forward Exchange Contracts (continued)
Currency	Counterpartya		Type		Quantity		Contract Amount*		Settlement Date		Unrealized Appreciation		Unrealized Depreciation
OTC Forward Exchange Contracts (continued)
South Korean Won		MSCO		Sell		1,399,093,131		1,184,573		2/08/22	$	7,843	$	—
Euro		HSBC		Sell		125,000		143,184		2/17/22		1,069		—
Ukraine Hryvnia		JPHQ		Sell		34,404,000		1,220,000		2/28/22		—		(46,044	)
Taiwan Dollar		JPHQ		Buy		218,296,000		8,000,000		3/01/22		—		(149,016	)
Taiwan Dollar		JPHQ		Sell		218,296,000		8,137,261		3/01/22		286,277		—
Brazilian Real		BOFA		Sell		1,192,000		207,121		3/03/22		—		(471	)
Chilean Peso		MSCO		Sell		938,020,650		1,116,150		3/15/22		4,509		(8,534	)
Chinese Yuan		JPHQ		Sell		2,575,922		400,000		3/16/22		—		(1,317	)
Czech Koruna		JPHQ		Buy		22,956,706		1,011,967		3/16/22		2,884		—
Czech Koruna		JPHQ		Sell		22,956,706		1,002,783		3/16/22		—		(12,068	)
Indian Rupee		JPHQ		Buy		18,948,150		250,000		3/16/22		—		(808	)
Indian Rupee		JPHQ		Sell		18,871,625		250,000		3/16/22		1,815		—
Indonesian Rupiah		JPHQ		Buy		3,626,750,000		250,000		3/16/22		543		—
Indonesian Rupiah		JPHQ		Sell		45,648,947,384		3,165,750		3/16/22		12,556		(327	)
Russian Ruble		JPHQ		Buy		106,717,848		1,397,800		3/16/22		11,082		—
Russian Ruble		JPHQ		Sell		182,902,321		2,395,671		3/16/22		—		(18,994	)
South African Rand		JPHQ		Buy		13,910,024		847,637		3/16/22		14,576		—
South African Rand		JPHQ		Sell		27,749,110		1,735,672		3/16/22		15,642		—
South Korean Won		JPHQ		Buy		335,400,900		300,000		3/16/22		—		(18,028	)
South Korean Won		JPHQ		Sell		335,106,000		300,000		3/16/22		18,276		—
Kazakhstan Tenge		JPHQ		Buy		153,495,679		346,960		3/17/22		—		(6,869	)
Kazakhstan Tenge		JPHQ		Sell		153,495,679		345,382		3/17/22		5,290		—
Kazakhstan Tenge		JPHQ		Buy		129,816,848		293,040		3/21/22		—		(5,677	)
Kazakhstan Tenge		JPHQ		Sell		129,816,848		291,609		3/21/22		4,245		—
Total Forward Exchange Contracts											$	6,573,274	$	(4,677,335	)
Net unrealized appreciation (depreciation)											$	1,895,939

*In U.S. dollars unless otherwise indicated.

^aMay be comprised of multiple contracts with the same counterparty, currency and settlement date.

^bA portion or all of the contracts are owned by K2 Holdings Investment Corp., a wholly-owned subsidiary of the Fund. See Note 1(k).

At November 30, 2021, the Fund had the following credit default swap contracts outstanding. See Note 1(e).

Credit Default Swap Contracts
Description	Annual Payment Rate Received (Paid)		Payment Frequency		Maturity Date		Notional Amounta			Value			Unamortized Upfront Payments (Receipts)			Unrealized Appreciation (Depreciation)			Ratingb
Centrally Cleared Swap Contracts
Contracts to Buy Protectionc
Single Name
Government of Mexico		(1.00)%		Quarterly		12/20/23		4,039,000		$	(37,273	)	$	(11,786	)	$	(25,487	)
Government of Mexico		(1.00)%		Quarterly		12/20/23		61,000			(563	)		(945	)		382
Government of Mexico		(1.00)%		Quarterly		6/20/25		142,000			(679	)		(1,790	)		1,111
Government of South Africa		(1.00)%		Quarterly		12/20/24		1,464,000			31,619			42,608			(10,989	)
Government of South Africa		(1.00)%		Quarterly		12/20/24		4,478,000			96,715			132,619			(35,904	)
Talen Energy Supply LLC		(1.00)%		Quarterly		6/20/23		527,000			159,228			198,062			(38,834	)
Traded Index
CDX.NA.HY.36		(5.00)%		Quarterly		6/20/26		1,000,000			(76,522	)		(91,200	)		14,678
CDX.NA.HY.37		(5.00)%		Quarterly		12/20/26		6,779,000			(515,585	)		(512,384	)		(3,201	)
CDX.NA.HY.37		(5.00)%		Quarterly		12/20/26		2,700,000			(205,352	)		(254,863	)		49,511
iTraxx Europe Crossover S36		(5.00)%		Quarterly		12/20/26		5,122,000	EUR		(576,949	)		(576,949	)		—
iTraxx Europe Crossover S36		(5.00)%		Quarterly		12/20/26		5,130,000	EUR		(568,379	)		(566,296	)		(2,083	)

franklintempleton.com Semiannual Report 75

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

Credit Default Swap Contracts (continued)
Description	Annual Payment Rate Received (Paid)		Payment Frequency			Maturity Date		Notional Amounta			Value			Unamortized Upfront Payments (Receipts)			Unrealized Appreciation (Depreciation)			Ratingb
Contracts to Sell Protectionc,d
Single Name
Government of South Africa		1.00%		Quarterly			12/20/24		2,847,000		$	(61,489	)	$	(221,735	)	$	160,246			BB-
Government of South Africa		1.00%		Quarterly			12/20/24		874,000			(18,876	)		(25,494	)		6,618			BB-
Talen Energy Supply LLC		1.00%		Quarterly			12/20/21		159,000			(15,801	)		(33,755	)		17,954			B-
Traded Index
CDX.NA.HY.37		5.00%		Quarterly			12/20/26		1,735,000			131,958			146,513			(14,555	)		Non- Investment Grade
Total Centrally Cleared Swap Contracts											$	(1,657,948	)	$	(1,777,395	)	$	119,447
OTC Swap Contracts
Contracts to Buy Protectionc
Single Name					Counterparty
Air France-KLM		(5.00)%		Quarterly	JPHQ		12/20/21		32,000	EUR		(392	)		65			(457	)
Air France-KLM		(5.00)%		Quarterly	JPHQ		12/20/21		48,000	EUR		(588	)		68			(656	)
Air France-KLM		(5.00)%		Quarterly	JPHQ		12/20/21		64,000	EUR		(784	)		129			(913	)
Air France-KLM		(5.00)%		Quarterly	JPHQ		6/20/22		73,000	EUR		(1,512	)		(435	)		(1,077	)
Air France-KLM		(5.00)%		Quarterly	JPHQ		6/20/22		23,000	EUR		(476	)		(305	)		(171	)
Air France-KLM		(5.00)%		Quarterly	JPHQ		6/20/22		44,000	EUR		(912	)		(278	)		(634	)
Air France-KLM		(5.00)%		Quarterly	JPHQ		6/20/22		44,000	EUR		(912	)		(265	)		(647	)
American Airlines Inc.		(5.00)%		Quarterly	BZWS		12/20/21		34,000			(335	)		153			(488	)
American Airlines Inc.		(5.00)%		Quarterly	BZWS		12/20/21		73,000			(719	)		310			(1,029	)
American Airlines Inc.		(5.00)%		Quarterly	BZWS		12/20/23		518,000			22,084			23,279			(1,195	)
American Airlines Inc.		(5.00)%		Quarterly	BZWS		6/20/24		143,000			7,738			7,616			122
American Airlines Inc.		(5.00)%		Quarterly	BZWS		6/20/26		600,000			62,965			28,845			34,120
American Airlines Inc.		(5.00)%		Quarterly	CITI		12/20/21		44,000			(433	)		279			(712	)
American Airlines Inc.		(5.00)%		Quarterly	CITI		12/20/21		147,000			(1,447	)		586			(2,033	)
American Airlines Inc.		(5.00)%		Quarterly	CITI		6/20/26		103,000			10,809			9,055			1,754
American Airlines Inc.		(5.00)%		Quarterly	CITI		6/20/26		96,000			10,074			9,111			963
American Airlines Inc.		(5.00)%		Quarterly	FBCO		12/20/21		29,000			(285	)		116			(401	)
American Airlines Inc.		(5.00)%		Quarterly	FBCO		12/20/21		44,000			(433	)		204			(637	)
American Airlines Inc.		(5.00)%		Quarterly	GSCO		12/20/21		29,000			(285	)		117			(402	)
American Airlines Inc.		(5.00)%		Quarterly	GSCO		12/20/21		73,000			(719	)		612			(1,331	)
American Airlines Inc.		(5.00)%		Quarterly	GSCO		6/20/23		60,000			1,423			786			637
American Airlines Inc.		(5.00)%		Quarterly	GSCO		6/20/23		60,000			1,423			1,058			365

76 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

Credit Default Swap Contracts (continued)
Description	Annual Payment Rate Received (Paid)		Payment Frequency		Counterparty		Maturity Date		Notional Amounta		Value			Unamortized Upfront Payments (Receipts)			Unrealized Appreciation (Depreciation)			Ratingb
OTC Swap Contracts (continued)
Contracts to Buy Protectionc (continued)
Single Name (continued)
American Airlines Inc.		(5.00)%		Quarterly		GSCO		6/20/23		60,000	$	1,423		$	1,115		$	308
American Airlines Inc.		(5.00)%		Quarterly		GSCO		12/20/23		120,000		5,116			3,677			1,439
American Airlines Inc.		(5.00)%		Quarterly		GSCO		12/20/23		846,000		36,068			26,080			9,988
American Airlines Inc.		(5.00)%		Quarterly		JPHQ		12/20/21		29,000		(285	)		191			(476	)
American Airlines Inc.		(5.00)%		Quarterly		JPHQ		12/20/21		73,000		(719	)		315			(1,034	)
American Airlines Inc.		(5.00)%		Quarterly		JPHQ		12/20/25		241,000		22,397			39,825			(17,428	)
American Axle & Manufacturing Inc.		(5.00)%		Quarterly		BZWS		12/20/26		330,000		(13,480	)		(12,534	)		(946	)
American Axle & Manufacturing Inc.		(5.00)%		Quarterly		BZWS		12/20/26		274,000		(11,193	)		(8,603	)		(2,590	)
American Axle & Manufacturing Inc.		(5.00)%		Quarterly		BZWS		12/20/26		330,000		(13,480	)		(8,260	)		(5,220	)
American Axle & Manufacturing Inc.		(5.00)%		Quarterly		BZWS		12/20/26		274,000		(11,193	)		(8,011	)		(3,182	)
American Axle & Manufacturing Inc.		(5.00)%		Quarterly		BZWS		12/20/26		233,000		(9,518	)		(6,332	)		(3,186	)
American Axle & Manufacturing Inc.		(5.00)%		Quarterly		BZWS		12/20/26		121,000		(4,943	)		(3,133	)		(1,810	)
American Axle & Manufacturing Inc.		(5.00)%		Quarterly		BZWS		12/20/26		82,000		(3,350	)		(2,400	)		(950	)
American Axle & Manufacturing Inc.		(5.00)%		Quarterly		GSCO		12/20/26		137,000		(4,012	)		(4,012	)		—
Dow Inc.		(1.00)%		Quarterly		GSCO		6/20/25		78,000		(1,473	)		(405	)		(1,068	)
Dow Inc.		(1.00)%		Quarterly		GSCO		6/20/25		78,000		(1,473	)		(377	)		(1,096	)
Dow Inc.		(1.00)%		Quarterly		GSCO		6/20/25		78,000		(1,473	)		(269	)		(1,204	)
GE Capital Funding LLC		(1.00)%		Quarterly		JPHQ		12/20/26		1,037,000		(16,842	)		(10,072	)		(6,770	)
Government of Brazil		(1.00)%		Quarterly		BZWS		12/20/24		1,840,000		44,972			39,937			5,035
Government of Brazil		(1.00)%		Quarterly		BZWS		12/20/24		9,700,000		237,079			163,907			73,172
Government of Brazil		(1.00)%		Quarterly		BZWS		12/20/26		201,000		14,392			9,340			5,052
Government of Colombia		(1.00)%		Quarterly		BNPP		12/20/26		461,000		27,277			27,277			—
Government of Colombia		(1.00)%		Quarterly		BNPP		12/20/26		760,000		44,632			44,632			—
Government of Colombia		(1.00)%		Quarterly		BZWS		12/20/26		535,000		30,944			30,944			—
Government of Colombia		(1.00)%		Quarterly		BZWS		12/20/26		1,120,000		64,781			64,781			—
Government of Colombia		(1.00)%		Quarterly		DBAB		12/20/26		669,000		38,754			33,200			5,554
Government of Italy		(1.00)%		Quarterly		BOFA		6/20/24		132,000		(1,946	)		1,586			(3,532	)
Government of Italy		(1.00)%		Quarterly		JPHQ		6/20/24		218,000		(3,215	)		1,219			(4,434	)
Government of Mexico		(1.00)%		Quarterly		BZWS		6/20/26		1,510,000		2,713			5,284			(2,571	)
Government of Mexico		(1.00)%		Quarterly		CITI		12/20/26		345,000		2,435			(167	)		2,602
Government of Turkey		(1.00)%		Quarterly		BZWS		12/20/23		418,000		30,510			31,319			(809	)
Government of Turkey		(1.00)%		Quarterly		BZWS		12/20/23		975,000		71,166			65,227			5,939
Government of Ukraine		(1.00)%		Quarterly		BZWS		12/20/22		610,000		(5,797	)		25,111			(30,908	)

franklintempleton.com Semiannual Report 77

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

Credit Default Swap Contracts (continued)
Description	Annual Payment Rate Received (Paid)		Payment Frequency		Counterparty		Maturity Date		Notional Amounta			Value			Unamortized Upfront Payments (Receipts)			Unrealized Appreciation (Depreciation)			Ratingb
OTC Swap Contracts (continued)
Contracts to Buy Protectionc (continued)
Single Name (continued)
Government of Ukraine		(5.00)%		Quarterly		HSBC		12/20/26		923,000		$	10,137		$	—		$	10,137
Government of Ukraine		(5.00)%		Quarterly		HSBC		12/20/26		382,000			4,195			7,157			(2,962	)
Groupe Casino		(5.00)%		Quarterly		BZWS		12/20/23		60,000	EUR		(259	)		67			(326	)
Groupe Casino		(5.00)%		Quarterly		BZWS		12/20/23		60,000	EUR		(259	)		133			(392	)
Groupe Casino		(5.00)%		Quarterly		JPHQ		12/20/23		200,000	EUR		(865	)		(5,244	)		4,379
Hovnanian		(5.00)%		Quarterly		BZWS		6/20/26		29,000			2,558			2,818			(260	)
Hovnanian		(5.00)%		Quarterly		BZWS		6/20/26		145,000			12,791			13,441			(650	)
Kohl’s Corp.		(1.00)%		Quarterly		GSCO		12/20/25		899,000			(1,105	)		66,005			(67,110	)
Kohl’s Corp.		(1.00)%		Quarterly		MSCO		12/20/25		455,000			(560	)		33,863			(34,423	)
Loxam SAS		(5.00)%		Quarterly		JPHQ		12/20/26		100,000	EUR		(7,060	)		(5,490	)		(1,570	)
Macy’s Retail Holdings LLC		(1.00)%		Quarterly		BZWS		12/20/26		71,000			3,993			5,028			(1,035	)
MBIA Inc.		(5.00)%		Quarterly		BZWS		6/20/22		24,000			(759	)		(156	)		(603	)
MBIA Inc.		(5.00)%		Quarterly		CITI		6/20/22		40,000			(1,265	)		(722	)		(543	)
MBIA Inc.		(5.00)%		Quarterly		CITI		12/20/24		112,000			(9,331	)		(12,030	)		2,699
MBIA Inc.		(5.00)%		Quarterly		GSCO		6/20/22		25,000			(791	)		(357	)		(434	)
MBIA Inc.		(5.00)%		Quarterly		GSCO		12/20/24		244,000			(20,329	)		(24,658	)		4,329
Simon Property Group LP		(1.00)%		Quarterly		BZWS		12/20/26		625,000			(10,482	)		(8,837	)		(1,645	)
Simon Property Group LP		(1.00)%		Quarterly		JPHQ		12/20/25		291,000			(5,812	)		5,017			(10,829	)
Simon Property Group LP		(1.00)%		Quarterly		MSCO		12/20/25		531,000			(10,605	)		9,154			(19,759	)
Stena AB		(5.00)%		Quarterly		GSCO		6/20/24		87,000	EUR		(5,790	)		3,988			(9,778	)
Stena AB		(5.00)%		Quarterly		GSCO		6/20/24		186,000	EUR		(12,378	)		8,345			(20,723	)
Stena AB		(5.00)%		Quarterly		GSCO		12/20/26		29,000	EUR		(1,124	)		(837	)		(287	)
TDC A/S		(1.00)%		Quarterly		BNPP		12/20/26		70,000	EUR		2,737			2,636			101
TDC A/S		(1.00)%		Quarterly		BNPP		12/20/26		71,000	EUR		2,776			3,327			(551	)
TDC A/S		(1.00)%		Quarterly		BNPP		12/20/26		71,000	EUR		2,776			3,327			(551	)
Telecom Italia		(1.00)%		Quarterly		JPHQ		12/20/26		70,000	EUR		5,929			3,721			2,208
Telecom Italia		(1.00)%		Quarterly		JPHQ		12/20/26		70,000	EUR		5,929			3,970			1,959
Telecom Italia		(1.00)%		Quarterly		JPHQ		12/20/26		70,000	EUR		5,929			5,480			449
Telecom Italia		(1.00)%		Quarterly		JPHQ		12/20/26		68,000	EUR		5,760			5,489			271
Telecom Italia		(1.00)%		Quarterly		JPHQ		12/20/26		139,000	EUR		11,774			11,356			418
Contracts to Sell Protectionc,d
Single Name
Euro Garages Ltd.		5.00%		Quarterly		GSCO		12/20/26		50,000	EUR		2,904			2,595			309			B
Government of Turkey		1.00%		Quarterly		BZWS		12/20/26		697,000			(119,859	)		(108,522	)		(11,337	)		B+
Government of Turkey		1.00%		Quarterly		BZWS		12/20/26		279,000			(47,978	)		(47,471	)		(507	)		B+
Groupe Casino		5.00%		Quarterly		GSCO		12/20/26		70,000	EUR		(7,929	)		(5,702	)		(2,227	)		BB-
Total OTC Swap Contracts												$	492,199		$	608,389		$	(116,190	)
Total Credit Default Swap Contracts												$	(1,165,749	)	$	(1,169,006	)	$	3,257

^aIn U.S. dollars unless otherwise indicated. For contracts to sell protection, the notional amount is equal to the maximum potential amount of the future payments and no recourse provisions have been entered into in association with the contracts.

^bBased on Standard and Poor’s (S&P) Rating for single name swaps and internal ratings for index swaps. Internal ratings based on mapping into equivalent ratings from external vendors.

^cPerformance triggers for settlement of contract include default, bankruptcy or restructuring for single name swaps and failure to pay or bankruptcy of the underlying securities for traded index swaps.

^dThe Fund enters contracts to sell protection to create a long credit position.

78 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

At November 30, 2021, the Fund had the following interest rate swap contracts outstanding. See Note 1(e).

Interest Rate Swap Contracts
Description	Payment Frequency		Maturity Date		Notional Amount*			Value/Unrealized Appreciation (Depreciation)
Centrally Cleared Swap Contracts
Receive Fixed 1.34% Pay Floating 3-Month-KDR		Quarterly		12/15/22		46,000,000,000	KRW	$	(78,228	)
Receive Fixed 11.59% Pay Floating BRLCDI		Annually		1/02/23		37,424,742	BRL		5,811
Receive Fixed 7.68% Pay Floating BRLCDI		Annually		1/02/23		27,000,000	BRL		(158,233	)
Receive Floating rate 3-Month-JIBAR Pay Fixed rate 5.65%		Quarterly		1/25/24		22,006,060	ZAR		(1,767	)
Receive Floating rate 3-Month-JIBAR Pay Fixed rate 5.66%		Quarterly		1/25/24		27,762,629	ZAR		(2,638	)
Receive Floating rate 6 Month-PRIBOR Pay Fixed rate 3.62%		Annually		1/25/24		137,702,160	CZK		(9,784	)
Receive Floating rate 6 Month-PRIBOR Pay Fixed rate 3.95%		Annually		1/25/24		58,801,602	CZK		(20,912	)
Receive Floating rate 6 Month-PRIBOR Pay Fixed rate 3.95%		Annually		1/25/24		25,979,911	CZK		(9,240	)
Receive Floating rate 6 Month-PRIBOR Pay Fixed rate 3.95%		Annually		1/25/24		58,915,966	CZK		(20,953	)
Receive Fixed 8.44% Pay Floating BRLCDI		Annually		1/02/25		12,000,000	BRL		(122,207	)
Receive Fixed 6.30% Pay Floating rate 3-Month-JIBAR		Quarterly		7/31/25		53,795,745	ZAR		(43,400	)
Receive Fixed 7.57% Pay Floating rate 3-Month-JIBAR		Quarterly		11/04/25		39,000,000	ZAR		15,018
Receive Floating rate 3-Month USD LIBOR Pay Fixed rate 0.50%		Semi-Annually		6/16/26		1,400,000			12,193
Receive Floating rate 3-Month USD LIBOR Pay Fixed rate 0.50%		Semi-Annually		6/16/26		1,150,000			11,431
Receive Fixed 1.25% Pay Floating 3-Month-USD LIBOR		Quarterly		12/15/26		1,300,000			1,425
Receive Fixed 6.26% Pay Floating rate 1-Day-COPIBR		Quarterly		1/25/27		6,652,804,515	COP		(20,159	)
Receive Floating rate 6 Month-WIBOR Pay Fixed rate 2.95%		Annually		3/16/27		14,502,985	PLN		—
Receive Floating rate 6 Month-SORA Pay Fixed rate 1.23%		Semi-Annually		12/15/31		1,857,493	SGD		59,904
Receive Fixed 7.72% Pay Floating Banxico Mexico 1 Month rate		Monthly		1/13/32		64,105,000	MXN		40,053
Receive Fixed 7.94% Pay Floating rate 3-Month-JIBAR		Quarterly		1/25/32		25,017,434	ZAR		19,721
Total Interest Rate Swap Contracts								$	(321,965	)

*In U.S. dollars unless otherwise indicated.

franklintempleton.com Semiannual Report 79

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

At November 30, 2021, the Fund had the following total return swap contracts outstanding. See Note 1(e).

Total Return Swap Contracts

Underlying Instrument

Financing Rate

Payment Frequency

Counterparty

Maturity Date

Notional Value*

Value/Unrealized Appreciation (Depreciation)

OTC Swap Contracts

Equity Contracts – Longa

Afterpay Ltd.

1-Day FEDEF + 0.55%

Monthly

MSCO

11/11/22

295,374

$

(29,015

)

AKKA Technologies

1-Month EIBOR + 0.40%

Monthly

BZWS

9/09/22

1,679,003

EUR

1,603

Amundi SA

1-Day EONIA + 0.40%

Monthly

MSCS

3/14/25

266,038

EUR

161,514

Anima Holding SpA

1-Month EURIBOR + 0.40%

Monthly

MSCS

12/21/21

2,129,238

EUR

(265,164

)

Avast PLC

1-Day SONIA + 0.40%

Monthly

BZWS

7/27/22

2,852,688

GBP

25,171

Avast PLC

1-Day FEDEF + 0.65%

Monthly

MSCO

9/21/22

552,290

22,409

Barclays PLC

1-Month LIBOR + 0.40%

Monthly

MSCS

4/20/22

1,058,676

GBP

(62,736

)

BHP Group PLC

1-Day FEDEF + 0.40%

Monthly

MSCO

11/22/22

1,333,980

(70,718

)

Blue Prism Group PLC

1-Day SONIA + 0.40%

Monthly

BZWS

9/07/22

730,086

GBP

736

BNP Paribas SA

1-Month LIBOR + 0.40%

Monthly

MSCS

3/14/25

1,368,172

EUR

907,267

Bureau Veritas SA

1-Month EURIBOR + 0.40%

Monthly

GSCO

12/21/21

212,386

EUR

(7,813

)

Bureau Veritas SA

1-Month EURIBOR + 0.40%

Monthly

MSCS

3/14/25

1,082,490

EUR

535,166

Callaway Golf Co.

1-Day FEDEF + 0.40%

Monthly

MSCO

11/22/22

1,217,822

(320,228

)

CapitaLand Investment Ltd.

1-Day SORA + 0.55%

Monthly

MSCO

5/22/23

710,355

SGD

169,404

Christian Dior SE

1-Month EURIBOR + 0.40%

Monthly

BZWS

5/25/22

1,543,050

EUR

(16,714

)

Clearway Energy Inc.

1-Month LIBOR + 0.35%

Monthly

JPHQ

1/20/22

238,994

43,597

CorePoint Lodging Inc.

1-Month LIBOR + 0.35%

Monthly

BZWS

11/28/22

917,832

(4,834

)

CoreSite Realty Corp.

1-Month LIBOR + 0.35%

Monthly

BZWS

11/16/22

1,144,611

2,235

Croda International PLC

1-Month LIBOR + 0.40%

Monthly

MSCS

4/20/22

1,344,683

GBP

84,169

Crown Holdings Inc.

1-Day FEDEF + 0.40%

Monthly

MSCO

11/22/22

1,692,599

104,289

Crown Resorts Ltd.

1-Month BBSW + 0.55%

Monthly

MSCO

12/22/21

247,672

AUD

(14,166

)

CyrusOne Inc.

1-Month LIBOR + 0.35%

Monthly

BZWS

11/16/22

3,670,887

(9,063

)

Danone SA

1-Month EURIBOR + 0.40%

Monthly

MSCO

12/21/21

2,010,228

EUR

(233,917

)

Danone SA

1-Month LIBOR + 0.40%

Monthly

MSCS

3/14/25

3,905,164

EUR

(185,520

)

Electricite de France SA

1-Day EONIA + 0.40%

Monthly

MSCO

9/23/22

2,273,564

EUR

10,294

Elisa OYJ

1-Month EURIBOR + 0.40%

Monthly

MSCO

12/21/21

260,810

EUR

(39,399

)

Elisa OYJ

1-Month EURIBOR + 0.40%

Monthly

MSCS

3/14/25

444,640

EUR

60,223

Energy Transfer LP

1-Month LIBOR + 0.90%

Monthly

GSCO

10/04/22

121,446

(16,036

)

Energy Transfer LP

1-Month LIBOR + 0.50%

Monthly

CITI

10/20/22

115,578

(19,263

)

Engie SA

1-Day EONIA + 0.40%

Monthly

MSCO

9/23/22

4,085,632

EUR

(195,908

)

Entain PLC

1-Month LIBOR + 0.40%

Monthly

BZWS

2/28/22

316,785

GBP

(13,446

)

Entain PLC

1-Day SONIA + 0.65%

Monthly

MSCO

10/17/22

419,114

GBP

(113,948

)

Enterprise Products Partners LP

1-Month LIBOR + 0.90%

Monthly

BOFA

3/04/22

102,869

(12,211

)

Enterprise Products Partners LP

1-Month LIBOR + 0.90%

Monthly

GSCO

4/20/22

100,201

(11,935

)

ESG Core Investments BV

1-Day EONIA + 0.65%

Monthly

MSCO

9/06/22

41,835

EUR

(3,064

)

Ferguson PLC

1-Day EONIA + 0.65%

Monthly

MSCO

9/23/22

654,490

269,755

Frasers Group PLC

1-Month LIBOR + 0.40%

Monthly

MSCS

4/20/22

813,732

GBP

3,719

GCP Student Living PLC

1-Day SONIA + 0.40%

Monthly

BZWS

7/26/22

326,435

GBP

2,062

HeidelbergCement AG

1-Month EURIBOR + 0.40%

Monthly

MSCS

12/21/21

2,132,035

EUR

(232,566

)

Hermes International

1-Month EURIBOR + 0.40%

Monthly

MSCO

12/21/21

689,260

EUR

121,968

Hikma Pharmaceuticals PLC

1-Month LIBOR + 0.40%

Monthly

MSCS

4/20/22

110,696

GBP

(10,129

)

ITV PLC

1-Month LIBOR + 0.40%

Monthly

MSCS

4/20/22

1,737,983

GBP

(292,613

)

Kansas City Southern

1-Day FEDEF + 0.40%

Monthly

MSCO

11/22/22

2,547,080

82,674

Kering SA

1-Month EURIBOR + 0.40%

Monthly

MSCO

12/21/21

839,642

EUR

23,861

Kering SA

1-Month EURIBOR + 0.40%

Monthly

MSCS

3/14/25

1,461,221

EUR

736,882

Landmark Infrastructure Partners LP

1-Month LIBOR + 0.35%

Monthly

BZWS

5/20/22

1,600,983

2,936

LG Chem Ltd.

1-Day FEDEF + 0.30%

Monthly

MSCO

8/10/23

2,548,323

(255,062

)

LVMH Moet Hennessy Louis Vuitton SE

1-Day EONIA + 0.40%

Monthly

MSCS

3/14/25

348,838

EUR

370,312

Meggitt PLC

1-Day SONIA + 0.65%

Monthly

MSCO

2/08/22

1,223,711

GBP

(190,297

)

80 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

Total Return Swap Contracts (continued)

Underlying Instrument

Financing Rate

Payment Frequency

Counterparty

Maturity Date

Notional Value*

Value/Unrealized Appreciation (Depreciation)

OTC Swap Contracts (continued)

Equity Contracts – Longa (continued)

Meggitt PLC

1-Day SONIA + 0.65%

Monthly

BZWS

8/17/22

1,897,785

GBP

$

(8,544

)

MGM Growth Properties LLC

1-Month LIBOR + 0.35%

Monthly

BZWS

8/08/22

2,509,560

(58,000

)

Nestle SA

1-Month LIBOR + 0.40%

Monthly

MSCS

1/20/22

1,789,306

CHF

(85,816

)

Nippo Corp.

1-Day MUTSCALM + 0.50%

Monthly

MSCO

11/10/22

35,904,751

JPY

(2,521

)

Phillips 66 Partners LP

1-Month LIBOR + 0.35%

Monthly

BZWS

10/28/22

1,312,362

(15,022

)

Playtech PLC

1-Day SONIA + 0.40%

Monthly

BZWS

10/19/22

621,464

GBP

11,220

Ryanair Holdings PLC

1-Month EURIBOR + 0.40%

Monthly

MSCS

12/21/21

817,408

EUR

(168,758

)

Sanne Group PLC

1-Day SONIA + 0.40%

Monthly

BZWS

6/24/22

679,945

GBP

2,987

Siltronic AG

1-Month LIBOR + 0.40%

Monthly

BZWS

2/28/22

2,434,914

EUR

(20,595

)

Siltronic AG

1-Day EONIA + 0.65%

Monthly

MSCO

11/03/22

471,192

EUR

(27,544

)

Smith & Nephew PLC

1-Month LIBOR + 0.40%

Monthly

MSCO

4/20/22

3,800,799

GBP

(430,592

)

Smiths Group PLC

1-Month LIBOR + 0.40%

Monthly

MSCS

4/20/22

984,659

GBP

(9,351

)

Societe Generale SA

1-Month LIBOR + 0.40%

Monthly

MSCS

3/14/25

853,440

EUR

624,972

bSpark Infrastructure Group

1-Month BBSW + 0.55%

Monthly

MSCO

12/22/21

792,475

AUD

15,122

SSE PLC

1-Day SONIA + 0.40%

Monthly

MSCO

9/29/22

2,753,666

GBP

(231,659

)

Stroeer SE & Co. KGaA

1-Month EURIBOR + 0.40%

Monthly

MSCS

12/21/21

1,032,647

EUR

(99,132

)

Sydney Airport Finance Co. Pty Ltd.

1-Month BBSW + 0.55%

Monthly

MSCO

12/22/21

648,764

AUD

(423

)

Teekay LNG Partners LP

1-Month LIBOR + 0.35%

Monthly

BZWS

10/05/22

3,708,722

10,940

TGOOD

1-Day FEDEF + 0.30%

Monthly

MSCO

9/28/22

2,038,297

2,583

Toshiba Corp.

1-Day MUTSCALM + 0.55%

Monthly

MSCO

8/25/23

7,280,061

JPY

(397

)

TotalEnergies

1-Day EONIA + 0.40%

Monthly

MSCO

9/29/22

474,410

EUR

(37,327

)

Ultra Electronics Holdings PLC

1-Day SONIA + 0.65%

Monthly

MSCO

2/08/22

344,769

GBP

(22,112

)

Vodafone Group PLC

1-Day SONIA + 0.65%

Monthly

MSCO

2/08/22

951,494

GBP

10,733

Willis Towers Watson PLC

1-Day FEDEF + 0.40%

Monthly

MSCO

11/22/22

3,309,078

(69,553

)

507,692

Equity Contracts – Shortc

Arthur J. Gallagher & Co.

1-Day FEDEF - 0.35%

Monthly

MSCO

2/04/22

1,566,238

(274,221

)

BHP Group PLC

1-Day FEDEF - 2.02%

Monthly

MSCO

2/04/22

1,478,285

184,831

Canadian Pacific Railway Ltd.

1-Day FEDEF - 0.35%

Monthly

MSCO

2/04/22

1,896,732

69,306

China Power

1-Day HONIX - 0.50%

Monthly

MSCO

10/13/22

3,661,252

HKD

(52,551

)

CLP Holdings

1-Day HONIX - 0.50%

Monthly

MSCO

7/20/23

11,865,026

HKD

(13,352

)

Colruyt SA

1-Day EONIA - 0.40%

Monthly

MSCS

3/14/25

1,343,611

EUR

(13,800

)

DJ EURO STOXX 50 Index

1-Day EONIA - 0.45%

Monthly

MSCO

3/22/22

307,887

EUR

(231,677

)

Elisa OYJ

1-Day EONIA - 0.40%

Monthly

MSCS

3/14/25

390,256

EUR

(75,937

)

Hannover Rueck SE

1-Day EONIA - 0.35%

Monthly

MSCS

3/14/25

558,395

EUR

(173,703

)

Hennes & Mauritz AB

1-Week STIBOR - 0.40%

Monthly

MSCS

3/14/25

5,777,721

SEK

(68,181

)

HMM Co. Ltd.

1-Day FEDEF - 3.50%

Monthly

MSCO

11/10/22

491,679

72,314

Huaneng Power

1-Day HONIX - 4.63%

Monthly

MSCO

10/24/22

3,274,210

HKD

(10,644

)

Industrial Select Sector Index

1-Day LIBOR - 0.40%

Monthly

MSCO

8/22/23

5,906,140

200,527

Korea Electric Power Corp.

1-Day FEDEF - 2.75%

Monthly

MSCO

8/10/23

357,608

34,979

KOSPI 200 Index

1-Day FEDEF - 0.35%

Monthly

MSCO

9/07/23

1,844,700

116,082

LVMH Moet Hennessy Louis Vuitton SE

1-Day EONIA - 0.30%

Monthly

BZWS

5/25/22

1,370,160

EUR

5,352

Marks & Spencer Group PLC

1-Day SONIA - 0.30%

Monthly

MSCS

4/20/22

320,470

GBP

(18,309

)

Marsh McLennan

1-Day FEDEF - 0.35%

Monthly

MSCO

2/04/22

1,455,005

(180,099

)

Morgan Stanley MSHDGCWN Index

1-Day RBACR - 0.60%

Monthly

MSCO

8/25/23

139,620

AUD

53

Morgan Stanley MSPSARKK Index

1-Day FEDEF - 0.46%

Monthly

MSCO

9/21/22

361,165

5,865

franklintempleton.com Semiannual Report 81

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Alternative Strategies Fund (continued)

Total Return Swap Contracts (continued)

Underlying Instrument

Financing Rate

Payment Frequency

Counterparty

Maturity Date

Notional Value*

Value/Unrealized Appreciation (Depreciation)

OTC Swap Contracts (continued)

Equity Contracts – Shortc (continued)

Morgan Stanley MSPSENTH Index

1-Day SONIA - 0.45%

Monthly

MSCO

10/31/22

284,158

GBP

$

43,613

Morgan Stanley MSPSFERL Index

1-Day FEDEF - 0.35%

Monthly

MSCO

9/21/22

277,233

(52,236

)

Morgan Stanley MSPSHRTZ Index

1-Day FEDEF - 0.35%

Monthly

MSCO

9/21/22

703,650

63,890

Morgan Stanley MSPSKSS Index

1-Day FEDEF - 0.40%

Monthly

MSCO

9/21/22

337,234

(23,292

)

Morgan Stanley MSPSPRMW Index

1-Day FEDEF - 0.55%

Monthly

MSCO

9/21/22

574,402

(75,680

)

Morgan Stanley MSPSPRNT Index

1-Day FEDEF - 1.48%

Monthly

MSCO

9/21/22

51,663

(292

)

Morgan Stanley MSPSSPY Index

1-Day FEDEF - 0.35%

Monthly

MSCO

9/21/22

136,569

(6,186

)

Morgan Stanley MSPSVLRS Index

1-Day FEDEF - 0.35%

Monthly

MSCO

10/26/22

230,517

23,587

Morgan Stanley MSPSVOD Index

1-Day FEDEF - 0.39%

Monthly

MSCO

9/21/22

655,308

(40,544

)

Morgan Stanley MSPSXLU Index

1-Day FEDEF - 0.35%

Monthly

MSCO

9/21/22

5,664,202

110,021

Morgan Stanley MSPSXPOH Index

1-Day FEDEF - 0.35%

Monthly

MSCO

9/21/22

946,276

(10,313

)

Next PLC

1-Day SONIA - 0.30%

Monthly

MSCS

4/20/22

690,538

GBP

44,341

Nike Inc.

1-Day FEDEF - 0.35%

Monthly

MSCO

3/16/22

1,305,529

(7,770

)

Nippon Yusen

1-Day MUTSCALM - 0.40%

Monthly

MSCO

11/28/22

68,921,613

JPY

4,674

NortonLifeLock Inc.

1-Day FEDEF - 0.35%

Monthly

MSCO

11/09/22

55,332

1,553

Philadelphia SE Utility Index

1-Day FEDEF - 0.05%

Monthly

MSCO

8/22/23

3,936,403

100,875

Phillips 66

1-Month LIBOR - 0.35%

Monthly

BZWS

10/28/22

1,305,604

(15,869

)

Siltronic AG

1-Day EONIA - 4.00%

Monthly

BZWS

3/04/22

1,238,747

EUR

(5,426

)

Square Inc.

1-Day FEDEF - 0.35%

Monthly

MSCO

11/10/22

296,731

28,360

STOXX Europe 600 Utilities Index

1-Day EONIA - 0.45%

Monthly

MSCO

9/13/23

3,227,351

EUR

67,381

Straits Times Index

1-Day SOFR - 0.65%

Monthly

MSCO

5/24/23

673,401

SGD

9,663

Swisscom AG

1-Day SARON - 0.35%

Monthly

MSCS

3/14/25

749,259

CHF

(61,191

)

VICI Properties Inc.

1-Month LIBOR - 0.35%

Monthly

BZWS

8/08/22

2,541,992

53,909

(170,097

)

Interest Rate Contracts – Longa

Government of Egypt

1-Day FEDEF

Monthly

CITI

1/11/22

476,021

22,068

Government of Indonesia

3-Month LIBOR + 0.70%

Monthly

BOFA

5/18/22

2,043,470

(32,110

)

Government of Indonesia

3-Month LIBOR + 0.60%

Monthly

DBAB

6/15/32

573,840

39,768

29,726

Total - Total Return Swap Contracts

$

367,321

*In U.S. dollars unless otherwise indicated.

^aThe Fund receives the total return on the underlying instrument and pays a variable financing rate.

^bFair valued using significant unobservable inputs. See Note 14 regarding fair value measurements.

^cThe Fund receives the variable financing rate and pays the total return on the underlying instrument.

See Note 12 regarding other derivative information.

See Abbreviations on page 104.

82 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statement of Assets and Liabilities

November 30, 2021 (unaudited)

Franklin K2 Alternative Strategies Fund

Assets:
Investments in securities:
Cost – Unaffiliated issuers	$	1,176,152,060
Cost – Non-controlled affiliates (Note 3f)		5,752,000
Cost – Unaffiliated repurchase agreements		1,439,225
Value – Unaffiliated issuers†	$	1,331,864,352
Value – Non-controlled affiliates (Note 3f)		5,752,000
Value – Unaffiliated repurchase agreements		1,439,225
Cash		61,621,113
Restricted cash for OTC derivatives (Note 1f)		3,020,000
Foreign currency, at value (cost $7,324,672)		6,895,935
Receivables:
Investment securities sold		35,092,337
Capital shares sold		1,153,286
Dividends and interest		4,814,765
Deposits with brokers for:
Exchange traded options written		133,903
Securities sold short		244,574,018
OTC derivative contracts		31,012,181
Futures contracts		9,017,804
Centrally cleared swap contracts		1,656,220
Due from brokers		14,459,310
Variation margin on centrally cleared swap contracts		3,712
OTC swap contracts (upfront payments $1,022,060)		894,273
Unrealized appreciation on OTC forward exchange contracts		6,573,274
Unrealized appreciation on OTC swap contracts		5,898,124
Other assets		8,244
Total assets		1,765,884,076
Liabilities:
Payables:
Investment securities purchased		43,876,850
Capital shares redeemed		1,359,883
Management fees		2,037,577
Distribution fees		46,399
Trustees’ fees and expenses		14,056
Transfer agent fees		222,027
Deposits from brokers for:
OTC derivative contracts		3,020,000
Variation margin on futures contracts		58,035
Due to brokers		13,350,873
OTC swap contracts (upfront receipts $318,012)		285,884
Options written, at value (premiums received $724,467)		434,251
Securities sold short, at value (proceeds $250,976,790)		250,220,336
Payable upon return of securities loaned (Note 1j)		7,191,225
Unrealized depreciation on OTC forward exchange contracts		4,677,335
Unrealized depreciation on OTC swap contracts		5,646,993
Unrealized depreciation on unfunded loan commitments (Note 11)		22,745
Accrued expenses and other liabilities		309,155
Total liabilities		332,773,624
Net assets, at value	$	1,433,110,452
Net assets consist of:
Paid-in capital	$	1,247,767,006
Total distributable earnings (loss)		185,343,446
Net assets, at value	$	1,433,110,452
†Includes securities loaned	$	15,260,059

franklintempleton.com The accompanying notes are an integral part of these consolidated financial statements.    |   Semiannual Report 83

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statement of Assets and Liabilities (continued)

November 30, 2021 (unaudited)

Franklin K2 Alternative Strategies Fund

Class A:
Net assets, at value	$	104,373,018
Shares outstanding		8,350,335
Net asset value per sharea	$	12.50
Maximum offering price per share (net asset value per share ÷ 94.50%)	$	13.23
Class C:
Net assets, at value	$	29,196,259
Shares outstanding		2,413,778
Net asset value and maximum offering price per sharea	$	12.10
Class R:
Net assets, at value	$	1,139,356
Shares outstanding		91,371
Net asset value and maximum offering price per share	$	12.47
Class R6:
Net assets, at value	$	53,365,449
Shares outstanding		4,222,946
Net asset value and maximum offering price per share	$	12.64
Advisor Class:
Net assets, at value	$	1,245,036,370
Shares outstanding		98,806,099
Net asset value and maximum offering price per share	$	12.60

^aRedemption price is equal to net asset value less contingent deferred sales charges, if applicable.

84 Semiannual Report    |   The accompanying notes are an integral part of these consolidated financial statements. franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statement of Operations

for the six months ended November 30, 2021 (unaudited)

Franklin K2 Alternative Strategies Fund

Investment income:
Dividends (net of foreign taxes)*
Unaffiliated issuers	$	2,064,233
Interest: (net of foreign taxes)~
Unaffiliated issuers		11,362,014
Income from securities loaned:
Unaffiliated entities (net of fees and rebates)		52,504
Non-controlled affiliates (Note 3f)		189
Total investment income		13,478,940
Expenses:
Management fees (Note 3a)		12,996,815
Distribution fees: (Note 3c)
Class A		129,910
Class C		152,780
Class R		2,283
Transfer agent fees: (Note 3e)
Class A		48,997
Class C		14,402
Class R		431
Class R6		6,112
Advisor Class		567,886
Custodian fees (Note 4) .		124,237
Reports to shareholders fees		50,734
Registration and filing fees		52,155
Professional fees		304,303
Trustees’ fees and expenses		209,398
Dividends and interest on securities sold short		1,299,783
Security borrowing fees		1,202,491
Other		76,102
Total expenses		17,238,819
Expense reductions (Note 4)		(20,001	)
Expenses waived/paid by affiliates (Note 3f and 3g)		(1,122,836	)
Net expenses		16,095,982
Net investment income (loss)		(2,617,042	)
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:
Unaffiliated issuers		44,497,888
Written options		698,852
Foreign currency transactions		(564,144	)
Forward exchange contracts		2,940,314
Futures contracts		(8,054,427	)
Securities sold short		(20,772,240	)
Swap contracts		(968,475	)
Net realized gain (loss)		17,777,768
Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		(22,481,528	)
Translation of other assets and liabilities denominated in foreign currencies		(266,259	)
Forward exchange contracts		3,871,678
Written options		120,574
Futures contracts		543,531
Securities sold short		10,563,198
Swap contracts		(3,306,280	)
Net change in unrealized appreciation (depreciation)		(10,955,086	)
Net realized and unrealized gain (loss)		6,822,682
Net increase (decrease) in net assets resulting from operations	$	4,205,640
* Foreign taxes withheld on dividends	$	73,000
~ Foreign taxes withheld on interest	$	21,764

franklintempleton.com The accompanying notes are an integral part of these financial statements.    |   Semiannual Report 85

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statements of Changes in Net Assets

Franklin K2 Alternative Strategies Fund

	Six Months Ended November 30, 2021 (unaudited)			Year Ended May 31, 2021
Increase (decrease) in net assets:
Operations:
Net investment income (loss)	$	(2,617,042	)	$	(5,706,292	)
Net realized gain (loss)		17,777,768			82,760,682
Net change in unrealized appreciation (depreciation)		(10,955,086	)		64,678,301
Net increase (decrease) in net assets resulting from operations		4,205,640			141,732,691
Distributions to shareholders:
Class A		—			(770,421	)
Class C		—			(270,063	)
Class R		—			(6,563	)
Class R6		—			(218,294	)
Advisor Class		—			(8,558,261	)
Total distributions to shareholders		—			(9,823,602	)
Capital share transactions: (Note 2)
Class A		1,964,793			1,751,000
Class C		(2,335,970	)		(7,911,374	)
Class R		299,653			(133,193	)
Class R6		25,945,345			9,227,168
Advisor Class		88,936,324			59,488,692
Total capital share transactions		114,810,145			62,422,293
Net increase (decrease) in net assets		119,015,785			194,331,382
Net assets:
Beginning of period		1,314,094,667			1,119,763,285
End of period	$	1,433,110,452		$	1,314,094,667

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

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

Notes to Consolidated Financial Statements

Franklin K2 Alternative Strategies Fund

1. Organization and Significant Accounting Policies

Franklin Alternative Strategies Funds (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company, consisting of two separate funds and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP). Franklin K2 Alternative Strategies Fund (Fund) is included in this report. The Fund offers five classes of shares: Class A, Class C, Class R, Class R6 and Advisor Class. Effective August 2, 2021, Class C shares automatically convert to Class A shares on a monthly basis, after they have been held for 8 years. Prior to August 2, 2021, Class C shares converted to Class A shares after a 10-year holding period. Each class of shares may differ by its initial sales load, contingent deferred sales charges, voting rights on matters affecting a single class, its exchange privilege and fees due to differing arrangements for distribution and transfer agent fees.

The following summarizes the Fund’s significant accounting policies.

a. Financial Instrument Valuation

The Fund’s investments in financial instruments are carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Fund calculates the net asset value

(NAV) per share 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 Trust’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, exchange traded funds and derivative financial instruments listed on an exchange or on the NASDAQ National Market System are valued at the last quoted sale price or the official closing price of the day, respectively. Foreign equity securities are valued as of the close of trading on the foreign stock exchange on which the security is primarily traded or as of 4 p.m. Eastern time. The value is then converted into its U.S. dollar equivalent at the foreign exchange rate in effect at 4 p.m. Eastern time on the

day that the value of the security is determined. Over-the-counter (OTC) securities are valued within the range of the most recent quoted bid and ask prices. Securities that trade in multiple markets or on multiple exchanges are valued according to the broadest and most representative market. Certain equity securities are valued based upon fundamental characteristics or relationships to similar securities.

Debt securities generally trade in the OTC market rather than on a securities exchange. The Fund’s pricing services use multiple valuation techniques to determine fair value. In instances where sufficient market activity exists, the pricing services may utilize a market-based approach through which quotes from market makers are used to determine fair value. In instances where sufficient market activity may not exist or is limited, the pricing services also utilize proprietary valuation models which may consider market characteristics such as benchmark yield curves, credit spreads, estimated default rates, anticipated market interest rate volatility, coupon rates, anticipated timing of principal repayments, underlying collateral, and other unique security features in order to estimate the relevant cash flows, which are then discounted to calculate the fair value. Securities denominated in a foreign currency are converted into their U.S. dollar equivalent at the foreign exchange rate in effect at 4 p.m. Eastern time on the date that the values of the foreign debt securities are determined.

Investments in open-end mutual funds are valued at the closing NAV. Investments in repurchase agreements are valued at cost, which approximates fair value.

Certain derivative financial instruments are centrally cleared or 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

franklintempleton.com Semiannual Report 87

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Franklin K2 Alternative Strategies Fund (continued)

1. Organization and Significant Accounting Policies (continued)

a. Financial Instrument Valuation (continued)

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.

Trading in securities on foreign securities stock exchanges and OTC markets may be completed before 4 p.m. Eastern time. In addition, trading in certain foreign markets may not take place on every Fund’s business day. Events can occur between the time at which trading in a foreign security is completed and 4 p.m. Eastern time that might call into question the reliability of the value of a portfolio security held by the Fund. As a result, differences may arise between the value of the Fund’s portfolio securities as determined at the foreign market close and the latest indications of value at 4 p.m. Eastern time. In order to minimize the potential for these differences, an independent pricing service may be used to adjust the value of the Funds’ portfolio securities to the latest indications of fair value at 4 p.m. Eastern time. At November 30, 2021, certain securities may have been fair valued using these procedures, in which case the securities were categorized as Level 2 inputs within the fair value hierarchy (referred to as “market level fair value”). See the Fair Value Measurements note for more information.

When the last day of the reporting period is a non-business day, certain foreign markets may be open on those days that the Fund’s NAV is not calculated, which could result in differences between the value of the Fund’s portfolio securities on the last business day and the last calendar day of the reporting period. Any significant security valuation changes due to an open foreign market are adjusted and reflected by the Fund for financial reporting purposes.

b. Foreign Currency Translation

Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the exchange rate of such currencies against U.S. dollars on the date of valuation. The Fund may enter into foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of

securities, income and expense items denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date. Portfolio securities and assets and liabilities denominated in foreign currencies contain risks that those currencies will decline in value relative to the U.S. dollar. Occasionally, events may impact the availability or reliability of foreign exchange rates used to convert the U.S. dollar equivalent value. If such an event occurs, the foreign exchange rate will be valued at fair value using procedures established and approved by the Board.

The Fund does not separately report the effect of changes in foreign exchange rates from changes in market prices on securities held. Such changes are included in net realized and unrealized gain or loss from investments in the Consolidated Statement of Operations.

Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions and the difference between the recorded amounts of dividends, interest, and foreign withholding taxes and the

U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period.

c. Joint Repurchase Agreement

The Fund enters into a joint repurchase agreement whereby its uninvested cash balance is deposited into a joint cash account with other funds managed by the investment manager or an affiliate of the investment manager and is used to invest in one or more repurchase agreements. The value and face amount of the joint repurchase agreement are allocated to the funds based on their pro-rata interest. A repurchase agreement is accounted for as a loan by the Fund to the seller, collateralized by securities which are delivered to the Fund’s custodian. The fair value, including accrued interest, of the initial collateralization is required to be at least 102% of the dollar amount invested by the funds, with the value of the underlying securities marked to market daily to maintain coverage of at least 100%. Repurchase agreements are subject to the terms of Master Repurchase Agreements (MRAs) with approved counterparties (sellers). The MRAs contain various provisions, including but not limited to events of default and maintenance of collateral for repurchase agreements. In the event of default by either the seller or the Fund, certain

88 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Franklin K2 Alternative Strategies Fund (continued)

MRAs may permit the non-defaulting party to net and close-out all transactions, if any, traded under such agreements. The Fund may sell securities it holds as collateral and apply the proceeds towards the repurchase price and any other amounts owed by the seller to the Fund in the event of default by the seller. This could involve costs or delays in addition to a loss on the securities if their value falls below the repurchase price owed by the seller. The joint repurchase agreement held by the Fund at period end, as indicated in the Consolidated Statement of Investments, had been entered into on November 30, 2021.

d. Securities Purchased on a Delayed Delivery Basis

The Fund purchases securities on a delayed delivery 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.

e. 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 Consolidated Statement of Assets and Liabilities. Realized gain and loss and unrealized appreciation and depreciation on these contracts for the period are included in the Consolidated Statement of Operations.

Derivative counterparty credit risk is managed through a formal evaluation of the creditworthiness of all potential counterparties. The Fund attempts to reduce its exposure to counterparty credit risk on OTC derivatives, whenever possible, by entering into International Swaps and Derivatives Association (ISDA) master agreements with certain counterparties. These agreements contain various provisions, including but not limited to collateral requirements, events of

default, or early termination. Termination events applicable to the counterparty include certain deteriorations in the credit quality of the counterparty. Termination events applicable to the Fund include failure of the Fund to maintain certain net asset levels and/or limit the decline in net assets over various periods of time. In the event of default or early termination, the ISDA master agreement gives the non-defaulting party the right to net and close-out all transactions traded, whether or not arising under the ISDA agreement, to one net amount payable by one counterparty to the other. However, absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Consolidated Statement of Assets and Liabilities. Early termination by the counterparty may result in an immediate payment by the Fund of any net liability owed to that counterparty under the ISDA agreement.

Collateral requirements differ by type of derivative. Collateral or initial margin requirements are set by the broker or exchange clearing house for exchange traded and centrally cleared derivatives. Initial margin deposited is held at the exchange and can be in the form of cash and/or securities. For OTC derivatives traded under an ISDA master agreement, posting of collateral is required by either the Fund or the applicable counterparty if the total net exposure of all OTC derivatives with the applicable counterparty exceeds the minimum transfer amount, which typically ranges from

$100,000 to $250,000, and can vary depending on the counterparty and the type of the agreement. Generally, collateral is determined at the close of Fund business each day and any additional collateral required due to changes in derivative values may be delivered by the Fund or the counterparty the next business day, or within a few business days. Collateral pledged and/or received by the Fund for OTC derivatives, if any, is held in segregated accounts with the Fund’s custodian/counterparty broker and can be in the form of cash and/or securities. Unrestricted cash may be invested according to the Fund’s investment objectives. To the extent that the amounts due to the Fund from its counterparties are not subject to collateralization or are not fully collateralized, the Fund bears the risk of loss from counterparty non-performance.

The Fund entered into exchange traded futures contracts primarily to manage and/or gain exposure to commodity price, interest rate, equity price and foreign exchange rate risk. A futures contract is an agreement between the Fund and a counterparty to buy or sell an asset at a specified price on a future date. Required initial margins are pledged by the Fund,

franklintempleton.com Semiannual Report 89

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Franklin K2 Alternative Strategies Fund (continued)

1. Organization and Significant Accounting Policies (continued)

e. Derivative Financial Instruments (continued)

and the daily change in fair value is accounted for as a variation margin payable or receivable in the Consolidated Statement of Assets and Liabilities.

The Fund entered into OTC forward exchange contracts primarily to manage and/or gain exposure to certain foreign currencies. A forward exchange contract is an agreement between the Fund and a counterparty to buy or sell a foreign currency at a specific exchange rate on a future date.

The Fund entered into credit default swap contracts primarily to manage and/or gain exposure to credit risk. A credit default swap is an agreement between the Fund and a counterparty whereby the buyer of the contract receives credit protection and the seller of the contract guarantees the credit worthiness of a referenced debt obligation. These agreements may be privately negotiated in the over-the-counter market (OTC credit default swaps) or may be executed in a multilateral trade facility platform, such as a registered exchange (centrally cleared credit default swaps). The underlying referenced debt obligation may be a single issuer of corporate or sovereign debt, a credit index, a basket of issuers or indices, or a tranche of a credit index or basket of issuers or indices. In the event of a default of the underlying referenced debt obligation, the buyer is entitled to receive the notional amount of the credit default swap contract from the seller in exchange for the referenced debt obligation, a net settlement amount equal to the notional amount of the credit default swap less the recovery value of the referenced debt obligation, or other agreed upon amount. For centrally cleared credit default swaps, required initial margins are pledged by the Fund, and the daily change in fair value is accounted for as a variation margin payable or receivable in the Consolidated Statement of Assets and Liabilities. Over the term of the contract, the buyer pays the seller a periodic stream of payments, provided that no event of default has occurred. Such periodic payments are accrued daily as an unrealized appreciation or depreciation until the payments are made, at which time they are realized. Upfront payments and receipts are reflected in the Consolidated Statement of Assets and Liabilities and represent compensating factors between stated terms of the credit default swap agreement and prevailing market conditions (credit spreads and other relevant factors). These upfront payments and receipts are

amortized over the term of the contract as a realized gain or loss in the Consolidated Statement of Operations.

The Fund entered into interest rate swap contracts primarily to manage interest rate risk. An interest rate swap is an agreement between the Fund and a counterparty to exchange cash flows based on the difference between two interest rates, applied to a notional amount. These agreements may be privately negotiated in the over-the-counter market (OTC interest rate swaps) or may be executed on a registered exchange (centrally cleared interest rate swaps). For centrally cleared interest rate swaps, required initial margins are pledged by the Fund, and the daily change in fair value is accounted for as a variation margin payable or receivable in the Consolidated Statement of Assets and Liabilities. Over the term of the contract, contractually required payments to be paid and to be received are accrued daily and recorded as unrealized depreciation and appreciation until the payments are made, at which time they are realized.

The Fund entered into OTC total return swap contracts primarily to manage and/or gain exposure to interest rate, equity price and credit 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.

The Fund purchased or wrote exchange traded and/or OTC option contracts primarily to manage and/or gain exposure to equity price and foreign exchange rate risk. An option is a contract entitling the holder to purchase or sell a specific amount of shares or units of an asset or notional amount of a swap (swaption), at a specified price. When an option is purchased or written, an amount equal to the premium paid or received is recorded as an asset or liability, respectively. Upon exercise of an option, the acquisition cost or sales proceeds of the underlying investment is adjusted by any premium received or paid. Upon expiration of an option, any premium received or paid is recorded as a realized gain or loss. Upon closing an option other than through expiration or exercise, the difference between the premium received or paid and the cost to close the position is recorded as a realized gain or loss.

90 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Franklin K2 Alternative Strategies Fund (continued)

See Notes 6 and 12 regarding investment transactions and other derivative information, respectively.

f. Restricted Cash

At November 30, 2021, the Fund held restricted cash in connection with investments in certain derivative securities. Restricted cash is held in a segregated account with the Fund’s custodian/counterparty broker and is reflected in the Consolidated Statement of Assets and Liabilities.

g. Loan Participation Notes

The Fund invests in loan participation notes (Participations). Participations are loans originally issued to a borrower by one or more financial institutions (the Lender) and subsequently sold to other investors, such as the Fund. Participations typically result in the Fund having a contractual relationship only with the Lender and not with the borrower. The Fund has the right to receive from the Lender any payments of principal, interest and fees which the Lender received from the borrower. The Fund generally has no rights to either enforce compliance by the borrower with the terms of the loan agreement or to any collateral relating to the original loan. As a result, the Fund assumes the credit risk of both the borrower and the Lender that is selling the Participation. The Participations may also involve interest rate risk and liquidity risk, including the potential default or insolvency of the borrower and/or the Lender.

h. Credit-Linked Notes

The Fund purchases credit-linked notes. Credit-linked notes are intended to replicate the economic effects that would apply had the Fund directly purchased the underlying reference asset. The risks of credit-linked notes include the potential default of the underlying reference asset, the movement in the value of the currency of the underlying reference asset relative to the credit-linked note, the potential inability of the Fund to dispose of the credit-linked note in the normal course of business, and the possible inability of the counterparties to fulfill their obligations under the contracts.

i. Securities Sold Short

The Fund is engaged in selling securities short, which obligates the Fund to replace a borrowed security with the same security at current fair value. The Fund incurs a loss if the price of the security increases between the date of the short sale and the date on which the Fund replaces the borrowed

security. The Fund realizes a gain if the price of the security declines between those dates. Gains are limited to the price at which the Fund sold the security short, while losses are potentially unlimited in size.

The Fund is required to establish a margin account with the broker lending the security sold short. While the short sale is outstanding, the broker retains the proceeds of the short sale to the extent necessary to meet margin requirements until the short position is closed out. A deposit must also be maintained with the Fund’s custodian/counterparty broker consisting of cash and/or securities having a value equal to a specified percentage of the value of the securities sold short. The Fund is obligated to pay fees for borrowing the securities sold short and is required to pay the counterparty any dividends and/or interest due on securities sold short. Such dividends and/or interest and any security borrowing fees are recorded as an expense to the Fund.

j. Securities Lending

The Fund participates in an agency based securities lending program to earn additional income. The Fund receives collateral in the form of cash and/or U.S. Government and Agency Securities against the loaned securities in an amount equal to at least 102% of the fair value of the loaned securities. Collateral is maintained over the life of the loan in an amount not less than 100% of the fair value of loaned securities, as determined at the close of Fund business each day; any additional collateral required due to changes in security values is delivered to the Fund on the next business day. Any cash collateral received is deposited into a joint cash account with other funds and is used to invest in a money market fund managed by Franklin Advisers, Inc., an affiliate of the Fund, and/or a joint repurchase agreement. Additionally, the Fund received $8,741,681 in U.S. Government and Agency Securities as collateral. These securities received as collateral are held in segregated accounts with the Fund’s custodian. The Fund cannot repledge or resell these securities received as collateral. As such, the non-cash collateral is excluded from the Consolidated Statement of Assets and Liabilities. The Fund may receive income from the investment of cash collateral, in addition to lending fees and rebates paid by the borrower. Income from securities loaned, net of fees paid to the securities lending agent and/or third party vendor, is reported separately in the Consolidated Statement of Operations. The Fund bears the market risk with respect to any cash collateral investment, securities loaned, and the risk that the agent may default on its obligation to the Fund. If the

franklintempleton.com Semiannual Report 91

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Franklin K2 Alternative Strategies Fund (continued)

1. Organization and Significant Accounting Policies (continued)

j. Securities Lending (continued)

borrower defaults on its obligations to return the securities loaned, the Fund has the right to repurchase the securities in the open market using the collateral received. The securities lending agent has agreed to indemnify the Fund in the event of default by a third party borrower.

k. Investments in K2 Holdings Investment Corp. (K2 Subsidiary)

The Fund invests in certain financial instruments and commodity-linked derivative investments through its investment in the K2 Subsidiary. The K2 Subsidiary is a Cayman Islands exempted company with limited liability, is a wholly-owned subsidiary of the Fund, and is able to invest in certain financial instruments and commodity-linked derivative investments consistent with the investment objective of the Fund. At November 30, 2021, the K2 Subsidiary’s investments, as well as any other assets and liabilities of the K2 Subsidiary, are reflected in the Fund’s Consolidated Statement of Investments and Consolidated Statement of Assets and Liabilities. All intercompany transactions and balances have been eliminated. For tax purposes, the Fund is required to increase its taxable income by its share of the K2 Subsidiary’s income. Net losses incurred by the K2 Subsidiary cannot offset income earned by the Fund and cannot be carried back or forward by the K2 Subsidiary to offset income from prior or future years. At November 30, 2021, the net assets of the K2 Subsidiary were $21,065,227 representing 1.5% of the Fund’s consolidated net assets. The Fund’s investment in the K2 Subsidiary is limited to 25% of consolidated assets.

l. 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.

m. 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 November 30, 2021, the Fund has determined that no tax liability is required in its consolidated financial statements related to uncertain tax positions for any open tax years (or expected to be taken 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.

n. Security Transactions, Investment Income, Expenses and Distributions

Security transactions are accounted for on trade date. Realized gains and losses on security transactions are determined on a specific identification basis. Interest income and estimated expenses are accrued daily. Amortization of premium and accretion of discount on debt securities are included in interest income. 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 and dividends declared on securities sold short are 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. Distributable earnings are determined according to income tax regulations

92 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Franklin K2 Alternative Strategies Fund (continued)

(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.

Common expenses incurred by the Trust are allocated among the Funds based on the ratio of net assets of each Fund to the combined net assets of the Trust or based on the ratio of number of shareholders of each Fund to the combined number of shareholders of the Trust. Fund specific expenses are charged directly to the Fund that incurred the expense.

Realized and unrealized gains and losses and net investment income, excluding class specific expenses, are allocated daily to each class of shares based upon the relative proportion of net assets of each class. Differences in per share distributions by class are generally due to differences in class specific expenses.

o. 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.

p. Guarantees and Indemnifications

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

2. Shares of Beneficial Interest

At November 30, 2021, there were an unlimited number of shares authorized (without par value). Transactions in the Fund’s shares were as follows:

	Six Months Ended November 30, 2021						Year Ended May 31, 2021
	Shares			Amount			Shares			Amount
Class A Shares:
Shares solda		763,648		$	9,604,446			1,951,153		$	23,399,007
Shares issued in reinvestment of distributions		—			—			57,588			702,572
Shares redeemed		(607,919	)		(7,639,653	)		(1,878,747	)		(22,350,579	)
Net increase (decrease)		155,729		$	1,964,793			129,994		$	1,751,000
Class C Shares:
Shares sold		197,230		$	2,405,282			378,698		$	4,426,844
Shares issued in reinvestment of distributions		—			—			20,310			241,483
Shares redeemeda		(388,721	)		(4,741,252	)		(1,086,696	)		(12,579,701	)
Net increase (decrease)		(191,491	)	$	(2,335,970	)		(687,688	)	$	(7,911,374	)
Class R Shares:
Shares sold		25,795		$	323,759			7,188		$	83,786
Shares issued in reinvestment of distributions		—			—			538			6,563
Shares redeemed		(1,940	)		(24,106	)		(19,125	)		(223,542	)
Net increase (decrease)		23,855		$	299,653			(11,399	)	$	(133,193	)

franklintempleton.com Semiannual Report 93

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Franklin K2 Alternative Strategies Fund (continued)

2. Shares of Beneficial Interest (continued)

	Six Months Ended November 30, 2021						Year Ended May 31, 2021
	Shares			Amount			Shares			Amount
Class R6 Shares:
Shares sold		2,393,692		$	30,438,624			1,604,568		$	19,048,050
Shares issued in reinvestment of distributions		—			—			15,991			196,690
Shares redeemed		(354,326	)		(4,493,279	)		(817,737	)		(10,017,572	)
Net increase (decrease)		2,039,366		$	25,945,345			802,822		$	9,227,168
Advisor Class Shares:
Shares sold		14,688,334		$	186,253,218			25,684,121		$	308,883,780
Shares issued in reinvestment of distributions		—			—			466,135			5,719,482
Shares redeemed		(7,688,175	)		(97,316,894	)		(21,325,304	)		(255,114,570	)
Net increase (decrease)		7,000,159		$	88,936,324			4,824,952		$	59,488,692

^aMay include a portion of Class C shares that were automatically converted to Class A.

3. 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 Trust are also officers and/or directors of the following subsidiaries:

Subsidiary	Affiliation
K2/D&S Management Co., L.L.C. (K2 Advisors)	Investment manager
Franklin Templeton Services, LLC (FT Services)	Administrative manager
Franklin Distributors, LLC (Distributors) (formerly Franklin Templeton Distributors, Inc.)	Principal underwriter
Franklin Templeton Investor Services, LLC (Investor Services)	Transfer agent

a. Management Fees

The Fund and K2 Subsidiary pay an investment management fee to K2 Advisors based on the average daily net assets of the Fund and K2 Subsidiary as follows:

Annualized Fee Rate	Net Assets
1.90%	Up to and including $1 billion
1.85%	Over $1 billion, up to and including $1.5 billion
1.80%	Over $1.5 billion, up to and including $3 billion
1.75%	In excess of $3 billion

For the period ended November 30, 2021, the annualized gross effective management fee rate was 1.89% of the Fund’s average daily net assets.

Management fees paid by the Fund are reduced on assets invested in the K2 Subsidiary, in an amount equal to the management fees paid by the K2 Subsidiary.

94 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Franklin K2 Alternative Strategies Fund (continued)

Under each subadvisory agreement, the below entities provide subadvisory services to the Fund or K2 Subsidiary. The subadvisory fees are paid by K2 Advisors and are not an additional expense of the Fund or K2 Subsidiary. Each subadvisor is compensated for managing its respective portion of the average daily net assets of the Fund or K2 Subsidiary.

Subadvisors

Apollo Credit Management LLC

Bardin Hill Arbitrage IC Management LP

Benefit Street Partners L.L.C.*

BlueBay Asset Management, LLP

Chilton Investment Company, LLC

Electron Capital Partners, LLC

Ellington Global Asset Management, LLC

Emso Asset Management Limited

Graham Capital Management, L.P.

Jennison Associates, LLC

Lazard Asset Management, LLC

Loomis Sayles & Company, L.P.

One River Asset Management, LLC

P. Schoenfeld Asset Management L.P.

Portland Hill Asset Management Limited

RV Capital Management Private, Ltd.

Wellington Management Company, LLP

*An affiliate of K2 Advisors.

b. Administrative Fees

Under an agreement with K2 Advisors, FT Services provides administrative services to the Fund and K2 Subsidiary. The fee is paid by K2 Advisors based on the Fund’s and K2 Subsidiary’s average daily net assets, and is not an additional expense of the Fund or K2 Subsidiary.

c. Distribution Fees

The Board has adopted distribution plans for each share class, with the exception of Class R6 and Advisor Class shares, pursuant to Rule 12b-1 under the 1940 Act. Under the Fund’s Class A reimbursement distribution plan, the Fund reimburses Distributors for costs incurred in connection with the servicing, sale and distribution of the Fund’s shares up to the maximum annual plan rate. Under the Class A reimbursement distribution plan, costs exceeding the maximum for the current plan year cannot be reimbursed in subsequent periods. In addition, under the Fund’s Class C and R compensation distribution plans, the Fund pays Distributors for costs incurred in connection with the servicing, sale and distribution of the Fund’s shares up to the maximum annual plan rate for each class. The plan year, for purposes of monitoring compliance with the maximum annual plan rates, is February 1 through January 31.

The maximum annual plan rates, based on the average daily net assets, for each class, are as follows:

Class A	0.30%
Class C	1.00%
Class R	0.50%

The Board has set the current rate at 0.25% per year for Class A shares until further notice and approval by the Board.

franklintempleton.com Semiannual Report 95

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Franklin K2 Alternative Strategies Fund (continued)

3. Transactions with Affiliates (continued)

d. Sales Charges/Underwriting Agreements

Front-end sales charges and contingent deferred sales charges (CDSC) do not represent expenses of the Fund. These charges are deducted from the proceeds of sales of Fund shares prior to investment or from redemption proceeds prior to remittance, as applicable. Distributors has advised the Fund of the following commission transactions related to the sales and redemptions of the Fund’s shares for the period:

Sales charges retained net of commissions paid to unaffiliated brokers/dealers	$	7,066
CDSC retained	$	692

e. Transfer Agent Fees

Each class of shares pays transfer agent fees to Investor Services for its performance of shareholder servicing obligations. The fees are based on an annualized asset based fee of 0.02% plus a transaction based fee. In addition, each class reimburses Investor Services for out of pocket expenses incurred and, except for Class R6, reimburses shareholder servicing fees paid to third parties. These fees are allocated daily based upon their relative proportion of such classes’ aggregate net assets. Class R6 pays Investor Services transfer agent fees specific to that class.

For the period ended November 30, 2021, the Fund paid transfer agent fees of $637,828 of which $221,658 was retained by Investor Services.

f. Investments in Affiliated Management Investment Companies

The Fund invests in one or more affiliated management investment companies. As defined in the 1940 Act, an investment is deemed to be a “Controlled Affiliate” of a fund when a fund owns, either directly or indirectly, 25% or more of the affiliated fund’s outstanding shares or has the power to exercise control over management or policies of such fund. The Fund does not invest for purposes of 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 Consolidated Statement of Operations, in an amount not to exceed the management and administrative fees paid directly or indirectly by each affiliate. During the period ended November 30, 2021, the Fund held investments in affiliated management investment companies as follows:

	Value at Beginning of Period		Purchases		Sales			Realized Gain (Loss)		Net Change in Unrealized Appreciation (Depreciation)		Value at End of Period		Number of Shares Held at End of Period		Income from Securities Loaned
Non-Controlled Affiliates
Institutional Fiduciary Trust Money Market Portfolio, 0.01%	$	3,305,000	$	32,389,000	$	(29,942,000	)	$	—	$	—	$	5,752,000		5,752,000	$	189

g. Waiver and Expense Reimbursements

K2 Advisors has contractually agreed in advance to waive or limit its fees and to assume as their own expense certain expenses otherwise payable by the Fund so that the operating expenses (excluding interest expense, distribution fees, acquired fund fees and expenses, expenses related to securities sold short and certain non-routine expenses or costs, including those relating to litigation, indemnification, reorganizations and liquidations) for each class of the Fund do not exceed 1.95% based on the average net assets of each class until September 30, 2022. Total expenses waived or paid are not subject to recapture subsequent to the Fund’s fiscal year end.

Investor Services has contractually agreed in advance to waive or limit its fees so that the Class R6 transfer agent fees do not exceed 0.03% based on the average net assets of the class until September 30, 2022.

96 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Franklin K2 Alternative Strategies Fund (continued)

4. Expense Offset Arrangement

The Fund has entered into an arrangement with its custodian whereby credits realized as a result of uninvested cash balances are used to reduce a portion of the Fund’s custodian expenses. During the period ended November 30, 2021, the custodian fees were reduced as noted in the Consolidated Statement of Operations.

5. Income Taxes

At November 30, 2021, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:

Cost of investments	$	965,240,646
Unrealized appreciation	$	182,230,469
Unrealized depreciation		(58,839,956	)
Net unrealized appreciation (depreciation)	$	123,390,513

Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatments of foreign currency transactions, wash sales and investments in the K2 Subsidiary.

6. Investment Transactions

Purchases and sales of investments and securities sold short (excluding short term securities) for the period ended November 30, 2021, aggregated $1,065,253,084 and $985,313,061, respectively.

At November 30, 2021, in connection with securities lending transactions, the Fund loaned equity investments and corporate bonds and notes and received $7,191,225 of cash collateral. The gross amounts of recognized liability for such transactions is included in payable upon return of securities loaned in the Consolidated Statement of Assets and Liabilities. The agreements can be terminated at any time.

The Fund sold certain long positions held in the portfolio and simultaneously entered into total return swaps on the positions, retaining substantially all of the exposure to the economic return and the related risks on the long positions. At November 30, 2021, the transfers of financial assets accounted for as sales were as follows:

	At Original Transactions Dates				At Period Ended November 30, 2021
	Cost Basis of Positions Sold		Gross Cash Received for Positions Sold		Fair Value of Transferred Assetsa		Gross Derivative Assets Recordedb		Gross Derivative Liabilities Recordedb
Sales and total return swaps	$	841,774	$	1,148,234	$	829,709	$	830,152	$	(1,148,677	)

^a$(318,525) of fair value of transferred assets are included as unrealized depreciation on OTC swap contracts in the Consolidated Statement of Assets and Liabilities.

^bBalances are presented on a gross basis, based on each leg of the swap contract, before the application of counterparty and cash collateral offsetting.

See Notes 1(e) and 12 regarding derivative financial instruments and other derivative information, respectively.

7. Credit Risk and Defaulted Securities

At November 30, 2021, the Fund had 5.4% of its portfolio invested in high yield, senior secured floating rate loans, or other securities rated below investment grade as determined by Nationally Recognized Statistical Credit Ratings Organizations and/or internally, by investment management and unrated securities. 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.

franklintempleton.com Semiannual Report 97

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Franklin K2 Alternative Strategies Fund (continued)

7. Credit Risk and Defaulted Securities (continued)

The Fund may purchase the pre-default or defaulted debt of distressed companies. Distressed companies are financially troubled and could be or are already involved in financial restructuring or bankruptcy. Risks associated with purchasing these securities include the possibility that the bankruptcy or other restructuring process takes longer than expected, or that distributions in restructuring are less than anticipated, either or both of which may result in unfavorable consequences to the Fund. If it becomes probable that the income on debt securities, including those of distressed companies, will not be collected, the Fund discontinues accruing income and recognizes an adjustment for uncollectible interest.

At November 30, 2021, the aggregate long value of distressed company securities for which interest recognition has been discontinued was $9,856,716, representing 0.7% of the Fund’s net assets. For information as to specific securities, see the accompanying Consolidated Statement of Investments.

8. Concentration of Risk

Investments in issuers domiciled or with significant operations in developing or emerging market countries may be subject to higher risks than investments in developed countries. These risks include fluctuating currency values, underdeveloped legal or business systems, and changing local and regional economic, political and social conditions, which may result in greater market volatility. In addition, certain foreign securities may not be as liquid as U.S. securities. Currencies of developing or emerging market countries may be subject to significantly greater risks than currencies of developed countries, including the potential inability to repatriate those currencies into U.S. dollars.

At November 30, 2021, the Fund had less than 0.1% of its net assets denominated in Argentine Pesos. Argentina has restricted currency repatriation since September 2019, and had restructured certain issues of its debt. Political and economic conditions in Argentina could continue to affect the value of the Fund’s holdings.

9. Novel Coronavirus Pandemic

The global outbreak of the novel coronavirus disease, known as COVID-19, has caused adverse effects on many companies, sectors, nations, regions and the markets in general, and may continue for an unpredictable duration. The effects of this pandemic may materially impact the value and performance of the Fund, its ability to buy and sell fund investments at appropriate valuations and its ability to achieve its investment objectives.

10. 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.

At November 30, 2021, investments in restricted securities, excluding securities exempt from registration under the 1933 Act, were as follows:

Principal Amount	Issuer	Acquisition Date		Cost		Value
54,708	Riverbed Technology Inc., senior note, 6.00%, 1/13/22		10/13/21	$	54,451	$	54,161
Total Restricted Securities (Value is less than 0.1% of Net Assets)				$	54,451	$	54,161

98 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Franklin K2 Alternative Strategies Fund (continued)

11. Unfunded Loan Commitments

The Fund enters into certain credit agreements, all or a portion of which may be unfunded. The Fund is obligated to fund these loan commitments at the borrowers’ discretion. Unfunded loan commitments and funded portions of credit agreements are marked to market daily and any unrealized appreciation or depreciation is included in the Consolidated Statement of Assets and Liabilities and the Consolidated Statement of Operations. Funded portions of credit agreements are presented in the Consolidated Statement of Investments.

At November 30, 2021, unfunded commitments were as follows:

Borrower	Unfunded Commitment
Intelsat Jackson Holdings SA, Term Loan DIP	$	28,931
Upfield Group BV, Term Loan RC		726,041
	$	754,972

12. Other Derivative Information

At November 30, 2021, the investments in derivative contracts are reflected in the Consolidated Statement of Assets and Liabilities as follows:

	Asset Derivatives				Liability Derivatives
Derivative Contracts Not Accounted for as Hedging Instruments	Consolidated Statement of Assets and Liabilities Location	Fair Value			Consolidated Statement of Assets and Liabilities Location	Fair Value
Interest rate contracts	Variation margin on futures contracts	$	274,632	a	Variation margin on futures contracts	$	1,040,560	a
	Variation margin on centrally cleared swap contracts		165,556	a	Variation margin on centrally cleared swap contracts		487,521	a
	Unrealized appreciation on OTC swap contracts		61,836		Unrealized depreciation on OTC swap contracts		32,110
Foreign exchange contracts	Investments in securities, at value		200	b
	Variation margin on futures contracts		20,168	a
	Unrealized appreciation on OTC forward exchange contracts		6,573,274		Unrealized depreciation on OTC forward exchange contracts		4,677,335
Credit contracts	Variation margin on centrally cleared swap contracts		250,500	a	Variation margin on centrally cleared swap contracts		131,053	a
	OTC swap contracts (upfront payments)		894,273		OTC swap contracts (upfront receipts)		285,884
	Unrealized appreciation on OTC swap contracts		174,309		Unrealized depreciation on OTC swap contracts		290,499
Equity contracts	Investments in securities, at value		1,766,117	b	Options written, at value		434,251
	Variation margin on futures contracts		1,763,399	a	Variation margin on futures contracts		627,141	a
	Unrealized appreciation on OTC swap contracts		5,661,979		Unrealized depreciation on OTC swap contracts		5,324,384
Commodity contracts	Variation margin on futures contracts		285,298	a	Variation margin on futures contracts		1,224,382	a
Totals		$	17,891,541			$	14,555,120

^aThis amount reflects the cumulative appreciation (depreciation) of futures contracts and centrally cleared swap contracts as reported in the Consolidated Statement of Investments. Only the variation margin receivable/payable at period end is separately reported within the Consolidated Statement of Assets and Liabilities. Prior variation margin movements were recorded to cash upon receipt or payment.

^bPurchased option contracts are included in investments in securities, at value in the Consolidated Statement of Assets and Liabilities.

franklintempleton.com Semiannual Report 99

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Franklin K2 Alternative Strategies Fund (continued)

12. Other Derivative Information (continued)

For the period ended November 30, 2021, the effect of derivative contracts in the Consolidated Statement of Operations was as follows:

Derivative Contracts Not Accounted for as Hedging Instruments	Consolidated Statement of Operations Location	Net Realized Gain (Loss) for the Period			Consolidated Statement of Operations Location	Net Change in Unrealized Appreciation (Depreciation) for the Period
	Net realized gain (loss) from:				Net change in unrealized appreciation (depreciation) on:
Interest rate contracts	Futures contracts	$	(4,023,560	)	Futures contracts	$	(629,287	)
	Swap contracts		(309,398	)	Swap contracts		(241,833	)
Foreign exchange contracts	Forward exchange contracts		2,940,314		Investments		(11,825	)a
	Futures contracts		(16,534	)	Forward exchange contracts		3,871,678
					Futures contracts		20,098
Credit contracts	Swap contracts		(769,881	)	Swap contracts		597,601
Equity contracts	Investments		(3,694,424	)a	Investments		130,112	a
	Written options		698,852		Written options		120,574
	Futures contracts		(6,558,736	)	Futures contracts		3,413,753
	Swap contracts		110,804		Swap contracts		(3,662,048	)
Commodity contracts	Futures contracts		2,544,403		Futures contracts		(2,261,033	)
Totals		$	(9,078,160	)		$	1,347,790

^aPurchased option contracts are included in net realized gain (loss) from investments and net change in unrealized appreciation (depreciation) on investments in the Consolidated Statement of Operations.

For the period ended November 30, 2021, the average month end notional amount of options, futures contracts and swap contracts represented 1,314,631 shares/units, $425,949,854 and $282,944,327, respectively. The average month end contract value of forward exchange contracts was $390,275,085.

At November 30, 2021, OTC derivative assets and liabilities are as follows:

	Gross Amounts of Assets and Liabilities Presented in the Consolidated Statement of Assets and Liabilities
	Assetsa		Liabilitiesa
Derivatives
Forward Exchange Contracts	$	6,573,274	$	4,677,335
Options Purchased		11,360		—
Swap Contracts		6,792,397		5,932,877
Total	$	13,377,031	$	10,610,212

^aAbsent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Consolidated Statement of Assets and Liabilities.

100 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Franklin K2 Alternative Strategies Fund (continued)

At November 30, 2021, OTC derivative assets, which may be offset against OTC derivative liabilities and collateral received from the counterparty, are as follows:

			Amounts Not Offset in the Consolidated Statement of Assets and Liabilities
	Gross Amounts of Assets Presented in the Consolidated Statement of Assets and Liabilities		Financial Instruments Available for Offset			Financial Instruments Collateral Receiveda			Cash Collateral Receiveda		Net Amount (Not less than zero)
Counterparty
BNPP	$	81,300	$	(1,102	)	$	—		$	—	$	80,198
BNYM		581,952		(332,833	)		(249,119	)		—		—
BOFA		35,764		(35,764	)		—			—		—
BZWS		1,522,374		(744,521	)		—			—		777,853
CITI		49,117		(35,470	)		—			—		13,647
DBAB		85,196		—			—			—		85,196
FBCO		320		(320	)		—			—		—
GSCO		131,753		(131,753	)		—			—		—
HSBC		18,363		(2,962	)		—			—		15,401
JPHQ		1,989,174		(1,422,573	)		(496,496	)		—		70,105
JPHQb		1,153,708		—			—			—		1,153,708
MSCO		946,470		(946,470	)		—			—		—
MSCOb		1,215,128		—			—			—		1,215,128
MSCOc		2,032,148		(1,532,667	)		—			—		499,481
MSCS		3,534,264		(1,822,906	)		—			—		1,711,358
Total	$	13,377,031	$	(7,009,341	)	$	(745,615	)	$	—	$	5,622,075

At November 30, 2021, OTC derivative liabilities, which may be offset against OTC derivative assets and collateral pledged to the counterparty, are as follows:

			Amounts Not Offset in the Consolidated Statement of Assets and Liabilities
	Gross Amounts of Liabilities Presented in the Consolidated Statement of Assets and Liabilities		Financial Instruments Available for Offset			Financial Instruments Collateral Pledged		Cash Collateral Pledgeda			Net Amount (Not less than zero)
Counterparty
BNPP	$	1,102	$	(1,102	)	$	—	$	—		$	—
BNYM		332,833		(332,833	)		—		—			—
BOFA		48,324		(35,764	)		—		(12,560	)		—
BZWS		744,521		(744,521	)		—		—			—
CITI		35,470		(35,470	)		—		—			—
DBAB		—		—			—		—			—
FBCO		1,038		(320	)		—		—			718
GSCO		178,061		(131,753	)		—		(46,308	)		—
HSBC		2,962		(2,962	)		—		—			—
JPHQ		1,422,573		(1,422,573	)		—		—			—
JPHQb		1,055,143		—			—		—			1,055,143
MSCO		1,674,086		(946,470	)		—		—			727,616
MSCOb		1,758,526		—			—		—			1,758,526
MSCOc		1,532,667		(1,532,667	)		—		—			—
MSCS		1,822,906		(1,822,906	)		—		—			—
Total	$	10,610,212	$	(7,009,341	)	$	—	$	(58,868	)	$	3,542,003

franklintempleton.com Semiannual Report 101

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Franklin K2 Alternative Strategies Fund (continued)

12. Other Derivative Information (continued)

^aIn some instances, the collateral amounts disclosed in the table above were adjusted due to the requirement to limit the collateral amounts to avoid the effect of over collateralization. Actual collateral received and/or pledged may be more than the amounts disclosed herein.

^bRepresents derivatives not subject to an ISDA master agreement.

^cRepresents derivatives owned by the K2 Holdings Investment Corp., a wholly-owned subsidiary of the Fund. See Note 1(k).

See Notes 1(e) and 6 regarding derivative financial instruments and investment transactions, respectively.

See Abbreviations on page 104.

13. Credit Facility

The Fund, together with other U.S. registered and foreign investment funds (collectively, Borrowers), managed by Franklin Templeton, are borrowers in a joint syndicated senior unsecured credit facility totaling $2.675 billion (Global Credit Facility) which matures on February 4, 2022. This Global Credit Facility provides a source of funds to the Borrowers for temporary and emergency purposes, including the ability to meet future unanticipated or unusually large redemption requests.

Under the terms of the Global Credit Facility, the Fund shall, in addition to interest charged on any borrowings made by the Fund and other costs incurred by the Fund, pay its share of fees and expenses incurred in connection with the implementation and maintenance of the Global Credit Facility, based upon its relative share of the aggregate net assets of all of the Borrowers, including an annual commitment fee of 0.15% based upon the unused portion of the Global Credit Facility. These fees are reflected in other expenses in the Consolidated Statement of Operations. During the period ended November 30, 2021, the Fund did not use the Global Credit Facility.

14. 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.

A summary of inputs used as of November 30, 2021, 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 Investmentsb	$	527,809,173	$	69,721,202	$	2,495,819		$	600,026,194
Convertible Bonds		—		176,655,406		—			176,655,406
Corporate Bonds and Notes		—		155,315,533		23,978			155,339,511
Corporate Bonds and Notes in Reorganization		—		2,446,158		—	c		2,446,158
Senior Floating Rate Interests		—		6,460,192		—			6,460,192
Senior Floating Rate Interests in Reorganization		—		109,959		—			109,959
Credit-Linked Notes		—		3,474,681		2,501,698			5,976,379
Foreign Government and Agency Securities		—		59,802,009		—			59,802,009

102 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Franklin K2 Alternative Strategies Fund (continued)

	Level 1		Level 2			Level 3		Total
Foreign Government and Agency Securities in Reorganization	$	—	$	167,749		$	—	$	167,749
U.S. Government and Agency Securities		—		1,792,921			—		1,792,921
Asset-Backed Securities and Commercial Mortgage-Backed Securities		—		94,159,279			360,686		94,519,965
Municipal Bonds in Reorganization		—		7,132,850			—		7,132,850
Options Purchased		1,766,117		200			—		1,766,317
Short Term Investments		219,615,742		7,244,225			—		226,859,967
Total Investments in Securities	$	749,191,032	$	584,482,364	d	$	5,382,181	$	1,339,055,577
Other Financial Instruments:
Futures Contracts	$	2,343,497	$	—		$	—	$	2,343,497
Forward Exchange Contracts		—		6,573,274			—		6,573,274
Swap Contracts		—		6,299,058			15,122		6,314,180
Total Other Financial Instruments	$	2,343,497	$	12,872,332		$	15,122	$	15,230,951
Liabilities:
Other Financial Instruments:
Options Written	$	434,251	$	—		$	—	$	434,251
Securities Sold Shorta		234,138,372		16,081,964	e		—		250,220,336
Futures Contracts		2,892,083		—			—		2,892,083
Forward Exchange Contracts		—		4,677,335			—		4,677,335
Swap Contracts		—		6,265,567			—		6,265,567
Unfunded Loan Commitments		—		22,745			—		22,745
Total Other Financial Instruments	$	237,464,706	$	27,047,611		$	—	$	264,512,317

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

^bIncludes common, preferred and convertible preferred stocks and exchange traded funds as well as other equity interests.

^cIncludes securities determined to have no value at November 30, 2021.

^dIncludes foreign securities valued at $69,471,883, which were categorized as Level 2 as a result of the application of market level fair value procedures. See the Financial Instrument Valuation note for more information.

^eIncludes foreign securities valued at $3,856,176, which were categorized as Level 2 as a result of the application of market level fair value procedures. See the Financial Instrument Valuation note for more information.

A reconciliation in which Level 3 inputs are used in determining fair value is presented when there are significant Level 3 assets and/or liabilities at the beginning and/or end of the period.

15. New Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (Topic 848)—Facilitation of the Effects of Reference Rate Reform on Financial Reporting. In January 2021, the FASB issued ASU No. 2021-01, with further amendments to Topic 848. The amendments in the ASUs provide optional temporary accounting recognition and financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of the LIBOR and other interbank-offered based reference rates as of the end of 2021 for certain LIBOR settings and 2023 for the remainder. The ASUs are effective for certain reference rate-related contract modifications that occur during the period March 12, 2020 through December 31, 2022. Management has reviewed the requirements and believes the adoption of these ASUs will not have a material impact on the financial statements.

16. Subsequent Events

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

franklintempleton.com Semiannual Report 103

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Franklin K2 Alternative Strategies Fund (continued)

Abbreviations

Counterparty		Currency		Selected Portfolio
BNPP	BNP Paribas	ARS	Argentine Peso	ADR	American Depositary Receipt
BNYM	The Bank of New York Mellon Corp.	AUD	Australian Dollar	ARM	Adjustable Rate Mortgage
BOFA	Bank of America Corp.	BRL	Brazilian Real	BADLAR	Argentina Deposit Rates BADLAR Private Banks ARS
BZWS	Barclays Bank PLC	CAD	Canadian Dollar
CITI	Citigroup, Inc.	CHF	Swiss Franc	BBSW	Bank Bill Swap Rate
DBAB	Deutsche Bank, AG	COP	Colombian Peso	BRLCDI	Brazil Cetip Di Interbank Deposit Rate
FBCO	Credit Suisse Group AG	CZK	Czech Koruna	CAC	Cotation Assistee en Continu
GSCO	The Goldman Sachs Group, Inc.	EGP	Egyptian Pound	CLO	Collateralized Loan Obligation
HSBC	HSBC Bank USA, N.A.	EUR	Euro	COPIBR	Colombian Peso Interbank Offered Rate
JPHQ	JP Morgan Chase & Co.	GBP	British Pound	DAX	Deutscher Aktienindex
MSCO	Morgan Stanley & Co. LLC	HKD	Hong Kong Dollar	DIP	Debtor-In-Possession
MSCS	Morgan Stanley Capital Services LLC	HUF	Hungarian Forint	DJIA	Dow Jones Industrial Average
		INR	Indian Rupee	EIBOR	Emirates Interbank Offered Rate
		JPY	Japanese Yen	EONIA	Euro OverNight Index Average
		KRW	South Korean Won	ETF	Exchange Traded Fund
		MXN	Mexican Peso	EURIBOR	Euro Interbank Offered Rate
		NOK	Norwegian Krone	FEDEF	Federal Funds Effective Rate
		NZD	New Zealand Dollar	FHLMC	Federal Home Loan Mortgage Corp.
		PEN	Peruvian Nuevo Sol	FNMA	Federal National Mortgage Association
		PLN	Polish Zloty	FRN	Floating Rate Note
		RUB	Russian Ruble	FTSE	Financial Times Stock Exchange
		SEK	Swedish Krona	HONIX	Hong Kong Overnight Index Rate
		SGD	Singapore Dollar	JIBAR	Johannesburg Interbank Agreed Rate
		USD	United States Dollar	KDR	Korean Depositary Receipt
		ZAR	South African Rand	LIBOR	London InterBank Offered Rate
				MIB	Milano Italia Borsa
Index				MSCI	Morgan Stanley Capital International
				MTN	Medium Term Note
CDX.NA.HY	CDX North America High Yield Index			MUTSCALM	Japan Unsecured Overnight Call Rate
				PIK	Payment In-Kind
				PRIBOR	Prague Interbank Offered Rate
				RBACR	Reserve Bank of Australia Cash Rate
				RC	Revolving Loan Commitment
				REIT	Real Estate Investment Trust
				SARON	Swiss Average Rate Overnight
				SOFR	Secured Overnight Financing Rate
				SONIA	Sterling Overnight Index Average
				SORA	Singapore Overnight Rate Average
				SPAC	Special Purpose Acquisition Company
				SPDR	Standard & Poor’s Depositary Receipt
				STIBOR	Stockholm Interbank Offered Rate
				TOPIX	Tokyo Price Index
				WIBOR	Warsaw Interbank Offered Rate

104 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

Shareholder Information

Board Approval of Sub-Advisory Agreement

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

Franklin K2 Alternative Strategies Fund

(Fund)

The Board of Trustees (Board) of Franklin Alternative Strategies Funds (the Trust), including a majority of trustees that are not “interested persons” as such term is defined in section 2(a)(19) of the Investment Company Act of 1940 (hereinafter referred to as “independent trustees”), at a meeting held on July 13, 2021, unanimously approved the sub-advisory agreement (the “New Sub-Advisory Agreement”) with Benefit Street Partners, L.L.C. (“Sub-Advisor”) with respect to the Fund.

In approving the New Sub-Advisory Agreement, the Board, including the independent trustees, determined that fees to be paid under the New Sub-Advisory Agreement were fair and reasonable and that approval of the New Sub-Advisory Agreement was in the best interests of the Fund and its shareholders. As part of the approval process, the trustees considered the process undertaken and information provided during their consideration and approval on May 19, 2021 of the investment management agreement between K2/D&S Management Co., L.L.C., the Fund’s investment manager (“K2 Advisors”), and the Trust, on behalf of the Fund, and the sub-advisory agreements between K2 Advisors and the Fund’s existing sub-advisors.

In making the foregoing approvals, the independent trustees received assistance and advice from their independent counsel and, in addition to the materials provided at prior meetings, considered various materials related to the New Sub-Advisory Agreement including: (1) a copy of the proposed form of New Sub-Advisory Agreement for the Sub-Advisor; (2) information describing the nature, quality and extent of services that the Sub-Advisor would provide to the Fund, and the proposed sub-advisory fees payable to the Sub-Adviser; (3) a report from K2 Advisors on the diligence conducted on the Sub-Advisor and the reasons for recommending the Sub-Advisor as a sub-advisor for the Fund, including, but not limited to, the Sub-Advisor’s background, experience, personnel, operations, policies, procedures and compliance functions and plans for the integration of such operations, policies, procedures and compliance functions with those of K2 Advisors; and (4) a report from the Fund’s Chief Compliance Officer regarding the Sub-Advisor’s compliance program and capabilities, including the Sub-Advisor’s policies and procedures in place to address potential conflicts

of interest, and the diligence undertaken by the Fund’s Chief Compliance Officer with respect thereto. The Board noted that the terms of the New Sub-Advisory Agreement were substantially similar to the terms of the sub-advisory agreements with the Fund’s existing sub-advisors and identical to the terms of the Sub-Advisor’s sub-advisory agreement with the Franklin K2 Long Short Credit Fund.

The Board’s consideration of whether to approve the New Sub-Advisory Agreement on behalf of the Fund took into account several factors including, but not limited to, the following: (1) the nature and quality of the services to be provided by the Sub-Advisor to the Fund under the New Sub-Advisory Agreement; (2) the Sub-Advisor’s experience as a manager of other accounts, including as a sub-advisor to the Franklin K2 Long Short Credit Fund; (3) the Sub-Advisor’s strength and reputation within the industry; (4) the fairness of the compensation under the New Sub-Advisory Agreement; (5) the personnel, operations, financial condition, and investment management capabilities, methodologies and resources of the Sub-Advisor; (6) profitability matters; (7) reports from K2 Advisors on the diligence conducted on the Sub-Advisor and the reasons for recommending the Sub-Advisor as a sub-advisor for the Fund, including, but not limited to, the Sub-Advisor’s background, experience, personnel, operations, policies, procedures and compliance functions and plans for the integration of such operations, policies, procedures and compliance functions with those of K2 Advisors; and (8) a report from the Trust’s Chief Compliance Officer regarding the Sub-Advisor’s compliance program and capabilities, including the Sub-Advisor’s policies and procedures in place to address potential conflicts of interest, and the diligence undertaken by the Trust’s Chief Compliance Officer with respect thereto. Particular attention was given to the due diligence and risk management procedures of K2 Advisors with respect to selecting and overseeing sub-advisors of the Fund, as well as the Sub-Advisor’s risk management program and to derivatives and other complex instruments that are expected to be held by the Fund and how such instruments are expected to be used to pursue the Fund’s investment goal.

The following discussion relates to certain primary factors relevant to the Board’s decision to approve the New Sub-Advisory Agreement. This discussion of the information and factors considered by the Board (including the information and factors discussed above) is not intended to be

franklintempleton.com Semiannual Report 105

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

SHAREHOLDER INFORMATION

exhaustive, but rather summarizes certain factors considered by the Board. In view of the wide variety of factors considered, the Board did not, unless otherwise noted, find it practicable to quantify or otherwise assign relative weights to the following factors. In addition, individual trustees may have assigned different weights to various factors.

NATURE, EXTENT AND QUALITY OF SERVICES. The trustees reviewed the nature, extent and quality of the services to be provided by the Sub-Advisor. In this regard, they reviewed the Fund’s investment goal and the Sub-Advisor’s proposed investment strategy, and the Sub-Advisor’s ability to implement such investment goal and/or investment strategy, including, but not limited to, the Sub-Advisor’s trading practices and investment decision processes.

With respect to the sub-advisory services to be provided by the Sub-Advisor, the Board noted the responsibilities that the Sub-Advisor would have with respect to the Fund’s assets to be allocated to it by K2-Advisors (the “Sub-Advised Portion”), including, among others, implementing the investment strategies with respect to the Sub-Advised Portion and ensuring compliance with the investment strategies, policies, and limitations of the Sub-Advised Portion. The trustees considered the successful performance of the Sub-Advisor in managing other investment products with investment strategies similar to the investment strategies of its Sub-Advised Portion, including the performance of the Sub-Advisor as a sub-advisor to the Franklin K2 Long Short Credit Fund.

The trustees reviewed the portfolio management teams at the Sub-Advisor that would be responsible for managing the Sub-Advised Portion, including the team’s performance, staffing, skills and compensation program. The trustees considered various other products, portfolios and entities that are advised by the Sub-Advisor, their relative fees and reasons for differences with respect thereto and any potential conflicts. The Board also considered a report from the Trust’s Chief Compliance Officer regarding the Sub-Advisor’s compliance program as such policies relate to the operations of the Fund. The Board considered the selection and due diligence process employed by K2 Advisors in proposing the Sub-Advisor as a sub-advisor to the Fund, including the due diligence undertaken with respect to the Sub-Advisor’s compliance capabilities, and efforts to integrate the Sub-Advisor’s operations, policies, procedures and compliance functions with those of K2 Advisors.

Based on their review, the trustees were satisfied with the nature and quality of the overall services to be provided by the Sub-Advisor to the Fund and its shareholders and were

confident in the abilities of the Sub-Advisor to implement its proposed investment strategies, and to provide quality services to the Fund and its shareholders.

INVESTMENT PERFORMANCE. The Board noted that, as the Sub-Advisor had not provided any services to the Fund, there was no investment performance of the Sub-Advisor with respect to the Fund. The Board considered the investment performance of the Sub-Advisor in managing other investment products with similar investment strategies to the investment strategies of the Sub-Advised Portion, including the performance of the Sub-Advisor as a sub-advisor to the Franklin K2 Long Short Credit Fund. The Board also considered the performance benchmarks for the Fund and how such benchmarks would be utilized to measure the performance of the Sub-Advisor in managing the Sub-Advised Portion.

COMPARATIVE EXPENSES AND PROFITABILITY. The Board considered the cost of the services to be provided by the Sub-Advisor. The Board also noted that it could not evaluate the Sub-Advisor’s profitability with respect to the Fund since no assets had yet been allocated to the Sub-Advisor.

The Board noted that the sub-advisory fees would be paid by K2 Advisors to the Sub-Advisor and would not be additional fees to be borne by the Fund. The Board also noted that the sub-advisory fees to be paid by K2 Advisors to the Sub-Advisor were the product of negotiations between K2 Advisors and the Sub-Advisor and the Board considered the allocation of the investment management fee charged to the Fund between K2 Advisors and the Sub-Advisor in light of the nature, extent and quality of the investment management services expected to be provided by K2 Advisors and the Sub-Advisor. The trustees considered various other products, portfolios and entities that are advised by the Sub-Advisor and the allocation of assets and expenses among and within them, as well as their relative fees and reasons for differences with respect thereto and any potential conflicts. The Board considered the extent to which the Sub-Advisor may derive ancillary benefits from the Fund’s operations.

With respect to the impact on K2 Advisors’ and its affiliates’ profitability as a result of hiring the Sub-Advisor as a sub-advisor to the Fund, the Board considered the following: (1) the fee waiver and expense limitation arrangements in effect, the amount of Fund expenses that were absorbed since the inception of the Fund by K2 Advisors through such arrangements, and the expected impact of the engagement of the Sub-Advisor on the amount of Fund expenses being

106 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

SHAREHOLDER INFORMATION

waived by K2 Advisors (2) the level of sub-advisory fees to be paid to the Sub-Advisor, and (3) whether there is a conflict of interest from which K2 Advisors or the Sub-Advisor derives an inappropriate advantage.

Based upon its consideration of all these factors, the Board determined that the sub-advisory fee structure for the Sub-Advisor was fair and reasonable. In doing so, the Board, including the Independent Trustees, found that the appointment of the Sub-Advisor is in the best interests of the Fund and its shareholders, and does not involve a conflict of interest from which K2 Advisors or the Sub-Advisor derives an inappropriate advantage.

ECONOMIES OF SCALE. The Board considered economies of scale that may be realized by the Sub-Advisor as the Fund grows larger and the extent to which such economies of scale may be shared with Fund shareholders, as for example, in the level of the sub-advisory fees charged, in the quality and efficiency of services rendered and in increased capital commitments benefiting the Fund directly or indirectly. The Board concluded that economies of scale were deemed not to be a significant factor at that time in light of, among other matters, the fee waiver and expense limitation arrangement in effect.

CONCLUSION. After consideration of the foregoing factors, and such other matters as were deemed relevant, and with no single factor being determinative to their decision, the trustees—including a majority of the independent trustees—with the assistance of independent counsel approved the New Sub-Advisory Agreement, including the fees payable thereunder, with the Sub-Advisor for the Fund.

Proxy Voting Policies and Procedures

The Fund’s investment manager has established Proxy Voting Policies and Procedures (Policies) that the Fund uses to determine how to vote proxies relating to portfolio securities. Shareholders may view the Fund’s complete Policies online at franklintempleton.com. Alternatively, shareholders may request copies of the Policies free of charge by calling the Proxy Group collect at (954) 527-7678 or by sending a written request to: Franklin Templeton Companies, LLC, 300 S.E. 2nd Street, Fort Lauderdale, FL 33301, Attention: Proxy Group. Copies of the Fund’s proxy voting records are also made available online at franklintempleton.com and posted on the U.S. Securities and Exchange Commission’s website at sec.gov and reflect the most recent 12-month period ended June 30.

Quarterly Consolidated Statement of Investments

The Trust, on behalf of the Fund, files a complete 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.

Householding of Reports and Prospectuses

You will receive, or receive notice of the availability of, the Fund’s financial reports every six months. In addition, you will receive an annual updated summary prospectus (detail prospectus available upon request). To reduce Fund expenses, we try to identify related shareholders in a household and send only one copy of the financial reports (to the extent received by mail) and summary prospectus. This process, called “householding,” will continue indefinitely unless you instruct us otherwise. If you prefer not to have these documents householded, please call us at (800) 632-2301. At any time you may view current prospectuses/summary prospectuses and financial reports on our website. If you choose, you may receive these documents through electronic delivery.

franklintempleton.com Semiannual Report 107

Authorized for distribution only when accompanied or preceded by a summary prospectus and/or prospectus. Investors should carefully consider a fund’s investment goals, risks, charges and expenses before investing. A prospectus contains this and other information; please read it carefully before investing.

To help ensure we provide you with quality service, all calls to and from our service areas are monitored and/or recorded.

	Semiannual Report and Shareholder Letter Franklin K2 Alternative Strategies Fund
	Investment Manager	Distributor	Shareholder Services
	K2/D&S Management Co., L.L.C.	Franklin Distributors, LLC (800) DIAL BEN®/342-5236 franklintempleton.com	(800) 632-2301
© 2022 Franklin Templeton Investments. All rights reserved.			068 S 01/22

SEMIANNUAL REPORT AND SHAREHOLDER LETTER

FRANKLIN K2 LONG SHORT CREDIT FUND

A Series of Franklin Alternative Strategies Funds

November 30, 2021

Sign up for electronic delivery at franklintempleton.com/edelivery

SHAREHOLDER LETTER

Dear Fellow Shareholder:

During the six months ended November 30, 2021, the global economy benefited from continued monetary and fiscal stimulus measures, improved global trade, easing COVID-19 pandemic restrictions and the progress of vaccination programs. During parts of the period, geopolitical tensions, the Chinese government’s regulatory changes, surges of COVID-19 cases in certain regions and the emergence of the Omicron variant pressured global stock and bond prices. Conversely, investor sentiment was boosted by economic growth in the U.S. and China and accommodative monetary policies by some central banks, including the U.S. Federal Reserve and the European Central Bank.

In this environment, global developed market stocks, as measured by the MSCI World Index (USD), posted a +5.08% total return for the period.¹ In contrast, global emerging market stocks, as measured by the MSCI Emerging Markets Index (USD), posted a -10.65% total return, while global government bonds, as measured by the FTSE World Government Bond Index (USD), posted a -2.76% total return.¹

We are committed to our long-term perspective and disciplined investment approach as we continue to conduct a rigorous analysis of Fund subadvisors and markets with a strong emphasis on investment risk management.

We believe active, professional investment management serves investors well. We also recognize the important role of financial professionals in today’s markets and encourage investors to continue to seek their advice. Amid changing

markets and economic conditions, we are confident investors with a well-diversified portfolio and a patient, long-term outlook should be well-positioned for the years ahead.

On the following pages, the Fund’s portfolio management team reviews investment decisions that pertain to performance during the past six months in light of the economic environment and other factors. Please remember all securities markets fluctuate, as do mutual fund share prices.

We thank you for investing with Franklin Templeton, welcome your questions and comments, and look forward to continuing to serve your investment needs in the future.

Sincerely,

Brooks Ritchey

President and Chief Executive Officer –

Investment Management

Franklin Alternative Strategies Funds

This letter reflects our analysis and opinions as of November 30, 2021, unless otherwise indicated. The information is not a complete analysis of every aspect of any market, country, industry, security or fund. Statements of fact are from sources considered reliable.

1. Source: Morningstar.

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

Not FDIC Insured | May Lose Value | No Bank Guarantee

franklintempleton.com Semiannual Report 1

Contents
Semiannual Report
Franklin K2 Long Short Credit Fund	3
Performance Summary	6
Your Fund’s Expenses	8
Financial Highlights and Statement of Investments	9
Financial Statements	33
Notes to Financial Statements	37
Shareholder Information	52

Visit franklintempleton.com for fund updates, to access your account, or to find helpful financial planning tools.

2 Semiannual Report franklintempleton.com

SEMIANNUAL REPORT

Franklin K2 Long Short Credit Fund

This semiannual report for Franklin K2 Long Short Credit Fund covers the period ended November 30, 2021.

Your Fund’s Goal and Main Investments

The Fund seeks total return through a combination of current income, capital preservation and capital appreciation. The Fund seeks to achieve its investment goal by allocating its assets across multiple alternative strategies in the fixed income and credit areas, including, but not limited to, some or all of the following: credit long short, structured credit and emerging market fixed income. The Fund is structured as a multi-manager fund, meaning the Fund’s assets are managed by multiple subadvisors, and the Fund’s investment manager has overall responsibility for the Fund’s investments.

Under normal market conditions, the Fund invests at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in credit-related investments. As defined in the Fund’s prospectus, credit-related investments include, but are not limited to: U.S. or foreign debt obligations of any credit quality, maturity or duration; all varieties of fixed income, variable-rate and floating-rate debt securities and investments; and derivatives, such as swap agreements, futures contracts and options, and other transactions and instruments that provide exposure to credit-related investments.

Performance Overview

The Fund’s Class A shares posted a +0.09% cumulative total return for the six months under review. For comparison, the Fund’s primary benchmark, the HFRX Fixed Income - Credit Index, which measures performance of strategies with exposure to credit across a broad continuum of credit substrategies, posted a -0.19% cumulative total return for the same period.¹ Also for comparison, the Fund’s secondary benchmark, the ICE BofA U.S. 3-Month Treasury Bill Index, which is an index of short-term U.S. government securities with a remaining term to final maturity of less than three months, posted a +0.01% cumulative total return.² You can

find more of the Fund’s performance data in the Performance Summary beginning on page 6.

Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.

Portfolio Composition
11/30/21
	% of Total Net Assets
Long Positions		75.8%
Short Positions		-3.9%
Short-Term Investments		20.9%
Other Assets, less Liabilities		7.2%

Economic and Market Overview

Global developed and emerging market equities, as measured by the MSCI All Country World Index (USD), posted a +3.03% total return for the six months ended November 30, 2021.² Global equities benefited from the continued progress of vaccination programs for COVID-19, solid economic growth and a rebound in global trade. However, the Chinese government’s imposition of additional restrictions on some businesses pressured Asian and global emerging market stocks. The combination of increased consumer demand and persistent supply-chain disruptions contributed to higher inflation in many countries. Additionally, the spread of the highly contagious Delta variant pressured global stocks, and the emergence of the Omicron variant late in the six-month period injected further uncertainty into equity markets.

In the U.S., the economy continued to recover amid declining unemployment, solid wage growth and high business confidence. Gross domestic product (GDP) growth continued, as strong consumer spending supported the economy. A rebound in corporate earnings and the passage of a bipartisan infrastructure bill further bolstered investor

1. Source: FactSet. Hedge Fund Research, Inc. – www.hedgefundresearch.com. The HFRX Fixed Income - Credit Index is being used under license from Hedge Fund Research, Inc., which does not endorse or approve of any of the contents of this report.

2. Source: Morningstar.

The indexes are unmanaged and include reinvestment of any income or distributions. They do not reflect any fees, expenses or sales charges. One cannot invest directly in an index, and an index is not representative of the Fund’s portfolio. Unlike most asset class indexes, HFR Index returns reflect fees and expenses.

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

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 14.

franklintempleton.com Semiannual Report 3

FRANKLIN K2 LONG SHORT CREDIT FUND

sentiment. The U.S. Federal Reserve (Fed) kept the federal funds target rate at a record-low range of 0.00%–0.25% and continued its program of open-ended U.S. Treasury and mortgage bond purchases to help keep markets functioning. However, in its November 2021 meeting statement, the Fed detailed plans to reduce its purchases of U.S. Treasury and mortgage-backed securities beginning in November. The Fed also noted that it views inflation as partially transitory, and that further employment progress was needed before the Fed would consider raising the range for the federal funds target rate.

The eurozone economy showed signs of recovery, as quarter-over-quarter GDP increased in the second and third quarters of 2021 after contracting for the previous two quarters. Most of the eurozone’s largest economies posted solid growth rates, as increased vaccination rates helped consumer activity return to pre-pandemic levels. Strong corporate earnings growth also helped European developed market equities. However, in November 2021, the annual inflation rate in the eurozone reached the highest level since 1997, two years before the introduction of the euro, and the prospect of energy shortages as winter approached tempered investor optimism. Consequently, European developed market equities, as measured by the MSCI Europe Index (USD), posted a -3.58% total return for the six months under review.²

Asian developed and emerging market equities, as measured by the MSCI All Country Asia Index (USD), posted a -8.18% total return for the six-month period.² Although China’s economy continued to grow, it was pressured by higher commodity prices, increased fuel costs and production disruption caused by government-mandated suspensions of power use. Asian equity markets experienced heightened volatility due to inflation concerns and rising COVID-19 infection rates in some countries. Unexpected regulatory changes by the Chinese government, which negatively impacted education- and technology-related businesses, and concerns about a Chinese large property developer’s solvency further pressured Asian stocks during the six-month period.

Global emerging market stocks, as measured by the MSCI Emerging Markets Index (USD), posted a -10.65% total return for the six months under review.² Higher COVID-19 cases in some countries, limited vaccine rollouts and concerns about rising interest rates and elevated inflation dampened investor enthusiasm in global emerging market equities. Interest-rate increases by several central banks, including Brazil, Russia and Mexico, to counter inflation raised investor concerns about a slowdown in economic growth.

Investment Strategy

We manage the Fund using a multi-manager approach. While we have overall responsibility for the Fund’s investments, we allocate the Fund’s assets to multiple subadvisors, each of whom independently manages a separate portion of the Fund’s portfolio in accordance with some or all of the following strategies: credit long short, structured credit and emerging market fixed income. We allocate the Fund’s assets among these strategies utilizing a top-down approach, generating the Fund’s strategy and subadvisor weightings by taking into account market conditions, risk factors, diversification, liquidity, transparency, and other investment options, among other things. We allocate the Fund’s assets to specific subadvisors utilizing a bottom-up approach, selecting subadvisors and their weighting within the Fund’s portfolio by taking into account their correlation to various markets and to each other, risk profiles and their return expectations.

Credit long short strategies seek to isolate issuer-specific exposure, while limiting general market risks, by taking long and/or short positions in debt securities and other related instruments. Structured credit strategies aim to profit from trading in interest-rate sensitive securities such as residential and commercial MBS, REITs, credit default swaps on various indexes, collateralized loan obligations (CLOs) and ABS. Emerging market fixed income strategies invest in corporate

and/or sovereign securities in emerging markets countries with a focus on fixed income. The Fund may invest in debt securities of any credit quality or rating, including high-yield (“junk”) bonds, distressed debt securities (securities of companies that are, or are about to be, involved in reorganizations, financial restructurings, or bankruptcy) and securities that are in default. The Fund may engage in active and frequent trading as part of its investment strategies.

The Fund takes long and/or short positions in a wide range of asset classes, including credit, fixed income, equities and currencies, among others. The Fund may gain long or short exposure to select instruments by utilizing derivatives, engaging in short sales or entering into a series of purchase and sale contracts or repurchase agreements. Long positions benefit from an increase in the price of the underlying instrument, while short positions benefit from a decrease in that price. The Fund may also use derivatives for hedging and nonhedging (investment) purposes, although no subadvisor is required to hedge any of the Fund’s positions or to use derivatives. Such derivative investments may include currency forward contracts; futures contracts; put and call options on currencies, securities, indexes and exchange-traded funds; and swaps.

4 Semiannual Report franklintempleton.com

FRANKLIN K2 LONG SHORT CREDIT FUND

Subadvisors

11/30/21

Credit Long Short

Apollo Credit Management LLC

Benefit Street Partners L.L.C.

Structured Credit

Ellington Global Asset Management, LLC

Medalist Partners, LP

Emerging Market Fixed Income

Emso Asset Management Limited

Manager’s Discussion

The Fund’s subadvisors for the six months under review were Apollo Management, Benefit Street Partners, Ellington Global Asset Management, Emso Asset Management and Medalist Partners. These subadvisors are also listed in the Subadvisors table on this page. Four of the five subadvisors posted gains for the period, led by structured credit subadvisors Ellington and Medalist. The emerging market fixed income subadvisor, Emso, posted a decline for the period.

Two of the Fund’s three underlying strategies—structured credit and credit long short—contributed to the Fund’s positive performance for the period, while the emerging market fixed income strategy detracted from performance. On an asset class level, credit positioning was the top positive contributor to the Fund’s aggregate returns, with additional positive contribution from currencies (net short positioning versus the U.S. dollar) and equity exposures. Conversely, interest-rate positioning detracted from Fund performance.

In terms of aggregate sector exposures, the top positive performance drivers for the Fund were MBS, ABS and utilities. In contrast, long positions in emerging market government bonds and short positions in U.S. government bonds negatively affected returns, as did equity index hedges.

In the structured credit strategy, MBS and ABS led positive contributors. In contrast, credit index hedges detracted from performance. Ellington, the top overall positive-performing subadvisor during the period, benefited from residential MBS, driven by an increase in trading activity, and collateralized loan obligations, as loan performance and trading value broadly remained solid.

The credit long short strategy benefited from exposures to sectors such as utilities (long positioning), currencies (net short positioning versus the U.S. dollar) and energy (long positioning). Conversely, information technology (long positioning) and equity index hedges were net detractors from strategy results.

For the emerging market fixed income strategy, detractors from performance included emerging market sovereign bonds (long positioning), especially in the Ukraine, South Africa, Russia and Egypt, along with short positioning in U.S. government bond futures. U.S. index futures (short positioning) also hindered results. Conversely, positive contributors included municipal bonds in Puerto Rico (long positioning), driven by renewed optimism around restructuring, as well as short positioning in both interest-rate swaps in Poland and currency forward contracts in South Africa.

Thank you for your participation in Franklin K2 Long Short Credit Fund. We look forward to continuing to serve your future investment needs.

Robert Christian

Co-Lead Portfolio Manager

Brooks Ritchey

Co-Lead Portfolio Manager

Art Vinokur

Portfolio Manager

The foregoing information reflects our analysis, opinions and portfolio holdings as of November 30, 2021, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.

franklintempleton.com Semiannual Report 5

FRANKLIN K2 LONG SHORT CREDIT FUND

Performance Summary as of November 30, 2021

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. Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses of each class. Capital gain distributions are net profits realized from the sale of portfolio securities.

Performance as of 11/30/21¹

Cumulative total return excludes sales charges. Average annual total return includes maximum sales charges. Sales charges will vary depending on the size of the investment and the class of share purchased. The maximum is 5.50% and the minimum is 0%. Class A: 5.50% maximum initial sales charge; Advisor Class: no sales charges. For other share classes, visit franklintempleton.com.

Share Class	Cumulative Total Return2		Average Annual Total Return3
A4
6-Month		+0.09%		-5.38%
1-Year		+4.34%		-1.37%
5-Year		+21.59%		+2.81%
Since Inception (9/8/15)		+30.77%		+3.46%
Advisor
6-Month		+0.18%		+0.18%
1-Year		+4.46%		+4.46%
5-Year		+22.59%		+4.16%
Since Inception (9/8/15)		+31.97%		+4.56%

Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.

See page 7 for Performance Summary footnotes.

6 Semiannual Report franklintempleton.com

FRANKLIN K2 LONG SHORT CREDIT FUND

PERFORMANCE SUMMARY

Total Annual Operating Expenses⁵

Share Class	With Fee Waiver		Without Fee Waiver
A		2.33%		2.92%
Advisor		2.08%		2.67%

Each class of shares is available to certain eligible investors and has different annual fees and expenses, as described in the prospectus.

All investments involve risks, including possible loss of principal. The market values of securities owned by the Fund will go up or down, sometimes rapidly or unpredictably. The Fund’s performance depends on the manager’s skill in selecting, overseeing and allocating Fund assets to the subadvisors. The Fund is actively managed and could experience losses if the manager’s and subadvisors’ judgment about particular Fund portfolio investments prove to be incorrect. Some subadvisors may have little or no experience managing the assets of a registered investment company. Bond prices generally move in the opposite direction of interest rates. Changes in the financial strength of a bond issuer or in a bond’s credit rating may affect its value. Lower-rated or high-yield debt securities (junk bonds) involve greater credit risk, including the possibility of default or bankruptcy. Liquidity risk exists when securities become more difficult to sell, or are unable to be sold, at the price at which they have been valued. Investments in derivatives involve costs and create economic leverage, which may result in significant volatility and cause the Fund to participate in losses (as well as gains) that significantly exceed the Fund’s initial investment. The Fund may make short sales of securities, which involves the risk that losses may exceed the original amount invested. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a description of the main investment risks, including the risks of foreign investments.

1. The Fund has an expense reduction contractually guaranteed through 9/30/22. Fund investment results reflect the expense reduction; without this reduction, the results would have been lower.

2. Cumulative total return represents the change in value of an investment over the periods indicated.

3. Average annual total return represents the average annual change in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.

4. Prior to 9/10/18, these shares were offered at a higher initial sales charge of 5.75%, thus actual returns (with sales charges) would have differed. Average annual total returns (with sales charges) have been restated to reflect the current maximum initial sales charge of 5.50%.

5. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.

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

franklintempleton.com Semiannual Report 7

FRANKLIN K2 LONG SHORT CREDIT FUND

Your Fund’s Expenses

As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including sales charges (loads) on Fund purchases and redemptions; and (2) ongoing Fund costs, including management fees, distribution and service (12b-1) fees, and other Fund expenses. All mutual funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other mutual funds. The table assumes a $1,000 investment held for the six months indicated.

Actual Fund Expenses

The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value” for each class of shares. You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row for your class of shares under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 x $7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.

Hypothetical Example for Comparison with Other Funds

Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example for the class of shares you hold with the 5% hypothetical examples that appear in the shareholder reports of other funds.

Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.

			Actual (actual return after expenses)				Hypothetical (5% annual return before expenses)
Share Class	Beginning Account Value 6/1/21		Ending Account Value 11/30/21		Expenses Paid During Period 6/1/21–11/30/211,2		Ending Account Value 11/30/21		Expenses Paid During Period 6/1/21–11/30/211,2		Net Annualized Expense Ratio2
A	$	1,000	$	1,000.90	$	10.83	$	1,014.24	$	10.91		2.16	%
C	$	1,000	$	997.20	$	14.57	$	1,010.48	$	14.67		2.91	%
R	$	1,000	$	1,000.00	$	12.13	$	1,012.94	$	12.21		2.42	%
R6	$	1,000	$	1,002.70	$	9.09	$	1,015.99	$	9.15		1.81	%
Advisor	$	1,000	$	1,002.70	$	9.64	$	1,015.44	$	9.70		1.92	%

1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/365 to reflect the one-half year period.

2. Reflects expenses after fee waivers and expense reimbursements. Does not include acquired fund fees and expenses.

8 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

Financial Highlights

Franklin K2 Long Short Credit Fund

	Six Months Ended November 30, 2021 (unaudited)			Year Ended May 31,
				2021			2020			2019			2018			2017
Class A
Per share operating performance (for a share outstanding throughout the period)
Net asset value, beginning of period	$	10.90		$	9.86		$	10.45		$	10.50		$	10.49		$	10.15
Income from investment operationsa:
Net investment incomeb		0.13			0.28			0.23			0.37			0.29			0.23
Net realized and unrealized gains (losses)		(0.12	)		1.03			(0.53	)		(0.02	)		0.08			0.53
Total from investment operations		0.01			1.31			(0.30	)		0.35			0.37			0.76
Less distributions from:
Net investment income		—			(0.26	)		(0.25	)		(0.31	)		(0.19	)		(0.32	)
Net realized gains		—			(0.01	)		(0.04	)		(0.09	)		(0.17	)		(0.10	)
Total distributions		—			(0.27	)		(0.29	)		(0.40	)		(0.36	)		(0.42	)
Net asset value, end of period	$	10.91		$	10.90		$	9.86		$	10.45		$	10.50		$	10.49
Total returnc		0.09%			13.33%			(2.92)%			3.42%			3.63%			7.58%
Ratios to average net assetsd
Expenses before waiver, payments by affiliates and expense reductione		2.62%			2.85%			3.24%			3.15%			3.51%			3.50%
Expenses net of waiver, payments by affiliates and expense reductione		2.16%	f		2.27%	f		2.74%			2.69%			2.98%	f		2.75%
Expenses incurred in connection with securities sold short		0.27%			0.41%			0.58%			0.62%			0.89%			0.76%
Net investment income		2.34%			2.61%			2.24%			3.49%			2.71%			2.24%
Supplemental data
Net assets, end of period (000’s)		$23,487			$26,581			$20,212			$27,870			$45,088			$41,001
Portfolio turnover rate		81.03%			194.81%			205.14%			158.66%			251.81%			317.70%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year.

^dRatios are annualized for periods less than one year.

^eIncludes dividend and/or interest expense on securities sold short and security borrowing fees, if any. See below for the ratios of such expenses to average net assets for the periods presented. See Note 1(i).

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

franklintempleton.com The accompanying notes are an integral part of these financial statements.    |   Semiannual Report 9

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

FINANCIAL HIGHLIGHTS

Franklin K2 Long Short Credit Fund (continued)

	Six Months Ended November 30, 2021 (unaudited)			Year Ended May 31,
				2021			2020			2019			2018			2017
Class C
Per share operating performance (for a share outstanding throughout the period)
Net asset value, beginning of period	$	10.70		$	9.69		$	10.26		$	10.34		$	10.35		$	10.07
Income from investment operationsa:
Net investment incomeb		0.08			0.19			0.15			0.27			0.19			0.14
Net realized and unrealized gains (losses)		(0.11	)		1.01			(0.52	)		(0.01	)		0.07			0.52
Total from investment operations		(0.03	)		1.20			(0.37	)		0.26			0.26			0.66
Less distributions from:
Net investment income		—			(0.18	)		(0.16	)		(0.25	)		(0.10	)		(0.28	)
Net realized gains		—			(0.01	)		(0.04	)		(0.09	)		(0.17	)		(0.10	)
Total distributions		—			(0.19	)		(0.20	)		(0.34	)		(0.27	)		(0.38	)
Net asset value, end of period	$	10.67		$	10.70		$	9.69		$	10.26		$	10.34		$	10.35
Total returnc		(0.28)%			12.40%			(3.66)%			2.61%			2.70%			6.56%
Ratios to average net assetsd
Expenses before waiver, payments by affiliates and expense reductione		3.37%			3.64%			3.96%			4.03%			4.37%			4.44%
Expenses net of waiver, payments by affiliates and expense reductione		2.91%	f		3.05%	f		3.46%			3.57%			3.84%	f		3.69%
Expenses incurred in connection with securities sold short		0.27%			0.41%			0.58%			0.62%			0.89%			0.76%
Net investment income		1.59%			1.82%			1.52%			2.61%			1.85%			1.30%
Supplemental data
Net assets, end of period (000’s)		$2,684			$2,945			$2,882			$2,893			$2,503			$1,507
Portfolio turnover rate		81.03%			194.81%			205.14%			158.66%			251.81%			317.70%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year.

^dRatios are annualized for periods less than one year.

^eIncludes dividend and/or interest expense on securities sold short and security borrowing fees, if any. See below for the ratios of such expenses to average net assets for the periods presented. See Note 1(i).

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

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

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

FINANCIAL HIGHLIGHTS

Franklin K2 Long Short Credit Fund (continued)

	Six Months Ended November 30, 2021 (unaudited)			Year Ended May 31,
				2021			2020			2019			2018			2017
Class R
Per share operating performance (for a share outstanding throughout the period)
Net asset value, beginning of period	$	10.79		$	9.77		$	10.36		$	10.41		$	10.41		$	10.10
Income from investment operationsa:
Net investment incomeb		0.11			0.25			0.21			0.33			0.25			0.20
Net realized and unrealized gains (losses)		(0.12	)		1.01			(0.53	)		(0.01	)		0.09			0.53
Total from investment operations		(0.01	)		1.26			(0.32	)		0.32			0.34			0.73
Less distributions from:
Net investment income		—			(0.23	)		(0.23	)		(0.28	)		(0.17	)		(0.32	)
Net realized gains		—			(0.01	)		(0.04	)		(0.09	)		(0.17	)		(0.10	)
Total distributions		—			(0.24	)		(0.27	)		(0.37	)		(0.34	)		(0.42	)
Net asset value, end of period	$	10.78		$	10.79		$	9.77		$	10.36		$	10.41		$	10.41
Total returnc		(0.09)%			12.95%			(3.13)%			3.12%			3.29%			7.29%
Ratios to average net assetsd
Expenses before waiver, payments by affiliates and expense reductione		2.87%			3.15%			3.46%			3.50%			3.82%			3.83%
Expenses net of waiver, payments by affiliates and expense reductione		2.42%	f		2.55%	f		2.96%			3.04%			3.29%	f		3.08%
Expenses incurred in connection with securities sold short		0.27%			0.41%			0.58%			0.62%			0.89%			0.76%
Net investment income		2.09%			2.31%			2.02%			3.14%			2.40%			1.91%
Supplemental data
Net assets, end of period (000’s)		$212			$196			$169			$166			$162			$127
Portfolio turnover rate		81.03%			194.81%			205.14%			158.66%			251.81%			317.70%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

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

^dRatios are annualized for periods less than one year.

^eIncludes dividend and/or interest expense on securities sold short and security borrowing fees, if any. See below for the ratios of such expenses to average net assets for the periods presented. See Note 1(i).

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

franklintempleton.com The accompanying notes are an integral part of these financial statements.    |   Semiannual Report 11

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

FINANCIAL HIGHLIGHTS

Franklin K2 Long Short Credit Fund (continued)

	Six Months Ended November 30, 2021 (unaudited)			Year Ended May 31,
				2021			2020			2019			2018			2017
Class R6
Per share operating performance (for a share outstanding throughout the period)
Net asset value, beginning of period		$10.94			$9.87			$10.45			$10.51			$10.50			$10.15
Income from investment operationsa:
Net investment incomeb		0.15			0.31			0.26			0.36			0.31			0.24
Net realized and unrealized gains (losses)		(0.12	)		1.02			(0.53	)		—	c		0.08			0.53
Total from investment operations		0.03			1.33			(0.27)			0.36			0.39			0.77
Less distributions from:
Net investment income		—			(0.25	)		(0.27	)		(0.33	)		(0.21	)		(0.32	)
Net realized gains		—			(0.01	)		(0.04	)		(0.09	)		(0.17	)		(0.10	)
Total distributions		—			(0.26	)		(0.31	)		(0.42	)		(0.38	)		(0.42	)
Net asset value, end of period	$	10.97		$	10.94		$	9.87		$	10.45		$	10.51		$	10.50
Total returnd		0.18%			13.54%			(2.58)%			3.53%			3.76%			7.71%
Ratios to average net assetse
Expenses before waiver, payments by affiliates and expense reductionf		3.66%			2.58%			2.95%			3.10%			3.35%			3.43%
Expenses net of waiver, payments by affiliates and expense reductionf		1.81%	g		1.99%	g		2.41%			2.55%			2.83%	g		2.68%
Expenses incurred in connection with securities sold short		0.24%			0.42%			0.58%			0.62%			0.89%			0.76%
Net investment income		2.70%			2.88%			2.57%			3.63%			2.86%			2.31%
Supplemental data
Net assets, end of period (000’s)		$6			$6			$5			$233			$13			$13,052
Portfolio turnover rate		81.03%			194.81%			205.14%			158.66%			251.81%			317.70%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cAmount rounds to less than $0.01 per share.

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

^eRatios are annualized for periods less than one year.

^fIncludes dividend and/or interest expense on securities sold short and security borrowing fees, if any. See below for the ratios of such expenses to average net assets for the periods presented. See Note 1(i).

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

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

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

FINANCIAL HIGHLIGHTS

Franklin K2 Long Short Credit Fund (continued)

	Six Months Ended November 30, 2021 (unaudited)			Year Ended May 31,
				2021			2020			2019			2018			2017
Advisor Class
Per share operating performance (for a share outstanding throughout the period)
Net asset value, beginning of period	$	10.91		$	9.88		$	10.46		$	10.51		$	10.50		$	10.15
Income from investment operationsa:
Net investment incomeb		0.14			0.30			0.26			0.38			0.30			0.24
Net realized and unrealized gains (losses)		(0.12	)		1.02			(0.53	)		(0.01	)		0.09			0.53
Total from investment operations		0.02			1.32			(0.27	)		0.37			0.39			0.77
Less distributions from:
Net investment income		—			(0.28	)		(0.27	)		(0.33	)		(0.21	)		(0.32	)
Net realized gains		—			(0.01	)		(0.04	)		(0.09	)		(0.17	)		(0.10	)
Total distributions		—			(0.29	)		(0.31	)		(0.42	)		(0.38	)		(0.42	)
Net asset value, end of period	$	10.93		$	10.91		$	9.88		$	10.46		$	10.51		$	10.50
Total returnc		0.18%			13.45%			(2.61)%			3.60%			3.75%			7.70%
Ratios to average net assetsd
Expenses before waiver, payments by affiliates and expense reductione		2.37%			2.65%			2.96%			3.03%			3.37%			3.44%
Expenses net of waiver, payments by affiliates and expense reductione		1.92%	f		2.06%f			2.46%			2.57%			2.84%f			2.69%
Expenses incurred in connection with securities sold short		0.27%			0.41%			0.58%			0.62%			0.89%			0.76%
Net investment income		2.59%			2.81%			2.52%			3.61%			2.85%			2.30%
Supplemental data
Net assets, end of period (000’s)		$80,058			$76,637			$73,047			$86,868			$45,514			$25,125
Portfolio turnover rate		81.03%			194.81%			205.14%			158.66%			251.81%			317.70%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

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

^dRatios are annualized for periods less than one year.

^eIncludes dividend and/or interest expense on securities sold short and security borrowing fees, if any. See below for the ratios of such expenses to average net assets for the periods presented. See Note 1(i).

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

franklintempleton.com The accompanying notes are an integral part of these financial statements.    |   Semiannual Report 13

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

Statement of Investments, November 30, 2021 (unaudited)

Franklin K2 Long Short Credit Fund

		Country		Shares/Warrants		Value
	Common Stocks and Other Equity Interests 2.2%
	Automobiles 0.2%
a	General Motors Co.		United States		2,700	$	156,249
	Biotechnology 0.0%†
a	CytoDyn Inc.		United States		2,389		2,986
	Commercial Services & Supplies 0.2%
a	CM Life Sciences III Inc.		United States		2,593		26,915
a	Executive Network Partnering Corp., A		United States		6,280		61,795
a	Executive Network Partnering Corp., A, 9/25/28, wts.		United States		925		653
a	Gores Technology Partners II Inc.		United States		362		3,683
a	Gores Technology Partners Inc.		United States		145		1,470
a	Hedosophia European Growth		United Kingdom		1,142		12,770
	Iron Spark I Inc., A		United States		1,578		15,859
a	Landcadia Holdings IV Inc.		United States		1,374		13,912
a	Tech And Energy Transition Corp.		United States		2,499		24,915
a	Tishman Speyer Innovation Corp. II, A		United States		113		1,106
a	Twelve Seas Investment Co. II, A		United States		3,059		29,795
a	Twelve Seas Investment Co. II, A, 3/2/28, wts.		United States		1,019		658
							193,531
	Communications Equipment 0.0%†
a	Commscope Holding Co. Inc.		United States		2,026		20,179
	Diversified Financial Services 0.8%
a	2MX Organic SA, 11/16/25, wts.		France		1,165		322
a	Aequi Acquisition Corp.		United States		440		4,382
a	Aequi Acquisition Corp., A		United States		3,553		34,713
a	African Gold Acquisition Corp., A		United States		1,912		18,623
a	African Gold Acquisition Corp., A, 3/13/28, wts.		United States		1,434		809
a	Agile Growth Corp.		United States		1,147		11,550
a	Ares Acquisition Corp., A		United States		2,110		20,657
a	Ares Acquisition Corp., A, 12/31/27, wts.		United States		566		594
a	Blue Whale Acquisition Corp. I		United Arab Emirates		3,792		37,711
a	CF Acquisition Corp. V, A		United States		1,761		17,540
a	CF Acquisition Corp. V, A, 12/31/27, wts.		United States		603		603
a	Corsair Partnering Corp.		United States		1,149		11,484
a	Crystal Peak Acquisition		Netherlands		1,993		19,561
a	Crystal Peak Acquisition, 6/22/26, wts.		Netherlands		802		—
a	Decarbonization Plus Acquisition Corp. II, A		United States		1,373		13,840
a	DHC Acquisition Corp., A		United States		1,838		17,957
a	DHC Acquisition Corp., A, 12/31/27, wts.		United States		612		465
a	Disruptive Acquisition Corp. I		United States		2,007		20,000
a	Dragoneer Growth Opportunities Corp. III, A		United States		3,050		30,439
a	ECP Environmental Growth Opportunities Corp., A, 2/11/28, wts.		United States		135		142
a	Elliott Opportunity II Corp.		United States		1,335		13,844
a	European Biotech Acquisition Corp.		Netherlands		361		3,585
a	Far Peak Acquisition Corp.		United States		7,608		78,058
a	Fast Acquisition Corp. II		United States		213		2,138
a	Figure Acquisition Corp. I, A		United States		409		4,041
a	Figure Acquisition Corp. I, A, 12/31/27, wts.		United States		345		417
a	Forum Merger IV Corp.		United States		849		8,545
a	Freedom Acquisition I Corp., A		United States		573		5,587
a	FTAC Hera Acquisition Corp., A		United States		1,805		17,725
a	Fusion Acquisition Corp. II, A		United States		956		9,321
a	Fusion Acquisition Corp. II, A, 12/31/27, wts.		United States		318		240
a	Glenfarne Merger Corp.		United States		361		3,597
a	Investindustrial Acquisition Corp., 10/30/27, wts.		United States		580		1,102
a	ION Acquisition Corp. III Ltd., A		Israel		796		7,781
a	Joff Fintech Acquisition Corp., A		United States		1,575		15,372

14 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Long Short Credit Fund (continued)

		Country		Shares/Warrants		Value
	Common Stocks and Other Equity Interests (continued)
	Diversified Financial Services (continued)
a	Joff Fintech Acquisition Corp., A, 12/31/27, wts.		United States		525	$	420
a	Khosla Ventures Acquisition Co. III, A		United States		3,158		31,359
a	L Catterton Asia Acquisition Corp.		Singapore		668		6,727
a	Lakestar SPAC I SE, 12/31/25, wts.		Luxembourg		210		214
a	LDH Growth Corp. I		United States		180		1,791
a	Lead Edge Growth Opportunities Ltd.		United States		1,379		13,694
a	Lerer Hippeau Acquisition Corp., A		United States		2,839		27,765
a	Live Oak Mobility Acquisition Corp., A		United States		757		7,411
a	MDH Acquisition Corp., A		United States		1,367		13,506
a	MDH Acquisition Corp., A, 2/2/28, wts.		United States		683		424
a	The Music Acquisition Corp., A		United States		1,590		15,534
a	The Music Acquisition Corp., A, 2/5/28, wts.		United States		795		533
a	Nightdragon Acquisition Corp., A		United States		367		3,602
a	Obotech Acquisition SE, A		Luxembourg		1,240		13,711
a	Obotech Acquisition SE, A, 4/30/26, wts.		Luxembourg		413		328
a	Pegasus Acquisition Co. Europe BV		Netherlands		1,768		19,850
a	Pegasus Digital Mobility Acquisition Corp.		Cayman Islands		1,665		16,733
a	Peridot Acquisition Corp. II		United States		735		7,354
a	Pershing Square Tontine Holdings Ltd., A		United States		1,507		30,381
a	Pioneer Merger Corp., A		United States		597		5,934
a	Population Health Investment Co. Inc., A		United States		342		3,348
a	Powered Brands, A		United States		1,065		10,394
a	PWP Forward Acquisition Corp. I		United States		1,807		17,889
a	Silver Crest Acquisition Corp., A		United States		857		8,416
a	Silver Crest Acquisition Corp., A, 3/31/28, wts.		United States		428		304
a	Supernova Partners Acquisition Co. II Ltd., A		United States		1,102		11,902
a	Supernova Partners Acquisition Co. II Ltd., A, 12/31/27, wts.		United States		435		1,266
a	Supernova Partners Acquisition Co. III Ltd.		United States		2,530		25,174
a	SVF Investment Corp. 2, A		United States		72		719
a	SVF Investment Corp. 3, A		United States		72		720
a	TCV Acquisition Corp., A		United States		500		4,975
a	TCW Special Purpose Acquisition Corp., A		United States		1,838		17,939
a	TCW Special Purpose Acquisition Corp., A, 12/31/28, wts.		United States		612		465
a	Tekkorp Digital Acquisition Corp., 10/26/27, wts.		United States		433		370
a	TPG Pace Beneficial II Corp., A		United States		83		830
a	Twin Ridge Capital Acquisition Corp., A		United States		2,202		21,448
a	Twin Ridge Capital Acquisition Corp., A, 12/31/28, wts.		United States		734		551
a	VPC Impact Acquisition Holdings III Inc., A		United States		1,445		14,450
a	Waldencast Acquisition Corp.		United States		82		846
a	Zimmer Energy Transition Acquisition Corp.		United States		2,110		21,216
							813,238
	Diversified Telecommunication Services 0.2%
a	BT Group PLC, A		United Kingdom		26,436		55,650
a	Liberty Global PLC, C		United Kingdom		5,073		135,145
							190,795
	Equity Real Estate Investment Trusts (REITs) 0.2%
	VICI Properties Inc.		United States		9,272		252,199
	Independent Power & Renewable Electricity Producers 0.4%
b	Clearway Energy Inc., A		United States		11,757		405,969
	Internet & Direct Marketing Retail 0.0%†
a	THG PLC, B		United Kingdom		14,340		33,718
	Media 0.1%
a	Altice USA Inc., A		United States		4,509		71,423

franklintempleton.com Semiannual Report 15

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Long Short Credit Fund (continued)

		Country		Shares/Warrants			Value
	Common Stocks and Other Equity Interests (continued)
	Oil, Gas & Consumable Fuels 0.0%†
a,c	Bighorn Permian Resources LLC, 2/1/24, wts.		United States		1,346		$	20,129
	Pharmaceuticals 0.1%
a	Bausch Health Cos. Inc.		United States		4,071			97,053
	Professional Services 0.0%†
a,c,d	Acosta Inc.		United States		923			7,476
	Textiles, Apparel & Luxury Goods 0.0%†
a,e	Samsonite International SA, 144A		United States		10,513			19,660
	Total Common Stocks and Other Equity Interests (Cost $1,978,597)							2,284,605
	Convertible Preferred Stocks 0.3%
	Media 0.2%
	Viacomcbs Inc., 5.75%, cvt. pfd., A		United States		4,492			232,057
	Professional Services 0.1%
a,c,d	Acosta Inc., cvt. pfd.		United States		925			46,250
	Total Convertible Preferred Stocks (Cost $343,770)							278,307
	Preferred Stocks 0.1%
	Diversified Financial Services 0.0%†
a	2MX Organic SA, pfd.		France		1,177			13,225
	Electric Utilities 0.0%†
	SCE Trust VI, 5.00%, pfd.		United States		1,042			25,842
	Thrifts & Mortgage Finance 0.1%
	FHLMC, pfd.,
	O, 5.81%		United States		9,100			45,318
	Z, 8.375%		United States		2,420			8,881
	FNMA, pfd.,
	a O		United States		8,600			45,580
	S, 8.25%		United States		4,475			17,453
								117,232
	Total Preferred Stocks (Cost $146,898)							156,299
				Principal Amount*
	Convertible Bonds 1.8%
	Airlines 0.2%
e	Air France-KLM, senior note, Reg S, 0.125%, 3/25/26		France		10,925	EUR		198,915
	Diversified Consumer Services 0.4%
	Chegg Inc., senior note,
	0.125%, 3/15/25		United States		82,000			78,966
	zero cpn., 9/01/26		United States		424,000			349,164
								428,130
	Internet & Direct Marketing Retail 0.5%
e	Just Eat Takeaway.Com NV, B, senior note, Reg S, 0.625%, 2/09/28		United Kingdom		200,000	EUR		196,582
	Pinduoduo Inc., senior note, zero cpn., 12/01/25		China		56,000			50,008
e	The Realreal Inc., senior note, 144A, 1.00%, 3/01/28		United States		102,000			91,025
	Wayfair Inc., senior note, 1.00%, 8/15/26		United States		96,000			175,344
								512,959
	IT Services 0.0%†
e	Fastly Inc., senior note, 144A, zero cpn., 3/15/26		United States		19,000			16,031

16 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Long Short Credit Fund (continued)

		Country		Principal Amount*			Value
	Convertible Bonds (continued)
	Leisure Products 0.1%
e	Peloton Interactive Inc., senior note, 144A, zero cpn., 2/15/26		United States		136,000		$	113,900
	Specialty Retail 0.6%
e	Dufry One BV, senior note, Reg S, 0.75%, 3/30/26		Switzerland		600,000	CHF		618,385
	Total Convertible Bonds (Cost $1,919,670)							1,888,320
	Corporate Bonds and Notes 25.5%
	Aerospace & Defense 0.1%
e	Spirit Aerosystems Inc., senior secured note, 144A, 5.50%, 1/15/25		United States		118,000			121,782
	Airlines 0.4%
e	American Airlines Group Inc., senior note, 144A, 3.75%, 3/01/25		United States		499,000			445,253
	Automobiles 0.6%
e	Aston Martin Capital Holdings Ltd., senior secured note, 144A, 10.50%, 11/30/25		United Kingdom		400,000			433,752
	Ford Motor Credit Co. LLC, senior note, 3.625%, 6/17/31		United States		166,000			169,639
								603,391
	Banks 0.2%
e,f	VTB Bank OJSC Via VTB Capital SA, senior note, loan participation, Reg S, 6.95%, 10/17/22		Russia		200,000			205,583
	Capital Markets 0.4%
e	Coinbase Global Inc., senior bond, 144A, 3.625%, 10/01/31		United States		500,000			464,583
	Chemicals 0.6%
e	Braskem Idesa SAPI, senior secured bond, 144A, 6.99%, 2/20/32		Mexico		200,000			196,346
e	Polar US Borrower LLC / Schenectady International Group Inc., senior note, 144A, 6.75%, 5/15/26		United States		500,000			486,620
								682,966
	Communications Equipment 0.4%
e	Audacy Capital Corp., secured note, 144A, 6.75%, 3/31/29		United States		450,000			441,326
d	Riverbed Technology Inc., senior note, 6.00%, 1/13/22		United States		35,221			34,869
								476,195
	Construction & Engineering 0.6%
e	Artera Services LLC, senior secured note, 144A, 9.033%, 12/04/25		United States		273,000			275,013
e	Brand Industrial Services Inc., senior note, 144A, 8.50%, 7/15/25		United States		400,000			394,936
								669,949
	Consumer Finance 0.1%
e	PROG Holdings Inc., senior note, 144A, 6.00%, 11/15/29		United States		58,000			57,383
	Containers & Packaging 0.4%
e	Mauser Packaging Solutions Holding Co., senior note, 144A, 7.25%, 4/15/25		United States		400,000			393,240
	Diversified Consumer Services 1.4%
e	The Hertz Corp., senior note, 144A,
	4.625%, 12/01/26		United States		228,000			225,009
	5.00%, 12/01/29		United States		509,000			499,675
e	MPH Acquisition Holdings LLC, senior note, 144A, 5.75%, 11/01/28		United States		400,000			358,000
e	Paysafe Finance PLC / Paysafe Holdings US Corp., senior secured note, 144A, 4.00%, 6/15/29		United States		250,000			231,204
e	Sotheby’s/Bidfair Holdings Inc., senior secured note, 144A, 5.875%, 6/01/29		United States		200,000			201,060
								1,514,948

franklintempleton.com Semiannual Report 17

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Long Short Credit Fund (continued)

		Country		Principal Amount*			Value
	Corporate Bonds and Notes (continued)
	Diversified Financial Services 1.0%
e	Advisor Group Holdings Inc., senior note, 144A, 10.75%, 8/01/27		United States		360,000		$	392,456
e	Constellation Automotive Financing PLC, senior note, 144A, 4.875%, 7/15/27		United Kingdom		100,000			129,530
e	Finance of America Funding LLC, senior note, 144A, 7.875%, 11/15/25		United States		500,000			486,092
e	Jane Street Group / JSG Finance Inc., senior secured note, 144A, 4.50%, 11/15/29		United States		64,000			63,998
								1,072,076
	Diversified Telecommunication Services 0.2%
	Frontier Communications Holdings LLC,
	secured note, 5.875%, 11/01/29		United States		34,658			34,127
	e senior secured note, 144A, 5.875%, 10/15/27		United States		125,000			129,285
	e senior secured note, 144A, 5.00%, 5/01/28		United States		55,000			55,256
e	Telesat Canada / Telesat LLC, senior secured note, 144A, 4.875%, 6/01/27		Canada		58,000			50,811
								269,479
	Electric Utilities 1.1%
g	Edison International, B, junior sub. note, 5.00% to 12/15/26, FRN thereafter, Perpetual		United States		6,000			6,027
e	Eskom Holdings SOC Ltd., senior bond, Reg S, 8.45%, 8/10/28		South Africa		200,000			212,898
	Pacific Gas and Electric Co., secured bond,
	4.50%, 7/01/40		United States		320,653			336,303
	4.95%, 7/01/50		United States		60,000			67,451
	PG&E Corp., senior secured bond, 5.25%, 7/01/30		United States		500,000			513,335
								1,136,014
	Entertainment 0.8%
e,h	AMC Entertainment Holdings Inc., secured note, 144A, PIK, 12.00%, 6/15/26		United States		360,000			366,523
e	Roblox Corp., senior note, 144A, 3.875%, 5/01/30		United States		500,000			502,085
								868,608
	Equity Real Estate Investment Trusts (REITs) 0.9%
e	Brookfield Property REIT Inc. / BPR Cumulus LLC / BPR Nimbus LLC / GGSI Sellco LL, senior secured note, 144A, 4.50%, 4/01/27		United States		500,000			475,860
e	SBA Communications Corp., senior note, 144A, 3.125%, 2/01/29		United States		500,000			475,638
								951,498
	Food & Staples Retailing 0.6%
e,g	Casino Guichard Perrachon SA, E, junior sub. note, 3.992% to 1/31/24, FRN thereafter, Reg S, Perpetual		France		200,000	EUR		148,713
e	Rite AID Corp., senior secured note, 144A, 7.50%, 7/01/25		United States		500,000			499,843
								648,556
	Health Care Providers & Services 0.5%
	Encompass Health Corp., senior bond, 4.625%, 4/01/31		United States		334,000			332,226
e	LifePoint Health Inc., senior note, 144A, 5.375%, 1/15/29		United States		187,000			180,399
								512,625
	Hotels, Restaurants & Leisure 0.8%
e	Carnival Corp., senior note, 144A, 6.00%, 5/01/29		United States		426,000			414,818
e	Lions Gate Capital Holdings LLC, senior note, 144A, 5.50%, 4/15/29		United States		400,000			405,700
								820,518

18 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Long Short Credit Fund (continued)

		Country		Principal Amount*		Value
	Corporate Bonds and Notes (continued)
	Household Durables 0.9%
e	K. Hovnanian Enterprises Inc., 144A,
	senior secured note, 7.75%, 2/15/26		United States		626,000	$	658,615
	senior secured note, 10.50%, 2/15/26		United States		250,000		266,791
							925,406
	Independent Power & Renewable Electricity Producers 0.3%
e	Calpine Corp., senior secured bond, 144A, 3.75%, 3/01/31		United States		355,000		338,833
	Insurance 0.5%
e,i	Sitka Holdings LLC, senior secured note, 144A, FRN, 5.25%, (3-Month USD LIBOR + 4.50%), 7/06/26		United States		500,000		509,956
	Internet & Direct Marketing Retail 0.6%
e	Arches Buyer Inc., senior note, 144A, 6.125%, 12/01/28		United States		502,000		508,029
e	Match Group Holdings II LLC, senior note, 144A, 3.625%, 10/01/31		United States		107,000		101,036
							609,065
	IT Services 0.3%
e	Austin Bidco Inc., senior note, 144A, 7.125%, 12/15/28		United States		286,000		294,032
	Leisure Products 0.4%
e	Majordrive Holdings IV LLC, senior note, 144A, 6.375%, 6/01/29		United States		400,000		383,616
	Marine 0.1%
e	Stena International SA, senior secured bond, 144A, 5.75%, 3/01/24		Sweden		100,000		103,146
	Media 3.0%
	AMC Networks Inc., senior note, 4.25%, 2/15/29		United States		441,000		431,225
e	Clear Channel Outdoor Holdings Inc., senior note, 144A, 7.75%, 4/15/28		United States		364,000		380,266
e	DIRECTV Holdings LLC / DIRECTV Financing Co. Inc., senior secured note, 144A, 5.875%, 8/15/27		United States		101,000		102,957
	Dish DBS Corp.,
	senior note, 5.125%, 6/01/29		United States		92,000		80,969
	e senior secured note, 144A, 5.25%, 12/01/26		United States		220,000		218,303
	e senior secured note, 144A, 5.75%, 12/01/28		United States		310,000		306,034
e	Gannett Holdings LLC, senior secured note, 144A, 6.00%, 11/01/26		United States		455,000		456,317
	Liberty Interactive LLC, senior bond, 8.25%, 2/01/30		United States		360,000		385,949
e	Spanish Broadcasting System Inc., senior secured note, 144A, 9.75%, 3/01/26		United States		259,000		268,026
e	Urban One Inc., senior secured note, 144A, 7.375%, 2/01/28		United States		506,000		516,191
							3,146,237
	Metals & Mining 0.4%
e	Taseko Mines Ltd., senior secured note, 144A, 7.00%, 2/15/26		Canada		387,000		393,743
	Mortgage Real Estate Investment Trusts (REITs) 0.8%
e	Apollo Commercial Real Estate Finance Inc., senior secured note, 144A, 4.625%, 6/15/29		United States		355,000		337,703
e	New Residential Investment Corp., senior note, 144A, 6.25%, 10/15/25		United States		520,000		513,913
							851,616
	Multiline Retail 0.1%
	Kohl’s Corp., senior bond, 5.55%, 7/17/45		United States		123,000		148,631
	Oil, Gas & Consumable Fuels 4.3%
e	DT Midstream Inc., senior bond, 144A, 4.375%, 6/15/31		United States		336,000		334,495
g	Energy Transfer LP, H, junior sub. note, 6.50% to 11/15/26, FRN thereafter, Perpetual		United States		149,000		152,725
e	Hurricane Finance PLC, senior note, 144A, 8.00%, 10/15/25		United Kingdom		134,000		187,752
e	Laredo Petroleum Inc., senior note, 144A, 7.75%, 7/31/29		United States		500,000		473,962
e	MC Brazil Downstream Trading SARL, senior secured note, Reg S, 7.25%, 6/30/31		Brazil		271,000		260,655

franklintempleton.com Semiannual Report 19

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Long Short Credit Fund (continued)

		Country		Principal Amount*			Value
	Corporate Bonds and Notes (continued)
	Oil, Gas & Consumable Fuels (continued)
e	Moss Creek Resources Holdings Inc., senior note, 144A,
	7.50%, 1/15/26		United States		422,000		$	372,651
	10.50%, 5/15/27		United States		515,000			485,295
e	Northern Oil And Gas Inc., senior note, 144A, 8.125%, 3/01/28		United States		446,000			462,984
	Occidental Petroleum Corp., senior note, 5.50%, 12/01/25		United States		500,000			535,740
e	Petrofac Ltd., senior secured note, 144A, 9.75%, 11/15/26		United Kingdom		200,000			200,508
	Petroleos Mexicanos,
	senior bond, 5.95%, 1/28/31		Mexico		87,000			81,858
	senior bond, 6.375%, 1/23/45		Mexico		242,000			195,893
	senior bond, 6.75%, 9/21/47		Mexico		165,000			135,847
	senior bond, 6.35%, 2/12/48		Mexico		283,000			224,180
	senior bond, 6.95%, 1/28/60		Mexico		101,000			83,256
	senior note, 3.50%, 1/30/23		Mexico		135,000			135,505
	e senior note, 144A, 6.875%, 10/16/25		Mexico		47,000			50,231
	senior note, 4.50%, 1/23/26		Mexico		53,000			51,998
e	Tullow Oil PLC, senior note, Reg S, 10.25%, 5/15/26		Ghana		200,000			199,279
								4,624,814
	Pharmaceuticals 0.2%
e	Par Pharmaceutical Inc., senior secured note, 144A, 7.50%, 4/01/27		United States		209,000			211,027
	Real Estate Management & Development 0.4%
e	Hunt Cos. Inc., senior secured note, 144A, 5.25%, 4/15/29		United States		410,000			399,756
	Specialty Retail 2.1%
e	Carvana Co., senior note, 144A,
	5.50%, 4/15/27		United States		28,000			28,007
	5.875%, 10/01/28		United States		40,000			40,214
	4.875%, 9/01/29		United States		178,000			169,246
e	Douglas GMBH, senior secured note, 144A, 6.00%, 4/08/26		Germany		531,000	EUR		586,773
e	Guitar Center Inc., senior secured note, 144A, 8.50%, 1/15/26		United States		222,000			235,825
e,h	Kirk Beauty Sun GMBH, senior note, 144A, PIK, 8.25%, 10/01/26		Germany		147,591	EUR		158,603
	Macy’s Retail Holdings LLC, senior bond, 5.125%, 1/15/42		United States		500,000			480,938
e	Staples Inc., 144A,
	senior note, 10.75%, 4/15/27		United States		400,000			364,968
	senior secured note, 7.50%, 4/15/26		United States		200,000			198,876
								2,263,450
	Total Corporate Bonds and Notes (Cost $27,301,793)							27,117,975
i,j	Senior Floating Rate Interests 2.1%
	Communications Equipment 0.1%
	Riverbed Technology Inc., Term Loan B, 7.00%, (3-Month USD LIBOR + 6.00%), 12/31/25		United States		109,866			99,927
	Consumer Discretionary Services 0.1%
	Travel Leaders Group LLC, Term Loan B, 4.087%, (1-Month USD LIBOR + 4.00%), 1/25/24		United States		142,255			133,364
	Diversified Financial Services 0.2%
	MPH Acquisition Holdings LLC, Term Loan B, 4.75%, (3-Month USD LIBOR + 4.25%), 9/01/28		United States		248,765			237,881
	Diversified Telecommunication Services 1.4%
	Frontier Communications Corp., Term Loan DIP, 4.50%, (1-Month USD LIBOR + 3.75%), 12/31/21		United States		83,702			83,723
	Intelsat Jackson Holdings SA,
	Term Loan B3, 8.00%, (6-Month USD LIBOR + 3.75%), 11/27/23		United States		281,120			282,460
	Term Loan B4, 8.75%, (1-Month USD LIBOR + 4.50%), 1/02/24		United States		20,944			21,038
	Term Loan B5, 8.625%, (6-Month USD LIBOR + 6.63%), 1/02/24		United States		329,824			331,681

20 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Long Short Credit Fund (continued)

		Country		Principal Amount*			Value
i,j	Senior Floating Rate Interests (continued)
	Diversified Telecommunication Services (continued)
	Intelsat Jackson Holdings SA, (continued)
	k Term Loan DIP, 5.75%, (3-Month USD LIBOR + 4.75%), 7/13/22		United States		700,000		$	703,174
								1,422,076
	Equity Real Estate Investment Trusts (REITs) 0.1%
	The GEO Group Inc., Term Loan B, 2.75%, (3-Month USD LIBOR + 2.00%), 3/22/24		United States		79,482			74,713
	McCarthy & Stone PLC, Term Loan B, 7.00%, 12/16/25		United Kingdom		50,969	GBP		67,490
								142,203
	Media 0.2%
	Advantage Sales & Marketing Inc., Term Loan B1, 5.25%, (3-Month USD LIBOR + 4.50%), 10/28/27		United States		197,802			198,420
	Total Senior Floating Rate Interests (Cost $2,224,916)							2,233,871
i, j	Senior Floating Rate Interests in Reorganization (Cost $176,070) 0.1%
	Communications Equipment 0.1%
l	Riverbed Technology Inc., Term Loan B, 7.50%, (3-Month USD LIBOR + 6.50%), 12/31/26		United States		250,151			70,793
m	Credit-Linked Notes 0.9%
e	Citigroup Global Markets Holdings Inc., (Egypt), E, senior note, 144A, zero cpn., 12/16/21		Egypt		2,808,164	EGP		177,457
e	Citigroup Global Markets Holdings Inc., (Egypt), EMTN, senior note, 144A, zero cpn., 3/31/22		Egypt		2,788,269	EGP		170,704
e	HSBC Bank PLC, (Egypt), senior note, 144A, zero cpn., 12/23/21		Egypt		1,450,000	EGP		91,404
e	HSBC Bank PLC, (Egypt), senior note, 144A, zero cpn., 2/10/22		Egypt		8,925,000	EGP		552,914
	Total Credit-Linked Notes (Cost $995,063)							992,479
	Foreign Government and Agency Securities 5.6%
e	CBB International Sukuk Programme Co. Wll, senior note, 144A, 3.875%, 5/18/29		Bahrain		467,000			450,344
e	Government of Angola, senior bond, Reg S,
	8.00%, 11/26/29		Angola		201,000			186,082
	9.375%, 5/08/48		Angola		200,000			182,715
e	Government of Bahrain, senior bond, Reg S, 7.00%, 1/26/26		Bahrain		200,000			220,035
e	Government of Egypt, senior bond, Reg S,
	7.50%, 1/31/27		Egypt		400,000			402,228
	7.60%, 3/01/29		Egypt		200,000			191,177
e	Government of Germany, senior bond, Reg S, 0.50%, 2/15/25		Germany		94,000	EUR		110,932
e	Government of Ghana, senior note, Reg S, 7.75%, 4/07/29		Ghana		213,000			173,595
	Government of Italy, senior note, 2.375%, 10/17/24		Italy		373,000			383,909
e	Government of Jordan, senior note, 144A, 4.95%, 7/07/25		Jordan		200,000			205,500
e	Government of Nigeria, senior note, Reg S, 7.625%, 11/21/25		Nigeria		400,000			420,562
e	Government of Oman, senior bond, Reg S,
	6.25%, 1/25/31		Oman		216,000			226,796
	6.75%, 1/17/48		Oman		200,000			192,924
e	Government of Paraguay, senior bond, Reg S, 4.625%, 1/25/23		Paraguay		421,000			435,739
	Government of Russia,
	senior bond, 6233, 6.10%, 7/18/35		Russia		27,868,000	RUB		312,827
	senior note, 6229, 7.15%, 11/12/25		Russia		28,550,000	RUB		368,505
e	Government of Saudi Arabia, senior bond, 144A, 2.75%, 2/03/32		Saudi Arabia		221,000			225,950
	Government of South Africa, senior bond,
	2030, 8.00%, 1/31/30		South Africa		2,600,259	ZAR		147,651
	2035, 8.875%, 2/28/35		South Africa		1,564,783	ZAR		86,229

franklintempleton.com Semiannual Report 21

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Long Short Credit Fund (continued)

		Country		Principal Amount*		Value
	Foreign Government and Agency Securities (continued)
	Government of Turkey,
	senior bond, 6.50%, 9/20/33		Turkey		200,000	$	184,573
	senior note, 6.375%, 10/14/25		Turkey		200,000		199,031
e	Government of Ukraine, Reg S,
	senior bond, 7.375%, 9/25/32		Ukraine		200,000		188,859
	senior bond, 1.258%, 5/31/40		Ukraine		171,000		155,619
	senior note, 6.876%, 5/21/29		Ukraine		400,000		373,431
	Total Foreign Government and Agency Securities (Cost $6,311,095)						6,025,213
	U.S. Government and Agency Securities 0.5%
	U.S. Treasury Bond,
	1.875%, 2/15/41		United States		1,000		1,004
	1.75%, 8/15/41		United States		1,100		1,080
	1.625%, 11/15/50		United States		77,000		73,857
	1.875%, 2/15/51		United States		104,000		105,771
	U.S. Treasury Note,
	1.625%, 5/15/31		United States		309,000		315,059
	1.375%, 11/15/31		United States		39,400		39,166
	Total U.S. Government and Agency Securities (Cost $519,010)						535,937
	Asset-Backed Securities and Commercial Mortgage-Backed Securities 34.9%
	Diversified Financial Services 16.3%
e,n	AMSR Trust, 2021-SFR1, G, 144A, FRN, 4.612%, 6/17/38		United States		500,000		510,309
e,o	Assurant CLO Ltd., 2019-5A, D, 144A, FRN, 4.324%, (3-Month USD LIBOR + 4.20%), 1/15/33		United States		1,500,000		1,488,375
e,o	Blue Ridge CLO Ltd. II, 2014-2A, C, 144A, FRN, 3.922%, (3-Month USD LIBOR + 3.80%), 7/18/26		United States		700,000		700,539
e,o	Catskill Park CLO Ltd., 2017-1A, C, 144A, FRN, 3.832%, (3-Month USD LIBOR + 3.70%), 4/20/29		United States		1,000,000		1,003,538
	CitiMortgage Alternative Loan Trust, 2007-A1, 2A1, 5.50%, 1/25/22		United States		15,845		15,070
e	FRTKL, 2021-SFR1, G, 144A, 4.105%, 9/17/38		United States		990,000		975,823
e,o	GPMT Ltd., 2019-FL2, D, 144A, FRN, 3.039%, (1-Month USD LIBOR + 2.95%), 2/22/36		United States		700,000		696,955
e,o	GSMSC Pass-Through Trust, 2009-4R, 2A3, 144A, FRN, 0.539%, (1-Month USD LIBOR + 0.45%), 12/26/36		United States		706,258		500,488
e,o	Hull Street CLO Ltd., 2014-1A, D, 144A, FRN, 3.722%, (3-Month USD LIBOR + 3.60%), 10/18/26		United States		1,130,000		1,109,727
e,o	KREF Ltd., 2021-FL2, C, 144A, FRN, 2.089%, (1-Month USD LIBOR + 2.00%), 2/15/39		United States		500,000		500,625
e,o	Mountain View CLO Ltd., 2018-1A, DRR, 144A, FRN, 3.774%, (3-Month USD LIBOR + 3.65%), 10/15/26		United States		1,290,000		1,296,533
e,o	OCP CLO Ltd., 2021-8RA, C, 144A, FRN, 3.872%, (3-Month USD LIBOR + 3.75%), 1/17/32		United States		1,000,000		992,500
o	Ramp Series Trust, 2003-RS9, MII3, FRN, 3.317%, (1-Month USD LIBOR + 2.15%), 10/25/33		United States		1,156,753		1,169,161
e	S-Jets Ltd., 2017-1, A, 144A, 3.967%, 8/15/42		Bermuda		722,471		721,358
e,o	Staniford Street CLO Ltd., 2014-1A, D, 144A, FRN, 3.616%, (3-Month USD LIBOR + 3.50%), 6/15/25		United States		890,238		892,074
n	STARM Mortgage Loan Trust, 2007-2, 4A1, FRN, 2.474%, 4/25/37		United States		57,249		39,626
e	Stellar Jay Ireland DAC, 2021-1, B, 144A, 5.926%, 10/15/41		Ireland		1,000,000		999,990
o	Suntrust Alternative Loan Trust, 2005-1F, 1A1, FRN, 0.742%, (1-Month USD LIBOR + 0.65%), 12/25/35		United States		122,563		104,936
o	Terwin Mortgage Trust, 2003-6HE, M2, FRN, 2.717%, (1-Month USD LIBOR + 2.63%), 11/25/33		United States		43,660		45,214

22 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Long Short Credit Fund (continued)

		Country		Principal Amount*		Value
	Asset-Backed Securities and Commercial Mortgage-Backed Securities (continued)
	Diversified Financial Services (continued)
e	Thunderbolt II Aircraft Lease Ltd., 2018-A, A, 144A, 4.147%, 9/15/38		United States		2,584,976	$	2,583,829
e,o	VMC Finance LLC, 2019-FL3, C, 144A, FRN, 2.139%, (1-Month USD LIBOR + 2.05%), 9/15/36		United States		880,961		877,657
	Wells Fargo Alternative Loan Trust, 2007-PA3, 2A2, 6.00%, 7/25/37		United States		110,207		112,273
							17,336,600
	Mortgage Real Estate Investment Trusts (REITs) 18.6%
	Alternative Loan Trust, 2005-J10, 2A4, 6.00%, 10/25/35		United States		412,039		272,313
n	American Home Mortgage Assets Trust, 2005-1, 1A1, FRN, 2.771%, 11/25/35		United States		103,690		94,448
n	Banc of America Mortgage Trust, FRN,
	2005-K, 2A1, 2.564%, 12/25/35		United States		152,953		149,096
	2005-L, 1A1, 3.073%, 1/25/36		United States		90,884		89,168
	2005-L, 3A1, 3.133%, 1/25/36		United States		130,690		128,064
e,o	BBCMS Mortgage Trust, 2019-BWAY, E, 144A, FRN, 2.94%, (1-Month USD LIBOR + 2.85%), 11/15/34		United States		2,000,000		1,899,309
e,n	BCAP LLC Trust, 2010-RR1, 1A4, 144A, FRN, 3.144%, 3/26/37		United States		191,814		167,453
n	Bear Stearns ARM Trust, FRN,
	2002-11, 1A2, 2.834%, 2/25/33		United States		2,827		2,638
	2006-2, 4A1, 3.115%, 7/25/36		United States		35,026		32,908
e,o	BXMT Ltd., 2021-FL4, C, 144A, FRN, 1.84%, (1-Month USD LIBOR + 1.75%), 5/15/38		United States		500,000		499,029
	Citigroup Commercial Mortgage Trust,
	2015-GC33, D, 3.172%, 9/10/58		United States		2,000,000		1,806,072
	e,n 2016-P4, D, 144A, FRN, 4.10%, 7/10/49		United States		2,000,000		1,777,708
n	Citigroup Mortgage Loan Trust, 2007-AR5, 2A1A, FRN, 3.425%, 4/25/37		United States		83,326		83,035
	Countrywide Alternative Loan Trust,
	2005-73CB, 1A2, 6.25%, 1/25/36		United States		129,017		134,141
	o 2005-IM1, A1, FRN, 0.692%, (1-Month USD LIBOR + 0.60%), 1/25/36		United States		121,270		117,430
n	Credit Suisse First Boston Mortgage Securities Corp., 2004-AR3, CB2, FRN, 2.415%, 4/25/34		Switzerland		113,844		104,248
	CSMC Mortgage-Backed Trust, 2006-4, 9A1, 6.50%, 5/25/36		United States		735,947		382,230
e,n	FARM Mortgage Trust, 2021-1, B, 144A, FRN, 3.249%, 1/25/51		United States		987,184		852,978
e,o,p	FNMA, 2021-R02, 2B1, 144A, FRN, 3.35%, (SOFR + 3.30%), 11/25/41		United States		650,000		652,437
o	FREMF Mortgage Trust, 2018-KF52, B, FRN, 2.038%, (1-Month USD LIBOR + 1.95%), 9/25/28		United States		783,009		779,575
	GSR Mortgage Loan Trust, 2004-6F, 2A4, 5.50%, 5/25/34		United States		87,602		89,572
	Impac CMB Trust,
	2004-4, 2A2, 5.214%, 9/25/34		United States		136,237		147,931
	o 2004-8, 3B, FRN, 2.717%, (1-Month USD LIBOR + 2.63%), 8/25/34		United States		97,249		99,809
	o 2005-2, 2B, FRN, 2.567%, (1-Month USD LIBOR + 2.48%), 4/25/35		United States		83,532		82,319
	o 2005-4, 2M1, FRN, 0.842%, (1-Month USD LIBOR + 0.50%), 5/25/35		United States		147,428		137,781
	o 2005-8, 2B, FRN, 2.342%, (1-Month USD LIBOR + 2.25%), 2/25/36		United States		75,124		75,725
	IndyMac INDX Mortgage Loan Trust, FRN,
	n 2005-AR23, 3A1, 2.504%, 11/25/35		United States		674,204		664,272
	o 2006-AR12, A1, 0.282%, (1-Month USD LIBOR + 0.19%), 9/25/46		United States		162,640		153,149
	o 2006-AR29, A2, 0.252%, (1-Month USD LIBOR + 0.16%), 11/25/36		United States		284,617		288,639
	n 2007-AR5, 2A1, 2.969%, 5/25/37		United States		363,100		341,170
n	JPMBB Commercial Mortgage Securities Trust, 2015-C31, D, FRN, 4.275%, 8/15/48		United States		702,000		643,961
n	JPMorgan Mortgage Trust, FRN,
	2006-A5, 6A1, 2.823%, 8/25/36		United States		187,213		165,480
	2006-A7, 2A3, 3.095%, 1/25/37		United States		81,919		77,499
	2007-A2, 2A1, 2.979%, 4/25/37		United States		122,079		108,873
	Lehman Mortgage Trust, 2005-3, 2A3, 5.50%, 1/25/36		United States		57,754		59,307

franklintempleton.com Semiannual Report 23

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Long Short Credit Fund (continued)

		Country		Principal Amount*		Value
	Asset-Backed Securities and Commercial Mortgage-Backed Securities (continued)
	Mortgage Real Estate Investment Trusts (REITs) (continued)
	MASTR Adjustable Rate Mortgages Trust, FRN,
	n 2004-10, B1, 2.37%, 10/25/34		United States		445,019	$	408,036
	o 2006-OA1, 1A1, 0.302%, (1-Month USD LIBOR + 0.21%), 4/25/46		United States		205,627		190,950
n	MASTR Alternative Loan Trust, 2007-HF1, 3A1, FRN, 2.283%, 10/25/47		United States		488,443		362,013
n	MASTR Seasoned Securitization Trust, 2004-1, 4A1, FRN, 2.41%, 10/25/32		United States		66,934		69,773
n	RFMSI Trust, 2007-SA2, 3A, FRN, 5.367%, 4/25/37		United States		738,142		248,344
o	Securitized Asset Backed Receivables LLC Trust, 2004-OP2, A2, FRN, 0.792%, (1-Month USD LIBOR + 0.70%), 8/25/34		United States		199,024		195,390
e,o	STACR Trust, 2018-HRP1, B2, 144A, FRN, 11.842%, (1-Month USD LIBOR + 11.75%), 5/25/43		United States		2,889,096		3,259,751
n	Structured ARM Loan Trust, 2004-4, B1, FRN, 2.621%, 4/25/34		United States		412,669		372,836
n	Wachovia Mortgage Loan Trust LLC, 2005-B, 1A1, FRN, 2.178%, 10/20/35		United States		217,960		212,977
n	WAMU Mortgage Pass-Through Certificates Series Trust, 2006-AR12, 1A1, FRN, 2.956%, 10/25/36		United States		966,153		972,268
o	Washington Mutual Mortgage Pass-Through Certificates, 2006-4, 3A2B, FRN, 0.252%, (1-Month USD LIBOR + 0.16%), 5/25/36		United States		214,259		174,061
n	Washington Mutual MSC Mortgage Pass-Through Certificates Series Trust, 2003-AR3, B1, FRN, 3.045%, 6/25/33		United States		224,931		222,022
							19,848,188
	Total Asset-Backed Securities and Commercial Mortgage-Backed Securities (Cost $36,883,194)						37,184,788
	Municipal Bonds in Reorganization 1.8%
	Puerto Rico 1.8%
l	Commonwealth of Puerto Rico,
	8.00%, 7/01/35		United States		1,745,000		1,531,238
	5.50%, 7/01/39		United States		155,000		146,087
	5.00%, 7/01/41		United States		225,000		202,500
	Total Municipal Bonds in Reorganization (Cost $1,212,050)						1,879,825
		Number of Contracts		Notional Amount#
	Options Purchased 0.0%†
	Calls – Exchange-Traded 0.0%†
	Casino Guichard Perrachon SA, December Strike Price 26.00 EUR, Expires 12/17/21		24		2,400		27
	SPDR Gold Shares ETF, June Strike Price $200.00, Expires 6/17/22		43		4,300		5,332
							5,359
	Puts – Exchange-Traded 0.0%†
	Alcon Inc., May Strike Price $70.00, Expires 5/20/22		4		400		880
	Coinbase Global Inc., March Strike Price $200.00, Expires 3/18/22		5		500		2,755
	The Cooper Cos Inc., May Strike Price $360.00, Expires 5/20/22		1		100		2,360
	Fluor Corp., January Strike Price $15.00, Expires 1/21/22		8		800		180
	Fluor Corp., January Strike Price $17.50, Expires 1/21/22		8		800		400
	Fluor Corp., January Strike Price $20.00, Expires 1/21/22		8		800		760
	Iron Mountain Inc., January Strike Price $40.00, Expires 1/21/22		7		700		280
	Iron Mountain Inc., March Strike Price $42.50, Expires 3/18/22		10		1,000		1,620
	Owens & Minor Inc., March Strike Price $30.00, Expires 3/18/22		28		2,800		3,990
	SPDR S&P Retail ETF, December Strike Price $92.00, Expires 12/17/21		7		700		1,330
	SPDR S&P Retail ETF, January Strike Price $75.00, Expires 1/21/22		19		1,900		1,254

24 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Long Short Credit Fund (continued)

		Number of Contracts		Notional Amount#		Value
	Options Purchased (continued)
	Puts – Exchange-Traded (continued)
	SPDR S&P Retail ETF, January Strike Price $85.00, Expires 1/21/22		17		1,700	$	3,094
							18,903
	Puts – Over-the-Counter 0.0%†
	The Western Union Co., Counterparty BOFA, May Strike Price $14.00, Expires 5/20/22		36		3,600		3,240
	Total Options Purchased (Cost $45,062)						27,502
	Total Investments before Short Term Investments (Cost $80,057,188)						80,675,914
		Country		Shares
	Short Term Investments 20.9%
	Money Market Funds (Cost $17,850,091) 16.8%
q	Fidelity Investments Money Market Government Portfolio, Institutional, 0.01%		United States		17,850,091		17,850,091
				Principal Amount*
	Repurchase Agreements (Cost $4,402,397) 4.1%
r	Joint Repurchase Agreement, 0.025%, 12/01/21 (Maturity Value $4,402,400)		United States		4,402,397		4,402,397
	BNP Paribas Securities Corp. (Maturity Value $2,530,148) Deutsche Bank Securities Inc. (Maturity Value $466,610) HSBC Securities (USA) Inc. (Maturity Value $1,405,642)
	Collateralized by U.S. Government Agency Securities, 4.00% - 4.50%, 11/20/48 - 3/20/49; and U.S. Treasury Notes, 0.16% - 0.38%, 4/30/22 - 4/30/25, (Valued at $4,490,432)
	Total Investments (Cost $102,309,676) 96.7%						102,928,402
	Options Written (0.0)%†						(867	)
	Securities Sold Short (3.9)%						(4,225,944	)
	Other Assets, less Liabilities 7.2%						7,744,430
	Net Assets 100.0%					$	106,446,021
		Number of Contracts		Notional Amount#
s	Options Written (0.0)%†
	Calls – Exchange-Traded (0.0)%†
	Casino Guichard Perrachon SA, December Strike Price 30.00 EUR, Expires 12/17/21		12		1,200		(13	)
	Casino Guichard Perrachon SA, December Strike Price 34.00 EUR, Expires 12/17/21		12		1,200		(14	)
							(27	)
	Puts – Exchange-Traded (0.0)%†
	Owens & Minor Inc., March Strike Price $20.00, Expires 3/18/22		28		2,800		(840	)
	Total Options Written (Premiums Received $1,424)						(867	)
		Country		Shares
t	Securities Sold Short (3.9)%
	Common Stocks (0.2)%
	Internet & Direct Marketing Retail (0.2)%
	Wayfair Inc., A		United States		653		(161,839	)

franklintempleton.com Semiannual Report 25

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Long Short Credit Fund (continued)

		Country		Shares			Value
t	Securities Sold Short (continued)
	Common Stocks (continued)
	IT Services (0.0)%†
	Fastly Inc., A		United States		63		$	(2,568	)
	Total Common Stocks (Proceeds $171,352)							(164,407	)
				Principal Amount*
	Corporate Bonds and Notes (3.2)%
	Aerospace & Defense (0.1)%
e	Spirit Aerosystems Inc., secured note, 144A, 7.50%, 4/15/25		United States		87,000			(91,123	)
	Auto Components (0.1)%
	American Axle & Manufacturing Inc., senior note, 6.875%, 7/01/28		United States		50,000			(53,485	)
e	Wheel Pros Inc., senior note, 144A, 6.50%, 5/15/29		United States		32,000			(31,230	)
								(84,715	)
	Banks (0.1)%
e,g	China Zheshang Bank Co. Ltd., junior sub. bond, 5.45% to 3/29/22, FRN thereafter, Reg S, Perpetual		China		72,000			(72,369	)
	Capital Markets (0.0)%†
e	Coinbase Global Inc., senior note, 144A, 3.375%, 10/01/28		United States		42,000			(39,548	)
	Communications Equipment (0.2)%
e	Audacy Capital Corp., secured note, 144A,
	6.50%, 5/01/27		United States		136,000			(133,180	)
	6.75%, 3/31/29		United States		44,000			(43,152	)
e	CommScope Technologies LLC, senior bond, 144A, 5.00%, 3/15/27		United States		84,000			(75,617	)
								(251,949	)
	Construction & Engineering (0.4)%
	Fluor Corp., senior bond,
	3.50%, 12/15/24		United States		136,000			(139,594	)
	4.25%, 9/15/28		United States		54,000			(55,167	)
e	Sydney Airport Finance Co. Pty Ltd., senior secured bond, 144A,
	3.375%, 4/30/25		Australia		42,000			(44,249	)
	3.625%, 4/28/26		Australia		22,000			(23,398	)
e	Tutor Perini Corp., senior note, 144A, 6.875%, 5/01/25		United States		199,000			(199,418	)
								(461,826	)
	Diversified Consumer Services (0.1)%
e	MPH Acquisition Holdings LLC, senior note, 144A, 5.75%, 11/01/28		United States		160,000			(143,200	)
	Diversified Telecommunication Services (0.2)%
e	British Telecommunications PLC, senior bond, Reg S, 1.874% to 5/18/25, FRN thereafter, 8/18/80		United Kingdom		200,000	EUR		(220,761	)
e	Telesat Canada / Telesat LLC, senior note, 144A, 6.50%, 10/15/27		Canada		41,000			(32,056	)
								(252,817	)
	Equity Real Estate Investment Trusts (REITs) (0.1)%
	The GEO Group Inc., senior note, 6.00%, 4/15/26		United States		40,000			(34,496	)
	Simon Property Group LP, senior bond, 2.65%, 7/15/30		United States		115,000			(117,499	)
								(151,995	)
	Food & Staples Retailing (0.6)%
	Koninklijke Ahold Delhaize NV, senior bond, 5.70%, 10/01/40		Netherlands		196,000			(271,890	)
	The Kroger Co., senior bond,
	5.40%, 1/15/49		United States		78,000			(109,455	)
	3.95%, 1/15/50		United States		4,000			(4,635	)
e	SEG Holding LLC / SEG Finance Corp., senior secured note, 144A, 5.625%, 10/15/28		United States		149,000			(156,630	)

26 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Long Short Credit Fund (continued)

		Country		Principal Amount*			Value
t	Securities Sold Short (continued)
	Corporate Bonds and Notes (continued)
	Food & Staples Retailing (continued)
e	Sigma Holdco BV, senior note, Reg S, 5.75%, 5/15/26		Netherlands		100,000	EUR	$	(104,872	)
								(647,482	)
	Food Products (0.2)%
	B&G Foods Inc., senior note, 5.25%, 9/15/27		United States		196,000			(199,234	)
	Health Care Providers & Services (0.1)%
e	Air Methods Corp., senior note, 144A, 8.00%, 5/15/25		United States		132,000			(102,788	)
	Media (0.1)%
e	Dish DBS Corp., senior secured note, 144A, 5.75%, 12/01/28		United States		63,000			(62,194	)
e	Wolverine Escrow LLC, senior secured note, 144A, 9.00%, 11/15/26		United States		85,000			(80,310	)
								(142,504	)
	Oil, Gas & Consumable Fuels (0.1)%
e	SM Energy Co., secured note, 144A, 10.00%, 1/15/25		United States		54,000			(59,154	)
	Professional Services (0.1)%
e	Teleperformance, senior note, Reg S, 1.875%, 7/02/25		France		100,000	EUR		(119,733	)
	Specialty Retail (0.7)%
e	Ambience Merger Sub Inc., senior note, 144A, 7.125%, 7/15/29		United States		71,000			(68,811	)
e	Dufry One BV, senior note, Reg S, 2.00%, 2/15/27		Switzerland		528,000	EUR		(548,458	)
e	Macy’s Retail Holdings LLC, senior note, 144A, 5.875%, 4/01/29		United States		87,000			(92,872	)
								(710,141	)
	Total Corporate Bonds and Notes (Proceeds $3,602,922)							(3,530,578	)
	U.S. Government and Agency Securities (0.5)%
	U.S. Treasury Bond,
	1.375%, 11/15/40		United States		2,000			(1,845	)
	1.375%, 8/15/50		United States		266,700			(240,770	)
	U.S. Treasury Note,
	1.25%, 9/30/28		United States		1,300			(1,291	)
	0.875%, 11/15/30		United States		205,000			(196,039	)
	1.125%, 2/15/31		United States		28,000			(27,340	)
	1.25%, 8/15/31		United States		64,700			(63,674	)
	Total U.S. Government and Agency Securities (Proceeds $548,105)							(530,959	)
	Total Securities Sold Short (Proceeds $4,322,379)						$	(4,225,944	)

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

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

^#Notional amount is the number of units specified in the contract, and can include currency units, bushels, shares, pounds, barrels or other units. Currency units are stated in U.S. dollars unless otherwise indicated.

^aNon-income producing.

^bA portion or all of the security has been segregated as collateral for securities sold short, open swap contracts, open forward exchange contracts, open futures contracts and/or open written option contracts. At November 30, 2021, the aggregate value of these securities and/or cash pledged amounted to $995,710, representing 0.9% of net assets.

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

^dSee Note 9 regarding restricted securities.

^eSecurity was purchased pursuant to Rule 144A or Regulation S under the Securities Act of 1933. 144A securities may be sold in transactions exempt from registration only to qualified institutional buyers or in public offering registered under the Securities Act of 1933. Regulation S securities cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At November 30, 2021, the net value of these securities was $51,502,611, representing 48.4% of net assets.

^fSee Note 1(g) regarding loan participation notes.

^gPerpetual security with no stated maturity date.

franklintempleton.com Semiannual Report 27

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Long Short Credit Fund (continued)

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

ⁱThe coupon rate shown represents the rate at period end.

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

^kSee Note 10 regarding unfunded loan commitments.

^lSee Note 7 regarding defaulted securities.

^mSee Note 1(h) regarding credit-linked notes.

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 purchased on a delayed delivery basis. See Note 1(d).

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

^rSee Note 1(c) regarding joint repurchase agreement.

^sSee Note 1(e) regarding written options.

^tSee Note 1(i) regarding securities sold short.

At November 30, 2021, the Fund had the following futures contracts outstanding. See Note 1(e).

Futures Contracts
Description	Type		Number of Contracts		Notional Amount*		Expiration Date		Value/Unrealized Appreciation (Depreciation)
Equity Contracts
CBOE Volatility Index		Long		9	$	231,178		12/22/21	$	16,423
E-Mini Russell 2000		Short		5		549,325		12/17/21		16,363
S&P 500 E-Mini Index		Short		3		684,938		12/17/21		(12,471	)
										20,315
Interest Rate Contracts
U.S. Treasury 10 Yr. Note		Short		1		130,813		3/22/22		(1,924	)
U.S. Treasury Long Bond		Short		7		1,134,875		3/22/22		(26,044	)
										(27,968	)
Total Futures Contracts									$	(7,653	)

*As of period end.

At November 30, 2021, the Fund had the following forward exchange contracts outstanding. See Note 1(e).

Forward Exchange Contracts
Currency	Counterpartya		Type		Quantity		Contract Amount		Settlement Date		Unrealized Appreciation		Unrealized Depreciation
OTC Forward Exchange Contracts
Colombian Peso		JPHQ		Buy		1,150,840,566	$	305,093		12/15/21	$	—	$	(17,535	)
Colombian Peso		JPHQ		Sell		1,150,840,566		297,068		12/15/21		9,510		—
Czech Koruna		JPHQ		Buy		5,601,383		259,457		12/15/21		—		(10,439	)
Czech Koruna		JPHQ		Sell		5,601,383		248,110		12/15/21		—		(909	)
Indonesian Rupiah		JPHQ		Buy		9,389,872,441		658,107		12/15/21		—		(3,520	)
Indonesian Rupiah		JPHQ		Sell		9,389,872,441		650,809		12/15/21		—		(3,778	)
Mexican Peso		JPHQ		Buy		8,315,084		410,250		12/15/21		—		(23,722	)
Mexican Peso		JPHQ		Sell		8,315,084		399,637		12/15/21		13,109		—
Peruvian Nuevo Sol		JPHQ		Buy		1,406,262		343,200		12/15/21		2,275		—
Peruvian Nuevo Sol		JPHQ		Sell		1,406,262		355,791		12/15/21		10,316		—
Russian Ruble		JPHQ		Buy		104,210,391		1,400,906		12/15/21		5,184		(4,361	)
Russian Ruble		JPHQ		Sell		104,210,391		1,398,394		12/15/21		—		(3,337	)
South African Rand		JPHQ		Buy		9,370,571		598,645		12/15/21		—		(10,817	)
South African Rand		JPHQ		Sell		9,370,571		641,346		12/15/21		53,519		—
British Pound		JPHQ		Buy		100,000		137,268		1/31/22		—		(4,159	)
British Pound		JPHQ		Sell		590,000		806,704		1/31/22		21,364		—
Euro		JPHQ		Sell		1,820,000		2,141,776		1/31/22		73,278		—
Hong Kong Dollar		JPHQ		Sell		155,000		19,911		1/31/22		34		—

28 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Long Short Credit Fund (continued)

Forward Exchange Contracts (continued)
Currency	Counterpartya		Type		Quantity		Contract Amount		Settlement Date		Unrealized Appreciation		Unrealized Depreciation
OTC Forward Exchange Contracts (continued)
Swiss Franc		JPHQ		Sell		580,000	$	630,079		1/31/22	$	—	$	(3,222	)
Czech Koruna		JPHQ		Buy		5,601,383		246,918		3/16/22		703		—
Czech Koruna		JPHQ		Sell		5,601,383		244,677		3/16/22		—		(2,944	)
Indonesian Rupiah		JPHQ		Sell		9,389,872,441		651,577		3/16/22		2,906		—
Russian Ruble		JPHQ		Buy		34,193,012		447,905		3/16/22		3,509		—
Russian Ruble		JPHQ		Sell		57,320,597		750,790		3/16/22		—		(5,953	)
South African Rand		JPHQ		Buy		3,755,187		229,134		3/16/22		3,631		—
South African Rand		JPHQ		Sell		7,765,195		485,703		3/16/22		4,377		—
Total Forward Exchange Contracts											$	203,715	$	(94,696	)
Net unrealized appreciation (depreciation)											$	109,019

^aMay be comprised of multiple contracts with the same counterparty, currency and settlement date.

At November 30, 2021, the Fund had the following credit default swap contracts outstanding. See Note 1(e).

Credit Default Swap Contracts
Description	Annual Payment Rate Received (Paid)		Payment Frequency				Maturity Date		Notional Amounta			Value			Unamortized Upfront Payments (Receipts)			Unrealized Appreciation (Depreciation)			Ratingb
Centrally Cleared Swap Contracts
Contracts to Buy Protectionc
Single Name
Government of Mexico		(1.00)%		Quarterly				6/20/23		186,000		$	(1,440	)	$	(26	)	$	(1,414	)
Government of Mexico		(1.00)%		Quarterly				12/20/23		787,000			(7,263	)		(5,984	)		(1,279	)
Government of Mexico		(1.00)%		Quarterly				12/20/23		15,000			(138	)		(232	)		94
Government of Mexico		(1.00)%		Quarterly				6/20/25		105,000			(501	)		(1,323	)		822
Government of South Africa		(1.00)%		Quarterly				12/20/24		322,000			6,955			9,249			(2,294	)
Government of South Africa		(1.00)%		Quarterly				12/20/24		900,000			19,438			26,654			(7,216	)
Traded Index
CDX.NA.HY.34		(5.00)%		Quarterly				6/20/25		1,840,000			(129,762	)		(27,734	)		(102,028	)
CDX.NA.HY.35		(5.00)%		Quarterly				12/22/25		1,930,000			(144,407	)		(183,350	)		38,943
Contracts to Sell Protectionc,d
Single Name
Government of South Africa		1.00%		Quarterly				12/20/24		646,000			(13,952	)		(50,313	)		36,361			BB-
Government of South Africa		1.00%		Quarterly				12/20/24		184,000			(3,974	)		(5,367	)		1,393			BB-
Total Centrally Cleared Swap Contracts												$	(275,044	)	$	(238,426	)	$	(36,618	)
OTC Swap Contracts
Contracts to Buy Protectionc
Single Name					Counterparty
Air France-KLM		(5.00)%		Quarterly		JPHQ		12/20/21		9,000	EUR		(111	)		18			(129	)
Air France-KLM		(5.00)%		Quarterly		JPHQ		12/20/21		14,000	EUR		(171	)		20			(191	)
Air France-KLM		(5.00)%		Quarterly		JPHQ		12/20/21		19,000	EUR		(232	)		39			(271	)
Air France-KLM		(5.00)%		Quarterly		JPHQ		6/20/22		21,000	EUR		(435	)		(125	)		(310	)
Air France-KLM		(5.00)%		Quarterly		JPHQ		6/20/22		7,000	EUR		(145	)		(93	)		(52	)
Air France-KLM		(5.00)%		Quarterly		JPHQ		6/20/22		13,000	EUR		(269	)		(82	)		(187	)
Air France-KLM		(5.00)%		Quarterly		JPHQ		6/20/22		13,000	EUR		(269	)		(78	)		(191	)
American Airlines Group Inc.		(5.00)%		Quarterly		BZWS		12/20/21		9,000			(89	)		40			(129	)
American Airlines Group Inc.		(5.00)%		Quarterly		BZWS		12/20/21		23,000			(226	)		98			(324	)
American Airlines Group Inc.		(5.00)%		Quarterly		BZWS		12/20/21		23,000			(227	)		99			(326	)
American Airlines Group Inc.		(5.00)%		Quarterly		BZWS		12/20/23		39,000			1,663			1,107			556
American Airlines Group Inc.		(5.00)%		Quarterly		BZWS		12/20/23		66,000			2,814			2,966			(152	)
American Airlines Group Inc.		(5.00)%		Quarterly		BZWS		6/20/24		42,000			2,273			2,237			36

franklintempleton.com Semiannual Report 29

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Long Short Credit Fund (continued)

Credit Default Swap Contracts (continued)
Description	Annual Payment Rate Received (Paid)		Payment Frequency		Counterparty		Maturity Date		Notional Amounta			Value			Unamortized Upfront Payments (Receipts)			Unrealized Appreciation (Depreciation)			Ratingb
OTC Swap Contracts (continued)
Contracts to Buy Protectionc (continued)
Single Name (continued)
American Airlines Group Inc.		(5.00)%		Quarterly		BZWS		6/20/26		200,000		$	20,988		$	9,615		$	11,373
American Airlines Group Inc.		(5.00)%		Quarterly		CITI		12/20/21		14,000			(138	)		89			(227	)
American Airlines Group Inc.		(5.00)%		Quarterly		CITI		12/20/21		43,000			(423	)		172			(595	)
American Airlines Group Inc.		(5.00)%		Quarterly		CITI		6/20/26		28,000			2,938			2,657			281
American Airlines Group Inc.		(5.00)%		Quarterly		CITI		6/20/26		34,000			3,568			2,989			579
American Airlines Group Inc.		(5.00)%		Quarterly		FBCO		12/20/21		9,000			(89	)		36			(125	)
American Airlines Group Inc.		(5.00)%		Quarterly		FBCO		12/20/21		14,000			(138	)		65			(203	)
American Airlines Group Inc.		(5.00)%		Quarterly		GSCO		12/20/21		9,000			(89	)		36			(125	)
American Airlines Group Inc.		(5.00)%		Quarterly		GSCO		12/20/21		24,000			(237	)		201			(438	)
American Airlines Group Inc.		(5.00)%		Quarterly		GSCO		6/20/23		19,000			451			249			202
American Airlines Group Inc.		(5.00)%		Quarterly		GSCO		6/20/23		19,000			451			335			116
American Airlines Group Inc.		(5.00)%		Quarterly		GSCO		6/20/23		19,000			450			353			97
American Airlines Group Inc.		(5.00)%		Quarterly		GSCO		12/20/23		38,000			1,620			1,164			456
American Airlines Group Inc.		(5.00)%		Quarterly		GSCO		12/20/23		46,000			1,961			1,418			543
American Airlines Group Inc.		(5.00)%		Quarterly		JPHQ		12/20/21		10,000			(98	)		66			(164	)
American Airlines Group Inc.		(5.00)%		Quarterly		JPHQ		12/20/25		75,000			6,970			12,394			(5,424	)
American Axle & Manufacturing Inc.		(5.00)%		Quarterly		BZWS		12/20/26		119,000			(4,862	)		(4,520	)		(342	)
American Axle & Manufacturing Inc.		(5.00)%		Quarterly		BZWS		12/20/26		96,000			(3,922	)		(3,014	)		(908	)
American Axle & Manufacturing Inc.		(5.00)%		Quarterly		BZWS		12/20/26		119,000			(4,861	)		(2,979	)		(1,882	)
American Axle & Manufacturing Inc.		(5.00)%		Quarterly		BZWS		12/20/26		96,000			(3,922	)		(2,807	)		(1,115	)
American Axle & Manufacturing Inc.		(5.00)%		Quarterly		BZWS		12/20/26		82,000			(3,349	)		(2,228	)		(1,121	)
American Axle & Manufacturing Inc.		(5.00)%		Quarterly		BZWS		12/20/26		36,000			(1,470	)		(932	)		(538	)
American Axle & Manufacturing Inc.		(5.00)%		Quarterly		BZWS		12/20/26		29,000			(1,185	)		(849	)		(336	)
American Axle & Manufacturing Inc.		(5.00)%		Quarterly		GSCO		12/20/26		48,000			(1,406	)		(1,406	)		—
Dow Inc.		(1.00)%		Quarterly		GSCO		6/20/25		66,000			(1,246	)		(342	)		(904	)
Dow Inc.		(1.00)%		Quarterly		GSCO		6/20/25		66,000			(1,247	)		(228	)		(1,019	)
Dow Inc.		(1.00)%		Quarterly		GSCO		6/20/25		7,000			(132	)		(34	)		(98	)
GE Capital Funding LLC		(1.00)%		Quarterly		JPHQ		12/20/26		338,000			(5,490	)		(3,283	)		(2,207	)
Government of Brazil		(1.00)%		Quarterly		BZWS		12/20/26		182,000			13,032			8,457			4,575
Government of Italy		(1.00)%		Quarterly		BOFA		6/20/24		233,000			(3,435	)		1,248			(4,683	)
Government of Italy		(1.00)%		Quarterly		BOFA		6/20/24		140,000			(2,064	)		1,683			(3,747	)
Government of Turkey		(1.00)%		Quarterly		BZWS		12/20/23		124,000			9,051			9,291			(240	)
Government of Turkey		(1.00)%		Quarterly		BZWS		12/20/23		290,000			21,167			19,401			1,766
Hovnanian Enterprises Inc.		(5.00)%		Quarterly		BZWS		6/20/26		8,000			705			777			(72	)
Hovnanian Enterprises Inc.		(5.00)%		Quarterly		BZWS		6/20/26		40,000			3,529			3,708			(179	)
Itochu Corp.		(1.00)%		Quarterly		GSCO		6/20/22		12,107,000	JPY		(791	)		(390	)		(401	)
JFE Holdings Inc.		(1.00)%		Quarterly		GSCO		6/20/22		5,348,000	JPY		(339	)		(178	)		(161	)
Kohl’s Corp.		(1.00)%		Quarterly		CITI		12/20/25		207,000			(255	)		15,406			(15,661	)
Kohl’s Corp.		(1.00)%		Quarterly		GSCO		12/20/25		154,000			(189	)		11,307			(11,496	)
Kohl’s Corp.		(1.00)%		Quarterly		MSCS		12/20/25		221,000			(272	)		16,448			(16,720	)
Macy’s Retail Holdings LLC		(1.00)%		Quarterly		BZWS		12/20/26		21,000			1,181			1,487			(306	)
Marubeni Corp.		(1.00)%		Quarterly		CITI		6/20/25		3,711,000	JPY		(972	)		773			(1,745	)
Marubeni Corp.		(1.00)%		Quarterly		GSCO		6/20/22		18,860,000	JPY		(1,211	)		(502	)		(709	)

30 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Long Short Credit Fund (continued)

Credit Default Swap Contracts (continued)
Description	Annual Payment Rate Received (Paid)		Payment Frequency		Counterparty		Maturity Date		Notional Amounta			Value			Unamortized Upfront Payments (Receipts)			Unrealized Appreciation (Depreciation)			Ratingb
OTC Swap Contracts (continued)
Contracts to Buy Protectionc (continued)
Single Name (continued)
MBIA Inc.		(5.00)%		Quarterly		BZWS		6/20/22		23,000		$	(728	)	$	(150	)	$	(578	)
MBIA Inc.		(5.00)%		Quarterly		CITI		6/20/22		36,000			(1,138	)		(650	)		(488	)
MBIA Inc.		(5.00)%		Quarterly		GSCO		6/20/22		21,000			(664	)		(300	)		(364	)
MBIA Inc.		(5.00)%		Quarterly		JPHQ		12/20/24		97,000			(8,082	)		(8,353	)		271
Mitsui O.S.K. Lines Ltd.		(1.00)%		Quarterly		JPHQ		6/20/22		3,878,000	JPY		(231	)		(33	)		(198	)
Mitsui O.S.K. Lines Ltd.		(1.00)%		Quarterly		JPHQ		6/20/22		3,618,000	JPY		(215	)		(30	)		(185	)
Simon Property Group LP		(1.00)%		Quarterly		JPHQ		12/20/25		434,000			(8,668	)		7,482			(16,150	)
Simon Property Group LP		(1.00)%		Quarterly		MSCS		12/20/25		340,000			(6,790	)		5,862			(12,652	)
Softbank Group Corp.		(1.00)%		Quarterly		BZWS		12/20/26		33,600,000	JPY		23,013			20,822			2,191
Stena AB		(5.00)%		Quarterly		GSCO		6/20/24		92,000	EUR		(6,122	)		4,128			(10,250	)
Stena AB		(5.00)%		Quarterly		GSCO		12/20/26		9,000	EUR		(349	)		(260	)		(89	)
TDC A/S		(1.00)%		Quarterly		BNPP		12/20/26		20,000	EUR		782			753			29
TDC A/S		(1.00)%		Quarterly		BNPP		12/20/26		20,000	EUR		782			937			(155	)
TDC A/S		(1.00)%		Quarterly		BNPP		12/20/26		20,000	EUR		782			937			(155	)
Telecom Italia		(1.00)%		Quarterly		JPHQ		12/20/26		20,000	EUR		1,694			1,063			631
Telecom Italia		(1.00)%		Quarterly		JPHQ		12/20/26		20,000	EUR		1,694			1,134			560
Telecom Italia		(1.00)%		Quarterly		JPHQ		12/20/26		20,000	EUR		1,695			1,566			129
Telecom Italia		(1.00)%		Quarterly		JPHQ		12/20/26		22,000	EUR		1,864			1,776			88
Telecom Italia		(1.00)%		Quarterly		JPHQ		12/20/26		41,000	EUR		3,473			3,350			123
Contracts to Sell Protectionc,d
Single Name
Euro Garage Ltd.		5.00%		Quarterly		GSCO		12/20/26		16,000	EUR		929			830			99			B
Government of Turkey		1.00%		Quarterly		BZWS		12/20/26		207,000			(35,597	)		(32,230	)		(3,367	)		B+
Government of Turkey		1.00%		Quarterly		BZWS		12/20/26		83,000			(14,273	)		(14,122	)		(151	)		B+
Groupe Casino		5.00%		Quarterly		GSCO		12/20/26		21,000	EUR		(2,379	)		(1,711	)		(668	)		BB-
Total OTC Swap Contracts												$	278		$	97,180		$	(96,902	)
Total Credit Default Swap Contracts												$	(274,766	)	$	(141,246	)	$	(133,520	)

^aIn U.S. dollars unless otherwise indicated. For contracts to sell protection, the notional amount is equal to the maximum potential amount of the future payments and no recourse provisions have been entered into in association with the contracts.

^bBased on Standard and Poor’s (S&P) Rating for single name swaps.

^cPerformance triggers for settlement of contract include default, bankruptcy or restructuring for single name swaps and failure to pay or bankruptcy of the underlying securities for traded index swaps.

^dThe Fund enters contracts to sell protection to create a long credit position.

At November 30, 2021, the Fund had the following interest rate swap contracts outstanding. See Note 1(e).

Interest Rate Swap Contracts
Description	Payment Frequency		Maturity Date		Notional Amount*			Value/Unrealized Appreciation (Depreciation)
Centrally Cleared Swap Contracts
Receive Floating rate 3 Month USD-LIBOR Pay Fixed rate 1.75%		Quarterly		3/18/22		1,100,000		$	(3,507	)
Receive Floating rate 6 Month-WIBOR Pay Fixed rate 2.95%		Annually		3/16/27		3,980,767	PLN		—
Receive Floating rate 3 Month USD-LIBOR Pay Fixed rate 2.25%		Quarterly		6/20/28		1,100,000			(136,032	)

franklintempleton.com Semiannual Report 31

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

STATEMENT OF INVESTMENTS (UNAUDITED)

Franklin K2 Long Short Credit Fund (continued)

Interest Rate Swap Contracts (continued)
Description	Payment Frequency		Maturity Date		Notional Amount*			Value/Unrealized Appreciation (Depreciation)
Centrally Cleared Swap Contracts (continued)
Receive Floating rate 6 Month-SORA Pay Fixed rate 1.23%		Semi-Annually		12/15/31		455,901	SGD	$	14,703
Total Interest Rate Swap Contracts								$	(124,836	)

*In U.S. dollars unless otherwise indicated.

At November 30, 2021, the Fund had the following total return swap contracts outstanding. See Note 1(e).

Total Return Swap Contracts

Underlying Instrument

Financing Rate

Payment Frequency

Counterparty

Maturity Date

Notional Value

Value/Unrealized Appreciation (Depreciation)

OTC Swap Contracts

Equity Contracts – Longa

Clearway Energy Inc.

1-Month LIBOR + 0.35

%

Monthly

JPHQ

1/20/22

$

42,775

$

7,876

Clearway Energy Inc.

1-Month LIBOR + 0.40

%

Monthly

GSCO

4/20/22

126,174

22,996

Clearway Energy Inc.

1-Month LIBOR + 0.40

%

Monthly

BZWS

5/16/22

8,221

840

Energy Transfer LP

1-Month LIBOR + 0.90

%

Monthly

GSCO

10/04/22

36,005

(4,754

)

Energy Transfer LP

1-Month LIBOR + 0.50

%

Monthly

CITI

10/20/22

34,265

(5,711

)

Enterprise Products Partners LP

1-Month LIBOR + 0.90

%

Monthly

BOFA

3/04/22

30,167

(3,581

)

Enterprise Products Partners LP

1-Month LIBOR + 0.90

%

Monthly

GSCO

4/20/22

32,422

(3,862

)

13,804

Interest Rate Contracts – Longa

Government of Egypt

1-Day FEDEF

Monthly

CITI

1/11/22

86,712

4,020

Government of Indonesia

3-Month LIBOR + 0.70

%

Monthly

BOFA

2/17/22

114,441

(3,236

)

Government of Indonesia

3-Month LIBOR + 0.70

%

Monthly

BOFA

5/18/22

431,215

(6,776

)

Government of Indonesia

3-Month LIBOR + 0.60

%

Monthly

DBAB

6/15/32

103,643

7,183

1,191

Total - Total Return Swap Contracts

$

14,995

^aThe Fund receives the total return on the underlying instrument and pays a variable financing rate.

See Note 11 regarding other derivative information.

See Abbreviations on page 51.

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

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

FINANCIAL STATEMENTS

Statement of Assets and Liabilities

November 30, 2021 (unaudited)

Franklin K2 Long Short Credit Fund

Assets:
Investments in securities:
Cost – Unaffiliated issuers	$	97,907,279
Cost – Unaffiliated repurchase agreements		4,402,397
Value – Unaffiliated issuers	$	98,526,005
Value – Unaffiliated repurchase agreements		4,402,397
Cash		870,927
Restricted cash for OTC derivatives (Note 1f)		70,000
Foreign currency, at value (cost $500,915)		500,060
Receivables:
Investment securities sold		814,471
Capital shares sold		879,475
Dividends and interest		606,268
Deposits with brokers for:
Securities sold short		4,254,192
OTC derivative contracts		360,000
Futures contracts		86,500
Centrally cleared swap contracts		234,653
Due from brokers		238,512
Variation margin on futures contracts		47,141
OTC swap contracts (upfront payments $224,311)		179,089
Unrealized appreciation on OTC forward exchange contracts		203,715
Unrealized appreciation on OTC swap contracts		67,616
Total assets		112,341,021
Liabilities:
Payables:
Investment securities purchased		852,294
Capital shares redeemed		156,061
Management fees		104,579
Distribution fees		7,120
Trustees’ fees and expenses		1,592
Transfer agent fees		16,413
Deposits from brokers for:
OTC derivative contracts		70,000
Due to brokers		37,133
OTC swap contracts (upfront receipts $101,352)		81,909
Options written, at value (premiums received $1,424)		867
Securities sold short, at value (proceeds $4,322,379)		4,225,944
Unrealized depreciation on OTC forward exchange contracts		94,696
Unrealized depreciation on OTC swap contracts		149,523
Unrealized depreciation on unfunded loan commitments (Note 10)		4,403
Accrued expenses and other liabilities		92,466
Total liabilities		5,895,000
Net assets, at value	$	106,446,021
Net assets consist of:
Paid-in capital	$	102,486,855
Total distributable earnings (loss)		3,959,166
Net assets, at value	$	106,446,021

franklintempleton.com The accompanying notes are an integral part of these financial statements.    |   Semiannual Report 33

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

FINANCIAL STATEMENTS

Statement of Assets and Liabilities (continued)

November 30, 2021 (unaudited)

Franklin K2 Long Short Credit Fund

Class A:
Net assets, at value	$23,486,656
Shares outstanding	2,153,641
Net asset value per sharea	$10.91
Maximum offering price per share (net asset value per share ÷ 94.50%)	$11.54
Class C:
Net assets, at value	$2,684,207
Shares outstanding	251,604
Net asset value and maximum offering price per sharea	$10.67
Class R:
Net assets, at value	$211,835
Shares outstanding	19,650
Net asset value and maximum offering price per share	$10.78
Class R6:
Net assets, at value	$5,823
Shares outstanding	531
Net asset value and maximum offering price per share	$10.97
Advisor Class:
Net assets, at value	$80,057,500
Shares outstanding	7,323,392
Net asset value and maximum offering price per share	$10.93

^aRedemption price is equal to net asset value less contingent deferred sales charges, if applicable.

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

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

FINANCIAL STATEMENTS

Statement of Operations

for the six months ended November 30, 2021 (unaudited)

Franklin K2 Long Short Credit Fund

Investment income:
Dividends:
Unaffiliated issuers	$	45,136
Interest:
Unaffiliated issuers:
Paydown gain (loss)		265,135
Paid in cash		2,103,770
Total investment income		2,414,041
Expenses:
Management fees (Note 3a)		857,725
Distribution fees: (Note 3c)
Class A		31,553
Class C		14,055
Class R		494
Transfer agent fees: (Note 3e)
Class A		13,045
Class C		1,458
Class R		104
Class R6		41
Advisor Class		41,095
Custodian fees (Note 4) .		42,532
Reports to shareholders fees		15,341
Registration and filing fees		34,120
Professional fees		81,373
Trustees’ fees and expenses		15,406
Dividends and interest on securities sold short		112,015
Security borrowing fees		33,236
Other		24,246
Total expenses		1,317,839
Expense reductions (Note 4)		(804	)
Expenses waived/paid by affiliates (Note 3f)		(244,367	)
Net expenses		1,072,668
Net investment income		1,341,373
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:
Unaffiliated issuers		1,055,177
Written options		16,993
Foreign currency transactions		(47,317	)
Forward exchange contracts		(48,021	)
Futures contracts		(200,112	)
Securities sold short		(344,681	)
Swap contracts		(289,549	)
Net realized gain (loss)		142,490
Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		(2,525,347	)
Translation of other assets and liabilities denominated in foreign currencies		(79,592	)
Forward exchange contracts		311,948
Written options		1,573
Futures contracts		20,020
Securities sold short		481,973
Swap contracts		443,739
Net change in unrealized appreciation (depreciation)		(1,345,686	)
Net realized and unrealized gain (loss)		(1,203,196	)
Net increase (decrease) in net assets resulting from operations	$	138,177

franklintempleton.com The accompanying notes are an integral part of these financial statements.    |   Semiannual Report 35

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

FINANCIAL STATEMENTS

Statements of Changes in Net Assets

Franklin K2 Long Short Credit Fund

	Six Months Ended November 30, 2021 (unaudited)			Year Ended May 31, 2021
Increase (decrease) in net assets:
Operations:
Net investment income	$	1,341,373		$	2,724,125
Net realized gain (loss)		142,490			1,198,529
Net change in unrealized appreciation (depreciation)		(1,345,686	)		8,574,158
Net increase (decrease) in net assets resulting from operations		138,177			12,496,812
Distributions to shareholders:
Class A		—			(567,339	)
Class C		—			(51,591	)
Class R		—			(4,161	)
Class R6		—			(138	)
Advisor Class		—			(1,899,712	)
Total distributions to shareholders		—			(2,522,941	)
Capital share transactions: (Note 2)
Class A		(3,119,582	)		4,161,929
Class C		(252,540	)		(226,267	)
Class R		16,449			8,527
Advisor Class		3,298,910			(3,869,073	)
Total capital share transactions		(56,763	)		75,116
Net increase (decrease) in net assets		81,414			10,048,987
Net assets:
Beginning of period		106,364,607			96,315,620
End of period	$	106,446,021		$	106,364,607

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

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

FRANKLIN K2 LONG SHORT CREDIT FUND

Notes to Financial Statements

1. Organization and Significant Accounting Policies

Franklin Alternative Strategies Funds (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company, consisting of two separate funds and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP). Franklin K2 Long Short Credit Fund (Fund) is included in this report. The Fund offers five classes of shares: Class A, Class C, Class R, Class R6 and Advisor Class. Effective August 2, 2021, Class C shares automatically convert to Class A shares on a monthly basis, after they have been held for 8 years. Prior to August 2, 2021, Class C shares converted to Class A shares after a 10-year holding period. Each class of shares may differ by its initial sales load, contingent deferred sales charges, voting rights on matters affecting a single class, its exchange privilege and fees due to differing arrangements for distribution and transfer agent fees.

The following summarizes the Fund’s significant accounting policies.

a. Financial Instrument Valuation

The Fund’s investments in financial instruments are carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Fund calculates the net asset value (NAV) per share 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 Trust’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 and derivative financial instruments listed on an exchange or on the NASDAQ National Market System are valued at the last quoted sale price or the official closing price of the day, respectively. Foreign equity securities are valued as of the close of trading on the foreign stock exchange on which the security is primarily traded or as of 4 p.m. Eastern time. The value is then converted into its U.S. dollar equivalent at the foreign exchange rate in effect at 4 p.m. Eastern time on the day that the value of the security

is determined. Over-the-counter (OTC) securities are valued within the range of the most recent quoted bid and ask prices. Securities that trade in multiple markets or on multiple exchanges are valued according to the broadest and most representative market. Certain equity securities are valued based upon fundamental characteristics or relationships to similar securities.

Debt securities generally trade in the OTC market rather than on a securities exchange. The Fund’s pricing services use multiple valuation techniques to determine fair value. In instances where sufficient market activity exists, the pricing services may utilize a market-based approach through which quotes from market makers are used to determine fair value. In instances where sufficient market activity may not exist or is limited, the pricing services also utilize proprietary valuation models which may consider market characteristics such as benchmark yield curves, credit spreads, estimated default rates, anticipated market interest rate volatility, coupon rates, anticipated timing of principal repayments, underlying collateral, and other unique security features in order to estimate the relevant cash flows, which are then discounted to calculate the fair value. Securities denominated in a foreign currency are converted into their U.S. dollar equivalent at the foreign exchange rate in effect at 4 p.m. Eastern time on the date that the values of the foreign debt securities are determined.

Investments in open-end mutual funds are valued at the closing NAV. Investments in repurchase agreements are valued at cost, which approximates fair value.

Certain derivative financial instruments are centrally cleared or 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

franklintempleton.com Semiannual Report 37

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

NOTES TO FINANCIAL STATEMENTS

Franklin K2 Long Short Credit Fund (continued)

1. Organization and Significant Accounting Policies (continued)

a. Financial Instrument Valuation (continued)

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.

Trading in securities on foreign securities stock exchanges and OTC markets may be completed before 4 p.m. Eastern time. In addition, trading in certain foreign markets may not take place on every Fund’s business day. Events can occur between the time at which trading in a foreign security is completed and 4 p.m. Eastern time that might call into question the reliability of the value of a portfolio security held by the Fund. As a result, differences may arise between the value of the Fund’s portfolio securities as determined at the foreign market close and the latest indications of value at 4 p.m. Eastern time. In order to minimize the potential for these differences, an independent pricing service may be used to adjust the value of the Funds’ portfolio securities to the latest indications of fair value at 4 p.m. Eastern time. At November 30, 2021, certain securities may have been fair valued using these procedures, in which case the securities were categorized as Level 2 inputs within the fair value hierarchy (referred to as “market level fair value”). See the Fair Value Measurements note for more information.

When the last day of the reporting period is a non-business day, certain foreign markets may be open on those days that the Fund’s NAV is not calculated, which could result in differences between the value of the Fund’s portfolio securities on the last business day and the last calendar day of the reporting period. Any significant security valuation changes due to an open foreign market are adjusted and reflected by the Fund for financial reporting purposes.

b. Foreign Currency Translation

Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the exchange rate of such currencies against U.S. dollars on the date of valuation. The Fund may enter into foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of securities, income and expense items denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date. Portfolio securities and

assets and liabilities denominated in foreign currencies contain risks that those currencies will decline in value relative to the U.S. dollar. Occasionally, events may impact the availability or reliability of foreign exchange rates used to convert the U.S. dollar equivalent value. If such an event occurs, the foreign exchange rate will be valued at fair value using procedures established and approved by the Board.

The Fund does not separately report the effect of changes in foreign exchange rates from changes in market prices on securities held. Such changes are included in net realized and unrealized gain or loss from investments in the Statement of Operations.

Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions and the difference between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period.

c. Joint Repurchase Agreement

The Fund enters into a joint repurchase agreement whereby its uninvested cash balance is deposited into a joint cash account with other funds managed by the investment manager or an affiliate of the investment manager and is used to invest in one or more repurchase agreements. The value and face amount of the joint repurchase agreement are allocated to the funds based on their pro-rata interest. A repurchase agreement is accounted for as a loan by the Fund to the seller, collateralized by securities which are delivered to the Fund’s custodian. The fair value, including accrued interest, of the initial collateralization is required to be at least 102% of the dollar amount invested by the funds, with the value of the underlying securities marked to market daily to maintain coverage of at least 100%. Repurchase agreements are subject to the terms of Master Repurchase Agreements (MRAs) with approved counterparties (sellers). The MRAs contain various provisions, including but not limited to events of default and maintenance of collateral for repurchase agreements. In the event of default by either the seller 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 Fund may sell securities it holds as collateral and

38 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

NOTES TO FINANCIAL STATEMENTS

Franklin K2 Long Short Credit Fund (continued)

apply the proceeds towards the repurchase price and any other amounts owed by the seller to the Fund in the event of default by the seller. This could involve costs or delays in addition to a loss on the securities if their value falls below the repurchase price owed by the seller. The joint repurchase agreement held by the Fund at period end, as indicated in the Statement of Investments, had been entered into on November 30, 2021.

d. Securities Purchased on a Delayed Delivery Basis

The Fund purchases securities on a delayed delivery 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.

e. 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.

Derivative counterparty credit risk is managed through a formal evaluation of the creditworthiness of all potential counterparties. The Fund attempts to reduce its exposure to counterparty credit risk on OTC derivatives, whenever possible, by entering into International Swaps and Derivatives Association (ISDA) master agreements with certain counterparties. These agreements contain various provisions, including but not limited to collateral requirements, events of default, or early termination. Termination events applicable to the counterparty include certain deteriorations in the credit quality of the counterparty. Termination events applicable to

the Fund include failure of the Fund to maintain certain net asset levels and/or limit the decline in net assets over various periods of time. In the event of default or early termination, the ISDA master agreement gives the non-defaulting party the right to net and close-out all transactions traded, whether or not arising under the ISDA agreement, to one net amount payable by one counterparty to the other. However, absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities. Early termination by the counterparty may result in an immediate payment by the Fund of any net liability owed to that counterparty under the ISDA agreement.

Collateral requirements differ by type of derivative. Collateral or initial margin requirements are set by the broker or exchange clearing house for exchange traded and centrally cleared derivatives. Initial margin deposited is held at the exchange and can be in the form of cash and/or securities.

For OTC derivatives traded under an ISDA master agreement, posting of collateral is required by either the Fund or the applicable counterparty if the total net exposure of all OTC derivatives with the applicable counterparty exceeds the minimum transfer amount, which typically ranges from $100,000 to $250,000, and can vary depending on the counterparty and the type of the agreement. Generally, collateral is determined at the close of Fund business each day and any additional collateral required due to changes in derivative values may be delivered by the Fund or the counterparty the next business day, or within a few business days. Collateral pledged and/or received by the Fund for OTC derivatives, if any, is held in segregated accounts with the Fund’s custodian/counterparty broker and can be in the form of cash and/or securities. Unrestricted cash may be invested according to the Fund’s investment objectives. To the extent that the amounts due to the Fund from its counterparties are not subject to collateralization or are not fully collateralized, the Fund bears the risk of loss from counterparty non-performance.

The Fund entered into exchange traded futures contracts primarily to manage and/or gain exposure to interest rate and equity price risk. A futures contract is an agreement between the Fund and a counterparty to buy or sell an asset at a specified price on a future date. Required initial margins are pledged by the Fund, and the daily change in fair value is accounted for as a variation margin payable or receivable in the Statement of Assets and Liabilities.

franklintempleton.com Semiannual Report 39

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

NOTES TO FINANCIAL STATEMENTS

Franklin K2 Long Short Credit Fund (continued)

1. Organization and Significant Accounting Policies (continued)

e. Derivative Financial Instruments(continued)

The Fund entered into OTC forward exchange contracts primarily to manage and/or gain exposure to certain foreign currencies. A forward exchange contract is an agreement between the Fund and a counterparty to buy or sell a foreign currency at a specific exchange rate on a future date.

The Fund entered into credit default swap contracts primarily to manage and/or gain exposure to credit risk. A credit default swap is an agreement between the Fund and a counterparty whereby the buyer of the contract receives credit protection and the seller of the contract guarantees the credit worthiness of a referenced debt obligation. These agreements may be privately negotiated in the over-the-counter market (OTC credit default swaps) or may be executed in a multilateral trade facility platform, such as a registered exchange (centrally cleared credit default swaps). The underlying referenced debt obligation may be a single issuer of corporate or sovereign debt, a credit index, a basket of issuers or indices, or a tranche of a credit index or basket of issuers or indices. In the event of a default of the underlying referenced debt obligation, the buyer is entitled to receive the notional amount of the credit default swap contract from the seller in exchange for the referenced debt obligation, a net settlement amount equal to the notional amount of the credit default swap less the recovery value of the referenced debt obligation, or other agreed upon amount. For centrally cleared credit default swaps, required initial margins are pledged by the Fund, and the daily change in fair value is accounted for as a variation margin payable or receivable in the Statement of Assets and Liabilities. Over the term of the contract, the buyer pays the seller a periodic stream of payments, provided that no event of default has occurred. Such periodic payments are accrued daily as an unrealized appreciation or depreciation until the payments are made, at which time they are realized. Upfront payments and receipts are reflected in the Statement of Assets and Liabilities and represent compensating factors between stated terms of the credit default swap agreement and prevailing market conditions (credit spreads and other relevant factors). These upfront payments and receipts are amortized over the term of the contract as a realized gain or loss in the Statement of Operations.

The Fund entered into interest rate swap contracts primarily to manage interest rate risk. An interest rate swap is an

agreement between the Fund and a counterparty to exchange cash flows based on the difference between two interest rates, applied to a notional amount. These agreements may be privately negotiated in the over-the-counter market (OTC interest rate swaps) or may be executed on a registered exchange (centrally cleared interest rate swaps). For centrally cleared interest rate swaps, required initial margins are pledged by the Fund, and the daily change in fair value is accounted for as a variation margin payable or receivable in the Statement of Assets and Liabilities. Over the term of the contract, contractually required payments to be paid and to be received are accrued daily and recorded as unrealized depreciation and appreciation until the payments are made, at which time they are realized.

The Fund entered into OTC total return swap contracts primarily to manage and/or gain exposure to interest rate, equity price and credit 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.

The Fund purchased or wrote exchange traded and/or OTC option contracts primarily to manage and/or gain exposure to equity price risk. An option is a contract entitling the holder to purchase or sell a specific amount of shares or units of an asset or notional amount of a swap (swaption), at a specified price. When an option is purchased or written, an amount equal to the premium paid or received is recorded as an asset or liability, respectively. Upon exercise of an option, the acquisition cost or sales proceeds of the underlying investment is adjusted by any premium received or paid. Upon expiration of an option, any premium received or paid is recorded as a realized gain or loss. Upon closing an option other than through expiration or exercise, the difference between the premium received or paid and the cost to close the position is recorded as a realized gain or loss.

See Note 11 regarding other derivative information.

40 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

NOTES TO FINANCIAL STATEMENTS

Franklin K2 Long Short Credit Fund (continued)

f. Restricted Cash

At November 30, 2021, the Fund held restricted cash in connection with investments in certain derivative securities. Restricted cash is held in a segregated account with the Fund’s custodian/counterparty broker and is reflected in the Statement of Assets and Liabilities.

g. Loan Participation Notes

The Fund invests in loan participation notes (Participations). Participations are loans originally issued to a borrower by one or more financial institutions (the Lender) and subsequently sold to other investors, such as the Fund. Participations typically result in the Fund having a contractual relationship only with the Lender and not with the borrower. The Fund has the right to receive from the Lender any payments of principal, interest and fees which the Lender received from the borrower. The Fund generally has no rights to either enforce compliance by the borrower with the terms of the loan agreement or to any collateral relating to the original loan. As a result, the Fund assumes the credit risk of both the borrower and the Lender that is selling the Participation. The Participations may also involve interest rate risk and liquidity risk, including the potential default or insolvency of the borrower and/or the Lender.

h. Credit-Linked Notes

The Fund purchases credit-linked notes. Credit-linked notes are intended to replicate the economic effects that would apply had the Fund directly purchased the underlying reference asset. The risks of credit-linked notes include the potential default of the underlying reference asset, the movement in the value of the currency of the underlying reference asset relative to the credit-linked note, the potential inability of the Fund to dispose of the credit-linked note in the normal course of business, and the possible inability of the counterparties to fulfill their obligations under the contracts.

i. Securities Sold Short

The Fund is engaged in selling securities short, which obligates the Fund to replace a borrowed security with the same security at current fair value. The Fund incurs a loss if the price of the security increases between the date of the short sale and the date on which the Fund replaces the borrowed security. The Fund realizes a gain if the price of the security declines between those dates. Gains are limited to the price at which the Fund sold the security short, while losses are potentially unlimited in size.

The Fund is required to establish a margin account with the broker lending the security sold short. While the short sale is outstanding, the broker retains the proceeds of the short sale to the extent necessary to meet margin requirements until the short position is closed out. A deposit must also be maintained with the Fund’s custodian/counterparty broker consisting of cash and/or securities having a value equal to a specified percentage of the value of the securities sold short. The Fund is obligated to pay fees for borrowing the securities sold short and is required to pay the counterparty any dividends and/or interest due on securities sold short. Such dividends and/or interest and any security borrowing fees are recorded as an expense to the Fund.

j. 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.

k. 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

franklintempleton.com Semiannual Report 41

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

NOTES TO FINANCIAL STATEMENTS

Franklin K2 Long Short Credit Fund (continued)

1. Organization and Significant Accounting Policies (continued)

k. Income and Deferred Taxes (continued)

sustained upon examination by the tax authorities based on its technical merits. As of November 30, 2021, 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.

l. Security Transactions, Investment Income, Expenses and Distributions

Security transactions are accounted for on trade date. Realized gains and losses on security transactions are determined on a specific identification basis. Interest income and estimated expenses are accrued daily. Amortization of premium and accretion of discount on debt securities are included in interest income. Paydown gains and losses are recorded separately in the Statement of Operations. Facility fees are recognized as income over the expected term of the loan. Dividend income and dividends declared on securities sold short are 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. 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.

Common expenses incurred by the Trust are allocated among the Funds based on the ratio of net assets of each Fund to the combined net assets of the Trust or based on the ratio of number of shareholders of each Fund to the combined number of shareholders of the Trust. Fund specific expenses are charged directly to the Fund that incurred the expense.

Realized and unrealized gains and losses and net investment income, excluding class specific expenses, are allocated

daily to each class of shares based upon the relative proportion of net assets of each class. Differences in per share distributions by class are generally due to differences in class specific expenses.

m. 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.

n. Guarantees and Indemnifications

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

42 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

NOTES TO FINANCIAL STATEMENTS

Franklin K2 Long Short Credit Fund (continued)

2. Shares of Beneficial Interest

At November 30, 2021, there were an unlimited number of shares authorized (without par value). Transactions in the Fund’s shares were as follows:

	Six Months Ended November 30, 2021						Year Ended May 31, 2021
	Shares			Amount			Shares			Amount
Class A Shares:
Shares solda		319,974		$	3,504,807			822,527		$	8,771,228
Shares issued in reinvestment of distributions		—			—			28,242			300,782
Shares redeemed		(604,590	)		(6,624,389	)		(461,890	)		(4,910,081	)
Net increase (decrease)		(284,616	)	$	(3,119,582	)		388,879		$	4,161,929
Class C Shares:
Shares sold		37,204		$	399,699			36,427		$	380,419
Shares issued in reinvestment of distributions		—			—			4,906			51,466
Shares redeemeda		(60,738	)		(652,239	)		(63,557	)		(658,152	)
Net increase (decrease)		(23,534	)	$	(252,540	)		(22,224	)	$	(226,267	)
Class R Shares:
Shares sold		1,525		$	16,449			466		$	5,000
Shares issued in reinvestment of distributions		—			—			337			3,557
Shares redeemed		—			—			(3	)		(30	)
Net increase (decrease)		1,525		$	16,449			800		$	8,527
Class R6 Shares:
Shares sold		—		$	—			—		$	—
Shares issued in reinvestment of distributions		—			—			—			—
Shares redeemed		—			—			—			—
Net increase (decrease)		—		$	—			—		$	—
Advisor Class Shares:
Shares sold		2,261,037		$	24,813,761			3,735,776		$	39,446,888
Shares issued in reinvestment of distributions		—			—			144,113			1,534,808
Shares redeemed		(1,959,322	)		(21,514,851	)		(4,254,581	)		(44,850,769	)
Net increase (decrease)		301,715		$	3,298,910			(374,692	)	$	(3,869,073	)

^aMay include a portion of Class C shares that were automatically converted to Class A.

3. 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 Trust are also officers and/or directors of the following subsidiaries:

Subsidiary	Affiliation
K2/D&S Management Co., L.L.C. (K2 Advisors)	Investment manager
Franklin Templeton Services, LLC (FT Services)	Administrative manager
Franklin Distributors, LLC (Distributors) (formerly Franklin Templeton Distributors, Inc.)	Principal underwriter
Franklin Templeton Investor Services, LLC (Investor Services)	Transfer agent

a. Management Fees

The Fund pays an investment management fee to K2 Advisors of 1.60% per year of the average daily net assets of the Fund.

franklintempleton.com Semiannual Report 43

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

NOTES TO FINANCIAL STATEMENTS

Franklin K2 Long Short Credit Fund (continued)

3. Transactions with Affiliates (continued)

a. Management Fees (continued)

Under each subadvisory agreement, the below entities provide subadvisory services to the Fund. The subadvisory fees are paid by K2 Advisors and are not an additional expense of the Fund. Each subadvisor is compensated for managing its respective portion of the average daily net assets of the Fund.

Subadvisors

Apollo Credit Management LLC

Benefit Street Partners L.L.C.*

Ellington Global Asset Management, LLC

Emso Asset Management Limited

Medalist Partners, LP

* An affiliate of K2 Advisors.

b. Administrative Fees

Under an agreement with K2 Advisors, FT Services provides administrative services to the Fund. The fee is paid by K2 Advisors based on the Fund’s average daily net assets, and is not an additional expense of the Fund.

c. Distribution Fees

The Board has adopted distribution plans for each share class, with the exception of Class R6 and Advisor Class shares, pursuant to Rule 12b-1 under the 1940 Act. Under the Fund’s Class A reimbursement distribution plan, the Fund reimburses Distributors for costs incurred in connection with the servicing, sale and distribution of the Fund’s shares up to the maximum annual plan rate. Under the Class A reimbursement distribution plan, costs exceeding the maximum for the current plan year cannot be reimbursed in subsequent periods. In addition, under the Fund’s Class C and R compensation distribution plans, the Fund pays Distributors for costs incurred in connection with the servicing, sale and distribution of the Fund’s shares up to the maximum annual plan rate for each class. The plan year, for purposes of monitoring compliance with the maximum annual plan rates, is February 1 through January 31.

The maximum annual plan rates, based on the average daily net assets, for each class, are as follows:

Class A	0.25%
Class C	1.00%
Class R	0.50%

d. Sales Charges/Underwriting Agreements

Front-end sales charges and contingent deferred sales charges (CDSC) do not represent expenses of the Fund. These charges are deducted from the proceeds of sales of Fund shares prior to investment or from redemption proceeds prior to remittance, as applicable. Distributors has advised the Fund of the following commission transactions related to the sales and redemptions of the Fund’s shares for the period:

Sales charges retained net of commissions paid to unaffiliated brokers/dealers	$	1,003
CDSC retained	$	81

e. Transfer Agent Fees

Each class of shares pays transfer agent fees to Investor Services for its performance of shareholder servicing obligations. The fees are based on an annualized asset based fee of 0.02% plus a transaction based fee. In addition, each class reimburses Investor Services for out of pocket expenses incurred and, except for Class R6, reimburses shareholder servicing fees paid to third parties. These fees are allocated daily based upon their relative proportion of such classes’ aggregate net assets. Class R6 pays Investor Services transfer agent fees specific to that class.

44 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

NOTES TO FINANCIAL STATEMENTS

Franklin K2 Long Short Credit Fund (continued)

For the period ended November 30, 2021, the Fund paid transfer agent fees of $55,743, of which $22,243 was retained by Investor Services.

f. Waiver and Expense Reimbursements

K2 Advisors has contractually agreed in advance to waive or limit its fees and to assume as their own expense certain expenses otherwise payable by the Fund so that the operating expenses (excluding interest expense, distribution fees, acquired fund fees and expenses, expenses related to securities sold short, and certain non-routine expenses or costs, including those relating to litigation, indemnification, reorganizations and liquidations) for each class of the Fund do not exceed 1.65% based on the average net assets of each class until September 30, 2022. Total expenses waived or paid are not subject to recapture subsequent to the Fund’s fiscal year end.

Investor Services has contractually agreed in advance to waive or limit its fees so that the Class R6 transfer agent fees do not exceed 0.03% based on the average net assets of the class until September 30, 2022.

g. Other Affiliated Transactions

At November 30, 2021, Franklin Resources, Inc. owned 7.10% of the Fund’s outstanding shares.

4. Expense Offset Arrangement

The Fund has entered into an arrangement with its custodian whereby credits realized as a result of uninvested cash balances are used to reduce a portion of the Fund’s custodian expenses. During the period ended November 30, 2021, the custodian fees were reduced as noted in the Statement of Operations.

5. Income Taxes

At November 30, 2021, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:

Cost of investments	$	97,917,599
Unrealized appreciation	$	2,828,717
Unrealized depreciation		(2,327,949	)
Net unrealized appreciation (depreciation)	$	500,768

Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatments of foreign currency transactions and wash sales.

6. Investment Transactions

Purchases and sales of investments and securities sold short (excluding short term securities) for the period ended November 30, 2021, aggregated $69,314,210 and $68,329,641, respectively.

7. Credit Risk and Defaulted Securities

At November 30, 2021, the Fund had 25.4% of its portfolio invested in high yield, senior secured floating rate loans, or other securities rated below investment grade as determined by Nationally Recognized Statistical Credit Ratings Organizations and/or internally, by investment management and unrated securities. 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 may purchase the pre-default or defaulted debt of distressed companies. Distressed companies are financially troubled and could be or are already involved in financial restructuring or bankruptcy. Risks associated with purchasing these

franklintempleton.com Semiannual Report 45

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

NOTES TO FINANCIAL STATEMENTS

Franklin K2 Long Short Credit Fund (continued)

7. Credit Risk and Defaulted Securities (continued)

securities include the possibility that the bankruptcy or other restructuring process takes longer than expected, or that distributions in restructuring are less than anticipated, either or both of which may result in unfavorable consequences to the Fund. If it becomes probable that the income on debt securities, including those of distressed companies, will not be collected, the Fund discontinues accruing income and recognizes an adjustment for uncollectible interest.

At November 30, 2021, the aggregate long value of distressed company securities for which interest recognition has been discontinued was $1,950,618, representing 1.8% of the Fund’s net assets. For information as to specific securities, see the accompanying Statement of Investments.

8. Novel Coronavirus Pandemic

The global outbreak of the novel coronavirus disease, known as COVID-19, has caused adverse effects on many companies, sectors, nations, regions and the markets in general, and may continue for an unpredictable duration. The effects of this pandemic may materially impact the value and performance of the Fund, its ability to buy and sell fund investments at appropriate valuations and its ability to achieve its investment objectives.

9. 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.

At November 30, 2021, investments in restricted securities, excluding securities exempt from registration under the 1933 Act, were as follows:

Shares/ Principal Amount		Issuer	Acquisition Date		Cost		Value
	923	Acosta Inc.		12/31/19	$	8,144	$	7,476
	925	Acosta Inc., cvt. pfd.		12/31/19-6/30/21		50,262		46,250
	35,221	Riverbed Technology Inc., senior note, 6.00%, 1/13/22		10/13/21		35,055		34,869
	Total Restricted Securities (Value is 0.1% of Net Assets)				$	93,461	$	88,595

10. Unfunded Loan Commitments

The Fund enters into certain credit agreements, all or a portion of which may be unfunded. The Fund is obligated to fund these loan commitments at the borrowers’ discretion. Unfunded loan commitments and funded portions of credit agreements are marked to market daily and any unrealized appreciation or depreciation is included in the Statement of Assets and Liabilities and the Statement of Operations. Funded portions of credit agreements are presented in the Statement of Investments.

At November 30, 2021, unfunded commitments were as follows:

Borrower	Unfunded Commitment
Intelsat Jackson Holdings SA, Term Loan DIP	$	140,000
Upfield Group BV, Term Loan RC		214,532
	$	354,532

46 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

NOTES TO FINANCIAL STATEMENTS

Franklin K2 Long Short Credit Fund (continued)

11. Other Derivative Information

At November 30, 2021, the investments in derivative contracts are reflected in the Statement of Assets and Liabilities as follows:

	Asset Derivatives				Liability Derivatives
Derivative Contracts Not Accounted for as Hedging Instruments	Statement of Assets and Liabilities Location	Fair Value			Statement of Assets and Liabilities Location	Fair Value
Interest rate contracts	Variation margin on centrally cleared swap contracts	$	14,703	a	Variation margin on centrally cleared swap contracts	$	139,539	a
	Unrealized appreciation on OTC swap contracts		11,203		Unrealized depreciation on OTC swap contracts		10,012
					Variation margin on futures contracts		27,968	a
Foreign exchange contracts	Unrealized appreciation on OTC forward exchange contracts		203,715		Unrealized depreciation on OTC forward exchange contracts		94,696
Credit contracts	Variation margin on centrally cleared swap contracts		77,613	a	Variation margin on centrally cleared swap contracts		114,231	a
	OTC swap contracts (upfront payments)		179,089		OTC swap contracts (upfront receipts)		81,909
	Unrealized appreciation on OTC swap contracts		24,701		Unrealized depreciation on OTC swap contracts		121,603
Equity contracts	Investments in securities, at value		27,502	b	Options written, at value		867
	Unrealized appreciation on OTC swap contracts		31,712		Unrealized depreciation on OTC swap contracts		17,908
	Variation margin on futures contracts		32,786	a	Variation margin on futures contracts		12,471	a
Totals		$	603,024			$	621,204

^aThis amount reflects the cumulative appreciation (depreciation) of futures contracts and centrally cleared swap contracts as reported in the Statement of Investments. Only the variation margin receivable/payable at period end is separately reported within the Statement of Assets and Liabilities. Prior variation margin movements were recorded to cash upon receipt or payment.

^bPurchased option contracts are included in investments in securities, at value in the Statement of Assets and Liabilities.

For the period ended November 30, 2021, 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 Period			Statement of Operations Location	Net Change in Unrealized Appreciation (Depreciation) for the Period
	Net realized gain (loss) from:				Net change in unrealized appreciation (depreciation) on:
Interest rate contracts	Swap contracts	$	10,087		Swap contracts	$	67,545
	Futures contracts		(56,260	)	Futures contracts		(27,234	)
Foreign exchange contracts	Forward exchange contracts		(48,021	)	Forward exchange contracts		311,948
Credit contracts	Swap contracts		(421,977	)	Swap contracts		351,830
Equity contracts	Investments		(70,023	)a	Investments		(23,054	)a
	Written options		16,993		Written options		1,573
	Futures contracts		(143,852	)	Futures contracts		47,254
	Swap contracts		122,341		Swap contracts		24,364
Totals		$	(590,712	)		$	754,226

^aPurchased option contracts are included in net realized gain (loss) from investments and net change in unrealized appreciation (depreciation) on investments in the Statement of Operations.

franklintempleton.com Semiannual Report 47

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

NOTES TO FINANCIAL STATEMENTS

Franklin K2 Long Short Credit Fund (continued)

11. Other Derivative Information (continued)

For the period ended November 30, 2021, the average month end notional amount of options, futures contracts and swap contracts represented 36,500 shares, $3,082,563 and $21,184,096, respectively. The average month end contract value of forward exchange contracts was $9,958,035.

At November 30, 2021, OTC derivative assets and liabilities are as follows:

	Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
	Assetsa		Liabilitiesa
Derivatives
Forward Exchange Contracts	$	203,715	$	94,696
Options Purchased		3,240		—
Swap Contracts		246,705		231,432
Total	$	453,660	$	326,128

^aAbsent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

At November 30, 2021, OTC derivative assets, which may be offset against OTC derivative liabilities and collateral received from the counterparty, are as follows:

			Amounts Not Offset in the Statement of Assets and Liabilities
	Gross Amounts of Assets Presented in the Statement of Assets and Liabilities		Financial Instruments Available for Offset			Financial Instruments Collateral Received		Cash Collateral Received			Net Amount (Not less than zero)
Counterparty
BNPP	$	2,656	$	(310	)	$	—	$	—		$	2,346
BOFA		6,171		(6,171	)		—		—			—
BZWS		101,442		(75,897	)		—		—			25,545
CITI		26,966		(25,077	)		—		—			1,889
DBAB		7,183		—			—		—			7,183
FBCO		101		(101	)		—		—			—
GSCO		44,530		(40,689	)		—		—			3,841
JPHQ		133,262		(45,117	)		—		(70,000	)		18,145
JPHQa		109,039		—			—		—			109,039
MSCS		22,310		(22,310	)		—		—			—
Total	$	453,660	$	(215,672	)	$	—	$	(70,000	)	$	167,988

48 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

NOTES TO FINANCIAL STATEMENTS

Franklin K2 Long Short Credit Fund (continued)

At November 30, 2021, OTC derivative liabilities, which may be offset against OTC derivative assets and collateral pledged to the counterparty, are as follows:

			Amounts Not Offset in the Statement of Assets and Liabilities
	Gross Amounts of Liabilities Presented in the Statement of Assets and Liabilities		Financial Instruments Available for Offset			Financial Instruments Collateral Pledged		Cash Collateral Pledgedb			Net Amount (Not less than zero)
Counterparty
BNPP	$	310	$	(310	)	$	—	$	—		$	—
BOFA		22,023		(6,171	)		—		(15,852	)		—
BZWS		75,897		(75,897	)		—		—			—
CITI		25,077		(25,077	)		—		—			—
DBAB		—		—			—		—			—
FBCO		328		(101	)		—		(227	)		—
GSCO		40,689		(40,689	)		—		—			—
JPHQ		45,117		(45,117	)		—		—			—
JPHQa		87,315		—			—		—			87,315
MSCS		29,372		(22,310	)		—		(7,062	)		—
Total	$	326,128	$	(215,672	)	$	—	$	(23,141	)	$	87,315

^aRepresents derivatives not subject to an ISDA master agreement.

^bIn some instances, the collateral amounts disclosed in the table above were adjusted due to the requirement to limit the collateral amounts to avoid the effect of over collateralization. Actual collateral received and/or pledged may be more than the amounts disclosed herein.

See Note 1(e) regarding derivative financial instruments.

See Abbreviations on page 51.

12. Credit Facility

The Fund, together with other U.S. registered and foreign investment funds (collectively, Borrowers), managed by Franklin Templeton, are borrowers in a joint syndicated senior unsecured credit facility totaling $2.675 billion (Global Credit Facility) which matures on February 4, 2022. This Global Credit Facility provides a source of funds to the Borrowers for temporary and emergency purposes, including the ability to meet future unanticipated or unusually large redemption requests.

Under the terms of the Global Credit Facility, the Fund shall, in addition to interest charged on any borrowings made by the Fund and other costs incurred by the Fund, pay its share of fees and expenses incurred in connection with the implementation and maintenance of the Global Credit Facility, based upon its relative share of the aggregate net assets of all of the Borrowers, including an annual commitment fee of 0.15% based upon the unused portion of the Global Credit Facility. These fees are reflected in other expenses in the Statement of Operations. During the period ended November 30, 2021, the Fund did not use the Global Credit Facility.

franklintempleton.com Semiannual Report 49

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

NOTES TO FINANCIAL STATEMENTS

Franklin K2 Long Short Credit Fund (continued)

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.

A summary of inputs used as of November 30, 2021, 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 Investmentsb	$	2,570,046	$	75,310		$	73,855	$	2,719,211
Convertible Bonds		—		1,888,320			—		1,888,320
Corporate Bonds and Notes		—		27,117,975			—		27,117,975
Senior Floating Rate Interests		—		2,233,871			—		2,233,871
Senior Floating Rate Interests in Reorganization		—		70,793			—		70,793
Credit-Linked Notes		—		992,479			—		992,479
Foreign Government and Agency Securities		—		6,025,213			—		6,025,213
U.S. Government and Agency Securities		—		535,937			—		535,937
Asset-Backed Securities and Commercial Mortgage-Backed Securities		—		37,184,788			—		37,184,788
Municipal Bonds in Reorganization		—		1,879,825			—		1,879,825
Options Purchased		27,502		—			—		27,502
Short Term Investments		17,850,091		4,402,397			—		22,252,488
Total Investments in Securities	$	20,447,639	$	82,406,908	c	$	73,855	$	102,928,402
Other Financial Instruments:
Futures Contracts	$	32,786	$	—		$	—	$	32,786
Forward Exchange Contracts		—		203,715			—		203,715
Swap Contracts		—		159,932			—		159,932
Total Other Financial Instruments	$	32,786	$	363,647		$	—	$	396,433
Liabilities:
Other Financial Instruments:
Options Written	$	867	$	—		$	—	$	867
Securities Sold Shorta		164,407		4,061,537			—		4,225,944
Futures Contracts		40,439		—			—		40,439
Forward Exchange Contracts		—		94,696			—		94,696
Swap Contracts		—		403,293			—		403,293
Unfunded Loan Commitments		—		4,403			—		4,403
Total Other Financial Instruments	$	205,713	$	4,563,929		$	—	$	4,769,642

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

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

^cIncludes foreign securities valued at $75,310, which were categorized as Level 2 as a result of the application of market level fair value procedures. See the Financial Instrument Valuation note for more information.

A reconciliation in which Level 3 inputs are used in determining fair value is presented when there are significant Level 3 assets and/or liabilities at the beginning and/or end of the period.

50 Semiannual Report franklintempleton.com

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

NOTES TO FINANCIAL STATEMENTS

Franklin K2 Long Short Credit Fund (continued)

14. New Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting. In January 2021, the FASB issued ASU No. 2021-01, with further amendments to Topic 848. The amendments in the ASUs provide optional temporary accounting recognition and financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of the LIBOR and other interbank-offered based reference rates as of the end of 2021 for certain LIBOR settings and 2023 for the remainder. The ASUs are effective for certain reference rate-related contract modifications that occur during the period March 12, 2020 through December 31, 2022. Management has reviewed the requirements and believes the adoption of these ASUs will not have a material impact on the financial statements.

15. 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		Currency		Selected Portfolio
BNPP	BNP Paribas	CHF	Swiss Franc	ARM	Adjustable Rate Mortgage
BOFA	Bank of America Corp.	EGP	Egyptian Pound	CLO	Collateralized Loan Obligation
BZWS	Barclays Bank PLC	EUR	Euro	DIP	Debtor-In-Possession
CITI	Citigroup, Inc.	GBP	British Pound	ETF	Exchange Traded Fund
DBAB	Deutsche Bank AG	JPY	Japanese Yen	FEDEF	Federal Funds Effective Rate
FBCO	Credit Suisse Group AG	PLN	Polish Zloty	FHLMC	Federal Home Loan Mortgage Corp.
GSCO	The Goldman Sachs Group, Inc.	RUB	Russian Ruble	FNMA	Federal National Mortgage Association
JPHQ	JP Morgan Chase & Co.	SGD	Singapore Dollar	FRN	Floating Rate Note
MSCS	Morgan Stanley Capital Services LLC	USD	United States Dollar	LIBOR	London InterBank Offered Rate
		ZAR	South African Rand	PIK	Payment In-Kind
				RC	Revolving Loan Commitment
				REIT	Real Estate Investment Trust
Index				SFR	Single Family Revenue
CDX.NA.HY	CDX North America High Yield Index			SOFR	Secured Overnight Financing Rate
				SORA	Singapore Overnight Rate Average
				SPAC	Special Purpose Acquisition Company
				SPDR	Standard & Poor’s Depositary Receipt
				WIBOR	Warsaw Interbank Offered Rate

franklintempleton.com Semiannual Report 51

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

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 Trust, on behalf of the Fund, files a complete statement of investments with the U.S. Securities and Exchange Commission for the first and third quarters for each fiscal year 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.

Householding of Reports and Prospectuses

You will receive, or receive notice of the availability of, the Fund’s financial reports every six months. In addition, you will receive an annual updated summary prospectus (detail prospectus available upon request). To reduce Fund expenses, we try to identify related shareholders in a household and send only one copy of the financial reports (to the extent received by mail) and summary prospectus. This process, called “householding,” will continue indefinitely unless you instruct us otherwise. If you prefer not to have these documents householded, please call us at (800) 632-2301. At any time you may view current prospectuses/summary prospectuses and financial reports on our website. If you choose, you may receive these documents through electronic delivery.

52 Semiannual Report franklintempleton.com

Authorized for distribution only when accompanied or preceded by a summary prospectus and/or prospectus. Investors should carefully consider a fund’s investment goals, risks, charges and expenses before investing. A prospectus contains this and other information; please read it carefully before investing.

To help ensure we provide you with quality service, all calls to and from our service areas are monitored and/or recorded.

	Semiannual Report and Shareholder Letter Franklin K2 Long Short Credit Fund
	Investment Manager	Distributor	Shareholder Services
	K2/D&S Management Co., L.L.C.	Franklin Distributors, LLC (800) DIAL BEN®/342-5236 franklintempleton.com	(800) 632-2301
© 2022 Franklin Templeton Investments. All rights reserved.			948 S 01/22

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 experts are Ann Torre Bates and David W. Niemiec, and they are “independent” as defined under the relevant Securities and Exchange Commission Rules and Releases.

Item 4. Principal Accountant Fees and Services.

Not Applicable.

Item 5. Audit Committee of Listed Registrants.

Not Applicable.

Item 6. Investments.

Not applicable.

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

Not applicable.

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

Not applicable.

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

Not applicable.

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) The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)).

(b) There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d))) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.

Not applicable.

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 Christopher Kings, Treasurer, 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 Christopher Kings, Treasurer, 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.

(Registrant)       Franklin Alternative Strategies Funds                                             

By (Signature and Title)	/s/ Matthew T. Hinkle
	Matthew T. Hinkle, Chief Executive Officer – Finance and Administration
Date     January 26, 2022

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 (Signature and Title)	/s/ Matthew T. Hinkle
	Matthew T. Hinkle, Chief Executive Officer – Finance and Administration
Date     January 26, 2022
By (Signature and Title)	/s/ Christopher Kings
	Christopher Kings, Treasurer, Chief Financial Officer and Chief Accounting Officer
Date     January 26, 2022