UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

              Investment Company Act file number_811-04986

__Franklin Investors Securities Trust
(Exact name of registrant as specified in charter)

One Franklin Parkway

, San Mateo, CA  94403-1906

(Address of principal executive offices)           (Zip code)

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

(Name and address of agent for service)

Registrant's telephone number, including area code: _650 312-2000

Date of fiscal year end: 10/31

Date of reporting period: 10/31/20

Item 1. Reports to Stockholders.

ANNUAL

REPORT

AND

SHAREHOLDER

LETTER

Franklin

Investors

Securities

Trust

October

31,

2020

Sign

up

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delivery

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Franklin

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

Franklin

Managed

Income

Fund

Internet

Delivery

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Reports

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You

Request

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:

Effective

January

1,

2021,

as

permitted

by

the

SEC,

paper

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of

the

Fund’s

shareholder

reports

will

no

longer

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sent

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mail,

unless

you

specifically

request

them

from

the

Fund

or

your

financial

intermediary.

Instead,

the

reports

will

be

made

available

on

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and

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a

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franklintempleton.com

Not

part

of

the

annual

report

1

Shareholder

Letter

Dear

Shareholder:

During

the

12

months

ended

October

31,

2020,

the

U.S.

economy

grew

moderately

through

the

end

of

2019

amid

concerns

about

trade,

but

it

contracted

in

2020’s

first

and

second

quarters

in

response

to

the

novel

coronavirus

(COVID-19)

pandemic.

In

the

third

quarter,

the

economy

recovered

substantially

based

on

increased

business

and

residential

investment

and

consumer

spending.

The

U.S.

Federal

Reserve,

having

lowered

the

federal

funds

rate

three

times

earlier

in

2019

amid

global

trade

tensions,

held

it

unchanged

through

February

2020.

However,

given

larger

risks

posed

by

COVID-19,

the

Federal

Reserve

lowered

its

key

rate

twice

for

a

total

of

1.50%

in

March,

decreasing

it

from

1.75%

to

0.25%.

The

Federal

Reserve

also

announced

broad

quantitative

easing

measures

to

support

credit

markets

and

adjusted

its

policy

in

August

to

allow

more

flexibility

to

keep

interest

rates

low,

while

maintaining

a

2%

average

inflation

target.

In

this

environment,

the

prices

of

U.S.

stocks,

as

measured

by

the

Standard

&

Poor’s

®

500

Index

(S&P

500

®

),

rose

7.65%,

(the

index

increasing

from

3,037.56

to

3,269.96).

1,2

Investment-grade

bonds,

as

measured

by

the

Bloomberg

Barclays

U.S.

Aggregate

Bond

Index

(Bloomberg

Index),

posted

a

+6.19%

total

return

(an

index

increase

from

2,127.69

to

2,265.52),

which

includes

the

reinvestment

of

interest.

3

We

are

committed

to

our

long-term

perspective

and

disciplined

investment

approach

as

we

conduct

a

rigorous,

fundamental

analysis

of

securities

with

a

regular

emphasis

on

investment

risk

management.

We

believe

active,

professional

investment

management

serves

investors

well.

We

also

recognize

the

important

role

of

financial

advisors

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.

Franklin

Investors

Securities

Trust’s

annual

report,

covering

Franklin

Convertible

Securities

Fund,

Franklin

Equity

Income

Fund

and

Franklin

Managed

Income

Fund,

includes

more

detail

about

prevailing

conditions

and

a

discussion

about

investment

decisions

during

the

period.

All

securities

markets

fluctuate,

as

do

mutual

fund

share

prices.

We

thank

you

for

investing

with

Franklin,

welcome

your

questions

and

comments,

and

look

forward

to

serving

your

future

investment

needs.

Sincerely,

Rupert

H.

Johnson,

Jr.

Chairman

Franklin

Investors

Securities

Trust

This

letter

reflects

our

analysis

and

opinions

as

of

October

31,

2020

,

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:

Copyright

©

2020,

S&P

Dow

Jones

Indices

LLC.

All

rights

reserved.

2.

Source:

Morningstar.

The

changes

in

index

prices

shown

for

the

S&P

500

do

not

include

reinvestments

of

income

and

distributions,

which

are

included

in

its

total

return,

which

was:

S&P

500

+9.71%

(index

total

return

resulting

in

an

increase

from

6,138.73

to

6,734.84).

3.

Sources:

Morningstar

and

Bloomberg

Barclays

Indices.

For

the

Bloomberg

Index,

only

total

return

as

shown

is

available,

not

price

change

without

the

inclusion

of

reinvested

income

and

distributions.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

franklintempleton.com

Annual

Report

2

Contents

Annual

Report

Economic

and

Market

Overview

3

Franklin

Convertible

Securities

Fund

4

Franklin

Equity

Income

Fund

11

Franklin

Managed

Income

Fund

17

Financial

Highlights

and

Statements

of

Investments

26

Financial

Statements

58

Notes

to

Financial

Statements

63

Report

of

Independent

Registered

Public

Accounting

Firm

82

Tax

Information

83

Board

Members

and

Officers

84

Shareholder

Information

89

Visit

franklintempleton.com

for

fund

updates,

to

access

your

account,

or

to

find

helpful

financial

planning

tools.

3

franklintempleton.com

Annual

Report

ANNUAL

REPORT

Economic

and

Market

Overview

U.S.

equities,

as

measured

by

the

Standard

&

Poor’s

500

Index

(S&P

500),

posted

solid

gains

during

the

12

months

ended

October

31,

2020.

Equities

advanced

near

the

end

of

2019,

aided

by

relatively

steady

economic

growth,

easing

trade

tensions

and

the

U.S.

Federal

Reserve’s

(Fed’s)

supportive

monetary

policy.

However,

a

sharp

selloff

began

in

late

February

2020

amid

investor

fears

of

a

global

economic

slowdown

due

to

the

novel

coronavirus

(COVID-19)

pandemic.

Such

fears

drove

many

investors

to

sell

equities

and

buy

government

bonds,

cash

and

other

investments

perceived

as

safe.

Nevertheless,

equities

began

to

advance

in

late

March,

as

monetary

and

fiscal

stimulus

drove

stocks,

as

measured

by

the

S&P

500,

to

all-time

price

highs

in

early

September,

before

retreating

in

the

period’s

final

months.

Pandemic-related

restrictions

severely

curtailed

economic

activity,

resulting

in

mass

layoffs

that

drove

the

unemployment

rate

to

14.7%

in

April

2020.

1

The

longest

U.S.

economic

expansion

in

history

ended

in

February,

according

to

the

National

Bureau

of

Economic

Research,

and

the

country

slipped

into

a

deep

recession

with

second-

quarter

2020

gross

domestic

product

(GDP)

posting

a

record

annualized

decline.

In

an

effort

to

support

the

economy,

the

Fed

lowered

the

federal

funds

target

rate

to

a

range

of

0.00%–0.25%

in

March

2020.

The

Fed

also

enacted

quantitative

easing

measures

aimed

at

ensuring

credit

flows

to

borrowers

and

supporting

credit

markets

with

unlimited

amounts

of

bond

purchasing.

Furthermore,

the

Fed

signaled

that

interest

rates

would

potentially

remain

low,

even

if

inflation

persistently

exceeded

the

Fed’s

2%

target.

Equities

began

to

rebound

in

late

March

2020,

benefiting

from

fiscal

and

monetary

stimulus

and

a

gradual

lifting

of

restrictions.

Optimism

about

potential

COVID-19

vaccines,

rising

retail

sales

and

rebounding

economic

activity

led

the

third-quarter

GDP

to

expand

at

a

record

annualized

pace.

Despite

surging

summer

infection

rates,

stocks

reversed

earlier

losses

and

posted

sharp

gains.

However,

stocks

declined

in

the

period’s

last

two

months

amid

investor

concerns

that

the

economic

recovery

was

stalling,

as

new

job

growth

slowed

and

unemployment

claims

remained

high,

although

the

unemployment

rate

declined

to

6.9%

at

period-end.

1

Concerns

about

possible

new

restrictions

due

to

rising

COVID-19

infection

rates,

the

government’s

lack

of

consensus

about

additional

fiscal

stimulus

and

uncertainties

surrounding

the

upcoming

presidential

election

also

tempered

investor

enthusiasm.

The

foregoing

information

reflects

our

analysis

and

opinions

as

of

October

31,

2020

.

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:

Bureau

of

Labor

Statistics

4

franklintempleton.com

Annual

Report

Franklin

Convertible

Securities

Fund

This

annual

report

for

Franklin

Convertible

Securities

Fund

covers

the

fiscal

year

ended

October

31,

2020

.

The

Fund

closed

to

new

investors

with

limited

exceptions

on

August

29,

2018.

Existing

investors

may

continue

to

purchase

additional

shares

of

the

Fund.

Your

Fund’s

Goal

and

Main

Investments

The

Fund

seeks

to

maximize

total

return,

consistent

with

reasonable

risk,

by

seeking

to

optimize

capital

appreciation

and

high

current

income

under

varying

market

conditions.

The

Fund

normally

invests

at

least

80%

of

its

net

assets

in

convertible

securities

and

common

stock

received

upon

conversion

of

convertible

securities.

Performance

Overview

For

the

12

months

under

review,

the

Fund’s

Class

A

shares

posted

a

+33.49%

cumulative

total

return.

In

comparison,

the

Fund’s

benchmark,

the

ICE

BofA

All

Alternatives

U.S.

Convertibles

Index,

which

tracks

the

domestic

convertible

securities

market,

posted

a

+25.56%

total

return.

1

You

can

find

the

Fund’s

long-term

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

.

Investment

Strategy

When

choosing

convertible

securities

for

the

Fund,

we

attempt

to

maintain

a

balance

in

the

portfolio

between

the

equity

and

debt

characteristics

of

convertible

securities

with

an

emphasis

on

the

equity

features.

We

also

consider

the

company’s

long-term

earnings,

asset

value

and

cash

flow

potential.

By

investing

in

convertible

securities,

the

Fund

seeks

the

opportunity

to

participate

in

the

capital

appreciation

of

underlying

stocks,

while

at

the

same

time

relying

on

the

fixed

income

aspect

of

the

convertible

securities

to

provide

current

income

and

reduced

price

volatility,

which

can

limit

the

risk

of

loss

in

a

down

equity

market.

Some

of

the

convertible

securities

in

which

the

Fund

may

invest

have

been

structured

to

provide

enhanced

yield,

increased

equity

exposure

or

enhanced

downside

protection.

These

securities,

generally

referred

to

as

enhanced

convertible

securities,

typically

provide

a

benefit

to

the

issuer

in

exchange

for

the

enhanced

features,

such

as

a

conversion

premium

that

is

paid

by

the

Fund.

We

may

invest

in

convertible

securities

of

companies

of

any

capitalization

size,

but

we

generally

seek

to

make

the

portfolio

representative

of

the

entire

convertible

securities

market.

Manager’s

Discussion

The

Fund’s

robust

absolute

returns

stemmed

primarily

from

investments

across

four

sector

allocations:

information

technology

(IT),

consumer

discretionary,

health

care

and

communication

services.

The

growing

shop-at-home

trend

had

a

strong

positive

impact

on

our

related

holdings

in

internet-savvy

retailers,

e-commerce

platforms

and

digital

payment

software

providers

that

spent

much

of

the

year

extending

their

reach

and

capabilities

at

a

rapid

clip,

with

related

gains

distributed

across

the

portfolio’s

consumer

discretionary

and

IT

sector

allocations.

In

the

consumer

discretionary

sector,

key

contributors

included

Wayfair

(online

home-

goods

retail),

Etsy

(online

bazaar

for

handmade

or

vintage

items

and

craft

supplies),

MercadoLibre

(Latin

America’s

largest

e-commerce

provider)

and

Chinese

e-commerce

upstart

Pinduoduo.

Nearly

all

other

consumer

discretionary

holdings

also

advanced.

Related

IT

contributors

included

cloud-based

business

process

automation

specialist

ServiceNow,

and

Square

(electronic

payments

and

merchant

services).

Square

has

become

a

staple

of

the

small

business

community

by

creating

an

easy-to-use

and

increasingly

popular

payment

processing

platform,

particularly

among

restaurants

and

independent

retailers.

The

Fund’s

collection

of

IT

companies

was,

however,

buoyed

foremost

by

software

developers

such

as

DocuSign

and

IT

services

industry

standout

Twilio.

Electronic

signature

and

transaction

verification

specialist

DocuSign,

which

allows

Portfolio

Composition

10/31/20

%

of

Total

Net

Assets

Convertible

Bonds

75.0%

Convertible

Preferred

Stocks

20.1%

Short-Term

Investments

&

Other

Net

Assets

4.9%

1.

Source:

Morningstar.

The

index

is

unmanaged

and

includes

reinvestment

of

any

income

or

distributions.

It

does

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.

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

30

.

Franklin

Convertible

Securities

Fund

5

franklintempleton.com

Annual

Report

organizations

to

manage

contracts

and

other

agreements

in

the

cloud,

has

benefited

directly

from

the

swift

move

from

offline

to

online

and

remote-networking

activity.

The

Fund’s

convertible

bond

investment

in

Twilio

fared

well

also.

Twilio

makes

communications

software

for

its

cloud-

based

platform

and

related

services.

Tech

companies

like

DocuSign

and

Twilio

have

received

a

major

tailwind

from

the

global

pandemic-induced

shift

to

working

from

home.

In

the

health

care

sector,

holdings

geared

toward

medical

technologies

and

advanced

medical

equipment

manufacturing

generally

fared

better

than

their

peers

in

other

health

care

industries

such

as

biotechnology

and

pharmaceuticals.

In

particular,

medical

device

manufacturer

DexCom,

which

makes

continuous

glucose

monitoring

systems

for

people

with

diabetes,

was

backed

by

strong

sales,

corporate

earnings

and

business

expansions.

A

wide

variety

of

companies

led

our

absolute

performance

in

the

communication

services

sector,

from

digital

entertainment

to

social

media,

online

real

estate

databases,

traditional

communication

services

providers

and

more.

The

value

of

our

new

investment

in

Singapore-based

internet

platform

provider

Sea

Limited

rose

during

the

period

and

served

as

a

key

contributor

among

several

in

the

communication

services

sector.

The

company

has

seen

a

big

jump

in

demand

during

the

pandemic

for

its

digital

entertainment,

e-commerce

and

digital

financial

services,

allowing

it

to

deliver

strong

quarterly

financial

results.

In

contrast,

the

Fund’s

small

exposures

to

energy,

utilities,

consumer

staples

and

materials

sector

companies

worked

against

the

overall

outcome

as

most

of

these

holdings

traded

lower,

including

Oil

States

International

(OSI),

a

U.S.-based

oilfield

services

provider

in

the

deeply-troubled

energy

sector.

In

general,

global

energy

oversupply

combined

with

demand

destruction

to

push

crude

oil

and

natural

gas

prices

well

below

the

profitability

threshold

for

many

U.S.

energy

firms,

causing

them

to

seek

cost-cutting

measures,

bankruptcy

protection

and/or

asset

sales

to

survive.

The

Fund’s

positions

in

electric

utilities

companies

had

mixed

results

that

were

dragged

down

by

a

substantial

decline

for

South

Jersey

Industries

and

smaller

losses

for

Sempra

Energy

and

Southern

Company.

Most

other

notable

detractors

were

spread

across

various

sector

allocations,

including

online

travel-related

search

provider

Booking

Holdings

(consumer

discretionary),

direct-broadcast

satellite

provider

Dish

Network

(communication

services;

sold

by

period-end),

and

both

Viavi

Solutions

(network

testing

and

monitoring)

and

Guidewire

Software

(cloud

platform

for

insurers

worldwide).

Overall

gains

in

the

health

care

sector

were

also

pared

by

a

few

notable

detractors,

the

worst

of

which

were

Becton

Dickinson

(sold

by

period-end)

and

Intercept

Pharmaceuticals.

In

particular,

biopharmaceutical

drug

developer

Intercept

Pharmaceuticals

suffered

due

to

what

may

prove

to

be

a

minor,

temporary

setback:

the

U.S.

Food

and

Drug

Administration

ordered

the

postponement

of

an

advisory

panel

meeting

to

review

Ocaliva

as

a

treatment

for

liver

fibrosis

due

to

nonalcoholic

steatohepatitis

(NASH)

as

it

sought

to

review

additional

clinical

trial

data.

Top

10

Holdings

10/31/20

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

Snap,

Inc.

2.4%

Interactive

Media

&

Services,

United

States

Danaher

Corp.

2.3%

Health

Care

Equipment

&

Supplies,

United

States

Zendesk

,

Inc.

2.2%

Software,

United

States

Microchip

Technology,

Inc.

2.2%

Semiconductors

&

Semiconductor

Equipment,

United

States

Okta

,

Inc.

2.1%

IT

Services,

United

States

MercadoLibre

,

Inc.

2.0%

Internet

&

Direct

Marketing

Retail,

Argentina

RH

2.0%

Specialty

Retail,

United

States

Coupa

Software,

Inc.

2.0%

Software,

United

States

Pinduoduo

,

Inc.

1.9%

Internet

&

Direct

Marketing

Retail,

China

Square,

Inc.

1.9%

IT

Services,

United

States

Franklin

Convertible

Securities

Fund

6

franklintempleton.com

Annual

Report

Thank

you

for

your

continued

participation

in

Franklin

Convertible

Securities

Fund.

We

look

forward

to

serving

your

future

investment

needs.

Alan

E.

Muschott,

CFA

Lead

Portfolio

Manager

Eric

Webster,

CFA

Portfolio

Manager

The

foregoing

information

reflects

our

analysis,

opinions

and

portfolio

holdings

as

of

October

31,

2020,

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.

Performance

Summary

as

of

October

31,

2020

Franklin

Convertible

Securities

Fund

7

franklintempleton.com

Annual

Report

The

performance

tables

and

graphs

do

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

10/31/20

1

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.

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

.

Share

Class

Cumulative

Total

Return

2

Average

Annual

Total

Return

3

–

A

4

1-Year

+33.49%

+26.14%

5-Year

+106.10%

+14.26%

10-Year

+205.84%

+11.19%

Advisor

1-Year

+33.80%

+33.80%

5-Year

+108.73%

+15.86%

10-Year

+213.50%

+12.10%

30-Day

Standardized

Yield

6

Share

Class

Distribution

Rate

5

(with

fee

waiver)

(without

fee

waiver)

A

1.04%

0.50%

0.50%

Advisor

1.33%

0.79%

0.78%

See

page

9

for

Performance

Summary

footnotes.

Franklin

Convertible

Securities

Fund

Performance

Summary

8

franklintempleton.com

Annual

Report

See

page

9

for

Performance

Summary

footnotes.

Total

Return

Index

Comparison

for

a

Hypothetical

$10,000

Investment

1

Total

return

represents

the

change

in

value

of

an

investment

over

the

periods

shown.

It

includes

any

applicable

maximum

sales

charge,

Fund

expenses,

account

fees

and

reinvested

distributions.

The

unmanaged

index

includes

reinvestment

of

any

income

or

distributions.

It

differs

from

the

Fund

in

composition

and

does

not

pay

management

fees

or

expenses.

One

cannot

invest

directly

in

an

index.

Class

A

(11/1/10–10/31/20)

Advisor

Class

(11/1/10–10/31/20)

Franklin

Convertible

Securities

Fund

Performance

Summary

9

franklintempleton.com

Annual

Report

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.

Convertible

securities

are

subject

to

the

risks

of

stocks

when

the

underlying

stock

price

is

high

relative

to

the

conversion

price

(because

more

of

the

security’s

value

resides

in

the

conversion

feature)

and

debt

securities

when

the

underlying

stock

price

is

low

relative

to

the

conversion

price

(because

the

conversion

feature

is

less

valuable).

A

convertible

security

is

not

as

sensitive

to

interest

rate

changes

as

a

similar

non-convertible

debt

security,

and

generally

has

less

potential

for

gain

or

loss

than

the

underlying

stock.

The

Fund

may

invest

in

high-yielding,

fixed

income

securities.

High

yields

reflect

the

higher

credit

risk

associated

with

these

lower-rated

securities

and,

in

some

cases,

the

lower

market

prices

for

these

in-

struments.

Interest

rate

movements

may

affect

the

Fund’s

share

price

and

yield.

Bond

prices

generally

move

in

the

opposite

direction

of

interest

rates.

As

prices

of

bonds

in

the

Fund

adjust

to

a

rise

in

interest

rates,

the

Fund’s

share

price

may

decline.

The

Fund

may

also

invest

in

foreign

securities,

which

involve

special

risks,

including

political

uncertainty

and

currency

volatility.

Unexpected

events

and

their

aftermaths,

such

as

the

spread

of

deadly

diseases;

natural,

environmen-

tal

or

man-made

disasters;

financial,

political

or

social

disruptions;

terrorism

and

war;

and

other

tragedies

or

catastrophes,

can

cause

investor

fear

and

panic,

which

can

adversely

affect

the

economies

of

many

companies,

sectors,

nations,

regions

and

the

market

in

general,

in

ways

that

cannot

necessarily

be

foreseen.

The

Fund’s

prospectus

also

includes

a

description

of

the

main

investment

risks.

1.

The

Fund

has

a

fee

waiver

associated

with

any

investment

it

makes

in

a

Franklin

Templeton

money

fund

and/or

other

Franklin

Templeton

fund,

contractually

guaranteed

through

2/28/21.

Fund

investment

results

reflect

the

fee

waiver;

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.

Distribution

rate

is

based

on

an

annualization

of

the

respective

class’s

past

four

quarterly

dividends

and

the

maximum

offering

price

(NAV

for

Advisor

Class)

per

share

on

10/31/20.

6.

The

Fund’s

30-day

standardized

yield

is

calculated

over

a

trailing

30-day

period

using

the

yield

to

maturity

on

bonds

and/or

the

dividends

accrued

on

stocks.

It

may

not

equal

the

Fund’s

actual

income

distribution

rate,

which

reflects

the

Fund’s

past

dividends

paid

to

shareholders.

7.

Source:

Morningstar.

The

ICE

BofA

All

Alternatives

U.S.

Convertibles

Index

comprises

domestic

securities

of

all

quality

grades

that

are

convertible

into

U.S.

dollar-denom-

inated

common

stock,

ADRs

or

cash

equivalents

and

have

a

delta

(measure

of

equity

sensitivity)

that

indicates

the

security

likely

has

a

balance

between

the

debt

and

equity

characteristics

of

the

security.

8.

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.

Distributions

(11/1/19–10/31/20)

Share

Class

Net

Investment

Income

Short-Term

Capital

Gain

Long-Term

Capital

Gain

Total

A

$0.2993

$0.5120

$1.0963

$1.9076

C

$0.1073

$0.5120

$1.0963

$1.7156

R6

$0.3822

$0.5120

$1.0963

$1.9905

Advisor

$0.3618

$0.5120

$1.0963

$1.9701

Total

Annual

Operating

Expenses

8

Share

Class

With

Fee

Waiver

Without

Fee

Waiver

A

0.84%

0.86%

Advisor

0.59%

0.61%

Your

Fund’s

Expenses

Franklin

Convertible

Securities

Fund

10

franklintempleton.com

Annual

Report

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.

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

184/366

to

reflect

the

one-half

year

period.

2.

Reflects

expenses

after

fee

waivers

and

expense

reimbursements.

Does

not

include

acquired

fund

fees

and

expenses.

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Share

Class

Beginning

Account

Value

5/1/20

Ending

Account

Value

10/31/20

Expenses

Paid

During

Period

5/1/20–10/31/20

1,2

Ending

Account

Value

10/31/20

Expenses

Paid

During

Period

5/1/20–10/3

1/20

1,2

a

Net

Annualized

Expense

Ratio

2

A

$1,000

$1,294.14

$4.74

$1,021.00

$4.18

0.82%

C

$1,000

$1,288.89

$9.07

$1,017.21

$7.99

1.58%

R6

$1,000

$1,296.00

$2.87

$1,022.64

$2.53

0.50%

Advisor

$1,000

$1,295.66

$3.30

$1,022.26

$2.91

0.57%

11

franklintempleton.com

Annual

Report

Franklin

Equity

Income

Fund

This

annual

report

for

Franklin

Equity

Income

Fund

covers

the

fiscal

year

ended

October

31,

2020

.

Your

Fund’s

Goal

and

Main

Investments

The

Fund

seeks

to

maximize

total

return

by

emphasizing

high

current

income

and

long-term

capital

appreciation,

consistent

with

reasonable

risk,

by

normally

investing

at

least

80%

of

its

net

assets

in

equity

securities,

including

securities

convertible

into

common

stocks.

The

Fund

generally

invests

the

remainder

of

its

assets

in

other

equity-related

instruments

such

as

convertible

securities

and

equity-linked

notes

(ELNs),

and

may

also

invest

in

foreign

securities,

including

emerging

markets.

Performance

Overview

For

the

12

months

under

review,

the

Fund’s

Class

A

shares

posted

a

-2.43%

cumulative

total

return.

In

comparison,

the

Fund’s

new

primary

benchmark,

the

Russell

1000

®

Value

Index,

which

measures

performance

of

the

largest

companies

in

the

Russell

3000

®

Index,

and

represents

the

majority

of

the

U.S.

market’s

total

market

capitalization,

posted

a

-13.66%

total

return.

1

The

Fund’s

new

secondary

benchmark

and

former

primary

benchmark,

the

Standard

&

Poor’s

500

Index

(S&P

500),

which

tracks

the

broad

U.S.

stock

market,

posted

a

+9.71%

total

return.

1

The

Russell

1000

®

Value

Index

is

replacing

the

S&P

500

Index

as

the

Fund’s

primary

benchmark

because

the

investment

manager

believes

that

the

Russell

1000

®

Value

Index

more

accurately

reflects

the

Fund’s

investment

strategy.

You

can

find

the

Fund’s

long-term

performance

data

in

the

Performance

Summary

beginning

on

page

13

.

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

.

Investment

Strategy

We

seek

to

invest

in

a

broadly

diversified

portfolio

of

equity

securities

that

we

consider

to

be

financially

strong,

with

a

focus

on

blue

chip

companies.

We

apply

a

bottom-up

approach

to

investing

in

individual

securities.

We

will

assess

the

market

price

of

a

company’s

securities

relative

to

our

evaluation

of

the

company’s

long-term

earnings,

cash

flow

potential

and

balance

sheet

strength.

We

also

consider

a

company’s

price/earnings

ratio,

return

on

capital,

profit

margins

and

asset

value.

We

consider

dividend

yield

and

the

opportunity

for

dividend

growth

in

selecting

stocks

for

the

Fund

because

we

believe

that,

over

time,

dividend

income

can

contribute

significantly

to

total

return

and

can

be

a

more

consistent

source

of

investment

return

than

capital

appreciation.

We

seek

to

take

advantage

of

price

dislocations

that

result

from

the

market’s

short-term

focus

Portfolio

Composition

10/31/20

%

of

Total

Net

Assets

Banks

10.4%

Electric

Utilities

9.0%

Health

Care

Equipment

&

Supplies

7.2%

Pharmaceuticals

6.2%

Capital

Markets

5.9%

Beverages

4.6%

Semiconductors

&

Semiconductor

Equipment

4.5%

Software

4.4%

Aerospace

&

Defense

3.6%

Oil,

Gas

&

Consumable

Fuels

3.5%

Specialty

Retail

3.2%

Household

Products

3.1%

Machinery

2.9%

Diversified

Telecommunication

Services

2.8%

Multiline

Retail

2.5%

Health

Care

Providers

&

Services

2.4%

Food

&

Staples

Retailing

2.2%

Road

&

Rail

2.2%

Chemicals

2.0%

Hotels,

Restaurants

&

Leisure

1.8%

Media

1.8%

Commercial

Services

&

Supplies

1.7%

Air

Freight

&

Logistics

1.5%

Equity

Real

Estate

Investment

Trusts

(REITs)

1.4%

Internet

&

Direct

Marketing

Retail

1.4%

Technology

Hardware,

Storage

&

Peripherals

1.4%

Other

5.6%

Short-Term

Investments

&

Other

Net

Assets

0.8%

1.

Source:

Morningstar.

Frank

Russell

Company

is

the

source

and

owner

of

the

trademarks,

service

marks

and

copyrights

related

to

the

Russell

Indexes.

Russell

®

is

a

trademark

of

Frank

Russell

Company.

The

indexes

are

unmanaged

and

include

reinvestment

of

any

income

or

distributions.

They

do

not

include

any

fees,

expenses

or

sales

charges.

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

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

35

.

Franklin

Equity

Income

Fund

12

franklintempleton.com

Annual

Report

and

choose

to

invest

in

those

companies

that,

in

our

opinion,

offer

the

best

trade-off

between

growth

opportunity,

business

and

financial

risk,

and

valuation.

Manager’s

Discussion

The

information

technology

(IT)

and

consumer

discretionary

sectors

added

meaningfully

to

the

Fund’s

performance

over

the

annual

period.

Within

IT,

information

software

and

services

firm

Microsoft

and

personal

computing

device

manufacturer

and

service

provider

Apple

were

notable

contributors.

Tremendous

growth

in

the

overall

cloud

infrastructure

market

has

been

a

positive

catalyst

for

the

shares

of

Microsoft,

while

strong

iPhone

sales

and

a

fast-

growing

wearables

business

have

been

growth

drivers

for

Apple.

Overall,

nearly

every

major

IT

business

became

more

relevant

as

a

result

of

the

COVID-19

pandemic

and

the

broader

digital

transformation

opportunity.

Positions

in

Target

and

Lowe’s

added

to

returns

in

the

consumer

discretionary

sector.

Big

box

retailer

Target

continued

to

demonstrate

strong

momentum,

a

growing

customer

base

and

differentiated

digital

capabilities

that

we

believe

can

drive

higher

growth

over

time.

Demand

for

completing

home

improvement

projects

has

accelerated

during

the

pandemic

which

has

been

a

boost

for

our

holding

in

Lowe’s.

Elsewhere,

medical

and

environmental

technology

products

company

Danaher

was

a

notable

contributor

in

the

health

care

sector,

delivering

strong

organic

growth

from

a

range

of

products,

including

those

with

COVID-related

tailwinds.

In

contrast,

the

energy,

financials

and

industrials

sectors

detracted

most

from

performance.

In

the

energy

sector,

Chevron

and

Royal

Dutch

Shell

weighed

on

returns

as

oil

companies

faced

headwinds

brought

on

by

pandemic

disruptions,

pricing

pressures

and

demand

weakness.

Companies

in

the

financials

sector,

including

our

positions

in

Citigroup

and

JPMorgan

Chase,

struggled

with

declining

interest

rates,

fears

of

elevated

credit

losses,

and

the

need

to

build

reserves

as

recessionary

conditions

took

hold

due

to

the

pandemic.

In

the

industrials

sector,

aerospace

and

defense

company

Raytheon

Company

merged

with

United

Technologies

in

April

2020,

to

form

Raytheon

Technologies.

Despite

the

negative

impact

of

the

recent

decline

in

air

passenger

demand,

the

newly

combined

company

expects

to

introduce

breakthrough

technologies

at

an

accelerated

pace

across

high-value

areas

of

commercial

aerospace

and

defense.

Thank

you

for

your

continued

participation

in

Franklin

Equity

Income

Fund.

We

look

forward

to

serving

your

future

investment

needs.

Matthew

D.

Quinlan

Alan

E.

Muscott,

CFA

Todd

Brighton,

CFA

Portfolio

Management

Team

The

foregoing

information

reflects

our

analysis,

opinions

and

portfolio

holdings

as

of

October

31,

2020

,

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.

Top

10

Holdings

10/31/20

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

JPMorgan

Chase

&

Co.

3.8%

Banks,

United

States

Procter

&

Gamble

Co.

(The)

3.1%

Household

Products,

United

States

Johnson

&

Johnson

3.1%

Pharmaceuticals,

United

States

Duke

Energy

Corp.

2.9%

Electric

Utilities,

United

States

NextEra

Energy,

Inc.

2.9%

Electric

Utilities,

United

States

Morgan

Stanley

2.9%

Capital

Markets,

United

States

Medtronic

plc

2.6%

Health

Care

Equipment

&

Supplies,

United

States

Microsoft

Corp.

2.5%

Software,

United

States

Target

Corp.

2.5%

Multiline

Retail,

United

States

Verizon

Communications,

Inc.

2.4%

Diversified

Telecommunication

Services,

United

States

Performance

Summary

as

of

October

31,

2020

Franklin

Equity

Income

Fund

13

franklintempleton.com

Annual

Report

The

performance

tables

and

graphs

do

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

10/31/20

1

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.

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

.

Share

Class

Cumulative

Total

Return

2

Average

Annual

Total

Return

3

–

A

4

1-Year

-2.43%

-7.81%

5-Year

+40.07%

+5.77%

10-Year

+142.99%

+8.67%

Advisor

1-Year

-2.18%

-2.18%

5-Year

+41.83%

+7.24%

10-Year

+149.24%

+9.56%

30-Day

Standardized

Yield

6

Share

Class

Distribution

Rate

5

(with

fee

waiver)

(without

fee

waiver)

A

2.34%

1.94%

1.94%

Advisor

2.74%

2.31%

2.31%

See

page

15

for

Performance

Summary

footnotes.

Franklin

Equity

Income

Fund

Performance

Summary

14

franklintempleton.com

Annual

Report

See

page

15

for

Performance

Summary

footnotes.

Total

Return

Index

Comparison

for

a

Hypothetical

$10,000

Investment

1

Total

return

represents

the

change

in

value

of

an

investment

over

the

periods

shown.

It

includes

any

applicable

maximum

sales

charge,

Fund

expenses,

account

fees

and

reinvested

distributions.

The

unmanaged

indexes

include

reinvestment

of

any

income

or

distributions.

They

differ

from

the

Fund

in

composition

and

do

not

pay

management

fees

or

expenses.

One

cannot

invest

directly

in

an

index.

Class

A

(11/1/10–10/31/20)

Advisor

Class

(11/1/10–10/31/20)

Franklin

Equity

Income

Fund

Performance

Summary

15

franklintempleton.com

Annual

Report

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.

Stock

prices

fluctuate,

sometimes

rapidly

and

dramatically,

due

to

factors

affecting

individual

companies,

particular

industries

or

sectors,

or

general

market

conditions.

Convertible

securities

are

subject

to

the

risks

of

stocks

when

the

underlying

stock

price

is

high

relative

to

the

conversion

price

and

debt

securities

when

the

underlying

stock

price

is

low

relative

to

the

conversion

price.

Investments

in

ELNs

of-

ten

have

risks

similar

to

their

underlying

securities,

which

could

include

management

risk,

market

risk

and,

as

applicable,

foreign

securities

and

currency

risks.

The

Fund’s

investment

in

foreign

securities

also

involves

special

risks,

including

currency

fluctuations

and

economic

as

well

as

political

uncertainty.

Unexpected

events

and

their

aftermaths,

such

as

the

spread

of

deadly

diseases;

natural,

environmental

or

man-made

disasters;

financial,

political

or

social

disruptions;

terrorism

and

war;

and

other

tragedies

or

catastrophes,

can

cause

investor

fear

and

panic,

which

can

adversely

affect

the

economies

of

many

companies,

sectors,

nations,

regions

and

the

market

in

general,

in

ways

that

cannot

necessarily

be

foreseen.

The

Fund’s

prospectus

also

includes

a

description

of

the

main

investment

risks.

1.

The

Fund

has

a

fee

waiver

associated

with

any

investment

it

makes

in

a

Franklin

Templeton

money

fund

and/or

other

Franklin

Templeton

fund,

contractually

guaranteed

through

2/28/21.

Fund

investment

results

reflect

the

fee

waiver;

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.

Distribution

rate

is

based

on

an

annualization

of

the

respective

class’s

current

quarterly

dividend

and

the

maximum

offering

price

(NAV

for

Advisor

Class)

per

share

on

10/31/20.

6.

The

Fund’s

30-day

standardized

yield

is

calculated

over

a

trailing

30-day

period

using

the

yield

to

maturity

on

bonds

and/or

the

dividends

accrued

on

stocks.

It

may

not

equal

the

Fund’s

actual

income

distribution

rate,

which

reflects

the

Fund’s

past

dividends

paid

to

shareholders.

7.

Source:

Morningstar.

The

Russell

1000

Value

Index

is

market

capitalization

weighted

and

measures

performance

of

those

Russell

1000

Index

companies

with

relatively

lower

price-to-book

ratios

and

lower

forecasted

growth

rates.

The

S&P

500

is

a

market

capitalization-weighted

index

of

500

stocks

designed

to

measure

total

U.S.

equity

market

performance.

8.

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.

Distributions

(11/1/19–10/31/20)

Share

Class

Net

Investment

Income

Long-Term

Capital

Gain

Total

A

$0.6263

$0.7586

$1.3849

C

$0.4205

$0.7586

$1.1791

R

$0.5612

$0.7586

$1.3198

R6

$0.7228

$0.7586

$1.4814

Advisor

$0.6948

$0.7586

$1.4534

Total

Annual

Operating

Expenses

8

Share

Class

With

Fee

Waiver

Without

Fee

Waiver

A

0.86%

0.87%

Advisor

0.61%

0.62%

Your

Fund’s

Expenses

Franklin

Equity

Income

Fund

16

franklintempleton.com

Annual

Report

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.

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

184/366

to

reflect

the

one-half

year

period.

2.

Reflects

expenses

after

fee

waivers

and

expense

reimbursements.

Does

not

include

acquired

fund

fees

and

expenses.

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Share

Class

Beginning

Account

Value

5/1/20

Ending

Account

Value

10/31/20

Expenses

Paid

During

Period

5/1/20–10/31/20

1,2

Ending

Account

Value

10/31/20

Expenses

Paid

During

Period

5/1/20–10/31/20

1,2

a

Net

Annualized

Expense

Ratio

2

A

$1,000

$1,081.95

$4.55

$1,020.77

$4.42

0.87%

C

$1,000

$1,079.75

$8.48

$1,016.98

$8.22

1.62%

R

$1,000

$1,075.49

$5.72

$1,019.62

$5.57

1.10%

R6

$1,000

$1,078.46

$2.61

$1,022.63

$2.54

0.50%

Advisor

$1,000

$1,080.92

$3.23

$1,022.03

$3.14

0.62%

17

franklintempleton.com

Annual

Report

Franklin

Managed

Income

Fund

This

annual

report

for

Franklin

Managed

Income

Fund

covers

the

fiscal

year

ended

October

31,

2020

.

Your

Fund’s

Goal

and

Main

Investments

The

Fund

seeks

to

maximize

income

to

support

monthly

distributions,

while

maintaining

the

prospects

for

capital

appreciation

by

investing,

under

normal

market

conditions,

in

a

diversified

portfolio

of

stocks

(substantially

dividend

paying)

and

debt

securities.

The

Fund

normally

invests

at

least

25%

of

its

total

assets

in

debt

securities,

including

bonds,

notes,

debentures

and

money

market

securities,

and

at

least

25%

of

its

total

assets

in

equity

securities,

primarily

common

and

preferred

stock.

Performance

Overview

For

the

12

months

under

review,

the

Fund’s

Class

A

shares

posted

a

cumulative

total

return

of

-1.06%.

In

comparison,

the

Fund’s

new

primary

and

former

secondary

benchmark,

the

blended

25%

ICE

BofA

U.S.

Corporate

&

High

Yield

Index,

25%

Bloomberg

Barclays

U.S.

Aggregate

Bond

Index

and

50%

MSCI

USA

High

Dividend

Yield

Index

(Blended

Benchmark),

which

is

a

combination

of

leading

stock

and

bond

indexes,

posted

a

+0.65%

total

return.

1

The

ICE

BofA

U.S.

Corporate

&

High

Yield

Index

tracks

the

performance

of

U.S.

dollar-denominated

investment-grade

corporate

debt

publicly

issued

in

the

U.S.

domestic

market,

and

below

investment

grade,

but

not

in

default,

U.S.

dollar-denominated

corporate

bonds

publicly

issued

in

the

U.S.

domestic

market,

and

includes

issues

with

a

credit

rating

of

BBB

or

below,

as

rated

by

credit

rating

agencies

Moody’s

and

Standard

&

Poor’s.

The

Bloomberg

Barclays

U.S.

Aggregate

Bond

Index

tracks

the

U.S.

investment-grade,

taxable

bond

market.

The

MSCI

USA

High

Dividend

Yield

Index

is

designed

to

reflect

the

performance

of

equities

in

the

MSCI

USA

Index

(excluding

REITs)

with

higher

dividend

income

and

quality

characteristics

than

average

dividend

yields

that

are

both

sustainable

and

persistent.

The

Fund’s

new

secondary

and

former

primary

benchmark,

the

Bloomberg

Barclays

U.S.

Aggregate

Bond

Index,

posted

a

+6.19%

total

return.

2

The

Fund’s

third

benchmark,

the

Standard

&

Poor’s

500

Index

(S&P

500),

which

is

a

broad

measure

of

U.S.

stock

performance,

posted

a

+9.71%

total

return.

2

You

can

find

the

Fund’s

long-term

performance

data

in

the

Performance

Summary

beginning

on

page

21

.

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

.

Investment

Strategy

We

apply

a

bottom-up

approach

to

investing

in

individual

securities.

We

will

assess

the

market

price

of

a

company’s

securities

relative

to

our

evaluation

of

the

company’s

long-term

earnings,

asset

value

and

cash

flow

potential.

We

also

consider

a

company’s

price/earnings

ratio,

profit

margins

and

liquidation

value.

In

determining

an

optimal

mix

of

equity

and

fixed

income

investments

for

the

Fund,

we

assess

changing

economic,

market

and

industry

conditions.

The

Fund

seeks

income

by

investing

in

a

combination

of

corporate,

agency

and

government

bonds

issued

in

the

U.S.

and

other

countries,

as

well

as

common

stocks

of

companies

in

any

market

capitalization

range

and

convertible

securities.

The

Fund

seeks

capital

appreciation

by

investing

in

equity

securities

and

convertible

securities

of

companies

from

a

variety

of

industries.

We

may,

from

time

to

time,

use

for

various

purposes

equity-related

derivatives,

including

call

and

put

options

and

futures

on

equity

securities

and

equity

indexes,

options

on

equity

index

futures,

as

well

as

interest-

rate,

currency

and

credit-related

derivatives.

These

purposes

include

enhancing

Fund

returns,

increasing

liquidity,

gaining

exposure

to

particular

instruments

or

markets

in

more

efficient

or

less

expensive

ways

and/or

hedging

risks.

The

use

of

such

derivative

transactions

may

allow

the

Fund

to

Portfolio

Composition

10/31/20

%

of

Total

Net

Assets

Common

Stocks

36.4%

Corporate

Bonds

25.1%

Equity-Linked

Securities

14.8%

Convertible

Preferred

Stocks

12.3%

U.S.

Government

and

Agency

Securities

3.0%

Management

Investment

Companies

2.6%

Mortgage-Backed

Securities

2.4%

Other

0.6%

Short-Term

Investments

&

Other

Net

Assets

2.8%

1.

Source:

FactSet.

The

Fund's

Blended

Benchmark

was

calculated

internally

and

rebalanced

monthly.

2.

Source:

Morningstar.

The

indexes

are

unmanaged

and

include

reinvestment

of

any

income

or

distributions.

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

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

50

.

Franklin

Managed

Income

Fund

18

franklintempleton.com

Annual

Report

obtain

net

long

or

short

exposures

to

selected

securities,

markets,

interest

rates,

countries,

currencies,

credits

or

durations.

Manager’s

Discussion

The

period

under

review

was

characterized

by

a

relatively

calm

beginning

with

an

improving

growth

outlook

and

easing

trade

tensions.

What

followed

was

an

unprecedented

period

of

volatility

for

risk

assets.

The

COVID-19

global

pandemic

hobbled

global

growth,

which

led

to

the

sharpest

contraction

on

record

as

economies

across

the

globe

initiated

aggressive

initiatives

to

try

to

control

the

spread

of

the

virus.

Historic

monetary

and

fiscal

policy

intervention

globally,

as

well

as

the

gradual

reopening

of

economies

during

the

second

half

of

the

period

under

review,

led

to

a

sharp

reversal

in

risk

assets.

At

period-end,

the

global

economy

remained

amid

a

sharp

recovery

from

the

pandemic-induced

shutdowns

with

a

number

of

geographies

around

the

world

dealing

with

new

spikes

in

infections.

The

sharp

second-quarter

U.S.

GDP

decline

of

31.4%

was

reversed

to

a

large

quarter-over-

quarter

gain

of

33%

in

the

third

quarter,

but

there

continue

to

be

concerns

around

the

sustainability

of

the

recovery

and

how

broad

based

it

will

be

with

certain

segments

and

sectors

of

the

market

seemingly

not

participating

in

the

broader

recovery.

The

period

under

review

ended

with

a

high

degree

of

uncertainty

around

the

outcome

of

the

U.S.

election

and

awaiting

progress

on

COVID-19

vaccine

news.

Weakening

demand

for

energy

due

to

the

sharp

contraction

in

economic

activity

as

a

result

of

the

global

pandemic

was

compounded

by

a

market

share

battle

as

negotiations

broke

down

between

major

Organization

of

the

Petroleum

Exporting

Countries

(OPEC)

and

other

oil

producers,

including

Saudi

Arabia

and

Russia.

Oil

prices

recovered

relative

to

their

peak

declines

of

greater

than

60%,

ending

the

period

down

roughly

34%

from

the

beginning

of

the

period.

The

markets

began

the

year

with

volatility

relatively

subdued

through

mid-February

2020,

followed

by

record

spikes

in

volatility

to

all-time

highs

in

March

2020.

Subsequently,

volatility

steadily

declined

through

the

beginning

of

fall

before

increasing

again

through

period-end

due

to

uncertainty

about

upcoming

U.S.

elections

in

early

November.

Assets

perceived

by

investors

as

having

lower

risk,

U.S.

Treasury

securities

in

particular,

rallied

during

the

peak

periods

of

volatility

and

have

stayed

relatively

range-bound

for

the

final

seven

months

of

the

period

with

modest

increases

at

the

end

of

the

period.

The

yield

on

10-year

U.S.

Treasuries

declined

during

the

period

from

1.71%

to

0.87%

(bottoming

at

0.51%

in

August).

The

Fund

posted

a

marginally

negative

return

during

the

period

with

losses

experienced

in

February

and

March

as

the

coronavirus

triggered

the

fastest

bear

market

on

record

followed

by

the

fastest

recovery

from

a

bear

market

on

record

as

well.

Dividend

stocks,

particularly

value-oriented

sectors,

underperformed

and

the

equity

component

of

the

Fund’s

blended

benchmark

declined

with

the

MSCI

USA

High

Dividend

Yield

Index

returning

-6.48%

for

the

12-month

period.

2

Corporate

credit

struggled

in

response

to

the

onset

of

the

pandemic,

but

record

fiscal

and

monetary

accommodation

thawed

out

lending

markets,

leading

to

unprecedented

supply

as

well

as

notable

spread

tightening

from

their

peaks

during

the

period.

Buoyed

by

the

rally

in

U.S.

Treasuries,

the

benchmark

Bloomberg

Barclays

U.S.

Aggregate

Bond

Index

returned

+6.19%,

while

the

ICE

BofA

U.S.

Corporate

&

High

Yield

Index

returned

+6.39%.

2

The

Fund

entered

the

period

with

a

fairly

balanced

weighting

across

fixed

income

and

equity

securities

while

holding

a

reserve

of

cash

equivalents.

The

Fund

had

a

considerable

shift

in

asset

mix

over

the

course

of

the

period,

ending

the

period

under

review

with

a

meaningfully

lower

fixed

income

weighting

and

a

considerably

higher

equity

weighting,

while

holding

a

smaller

cash

balance.

Fixed

income

holdings

performed

well

during

the

period,

with

outperformance

(relative

to

equities

during

the

period)

offset

by

shifts

in

asset

allocation

as

we

reduced

holdings

of

U.S.

Treasuries

and

financials

sector

positions

in

order

to

take

advantage

of

lower

equity

prices

and

valuations.

Relative

to

the

Fund’s

blended

fixed

income

benchmark,

Fund

holdings

underperformed

due

to

the

shorter

duration

profile

of

the

Fund’s

assets

relative

to

the

benchmark

as

well

as

underperformance

from

select

financials

and

energy

sector

bond

holdings.

Top

Five

Equity

Holdings

10/31/20

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

Texas

Instruments,

Inc.

2.7%

Semiconductors

&

Semiconductor

Equipment

,

United

States

Dominion

Energy,

Inc.

2.5%

Multi-Utilities

,

United

States

JPMorgan

Chase

&

Co.

2.3%

Banks

,

United

States

Sempra

Energy

2.2%

Multi-Utilities

,

United

States

Amazon.com,

Inc.

2.1%

Internet

&

Direct

Marketing

Retail

,

United

States

Franklin

Managed

Income

Fund

19

franklintempleton.com

Annual

Report

U.S.

Treasury

and

agency

mortgage-back

securities

(MBS)

holdings

as

well

as

positions

in

the

health

care,

consumer

staples,

consumer

discretionary

and

communication

services

sectors

led

positive

absolute

returns

during

the

period

with

the

most

notable

outperformers

relative

to

benchmark

positioning

attributed

to

health

care

and

consumer

staples.

Within

health

care,

the

debt

of

integrated

pharmacy

health

care

provider

CVS

Health

was

the

leading

performer

with

high-yield

rated

hospital

company

Community

Health

Systems

helping

pace

fixed

income

returns.

Outside

of

health

care,

debt

holdings

of

communication

services

company

T-Mobile

helped

lead

sector

returns

as

the

company’s

debt

securities

performed

particularly

well

in

response

to

the

completion

of

the

long-awaited

merger

with

Sprint.

The

only

sector

with

negative

absolute

performance

on

the

corporate

bond

side

of

the

portfolio

was

the

energy

sector,

which

suffered

due

to

the

double

hit

from

extreme

demand

destruction

as

a

result

of

the

global

pandemic

and

rising

supplies

due

to

the

market

share

war

following

the

breakdown

in

negotiations

between

major

Organization

of

the

Petroleum

Exporting

Countries

(OPEC)

and

other

oil

producers

during

the

period.

Notable

detractors

included

Chesapeake

Energy

and

Williams

Companies.

Outside

of

energy

underperformance,

notable

underperformance

relative

to

our

blended

benchmark

included

U.S.

Treasury

holdings

given

our

preference

for

the

shorter

end

of

the

yield

curve

in

our

positioning.

The

only

other

sector

worth

highlighting

was

the

negative

performance

from

the

financials

sector

relative

to

our

benchmark,

with

negative

contributions

from

perpetual

preferred

bond

positions

of

JPMorgan

Chase,

PNC

Financial

and

Prudential

Financial.

As

an

asset

class,

equities

underperformed

during

the

period.

We

used

the

weakness

and

volatility

during

the

second

half

of

the

period

under

review

(with

a

focus

during

the

months

of

February

and

March)

to

shift

assets

out

of

areas

that

outperformed,

including

U.S.

Treasuries

and

agency

MBS,

while

adding

to

common

stocks,

convertible

securities

and

equity

linked

notes.

Information

technology

(IT),

health

care,

consumer

discretionary

and

utilities

holdings

were

large

positive

absolute

contributors

during

the

period

with

the

positive

contributors

relative

to

the

benchmark

in

the

IT,

utilities,

communication

services,

health

care

and

consumer

discretionary

sectors.

Positive

contributors

in

the

IT

sector

during

the

period

came

from

semiconductor

players

Texas

Instruments,

Broadcom

and

Analog

Devices.

Other

notable

contributors

included

Microsoft,

Apple

and

Nvidia.

Laboratory

company

Quest

Diagnostics

was

the

top

health

care

performer

in

the

period

with

strong

contributions

from

pharmaceutical

players

AstraZeneca

PLC

and

AbbVie.

Other

notable

positive

contributors

during

the

period

were

Peloton

Interactive

and

Target

in

the

consumer

discretionary

sector

as

well

as

DTE

Energy

and

NextEra

Energy

in

the

utilities

sector.

During

the

period,

negative

absolute

performance

was

focused

on

the

significant

weakness

in

the

energy

sector

with

meaningful

negative

contributions

from

the

financials

and

industrials

sectors.

Losses

in

energy

holdings

were

widespread

during

the

period

with

minimal

differentiation

related

to

long-term

viability.

Losses

were

pronounced

among

both

oil

and

gas

producers

and

oilfield

service

companies,

with

sharp

declines

experienced

by

Exxon

Mobil,

Chevron,

Royal

Dutch

Shell

and

Schlumberger.

Financials

sector

holdings

struggled

with

rapidly

falling

interest

rates

and

fears

of

elevated

credit

losses

as

recessionary

conditions

took

hold

due

to

the

global

pandemic.

Holdings

of

Wells

Fargo,

JPMorgan

Chase

and

Toronto-Dominion

Bank

all

negatively

impacted

Fund

results.

The

weakness

in

the

industrials

sector

was

focused

on

aerospace

players

Raytheon

Technologies

and

Boeing.

The

Fund

used

equity

call

and

put

options

during

the

period

largely

to

sell

covered

calls

and

sell

puts

aligned

with

our

price

targets

for

selling

and

reducing

positions

on

the

upside

(covered

calls)

or

initiating

and

adding

to

positions

at

lower

levels

(put

selling).

The

Fund

also

used

equity

index

put

spreads

during

the

period.

The

net

effect

of

derivative

use

generated

losses

during

the

period

under

review.

Top

Five

Fixed

Income

Holdings

10/31/20

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

U.S.

Treasury

Notes

3.0%

Diversified

Financial

Services

,

United

States

GNMA

II,

Single-family,

30

Year

1.9%

Diversified

Financial

Services

,

United

States

CHS/Community

Health

Systems,

Inc.

1.6%

Health

Care

Providers

&

Services

,

United

States

CVS

Health

Corp

1.0%

Health

Care

Providers

&

Services

,

United

States

Cigna

Corp

0.9%

Health

Care

Providers

&

Services

,

United

States

Franklin

Managed

Income

Fund

20

franklintempleton.com

Annual

Report

Thank

you

for

your

continued

participation

in

Franklin

Managed

Income

Fund.

We

look

forward

to

serving

your

future

investment

needs.

Edward

D.

Perks,

CFA

Co-Lead

Portfolio

Manager

Brendan

Circle,

CFA

Co-Lead

Portfolio

Manager

Todd

Brighton,

CFA

Portfolio

Manager

The

foregoing

information

reflects

our

analysis,

opinions

and

portfolio

holdings

as

of

October

31,

2020

,

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.

Performance

Summary

as

of

October

31,

2020

Franklin

Managed

Income

Fund

21

franklintempleton.com

Annual

Report

The

performance

tables

and

graphs

do

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

10/31/20

1

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.

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

.

Share

Class

Cumulative

Total

Return

2

Average

Annual

Total

Return

3

–

A

4

1-Year

-1.06%

-6.46%

5-Year

+31.59%

+4.46%

10-Year

+92.37%

+6.16%

Advisor

1-Year

-0.86%

-0.86%

5-Year

+33.27%

+5.91%

10-Year

+97.82%

+7.06%

30-Day

Standardized

Yield

6

Share

Class

Distribution

Rate

5

(with

fee

waiver)

(without

fee

waiver)

A

3.80%

1.98%

1.96%

Advisor

4.30%

2.35%

2.33%

See

page

24

for

Performance

Summary

footnotes.

Franklin

Managed

Income

Fund

Performance

Summary

22

franklintempleton.com

Annual

Report

See

page

24

for

Performance

Summary

footnotes.

Total

Return

Index

Comparison

for

a

Hypothetical

$10,000

Investment

1

Total

return

represents

the

change

in

value

of

an

investment

over

the

periods

shown.

It

includes

any

applicable

maximum

sales

charge,

Fund

expenses,

account

fees

and

reinvested

distributions.

The

unmanaged

indexes

include

reinvestment

of

any

income

or

distributions.

They

differ

from

the

Fund

in

composition

and

do

not

pay

management

fees

or

expenses.

One

cannot

invest

directly

in

an

index.

Class

A

(11/1/10–10/31/20)

Advisor

Class

(11/1/10–10/31/20)

Franklin

Managed

Income

Fund

Performance

Summary

23

franklintempleton.com

Annual

Report

Net

Asset

Value

Share

Class

(Symbol)

10/31/20

10/31/19

Change

A

(FBLAX)

$11.73

$12.80

-$1.07

C

(FBMCX)

$11.61

$12.67

-$1.06

R

(FBFQX)

$11.76

$12.84

-$1.08

R6

(FBFRX)

$11.76

$12.85

-$1.09

Advisor

(FBFZX)

$11.76

$12.84

-$1.08

Distributions

(11/1/19–10/31/20)

Share

Class

Net

Investment

Income

Short-Term

Capital

Gain

Long-Term

Capital

Gain

Total

A

$0.4646

$0.0943

$0.3878

$0.9467

C

$0.3684

$0.0943

$0.3878

$0.8505

R

$0.4348

$0.0943

$0.3878

$0.9169

R6

$0.5070

$0.0943

$0.3878

$0.9891

Advisor

$0.4974

$0.0943

$0.3878

$0.9795

Total

Annual

Operating

Expenses

9

Share

Class

With

Fee

Waiver

Without

Fee

Waiver

A

0.93%

0.97%

Advisor

0.68%

0.72%

Franklin

Managed

Income

Fund

Performance

Summary

24

franklintempleton.com

Annual

Report

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

Fund’s

share

price

and

yield

will

be

affected

by

interest

rate

movements.

Bond

prices

generally

move

in

the

opposite

direction

of

interest

rates.

As

the

prices

of

bonds

in

the

Fund

adjust

to

a

rise

in

interest

rates,

the

Fund’s

share

price

may

decline.

Stock

prices

fluctuate,

sometimes

rapidly

and

dramatically,

due

to

factors

affecting

individual

companies,

particular

industries

or

sectors,

or

general

market

conditions.

Unexpected

events

and

their

aftermaths,

such

as

the

spread

of

deadly

diseases;

natural,

environmental

or

man-made

disasters;

financial,

political

or

social

disruptions;

terrorism

and

war;

and

other

tragedies

or

catastrophes,

can

cause

investor

fear

and

panic,

which

can

adversely

affect

the

economies

of

many

companies,

sectors,

nations,

regions

and

the

market

in

general,

in

ways

that

cannot

necessarily

be

foreseen.

The

Fund’s

prospectus

also

includes

a

description

of

the

main

investment

risks.

The

Fund

is

not

guaranteed

to

achieve

its

investment

goal

of

making

monthly

distributions,

while

maintaining

prospects

for

capital

appreciation

nor

is

there

any

guarantee

that

the

Fund

will

provide

sufficient

income

at

or

through

the

investor’s

retirement.

In

addition,

some

of

its

distributions

may

be

treated

in

part

as

a

return

of

capital,

which

will

decrease

shareholders’

cost

basis

in

the

Fund

and

affect

the

amount

of

any

capital

gain

or

loss

that

they

realize

when

selling

or

exchanging

fund

shares.

The

annual

payout

rate

may

be

adjusted

higher

or

lower

from

year

to

year

and

could

vary

substantially

over

time.

It

is

possible

for

the

Fund

to

suffer

substantial

investment

losses

and

simultaneously

experience

additional

asset

reductions

as

a

result

of

its

distributions

to

shareholders

under

the

managed

distribution

policy.

Investors

who

hold

the

Fund

within

a

tax-advantaged

retirement

account

should

consult

their

tax

advisors

to

discuss

tax

consequences

of

receiving

cash

distributions.

In

addition,

use

of

the

Fund

or

election

of

the

option

to

receive

distribution

payments

in

cash

may

be

restricted

in

certain

retirement

plans

by

the

terms

of

the

governing

plan

documents

and/or

the

discretion

of

the

plan

administrator.

Investors

are

strongly

advised

to

consult

with

their

financial

advisor

for

assistance

before

selecting

the

appropriate

fund,

based

on

their

goals

and

personal

situations,

including

time

horizon,

retirement

income

needs,

risk

tolerance

and

tax

bracket.

1.

The

Fund

has

an

expense

reduction

and

a

fee

waiver

associated

with

any

investments

it

makes

in

a

Franklin

Templeton

money

fund

and/or

other

Franklin

Templeton

fund,

contractually

guaranteed

through

2/28/21.

Fund

investment

results

reflect

the

expense

reduction

and

fee

waiver;

without

these

reductions,

the

results

would

have

been

lower.

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.

Distribution

rate

is

based

on

an

annualization

of

the

respective

class’s

October

dividend

and

the

maximum

offering

price

(NAV

for

Advisor

Class)

per

share

on

10/31/20.

6.

The

Fund’s

30-day

standardized

yield

is

calculated

over

a

trailing

30-day

period

using

the

yield

to

maturity

on

bonds

and/or

the

dividends

accrued

on

stocks.

It

may

not

equal

the

Fund’s

actual

income

distribution

rate,

which

reflects

the

Fund’s

past

dividends

paid

to

shareholders.

7.

FactSet.

The

Blended

Benchmark

(25%

ICE

BofA

U.S.

Corporate

&

High

Yield

Index,

25%

Bloomberg

Barclays

U.S.

Aggregate

Bond

Index

and

50%

MSCI

USA

High

Divi-

dend

Yield

Index)

is

a

combination

of

leading

stock

and

bond

indexes.

The

ICE

BofA

U.S.

Corporate

&

High

Yield

Index

tracks

the

performance

of

U.S.

dollar-denominated

investment-grade

corporate

debt

publicly

issued

in

the

U.S.

domestic

market,

and

below

investment

grade,

but

not

in

default,

U.S.

dollar-denominated

corporate

bonds

pub-

licly

issued

in

the

U.S.

domestic

market,

and

includes

issues

with

a

credit

rating

of

BBB

or

below,

as

rated

by

credit

rating

agencies

Moody’s

and

S&P.

The

MSCI

USA

High

Dividend

Yield

Index

is

designed

to

reflect

the

performance

of

equities

in

the

MSCI

USA

Index

(excluding

REITs)

with

higher

dividend

income

and

quality

characteristics

than

average

dividend

yields

that

are

both

sustainable

and

persistent.

8.

Source:

Morningstar.

The

Bloomberg

Barclays

U.S.

Aggregate

Bond

Index

is

a

market

capitalization-weighted

index

representing

the

U.S.

investment-grade,

fixed-rate,

tax-

able

bond

market

with

index

components

for

government

and

corporate,

mortgage

pass-through

and

asset-backed

securities.

All

issues

included

are

SEC

registered,

taxable,

dollar

denominated

and

nonconvertible,

must

have

at

least

one

year

to

final

maturity

and

must

be

rated

investment

grade

(Baa3/BBB-/BBB-

or

higher)

using

the

middle

rating

of

Moody’s,

S&P

and

Fitch,

respectively.

The

S&P

500

is

a

market

capitalization-weighted

index

of

500

stocks

designed

to

measure

total

U.S.

equity

market

performance.

9.

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.

Your

Fund’s

Expenses

Franklin

Managed

Income

Fund

25

franklintempleton.com

Annual

Report

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.

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

184/366

to

reflect

the

one-half

year

period.

2.

Reflects

expenses

after

fee

waivers

and

expense

reimbursements.

Does

not

include

acquired

fund

fees

and

expenses.

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Share

Class

Beginning

Account

Value

5/1/20

Ending

Account

Value

10/31/20

Expenses

Paid

During

Period

5/1/20–10/31/20

1,2

Ending

Account

Value

10/31/20

Expenses

Paid

During

Period

5/1/20–10/31/20

1,2

a

Net

Annualized

Expense

Ratio

2

A

$1,000

$1,043.22

$4.78

$1,020.46

$4.72

0.93%

C

$1,000

$1,039.31

$8.61

$1,016.69

$8.52

1.68%

R

$1,000

$1,041.77

$6.06

$1,019.20

$5.99

1.18%

R6

$1,000

$1,044.07

$3.08

$1,022.12

$3.05

0.60%

Advisor

$1,000

$1,044.57

$3.49

$1,021.72

$3.46

0.68%

Franklin

Investors

Securities

Trust

Financial

Highlights

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Convertible

Securities

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

26

a

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

A

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$22.13

$20.65

$20.68

$18.24

$18.00

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.22

0.21

0.16

0.27

0.25

Net

realized

and

unrealized

gains

(losses)

...........

6.67

2.47

1.35

2.98

0.85

Total

from

investment

operations

....................

6.89

2.68

1.51

3.25

1.10

Less

distributions

from:

Net

investment

income

..........................

(0.30)

(0.45)

(0.49)

(0.47)

(0.50)

Net

realized

gains

.............................

(1.61)

(0.75)

(1.05)

(0.34)

(0.36)

Total

distributions

...............................

(1.91)

(1.20)

(1.54)

(0.81)

(0.86)

Net

asset

value,

end

of

year

.......................

$27.11

$22.13

$20.65

$20.68

$18.24

Total

return

c

...................................

33.49%

13.84%

7.65%

18.39%

6.41%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.83%

0.85%

0.86%

0.85%

0.86%

Expenses

net

of

waiver

and

payments

by

affiliates

d

......

0.83%

e

0.83%

0.84%

0.84%

0.85%

Net

investment

income

...........................

0.96%

0.97%

0.76%

1.39%

1.44%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$1,385,821

$1,169,928

$1,153,875

$815,491

$768,553

Portfolio

turnover

rate

............................

32.46%

26.83%

35.90%

27.24%

28.03%

a

The

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

repurchas-

es

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

e

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Convertible

Securities

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

27

a

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

C

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$21.77

$20.31

$20.37

$17.98

$17.75

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.05

0.04

(—)

c

0.12

0.12

Net

realized

and

unrealized

gains

(losses)

...........

6.56

2.45

1.33

2.93

0.84

Total

from

investment

operations

....................

6.61

2.49

1.33

3.05

0.96

Less

distributions

from:

Net

investment

income

..........................

(0.11)

(0.28)

(0.34)

(0.32)

(0.37)

Net

realized

gains

.............................

(1.61)

(0.75)

(1.05)

(0.34)

(0.36)

Total

distributions

...............................

(1.72)

(1.03)

(1.39)

(0.66)

(0.73)

Net

asset

value,

end

of

year

.......................

$26.66

$21.77

$20.31

$20.37

$17.98

Total

return

d

...................................

32.48%

13.03%

6.84%

17.49%

5.65%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

1.59%

1.60%

1.61%

1.60%

1.61%

Expenses

net

of

waiver

and

payments

by

affiliates

e

......

1.58%

1.58%

1.59%

1.59%

1.60%

Net

investment

income

...........................

0.21%

0.22%

0.01%

0.64%

0.69%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$233,295

$256,075

$299,716

$303,243

$293,038

Portfolio

turnover

rate

............................

32.46%

26.83%

35.90%

27.24%

28.03%

a

The

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

repurchas-

es

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Amount

rounds

to

less

than

$0.01

per

share.

d

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable.

e

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Investors

Securities

Trust

Financial

Highlights

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Convertible

Securities

Fund

(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

28

a

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

R6

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$22.28

$20.78

$20.79

$18.33

$18.09

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.31

0.28

0.24

0.34

0.33

Net

realized

and

unrealized

gains

(losses)

...........

6.69

2.50

1.36

3.00

0.84

Total

from

investment

operations

....................

7.00

2.78

1.60

3.34

1.17

Less

distributions

from:

Net

investment

income

..........................

(0.38)

(0.53)

(0.56)

(0.54)

(0.57)

Net

realized

gains

.............................

(1.61)

(0.75)

(1.05)

(0.34)

(0.36)

Total

distributions

...............................

(1.99)

(1.28)

(1.61)

(0.88)

(0.93)

Net

asset

value,

end

of

year

.......................

$27.29

$22.28

$20.78

$20.79

$18.33

Total

return

....................................

33.89%

14.26%

8.07%

18.84%

6.78%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.55%

0.54%

0.55%

0.49%

0.50%

Expenses

net

of

waiver

and

payments

by

affiliates

c

......

0.50%

0.49%

0.49%

0.48%

0.49%

Net

investment

income

...........................

1.30%

1.31%

1.11%

1.75%

1.80%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$113,642

$51,791

$57,824

$22,950

$7,154

Portfolio

turnover

rate

............................

32.46%

26.83%

35.90%

27.24%

28.03%

a

The

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

repurchas-

es

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Investors

Securities

Trust

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Convertible

Securities

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

29

a

Year

Ended

October

31,

2020

2019

2018

2017

2016

Advisor

Class

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$22.14

$20.65

$20.68

$18.24

$18.00

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.28

0.26

0.21

0.32

0.30

Net

realized

and

unrealized

gains

(losses)

...........

6.66

2.49

1.35

2.98

0.85

Total

from

investment

operations

....................

6.94

2.75

1.56

3.30

1.15

Less

distributions

from:

Net

investment

income

..........................

(0.36)

(0.51)

(0.54)

(0.52)

(0.55)

Net

realized

gains

.............................

(1.61)

(0.75)

(1.05)

(0.34)

(0.36)

Total

distributions

...............................

(1.97)

(1.26)

(1.59)

(0.86)

(0.91)

Net

asset

value,

end

of

year

.......................

$27.11

$22.14

$20.65

$20.68

$18.24

Total

return

....................................

33.80%

14.18%

7.91%

18.69%

6.68%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.58%

0.60%

0.61%

0.60%

0.61%

Expenses

net

of

waiver

and

payments

by

affiliates

c

......

0.58%

d

0.58%

0.59%

0.59%

0.60%

Net

investment

income

...........................

1.20%

1.22%

1.01%

1.64%

1.69%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$2,773,524

$2,379,435

$2,189,462

$1,542,254

$1,080,346

Portfolio

turnover

rate

............................

32.46%

26.83%

35.90%

27.24%

28.03%

a

The

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

repurchas-

es

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

d

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

Franklin

Investors

Securities

Trust

Statement

of

Investments,

October

31,

2020

Franklin

Convertible

Securities

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

30

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Convertible

Preferred

Stocks

20.1%

Auto

Components

1.4%

Aptiv

plc,

5.5%,

A

.....................................

United

States

530,000

$

63,812,000

Capital

Markets

1.2%

a

KKR

&

Co.,

Inc.,

6%,

C

.................................

United

States

1,060,000

55,162,400

a

Chemicals

1.0%

International

Flavors

&

Fragrances,

Inc.,

6%

.................

United

States

1,192,242

46,068,231

Electric

Utilities

4.0%

American

Electric

Power

Co.,

Inc.,

6.125%

..................

United

States

440,000

23,491,600

a

American

Electric

Power

Co.,

Inc.,

6.125%

..................

United

States

600,000

32,124,000

NextEra

Energy,

Inc.,

5.279%

............................

United

States

1,100,000

54,395,000

PG&E

Corp.,

5.5%

....................................

United

States

430,000

42,836,600

Southern

Co.

(The),

6.75%,

2019

.........................

United

States

550,000

26,587,000

179,434,200

Food

Products

1.4%

Bunge

Ltd.,

4.875%

...................................

United

States

630,000

64,990,800

Gas

Utilities

0.3%

South

Jersey

Industries,

Inc.,

7.25%

.......................

United

States

360,000

11,955,600

Health

Care

Equipment

&

Supplies

2.3%

Danaher

Corp.,

4.75%,

A

................................

United

States

54,000

84,774,060

Danaher

Corp.,

5%,

B

..................................

United

States

14,045

18,739,401

103,513,461

Health

Care

Technology

0.3%

Change

Healthcare,

Inc.,

6%

.............................

United

States

300,000

15,621,000

Life

Sciences

Tools

&

Services

1.4%

Avantor,

Inc.,

6.25%,

A

.................................

United

States

820,000

61,590,200

Machinery

0.7%

Fortive

Corp.,

5%,

A

...................................

United

States

34,350

31,750,735

Multi-Utilities

2.3%

DTE

Energy

Co.,

6.25%

................................

United

States

800,000

38,064,000

Sempra

Energy,

6%,

A

.................................

United

States

417,500

42,714,425

Sempra

Energy,

6.75%,

B

...............................

United

States

206,000

21,030,540

101,808,965

Semiconductors

&

Semiconductor

Equipment

1.9%

Broadcom,

Inc.,

8%,

A

..................................

United

States

71,100

84,608,289

Water

Utilities

0.9%

b

Essential

Utilities,

Inc.,

6%

..............................

United

States

770,000

41,949,600

Wireless

Telecommunication

Services

1.0%

a,c

2020

Cash

Mandatory

Exchangeable

Trust,

144A,

5.25%

.......

United

States

43,000

44,896,300

a

Total

Convertible

Preferred

Stocks

(Cost

$847,531,761)

..........................

907,161,781

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Convertible

Securities

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

31

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Convertible

Bonds

75.0%

Biotechnology

3.7%

Intercept

Pharmaceuticals,

Inc.

,

Senior

Note

,

2

%

,

5/15/26

.......

United

States

21,000,000

$

11,709,847

Neurocrine

Biosciences,

Inc.

,

Senior

Note

,

2.25

%

,

5/15/24

......

United

States

44,750,000

62,765,214

c

PTC

Therapeutics,

Inc.

,

Senior

Note

,

144A,

1.5

%

,

9/15/26

.......

United

States

48,000,000

58,654,186

Sarepta

Therapeutics,

Inc.

,

Senior

Note

,

1.5

%

,

11/15/24

........

United

States

16,000,000

31,987,388

165,116,635

Communications

Equipment

1.5%

Viavi

Solutions,

Inc.

,

Senior

Note,

1.75%,

6/01/23

...........................

United

States

40,969,000

47,047,100

Senior

Note,

1%,

3/01/24

.............................

United

States

20,000,000

23,178,955

70,226,055

Energy

Equipment

&

Services

0.3%

Oil

States

International,

Inc.

,

Senior

Note

,

1.5

%

,

2/15/23

........

United

States

28,000,000

15,888,346

Entertainment

3.3%

iQIYI,

Inc.

,

Senior

Note,

3.75%,

12/01/23

..........................

China

40,000,000

44,875,000

Senior

Note,

2%,

4/01/25

.............................

China

26,000,000

26,178,750

c

Sea

Ltd.

,

Senior

Note,

144A,

1%,

12/01/24

.......................

Taiwan

3,500,000

10,997,776

Senior

Note,

144A,

2.375%,

12/01/25

....................

Taiwan

34,000,000

64,825,750

146,877,276

Health

Care

Equipment

&

Supplies

3.5%

c

DexCom,

Inc.

,

Senior

Note

,

144A,

0.25

%

,

11/15/25

............

United

States

79,000,000

76,362,462

Insulet

Corp.

,

Senior

Note

,

0.375

%

,

9/01/26

.................

United

States

65,000,000

79,707,766

156,070,228

Insurance

1.6%

c

AXA

SA

,

Senior

Note

,

144A,

7.25

%

,

5/15/21

.................

France

71,500,000

71,410,625

Interactive

Media

&

Services

5.0%

Snap,

Inc.

,

Senior

Note

,

0.75

%

,

8/01/26

....................

United

States

59,000,000

110,002,356

Weibo

Corp.

,

Senior

Note

,

1.25

%

,

11/15/22

..................

China

63,000,000

61,188,750

Zillow

Group,

Inc.

,

Senior

Note

,

2.75

%

,

5/15/25

...............

United

States

34,500,000

54,262,527

225,453,633

Internet

&

Direct

Marketing

Retail

9.0%

Booking

Holdings,

Inc.

,

Senior

Note,

0.9%,

9/15/21

............................

United

States

37,500,000

39,241,161

b,c

Senior

Note,

144A,

0.75%,

5/01/25

......................

United

States

19,000,000

23,857,559

c

Etsy,

Inc.

,

Senior

Note

,

144A,

0.125

%

,

9/01/27

...............

United

States

80,000,000

83,265,380

MercadoLibre,

Inc.

,

Senior

Note

,

2

%

,

8/15/28

................

Argentina

32,000,000

90,040,583

Pinduoduo,

Inc.

,

Senior

Note

,

Zero

Cpn.,

10/01/24

............

China

40,500,000

87,067,759

c

Wayfair,

Inc.

,

Senior

Note

,

144A,

0.625

%

,

10/01/25

............

United

States

85,000,000

81,473,101

404,945,543

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Convertible

Securities

Fund

(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

32

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Convertible

Bonds

(continued)

IT

Services

7.6%

Okta,

Inc.

,

Senior

Note

,

0.125

%

,

9/01/25

....................

United

States

73,000,000

$

95,721,250

Square,

Inc.

,

Senior

Note

,

0.5

%

,

5/15/23

....................

United

States

42,000,000

86,947,953

Twilio,

Inc.

,

Senior

Note

,

0.25

%

,

6/01/23

....................

United

States

21,500,000

83,919,042

Wix.com

Ltd.

,

Senior

Note

,

Zero

Cpn.,

7/01/23

...............

Israel

42,500,000

77,267,979

343,856,224

Life

Sciences

Tools

&

Services

1.5%

Illumina,

Inc.

,

Senior

Note,

0.5%,

6/15/21

............................

United

States

32,500,000

40,204,743

Senior

Note,

Zero

Cpn.,

8/15/23

........................

United

States

25,750,000

27,403,047

67,607,790

Machinery

0.9%

Fortive

Corp.

,

Senior

Note

,

0.875

%

,

2/15/22

.................

United

States

40,270,000

40,220,065

Media

2.9%

c

Liberty

Broadband

Corp.

,

Senior

Bond

,

144A,

2.75

%

,

9/30/50

....

United

States

22,500,000

24,185,693

c

Liberty

Interactive

LLC

,

Senior

Bond

,

144A,

1.75

%

,

9/30/46

......

United

States

37,000,000

66,205,950

Liberty

Media

Corp.

,

Senior

Bond,

2.25%,

9/30/46

...........................

United

States

37,000,000

17,205,691

Senior

Note,

1.375%,

10/15/23

.........................

United

States

21,200,000

23,804,169

131,401,503

Pharmaceuticals

2.5%

Jazz

Investments

I

Ltd.

,

Senior

Note,

1.5%,

8/15/24

............................

United

States

39,750,000

40,714,816

c

Senior

Note,

144A,

2%,

6/15/26

........................

United

States

35,000,000

42,044,388

c

Revance

Therapeutics,

Inc.

,

Senior

Note

,

144A,

1.75

%

,

2/15/27

..

United

States

27,000,000

28,854,690

111,613,894

Road

&

Rail

1.1%

c

Lyft,

Inc.

,

Senior

Note

,

144A,

1.5

%

,

5/15/25

..................

United

States

52,000,000

50,068,904

Semiconductors

&

Semiconductor

Equipment

4.4%

Inphi

Corp.

,

Senior

Note,

0.75%,

9/01/21

...........................

United

States

7,600,000

18,676,370

c

Senior

Note,

144A,

0.75%,

4/15/25

......................

United

States

4,000,000

5,137,303

Microchip

Technology,

Inc.

,

Senior

Sub.

Note

,

1.625

%

,

2/15/27

...

United

States

62,250,000

96,991,961

c

Silicon

Laboratories,

Inc.

,

Senior

Note

,

144A,

0.625

%

,

6/15/25

...

United

States

68,000,000

75,947,997

196,753,631

Software

23.5%

Alteryx,

Inc.

,

Senior

Note,

0.5%,

8/01/24

............................

United

States

20,000,000

20,912,500

Senior

Note,

1%,

8/01/26

.............................

United

States

18,000,000

18,821,250

Atlassian,

Inc.

,

Senior

Note

,

0.625

%

,

5/01/23

................

United

States

32,500,000

76,380,670

Blackline,

Inc.

,

Senior

Note

,

0.125

%

,

8/01/24

.................

United

States

9,500,000

14,018,438

Coupa

Software,

Inc.

,

Senior

Note,

0.125%,

6/15/25

..........................

United

States

21,000,000

37,505,181

c

Senior

Note,

144A,

0.375%,

6/15/26

.....................

United

States

44,000,000

51,290,592

DocuSign,

Inc.

,

Senior

Note

,

0.5

%

,

9/15/23

..................

United

States

24,000,000

68,295,000

Envestnet,

Inc.

,

Senior

Note,

1.75%,

6/01/23

...........................

United

States

51,500,000

65,532,563

c

Senior

Note,

144A,

0.75%,

8/15/25

......................

United

States

11,500,000

11,553,065

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Convertible

Securities

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

33

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Convertible

Bonds

(continued)

Software

(continued)

Guidewire

Software,

Inc.

,

Senior

Note

,

1.25

%

,

3/15/25

.........

United

States

44,000,000

$

48,573,571

c

HubSpot,

Inc.

,

Senior

Note

,

144A,

0.375

%

,

6/01/25

............

United

States

68,000,000

85,450,332

New

Relic,

Inc.

,

Senior

Note

,

0.5

%

,

5/01/23

..................

United

States

24,000,000

23,163,628

Palo

Alto

Networks,

Inc.

,

Senior

Note

,

0.75

%

,

7/01/23

..........

United

States

43,000,000

46,209,346

Pluralsight,

Inc.

,

Senior

Note

,

0.375

%

,

3/01/24

...............

United

States

39,000,000

34,164,000

Q2

Holdings,

Inc.

,

Senior

Note

,

0.75

%

,

2/15/23

...............

United

States

32,000,000

54,020,000

RealPage,

Inc.

,

Senior

Note,

1.5%,

11/15/22

...........................

United

States

35,850,000

51,212,301

Senior

Note,

1.5%,

5/15/25

............................

United

States

18,750,000

19,367,112

ServiceNow,

Inc.

,

Senior

Note

,

Zero

Cpn.,

6/01/22

.............

United

States

23,000,000

84,911,515

Splunk,

Inc.

,

Senior

Note,

1.125%,

9/15/25

..........................

United

States

22,500,000

33,360,908

c

Senior

Note,

144A,

1.125%,

6/15/27

.....................

United

States

6,500,000

7,186,685

Workday,

Inc.

,

Senior

Note

,

0.25

%

,

10/01/22

.................

United

States

57,500,000

86,731,152

Workiva,

Inc.

,

Senior

Note

,

1.125

%

,

8/15/26

.................

United

States

22,000,000

21,885,856

c

Zendesk,

Inc.

,

Senior

Note

,

144A,

0.625

%

,

6/15/25

............

United

States

80,000,000

100,423,070

1,060,968,735

Specialty

Retail

2.7%

c

Burlington

Stores,

Inc.

,

Senior

Note

,

144A,

2.25

%

,

4/15/25

......

United

States

28,000,000

32,185,304

RH

,

Senior

Note,

Zero

Cpn.,

6/15/23

........................

United

States

27,000,000

48,601,494

c

Senior

Note,

144A,

Zero

Cpn.,

9/15/24

...................

United

States

24,000,000

40,945,311

121,732,109

Total

Convertible

Bonds

(Cost

$2,535,012,685)

..................................

3,380,211,196

Shares

Escrows

and

Litigation

Trusts

0.0%

d

Motors

Liquidation

Co.,

Escrow

Account

....................

United

States

376,200

—

Total

Escrows

and

Litigation

Trusts

(Cost

$–)

...................................

—

Total

Long

Term

Investments

(Cost

$3,382,544,446)

.............................

4,287,372,977

a

Short

Term

Investments

4.9%

a

a

Country

Shares

a

Value

a

Money

Market

Funds

4.7%

e,f

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0%

........

United

States

211,356,904

211,356,904

Total

Money

Market

Funds

(Cost

$211,356,904)

.................................

211,356,904

g

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

0.2%

a

a

a

a

a

Money

Market

Funds

0.2%

e,f

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0%

........

United

States

6,200,000

6,200,000

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Convertible

Securities

Fund

(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

34

Short

Term

Investments

(continued)

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Repurchase

Agreements

0.0%

†

h

Joint

Repurchase

Agreement,

BNP

Paribas

SA,

0.07%,

11/02/20

(Maturity

Value

$1,550,481)

Collateralized

by

U.S.

Treasury

Bonds,

6.875%

-

8.125%,

5/15/21

-

8/15/25;

U.S.

Treasury

Notes,

0.25%

-

3%,

2/15/21

-

9/30/25,

U.S.

Treasury

Note,

Index

Linked,

1.125%,

1/15/21;

and

U.S.

Treasury

Bill,

Discount

Note,

3/25/21

(valued

at

$1,581,490)

...........

1,550,475

$

1,550,475

Total

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

(Cost

$7,750,475)

............................................................

7,750,475

Total

Short

Term

Investments

(Cost

$219,107,379

)

...............................

219,107,379

a

Total

Investments

(Cost

$3,601,651,825)

100.0%

................................

$4,506,480,356

Other

Assets,

less

Liabilities

(

0.0

)

%

†

...........................................

(197,305)

Net

Assets

100.0%

...........................................................

$4,506,283,051

See

Abbreviations

on

page

81

.

*

The

principal

amount

is

stated

in

U.S.

dollars

unless

otherwise

indicated.

†

Rounds

to

less

than

0.1%

of

net

assets.

a

Non-income

producing.

b

A

portion

or

all

of

the

security

is

on

loan

at

October

31,

2020.

See

Note

1(f).

c

Security

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

a

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

October

31,

2020,

the

aggregate

value

of

these

securities

was

$1,137,222,423,

representing

25.2%

of

net

assets.

d

Fair

valued

using

significant

unobservable

inputs.

See

Note

11

regarding

fair

value

measurements.

e

See

Note

3(f)

regarding

investments

in

affiliated

management

investment

companies.

f

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

g

See

Note

1(f)

regarding

securities

on

loan.

h

See

Note

1(c)

regarding

joint

repurchase

agreement.

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Equity

Income

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

35

a

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

A

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$26.23

$24.86

$25.06

$22.50

$22.99

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.49

0.46

0.42

0.48

0.47

Net

realized

and

unrealized

gains

(losses)

...........

(1.11)

2.49

0.58

3.55

0.24

Total

from

investment

operations

....................

(0.62)

2.95

1.00

4.03

0.71

Less

distributions

from:

Net

investment

income

..........................

(0.63)

(0.58)

(0.57)

(0.58)

(0.60)

Net

realized

gains

.............................

(0.76)

(1.00)

(0.63)

(0.89)

(0.60)

Total

distributions

...............................

(1.39)

(1.58)

(1.20)

(1.47)

(1.20)

Net

asset

value,

end

of

year

.......................

$24.22

$26.23

$24.86

$25.06

$22.50

Total

return

c

...................................

(2.43)%

12.73%

3.98%

18.55%

3.31%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.86%

0.86%

0.85%

0.86%

0.87%

Expenses

net

of

waiver

and

payments

by

affiliates

d

......

0.85%

0.85%

0.84%

0.86%

e

0.87%

e

Net

investment

income

...........................

1.98%

1.85%

1.66%

2.02%

2.13%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$1,953,985

$2,017,910

$1,752,181

$1,753,135

$1,700,712

Portfolio

turnover

rate

............................

26.90%

23.23%

28.40%

27.18%

50.05%

a

The

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

repurchas-

es

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

e

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Equity

Income

Fund

(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

36

a

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

C

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$26.01

$24.64

$24.86

$22.32

$22.85

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.30

0.28

0.26

0.30

0.30

Net

realized

and

unrealized

gains

(losses)

...........

(1.10)

2.47

0.53

3.54

0.23

Total

from

investment

operations

....................

(0.80)

2.75

0.79

3.84

0.53

Less

distributions

from:

Net

investment

income

..........................

(0.42)

(0.38)

(0.38)

(0.41)

(0.46)

Net

realized

gains

.............................

(0.76)

(1.00)

(0.63)

(0.89)

(0.60)

Total

distributions

...............................

(1.18)

(1.38)

(1.01)

(1.30)

(1.06)

Net

asset

value,

end

of

year

.......................

$24.03

$26.01

$24.64

$24.86

$22.32

Total

return

c

...................................

(3.19)%

11.91%

3.16%

17.73%

2.51%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

1.61%

1.61%

1.60%

1.61%

1.62%

Expenses

net

of

waiver

and

payments

by

affiliates

d

......

1.60%

1.60%

1.59%

1.61%

e

1.62%

e

Net

investment

income

...........................

1.23%

1.10%

0.91%

1.27%

1.38%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$161,707

$208,734

$204,402

$267,450

$257,156

Portfolio

turnover

rate

............................

26.90%

23.23%

28.40%

27.18%

50.05%

a

The

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

repurchas-

es

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

e

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Equity

Income

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

37

a

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

R

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$26.23

$24.85

$25.05

$22.49

$22.99

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.43

0.41

0.36

0.42

0.41

Net

realized

and

unrealized

gains

(losses)

...........

(1.10)

2.49

0.58

3.56

0.24

Total

from

investment

operations

....................

(0.67)

2.90

0.94

3.98

0.65

Less

distributions

from:

Net

investment

income

..........................

(0.56)

(0.52)

(0.51)

(0.53)

(0.55)

Net

realized

gains

.............................

(0.76)

(1.00)

(0.63)

(0.89)

(0.60)

Total

distributions

...............................

(1.32)

(1.52)

(1.14)

(1.42)

(1.15)

Net

asset

value,

end

of

year

.......................

$24.24

$26.23

$24.85

$25.05

$22.49

Total

return

....................................

(2.62)%

12.50%

3.75%

18.29%

3.05%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

1.08%

1.09%

1.08%

1.09%

1.11%

Expenses

net

of

waiver

and

payments

by

affiliates

c

......

1.08%

d

1.08%

1.07%

1.09%

d

1.11%

d

Net

investment

income

...........................

1.75%

1.62%

1.43%

1.79%

1.89%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$5,795

$7,284

$6,750

$7,074

$6,395

Portfolio

turnover

rate

............................

26.90%

23.23%

28.40%

27.18%

50.05%

a

The

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

repurchas-

es

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

d

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Equity

Income

Fund

(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

38

a

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

R6

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$26.29

$24.91

$25.11

$22.54

$23.01

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.57

0.54

0.50

0.56

0.43

Net

realized

and

unrealized

gains

(losses)

...........

(1.11)

2.50

0.59

3.57

0.37

Total

from

investment

operations

....................

(0.54)

3.04

1.09

4.13

0.80

Less

distributions

from:

Net

investment

income

..........................

(0.72)

(0.66)

(0.66)

(0.67)

(0.67)

Net

realized

gains

.............................

(0.76)

(1.00)

(0.63)

(0.89)

(0.60)

Total

distributions

...............................

(1.48)

(1.66)

(1.29)

(1.56)

(1.27)

Net

asset

value,

end

of

year

.......................

$24.27

$26.29

$24.91

$25.11

$22.54

Total

return

....................................

(2.07)%

13.12%

4.35%

19.00%

3.72%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.52%

0.53%

0.52%

0.49%

0.49%

Expenses

net

of

waiver

and

payments

by

affiliates

c

......

0.51%

0.51%

0.50%

0.49%

d

0.49%

d

Net

investment

income

...........................

2.32%

2.19%

2.00%

2.39%

2.51%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$97,565

$96,406

$81,171

$12,728

$10,537

Portfolio

turnover

rate

............................

26.90%

23.23%

28.40%

27.18%

50.05%

a

The

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

repurchas-

es

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

d

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Equity

Income

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

39

a

Year

Ended

October

31,

2020

2019

2018

2017

2016

Advisor

Class

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$26.27

$24.90

$25.10

$22.53

$23.02

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.55

0.50

0.46

0.50

0.45

Net

realized

and

unrealized

gains

(losses)

...........

(1.11)

2.51

0.60

3.60

0.31

Total

from

investment

operations

....................

(0.56)

3.01

1.06

4.10

0.76

Less

distributions

from:

Net

investment

income

..........................

(0.69)

(0.64)

(0.63)

(0.64)

(0.65)

Net

realized

gains

.............................

(0.76)

(1.00)

(0.63)

(0.89)

(0.60)

Total

distributions

...............................

(1.45)

(1.64)

(1.26)

(1.53)

(1.25)

Net

asset

value,

end

of

year

.......................

$24.26

$26.27

$24.90

$25.10

$22.53

Total

return

....................................

(2.18)%

13.04%

4.22%

18.88%

3.53%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.61%

0.61%

0.60%

0.61%

0.62%

Expenses

net

of

waiver

and

payments

by

affiliates

c

......

0.60%

0.60%

0.59%

0.61%

d

0.62%

d

Net

investment

income

...........................

2.21%

2.10%

1.91%

2.27%

2.38%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$219,362

$173,739

$109,435

$147,681

$80,422

Portfolio

turnover

rate

............................

26.90%

23.23%

28.40%

27.18%

50.05%

a

The

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

repurchas-

es

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

d

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

Franklin

Investors

Securities

Trust

Statement

of

Investments,

October

31,

2020

Franklin

Equity

Income

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

40

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

82.4%

Aerospace

&

Defense

3.6%

Lockheed

Martin

Corp.

.................................

United

States

83,500

$

29,235,855

Raytheon

Technologies

Corp.

............................

United

States

1,070,000

58,122,400

87,358,255

Air

Freight

&

Logistics

1.5%

United

Parcel

Service,

Inc.,

B

............................

United

States

231,500

36,370,965

Banks

9.5%

Bank

of

America

Corp.

.................................

United

States

2,248,708

53,294,380

Citigroup,

Inc.

........................................

United

States

930,000

38,520,600

JPMorgan

Chase

&

Co.

.................................

United

States

940,000

92,157,600

Truist

Financial

Corp.

..................................

United

States

1,115,000

46,963,800

230,936,380

Beverages

4.6%

Coca-Cola

Co.

(The)

...................................

United

States

1,205,000

57,912,300

PepsiCo,

Inc.

........................................

United

States

415,000

55,315,350

113,227,650

Capital

Markets

5.9%

Apollo

Global

Management,

Inc.

..........................

United

States

552,500

20,365,150

Ares

Management

Corp.

................................

United

States

550,000

23,265,000

BlackRock,

Inc.

.......................................

United

States

49,500

29,660,895

Morgan

Stanley

.......................................

United

States

1,452,500

69,937,875

143,228,920

Chemicals

0.5%

BASF

SE

...........................................

Germany

210,000

11,498,727

Commercial

Services

&

Supplies

1.7%

Republic

Services,

Inc.

.................................

United

States

480,000

42,321,600

Communications

Equipment

0.6%

Cisco

Systems,

Inc.

...................................

United

States

403,000

14,467,700

Diversified

Telecommunication

Services

2.8%

TELUS

Corp.

........................................

Canada

645,000

11,029,200

Verizon

Communications,

Inc.

............................

United

States

1,020,000

58,129,800

69,159,000

Electric

Utilities

9.0%

Duke

Energy

Corp.

....................................

United

States

765,000

70,464,150

Entergy

Corp.

........................................

United

States

275,000

27,835,500

NextEra

Energy,

Inc.

...................................

United

States

960,000

70,281,600

Xcel

Energy,

Inc.

......................................

United

States

710,000

49,721,300

218,302,550

Electrical

Equipment

0.8%

Emerson

Electric

Co.

..................................

United

States

295,000

19,113,050

Equity

Real

Estate

Investment

Trusts

(REITs)

1.4%

Prologis,

Inc.

.........................................

United

States

240,000

23,808,000

Public

Storage

.......................................

United

States

50,000

11,453,500

35,261,500

Food

&

Staples

Retailing

2.2%

Walmart,

Inc.

........................................

United

States

385,000

53,418,750

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Equity

Income

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

41

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Food

Products

0.6%

Nestle

SA

...........................................

Switzerland

140,000

$

15,744,335

Health

Care

Equipment

&

Supplies

3.2%

Baxter

International,

Inc.

................................

United

States

195,500

15,164,935

Medtronic

plc

........................................

United

States

630,000

63,359,100

78,524,035

Health

Care

Providers

&

Services

1.7%

HCA

Healthcare,

Inc.

...................................

United

States

19,000

2,354,860

UnitedHealth

Group,

Inc.

................................

United

States

126,500

38,600,210

40,955,070

Hotels,

Restaurants

&

Leisure

1.8%

McDonald's

Corp.

.....................................

United

States

210,000

44,730,000

Household

Products

3.1%

Procter

&

Gamble

Co.

(The)

.............................

United

States

560,000

76,776,000

Insurance

0.8%

Arthur

J

Gallagher

&

Co.

................................

United

States

183,000

18,978,930

Machinery

0.7%

Illinois

Tool

Works,

Inc.

.................................

United

States

47,000

9,206,360

Stanley

Black

&

Decker,

Inc.

.............................

United

States

51,780

8,605,836

17,812,196

Media

1.8%

Comcast

Corp.,

A

.....................................

United

States

1,029,500

43,486,080

Multiline

Retail

2.5%

Target

Corp.

.........................................

United

States

395,000

60,126,900

Oil,

Gas

&

Consumable

Fuels

3.5%

Canadian

Natural

Resources

Ltd.

.........................

Canada

715,000

11,404,250

Chevron

Corp.

.......................................

United

States

615,000

42,742,500

Exxon

Mobil

Corp.

.....................................

United

States

195,000

6,360,900

a

Royal

Dutch

Shell

plc,

ADR,

A

............................

Netherlands

780,000

19,929,000

Suncor

Energy,

Inc.

....................................

Canada

400,000

4,516,000

84,952,650

Personal

Products

0.8%

Unilever

NV,

NYRS

....................................

United

Kingdom

350,000

19,796,000

Pharmaceuticals

6.2%

Johnson

&

Johnson

...................................

United

States

555,500

76,164,605

Merck

&

Co.,

Inc.

.....................................

United

States

425,000

31,964,250

Pfizer,

Inc.

...........................................

United

States

1,184,300

42,018,964

150,147,819

Road

&

Rail

2.2%

Norfolk

Southern

Corp.

.................................

United

States

255,000

53,325,600

Semiconductors

&

Semiconductor

Equipment

3.3%

Analog

Devices,

Inc.

...................................

United

States

165,000

19,557,450

Broadcom,

Inc.

.......................................

United

States

43,500

15,208,905

Intel

Corp.

...........................................

United

States

268,402

11,884,840

Texas

Instruments,

Inc.

.................................

United

States

233,000

33,689,470

80,340,665

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Equity

Income

Fund

(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

42

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Software

2.7%

Microsoft

Corp.

.......................................

United

States

297,500

$

60,234,825

Oracle

Corp.

.........................................

United

States

107,200

6,014,992

66,249,817

Specialty

Retail

1.6%

Lowe's

Cos.,

Inc.

......................................

United

States

190,000

30,039,000

TJX

Cos.,

Inc.

(The)

...................................

United

States

187,000

9,499,600

39,538,600

Technology

Hardware,

Storage

&

Peripherals

1.4%

Apple,

Inc.

..........................................

United

States

305,000

33,202,300

Trading

Companies

&

Distributors

0.4%

Fastenal

Co.

.........................................

United

States

200,000

8,646,000

Total

Common

Stocks

(Cost

$1,483,749,702)

....................................

2,007,998,044

b

Equity-Linked

Securities

9.8%

Banks

0.9%

c

Royal

Bank

of

Canada

into

Bank

of

America

Corp.,

144A,

7.75%,

11/01/21

..........................................

United

States

902,000

21,259,864

Chemicals

1.5%

c

Citigroup

Global

Markets

Holdings,

Inc.

into

Sherwin-Williams

Co.

(The),

144A,

6.5%,

7/09/21

............................

United

States

30,200

19,151,082

c

Goldman

Sachs

International

Bank

into

Linde

plc,

144A,

6.5%,

10/25/21

..........................................

United

Kingdom

80,150

18,102,732

37,253,814

Health

Care

Equipment

&

Supplies

0.6%

c

Citigroup

Global

Markets

Holdings,

Inc.

into

Becton

Dickinson

and

Co.,

144A,

7.5%,

12/11/20

.............................

United

States

61,000

14,346,953

Health

Care

Providers

&

Services

0.7%

c

Goldman

Sachs

International

Bank

into

HCA

Healthcare,

Inc.,

144A,

6%,

12/23/20

.......................................

United

States

145,000

18,176,064

Internet

&

Direct

Marketing

Retail

1.4%

c

Wells

Fargo

Bank

NA

into

Amazon.com,

Inc.,

144A,

6%,

4/05/21

..

United

States

14,500

33,442,071

Machinery

0.8%

c

Goldman

Sachs

International

Bank

into

Stanley

Black

&

Decker,

Inc.,

144A,

7%,

2/24/21

...................................

United

States

115,000

18,764,799

Software

1.7%

c

Barclays

Bank

plc

into

Microsoft

Corp.,

144A,

6.5%,

11/05/20

....

United

States

110,000

17,379,190

c

Barclays

Bank

plc

into

Oracle

Corp.,

144A,

6.5%,

1/22/21

.......

United

States

440,000

24,158,401

41,537,591

Specialty

Retail

1.6%

c

Citigroup

Global

Markets

Holdings,

Inc.

into

TJX

Cos.,

Inc.

(The),

144A,

6.5%,

9/14/21

.................................

United

States

321,500

16,714,332

c

Royal

Bank

of

Canada

into

Tractor

Supply

Co.,

144A,

6%,

12/11/20

United

States

200,000

22,425,191

39,139,523

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Equity

Income

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

43

a

a

Country

Shares

a

Value

a

a

a

a

a

a

b

Equity-Linked

Securities

(continued)

Trading

Companies

&

Distributors

0.6%

c

Citigroup

Global

Markets

Holdings,

Inc.

into

Fastenal

Co.,

144A,

7%,

12/22/20

..........................................

United

States

360,000

$

14,804,418

Total

Equity-Linked

Securities

(Cost

$229,624,614)

..............................

238,725,097

Convertible

Preferred

Stocks

7.0%

Health

Care

Equipment

&

Supplies

3.4%

Becton

Dickinson

and

Co.,

6%,

B

.........................

United

States

487,200

25,373,376

Boston

Scientific

Corp.,

5.5%,

A

..........................

United

States

110,000

11,393,800

Danaher

Corp.,

4.75%,

A

................................

United

States

25,000

39,247,250

Danaher

Corp.,

5%,

B

..................................

United

States

4,652

6,206,885

82,221,311

Machinery

1.4%

Fortive

Corp.,

5%,

A

...................................

United

States

36,600

33,830,478

Semiconductors

&

Semiconductor

Equipment

1.2%

Broadcom,

Inc.,

8%,

A

..................................

United

States

25,000

29,749,750

Water

Utilities

1.0%

Essential

Utilities,

Inc.,

6%

..............................

United

States

475,000

25,878,000

Total

Convertible

Preferred

Stocks

(Cost

$155,342,321)

..........................

171,679,539

Total

Long

Term

Investments

(Cost

$1,868,716,637)

.............................

2,418,402,680

a

Short

Term

Investments

1.3%

a

a

Country

Shares

a

Value

a

Money

Market

Funds

0.6%

d,e

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0%

........

United

States

13,813,242

13,813,242

Total

Money

Market

Funds

(Cost

$13,813,242)

..................................

13,813,242

f

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

0.7%

a

a

a

a

a

Money

Market

Funds

0.6%

d,e

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0%

........

United

States

14,180,000

14,180,000

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Equity

Income

Fund

(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

44

Short

Term

Investments

(continued)

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Repurchase

Agreements

0.1%

g

Joint

Repurchase

Agreement,

BNP

Paribas

SA,

0.07%,

11/02/20

(Maturity

Value

$3,545,609)

Collateralized

by

U.S.

Treasury

Bonds,

6.875%

-

8.125%,

5/15/21

-

8/15/25;

U.S.

Treasury

Notes,

0.25%

-

3%,

2/15/21

-

9/30/25,

U.S.

Treasury

Note,

Index

Linked,

1.125%,

1/15/21;

and

U.S.

Treasury

Bill,

Discount

Note,

3/25/21

(valued

at

$3,616,519)

...........

3,545,595

$

3,545,595

Total

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

(Cost

$17,725,595)

...........................................................

17,725,595

Total

Short

Term

Investments

(Cost

$31,538,837

)

................................

31,538,837

a

Total

Investments

(Cost

$1,900,255,474)

100.5%

................................

$2,449,941,517

Other

Assets,

less

Liabilities

(0.5)%

...........................................

(11,527,927)

Net

Assets

100.0%

...........................................................

$2,438,413,590

See

Abbreviations

on

page

81

.

*

The

principal

amount

is

stated

in

U.S.

dollars

unless

otherwise

indicated.

a

A

portion

or

all

of

the

security

is

on

loan

at

October

31,

2020.

See

Note

1(f).

b

See

Note

1(e)

regarding

equity-linked

securities.

c

Security

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

a

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

October

31,

2020,

the

aggregate

value

of

these

securities

was

$238,725,097,

representing

9.8%

of

net

assets.

d

See

Note

3(f)

regarding

investments

in

affiliated

management

investment

companies.

e

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

f

See

Note

1(f)

regarding

securities

on

loan.

g

See

Note

1(c)

regarding

joint

repurchase

agreement.

Franklin

Investors

Securities

Trust

Financial

Highlights

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Income

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part

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statements.

Annual

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45

a

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

A

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$12.80

$11.89

$12.36

$11.65

$11.40

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.31

0.29

0.27

0.33

0.30

Net

realized

and

unrealized

gains

(losses)

...........

(0.44)

1.17

(0.16)

0.91

0.31

Total

from

investment

operations

....................

(0.13)

1.46

0.11

1.24

0.61

Less

distributions

from:

Net

investment

income

..........................

(0.46)

(0.41)

(0.38)

(0.36)

(0.36)

Net

realized

gains

.............................

(0.48)

(0.14)

(0.20)

(0.17)

(—)

c

Total

distributions

...............................

(0.94)

(0.55)

(0.58)

(0.53)

(0.36)

Net

asset

value,

end

of

year

.......................

$11.73

$12.80

$11.89

$12.36

$11.65

Total

return

d

...................................

(1.06)%

12.64%

0.89%

10.88%

5.54%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.93%

0.96%

1.02%

1.02%

1.02%

Expenses

net

of

waiver

and

payments

by

affiliates

e

......

0.91%

0.94%

1.01%

1.00%

1.01%

Net

investment

income

...........................

2.55%

2.36%

2.22%

2.72%

2.62%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$2,860,390

$2,966,899

$2,586,246

$2,646,599

$2,532,459

Portfolio

turnover

rate

............................

64.69%

53.02%

63.64%

34.99%

46.03%

a

The

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

repurchas-

es

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Amount

rounds

to

less

than

$0.01

per

share.

d

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable.

e

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Managed

Income

Fund

(continued)

franklintempleton.com

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The

accompanying

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part

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statements.

46

a

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

C

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$12.67

$11.78

$12.25

$11.55

$11.31

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.22

0.20

0.19

0.24

0.21

Net

realized

and

unrealized

gains

(losses)

...........

(0.43)

1.15

(0.17)

0.90

0.31

Total

from

investment

operations

....................

(0.21)

1.35

0.02

1.14

0.52

Less

distributions

from:

Net

investment

income

..........................

(0.37)

(0.32)

(0.29)

(0.27)

(0.28)

Net

realized

gains

.............................

(0.48)

(0.14)

(0.20)

(0.17)

(—)

c

Total

distributions

...............................

(0.85)

(0.46)

(0.49)

(0.44)

(0.28)

Net

asset

value,

end

of

year

.......................

$11.61

$12.67

$11.78

$12.25

$11.55

Total

return

d

...................................

(1.79)%

11.79%

0.14%

10.06%

4.73%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

1.68%

1.71%

1.76%

1.77%

1.77%

Expenses

net

of

waiver

and

payments

by

affiliates

e

......

1.66%

1.69%

1.75%

1.75%

1.76%

Net

investment

income

...........................

1.84%

1.61%

1.48%

1.97%

1.87%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$341,521

$491,751

$493,762

$633,108

$630,110

Portfolio

turnover

rate

............................

64.69%

53.02%

63.64%

34.99%

46.03%

a

The

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

repurchas-

es

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Amount

rounds

to

less

than

$0.01

per

share.

d

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable.

e

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Managed

Income

Fund

(continued)

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part

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statements.

Annual

Report

47

a

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

R

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$12.84

$11.92

$12.39

$11.67

$11.42

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.28

0.26

0.26

0.30

0.27

Net

realized

and

unrealized

gains

(losses)

...........

(0.45)

1.18

(0.18)

0.92

0.32

Total

from

investment

operations

....................

(0.17)

1.44

0.08

1.22

0.59

Less

distributions

from:

Net

investment

income

..........................

(0.43)

(0.38)

(0.35)

(0.33)

(0.34)

Net

realized

gains

.............................

(0.48)

(0.14)

(0.20)

(0.17)

(—)

c

Total

distributions

...............................

(0.91)

(0.52)

(0.55)

(0.50)

(0.34)

Net

asset

value,

end

of

year

.......................

$11.76

$12.84

$11.92

$12.39

$11.67

Total

return

....................................

(1.38)%

12.43%

0.63%

10.66%

5.28%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

1.18%

1.21%

1.27%

1.27%

1.27%

Expenses

net

of

waiver

and

payments

by

affiliates

d

......

1.16%

1.19%

1.26%

1.25%

1.26%

Net

investment

income

...........................

2.33%

2.11%

1.97%

2.47%

2.37%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$3,093

$4,081

$3,371

$4,763

$4,482

Portfolio

turnover

rate

............................

64.69%

53.02%

63.64%

34.99%

46.03%

a

The

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

repurchas-

es

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Amount

rounds

to

less

than

$0.01

per

share.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Investors

Securities

Trust

Financial

Highlights

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Managed

Income

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(continued)

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part

of

these

financial

statements.

48

a

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

R6

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$12.85

$11.93

$12.39

$11.67

$11.42

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.35

0.33

0.31

0.41

0.34

Net

realized

and

unrealized

gains

(losses)

...........

(0.45)

1.18

(0.14)

0.88

0.31

Total

from

investment

operations

....................

(0.10)

1.51

0.17

1.29

0.65

Less

distributions

from:

Net

investment

income

..........................

(0.51)

(0.45)

(0.43)

(0.40)

(0.40)

Net

realized

gains

.............................

(0.48)

(0.14)

(0.20)

(0.17)

(—)

c

Total

distributions

...............................

(0.99)

(0.59)

(0.63)

(0.57)

(0.40)

Net

asset

value,

end

of

year

.......................

$11.76

$12.85

$11.93

$12.39

$11.67

Total

return

....................................

(0.86)%

13.14%

1.23%

11.33%

5.90%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.60%

0.63%

0.68%

0.71%

0.73%

Expenses

net

of

waiver

and

payments

by

affiliates

d

......

0.58%

0.61%

0.66%

0.64%

0.66%

Net

investment

income

...........................

2.87%

2.69%

2.56%

3.08%

2.97%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$155,563

$159,877

$138,923

$342

$233

Portfolio

turnover

rate

............................

64.69%

53.02%

63.64%

34.99%

46.03%

a

The

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

repurchas-

es

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Amount

rounds

to

less

than

$0.01

per

share.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Managed

Income

Fund

(continued)

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part

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statements.

Annual

Report

49

a

Year

Ended

October

31,

2020

2019

2018

2017

2016

Advisor

Class

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$12.84

$11.92

$12.39

$11.67

$11.42

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.34

0.32

0.30

0.35

0.29

Net

realized

and

unrealized

gains

(losses)

...........

(0.44)

1.18

(0.16)

0.93

0.35

Total

from

investment

operations

....................

(0.10)

1.50

0.14

1.28

0.64

Less

distributions

from:

Net

investment

income

..........................

(0.50)

(0.44)

(0.41)

(0.39)

(0.39)

Net

realized

gains

.............................

(0.48)

(0.14)

(0.20)

(0.17)

(—)

c

Total

distributions

...............................

(0.98)

(0.58)

(0.61)

(0.56)

(0.39)

Net

asset

value,

end

of

year

.......................

$11.76

$12.84

$11.92

$12.39

$11.67

Total

return

....................................

(0.86)%

12.96%

1.14%

11.21%

5.79%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.68%

0.71%

0.77%

0.77%

0.77%

Expenses

net

of

waiver

and

payments

by

affiliates

d

......

0.66%

0.69%

0.76%

0.75%

0.76%

Net

investment

income

...........................

2.79%

2.61%

2.47%

2.97%

2.87%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$166,947

$180,882

$124,265

$243,674

$138,111

Portfolio

turnover

rate

............................

64.69%

53.02%

63.64%

34.99%

46.03%

a

The

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

repurchas-

es

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Amount

rounds

to

less

than

$0.01

per

share.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Investors

Securities

Trust

Statement

of

Investments,

October

31,

2020

Franklin

Managed

Income

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

50

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

36.4%

Aerospace

&

Defense

1.1%

General

Dynamics

Corp.

................................

United

States

200,000

$

26,266,000

Northrop

Grumman

Corp.

...............................

United

States

42,900

12,433,278

38,699,278

Automobiles

0.3%

a

General

Motors

Co.

....................................

United

States

300,000

10,359,000

Banks

6.2%

Bank

of

America

Corp.

.................................

United

States

2,250,000

53,325,000

Citigroup,

Inc.

........................................

United

States

350,000

14,497,000

JPMorgan

Chase

&

Co.

.................................

United

States

700,000

68,628,000

Truist

Financial

Corp.

..................................

United

States

1,200,000

50,544,000

US

Bancorp

.........................................

United

States

800,000

31,160,000

218,154,000

Beverages

1.9%

Coca-Cola

Co.

(The)

...................................

United

States

650,200

31,248,612

PepsiCo,

Inc.

........................................

United

States

270,000

35,988,300

67,236,912

Biotechnology

0.6%

AbbVie,

Inc.

.........................................

United

States

250,000

21,275,000

Capital

Markets

1.2%

Morgan

Stanley

.......................................

United

States

875,000

42,131,250

Chemicals

0.5%

a

Linde

plc

............................................

United

Kingdom

78,000

17,186,520

Diversified

Telecommunication

Services

2.1%

Deutsche

Telekom

AG

..................................

Germany

1,200,000

18,237,713

Verizon

Communications,

Inc.

............................

United

States

1,000,000

56,990,000

75,227,713

Electric

Utilities

1.3%

Duke

Energy

Corp.

....................................

United

States

175,000

16,119,250

FirstEnergy

Corp.

.....................................

United

States

1,000,000

29,720,000

45,839,250

Food

Products

1.6%

Nestle

SA

...........................................

Switzerland

500,000

56,062,500

Health

Care

Providers

&

Services

2.2%

CVS

Health

Corp.

.....................................

United

States

520,000

29,166,800

Quest

Diagnostics,

Inc.

.................................

United

States

400,000

48,856,000

78,022,800

Household

Products

1.7%

Procter

&

Gamble

Co.

(The)

.............................

United

States

450,000

61,695,000

Industrial

Conglomerates

1.4%

Honeywell

International,

Inc.

.............................

United

States

300,000

49,485,000

Insurance

0.3%

Travelers

Cos.,

Inc.

(The)

...............................

United

States

100,000

12,071,000

IT

Services

0.6%

International

Business

Machines

Corp.

.....................

United

States

200,000

22,332,000

Multiline

Retail

0.9%

Target

Corp.

.........................................

United

States

200,000

30,444,000

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Managed

Income

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

51

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Multi-Utilities

2.6%

Dominion

Energy,

Inc.

..................................

United

States

500,000

$

40,170,000

DTE

Energy

Co.

......................................

United

States

200,000

24,684,000

Sempra

Energy

.......................................

United

States

200,000

25,072,000

89,926,000

Oil,

Gas

&

Consumable

Fuels

3.5%

BP

plc,

ADR

.........................................

United

Kingdom

500,000

7,740,000

Chevron

Corp.

.......................................

United

States

750,000

52,125,000

Exxon

Mobil

Corp.

.....................................

United

States

1,250,000

40,775,000

b

Royal

Dutch

Shell

plc,

ADR,

A

............................

Netherlands

350,000

8,942,500

TOTAL

SE,

ADR

......................................

France

400,000

12,132,000

121,714,500

Pharmaceuticals

3.2%

AstraZeneca

plc,

ADR

..................................

United

Kingdom

550,000

27,588,000

Bristol-Myers

Squibb

Co.

................................

United

States

600,000

35,070,000

Eli

Lilly

and

Co.

.......................................

United

States

125,000

16,307,500

Johnson

&

Johnson

...................................

United

States

250,000

34,277,500

113,243,000

Road

&

Rail

1.0%

Union

Pacific

Corp.

....................................

United

States

205,000

36,323,950

Semiconductors

&

Semiconductor

Equipment

1.2%

Analog

Devices,

Inc.

...................................

United

States

350,000

41,485,500

Trading

Companies

&

Distributors

0.6%

Fastenal

Co.

.........................................

United

States

500,000

21,615,000

Wireless

Telecommunication

Services

0.4%

Vodafone

Group

plc

...................................

United

Kingdom

10,000,000

13,338,141

Total

Common

Stocks

(Cost

$1,201,327,970)

....................................

1,283,867,314

Management

Investment

Companies

2.6%

Capital

Markets

2.6%

c

Franklin

FTSE

United

Kingdom

ETF

.......................

United

States

1,500,000

27,669,150

c

Franklin

Liberty

Systematic

Style

Premia

ETF

................

United

States

1,175,000

25,719,105

c

Franklin

Liberty

U.S.

Low

Volatility

ETF

.....................

United

States

1,000,000

37,699,500

91,087,755

Total

Management

Investment

Companies

(Cost

$100,268,313)

...................

91,087,755

d

Equity-Linked

Securities

14.8%

Aerospace

&

Defense

1.3%

e

Societe

Generale

SA

into

Raytheon

Technologies

Corp.,

144A,

8%,

6/01/21

...........................................

United

States

832,000

46,442,035

Banks

0.5%

e

Barclays

Bank

plc

into

Bank

of

America

Corp.,

144A,

8.5%,

11/25/20

United

States

750,000

18,292,000

Capital

Markets

1.2%

e

Credit

Suisse

AG

into

Charles

Schwab

Corp.

(The),

144A,

6.5%,

5/18/21

...........................................

United

States

1,007,000

41,470,057

Communications

Equipment

1.2%

e

Royal

Bank

of

Canada

into

Cisco

Systems,

Inc.,

144A,

7.5%,

8/04/21

United

States

1,077,000

41,143,128

Energy

Equipment

&

Services

0.3%

e

Societe

Generale

SA

into

Schlumberger

Ltd.,

144A,

9%,

2/01/21

..

United

States

715,000

11,868,758

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Managed

Income

Fund

(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

52

a

a

Country

Shares

a

Value

a

a

a

a

a

a

d

Equity-Linked

Securities

(continued)

Internet

&

Direct

Marketing

Retail

2.1%

e

Goldman

Sachs

International

Bank

into

Amazon.com,

Inc.,

144A,

7.5%,

1/11/21

.......................................

United

States

38,000

$

73,903,016

IT

Services

0.8%

e

Barclays

Bank

plc

into

Fidelity

National

Information

Services,

Inc.,

144A,

7.5%,

6/02/21

.................................

United

States

222,000

28,552,352

Media

0.9%

e

Merrill

Lynch

International

&

Co.

CV

into

Comcast

Corp.,

144A,

7%,

8/09/21

...........................................

United

States

744,000

31,746,738

Pharmaceuticals

1.5%

e

Credit

Suisse

AG

into

Pfizer,

Inc.,

144A,

8%,

8/27/21

...........

United

States

1,493,000

53,618,343

Semiconductors

&

Semiconductor

Equipment

4.2%

e

Barclays

Bank

plc

into

Intel

Corp.,

144A,

8%,

8/16/21

..........

United

States

1,054,000

50,458,245

e

BNP

Paribas

Issuance

BV

into

Texas

Instruments,

Inc.,

144A,

8.5%,

6/01/21

...........................................

United

States

715,000

97,148,446

147,606,691

Software

0.8%

e

Merrill

Lynch

International

&

Co.

CV

into

Oracle

Corp.,

144A,

8%,

11/08/21

..........................................

United

States

470,000

26,990,344

Total

Equity-Linked

Securities

(Cost

$548,265,131)

..............................

521,633,462

Convertible

Preferred

Stocks

12.3%

Capital

Markets

0.3%

b,f

KKR

&

Co.,

Inc.,

6%,

C

.................................

United

States

200,000

10,408,000

f

Chemicals

0.5%

International

Flavors

&

Fragrances,

Inc.,

6%

.................

United

States

500,000

19,320,000

Electric

Utilities

4.3%

b

American

Electric

Power

Co.,

Inc.,

6.125%

..................

United

States

700,000

37,373,000

NextEra

Energy,

Inc.,

5.279%

............................

United

States

1,200,000

59,340,000

Southern

Co.

(The),

6.75%,

2019

.........................

United

States

1,150,000

55,591,000

152,304,000

Health

Care

Equipment

&

Supplies

1.9%

Boston

Scientific

Corp.,

5.5%,

A

..........................

United

States

250,000

25,895,000

Danaher

Corp.,

5%,

B

..................................

United

States

30,000

40,027,200

65,922,200

Health

Care

Technology

0.4%

Change

Healthcare,

Inc.,

6%

.............................

United

States

250,000

13,017,500

Multi-Utilities

3.8%

Dominion

Energy,

Inc.,

7.25%,

A

..........................

United

States

450,000

46,737,000

DTE

Energy

Co.,

6.25%

................................

United

States

750,000

35,685,000

b

Sempra

Energy,

6%,

A

.................................

United

States

500,000

51,155,000

133,577,000

Semiconductors

&

Semiconductor

Equipment

1.1%

Broadcom,

Inc.,

8%,

A

..................................

United

States

32,000

38,079,680

Total

Convertible

Preferred

Stocks

(Cost

$400,794,343)

..........................

432,628,380

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Managed

Income

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

53

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Preferred

Stocks

0.3%

Banks

0.3%

JPMorgan

Chase

&

Co.,

6%,

EE

..........................

United

States

461,463

$

12,621,013

Total

Preferred

Stocks

(Cost

$11,536,575)

......................................

12,621,013

Principal

Amount

*

Corporate

Bonds

25.1%

Automobiles

0.3%

General

Motors

Co.

,

Senior

Note

,

5.4

%

,

10/02/23

.............

United

States

10,000,000

11,067,333

Banks

1.9%

Bank

of

America

Corp.

,

Senior

Bond,

3.419%

to

12/20/27,

FRN

thereafter,

12/20/28

...

United

States

15,000,000

16,680,292

L,

Sub.

Bond,

4.183%,

11/25/27

........................

United

States

10,000,000

11,454,076

Barclays

plc

,

Senior

Note

,

3.65

%

,

3/16/25

...................

United

Kingdom

15,000,000

16,278,912

Citigroup,

Inc.

,

Sub.

Bond

,

4.125

%

,

7/25/28

..................

United

States

20,000,000

22,908,960

67,322,240

Beverages

0.3%

Anheuser-Busch

Cos.

LLC

/

Anheuser-Busch

InBev

Worldwide,

Inc.

,

Senior

Bond

,

4.9

%

,

2/01/46

............................

Belgium

10,000,000

12,274,869

Capital

Markets

1.0%

Goldman

Sachs

Group,

Inc.

(The)

,

Senior

Note

,

3.5

%

,

11/16/26

..

United

States

15,000,000

16,617,496

Morgan

Stanley

,

Sub.

Bond

,

4.35

%

,

9/08/26

.................

United

States

15,000,000

17,421,650

34,039,146

Chemicals

0.7%

DuPont

de

Nemours,

Inc.

,

Senior

Note

,

4.493

%

,

11/15/25

.......

United

States

20,000,000

23,100,627

Communications

Equipment

0.4%

e

CommScope

Technologies

LLC

,

Senior

Note

,

144A,

5

%

,

3/15/27

..

United

States

15,000,000

14,071,875

Consumer

Finance

1.4%

Capital

One

Financial

Corp.

,

Senior

Note,

3.75%,

3/09/27

...........................

United

States

10,000,000

11,180,525

Sub.

Note,

3.75%,

7/28/26

............................

United

States

10,000,000

10,982,347

Ford

Motor

Credit

Co.

LLC

,

Senior

Note

,

5.113

%

,

5/03/29

.......

United

States

25,000,000

26,000,000

48,162,872

Diversified

Telecommunication

Services

0.4%

e

CCO

Holdings

LLC

/

CCO

Holdings

Capital

Corp.

,

Senior

Bond

,

144A,

5.125

%

,

5/01/27

................................

United

States

15,000,000

15,770,025

Electric

Utilities

0.9%

Duke

Energy

Corp.

,

Senior

Note

,

3.15

%

,

8/15/27

.............

United

States

10,000,000

10,984,590

e

Vistra

Operations

Co.

LLC

,

Senior

Secured

Bond

,

144A,

4.3

%

,

7/15/29

...........................................

United

States

20,000,000

21,649,066

32,633,656

Equity

Real

Estate

Investment

Trusts

(REITs)

1.1%

American

Tower

Corp.

,

Senior

Bond

,

3.375

%

,

10/15/26

.........

United

States

15,000,000

16,597,399

Healthpeak

Properties,

Inc.

,

Senior

Note

,

3.875

%

,

8/15/24

......

United

States

5,000,000

5,505,183

Realty

Income

Corp.

,

Senior

Bond

,

3.875

%

,

7/15/24

...........

United

States

15,000,000

16,535,210

38,637,792

Food

&

Staples

Retailing

0.7%

Walmart,

Inc.

,

Senior

Bond

,

3.25

%

,

7/08/29

..................

United

States

20,000,000

23,095,282

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Managed

Income

Fund

(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

54

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Corporate

Bonds

(continued)

Health

Care

Equipment

&

Supplies

0.3%

Edwards

Lifesciences

Corp.

,

Senior

Note

,

4.3

%

,

6/15/28

........

United

States

9,700,000

$

11,470,863

Health

Care

Providers

&

Services

5.0%

Anthem,

Inc.

,

Senior

Bond

,

3.65

%

,

12/01/27

.................

United

States

10,000,000

11,302,579

Centene

Corp.

,

Senior

Note

,

4.625

%

,

12/15/29

...............

United

States

20,000,000

21,800,600

e

CHS/Community

Health

Systems,

Inc.

,

Secured

Note,

144A,

11%,

6/30/23

......................

United

States

4,000,000

3,354,580

Secured

Note,

144A,

8.125%,

6/30/24

....................

United

States

6,000,000

4,627,500

Senior

Secured

Note,

144A,

6.625%,

2/15/25

..............

United

States

25,000,000

24,440,000

Senior

Secured

Note,

144A,

8%,

3/15/26

..................

United

States

25,000,000

25,125,000

Cigna

Corp.

,

Senior

Note,

3.75%,

7/15/23

...........................

United

States

13,292,000

14,393,004

Senior

Note,

3.4%,

3/01/27

............................

United

States

15,000,000

16,701,794

CVS

Health

Corp.

,

Senior

Bond,

5.05%,

3/25/48

...........................

United

States

15,000,000

18,984,423

Senior

Note,

3.875%,

7/20/25

..........................

United

States

15,000,000

16,848,485

Tenet

Healthcare

Corp.

,

Senior

Secured

Note

,

4.625

%

,

7/15/24

...

United

States

17,000,000

17,304,329

174,882,294

Hotels,

Restaurants

&

Leisure

0.9%

Las

Vegas

Sands

Corp.

,

Senior

Bond

,

3.9

%

,

8/08/29

...........

United

States

10,000,000

9,985,619

e

Vail

Resorts,

Inc.

,

Senior

Note

,

144A,

6.25

%

,

5/15/25

..........

United

States

10,000,000

10,512,500

e

Wynn

Las

Vegas

LLC

/

Wynn

Las

Vegas

Capital

Corp.

,

Senior

Bond

,

144A,

5.5

%

,

3/01/25

.................................

United

States

10,000,000

9,593,750

30,091,869

Household

Products

0.5%

Clorox

Co.

(The)

,

Senior

Note

,

3.1

%

,

10/01/27

...............

United

States

5,000,000

5,587,150

Procter

&

Gamble

Co.

(The)

,

Senior

Note

,

2.7

%

,

2/02/26

........

United

States

10,000,000

11,021,806

16,608,956

Insurance

0.5%

e

Liberty

Mutual

Group,

Inc.

,

Senior

Note

,

144A,

4.95

%

,

5/01/22

...

United

States

7,100,000

7,562,466

Prudential

Financial,

Inc.

,

Junior

Sub.

Bond

,

3.7%

to

10/01/30,

FRN

thereafter

,

10/01/50

..................................

United

States

10,000,000

10,237,500

17,799,966

IT

Services

0.7%

Fiserv,

Inc.

,

Senior

Note

,

4.2

%

,

10/01/28

....................

United

States

20,000,000

23,488,760

Machinery

0.2%

CNH

Industrial

NV

,

Senior

Note

,

3.85

%

,

11/15/27

.............

United

Kingdom

7,500,000

8,145,910

Media

0.3%

DISH

DBS

Corp.

,

Senior

Note

,

5.875

%

,

7/15/22

..............

United

States

12,000,000

12,372,000

Metals

&

Mining

0.6%

e

Cleveland-Cliffs,

Inc.

,

Senior

Secured

Note

,

144A,

9.875

%

,

10/17/25

United

States

10,000,000

11,450,000

Freeport-McMoRan,

Inc.

,

Senior

Bond

,

5.25

%

,

9/01/29

.........

United

States

10,000,000

10,816,900

22,266,900

Multiline

Retail

0.5%

Dollar

General

Corp.

,

Senior

Note

,

3.875

%

,

4/15/27

...........

United

States

10,000,000

11,446,340

Dollar

Tree,

Inc.

,

Senior

Note

,

4

%

,

5/15/25

..................

United

States

5,000,000

5,635,475

17,081,815

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Managed

Income

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

55

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Corporate

Bonds

(continued)

Oil,

Gas

&

Consumable

Fuels

0.7%

e

Calumet

Specialty

Products

Partners

LP

/

Calumet

Finance

Corp.

,

Senior

Note

,

144A,

11

%

,

4/15/25

........................

United

States

15,000,000

$

14,553,000

Occidental

Petroleum

Corp.

,

Senior

Note

,

6.375

%

,

9/01/28

......

United

States

10,000,000

8,768,750

23,321,750

Pharmaceuticals

1.7%

e

Bausch

Health

Cos.,

Inc.

,

Senior

Secured

Note

,

144A,

5.5

%

,

11/01/25

..........................................

United

States

10,000,000

10,283,000

e

Bayer

US

Finance

II

LLC

,

Senior

Note

,

144A,

4.25

%

,

12/15/25

...

Germany

15,000,000

17,064,816

Bristol-Myers

Squibb

Co.

,

Senior

Note

,

3.4

%

,

7/26/29

..........

United

States

10,000,000

11,547,946

Mylan,

Inc.

,

Senior

Note

,

4.55

%

,

4/15/28

....................

United

States

19,000,000

22,050,870

60,946,632

Road

&

Rail

0.6%

e

Ashtead

Capital,

Inc.

,

Senior

Note

,

144A,

4.125

%

,

8/15/25

......

United

Kingdom

21,000,000

21,620,970

Semiconductors

&

Semiconductor

Equipment

0.6%

Microchip

Technology,

Inc.

,

Senior

Secured

Note

,

4.333

%

,

6/01/23

United

States

15,000,000

16,176,181

Xilinx,

Inc.

,

Senior

Note

,

2.95

%

,

6/01/24

....................

United

States

6,000,000

6,409,744

22,585,925

Textiles,

Apparel

&

Luxury

Goods

0.6%

NIKE,

Inc.

,

Senior

Bond

,

2.375

%

,

11/01/26

..................

United

States

20,000,000

21,793,331

Tobacco

0.9%

BAT

Capital

Corp.

,

Senior

Note

,

3.557

%

,

8/15/27

.............

United

Kingdom

15,000,000

16,183,217

Reynolds

American,

Inc.

,

Senior

Note

,

4.45

%

,

6/12/25

..........

United

Kingdom

15,000,000

16,953,260

33,136,477

Wireless

Telecommunication

Services

1.4%

Sprint

Corp.

,

Senior

Note

,

7.625

%

,

2/15/25

..................

United

States

10,000,000

11,818,750

e

Sprint

Spectrum

Co.

LLC

/

Sprint

Spectrum

Co.

II

LLC

/

Sprint

Spectrum

Co.

III

LLC

,

Senior

Secured

Note

,

144A,

4.738

%

,

9/20/29

...........................................

United

States

7,500,000

8,181,337

e

T-Mobile

USA,

Inc.

,

Senior

Secured

Note

,

144A,

3.875

%

,

4/15/30

.

United

States

25,000,000

28,115,250

48,115,337

Total

Corporate

Bonds

(Cost

$802,855,728)

.....................................

885,905,472

U.S.

Government

and

Agency

Securities

3.0%

U.S.

Treasury

Notes

,

2.75%,

9/15/21

.....................................

United

States

50,000,000

51,131,367

2.875%,

10/31/23

....................................

United

States

50,000,000

54,001,953

Total

U.S.

Government

and

Agency

Securities

(Cost

$99,892,410)

.................

105,133,320

Asset-Backed

Securities

0.3%

Airlines

0.3%

United

Airlines

Pass

Through

Trust

,

2020-1

,

A

,

5.875

%

,

4/15/29

..

United

States

10,000,000

10,055,801

Total

Asset-Backed

Securities

(Cost

$10,000,000)

...............................

10,055,801

Mortgage-Backed

Securities

2.4%

Federal

National

Mortgage

Association

(FNMA)

Fixed

Rate

0.5%

FNMA,

30

Year,

3%,

7/01/50

-

8/01/50

......................

United

States

14,933,873

15,663,376

FNMA,

30

Year,

4%,

8/01/49

.............................

United

States

2,552,763

2,800,765

18,464,141

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Managed

Income

Fund

(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

56

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Mortgage-Backed

Securities

(continued)

Government

National

Mortgage

Association

(GNMA)

Fixed

Rate

1.9%

GNMA

II,

Single-family,

30

Year,

3%,

7/20/50

.................

United

States

31,405,899

$

33,037,912

GNMA

II,

Single-family,

30

Year,

3.5%,

6/20/50

...............

United

States

32,771,432

34,599,886

67,637,798

Total

Mortgage-Backed

Securities

(Cost

$86,752,024)

............................

86,101,939

Total

Long

Term

Investments

(Cost

$3,261,692,494)

.............................

3,429,034,456

a

Short

Term

Investments

0.9%

a

a

Country

Shares

a

Value

a

Money

Market

Funds

0.8%

c,g

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0%

........

United

States

28,554,890

28,554,890

Total

Money

Market

Funds

(Cost

$28,554,890)

..................................

28,554,890

h

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

0.1%

a

a

a

a

a

Money

Market

Funds

0.1%

c,g

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0%

........

United

States

2,956,000

2,956,000

Principal

Amount

*

Repurchase

Agreements

0.0%

†

i

Joint

Repurchase

Agreement,

BNP

Paribas

SA,

0.07%,

11/02/20

(Maturity

Value

$739,708)

Collateralized

by

U.S.

Treasury

Bonds,

6.875%

-

8.125%,

5/15/21

-

8/15/25;

U.S.

Treasury

Notes,

0.25%

-

3%,

2/15/21

-

9/30/25,

U.S.

Treasury

Note,

Index

Linked,

1.125%,

1/15/21;

and

U.S.

Treasury

Bill,

Discount

Note,

3/25/21

(valued

at

$754,502)

............

739,705

739,705

Total

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

(Cost

$3,695,705)

............................................................

3,695,705

Total

Short

Term

Investments

(Cost

$32,250,595

)

................................

32,250,595

a

Total

Investments

(Cost

$3,293,943,089)

98.1%

..................................

$3,461,285,051

Options

Written

(0.0)%

†

......................................................

(979,200)

Other

Assets,

less

Liabilities

1.9%

.............................................

67,207,976

Net

Assets

100.0%

...........................................................

$3,527,513,827

Number

of

Contracts

Notional

Amount

#

j

Options

Written

(0.0)%

†

Calls

-

Exchange-Traded

Equity

Options

General

Motors

Co.,

November

Strike

Price

$37.50,

Expires

11/20/20

..........................................

3,000

10,359,000

(207,000)

Linde

plc,

November

Strike

Price

$250.00,

Expires

11/20/20

.....

780

17,186,520

(46,800)

(253,800)

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Managed

Income

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

57

a

a

a

Number

of

Contracts

Notional

Amount

#

a

Value

a

a

a

a

a

a

j

Options

Written

(continued)

Puts

-

Exchange-Traded

Equity

Options

Linde

plc,

November

Strike

Price

$220.00,

Expires

11/20/20

.....

780

17,186,520

$

(725,400)

(725,400)

Total

Options

Written

(Premiums

received

$941,329)

............................

$

(979,200)

See

Abbreviations

on

page

81

.

#

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.

*

The

principal

amount

is

stated

in

U.S.

dollars

unless

otherwise

indicated.

†

Rounds

to

less

than

0.1%

of

net

assets.

a

A

portion

or

all

of

the

security

is

held

in

connection

with

written

option

contracts

open

at

year

end.

b

A

portion

or

all

of

the

security

is

on

loan

at

October

31,

2020.

See

Note

1(f).

c

See

Note

3(f)

regarding

investments

in

affiliated

management

investment

companies.

d

See

Note

1(e)

regarding

equity-linked

securities.

e

Security

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

a

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

October

31,

2020,

the

aggregate

value

of

these

securities

was

$769,608,597,

representing

21.8%

of

net

assets.

f

Non-income

producing.

g

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

h

See

Note

1(f)

regarding

securities

on

loan.

i

See

Note

1(c)

regarding

joint

repurchase

agreement.

j

See

Note

1(d)

regarding

written

options.

Franklin

Investors

Securities

Trust

Financial

Statements

Statements

of

Assets

and

Liabilities

October

31,

2020

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

58

Franklin

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

Franklin

Managed

Income

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

.................................

$3,382,544,446

$1,868,716,637

$3,161,424,181

Cost

-

Controlled

affiliates

(Note

3f)

..........................

—

—

100,268,313

Cost

-

Non-controlled

affiliates

(Note

3f)

......................

217,556,904

27,993,242

31,510,890

Cost

-

Unaffiliated

repurchase

agreements

....................

1,550,475

3,545,595

739,705

Value

-

Unaffiliated

issuers

(Includes

securities

loaned

$7,576,438,

$17,290,260

and

$3,609,657

,

respectively)

....................

$4,287,372,977

$2,418,402,680

$3,337,946,701

Value

-

Controlled

affiliates

(Note

3f)

.........................

—

—

91,087,755

Value

-

Non-controlled

affiliates

(Note

3f)

......................

217,556,904

27,993,242

31,510,890

Value

-

Unaffiliated

repurchase

agreements

....................

1,550,475

3,545,595

739,705

Cash

..................................................

—

846,000

1,348,750

Receivables:

Investment

securities

sold

.................................

—

7,992,575

59,708,579

Capital

shares

sold

......................................

6,921,144

3,170,610

2,331,001

Dividends

and

interest

...................................

11,443,632

2,832,772

15,509,536

European

Union

tax

reclaims

..............................

—

531,291

577,821

Other

assets

............................................

1,406

921

1,344

Total

assets

........................................

4,524,846,538

2,465,315,686

3,540,762,082

Liabilities:

Payables:

Investment

securities

purchased

............................

—

3,962,959

—

Capital

shares

redeemed

.................................

7,711,045

3,068,791

5,182,923

Management

fees

.......................................

1,689,443

931,631

1,759,518

Distribution

fees

........................................

508,715

577,171

916,042

Transfer

agent

fees

......................................

704,856

483,386

519,620

Options

written,

at

value

(premiums

received

$–,

$–

and

$941,329

,

respectively)

............................................

—

—

979,200

Payable

upon

return

of

securities

loaned

.......................

7,750,475

17,725,595

3,695,705

Accrued

expenses

and

other

liabilities

.........................

198,953

152,563

195,247

Total

liabilities

.......................................

18,563,487

26,902,096

13,248,255

Net

assets,

at

value

...............................

$4,506,283,051

$2,438,413,590

$3,527,513,827

Net

assets

consist

of:

Paid-in

capital

...........................................

$3,135,550,501

$1,863,391,641

$3,343,814,099

Total

distributable

earnings

(losses)

...........................

1,370,732,550

575,021,949

183,699,728

Net

assets,

at

value

...............................

$4,506,283,051

$2,438,413,590

$3,527,513,827

Franklin

Investors

Securities

Trust

Financial

Statements

Statements

of

Assets

and

Liabilities

(continued)

October

31,

2020

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

59

Franklin

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

Franklin

Managed

Income

Fund

Class

A:

Net

assets,

at

value

.....................................

$1,385,821,496

$1,953,984,906

$2,860,389,839

Shares

outstanding

......................................

51,123,274

80,662,254

243,927,941

Net

asset

value

per

share

a

................................

$27.11

$24.22

$11.73

Maximum

offering

price

per

share

(net

asset

value

per

share

÷

94.50%

)

..............................................

$28.69

$25.63

$12.41

Class

C:

Net

assets,

at

value

.....................................

$233,295,148

$161,707,059

$341,521,091

Shares

outstanding

......................................

8,751,697

6,728,566

29,428,217

Net

asset

value

and

maximum

offering

price

per

share

a

...........

$26.66

$24.03

$11.61

Class

R:

Net

assets,

at

value

.....................................

$—

$5,794,573

$3,093,290

Shares

outstanding

......................................

—

239,076

262,997

Net

asset

value

and

maximum

offering

price

per

share

...........

$—

$24.24

$11.76

Class

R6:

Net

assets,

at

value

.....................................

$113,642,468

$97,565,128

$155,562,813

Shares

outstanding

......................................

4,163,619

4,020,108

13,223,110

Net

asset

value

and

maximum

offering

price

per

share

...........

$27.29

$24.27

$11.76

Advisor

Class:

Net

assets,

at

value

.....................................

$2,773,523,939

$219,361,924

$166,946,794

Shares

outstanding

......................................

102,298,755

9,041,298

14,200,791

Net

asset

value

and

maximum

offering

price

per

share

...........

$27.11

$24.26

$11.76

a

Redemption

price

is

equal

to

net

asset

value

less

contingent

deferred

sales

charges,

if

applicable.

Franklin

Investors

Securities

Trust

Financial

Statements

Statements

of

Operations

for

the

year

ended

October

31,

2020

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

60

Franklin

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

Franklin

Managed

Income

Fund

Investment

income:

Dividends:

(net

of

foreign

taxes

of

$–,

$956,741

and

$482,498

,

respectively)

Unaffiliated

issuers

......................................

$38,970,313

$67,759,604

$59,457,010

Controlled

affiliates

(Not

e

3f)

...............................

—

—

1,251,558

Non-controlled

affiliates

(Not

e

3f)

...........................

435,828

196,679

774,035

Interest:

Unaffiliated

issuers

......................................

32,139,217

813,422

65,052,813

Income

from

securities

loaned:

Unaffiliated

entities

(net

of

fees

and

rebates)

...................

45,581

4,904

7,350

Non-controlled

affiliates

(Note

3

f

)

...........................

17,040

82

745

Other

income

(Note

1

g

)

....................................

—

388,345

401,325

Total

investment

income

.................................

71,607,979

69,163,036

126,944,836

Expenses:

Management

fees

(Note

3

a

)

.................................

18,404,545

11,186,167

20,133,115

Distribution

fees:

(Note

3c

)

    Class

A

..............................................

3,090,419

4,917,333

7,261,329

    Class

C

..............................................

2,459,549

1,860,820

4,300,261

    Class

R

..............................................

—

30,304

18,713

Transfer

agent

fees:

(Note

3e

)

    Class

A

..............................................

1,363,900

2,485,155

3,095,604

    Class

C

..............................................

274,604

234,904

458,293

    Class

R

..............................................

—

8,047

4,005

    Class

R6

.............................................

68,544

42,059

52,493

    Advisor

Class

..........................................

2,687,896

243,943

184,502

Custodian

fees

(Note

4

)

....................................

30,780

18,355

27,481

Reports

to

shareholders

....................................

266,984

164,316

210,150

Registration

and

filing

fees

..................................

131,184

178,898

249,190

Professional

fees

.........................................

91,188

96,044

92,896

Trustees'

fees

and

expenses

................................

41,196

25,461

39,015

Other

..................................................

77,784

52,288

70,834

Total

expenses

.......................................

28,988,573

21,544,094

36,197,881

Expense

reductions

(Note

4

)

.............................

(15,514)

(919)

(42,850)

Expenses

waived/paid

by

affiliates

(Note

3

f

and

3

g

)

............

(304,320)

(102,175)

(498,711)

Net

expenses

.......................................

28,668,739

21,441,000

35,656,320

Net

investment

income

..............................

42,939,240

47,722,036

91,288,516

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

Unaffiliated

issuers

....................................

564,693,488

35,361,475

96,664,485

Controlled

affiliates

(Note

3

f

)

.............................

—

—

(2,677,215)

Written

options

.........................................

—

—

(19,192,145)

Foreign

currency

transactions

..............................

—

29,380

20,123

Net

realized

gain

(loss)

................................

564,693,488

35,390,855

74,815,248

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

....................................

507,214,078

(149,225,293)

(204,099,384)

Controlled

affiliates

(Note

3

f

)

.............................

—

—

(9,169,858)

Translation

of

other

assets

and

liabilities

denominated

in

foreign

currencies

...........................................

—

8,445

53,393

Written

options

.........................................

—

—

(5,196,875)

Net

change

in

unrealized

appreciation

(depreciation)

..........

507,214,078

(149,216,848)

(218,412,724)

Net

realized

and

unrealized

gain

(loss)

..........................

1,071,907,566

(113,825,993)

(143,597,476)

Net

increase

(decrease)

in

net

assets

resulting

from

operations

........

$1,114,846,806

$(66,103,957)

$(52,308,960)

Franklin

Investors

Securities

Trust

Financial

Statements

Statements

of

Changes

in

Net

Assets

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

61

Franklin

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

Year

Ended

October

31,

2020

Year

Ended

October

31,

2019

Year

Ended

October

31,

2020

Year

Ended

October

31,

2019

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

............

$42,939,240

$40,894,875

$47,722,036

$41,731,072

Net

realized

gain

(loss)

............

564,693,488

324,390,042

35,390,855

91,535,502

Net

change

in

unrealized

appreciation

(depreciation)

.................

507,214,078

115,337,070

(149,216,848)

146,788,898

Net

increase

(decrease)

in

net

assets

resulting

from

operations

.

1,114,846,806

480,621,987

(66,103,957)

280,055,472

Distributions

to

shareholders:

Class

A

........................

(100,126,924)

(66,139,328)

(108,336,733)

(113,557,485)

Class

C

........................

(19,635,749)

(14,733,353)

(9,211,870)

(11,317,759)

Class

R

........................

—

—

(349,918)

(419,288)

Class

R6

.......................

(8,435,869)

(3,516,561)

(5,610,985)

(5,532,461)

Advisor

Class

...................

(205,378,395)

(131,568,983)

(10,606,257)

(8,002,666)

Total

distributions

to

shareholders

.....

(333,576,937)

(215,958,225)

(134,115,763)

(138,829,659)

Capital

share

transactions:

(Note

2

)

Class

A

........................

(32,527,936)

(66,639,987)

97,596,429

152,902,721

Class

C

........................

(71,327,737)

(64,918,362)

(30,492,088)

(7,886,644)

Class

R

........................

—

—

(937,037)

93,237

Class

R6

.......................

42,503,124

(9,724,781)

9,077,163

9,835,991

Advisor

Class

...................

(70,863,853)

32,971,457

59,317,042

53,962,771

Total

capital

share

transactions

.......

(132,216,402)

(108,311,673)

134,561,509

208,908,076

Net

increase

(decrease)

in

net

assets

.....................

649,053,467

156,352,089

(65,658,211)

350,133,889

Net

assets:

Beginning

of

year

..................

3,857,229,584

3,700,877,495

2,504,071,801

2,153,937,912

End

of

year

......................

$4,506,283,051

$3,857,229,584

$2,438,413,590

$2,504,071,801

Franklin

Investors

Securities

Trust

Financial

Statements

Statements

of

Changes

in

Net

Assets

(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

62

Franklin

Managed

Income

Fund

Year

Ended

October

31,

2020

Year

Ended

October

31,

2019

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

.................................................

$91,288,516

$81,744,524

Net

realized

gain

(loss)

.................................................

74,815,248

214,188,559

Net

change

in

unrealized

appreciation

(depreciation)

...........................

(218,412,724)

131,291,446

Net

increase

(decrease)

in

net

assets

resulting

from

operations

................

(52,308,960)

427,224,529

Distributions

to

shareholders:

Class

A

.............................................................

(224,726,464)

(122,327,719)

Class

C

.............................................................

(31,740,281)

(19,053,022)

Class

R

.............................................................

(279,688)

(160,782)

Class

R6

............................................................

(12,745,644)

(6,990,241)

Advisor

Class

........................................................

(14,013,214)

(7,106,607)

Total

distributions

to

shareholders

..........................................

(283,505,291)

(155,638,371)

Capital

share

transactions:

(Note

2

)

Class

A

.............................................................

158,395,068

170,733,085

Class

C

.............................................................

(109,248,688)

(39,706,617)

Class

R

.............................................................

(658,458)

422,350

Class

R6

............................................................

10,102,120

9,808,027

Advisor

Class

........................................................

1,247,711

44,080,423

Total

capital

share

transactions

............................................

59,837,753

185,337,268

Net

increase

(decrease)

in

net

assets

...................................

(275,976,498)

456,923,426

Net

assets:

Beginning

of

year

.......................................................

3,803,490,325

3,346,566,899

End

of

year

...........................................................

$3,527,513,827

$3,803,490,325

Franklin

Investors

Securities

Trust

63

franklintempleton.com

Annual

Report

Notes

to

Financial

Statements

1.

Organization

and

Significant

Accounting

Policies

Franklin

Investors

Securities

Trust (Trust)

is

registered

under

the

Investment

Company

Act

of

1940

(1940

Act)

as

an

open-

end

management

investment

company,

consisting

of

seven

separate

funds,

three

of

which

are

included

in

this

report

(Funds)

and

applies

the

specialized

accounting

and

reporting

guidance

in

U.S.

Generally

Accepted

Accounting

Principles

(U.S.

GAAP).

Class

C

shares

automatically

convert

to

Class

A

shares

after

they

have

been

held

for

10

years.

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.

Franklin

Convertible

Securities

Fund

closed

to

new

investors

with

limited

exceptions

on

August

29,

2018.

Class

A,

Class

C,

Class

R,

Class

R6

&

Advisor

Class

Franklin

Managed

Income

Fund

Franklin

Equity

Income

Fund

Class

A,

Class

C,

Class

R6

&

Advisor

Class

Franklin

Convertible

Securities

Fund

The

following

summarizes

the

Funds'

significant

accounting

policies

. 

a.

Financial

Instrument

Valuation 

The Funds'

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 Funds calculate 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

Funds' administrator

has

responsibility

for

oversight

of

valuation,

including

leading

the

cross-functional

Valuation

Committee

(VC).

The

Funds

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

and

certain

preferred

securities

generally

trade

in

the

OTC

market

rather

than

on

a

securities

exchange.

The

Funds'

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.

Investments

in open-end mutual

funds

are

valued

at

the

closing

NAV.

Investments

in

repurchase

agreements

are

valued

at

cost,

which

approximates

fair

value.

The

Funds

have

procedures

to

determine

the

fair

value

of

financial

instruments

for

which

market

prices

are

not

reliable

or

readily

available.

Under

these

procedures,

the

Funds

primarily

employ

a

market-based

approach

which

may

use

related

or

comparable

assets

or

liabilities,

recent

transactions,

market

multiples,

book

values,

and

other

relevant

information

for

the

investment

to

determine

the

fair

value

of

the

investment.

An

income-based

valuation

approach

may

also

be

used

in

which

the

anticipated

future

cash

flows

of

the

investment

are

discounted

to

calculate

fair

value.

Discounts

may

also

be

applied

due

to

the

nature

or

duration

of

any

restrictions

on

the

disposition

of

the

investments.

Due

to

the

inherent

uncertainty

of

valuations

of

such

investments,

the

fair

values

may

differ

significantly

from

the

values

that

would

have

been

used

had

an

active

market

existed.

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

64

franklintempleton.com

Annual

Report

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

Funds'

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

Funds.

As

a

result,

differences

may

arise

between

the

value

of

the

Funds'

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'

securities

to

the

latest

indications

of

fair

value

at

4

p.m.

Eastern

time.

At

October

31,

2020,

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.

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

Funds'

NAV

is

not

calculated,

which

could

result

in

differences

between

the

value

of

the

Funds'

portfolio

securities

on

the

last

business

day

and

the

last

calendar

day

of

the

reporting

period.

Any

security

valuation

changes

due

to

an

open

foreign

market

are

adjusted

and

reflected

by

the

Funds

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

Funds

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

Funds

do

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

Statements

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

Certain

or

all

Funds

enter

into

a

joint

repurchase

agreement

whereby

their

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

Funds'

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

Funds,

certain

MRAs

may

permit

the

non-defaulting

party

to

net

and

close-out

all

transactions,

if

any,

traded

under

such

agreements.

The

Funds

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

Funds

in

the

event

of

default

by

the

seller.

This

could

involve

costs

1.

Organization

and

Significant

Accounting

Policies

(continued)

a.

Financial

Instrument

Valuation 

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

65

franklintempleton.com

Annual

Report

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

Funds

at

year

end,

as

indicated

in

the

Statements

of

Investments,

had

been

entered

into

on

October

30,

2020.

d.

Derivative

Financial

Instruments

Certain

or

all

Funds

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

Statements

of

Assets

and

Liabilities.

Realized

gain

and

loss

and

unrealized

appreciation

and

depreciation

on

these

contracts

for

the

period

are

included

in

the

Statements

of

Operations.

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.

Certain

or

all

Funds

purchased

or

wrote

exchange

traded

option

contracts

primarily

to

manage

and/or

gain

exposure

to

equity

volatility

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

9 regarding

other

derivative

information.

e.

Equity-Linked

Securities

Certain

or

all

Funds

invest in

equity-linked

securities.

Equity-linked

securities

are

hybrid

financial

instruments

that

generally

combine

both

debt

and

equity

characteristics

into

a

single

note

form.

Income

received

from

equity-linked

securities

is

recorded

as

realized

gains

in

the

Statements

of

Operations

and

may

be

based

on

the

performance

of

an

underlying

equity

security,

an

equity

index,

or

an

option

position.

The

risks

of

investing

in

equity-linked

securities

include

unfavorable

price

movements

in

the

underlying

security

and

the

credit

risk

of

the

issuing

financial

institution.

There

may

be

no

guarantee

of

a

return

of

principal

with

equity-linked

securities

and

the

appreciation

potential

may

be

limited.

Equity-linked

securities

may

be

more

volatile

and

less

liquid

than

other

investments

held

by

the

Funds.

f.

Securities

Lending

Certain

or

all

Funds

participate

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

Funds,

and/

or

a

joint

repurchase

agreement.

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

Statements

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

obligations

to

the

Fund.

If

the

borrower

defaults

on

its

obligation

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.

1.

Organization

and

Significant

Accounting

Policies

(continued)

c.

Joint

Repurchase

Agreement

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

66

franklintempleton.com

Annual

Report

g.

Income

and

Deferred

Taxes

It

is each

Fund's

policy

to

qualify

as

a

regulated

investment

company

under

the

Internal

Revenue

Code. Each

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

Funds

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

the

Funds

invest.

Foreign

taxes,

if

any,

are

recorded

based

on

the

tax

regulations

and

rates

that

exist

in

the

foreign

markets

in

which

the

Funds

invest.

When

a

capital

gain

tax

is

determined

to

apply,

certain

or

all

Funds

record

an

estimated

deferred

tax

liability

in

an

amount

that

would

be

payable

if

the

securities

were

disposed

of

on

the

valuation

date.

As

a

result

of

several

court

cases,

in

certain

countries

across

the

European

Union,

certain

or

all

Funds

filed

additional

tax

reclaims

for

previously

withheld

taxes

on

dividends

earned

in

those

countries

(EU

reclaims).

These

additional

filings

are

subject

to

various

administrative

proceedings

by

the

local

jurisdictions’

tax

authorities

within

the

European

Union,

as

well

as

a

number

of

related

judicial

proceedings.

Income

recognized,

if

any,

for

EU

reclaims

is

reflected

as

other

income

in

the

Statements of

Operations

and

any

related

receivable,

if

any,

is

reflected

as

European

Union

tax

reclaims

in

the

Statements

of

Assets

and

Liabilities.

When

uncertainty

exists

as

to

the

ultimate

resolution

of

these

proceedings,

the

likelihood

of

receipt

of

these

EU

reclaims,

and

the

potential

timing

of

payment,

no

amounts

are

reflected

in

the

financial

statements.

For

U.S.

income

tax

purposes,

EU

reclaims

received

by

the

Funds,

if

any,

reduce

the

amounts

of

foreign

taxes

Fund

shareholders

can

use

as

tax

credits

in

their

individual

income

tax

returns.

Each

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

October

31,

2020, each

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. 

h.

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.

Facility

fees

are

recognized

as

income

over

the

expected

term

of

the

loan.

Dividend

income

and

capital

gain

distributions

by

Underlying

Funds

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

Funds.

Distributions

to

shareholders

are

recorded

on

the

ex-dividend

date.

The

Franklin

Managed

Income

Fund

employs

a

managed

distribution

policy.

Under

this

policy,

the

fund

will

distribute

level

monthly

distributions

in

any

given

year

regardless

of

the

performance

of

the

fund;

however,

the

twelfth

monthly

payment

may

be

greater

than

the

initially

anticipated

amount

if

additional

income

or

capital

gains

are

required

to

be

distributed.

These

distributions

may

include

income

and

capital

gains

generated

by

the

Fund,

as

well

as

a

possible

return

of

capital

component,

if

necessary,

to

meet

the

annual

distribution

rate.

The

annual

payout

rate

may

be

adjusted

higher

or

lower

from

year

to

year

in

response

to

market

conditions.

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.

1.

Organization

and

Significant

Accounting

Policies

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

67

franklintempleton.com

Annual

Report

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.

i.

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.

j.

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

Funds,

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

October

31,

2020,

there

were

an

unlimited

number

of

shares

authorized

(without

par

value).

Transactions

in

the

Funds'

shares

were

as

follows:

Franklin

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

Shares

Amount

Shares

Amount

Class

A

Class

A

Shares:

Year

ended

October

31,

2020

Shares

sold

a

...................................

5,850,734

$139,679,271

15,203,458

$367,436,854

Shares

issued

in

reinvestment

of

distributions

..........

4,470,194

95,912,693

4,273,011

105,999,994

Shares

redeemed

...............................

(12,063,859)

(268,119,900)

(15,752,185)

(375,840,419)

Net

increase

(decrease)

..........................

(1,742,931)

$(32,527,936)

3,724,284

$97,596,429

Year

ended

October

31,

2019

Shares

sold

a

...................................

6,419,478

$138,547,580

12,618,566

$311,210,362

Shares

issued

in

reinvestment

of

distributions

..........

3,246,558

63,366,459

4,757,293

111,013,154

Shares

redeemed

...............................

(12,685,094)

(268,554,026)

(10,930,597)

(269,320,795)

Net

increase

(decrease)

..........................

(3,019,058)

$(66,639,987)

6,445,262

$152,902,721

Class

C

1.

Organization

and

Significant

Accounting

Policies

(continued)

h.

Security

Transactions,

Investment

Income,

Expenses

and

Distributions

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

68

franklintempleton.com

Annual

Report

Franklin

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

Shares

Amount

Shares

Amount

Class

C

Shares:

Year

ended

October

31,

2020

Shares

sold

...................................

619,567

$14,330,154

1,933,557

$47,371,567

Shares

issued

in

reinvestment

of

distributions

..........

809,713

17,051,309

357,077

8,915,280

Shares

redeemed

a

..............................

(4,440,559)

(102,709,200)

(3,588,237)

(86,778,935)

Net

increase

(decrease)

..........................

(3,011,279)

$(71,327,737)

(1,297,603)

$(30,492,088)

Year

ended

October

31,

2019

Shares

sold

...................................

840,031

$17,694,676

1,754,938

$42,669,455

Shares

issued

in

reinvestment

of

distributions

..........

685,031

13,012,703

476,082

10,958,143

Shares

redeemed

a

..............................

(4,516,464)

(95,625,741)

(2,499,030)

(61,514,242)

Net

increase

(decrease)

..........................

(2,991,402)

$(64,918,362)

(268,010)

$(7,886,644)

Class

R

Class

R

Shares:

Year

ended

October

31,

2020

Shares

sold

...................................

—

$—

31,941

$797,707

Shares

issued

in

reinvestment

of

distributions

..........

—

—

13,393

334,537

Shares

redeemed

...............................

—

—

(83,928)

(2,069,281)

Net

increase

(decrease)

..........................

—

$—

(38,594)

$(937,037)

Year

ended

October

31,

2019

Shares

sold

...................................

—

$—

44,565

$1,076,955

Shares

issued

in

reinvestment

of

distributions

..........

—

—

16,690

388,732

Shares

redeemed

...............................

—

—

(55,202)

(1,372,450)

Net

increase

(decrease)

..........................

—

$—

6,053

$93,237

Class

R6

Class

R6

Shares:

Year

ended

October

31,

2020

Shares

sold

...................................

3,267,482

$75,404,210

1,357,448

$33,390,556

Shares

issued

in

reinvestment

of

distributions

..........

388,985

8,411,655

180,063

4,449,934

Shares

redeemed

...............................

(1,817,799)

(41,312,741)

(1,184,933)

(28,763,327)

Net

increase

(decrease)

..........................

1,838,668

$42,503,124

352,578

$9,077,163

Year

ended

October

31,

2019

Shares

sold

...................................

865,814

$18,678,428

958,941

$23,746,953

Shares

issued

in

reinvestment

of

distributions

..........

178,341

3,515,052

187,558

4,394,439

Shares

redeemed

...............................

(1,502,089)

(31,918,261)

(738,112)

(18,305,401)

Net

increase

(decrease)

..........................

(457,934)

$(9,724,781)

408,387

$9,835,991

Advisor

Class

2.

Shares

of

Beneficial

Interest

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

69

franklintempleton.com

Annual

Report

Franklin

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

Shares

Amount

Shares

Amount

Advisor

Class

Shares:

Year

ended

October

31,

2020

Shares

sold

...................................

29,352,686

$687,281,747

4,631,310

$110,786,281

Shares

issued

in

reinvestment

of

distributions

..........

8,255,321

177,255,222

398,372

9,845,978

Shares

redeemed

...............................

(42,789,544)

(935,400,822)

(2,600,761)

(61,315,217)

Net

increase

(decrease)

..........................

(5,181,537)

$(70,863,853)

2,428,921

$59,317,042

Year

ended

October

31,

2019

Shares

sold

...................................

31,898,944

$682,438,950

3,482,614

$85,115,695

Shares

issued

in

reinvestment

of

distributions

..........

5,813,623

113,983,447

310,395

7,308,854

Shares

redeemed

...............................

(36,235,757)

(763,450,940)

(1,575,590)

(38,461,778)

Net

increase

(decrease)

..........................

1,476,810

$32,971,457

2,217,419

$53,962,771

Franklin

Managed

Income

Fund

Shares

Amount

Class

A

Class

A

Shares:

Year

ended

October

31,

2020

Shares

sold

a

...................................

46,128,007

$550,402,800

Shares

issued

in

reinvestment

of

distributions

..........

17,971,520

219,203,827

Shares

redeemed

...............................

(51,901,964)

(611,211,559)

Net

increase

(decrease)

..........................

12,197,563

$158,395,068

Year

ended

October

31,

2019

Shares

sold

a

...................................

39,624,179

$481,294,589

Shares

issued

in

reinvestment

of

distributions

..........

9,892,242

119,363,850

Shares

redeemed

...............................

(35,313,277)

(429,925,354)

Net

increase

(decrease)

..........................

14,203,144

$170,733,085

Class

C

Class

C

Shares:

Year

ended

October

31,

2020

Shares

sold

...................................

5,329,297

$62,900,103

Shares

issued

in

reinvestment

of

distributions

..........

2,513,851

30,475,395

Shares

redeemed

a

..............................

(17,214,160)

(202,624,186)

Net

increase

(decrease)

..........................

(9,371,012)

$(109,248,688)

Year

ended

October

31,

2019

Shares

sold

...................................

6,705,072

$79,963,632

Shares

issued

in

reinvestment

of

distributions

..........

1,528,493

18,200,268

Shares

redeemed

a

..............................

(11,352,596)

(137,870,517)

Net

increase

(decrease)

..........................

(3,119,031)

$(39,706,617)

Class

R

2.

Shares

of

Beneficial

Interest

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

70

franklintempleton.com

Annual

Report

Franklin

Managed

Income

Fund

Shares

Amount

Class

R

Shares:

Year

ended

October

31,

2020

Shares

sold

...................................

39,218

$475,079

Shares

issued

in

reinvestment

of

distributions

..........

22,757

278,538

Shares

redeemed

...............................

(116,833)

(1,412,075)

Net

increase

(decrease)

..........................

(54,858)

$(658,458)

Year

ended

October

31,

2019

Shares

sold

...................................

79,143

$961,918

Shares

issued

in

reinvestment

of

distributions

..........

13,269

160,596

Shares

redeemed

...............................

(57,333)

(700,164)

Net

increase

(decrease)

..........................

35,079

$422,350

Class

R6

Class

R6

Shares:

Year

ended

October

31,

2020

Shares

sold

...................................

3,106,638

$37,375,347

Shares

issued

in

reinvestment

of

distributions

..........

1,041,392

12,723,008

Shares

redeemed

...............................

(3,371,512)

(39,996,235)

Net

increase

(decrease)

..........................

776,518

$10,102,120

Year

ended

October

31,

2019

Shares

sold

...................................

2,981,043

$36,633,670

Shares

issued

in

reinvestment

of

distributions

..........

576,916

6,987,353

Shares

redeemed

...............................

(2,761,099)

(33,812,996)

Net

increase

(decrease)

..........................

796,860

$9,808,027

Advisor

Class

Advisor

Class

Shares:

Year

ended

October

31,

2020

Shares

sold

...................................

5,713,128

$68,045,247

Shares

issued

in

reinvestment

of

distributions

..........

996,705

12,186,523

Shares

redeemed

...............................

(6,600,817)

(78,984,059)

Net

increase

(decrease)

..........................

109,016

$1,247,711

Year

ended

October

31,

2019

Shares

sold

...................................

6,300,058

$76,396,303

Shares

issued

in

reinvestment

of

distributions

..........

504,313

6,125,151

Shares

redeemed

...............................

(3,140,172)

(38,441,031)

Net

increase

(decrease)

..........................

3,664,199

$44,080,423

a

May

include

a

portion

of

Class

C

shares

that

were

automatically

converted

to

Class

A.

2.

Shares

of

Beneficial

Interest

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

71

franklintempleton.com

Annual

Report

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:

a.

Management

Fees

Franklin

Managed

Income

Fund

pays

an

investment

management

fee

to

Advisers

based

on

the

average

daily

net

assets

of

the

Fund

as

follows:

Franklin

Convertible

Securities

Fund

and

Franklin

Equity

Income

Fund

pay

an

investment

management

fee

to

Advisers

based

on

the

month-end

net

assets

of

each

of

the

Funds

as

follows:

Subsidiary

Affiliation

Franklin

Advisers,

Inc.

(Advisers)

Investment

manager

Franklin

Templeton

Services,

LLC

(FT

Services)

Administrative

manager

Franklin

Templeton

Distributors,

Inc.

(Distributors)

Principal

underwriter

Franklin

Templeton

Investor

Services,

LLC

(Investor

Services)

Transfer

agent

Annualized

Fee

Rate

Net

Assets

0.620%

Up

to

and

including

$250

million

0.595%

Over

$250

million,

up

to

and

including

$500

million

0.570%

Over

$500

million,

up

to

and

including

$1

billion

0.545%

Over

$1

billion,

up

to

and

including

$2.5

billion

0.520%

Over

$2.5

billion,

up

to

and

including

$5

billion

0.495%

Over

$5

billion,

up

to

and

including

$10

billion

0.470%

Over

$10

billion,

up

to

and

including

$15

billion

0.445%

Over

$15

billion,

up

to

and

including

$20

billion

0.420%

In

excess

of

$20

billion

Annualized

Fee

Rate

Net

Assets

0.625%

Up

to

and

including

$100

million

0.500%

Over

$100

million,

up

to

and

including

$250

million

0.450%

Over

$250

million,

up

to

and

including

$7.5

billion

0.440%

Over

$7.5

billion,

up

to

and

including

$10

billion

0.430%

Over

$10

billion,

up

to

and

including

$12.5

billion

0.420%

Over

$12.5

billion,

up

to

and

including

$15

billion

0.400%

Over

$15

billion,

up

to

and

including

$17.5

billion

0.380%

Over

$17.5

billion,

up

to

and

including

$20

billion

0.360%

Over

$20

billion,

up

to

and

including

$35

billion

0.355%

Over

$35

billion,

up

to

and

including

$50

billion

0.350%

In

excess

of

$50

billion

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

72

franklintempleton.com

Annual

Report

For

the

year

ended

October

31,

2020,

each

Fund's

gross

effective

investment

management

fee

rate

based

on

average

daily

net

assets

was

as

follows:

b.

Administrative

Fees

Under

an

agreement

with

Advisers,

FT

Services

provides

administrative

services

to

the

Funds.

The

fee

is

paid

by

Advisers

based

on

each

of

the

Funds'

average

daily

net

assets,

and

is

not

an

additional

expense

of

the

Funds.

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

Funds’

Class

A

reimbursement

distribution

plans,

the

Funds

reimburse

Distributors

for

costs

incurred

in

connection

with

the

servicing,

sale

and

distribution

of each

Fund's

shares

up

to

the

maximum

annual

plan

rate

for

each

class.

Under

the

Class

A

reimbursement

distribution

plans,

costs

exceeding

the

maximum

for

the

current

plan

year

cannot

be

reimbursed

in

subsequent

periods.

In

addition,

under

the

Funds’

Class

C

and

R

compensation

distribution

plans,

the

Funds

pay

Distributors

for

costs

incurred

in

connection

with

the

servicing,

sale

and

distribution

of

each

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

for

each

Fund.

The

maximum

annual

plan

rates,

based

on

the

average

daily

net

assets,

for

each

class,

are

as

follows:

For

Franklin

Managed

Income

Fund,

the

Board

has

set

the

current

rate

at

0.25%

per

year

for

Class

A

shares

until

further

notice

and

approval

by

the

Board.

Franklin

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

Franklin

Managed

Income

Fund

Gross

effective

investment

management

fee

rate

........

0.458%

0.457%

0.549%

Franklin

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

Franklin

Managed

Income

Fund

Reimbursement

Plans:

Class

A

...............................

0.25%

0.25%

0.35%

Compensation

Plans:

Class

C

...............................

1.00%

1.00%

1.00%

Class

R

...............................

—%

0.50%

0.50%

3.

Transactions

with

Affiliates

(continued)

a.

Management

Fees

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

73

franklintempleton.com

Annual

Report

d.

Sales

Charges/Underwriting

Agreements

Front-end

sales

charges

and

contingent

deferred

sales

charges

(CDSC)

do

not

represent

expenses

of

the

Funds.

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

Funds

of

the

following

commission

transactions

related

to

the

sales

and

redemptions

of

the

Funds'

shares

for

the

year:

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

year

ended

October

31,

2020,

the

Funds

paid

transfer

agent

fees

as

noted

in

the

Statements

of

Operations

of

which

the

following

amounts

were

retained

by

Investor

Services:

f.

Investments

in

Affiliated

Management

Investment

Companies

Certain

or

all

Funds

invest

in

one

or

more

affiliated

management

investment

companies

for

purposes

other

than

exercising

a

controlling

influence

over

the

management

or

policies.

Management

fees

paid

by

the

Funds

are

waived

on

assets

invested

in

the

affiliated

management

investment

companies,

as

noted

in

the

Statements

of

Operations,

in

an

amount

not

to

exceed

the

management

and

administrative

fees

paid

directly

or

indirectly

by

each

affiliate.

During

the

year

ended

October

31,

2020,

investments

in

affiliated

management

investment

companies

were

as

follows:

Franklin

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

Franklin

Managed

Income

Fund

Sales

charges

retained

net

of

commissions

paid

to

unaffiliated

brokers/dealers

..................

$50,718

$376,365

$515,758

CDSC

retained

...........................

$14,702

$33,804

$48,363

Franklin

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

Franklin

Managed

Income

Fund

Transfer

agent

fees

........................

$1,302,775

$1,065,041

$1,550,660

a

Value

at

Beginning

of

Year

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Year

Number

of

Shares

Held

at

End

of

Year

Investment

Income

a

a

a

a

a

a

a

a

a

Franklin

Convertible

Securities

Fund

Non-Controlled

Affiliates

Dividends

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0%

.........

$89,909,657

$1,175,294,870

$(1,053,847,623)

$

—

$

—

$

211,356,904

211,356,904

$

435,828

3.

Transactions

with

Affiliates

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

74

franklintempleton.com

Annual

Report

a

Value

at

Beginning

of

Year

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Year

Number

of

Shares

Held

at

End

of

Year

Investment

Income

a

a

a

a

a

a

a

a

a

Franklin

Convertible

Securities

Fund

(continued)

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0%

.........

$—

$104,772,000

$(98,572,000)

$

—

$

—

$

6,200,000

6,200,000

$

17,040

Total

Affiliated

Securities

....

$89,909,657

$1,280,066,870

$(1,152,419,623)

$—

$—

$217,556,904

$452,868

Franklin

Equity

Income

Fund

Non-Controlled

Affiliates

Dividends

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0%

.........

$69,588,667

$402,724,855

$(458,500,280)

—

—

$

13,813,242

13,813,242

$

196,679

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0%

.........

$—

$32,190,000

$(18,010,000)

—

—

14,180,000

14,180,000

$

82

Total

Affiliated

Securities

....

$69,588,667

$434,914,855

$(476,510,280)

$—

$—

$27,993,242

$196,761

Franklin

Managed

Income

Fund

Controlled

Affiliates

Dividends

Franklin

FTSE

United

Kingdom

ETF

....................

$—

$46,079,500

$(9,701,035)

$

(2,677,215)

$

(6,032,100)

$

27,669,150

1,500,000

$

637,180

Franklin

Liberty

Systematic

Style

Premia

ETF

..............

$—

$29,959,563

$—

—

(4,240,458)

25,719,105

1,175,000

60,020

Franklin

Liberty

U.S.

Low

Volatility

ETF

....................

$36,596,800

$—

$—

—

1,102,700

37,699,500

1,000,000

554,358

Total

Controlled

Affiliates

....

$36,596,800

$76,039,063

$(9,701,035)

$

(2,677,215)

$

(9,169,858)

$91,087,755

$

1,251,558

Non-Controlled

Affiliates

Dividends

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0%

.........

$331,668,940

$1,570,130,021

$(1,873,244,071)

—

—

$

28,554,890

28,554,890

$

774,035

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0%

.........

$—

$28,532,000

$(25,576,000)

—

—

$

2,956,000

2,956,000

$

745

Total

Affiliated

Securities

....

$368,265,740

$1,674,701,084

$(1,908,521,106)

$(2,677,215)

$(9,169,858)

$122,598,645

$2,026,338

3.

Transactions

with

Affiliates

(continued)

f.

Investments

in

Affiliated

Management

Investment

Companies

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

75

franklintempleton.com

Annual

Report

g.

Waiver

and

Expense

Reimbursements

Effective

March

1,

2020,

Advisers

and

Investor

Services

have

contractually

agreed

in

advance

to

waive

or

limit

their

respective

fees

and

to

assume

as

their

own

expense

certain

expenses

otherwise

payable

by

Franklin

Managed

Income

Fund

so

that

the

expenses

(including

acquired

fund

fees

and

expenses

but

excluding

distribution

fees,

and

certain

non-routine

expenses

or

costs

such

as

those

relating

to

litigation,

indemnification,

reorganizations,

and

liquidations)

for

Class

A,

Class

C,

Class

R,

Advisor

Class

and

for

Class

R6

of

the

Fund

do

not

exceed

0.68%

and

0.60%

respectively,

based

on

the

average

net

assets

of

each

class

until

February

28,

2021.

Total

expenses

waived

or

paid

are

not

subject

to

recapture

subsequent

to

the

Fund’s

fiscal

year

end.

For

Franklin

Convertible

Securities

Fund

and

Franklin

Equity

Income

Fund,

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

February

28,

2021.

h.

Interfund

Transactions

Franklin

Managed

Income

Fund

engaged

in

purchases

and

sales

of

investments

with

funds

or

other

accounts

that

have

common

investment

managers

(or

affiliated

investment

managers),

directors,

trustees

or

officers.

During

the

year

ended

October

31,

2020,

these

purchase

and

sale

transactions

aggregated

$0

and

$13,406,250,

respectively.

4.

Expense

Offset

Arrangement

The

Funds

have entered

into

an

arrangement

with

their

custodian

whereby

credits

realized

as

a

result

of

uninvested

cash

balances

are

used

to

reduce

a

portion

of

the

Funds'

custodian

expenses. During

the year

ended

October

31,

2020, the

custodian

fees

were

reduced

as

noted

in

the

Statements

of

Operations.

5.

Income

Taxes

The

tax

character

of

distributions

paid

during

the

years

ended

October

31,

2020

and

October

31,

2019,

was

as

follows:

Franklin

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

2020

2019

2020

2019

Distributions

paid

from:

Ordinary

income

........................

$144,316,737

$120,285,792

$61,251,863

$51,918,486

Long

term

capital

gain

....................

189,260,200

95,672,433

72,863,900

86,911,173

$333,576,937

$215,958,225

$134,115,763

$138,829,659

Franklin

Managed

Income

Fund

2020

2019

Distributions

paid

from:

Ordinary

income

........................

$158,461,426

$115,713,153

Long

term

capital

gain

....................

125,043,865

39,925,218

$283,505,291

$155,638,371

3.

Transactions

with

Affiliates

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

76

franklintempleton.com

Annual

Report

At

October

31,

2020,

the

cost

of

investments,

net

unrealized

appreciation

(depreciation),

undistributed

ordinary

income

and

undistributed

long

term

capital

gains

for

income

tax

purposes

were

as

follows:

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,

EU

Reclaims,

bond

discounts

and

premiums,

equity-linked

securities

and

wash

sales.

The

Funds

utilized

a

tax

accounting

practice

to

treat

a

portion

of

the

proceeds

from

capital

shares

redeemed

as

a

distribution

from

realized

capital

gains.

6.

Investment

Transactions

Purchases

and

sales

of

investments

(excluding

short

term

securities)

for

the

year

ended

October

31,

2020,

were

as

follows:

At

October

31,

2020,

in

connection

with

securities

lending

transactions,

the

Franklin

Convertible

Securities

Fund,

Franklin

Equity

Income

Fund

and

Franklin

Managed

Income

Fund

loaned

equity

investments

and

received

$7,750,475,

$17,725,595

and

$3,695,705

of

cash

collateral,

respectively.

The

gross

amount

of

recognized

liability

for

such

transactions

is

included

in

payable

upon

return

of

securities

loaned

in

the

Statement

of

Assets

and

Liabilities.

The

agreements

can

be

terminated

at

any

time.

7.

Credit Risk

At

October

31,

2020,

Franklin

Convertible

Securities

Fund

and

Franklin

Managed

Income

Fund

had

86.3%

and

12.8%,

respectively,

of

their

portfolio

invested

in

high

yield

securities,

senior

secured

floating

rate

loans,

or

other

securities

rated

below

investment

grade

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.

Franklin

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

Franklin

Managed

Income

Fund

a

a

a

a

Cost

of

investments

.......................

$3,628,205,838

$1,900,534,325

$3,303,928,072

Unrealized

appreciation

.....................

$996,649,555

$650,649,120

$326,222,021

Unrealized

depreciation

.....................

(118,375,037)

(101,241,928)

(168,865,042)

Net

unrealized

appreciation

(depreciation)

.......

$878,274,518

$549,407,192

$157,356,979

Distributable

earnings:

Undistributed

ordinary

income

................

$59,042,529

$3,651,266

$—

Undistributed

long

term

capital

gains

...........

433,415,513

21,421,257

25,765,254

Total

distributable

earnings

..................

$492,458,042

$25,072,523

$25,765,254

Franklin

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

Franklin

Managed

Income

Fund

Purchases

..............................

$1,267,521,192

$789,989,902

$2,486,015,830

Sales

..................................

$1,780,480,645

$645,388,142

$2,300,419,128

5.

Income

Taxes

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

77

franklintempleton.com

Annual

Report

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

Funds, their ability

to

buy

and

sell

fund

investments

at

appropriate

valuations

and their ability

to

achieve their investment

objectives.

9.

Other

Derivative

Information

At

October

31,

2020,

investments

in

derivative

contracts

are

reflected

in

the

Statements

of

Assets

and

Liabilities

as

follows:

For

the

year

ended

October

31,

2020,

the

effect

of

derivative

contracts

in

the

Statements

of

Operations

was

as

follows:

For

the

year

ended

October

31,

2020,

the

average

month

end

notional

amount

of

options

contracts

represented

4,154,685

shares.

See

Note

1(d)

regarding

derivative

financial

instruments. 

10.

Credit

Facility

The

Funds,

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

billion

(Global

Credit

Facility)

which

matures

on

February

5,

2021.

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.

Asset

Derivatives

Liability

Derivatives

Derivative

Contracts

Not

Accounted

for

as

Hedging

Instruments

Statement(s)

of

Assets

and

Liabilities

Location

Fair

Value

Statement(s)

of

Assets

and

Liabilities

Location

Fair

Value

Franklin

Managed

Income

Fund

Equity

contracts

...........

Investments

in

securities,

at

value

$

—

Options

written,

at

value

$

979,200

Total

....................

$—

$979,200

Derivative

Contracts

Not

Accounted

for

as

Hedging

Instruments

Statement

of

Operations

Location

Net

Realized

Gain

(Loss)

for

the

Year

Statement

of

Operations

Location

Net

Change

in

Unrealized

Appreciation

(Depreciation)

for

the

Year

Net

realized

gain

(loss)

from:

Net

change

in

unrealized

  appreciation

(depreciation)

on:

Franklin

Managed

Income

Fund

Equity

Contracts

...........

Investments

$(10,491,628)

a

Investments

$11,530,769

a

Written

options

(19,192,145)

Written

options

(5,196,875)

Total

....................

$(29,683,773)

$6,333,894

a

Purchased

option

contracts

are

included

in

net

realized

gain

(loss)

from

investments

and

net

change

in

unrealized

appreciation

(depreciation)  on

investments

in

the

Statements

of

Operations.

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

78

franklintempleton.com

Annual

Report

Under

the

terms

of

the

Global

Credit

Facility,

the

Funds

shall,

in

addition

to

interest

charged

on

any

borrowings

made

by

the

Funds

and

other

costs

incurred

by

the

Funds,

pay

their

share

of

fees

and

expenses

incurred

in

connection

with

the

implementation

and

maintenance

of

the

Global

Credit

Facility,

based

upon

their

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

Statements

of

Operations.

During

the

year

ended

October

31,

2020,

the Funds

did

not

use

the

Global

Credit

Facility.

11.

Fair

Value

Measurements

The Funds

follow

a

fair

value

hierarchy

that

distinguishes

between

market

data

obtained

from

independent

sources

(observable

inputs)

and

the Funds'

own

market

assumptions

(unobservable

inputs).

These

inputs

are

used

in

determining

the

value

of

the Funds' 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 Funds'

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

October

31,

2020,

in

valuing

the

Funds’

assets

and

liabilities

carried

at

fair

value,

is

as

follows:

Level

1

Level

2

Level

3

Total

Franklin

Convertible

Securities

Fund

Assets:

Investments

in

Securities:

Convertible

Preferred

Stocks

:

Auto

Components

......................

$

63,812,000

$

—

$

—

$

63,812,000

Capital

Markets

........................

55,162,400

—

—

55,162,400

Chemicals

...........................

46,068,231

—

—

46,068,231

Electric

Utilities

........................

179,434,200

—

—

179,434,200

Food

Products

........................

64,990,800

—

—

64,990,800

Gas

Utilities

..........................

11,955,600

—

—

11,955,600

Health

Care

Equipment

&

Supplies

.........

103,513,461

—

—

103,513,461

Health

Care

Technology

.................

15,621,000

—

—

15,621,000

Life

Sciences

Tools

&

Services

............

61,590,200

—

—

61,590,200

Machinery

............................

31,750,735

—

—

31,750,735

Multi-Utilities

..........................

101,808,965

—

—

101,808,965

Semiconductors

&

Semiconductor

Equipment

.

84,608,289

—

—

84,608,289

Water

Utilities

.........................

41,949,600

—

—

41,949,600

Wireless

Telecommunication

Services

.......

—

44,896,300

—

44,896,300

Convertible

Bonds

.......................

—

3,380,211,196

—

3,380,211,196

Escrows

and

Litigation

Trusts

...............

—

—

—

a

—

Short

Term

Investments

...................

217,556,904

1,550,475

—

219,107,379

Total

Investments

in

Securities

...........

$1,079,822,385

$3,426,657,971

$—

$4,506,480,356

Franklin

Equity

Income

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Aerospace

&

Defense

...................

87,358,255

—

—

87,358,255

Air

Freight

&

Logistics

...................

36,370,965

—

—

36,370,965

10.

Credit

Facility

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

79

franklintempleton.com

Annual

Report

Level

1

Level

2

Level

3

Total

Franklin

Equity

Income

Fund

(continued)

Assets:

Investments

in

Securities:

Common

Stocks:

Banks

...............................

$

230,936,380

$

—

$

—

$

230,936,380

Beverages

...........................

113,227,650

—

—

113,227,650

Capital

Markets

........................

143,228,920

—

—

143,228,920

Chemicals

...........................

—

11,498,727

—

11,498,727

Commercial

Services

&

Supplies

...........

42,321,600

—

—

42,321,600

Communications

Equipment

..............

14,467,700

—

—

14,467,700

Diversified

Telecommunication

Services

.....

69,159,000

—

—

69,159,000

Electric

Utilities

........................

218,302,550

—

—

218,302,550

Electrical

Equipment

....................

19,113,050

—

—

19,113,050

Equity

Real

Estate

Investment

Trusts

(REITs)

.

35,261,500

—

—

35,261,500

Food

&

Staples

Retailing

.................

53,418,750

—

—

53,418,750

Food

Products

........................

—

15,744,335

—

15,744,335

Health

Care

Equipment

&

Supplies

.........

78,524,035

—

—

78,524,035

Health

Care

Providers

&

Services

..........

40,955,070

—

—

40,955,070

Hotels,

Restaurants

&

Leisure

.............

44,730,000

—

—

44,730,000

Household

Products

....................

76,776,000

—

—

76,776,000

Insurance

............................

18,978,930

—

—

18,978,930

Machinery

............................

17,812,196

—

—

17,812,196

Media

...............................

43,486,080

—

—

43,486,080

Multiline

Retail

........................

60,126,900

—

—

60,126,900

Oil,

Gas

&

Consumable

Fuels

.............

84,952,650

—

—

84,952,650

Personal

Products

.....................

19,796,000

—

—

19,796,000

Pharmaceuticals

.......................

150,147,819

—

—

150,147,819

Road

&

Rail

..........................

53,325,600

—

—

53,325,600

Semiconductors

&

Semiconductor

Equipment

.

80,340,665

—

—

80,340,665

Software

.............................

66,249,817

—

—

66,249,817

Specialty

Retail

........................

39,538,600

—

—

39,538,600

Technology

Hardware,

Storage

&

Peripherals

.

33,202,300

—

—

33,202,300

Trading

Companies

&

Distributors

..........

8,646,000

—

—

8,646,000

Equity-Linked

Securities

...................

—

238,725,097

—

238,725,097

Convertible

Preferred

Stocks

...............

171,679,539

—

—

171,679,539

Short

Term

Investments

...................

27,993,242

3,545,595

—

31,538,837

Total

Investments

in

Securities

...........

$2,180,427,763

$269,513,754

$—

$2,449,941,517

Franklin

Managed

Income

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Aerospace

&

Defense

...................

38,699,278

—

—

38,699,278

Automobiles

..........................

10,359,000

—

—

10,359,000

Banks

...............................

218,154,000

—

—

218,154,000

Beverages

...........................

67,236,912

—

—

67,236,912

Biotechnology

.........................

21,275,000

—

—

21,275,000

Capital

Markets

........................

42,131,250

—

—

42,131,250

Chemicals

...........................

17,186,520

—

—

17,186,520

Diversified

Telecommunication

Services

.....

56,990,000

18,237,713

—

75,227,713

Electric

Utilities

........................

45,839,250

—

—

45,839,250

Food

Products

........................

56,062,500

—

—

56,062,500

Health

Care

Providers

&

Services

..........

78,022,800

—

—

78,022,800

Household

Products

....................

61,695,000

—

—

61,695,000

Industrial

Conglomerates

................

49,485,000

—

—

49,485,000

Insurance

............................

12,071,000

—

—

12,071,000

IT

Services

...........................

22,332,000

—

—

22,332,000

Multiline

Retail

........................

30,444,000

—

—

30,444,000

11.

Fair

Value

Measurements

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

80

franklintempleton.com

Annual

Report

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 year.

12.

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.

The

amendments

in

the

ASU

provides

optional

temporary

financial

reporting

relief

from

the

effect

of

certain

types

of

contract

modifications

due

to

the

planned

discontinuation

of

the

London

Interbank

Offered

Rate

and

other

interbank-offered

based

reference

rates

as

of

the

end

of

2021.

The

ASU

is

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

this

ASU

will

not

have

a

material

impact

on

the

financial

statements.

13.

Subsequent

Events

The

Funds

have

evaluated

subsequent

events

through

the

issuance

of

the

financial

statements

and

determined

that

no

events

have

occurred

that

require

disclosure.

Level

1

Level

2

Level

3

Total

Franklin

Managed

Income

Fund

(continued)

Assets:

Investments

in

Securities:

Common

Stocks:

Multi-Utilities

..........................

$

89,926,000

$

—

$

—

$

89,926,000

Oil,

Gas

&

Consumable

Fuels

.............

121,714,500

—

—

121,714,500

Pharmaceuticals

.......................

113,243,000

—

—

113,243,000

Road

&

Rail

..........................

36,323,950

—

—

36,323,950

Semiconductors

&

Semiconductor

Equipment

.

41,485,500

—

—

41,485,500

Trading

Companies

&

Distributors

..........

21,615,000

—

—

21,615,000

Wireless

Telecommunication

Services

.......

—

13,338,141

—

13,338,141

Management

Investment

Companies

.........

91,087,755

—

—

91,087,755

Equity-Linked

Securities

...................

—

521,633,462

—

521,633,462

Convertible

Preferred

Stocks

...............

432,628,380

—

—

432,628,380

Preferred

Stocks

........................

12,621,013

—

—

12,621,013

Corporate

Bonds

........................

—

885,905,472

—

885,905,472

U.S.

Government

and

Agency

Securities

.......

—

105,133,320

—

105,133,320

Asset-Backed

Securities

..................

—

10,055,801

—

10,055,801

Mortgage-Backed

Securities

................

—

86,101,939

—

86,101,939

Short

Term

Investments

...................

31,510,890

739,705

—

32,250,595

Total

Investments

in

Securities

...........

$1,820,139,498

$1,641,145,553

$—

$3,461,285,051

Liabilities:

Other

Financial

Instruments:

Options

written

..........................

$

979,200

$

—

$

—

$

979,200

$—

$—

$—

$—

a

Includes

securities

determined

to

have

no

value

at

October

31,

2020.

11.

Fair

Value

Measurements

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

81

franklintempleton.com

Annual

Report

Abbreviations

Selected

Portfolio

ADR

American

Depositary

Receipt

ETF

Exchange-Traded

Fund

FNMA

Federal

National

Mortgage

Association

FRN

Floating

Rate

Note

GNMA

Government

National

Mortgage

Association

NYRS

New

York

Registry

Shares

REIT

Real

Estate

Investment

Trust

Franklin

Investors

Securities

Trust

Report

of

Independent

Registered

Public

Accounting

Firm

82

franklintempleton.com

Annual

Report

To

the

Board

of

Trustees

of

Franklin

Investors

Securities

Trust

and

Shareholders

of

Franklin

Convertible

Securities

Fund,

Franklin

Equity

Income

Fund,

and

Franklin

Managed

Income

Fund.

Opinions

on

the

Financial

Statements

We

have

audited

the

accompanying

statements

of

assets

and

liabilities,

including

the

statements

of

investments,

of

Franklin

Convertible

Securities

Fund,

Franklin

Equity

Income

Fund,

and

Franklin

Managed

Income

Fund

(three

of

the

funds

constituting

Franklin

Investors

Securities

Trust,

hereafter

collectively

referred

to

as

the

"Funds")

as

of

October

31,

2020,

the

related

statements

of

operations

for

the

year

ended

October

31,

2020,

the

statements

of

changes

in

net

assets

for

each

of

the

two

years

in

the

period

ended

October

31,

2020,

including

the

related

notes,

and

the

financial

highlights

for

each

of

the

five

years

in

the

period

ended

October

31,

2020

(collectively

referred

to

as

the

“financial

statements”).

In

our

opinion,

the

financial

statements

present

fairly,

in

all

material

respects,

the

financial

position

of

each

of

the

Funds

as

of

October

31,

2020,

the

results

of

each

of

their

operations

for

the

year

then

ended,

the

changes

in

each

of

their

net

assets

for

each

of

the

two

years

in

the

period

ended

October

31,

2020

and

each

of

the

financial

highlights

for

each

of

the

five

years

in

the

period

ended

October

31,

2020

in

conformity

with

accounting

principles

generally

accepted

in

the

United

States

of

America.

Basis

for

Opinions

These

financial

statements

are

the

responsibility

of

the

Funds’

management.

Our

responsibility

is

to

express

an

opinion

on

the

Funds’

financial

statements

based

on

our

audits.

We

are

a

public

accounting

firm

registered

with

the

Public

Company

Accounting

Oversight

Board

(United

States)

(PCAOB)

and

are

required

to

be

independent

with

respect

to

the

Funds

in

accordance

with

the

U.S.

federal

securities

laws

and

the

applicable

rules

and

regulations

of

the

Securities

and

Exchange

Commission

and

the

PCAOB.

We

conducted

our

audits

of

these

financial

statements

in

accordance

with

the

standards

of

the

PCAOB.

Those

standards

require

that

we

plan

and

perform

the

audit

to

obtain

reasonable

assurance

about

whether

the

financial

statements

are

free

of

material

misstatement,

whether

due

to

error

or

fraud.

Our

audits

included

performing

procedures

to

assess

the

risks

of

material

misstatement

of

the

financial

statements,

whether

due

to

error

or

fraud,

and

performing

procedures

that

respond

to

those

risks.

Such

procedures

included

examining,

on

a

test

basis,

evidence

regarding

the

amounts

and

disclosures

in

the

financial

statements.

Our

audits

also

included

evaluating

the

accounting

principles

used

and

significant

estimates

made

by

management,

as

well

as

evaluating

the

overall

presentation

of

the

financial

statements.

Our

procedures

included

confirmation

of

securities

owned

as

of

October

31,

2020

by

correspondence

with

the

custodian,

transfer

agent

and

brokers;

when

replies

were

not

received

from

brokers,

we

performed

other

auditing

procedures.

We

believe

that

our

audits

provide

a

reasonable

basis

for

our

opinions.

PricewaterhouseCoopers

LLP

San

Francisco,

California

December

21,

2020

We

have

served

as

the

auditor

of

one

or

more

investment

companies

in

the

Franklin

Templeton

Group

of

Funds

since

1948.

Franklin

Investors

Securities

Trust

Tax

Information

(unaudited)

83

franklintempleton.com

Annual

Report

Under

Section

852(b)(3)(C)

of

the

Internal

Revenue

Code,

the

Funds

hereby

report

the

maximum

amount

allowable

but

no

less

than

the

following

amounts

as

long

term

capital

gain

dividends

for

the

fiscal

year

ended

October

31,

2020:

Under

Section

871(k)(2)(C)

of

the

Internal

Revenue

Code,

the

Funds

hereby

report

the

maximum

amount

allowable

but

no

less

than

the

following

amounts

as

short

term

capital

gain

dividends

for

purposes

of

the

tax

imposed

under

Section

871(a)(1)

(A)

of

the

Internal

Revenue

Code

for

the

fiscal

year

ended

October

31,

2020:

Under

Section

854(b)(1)(A)

of

the

Internal

Revenue

Code,

the

Funds

hereby

report

the

following

percentage

amounts

of

the

ordinary

income

dividends

as

income

qualifying

for

the

dividends

received

deduction

for

the

fiscal

year

ended

October

31,2020:

Under

Section

854(b)(1)(B)

of

the

Internal

Revenue

Code,

the

Funds

hereby

report

the

maximum

amount

allowable

but

no

less

than

the

following

amounts

as

qualified

dividends

for

purposes

of

the

maximum

rate

under

Section

1(h)(11)

of

the

Internal

Revenue

Code

for

the

fiscal

year

ended

October

31,

2020:

Distributions,

including

qualified

dividend

income,

paid

during

calendar

year

2020

will

be

reported

to

shareholders

on

Form

1099-DIV

by

mid-February

2021.

Shareholders

are

advised

to

check

with

their

tax

advisors

for

information

on

the

treatment

of

these

amounts

on

their

individual

income

tax

returns.

Under

Section

871(k)(1)(C)

of

the

Internal

Revenue

Code,

the

Funds

hereby

report

the

maximum

amount

allowable

but

no

less

than

the

following

amounts

as

interest

related

dividends

for

purposes

of

the

tax

imposed

under

Section

871(a)(1)(A)

of

the

Internal

Revenue

Code

for

the

fiscal

year

ended

October

31,

2020:

Franklin

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

Franklin

Managed

Income

Fund

$254,904,195

$75,477,568

$129,779,610

Franklin

Convertible

Securities

Fund

Franklin

Managed

Income

Fund

$88,389,330

$28,216,900

Franklin

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

Franklin

Managed

Income

Fund

7.77%

91.21%

25.49%

Franklin

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

Franklin

Managed

Income

Fund

$14,270,313

$63,513,035

$46,507,496

Franklin

Convertible

Securities

Fund

$11,376,794

Franklin

Investors

Securities

Trust

Board

Members

and

Officers

84

franklintempleton.com

Annual

Report

The

name,

year

of

birth

and

address

of

the

officers

and

board

members,

as

well

as

their

affiliations,

positions

held

with

the

Trust,

principal

occupations

during

at

least

the

past

five

years

and

number

of

U.S.

registered

portfolios

overseen

in

the

Franklin

Templeton

fund

complex,

are

shown

below.

Generally,

each

board

member

serves

until

that

person’s

successor

is

elected

and

qualified.

Independent

Board

Members

Name,

Year

of

Birth

and

Address

Position

Length

of

Time

Served

Number

of

Portfolios

in

Fund

Complex

Overseen

by

Board

Member*

Other

Directorships

Held

During

at

Least

the

Past

5

Years

Harris

J.

Ashton

(1932)

Trustee

Since

1986

126

Bar-S

Foods

(meat

packing

company)

(1981-2010).

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Director

of

various

companies;

and

formerly

,

Director,

RBC

Holdings,

Inc.

(bank

holding

company)

(until

2002);

and

President,

Chief

Executive

Officer

and

Chairman

of

the

Board,

General

Host

Corporation

(nursery

and

craft

centers)

(until

1998).

Terrence

J.

Checki

(1945)

Trustee

Since

2017

107

Hess

Corporation

(exploration

of

oil

and

gas)

(2014-present).

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Member

of

the

Council

on

Foreign

Relations

(1996-present);

Member

of

the

National

Committee

on

U.S.-China

Relations

(1999-present);

member

of

the

board

of

trustees

of

the

Economic

Club

of

New

York

(2013-present);

member

of

the

board

of

trustees

of

the

Foreign

Policy

Association

(2005-present);

member

of

the

board

of

directors

of

Council

of

the

Americas

(2007-present)

and

the

Tallberg

Foundation

(2018–

present);

and

formerly

,

Executive

Vice

President

of

the

Federal

Reserve

Bank

of

New

York

and

Head

of

its

Emerging

Markets

and

Internal

Affairs

Group

and

Member

of

Management

Committee

(1995-2014);

and

Visiting

Fellow

at

the

Council

on

Foreign

Relations

(2014).

Mary

C.

Choksi

(1950)

Trustee

Since

2014

126

Omnicom

Group

Inc.

(advertising

and

marketing

communications

services)

(2011-present)

and

White

Mountains

Insurance

Group,

Ltd.

(holding

company)

(2017-present);

and

formerly

,

Avis

Budget

Group

Inc.

(car

rental)

(2007-May

2020).

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Director

of

various

companies;

and

formerly

,

Founder

and

Senior

Advisor,

Strategic

Investment

Group

(investment

management

group)

(2015-2017);

Founding

Partner

and

Senior

Managing

Director,

Strategic

Investment

Group

(1987–2015);

Founding

Partner

and

Managing

Director,

Emerging

Markets

Management

LLC

(investment

management

firm)

(1987-2011);

and

Loan

Officer/Senior

Loan

Officer/Senior

Pension

Investment

Officer,

World

Bank

Group

(international

financial

institution)

(1977-1987).

Franklin

Investors

Securities

Trust

85

franklintempleton.com

Annual

Report

Name,

Year

of

Birth

and

Address

Position

Length

of

Time

Served

Number

of

Portfolios

in

Fund

Complex

Overseen

by

Board

Member*

Other

Directorships

Held

During

at

Least

the

Past

5

Years

Edith

E.

Holiday

(1952)

Lead

Independent

Trustee

Trustee

since

1998

and

Lead

Independent

Trustee

since

2019

126

Hess

Corporation

(exploration

of

oil

and

gas)

(1993-present),

Canadian

National

Railway

(railroad)

(2001-present),

White

Mountains

Insurance

Group,

Ltd.

(holding

company)

(2004-present),

Santander

Consumer

USA

Holdings,

Inc.

(consumer

finance)

(2016-present);

Santander

Holdings

USA.

(holding

company)

(2019-present);

and

formerly

,

RTI

International

Metals,

Inc.

(manufacture

and

distribution

of

titanium)

(1999-2015)

and

H.J.

Heinz

Company

(processed

foods

and

allied

products)

(1994-2013).

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Director

or

Trustee

of

various

companies

and

trusts;

and

formerly

,

Assistant

to

the

President

of

the

United

States

and

Secretary

of

the

Cabinet

(1990-1993);

General

Counsel

to

the

United

States

Treasury

Department

(1989-1990);

and

Counselor

to

the

Secretary

and

Assistant

Secretary

for

Public

Affairs

and

Public

Liaison-United

States

Treasury

Department

(1988-1989).

J.

Michael

Luttig

(1954)

Trustee

Since

2009

126

Boeing

Capital

Corporation

(aircraft

financing)

(2006-2010).

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Private

investor;

and

formerly

,

Counselor

and

Senior

Advisor

to

the

Chairman,

CEO,

and

Board

of

Directors,

of

The

Boeing

Company

(aerospace

company),

and

member

of

the

Executive

Council

(May

2019-January

1,

2020);

Executive

Vice

President,

General

Counsel

and

member

of

the

Executive

Council,

The

Boeing

Company

(2006-2019);

and

Federal

Appeals

Court

Judge,

United

States

Court

of

Appeals

for

the

Fourth

Circuit

(1991-2006).

Larry

D.

Thompson

(1945)

Trustee

Since

2007

126

Graham

Holdings

Company

(education

and

media

organization)

(2011-present);

and

formerly

,

The

Southern

Company

(energy

company)

(2014-May

2020;

previously

2010-2012),

Cbeyond,

Inc.

(business

communications

provider)

(2010-2012).

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Director

of

various

companies;

Counsel,

Finch

McCranie,

LLP

(law

firm)

(2015-present);

John

A.

Sibley

Professor

of

Corporate

and

Business

Law,

University

of

Georgia

School

of

Law

(2015-present;

previously

2011-2012);

and

formerly

,

Independent

Compliance

Monitor

and

Auditor,

Volkswagen

AG

(manufacturer

of

automobiles

and

commercial

vehicles)

(2017

–

September

2020);

Executive

Vice

President

-

Government

Affairs,

General

Counsel

and

Corporate

Secretary,

PepsiCo,

Inc.

(consumer

products)

(2012-2014);

Senior

Vice

President

-

Government

Affairs,

General

Counsel

and

Secretary,

PepsiCo,

Inc.

(2004-2011);

Senior

Fellow

of

The

Brookings

Institution

(2003-2004);

Visiting

Professor,

University

of

Georgia

School

of

Law

(2004);

and

Deputy

Attorney

General,

U.S.

Department

of

Justice

(2001-2003).

Independent

Board

Members

(continued)

Franklin

Investors

Securities

Trust

86

franklintempleton.com

Annual

Report

Interested

Board

Members

and

Officers

Name,

Year

of

Birth

and

Address

Position

Length

of

Time

Served

Number

of

Portfolios

in

Fund

Complex

Overseen

by

Board

Member*

Other

Directorships

Held

During

at

Least

the

Past

5

Years

**Gregory

E.

Johnson

(1961)

Trustee

Since

2013

137

None

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Executive

Chairman,

Chairman

of

the

Board

and

Director,

Franklin

Resources,

Inc.;

officer

and/or

director

or

trustee,

as

the

case

may

be,

of

some

of

the

other

subsidiaries

of

Franklin

Resources,

Inc.

and

of

39

of

the

investment

companies

in

Franklin

Templeton;

Vice

Chairman,

Investment

Company

Institute;

and

formerly

,

Chief

Executive

Officer

(2013-2020)

and

President

(1994-2015),

Franklin

Resources,

Inc.

**Rupert

H.

Johnson,

Jr.

(1940)

Chairman

of

the

Board,

Trustee

and

Vice

President

Chairman

of

the

Board

since

2013,

Trustee

since

1987

and

Vice

President

since

1986

126

None

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Director

(Vice

Chairman),

Franklin

Resources,

Inc.;

Director,

Franklin

Advisers,

Inc.;

and

officer

and/or

director

or

trustee,

as

the

case

may

be,

of

some

of

the

other

subsidiaries

of

Franklin

Resources,

Inc.

and

of

37

of

the

investment

companies

in

Franklin

Templeton.

Reema

Agarwal

(1974)

Vice

President

Since

2019

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Senior

Vice

President,

Franklin

Advisers,

Inc.;

and

officer

of

two

of

the

investment

companies

in

Franklin

Templeton.

Alison

E.

Baur

(1964)

Vice

President

Since

2012

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Deputy

General

Counsel,

Franklin

Templeton;

and

officer

of

some

of

the

other

subsidiaries

of

Franklin

Resources,

Inc.

and

of

41

of

the

investment

companies

in

Franklin

Templeton.

Breda

M.

Beckerle

(1958)

Chief

Compliance

Officer

Since

October

2020

Not

Applicable

Not

Applicable

280

Park

Avenue

New

York,

NY

10017

Principal

Occupation

During

at

Least

the

Past

5

Years:

Chief

Compliance

Officer,

Fiduciary

Investment

Management

International,

Inc.,

Franklin

Advisers,

Inc.,

Franklin

Advisory

Services,

LLC,

Franklin

Mutual

Advisers,

LLC,

Franklin

Templeton

Institutional,

LLC;

and

officer

of

41

of

the

investment

companies

in

Franklin

Templeton.

Gaston

Gardey

(1967)

Treasurer,

Chief

Financial

Officer

and

Chief

Accounting

Officer

Since

2009

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Treasurer,

U.S.

Fund

Administration

&

Reporting

and

officer

of

24

of

the

investment

companies

in

Franklin

Templeton.

Steven

J.

Gray

(1955)

Vice

President

and

Co-Secretary

Vice

President

since

2009

and

Co-Secretary

since

2019

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Senior

Associate

General

Counsel,

Franklin

Templeton;

Vice

President,

Franklin

Templeton

Distributors,

Inc.

and

FASA,

LLC;

and

officer

of

41

of

the

investment

companies

in

Franklin

Templeton.

Franklin

Investors

Securities

Trust

87

franklintempleton.com

Annual

Report

*We

base

the

number

of

portfolios

on

each

separate

series

of

the

U.S.

registered

investment

companies

within

the

Franklin

Templeton

fund

complex.

These

portfolios

have

a

common

investment

manager

or

affiliated

investment

managers.

**Gregory

E.

Johnson

is

considered

to

be

an

interested

person

of

the

Fund

under

the

federal

securities

laws

due

to

his

position

as

an

officer

and

director

of

Franklin

Resources,

Inc.

(Resources),

which

is

the

parent

company

of

the

Fund’s

investment

manager

and

distributor.

Rupert

H.

Johnson,

Jr.

is

considered

to

be

an

interested

person

of

the

Fund

under

the

federal

securities

laws

due

to

his

position

as

an

officer

and

director

and

major

shareholder

of

Resources.

Note

1:

Rupert

H.

Johnson,

Jr.

is

the

uncle

of

Gregory

E.

Johnson.

Note

2:

Officer

information

is

current

as

of

the

date

of

this

report.

It

is

possible

that

after

this

date,

information

about

officers

may

change.

Name,

Year

of

Birth

and

Address

Position

Length

of

Time

Served

Number

of

Portfolios

in

Fund

Complex

Overseen

by

Board

Member*

Other

Directorships

Held

During

at

Least

the

Past

5

Years

Matthew

T.

Hinkle

(1971)

Chief

Executive

Officer

–

Finance

and

Administration

Since

2017

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Senior

Vice

President,

Franklin

Templeton

Services,

LLC;

officer

of

41

of

the

investment

companies

in

Franklin

Templeton;

and

formerly

,

Vice

President,

Global

Tax

(2012-April

2017)

and

Treasurer/Assistant

Treasurer,

Franklin

Templeton

(2009-2017).

Robert

Lim

(1948)

Vice

President

–

AML

Compliance

Since

2016

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Vice

President,

Franklin

Templeton

Companies,

LLC;

Chief

Compliance

Officer,

Franklin

Templeton

Distributors,

Inc.

and

Franklin

Templeton

Investor

Services,

LLC;

and

officer

of

41

of

the

investment

companies

in

Franklin

Templeton.

Edward

D.

Perks

(1970)

President

and

Chief

Executive

Officer

–

Investment

Management

Since

2018

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

President

and

Director,

Franklin

Advisers,

Inc.;

and

officer

of

eight

of

the

investment

companies

in

Franklin

Templeton

(since

December

2018).

Navid

J.

Tofigh

(1972)

Vice

President

Since

2015

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Associate

General

Counsel

and

officer

of

41

of

the

investment

companies

in

Franklin

Templeton.

Craig

S.

Tyle

(1960)

Vice

President

Since

2005

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

General

Counsel

and

Executive

Vice

President,

Franklin

Resources,

Inc.;

and

officer

of

some

of

the

other

subsidiaries

of

Franklin

Resources,

Inc.

and

of

41

of

the

investment

companies

in

Franklin

Templeton.

Lori

A.

Weber

(1964)

Vice

President

and

Co-Secretary

Vice

President

since

2011

and

Co-Secretary

since

2019

Not

Applicable

Not

Applicable

300

S.E.

2nd

Street

Fort

Lauderdale,

FL

33301-

1923

Principal

Occupation

During

at

Least

the

Past

5

Years:

Senior

Associate

General

Counsel,

Franklin

Templeton;

Assistant

Secretary,

Franklin

Resources,

Inc.;

Vice

President

and

Secretary,

Templeton

Investment

Counsel,

LLC;

and

officer

of

41

of

the

investment

companies

in

Franklin

Templeton.

Interested

Board

Members

and

Officers

(continued)

Franklin

Investors

Securities

Trust

88

franklintempleton.com

Annual

Report

The

Sarbanes-Oxley

Act

of

2002

and

Rules

adopted

by

the

Securities

and

Exchange

Commission

require

the

Fund

to

disclose

whether

the

Fund’s

Audit

Committee

includes

at

least

one

member

who

is

an

audit

committee

financial

expert

within

the

meaning

of

such

Act

and

Rules.

The

Fund’s

Board

has

determined

that

there

is

at

least

one

such

financial

expert

on

the

Audit

Committee

and

has

designated

Mary

C.

Choksi

as

its

audit

committee

financial

expert.

The

Board

believes

that

Ms.

Choksi

qualifies

as

such

an

expert

in

view

of

her

extensive

business

background

and

experience.

She

served

as

a

director

of

Avis

Budget

Group,

Inc.

(2007-May

2020)

and

formerly,

Founder

and

Senior

Advisor,

Strategic

Investment

Group

(1987

to

2017).

Ms.

Choksi

has

been

a

Member

of

the

Fund’s

Audit

Committee

since

2014.

As

a

result

of

such

background

and

experience,

the

Board

believes

that

Ms.

Choksi

has

acquired

an

understanding

of

generally

accepted

accounting

principles

and

financial

statements,

the

general

application

of

such

principles

in

connection

with

the

accounting

estimates,

accruals

and

reserves,

and

analyzing

and

evaluating

financial

statements

that

present

a

breadth

and

level

of

complexity

of

accounting

issues

generally

comparable

to

those

of

the

Fund,

as

well

as

an

understanding

of

internal

controls

and

procedures

for

financial

reporting

and

an

understanding

of

audit

committee

functions.

Ms.

Choksi

is

an

independent

Board

member

as

that

term

is

defined

under

the

relevant

Securities

and

Exchange

Commission

Rules

and

Releases.

The

Statement

of

Additional

Information

(SAI)

includes

additional

information

about

the

board

members

and

is

available,

without

charge,

upon

request.

Shareholders

may

call

(800)

DIAL

BEN/342-5236

to

request

the

SAI.

Interested

Board

Members

and

Officers

(continued)

Franklin

Investors

Securities

Trust

Shareholder

Information

89

franklintempleton.com

Annual

Report

Liquidity

Risk

Management

Program

–

Funds

no

HLIM

Each

of

the

Funds

has

adopted

and

implemented

a

written

Liquidity

Risk

Management

Program

(the

“LRMP”)

as

required

by

Rule

22e-4

under

the

Investment

Company

Act

of

1940

(the

“Liquidity

Rule”).

The

LRMP

is

designed

to

assess

and

manage

each

Fund’s

liquidity

risk,

which

is

defined

as

the

risk

that

the

Fund

could

not

meet

requests

to

redeem

shares

issued

by

the

Fund

without

significant

dilution

of

remaining

investors’

interests

in

the

Fund.

In

accordance

with

the

Liquidity

Rule,

the

LRMP

includes

policies

and

procedures

that

provide

for:

(1)

assessment,

management,

and

review

(no

less

frequently

than

annually)

of

each

Fund’s

liquidity

risk;

(2)

classification

of

each

Fund’s

portfolio

holdings

into

one

of

four

liquidity

categories

(Highly

Liquid,

Moderately

Liquid,

Less

Liquid,

and

Illiquid);

(3)

for

Funds

that

do

not

primarily

hold

assets

that

are

Highly

Liquid,

establishing

and

maintaining

a

minimum

percentage

of

the

Fund’s

net

assets

in

Highly

Liquid

investments

(called

a

“Highly

Liquid

Investment

Minimum”

or

“HLIM”);

and

(4)

prohibiting

the

Fund’s

acquisition

of

Illiquid

investments

that

would

result

in

the

Fund

holding

more

than

15%

of

its

net

assets

in

Illiquid

assets.

The

LRMP

also

requires

reporting

to

the

Securities

and

Exchange

Commission

(“SEC”)

(on

a

non-public

basis)

and

to

the

Board

if

the

Fund’s

holdings

of

Illiquid

assets

exceed

15%

of

the

Fund’s

net

assets.

Funds

with

HLIMs

must

have

procedures

for

addressing

HLIM

shortfalls,

including

reporting

to

the

Board

and,

with

respect

to

HLIM

shortfalls

lasting

more

than

seven

consecutive

calendar

days,

reporting

to

the

SEC

(on

a

non-public

basis).

The

Funds’

Board

of

Trustees

approved

the

appointment

of

the

Director

of

Liquidity

Risk

within

the

Investment

Risk

Management

Group

(the

“IRMG”)

as

the

Administrator

of

the

LRMP.

The

IRMG

maintains

the

Investment

Liquidity

Committee

(the

“ILC”)

to

provide

oversight

and

administration

of

policies

and

procedures

governing

liquidity

risk

management

for

FT

products

and

portfolios.

The

ILC

includes

representatives

from

Franklin

Templeton’s

Risk,

Trading,

Global

Compliance,

Investment

Compliance,

Investment

Operations,

Valuation

Committee

and

Product

Management

groups.

In

assessing

and

managing

each

Fund’s

liquidity

risk,

the

ILC

considers,

as

relevant,

a

variety

of

factors,

including

the

Fund’s

investment

strategy

and

the

liquidity

of

its

portfolio

investments

during

both

normal

and

reasonably

foreseeable

stressed

conditions;

its

short

and

long-term

cash

flow

projections;

and

its

cash

holdings

and

access

to

other

funding

sources

including

the

Funds’

interfund

lending

facility

and

line

of

credit.

Classification

of

the

Fund’s

portfolio

holdings

in

the

four

liquidity

categories

is

based

on

the

number

of

days

it

is

reasonably

expected

to

take

to

convert

the

investment

to

cash

(for

Highly

Liquid

and

Moderately

Liquid

holdings)

or

sell

or

dispose

of

the

investment

(for

Less

Liquid

and

Illiquid

investments),

in

current

market

conditions

without

significantly

changing

the

investment’s

market

value.

Each

Fund

primarily

holds

liquid

assets

that

are

defined

under

the

Liquidity

Rule

as

"Highly

Liquid

Investments,"

and

therefore

is

not

required

to

establish

an

HLIM.

Highly

Liquid

Investments

are

defined

as

cash

and

any

investment

reasonably

expected

to

be

convertible

to

cash

in

current

market

conditions

in

three

business

days

or

less

without

the

conversion

to

cash

significantly

changing

the

market

value

of

the

investment.

At

meetings

of

the

Funds’

Board

of

Trustees

held

in

May

2020,

the

Program

Administrator

provided

a

written

report

to

the

Board

addressing

the

adequacy

and

effectiveness

of

the

program

during

the

period

December

1,

2018

to

December

31,

2019.

The

Program

Administrator

report

concluded

that

(i.)

the

LRMP,

as

adopted

and

implemented,

remains

reasonably

designed

to

assess

and

manage

each

Fund’s

liquidity

risk;

(ii.)

the

LRMP,

including

the

Highly

Liquid

Investment

Minimum

(“HLIM”)

where

applicable,

was

implemented

and

operated

effectively

to

achieve

the

goal

of

assessing

and

managing

each

Fund’s

liquidity

risk;

and

(iii.)

each

Fund

was

able

to

meet

requests

for

redemption

without

significant

dilution

of

remaining

investors’

interests

in

the

Fund.

At

the

same

time,

the

Program

Administrator

also

presented

the

Fund

Board

of

Trustees

an

update

on

liquidity

during

the

first

quarter

of

2020

in

relation

to

the

COVID-19

pandemic.

Proxy

Voting

Policies

and

Procedures

The

Trust’s

investment

manager

has

established

Proxy

Voting

Policies

and

Procedures

(Policies)

that

the

Trust

uses

to

determine

how

to

vote

proxies

relating

to

portfolio

securities.

Shareholders

may

view

the

Trust’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

Trust’s

Franklin

Investors

Securities

Trust

Shareholder

Information

90

franklintempleton.com

Annual

Report

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

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

each

Fund’s

financial

reports

every

six

months

as

well

as

an

annual

updated

summary

prospectus

(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

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.

FIST1

A

12/20

©

2020

Franklin

Templeton

Investments.

All

rights

reserved.

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.

Annual

Report

and

Shareholder

Letter

Franklin

Investors

Securities

Trust

Investment

Manager

Distributor

Shareholder

Services

Franklin

Advisers,

Inc.

Franklin

Templeton

Distributors,

Inc.

(800)

DIAL

BEN

®

/

342-5236

franklintempleton.com

(800)

632-2301

ANNUAL

REPORT

AND

SHAREHOLDER

LETTER

Franklin

Investors

Securities

Trust

October

31,

2020

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franklintempleton.com

Not

part

of

the

annual

report

1

Shareholder

Letter

Dear

Shareholder:

During

the

12

months

ended

October

31,

2020,

the

U.S.

economy

grew

moderately

through

the

end

of

2019

amid

concerns

about

trade,

but

it

contracted

in

2020’s

first

and

second

quarters

in

response

to

the

novel

coronavirus

(COVID-19)

pandemic.

In

the

third

quarter,

the

economy

recovered

substantially

based

on

increased

business

and

residential

investment

and

consumer

spending.

The

U.S.

Federal

Reserve,

having

lowered

the

federal

funds

rate

three

times

earlier

in

2019

amid

global

trade

tensions,

held

it

unchanged

through

February

2020.

However,

given

larger

risks

posed

by

COVID-19,

the

Federal

Reserve

lowered

its

key

rate

twice

for

a

total

of

1.50%

in

March,

decreasing

it

from

1.75%

to

0.25%.

The

Federal

Reserve

also

announced

broad

quantitative

easing

measures

to

support

credit

markets

and

adjusted

its

policy

in

August

to

allow

more

flexibility

to

keep

interest

rates

low,

while

maintaining

a

2%

average

inflation

target.

In

this

environment,

the

prices

of

U.S.

stocks,

as

measured

by

the

Standard

&

Poor’s

®

500

Index

(S&P

500

®

),

rose

7.65%,

(the

index

increasing

from

3,037.56

to

3,269.96).

1,2

Investment-grade

bonds,

as

measured

by

the

Bloomberg

Barclays

U.S.

Aggregate

Bond

Index

(Bloomberg

Index),

posted

a

+6.19%

total

return

(an

index

increase

from

2,127.69

to

2,265.52),

which

includes

the

reinvestment

of

interest.

3

We

are

committed

to

our

long-term

perspective

and

disciplined

investment

approach

as

we

conduct

a

rigorous,

fundamental

analysis

of

securities

with

a

regular

emphasis

on

investment

risk

management.

We

believe

active,

professional

investment

management

serves

investors

well.

We

also

recognize

the

important

role

of

financial

advisors

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.

Franklin

Investors

Securities

Trust’s

annual

report,

covering

Franklin

Adjustable

U.S.

Government

Securities

Fund,

Franklin

Floating

Rate

Daily

Access

Fund,

Franklin

Low

Duration

Total

Return

Fund

and

Franklin

Total

Return

Fund,

includes

more

detail

about

prevailing

conditions

and

a

discussion

about

investment

decisions

during

the

period.

All

securities

markets

fluctuate,

as

do

mutual

fund

share

prices.

We

thank

you

for

investing

with

Franklin,

welcome

your

questions

and

comments,

and

look

forward

to

serving

your

future

investment

needs.

Sincerely,

Rupert

H.

Johnson,

Jr.

Chairman

Franklin

Investors

Securities

Trust

This

letter

reflects

our

analysis

and

opinions

as

of

October

31,

2020,

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:

Copyright

©

2020,

S&P

Dow

Jones

Indices

LLC.

All

rights

reserved.

2.

Source:

Morningstar.

The

changes

in

index

prices

shown

for

the

S&P

500

do

not

include

reinvestments

of

income

and

distributions,

which

are

included

in

its

total

return,

which

was:

S&P

500

+9.71%

(index

total

return

resulting

in

an

increase

from

6,138.73

to

6,734.84).

3.

Sources:

Morningstar

and

Bloomberg

Barclays

Indices.

For

the

Bloomberg

Index,

only

total

return

as

shown

is

available,

not

price

change

without

the

inclusion

of

reinvested

income

and

distributions.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

franklintempleton.com

Annual

Report

2

Contents

Annual

Report

Economic

and

Market

Overview

....................

3

Franklin

Adjustable

U.S.

Government

Securities

Fund

..

4

Franklin

Floating

Rate

Daily

Access

Fund

............

10

Franklin

Low

Duration

Total

Return

Fund

.............

17

Franklin

Total

Return

Fund

........................

23

Financial

Highlights

and

Statements

of

Investments

...

29

Financial

Statements

.............................

127

Notes

to

Financial

Statements

.....................

134

Report

of

Independent

Registered

Public

Accounting

Firm

............................

170

Tax

Information

..................................

171

Board

Members

and

Officers

.......................

172

Shareholder

Information

..........................

177

Visit

franklintempleton.com

for

fund

updates,

to

access

your

account,

or

to

find

helpful

financial

planning

tools.

3

franklintempleton.com

Annual

Report

ANNUAL

REPORT

Economic

and

Market

Overview

The

U.S.

bond

market,

as

measured

by

the

Bloomberg

Barclays

U.S.

Aggregate

Bond

Index,

advanced

during

the

12

months

ended

October

31,

2020.

Before

the

acceleration

of

the

novel

coronavirus

(COVID-19)

outbreak

in

February,

prices

for

most

U.S.

bonds

rose,

and

their

yields

declined,

driven

by

muted

inflation,

low

interest

rates

and

strong

demand

for

yield.

In

late

February,

the

U.S.

bond

market

began

to

anticipate

the

adverse

economic

impact

of

business

shutdowns

and

social

distancing

measures.

Prices

for

higher-quality,

longer-term

bonds

rallied,

with

the

10-

year

U.S.

Treasury

yield

falling

to

intraday

record

lows

in

March,

while

riskier,

lower-rated

corporate

bonds

declined

sharply.

U.S.

Federal

Reserve

(Fed)

action

led

to

a

recovery

in

the

corporate

bond

market

beginning

in

late

March,

which

accelerated

in

subsequent

months

as

many

businesses

reopened.

However,

yields

on

most

bonds

rose

in

late

August,

fueled

by

the

rebounding

economy

and

a

change

in

the

Fed’s

long-standing

inflation

policy.

The

Fed

enacted

two

emergency

rate

cuts

in

March

2020,

lowering

the

federal

funds

target

rate

to

a

range

of

0.00%–

0.25%.

In

addition,

the

Fed

announced

unlimited,

open-

ended

purchasing

of

government-backed

and

corporate

bonds

to

help

keep

markets

functioning.

Furthermore,

the

Fed

announced

that

interest

rates

would

potentially

remain

low,

even

if

inflation

persistently

exceeded

the

Fed’s

2%

target.

U.S.

Treasury

bonds,

as

measured

by

the

Bloomberg

Barclays

U.S.

Treasury

Index,

posted

positive

total

returns

during

the

period.

The

10-year

U.S.

Treasury

yield

declined

during

the

period,

reaching

a

new

record

closing

low

in

early

August

2020.

Bond

purchasing

by

the

Fed

and

robust

demand

for

investments

perceived

as

safe

drove

the

U.S.

Treasury

market.

Mortgage-backed

securities

(MBS),

as

measured

by

the

Bloomberg

Barclays

MBS

Index,

posted

positive

total

returns

for

the

period

amid

Fed

support,

though

lower

interest

rates

accelerated

prepayments

from

mortgage

refinancing,

restricting

further

gains.

U.S.

corporate

bond

performance

varied

based

on

credit

rating,

as

many

investors

became

concerned

about

the

potential

credit

downgrades

of

many

companies.

Investment-

grade

corporate

bonds,

as

represented

by

the

Bloomberg

Barclays

U.S.

Corporate

Bond

Index,

posted

solid

total

returns.

High-yield

corporate

bonds,

as

represented

by

the

Bloomberg

Barclays

U.S.

Corporate

High

Yield

Bond

Index,

posted

modest

total

returns.

The

foregoing

information

reflects

our

analysis

and

opinions

as

of

October

31,

2020

.

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.

4

franklintempleton.com

Annual

Report

Franklin

Adjustable

U.S.

Government

Securities

Fund

This

annual

report

for

Franklin

Adjustable

U.S.

Government

Securities

Fund

covers

the

fiscal

year

ended

October

31,

2020

.

Your

Fund’s

Goal

and

Main

Investments

The

Fund

seeks

to

provide

a

high

level

of

current

income

while

providing

lower

volatility

of

principal

than

a

fund

that

invests

in

fixed-rate

securities

by

investing

at

least

80%

of

its

net

assets

in

adjustable-rate

U.S.

government

mortgage

securities,

which

are

issued

or

guaranteed

by

the

U.S.

government,

its

agencies

or

instrumentalities.

1

The

Fund’s

investments

may

include

securities

issued

by

Ginnie

Mae

(GNMA)

and

government-sponsored

entities,

such

as

Fannie

Mae

(FNMA)

and

Freddie

Mac

(FHLMC).

2

Performance

Overview

The

Fund’s

Class

A

shares

posted

a

+1.26%

cumulative

total

return

for

the

12

months

under

review.

In

comparison,

the

Fund’s

benchmark,

the

Bloomberg

Barclays

U.S.

Government

Index:

1-2

Year

Component

posted

a

+2.71%

total

return.

3

The

index

measures

public

obligations

of

the

U.S.

Treasury

with

one

to

two

years

to

final

maturity

and

publicly

issued

debt

of

U.S.

government

agencies,

quasi-federal

corporations,

and

corporate

or

foreign

debt

guaranteed

by

the

U.S.

government.

You

can

find

the

Fund’s

long-term

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

.

Investment

Strategy

We

employ

a

conservative

investment

strategy

as

we

strive

to

produce

solid

performance

in

a

variety

of

interest

rate

climates.

We

choose

securities

using

a

value-oriented

approach,

emphasizing

the

bonds’

economic

fundamentals

in

relation

to

comparable

securities

as

well

as

their

historical

prepayment

performance.

Manager’s

Discussion

The

Fund

employed

a

conservative

strategy

that

invested

primarily

in

adjustable-rate

mortgage

securities

(ARMs)

that

are

either

explicitly

or

implicitly

backed

by

the

U.S.

government.

1

During

the

period,

the

Fund

invested

predominantly

in

securities

issued

or

guaranteed

by

FNMA

and

FHLMC.

The

Fund

took

a

collateral-intensive

research

approach

to

analyze

the

prepayment

behavior

of

individual

ARMs

to

identify

those

with

the

most

attractive

prepayment

profiles

and

focused

on

seasoned

ARMs.

Such

securities

have

typically

been

through

several

interest-rate

cycles

and

therefore

tend

to

be

less

sensitive

to

changes

in

interest

rates,

compared

to

newer

issued

counterparts.

We

have

found

such

securities

historically

to

have

experienced

lower

volatility

than

comparable

maturity

Treasuries

and

have

provided

more

consistent

income.

During

the

period,

the

Fund’s

primary

focus

continued

to

be

on

seasoned,

shorter-maturity,

high-quality

ARMs

that

tend

to

be

less

sensitive

to

interest-rate

changes,

which

supported

performance.

Additionally,

we

deployed

capital

into

agency

collateralized

mortgage

obligation

(CMO)

floater

and

15-year

fixed-rate

agency

mortgage

backed

securities

markets

as

we

found

them

to

offer

appealing

yield

compared

to

the

agency

hybrid

ARM

markets. We

continued

to

focus

on

diverse,

seasoned,

post-reset

FNMA

and

FHLMC

ARMs

with

average

coupons

above

3%

and

larger

loan

counts

as

well

as

sequential

CMO

floaters

backed

by

seasoned

collateral.

Secondary

flow

activity

remained

muted

in

post-

reset

hybrids.

Portfolio

Composition

10/31/20

%

of

Total

Net

Assets

Mortgage-Backed

Securities

88.3%

Commercial

Mortgage-Backed

Securities

1.7%

Short-Term

Investments

&

Other

Net

Assets

10.0%

1.

Securities

owned

by

the

Fund,

but

not

shares

of

the

Fund,

are

issued

or

guaranteed

by

the

U.S.

government,

its

agencies

or

instrumentalities,

including

government

sponsored

entities,

as

to

timely

payment

of

principal

and

interest.

2.

Although

U.S.

government-sponsored

entities

may

be

chartered

by

acts

of

Congress,

their

securities

are

neither

issued

nor

guaranteed

by

the

U.S.

Government.

Please

see

the

Fund’s

prospectus

for

a

detailed

discussion

regarding

various

levels

of

credit

support

for

government

agency

or

instrumentality

securities.

The

Fund’s

yield

and

share

price

are

not

guaranteed

and

will

vary

with

market

conditions.

3.

Source:

Morningstar.

The

index

is

unmanaged

and

includes

reinvestment

of

any

income

or

distributions.

It

does

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.

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

34

.

Franklin

Adjustable

U.S.

Government

Securities

Fund

5

franklintempleton.com

Annual

Report

Underlying

coupons

continued

to

reset

lower

with

the

London

Interbank

Offered

Rates

(LIBOR)

4

declining. Prepayment

rate

uncertainty

clouded

both

the

fixed-rate

and

ARM

markets

outlook

as

they

remained

elevated.

We

continued

to

be

cautious

about

future

prepayment

speeds

given

the

rally

in

mortgage

rates

and

with

securities

trading

at

significant

premiums.

The

outlook

for

prepayments

has

created

caution

in

the

sector

and

led

to

a

downward

pressure

on

dollar

prices.

With

absolute

prepayments

continuing

to

be

elevated,

we

remain

cautious

on

high

premium

post

resets

going

forward.

We

do

believe

that

with

borrowers

having

experienced

a

full

year

of

mortgages

resetting

downward,

a

burnout

effect

could

offset

some

of

the

refinance

incentive,

which

would

help

lower

prepayment

rates

at

some

point

in

the

future.

Our

preference

remains

towards

bonds

linked

to

the

LIBOR

index,

which

should

have

slower

speeds

relative

to

those

indexed

off

the

One-Year

Constant

Maturity

Treasury

(CMT)

Index. The

LIBOR

transition

has

been

a

topic

of

discussion

for

the

market

and

in

our

view,

we

feel

the

market

will

adjust

to

the

Secured

Overnight

Financing

Rate

(SOFR)

with

minimal

disruption.

Given

the

high

probability

of

elevated

speeds

for

the

foreseeable

future

in

a

market

where

the

premiums

are

quite

significant,

we

retained

a

slightly

higher

cash

allocation

at

period-end.  

Thank

you

for

your

continued

participation

in

Franklin

Adjustable

U.S.

Government

Securities

Fund.

We

look

forward

to

serving

your

future

investment

needs.

Paul

Varunok

Lead

Portfolio

Manager

The

foregoing

information

reflects

our

analysis,

opinions

and

portfolio

holdings

as

of

October

31,

2020,

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.

4.

The

London

Interbank

Offered

Rate

(LIBOR)

is

the

interest

rate

banks

charge

each

other

for

loans.

LIBOR

is

a

widely

used

benchmark

for

short-term

interest

rates.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

Performance

Summary

as

of

October

31,

2020

Franklin

Adjustable

U.S.

Government

Securities

Fund

6

franklintempleton.com

Annual

Report

The

performance

tables

and

graphs

do

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

10/31/20

1

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

2.25%

and

the

minimum

is

0%.

Class

A

:

2.25%

maximum

initial

sales

charge;

Advisor

Class:

no

sales

charges.

For

other

share

classes,

visit

franklintempleton.com.

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

.

Share

Class

Cumulative

Total

Return

2

Average

Annual

Total

Return

3

–

A

1-Year

+1.26%

-0.96%

5-Year

+3.58%

+0.24%

10-Year

+6.99%

+0.45%

Advisor

1-Year

+1.51%

+1.51%

5-Year

+5.01%

+0.98%

10-Year

+9.71%

+0.93%

30-Day

Standardized

Yield

5

Share

Class

Distribution

Rate

4

(with

fee

waiver)

(without

fee

waiver)

A

1.41%

1.38%

1.37%

Advisor

1.69%

1.65%

1.65%

See

page

8

for

Performance

Summary

footnotes.

Franklin

Adjustable

U.S.

Government

Securities

Fund

Performance

Summary

7

franklintempleton.com

Annual

Report

See

page

8

for

Performance

Summary

footnotes.

Total

Return

Index

Comparison

for

a

Hypothetical

$10,000

Investment

1

Total

return

represents

the

change

in

value

of

an

investment

over

the

periods

shown.

It

includes

any

applicable

maximum

sales

charge,

Fund

expenses,

account

fees

and

reinvested

distributions.

The

unmanaged

index

includes

reinvestment

of

any

income

or

distributions.

It

differs

from

the

Fund

in

composition

and

does

not

pay

management

fees

or

expenses.

One

cannot

invest

directly

in

an

index.

Class

A

(11/1/10–10/31/20)

Advisor

Class

(11/1/10–10/31/20)

Franklin

Adjustable

U.S.

Government

Securities

Fund

Performance

Summary

8

franklintempleton.com

Annual

Report

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.

Interest

rate

movements,

unscheduled

mortgage

prepayments

and

other

risk

factors

will

affect

the

Fund’s

share

price

and

yield.

Bond

prices

generally

move

in

the

opposite

direction

of

interest

rates.

As

the

prices

of

bonds

in

a

Fund

adjust

to

a

rise

in

interest

rates,

the

Fund’s

share

price

may

decline.

Changes

in

the

financial

strength

of

a

bond

issuer

or

in

a

bond’s

credit

rating

may

affect

its

value.

Unexpected

events

and

their

aftermaths,

such

as

the

spread

of

deadly

diseases;

natural,

environmental

or

man-made

disasters;

financial,

political

or

social

disruptions;

terrorism

and

war;

and

other

tragedies

or

catastrophes,

can

cause

investor

fear

and

panic,

which

can

adversely

affect

the

economies

of

many

companies,

sectors,

nations,

regions

and

the

market

in

general,

in

ways

that

cannot

necessarily

be

foreseen.

The

Fund’s

prospectus

also

includes

a

description

of

the

main

investment

risks.

1.

The

Fund

has

a

fee

waiver

associated

with

any

investment

it

makes

in

a

Franklin

Templeton

money

fund

and/or

other

Franklin

Templeton

fund,

contractually

guaranteed

through

2/28/21.

Fund

investment

results

reflect

the

fee

waiver;

without

this

waiver,

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.

Distribution

rate

is

based

on

an

annualization

of

the

sum

of

the

respective

class’s

past

month’s

daily

distributions

and

the

maximum

offering

price

(NAV

for

Advisor

Class)

per

share

on

10/31/20.

5.

The

Fund’s

30-day

standardized

yield

is

calculated

over

a

trailing

30-day

period

using

the

yield

to

maturity

on

bonds

and/or

the

dividends

accrued

on

stocks.

It

may

not

equal

the

Fund’s

actual

income

distribution

rate,

which

reflects

the

Fund’s

past

dividends

paid

to

shareholders.

6.

Source:

Morningstar.

The

Bloomberg

Barclays

U.S.

Government

Index:

1-2

Year

Component

includes

public

obligations

of

the

U.S.

Treasury

with

at

least

one

year

up

to,

but

not

including,

two

years

to

final

maturity

and

publicly

issued

debt

of

U.S.

government

agencies,

quasi-federal

corporations,

and

corporate

or

foreign

debt

guaranteed

by

the

U.S.

government.

7.

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

Distributions

(11/1/19–10/31/20)

Share

Class

Net

Investment

Income

A

$0.169900

A1

$0.181760

C

$0.138211

R6

$0.198582

Advisor

$0.189826

Total

Annual

Operating

Expenses

7

Share

Class

With

Fee

Waiver

Without

Fee

Waiver

A

0.95%

0.96%

Advisor

0.70%

0.71%

Your

Fund’s

Expenses

Franklin

Adjustable

U.S.

Government

Securities

Fund

9

franklintempleton.com

Annual

Report

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.

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

184/366

to

reflect

the

one-half

year

period.

2.

Reflects

expenses

after

fee

waivers

and

expense

reimbursements.

Does

not

include

acquired

fund

fe

es

and

expenses.

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Share

Class

Beginning

Account

Value

5/1/20

Ending

Account

Value

10/31/20

Expenses

Paid

During

Period

5/1/20–10/31/20

1,2

Ending

Account

Value

10/31/20

Expenses

Paid

During

Period

5/1/20–10/31/20

1,2

a

Net

Annualized

Expense

Ratio

2

A

$1,000

$1,010.10

$4.87

$1,020.29

$4.90

0.96%

A1

$1,000

$1,010.80

$4.13

$1,021.03

$4.15

0.82%

C

$1,000

$1,008.10

$6.90

$1,018.27

$6.93

1.37%

R6

$1,000

$1,011.80

$2.92

$1,022.23

$2.94

0.58%

Advisor

$1,000

$1,011.30

$3.62

$1,021.54

$3.64

0.72%

10

franklintempleton.com

Annual

Report

Franklin

Floating

Rate

Daily

Access

Fund

This

annual

report

for

Franklin

Floating

Rate

Daily

Access

Fund

covers

the

fiscal

year

ended

October

31,

2020

.

Your

Fund’s

Goal

and

Main

Investments

The

Fund

seeks

to

provide

a

high

level

of

current

income

and,

secondarily,

preservation

of

capital

by

investing

at

least

80%

of

its

net

assets

in

income-producing

floating

interest-

rate

corporate

loans

and

corporate

debt

securities

made

to

or

issued

by

U.S.

companies,

non-U.S.

entities

and

U.S.

subsidiaries

of

non-U.S.

entities.

Performance

Overview

The

Fund’s

Class

A

shares

posted

a

-6.00%

cumulative

total

return

for

the

12

months

under

review.

In

comparison,

the

Credit

Suisse

Leveraged

Loan

Index

(CS

LLI),

which

is

designed

to

mirror

the

investable

universe

of

the

U.S.

dollar-

denominated

leveraged

loan

market,

posted

a

+1.50%

total

return.

1

You

can

find

more

of

the

Fund’s

performance

data

in

the

Performance

Summary

beginning

on

page

13

.

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

.

Corporate

Loan

Market

Overview

Despite

favorable

investor

sentiment

at

the

beginning

of

the

period,

as

fears

of

the

impact

of

COVID-19

on

the

global

economy

surfaced,

the

loan

market

entered

a

risk-off

mode

in

March

2020,

which

recorded

some

of

the

worst

daily

declines

since

the

global

financial

crisis

more

than

a

decade

ago.

As

fiscal

and

monetary

support

materialized,

the

loan

market

rallied

amid

improved

investor

sentiment

and

technical

conditions,

as

severe

outflows

subsided

and

modest

activity

with

collateralized

loan

obligations

(CLOs)

resumed.

Gains

were

initially

led

by

higher-rated

loans

and

those

in

industries

perceived

to

be

less

impacted

by

the

crisis,

but

eventually

spread

to

lower-rated

loans

as

investors

searched

for

principal

appreciation

and

higher

income

in

a

low-rate

environment.

By

the

end

of

the

period,

the

loan

*Figures

reflect

certain

derivatives

held

in

the

portfolio

(or

their

underlying

reference

assets)

and

may

not

total

100%

or

may

be

negative

due

to

rounding,

use

of

deriva-

tives,

unsettled

trades

or

other

factors.

market

retraced

most

of

the

spread

widening,

returning

to

levels

from

early-March,

but

levels

remained

wider

than

at

the

beginning

of

the

period.

At

the

beginning

of

the

period,

outflows

from

retail

investors

moderated

and

the

asset

class

reported

modest

weekly

inflows.

However,

the

increasing

likelihood

of

a

global

recession

and

aggressive

U.S.

Federal

Reserve

(Fed)

interest-rate

cuts

in

response

to

the

economic

slowdown

resulted

in

heavy

outflows

from

retail

loan

investment

vehicles.

The

accommodative

action

from

the

Fed

led

to

declines

in

rising

London

Interbank

Offered

Rates

(LIBOR),

resulting

in

lowered

coupons

throughout

the

loan

market

as

most

loans

had

not

instituted

LIBOR’s

protective

floor.

Elevated

redemption

activity

led

managers

to

sell

loans

across

the

credit

quality

spectrum,

leading

to

significant

dislocation

in

prices

and

wide

bid-ask

spreads.

Although

CLO

issuance

had

supported

loan

demand

earlier

in

the

period,

the

volume

stalled

in

March

2020

as

spreads

widened.

After

the

announcement

of

fiscal

stimulus

in

the

U.S.,

investor

sentiment

and

technical

conditions

improved

as

severe

outflows

eventually

subsided

and

modest

CLO

activity

resumed.

While

outflows

from

retail

loan

investment

vehicles

moderated,

CLO

issuance

helped

to

drive

gains

in

the

loan

market,

including

activity

from

CLO

warehouses

that

were

formed

before

COVID-19

hit.

While

a

stronger

technical

environment

and

higher

loan

prices

at

the

beginning

of

the

period

led

to

a

significant

repricing

wave

in

January

2020,

new

issuance

was

on

hold

for

much

of

March.

Primary

activity

eventually

resumed,

but

new

loan

deals

were

initially

sparse

and

included

issuers

that

needed

liquidity

and

offered

wider

spreads.

New

issuance

picked

up

by

the

end

of

the

period

and

included

an

increase

Portfolio

Composition*

10/31/20

%

of

Total

Net

Assets

Senior

Floating

Rate

Interests

83.8%

Corporate

Bonds

3.2%

Management

Investment

Companies

3.0%

Asset-Backed

Securities

2.2%

Common

Stocks

1.5%

Short-Term

Investments

&

Other

Net

Assets

6.3%

1.

Source:

Credit

Suisse

Group.

The

index

is

unmanaged

and

includes

reinvestment

of

any

income

or

distributions.

It

does

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.

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

41

.

Franklin

Floating

Rate

Daily

Access

Fund

11

franklintempleton.com

Annual

Report

in

deals

to

finance

acquisitions

and

opportunistic

deals

for

second

lien

loans

or

those

to

finance

dividends.

However,

expectations

for

robust

volume

were

subdued

amid

weaker

demand

from

traditional

retail

loan

investors

and

CLOs.

Among

issuers

that

had

bonds

and

loans,

more

looked

to

raise

capital

with

high-yield

bonds

in

consideration

of

stronger

technical

conditions

in

the

market.

Loan

default

activity

was

muted

for

much

of

the

period

but

increased

sharply

as

more

issuers

experienced

impacts

from

the

slowdown

in

economic

activity.

At

the

end

of

the

period,

the

default

rate

exceeded

its

historical

average

and

the

rate

by

issuer

count

was

the

highest

since

2010.

Defaults

were

primarily

concentrated

in

industries

that

were

more

impacted

by

COVID-19

related

declines

in

demand

and

shutdowns.

Despite

the

recovery

in

the

market,

a

significant

share

of

loans

continued

to

trade

at

distressed

levels

and

bifurcation

in

the

market

persisted

between

those

in

industries

less

impacted

by

the

COVID-19

crisis,

and

those

with

limited

revenue

and

cash

flow

prospects

amid

continued

virus

fears.

Investment

Strategy

We

use

a

detailed

credit

analysis

process

to

select

corporate

loan

and

corporate

debt

securities

that

meet

our

criteria.

We

conduct

ongoing

credit

monitoring

of

our

investments.

To

help

manage

the

credit

risk

associated

with

investing

in

securities

rated

below

investment

grade

(or

if

unrated,

of

comparable

quality),

we

seek

to

diversify

the

Fund

by

investing

in

a

large

number

of

loans

of

companies

that

we

have

identified

as

having

attractive

risk/reward

profiles,

favorable

capital

structures,

strong

asset

coverage

and

dominant

market

shares.

This

diversification

potentially

reduces

credit

risk

by

spreading

assets

across

many

different

industries.

Manager’s

Discussion

During

the

one-year

under

review,

the

Fund

underperformed

its

benchmark,

the

CS

LLI.

The

Fund

maintained

an

overweighting

in

the

upper

tier

of

the

market

throughout

the

period,

as

upper

tier

loans

in

the

index

returned

-0.70%,

middle

tier

returned

2.42%,

and

lower

tier

returned

-6.04%,

according

to

the

CS

LLI.

The

overweighting

in

these

higher-rated

loans

detracted

from

relative

performance,

but

performance

was

primarily

driven

by

loan

selection,

including

loans

that

were

impacted

by

COVID-19

shutdowns,

travel

restrictions

and

declines

in

oil

prices,

including

those

in

the

energy

and

gaming/leisure

industries.

The

top

contributors

to

performance

included

issuers

where

we

had

relatively

large

positions

and

through

proactive

engagement,

completed

transactions

that

were

more

favorable

to

investors.

The

term

loan

of

99

Cents

Only

Stores

(a

discount

retailer)

traded

higher

as

it

successfully

completed

an

amendment

that

extended

debt

maturities,

received

a

sponsor

equity

injection,

and

benefited

from

strong

customer

demand

as

a

result

of

COVID-19

driven

purchases.

The

term

loans

of

CSM

Bakery

(a

producer

of

bakery

ingredients

and

products)

contributed

to

performance

as

the

issuer

received

an

equity

infusion

from

its

sponsor

and

successfully

completed

an

amendment

that

extended

maturities

with

increased

compensation.

Additionally,

the

term

loans

of

General

Nutrition

Centers

(a

specialty

retailer

of

nutritional

health

and

wellness

products)

contributed

to

performance

as

the

company

filed

for

Chapter

11

but

successfully

sold

the

business

through

a

court-supervised

sale

process

that

resulted

in

significant

recovery

for

senior-

secured

creditors.

Major

detractors

from

performance

continued

to

be

in

industries

that

were

more

negatively

impacted

by

COVID-19

shutdowns

and

restrictions,

leading

the

companies

to

file

for

bankruptcy

amid

a

difficult

business

environment.

The

term

loan

of

Fieldwood

Energy

(a

producer

of

oil

and

gas)

declined

as

the

sharp

drop

in

oil

prices

negatively

impacted

the

company’s

cash

flow

and

liquidity.

FGI

Operating

(a

manufacturer

of

guns

and

ammunition)

detracted

from

performance

as

the

term

loan

was

marked

lower

due

to

reduced

recovery

expectations

as

the

company

conducted

an

auction

to

sell

its

assets.

Furthermore,

24

Hour

Fitness

(a

fitness

club

owner

and

operator)

detracted

from

performance

as

the

company

was

negatively

impacted

by

club

closures.

Top

10

Holdings

10/31/20

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

Franklin

Floating

Rate

Income

Fund

3.0%

Capital

Markets,

United

States

99

Cents

Only

Stores

LLC,

First

Lien,

Term

Loan

2.8%

Multiline

Retail,

United

States

FGI

Operating

Co.

LLC,

Term

Loan

2.5%

Household

Products,

United

States

Navistar,

Inc.,

Term

Loan

2.5%

Machinery,

United

States

Appvion

Operations,

Inc.,

Term

Loan

2.3%

Paper

&

Forest

Products,

United

States

CSC

Holdings

LLC,

March

2017

Refinancing

Term

Loan

2.1%

Media,

United

States

Sinclair

Television

Group,

Inc.,

Term

Loan

1.8%

Media,

United

States

CSM

Bakery

Solutions

Ltd.,

First

Lien,

Term

Loan

1.7%

Food

Products,

United

States

Gray

Television,

Inc.,

Term

Loan

1.7%

Media,

United

States

Ventia

Midco

Pty.

Ltd.,

2017

Refinancing

USD

Term

Loan

1.6%

Road

&

Rail,

Australia

Franklin

Floating

Rate

Daily

Access

Fund

12

franklintempleton.com

Annual

Report

The

Fund

continued

to

maintain

an

overweight

in

higher-

rated,

upper

tier

loans,

but

we

increased

our

allocation

to

middle

tier

loans

during

the

period.

Additionally,

we

reduced

our

CLO

holdings

and

modestly

increased

our

allocation

to

high-yield

bonds

for

additional

income

generation,

while

maintaining

settlement

liquidity.

In

addition,

we

maintained

the

Fund’s

investment

in

the

Franklin

Floating

Rate

Income

Fund,

which

allowed

the

Fund

to

have

further

exposure

to

credit,

while

providing

a

potential

source

of

liquidity.

In

an

effort

to

protect

against

volatility

in

the

credit

markets,

the

Fund

held

a

high-yield

bond

credit

default

swap

index

that

provided

synthetic

exposure

to

the

high-yield

bond

market.

Thank

you

for

your

continued

participation

in

Franklin

Floating

Rate

Daily

Access

Fund.

We

look

forward

to

serving

your

future

investment

needs.

Reema

Agarwal,

CFA

Justin

Ma,

CFA

Margaret

Chiu,

CFA

Judy

Sher

Portfolio

Management

Team

The

foregoing

information

reflects

our

analysis,

opinions

and

portfolio

holdings

as

of

October

31,

2020,

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.

Performance

Summary

as

of

October

31,

2020

Franklin

Floating

Rate

Daily

Access

Fund

13

franklintempleton.com

Annual

Report

The

performance

tables

and

graphs

do

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

10/31/20

1

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

2.25%

and

the

minimum

is

0%.

Class

A

:

2.25%

maximum

initial

sales

charge;

Advisor

Class:

no

sales

charges.

For

other

share

classes,

visit

franklintempleton.com.

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

.

Share

Class

Cumulative

Total

Return

2

Average

Annual

Total

Return

3

–

A

1-Year

-6.00%

-8.14%

5-Year

+6.85%

+0.87%

10-Year

+24.44%

+1.98%

Advisor

1-Year

-5.78%

-5.78%

5-Year

+8.18%

+1.58%

10-Year

+27.56%

+2.46%

30-Day

Standardized

Yield

5

Share

Class

Distribution

Rate

4

(with

fee

waiver)

(without

fee

waiver)

A

4.04%

3.04%

3.01%

Advisor

4.41%

3.36%

3.33%

See

page

15

for

Performance

Summary

footnotes.

Franklin

Floating

Rate

Daily

Access

Fund

Performance

Summary

14

franklintempleton.com

Annual

Report

See

page

15

for

Performance

Summary

footnotes.

Total

Return

Index

Comparison

for

a

Hypothetical

$10,000

Investment

1

Total

return

represents

the

change

in

value

of

an

investment

over

the

periods

shown.

It

includes

any

applicable

maximum

sales

charge,

Fund

expenses,

account

fees

and

reinvested

distributions.

The

unmanaged

index

includes

reinvestment

of

any

income

or

distributions.

It

differs

from

the

Fund

in

composition

and

does

not

pay

management

fees

or

expenses.

One

cannot

invest

directly

in

an

index.

Class

A

(11/1/10–10/31/20)

Advisor

Class

(11/1/10–10/31/20)

Franklin

Floating

Rate

Daily

Access

Fund

Performance

Summary

15

franklintempleton.com

Annual

Report

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

loss

of

principal.

Investors

should

be

aware

that

the

Fund’s

share

price

and

yield

will

fluctuate

with

market

conditions.

The

Fund

should

not

be

considered

alternative

to

money

market

funds

or

certificates

of

deposit

(CDs).

The

floating

rate

loans

and

debt

securities

in

which

the

Fund

invests

tend

to

be

rated

below

investment

grade.

Investing

in

higher-yielding,

lower-rated,

floating

rate

loans

and

debt

securities

involved

greater

risk

of

default,

which

could

result

in

loss

of

principal—a

risk

that

may

be

heightened

in

a

slowing

economy.

Interest

earned

on

floating

rate

loans

varies

with

changes

in

prevailing

interest

rates.

Therefore,

while

floating

rate

loans

offer

higher

interest

income

when

interest

rates

rise,

they

will

also

generate

less

income

when

interest

rates

decline.

Changes

in

the

financial

strength

of

a

bond

issuer

or

in

a

bond’s

credit

rating

may

affect

its

value.

Unexpected

events

and

their

aftermaths,

such

as

the

spread

of

deadly

diseases;

natural,

environmental

or

man-made

disasters;

financial,

political

or

social

disruptions;

terrorism

and

war;

and

other

tragedies

or

catastrophes,

can

cause

investor

fear

and

panic,

which

can

adversely

affect

the

economies

of

many

companies,

sectors,

nations,

regions

and

the

market

in

general,

in

ways

that

cannot

necessarily

be

foreseen.

The

Fund’s

prospectus

also

includes

a

description

of

the

main

investment

risks.

1.

The

Fund

has

a

fee

waiver

associated

with

any

investment

it

makes

in

a

Franklin

Templeton

money

fund

and/or

other

Franklin

Templeton

fund,

contractually

guaranteed

through

2/28/21.

Fund

investment

results

reflect

the

fee

waiver;

without

this

waiver,

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.

Distribution

rate

is

based

on

an

annualization

of

the

sum

of

the

respective

class’s

past

month’s

daily

distributions

and

the

maximum

offering

price

(NAV

for

Advisor

Class)

per

share

on

10/31/20.

5.

The

Fund’s

30-day

standardized

yield

is

calculated

over

a

trailing

30-day

period

using

the

yield

to

maturity

on

bonds

and/or

the

dividends

accrued

on

stocks.

It

may

not

equal

the

Fund’s

actual

income

distribution

rate,

which

reflects

the

Fund’s

past

dividends

paid

to

shareholders.

6.

Source:

Credit

Suisse

Group.

The

CS

LLI

is

designed

to

mirror

the

investable

universe

of

the

U.S.

dollar-denominated

leveraged

loan

market.

Loans

must

be

below

invest-

ment

grade

and

rated

no

higher

than

Baa/BB+

or

Ba1/BBB+

by

Moody’s

or

S&P.

7.

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.

Distributions

(11/1/19–10/31/20)

Share

Class

Net

Investment

Income

A

$0.354719

C

$0.323283

R6

$0.380117

Advisor

$0.373314

Total

Annual

Operating

Expenses

7

Share

Class

With

Fee

Waiver

Without

Fee

Waiver

A

0.89%

0.92%

Advisor

0.64%

0.67%

Your

Fund’s

Expenses

Franklin

Floating

Rate

Daily

Access

Fund

16

franklintempleton.com

Annual

Report

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.

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

184/366

to

reflect

the

one-half

year

period.

2.

Reflects

expenses

after

fee

waivers

and

expense

reimbursements.

Does

not

include

acquired

fund

fees

and

expenses.

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Share

Class

Beginning

Account

Value

5/1/20

Ending

Account

Value

10/31/20

Expenses

Paid

During

Period

5/1/20–10/31/20

1,2

Ending

Account

Value

10/31/20

Expenses

Paid

During

Period

5/1/20–10/31/20

1,2

a

Net

Annualized

Expense

Ratio

2

A

$1,000

$1,040.40

$4.75

$1,020.48

$4.70

0.93%

C

$1,000

$1,038.20

$6.81

$1,018.45

$6.75

1.33%

R6

$1,000

$1,041.90

$3.05

$1,022.15

$3.02

0.59%

Advisor

$1,000

$1,041.60

$3.48

$1,021.73

$3.44

0.68%

17

franklintempleton.com

Annual

Report

Franklin

Low

Duration

Total

Return

Fund

This

annual

report

for

Franklin

Low

Duration

Total

Return

Fund

covers

the

fiscal

year

ended

October

31,

2020

.

Your

Fund’s

Goal

and

Main

Investments

The

Fund

seeks

a

high

level

of

current

income

as

is

consistent

with

prudent

investing,

while

seeking

capital

preservation.

The

Fund

invests

primarily

in

investment-grade

debt

securities

and

investments,

including

government

and

corporate

debt

securities

and

mortgage-

and

asset-backed

securities,

targeting

an

estimated

average

portfolio

duration

of

three

years

or

less.

Performance

Overview

The

Fund’s

Class

A

shares

posted

a

+1.77%

cumulative

total

return

for

the

12

months

under

review.

In

comparison,

the

Fund’s

benchmark,

the

Bloomberg

Barclays

U.S.

Government/Credit

Index:

1-3

Year

Component,

posted

a

+3.39%

total

return.

1

The

index

measures

public

obligations

of

the

U.S.

Treasury

with

one

to

three

years

to

final

maturity

and

publicly

issued

debt

of

U.S.

government

agencies,

quasi-federal

corporations,

and

corporate

or

foreign

debt

guaranteed

by

the

U.S.

government.

You

can

find

more

of

the

Fund’s

performance

data

in

the

Performance

Summary

beginning

on

page

19

.

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

.

Investment

Strategy

We

seek

to

invest

in

a

combination

of

fixed

income

securities,

primarily

from

across

the

investment-grade

debt

universe.

We

analyze

securities

using

proprietary

and

nonproprietary

research

to

help

us

identify

attractive

investment

opportunities

across

the

entire

fixed

income

opportunity

set,

on

a

relative

basis.

When

making

investment

decisions,

we

evaluate

business

cycles,

yield

curves,

and

values

between

and

within

markets.

Through

a

low

duration

portfolio,

we

seek

to

position

the

Fund

to

be

less

affected

by

interest-rate

changes

than

a

fund

with

a

higher

duration.

In

addition,

we

may

use

derivative

transactions,

such

as

*Figures

reflect

certain

derivatives

held

in

the

portfolio

(or

their

underlying

reference

assets)

and

may

not

total

100%

or

may

be

negative

due

to

rounding,

use

of

deriva-

tives,

unsettled

trades

or

other

factors.

**Includes

non-agency

residential

mortgage

backed

securities,

collateralized

loan

obligations

and

consumer

loan

certificates.

forwards,

futures

contracts

and

swap

agreements

to

obtain

net

long

or

short

exposures

to

select

currencies,

interest

rates,

countries,

duration

or

credit

risks.

Manager’s

Discussion

Before

the

acceleration

of

the

novel

coronavirus

(COVID-19)

outbreak

in

February

2020,

fixed

income

markets

posted

strong

returns

as

spreads

generally

tightened

with

improving

market

sentiment,

muted

inflation,

low

interest-rates

and

strong

demand

for

yield.

As

the

seriousness

of

COVID-19

became

increasingly

apparent,

volatility

in

financial

markets

rose

sharply

and

market

liquidity

conditions

became

impaired.

As

a

result,

fixed

income

sector

spreads

saw

significant

widening

before

the

U.S.

Federal

Reserve

(Fed)

enacted

two

emergency

rate

cuts

and

launched

a

broad

range

of

liquidity-enhancing

vehicles.

In

March,

the

Fed,

lowered

the

federal

funds

target

rate

to

a

range

of

0.00%–

0.25%.

In

addition,

it

announced

unlimited,

open-ended

purchasing

of

government-backed

and

corporate

bonds

to

help

keep

markets

functioning.

Later

in

the

period,

the

Fed

announced

that

interest

rates

would

remain

low,

even

if

inflation

persistently

exceeded

the

Fed’s

2%

target

rate. In

August,

the

Fed

announced

that

it

would

be

adopting

what

Chairman

Powell

described

as

“flexible

average

inflation

targeting.”

Under

this

framework,

the

Fed

would

seek

to

obtain

an

average

level

of

inflation

(currently

set

at

2%)

over

time.

Portfolio

Composition*

10/31/20

%

of

Total

Net

Assets

Asset-Backed

Securities**

23.0%

Corporate

Bonds

22.4%

Commercial

Mortgage-Backed

Securities

18.4%

U.S.

Government

and

Agency

Securities

15.3%

Foreign

Government

and

Agency

Securities

4.9%

Municipal

Bonds

3.1%

Senior

Floating

Rate

Interests

3.0%

Mortgage-Backed

Securities

2.8%

Other

1.9%

Short-Term

Investments

&

Other

Net

Assets

5.2%

1.

Source:

Morningstar.

The

index

is

unmanaged

and

includes

reinvestment

of

any

income

or

distributions.

It

does

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.

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

57

.

Franklin

Low

Duration

Total

Return

Fund

18

franklintempleton.com

Annual

Report

Financial

markets

recovered

from

the

sharp

decline

experienced

earlier

in

the

year

as

the

Fed’s

actions

created

a

backstop

for

credit

markets,

which

bolstered

investor

confidence.

Against

this

backdrop,

fixed

income

spread

levels

have

generally

tightened

from

the

wide

levels

reached

in

March

2020.

U.S.

Treasury

yields

decreased

over

the

12-month

period,

with

most

of

the

rapid

decline

occurring

in

March

and

then

retracing

to

low

levels

again

in

August,

before

gradually

increasing

towards

period-end.

Fixed

income

markets

posted

positive

total

returns

during

the

12-months

ended

October

31,

2020,

but

performance

was

mixed

across

sectors.

Non-agency

residential-mortgage

backed

securities

(RMBS),

Treasury

Inflation-Protected

Securities

(TIPS),

collateralized

loan

obligations

(CLOs),

senior

secured

floating-rate

loans

and

agency

mortgage-

backed

securities

(MBS)

delivered

positive

excess

returns

and

outperformed

U.S.

Treasuries.

Emerging

market

bonds,

high-yield

and

investment-grade

corporate

credit

and

commercial

mortgage-backed

securities

(CMBS)

generally

lagged,

posting

negative

excess

returns.

During

the

period,

the

Fund’s

exposure

to

investment-

grade

corporate

credit

was

the

primary

contributor

to

the

Fund’s

performance

relative

to

its

benchmark.

The

Fund’s

exposures

to

CLOs,

non-dollar

emerging

market

debt

selection

and

non-U.S.

yield

curve

positioning

were

also

positive

for

returns.

In

contrast,

the

Fund’s

U.S.

yield

curve

positioning

detracted,

as

did

the

Fund’s

exposure

to

high-

yield

grade

corporate

credit,

TIPS,

sovereign

emerging

market

debt

and

foreign

currencies.

RMBS

and

investment-grade

corporate

bonds

remained

the

Fund’s

largest

allocations.

A

majority

of

RMBS

exposure

in

the

portfolio

is

in

credit

risk

transfers

(CRTs).

While

we

still

anticipate

RMBS

to

provide

strong

risk-adjusted

returns,

from

a

broader

perspective

the

potential

economic

headwinds

and

generally

supportive

valuations

balance

each

other

out.

Thus,

we

have

a

somewhat

neutral

view

on

the

sector

and

pared

exposure

amid

strength

in

the

market

towards

the

latter

part

of

the

period.

While

we

remain

generally

positive

on

the

investment-grade

corporate

bond

sector,

we

believe

it

has

become

less

compelling

given

tighter

valuations

and

uncertainty

over

the

path

of

the

economic

recovery.

We

reduced

our

TIPS

exposure

over

the

period

as

inflation

expectations

have

continued

to

recover

since

their

March

2020

lows,

while

adding

to

U.S.

Treasuries

and

taxable

municipal

bonds.

Thank

you

for

your

continued

participation

in

Franklin

Low

Duration

Total

Return

Fund.

We

look

forward

to

serving

your

future

investment

needs.

Sonal

Desai,

Ph.D.

David

Yuen,

CFA,

FRM

Tina

Chou

Kent

Burns,

CFA

Portfolio

Management

Team

The

foregoing

information

reflects

our

analysis,

opinions

and

portfolio

holdings

as

of

October

31,

2020,

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.

Performance

Summary

as

of

October

31,

2020

Franklin

Low

Duration

Total

Return

Fund

19

franklintempleton.com

Annual

Report

The

performance

tables

and

graphs

do

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

10/31/20

1

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

2.25%

and

the

minimum

is

0%.

Class

A

:

2.25%

maximum

initial

sales

charge;

Advisor

Class:

no

sales

charges.

For

other

share

classes,

visit

franklintempleton.com.

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

.

Share

Class

Cumulative

Total

Return

2

Average

Annual

Total

Return

3

–

A

1-Year

+1.77%

-0.50%

5-Year

+9.81%

+1.42%

10-Year

+17.53%

+1.40%

Advisor

1-Year

+2.10%

+2.10%

5-Year

+11.22%

+2.15%

10-Year

+20.55%

+1.89%

30-Day

Standardized

Yield

5

Share

Class

Distribution

Rate

4

(with

fee

waiver)

(without

fee

waiver)

A

2.69%

1.46%

1.21%

Advisor

2.98%

1.73%

1.47%

See

page

21

for

Performance

Summary

footnotes.

Franklin

Low

Duration

Total

Return

Fund

Performance

Summary

20

franklintempleton.com

Annual

Report

See

page

21

for

Performance

Summary

footnotes.

Total

Return

Index

Comparison

for

a

Hypothetical

$10,000

Investment

1

Total

return

represents

the

change

in

value

of

an

investment

over

the

periods

shown.

It

includes

any

applicable

maximum

sales

charge,

Fund

expenses,

account

fees

and

reinvested

distributions.

The

unmanaged

index

includes

reinvestment

of

any

income

or

distributions.

It

differs

from

the

Fund

in

composition

and

does

not

pay

management

fees

or

expenses.

One

cannot

invest

directly

in

an

index.

Class

A

(11/1/10–10/31/20)

Advisor

Class

(11/1/10–10/31/20)

Franklin

Low

Duration

Total

Return

Fund

Performance

Summary

21

franklintempleton.com

Annual

Report

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

loss

of

principal.

Interest

rate

movements

and

mortgage

prepayments

will

affect

the

Fund’s

share

price

and

yield.

Bond

prices

generally

move

in

the

opposite

direction

of

interest

rates.

Thus,

as

the

prices

of

bonds

in

the

Fund

adjust

to

a

rise

in

interest

rates,

the

Fund’s

share

price

may

decline.

Changes

in

the

financial

strength

of

a

bond

issuer

or

in

a

bond’s

credit

rating

may

affect

its

value.

The

risks

associated

with

higher-yielding,

low-

er-rated

securities

include

higher

risk

of

default

and

loss

of

principal.

Investment

in

foreign

securities

also

involves

special

risks,

including

currency

fluctuations,

and

political

and

economic

uncertainty.

Derivatives,

including

currency

management

strategies,

involve

costs

and

can

create

economic

leverage

in

the

portfolio

which

may

result

in

significant

volatility

and

cause

the

Fund

to

participate

in

losses

(as

well

as

gains)

on

an

amount

that

exceeds

the

Fund’s

initial

investment.

The

Fund

may

not

achieve

the

anticipated

benefits,

and

may

realize

losses

when

a

counterparty

fails

to

perform.

Unexpected

events

and

their

aftermaths,

such

as

the

spread

of

deadly

diseases;

natural,

environmental

or

man-made

disasters;

financial,

political

or

social

disruptions;

terrorism

and

war;

and

other

tragedies

or

catastrophes,

can

cause

investor

fear

and

panic,

which

can

adversely

affect

the

economies

of

many

companies,

sectors,

nations,

regions

and

the

market

in

general,

in

ways

that

cannot

necessarily

be

foreseen.

The

Fund’s

prospectus

also

includes

a

description

of

the

main

investment

risks.

1.

The

Fund

has

an

expense

reduction

and

a

fee

waiver

associated

with

any

investments

it

makes

in

a

Franklin

Templeton

money

fund

and/or

other

Franklin

Templeton

fund,

contractually

guaranteed

through

2/28/21.

Fund

investment

results

reflect

the

expense

reduction

and

fee

waiver;

without

these

reductions,

the

results

would

have

been

lower.

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.

Distribution

rate

is

based

on

an

annualization

of

the

sum

of

the

respective

class’s

past

month’s

daily

distributions

and

the

maximum

offering

price

(NAV

for

Advisor

Class)

per

share

on

10/31/20.

5.

The

Fund’s

30-day

standardized

yield

is

calculated

over

a

trailing

30-day

period

using

the

yield

to

maturity

on

bonds

and/or

the

dividends

accrued

on

stocks.

It

may

not

equal

the

Fund’s

actual

income

distribution

rate,

which

reflects

the

Fund’s

past

dividends

paid

to

shareholders.

6.

Source:

Morningstar.

The

Bloomberg

Barclays

U.S.

Government/Credit

Index:

1-3

Year

Component

includes

dollar-denominated

investment

grade

corporate

debt

and

non-native

currency

agency

and

local

authority

debt,

sovereign,

supranational,

and

taxable

municipal

debt,

public

obligations

of

the

U.S.

Treasury

with

at

least

one

year

up

to,but

not

including,

three

years

to

final

maturity,

and

publicly

issued

debt

of

U.S.

government

agencies,

quasi-federal

corporations,

and

corporate

or

foreign

debt

guaranteed

by

the

U.S.

government.

7.

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.

Distributions

(11/1/19–10/31/20)

Share

Class

Net

Investment

Income

A

$0.275074

C

$0.241889

R

$0.256241

R6

$0.306348

Advisor

$0.296770

Total

Annual

Operating

Expenses

7

Share

Class

With

Fee

Waiver

Without

Fee

Waiver

A

0.71%

0.96%

Advisor

0.46%

0.71%

Your

Fund’s

Expenses

Franklin

Low

Duration

Total

Return

Fund

22

franklintempleton.com

Annual

Report

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.

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

184/366

to

reflect

the

one-half

year

period.

2.

Reflects

expenses

after

fee

waivers

and

expense

reimbursements.

Does

not

include

acquired

fund

fees

and

expenses.

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Share

Class

Beginning

Account

Value

5/1/20

Ending

Account

Value

10/31/20

Expenses

Paid

During

Period

5/1/20–10/31/20

1,2

Ending

Account

Value

10/31/20

Expenses

Paid

During

Period

5/1/20–10/31/20

1,2

a

Net

Annualized

Expense

Ratio

2

A

$1,000

$1,064.50

$3.45

$1,021.80

$3.38

0.66%

C

$1,000

$1,063.10

$5.55

$1,019.76

$5.43

1.07%

R

$1,000

$1,063.50

$4.64

$1,020.64

$4.55

0.90%

R6

$1,000

$1,066.60

$1.57

$1,023.62

$1.54

0.30%

Advisor

$1,000

$1,066.20

$2.15

$1,023.06

$2.10

0.41%

23

franklintempleton.com

Annual

Report

Franklin

Total

Return

Fund

This

annual

report

for

Franklin

Total

Return

Fund

covers

the

period

ended

October

31,

2020

.

Your

Fund’s

Goal

and

Main

Investments

The

Fund

seeks

to

provide

high

current

income,

consistent

with

preservation

of

capital.

Capital

appreciation

over

the

long

term

is

a

secondary

goal.

The

Fund

invests

primarily

in

investment

grade

debt

securities

(including

unrated

securities

of

comparable

quality)

and

other

investments

that

provide

exposure

to

such

securities.

The

Fund

currently

focuses

on

government

and

corporate

debt

securities

and

mortgage-

and

asset-backed

securities,

but

may

invest

in

other

securities

and

investments,

such

as

floating-rate

corporate

loans

and

securities

and

municipal

securities.

*Figures

reflect

certain

derivatives

held

in

the

portfolio

(or

their

underlying

reference

assets)

and

may

not

total

100%

or

may

be

negative

due

to

rounding,

use

of

deriva-

tives,

unsettled

trades

or

other

factors.

**Includes

non-agency

residential

mortgage

backed

securities,

collateralized

loan

obligations

and

consumer

loan

certificates.

Performance

Overview

The

Fund’s

Class

A

shares

posted

a

+4.38%

cumulative

total

return

for

the

12

months

under

review.

In

comparison,

the

Fund’s

benchmark,

the

Bloomberg

Barclays

U.S.

Aggregate

Bond

Index

posted

a

+6.19%

total

return.

1

The

index

measures

the

U.S.

investment-grade,

fixed-rate,

taxable

bond

market

with

index

components

for

government

and

corporate,

mortgage

pass

through

and

asset-backed

securities.

You

can

find

the

Fund’s

long-term

performance

data

in

the

Performance

Summary

beginning

on

page

25

.

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

.

Investment

Strategy

We

seek

to

invest

in

a

combination

of

fixed

income

securities,

primarily

from

across

the

investment-grade

debt

universe.

We

analyze

securities

using

proprietary

and

nonproprietary

research

to

help

us

identify

attractive

investment

opportunities,

across

the

entire

fixed

income

opportunity

set,

on

a

relative

basis.

The

Fund

may

also

invest

up

to

20%

of

its

total

assets

in

noninvestment-

grade

debt

securities.

In

addition,

we

may

use

derivative

transactions,

such

as

currency

and

cross-currency

forwards,

futures

contracts

and

swap

agreements,

to

obtain

net

long

or

short

exposures

to

select

currencies,

interest

rates,

countries,

duration

or

credit

risks.

Manager’s

Discussion

Before

the

acceleration

of

the

novel

coronavirus

(COVID-19)

outbreak

in

February

2020,

fixed

income

markets

posted

strong

returns

as

spreads

generally

tightened

with

improving

market

sentiment,

muted

inflation,

low

interest-rates

and

strong

demand

for

yield.

As

the

seriousness

of

COVID-19

became

increasingly

apparent,

volatility

in

financial

markets

rose

sharply

and

market

liquidity

conditions

became

impaired.

As

a

result,

fixed

income

sector

spreads

saw

significant

widening

before

the

U.S.

Federal

Reserve

(Fed)

enacted

two

emergency

rate

cuts

and

launched

a

broad

range

of

liquidity-enhancing

vehicles.

In

March,

the

Fed

lowered

the

federal

funds

target

rate

to

a

range

of

0.00%–

0.25%.

In

addition,

it

announced

unlimited,

open-ended

purchasing

of

government-backed

and

corporate

bonds

to

help

keep

markets

functioning.

Later

in

the

period,

the

Fed

announced

that

interest

rates

would

remain

low,

even

if

inflation

persistently

exceeded

the

Fed’s

2%

target

rate. In

August,

the

Fed

announced

that

it

would

be

adopting

what

Chairman

Powell

described

as

“flexible

average

inflation

targeting.”

Under

this

framework,

the

Fed

would

seek

to

obtain

an

average

level

of

inflation

(currently

set

at

2%)

over

time.

Portfolio

Composition*

10/31/20

%

of

Total

Net

Assets

Corporate

Bonds

27.8%

Mortgage-Backed

Securities

21.0%

U.S.

Government

and

Agency

Securities

14.1%

Management

Investment

Companies

13.1%

Asset-Backed

Securities**

12.6%

Commercial

Mortgage-Backed

Securities**

9.3%

Foreign

Government

and

Agency

Securities

5.2%

Municipal

Bonds

4.0%

Senior

Floating

Rate

Interests

2.2%

Other

0.5%

Short-Term

Investments

&

Other

Net

Assets

(9.8)%

1.

Source:

Morningstar.

The

index

is

unmanaged

and

includes

reinvestment

of

any

income

or

distributions.

It

does

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.

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

94

.

Franklin

Total

Return

Fund

24

franklintempleton.com

Annual

Report

Fixed

income

markets

posted

positive

total

returns

during

the

12-months

ended

October

31,

2020,

but

performance

was

mixed

across

sectors.

Non-agency

residential-mortgage

backed

securities

(RMBS),

Treasury

Inflation-Protected

Securities

(TIPS),

collateralized

loan

obligations

(CLOs),

senior

secured

floating-rate

loans

and

agency

mortgage-

backed

securities

(MBS)

delivered

positive

excess

returns

and

outperformed

U.S.

Treasuries.

Emerging

market

bonds,

high-yield

and

investment-grade

corporate

credit

and

commercial

mortgage-backed

securities

(CMBS)

generally

lagged,

posting

negative

excess

returns.

During

the

period,

the

Fund’s

allocation

to

investment-

grade

corporate

credit

was

the

primary

contributor

to

the

Fund’s

performance

relative

to

its

benchmark.

Sovereign

emerging

market

(EM)

debt

selection,

non-dollar

EM

allocation

and

exposure

to

CLOs

also

benefited

results.

In

contrast,

the

Fund’s

exposure

to

high-yield

corporate

credit,

senior

secured

floating-rate

loans,

RMBS,

TIPS

and

foreign

currencies

detracted

from

relative

returns

as

did

both

the

Fund’s

U.S.

yield

curve

and

non-U.S.

yield

curve

positioning.

RMBS

and

investment-grade

corporate

bonds

remained

the

Fund’s

largest

allocations.

A

majority

of

RMBS

exposure

in

the

portfolio

is

in

credit

risk

transfers

(CRTs).

While

we

still

anticipate

RMBS

to

provide

strong

risk-adjusted

returns,

from

a

broader

perspective

the

potential

economic

headwinds

and

generally

supportive

valuations

balance

each

other

out.

Thus,

we

have

a

somewhat

neutral

view

on

the

sector

and

pared

exposure

amid

strength

in

the

market

towards

the

latter

part

of

the

period.

While

we

remain

generally

positive

on

the

investment-grade

corporate

bond

sector,

we

believe

it

has

become

less

compelling

given

tighter

valuations

and

uncertainty

over

the

path

of

the

economic

recovery.

We

reduced

our

TIPS

exposure

over

the

period

as

inflation

expectations

have

continued

to

recover

since

their

March

2020

lows,

while

adding

to

U.S.

Treasuries

and

taxable

municipal

bonds.

The

Fund’s

largest

allocation

was

in

investment-grade

corporate

bonds,

as

we

added

a

sizable

allocation

over

the

period.

We

increased

our

exposure

to

investment-

grade

corporate

credit,

taxable

municipal

bonds

and

U.S.

Treasuries

positions,

while

paring

our

exposure

to

fixed-rate

agency

mortgage-backed

securities,

CLOs

and

RMBS.

During

the

period,

the

portfolio

utilized

derivatives,

including

credit

default

and

currency

swaps,

currency

forwards,

Treasury

futures,

inflation

index

swaps

and

credit

default

swap

options,

principally

as

a

tool

for

efficient

portfolio

management

and

to

manage

overall

portfolio

risk.

These

derivative

transactions

may

provide

the

same,

or

similar,

net

long

or

short

exposure

to

select

currencies,

interest

rates,

countries,

duration

or

credit

risks

in

a

less

expensive

way

than

by

directly

purchasing

securities.

In

those

markets

where

non-derivative

securities

are

readily

available,

the

cost

difference

in

normal

market

conditions

may

be

small.

Thank

you

for

your

continued

participation

in

Franklin

Total

Return

Fund.

We

look

forward

to

serving

your

future

investment

needs.

Sonal

Desai,

Ph.D.

Tina

Chou

David

Yuen,

CFA,

FRM

Patrick

Klein,

Ph.D.

Portfolio

Management

Team

The

foregoing

information

reflects

our

analysis,

opinions

and

portfolio

holdings

as

of

October

31,

2020

,

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.

Performance

Summary

as

of

October

31,

2020

Franklin

Total

Return

Fund

25

franklintempleton.com

Annual

Report

The

performance

tables

and

graphs

do

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

10/31/20

1

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

3.75%

and

the

minimum

is

0%.

Class

A

:

3.75%

maximum

initial

sales

charge;

Advisor

Class:

no

sales

charges.

For

other

share

classes,

visit

franklintempleton.com.

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

.

Share

Class

Cumulative

Total

Return

2

Average

Annual

Total

Return

3

–

A

4

1-Year

+4.38%

+0.43%

5-Year

+17.54%

+2.51%

10-Year

+38.71%

+2.93%

Advisor

1-Year

+4.60%

+4.60%

5-Year

+18.90%

+3.52%

10-Year

+42.15%

+3.58%

30-Day

Standardized

Yield

6

Share

Class

Distribution

Rate

5

(with

fee

waiver)

(without

fee

waiver)

A

2.40%

1.77%

1.76%

Advisor

2.64%

2.08%

2.08%

See

page

27

for

Performance

Summary

footnotes.

Franklin

Total

Return

Fund

Performance

Summary

26

franklintempleton.com

Annual

Report

See

page

27

for

Performance

Summary

footnotes

.

Total

Return

Index

Comparison

for

a

Hypothetical

$10,000

Investment

1

Total

return

represents

the

change

in

value

of

an

investment

over

the

periods

shown.

It

includes

any

applicable

maximum

sales

charge,

Fund

expenses,

account

fees

and

reinvested

distributions.

The

unmanaged

index

includes

reinvestment

of

any

income

or

distributions.

It

differs

from

the

Fund

in

composition

and

does

not

pay

management

fees

or

expenses.

One

cannot

invest

directly

in

an

index.

Class

A

(11/1/10–10/31/20)

Advisor

Class

(11/1/10–10/31/20)

Franklin

Total

Return

Fund

Performance

Summary

27

franklintempleton.com

Annual

Report

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

loss

of

principal.

Interest

rate

movements

and

mortgage

prepayments

will

affect

the

Fund’s

share

price

and

yield.

Bond

prices

generally

move

in

the

opposite

direction

of

interest

rates.

Thus,

as

the

prices

of

bonds

in

the

Fund

adjust

to

a

rise

in

interest

rates,

the

Fund’s

share

price

may

decline.

Changes

in

the

financial

strength

of

a

bond

issuer

or

in

a

bond’s

credit

rating

may

affect

its

value.

The

risks

associated

with

higher-yielding,

low-

er-rated

securities

include

higher

risk

of

default

and

loss

of

principal.

Investment

in

foreign

securities

also

involves

special

risks,

including

currency

fluctuations,

and

political

and

economic

uncertainty.

Derivatives,

including

currency

management

strategies,

involve

costs

and

can

create

economic

leverage

in

the

portfolio

which

may

result

in

significant

volatility

and

cause

the

Fund

to

participate

in

losses

(as

well

as

gains)

on

an

amount

that

exceeds

the

Fund’s

initial

investment.

The

Fund

may

not

achieve

the

anticipated

benefits,

and

may

realize

losses

when

a

counterparty

fails

to

perform.

Unexpected

events

and

their

aftermaths,

such

as

the

spread

of

deadly

diseases;

natural,

environmental

or

man-made

disasters;

financial,

political

or

social

disruptions;

terrorism

and

war;

and

other

tragedies

or

catastrophes,

can

cause

investor

fear

and

panic,

which

can

adversely

affect

the

economies

of

many

companies,

sectors,

nations,

regions

and

the

market

in

general,

in

ways

that

cannot

necessarily

be

foreseen.

The

Fund’s

prospectus

also

includes

a

description

of

the

main

investment

risks.

1.

The

Fund

has

an

expense

reduction

and

a

fee

waiver

associated

with

any

investments

it

makes

in

a

Franklin

Templeton

money

fund

and/or

other

Franklin

Templeton

fund,

contractually

guaranteed

through

2/28/21.

Fund

investment

results

reflect

the

expense

reduction

and

fee

waiver;

without

these

reductions,

the

results

would

have

been

lower.

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

3/1/19,

these

shares

were

offered

at

a

higher

initial

sales

charge

of

4.25%,

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

3.75%.

5.

Distribution

rate

is

based

on

an

annualization

of

the

sum

of

the

respective

class’s

past

month’s

daily

distributions

and

the

maximum

offering

price

(NAV

for

Advisor

Class)

per

share

on

10/31/20.

6.

The

Fund’s

30-day

standardized

yield

is

calculated

over

a

trailing

30-day

period

using

the

yield

to

maturity

on

bonds

and/or

the

dividends

accrued

on

stocks.

It

may

not

equal

the

Fund’s

actual

income

distribution

rate,

which

reflects

the

Fund’s

past

dividends

paid

to

shareholders.

7.

Source:

Morningstar.

The

Bloomberg

Barclays

U.S.

Aggregate

Bond

Index

is

a

market

capitalization-weighted

index

representing

the

U.S.

investment-grade,

fixed-rate,

taxable

bond

market

with

index

components

for

government

and

corporate,

mortgage

pass

through

and

asset-backed

securities.

All

issues

included

are

SEC

registered,

tax-

able,

dollar

denominated

and

nonconvertible,

must

have

at

least

one

year

to

final

maturity

and

must

be

rated

investment

grade

(Baa3/BBB-/BBB-

or

higher)

using

the

middle

rating

of

Moody’s,

Standard

&

Poor’s

and

Fitch,

respectively.

8.

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.

Distributions

(11/1/19–10/31/20)

Share

Class

Net

Investment

Income

A

$0.305540

C

$0.267410

R

$0.281528

R6

$0.340973

Advisor

$0.329221

Total

Annual

Operating

Expenses

8

Share

Class

With

Fee

Waiver

Without

Fee

Waiver

A

0.88%

0.93%

Advisor

0.63%

0.68%

Your

Fund’s

Expenses

Franklin

Total

Return

Fund

28

franklintempleton.com

Annual

Report

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.

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

184/366

to

reflect

the

one-half

year

period.

2.

Reflects

expenses

after

fee

waivers

and

expense

reimbursements.

Does

not

include

acquired

fund

fees

and

expenses.

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Share

Class

Beginning

Account

Value

5/1/20

Ending

Account

Value

10/31/20

Expenses

Paid

During

Period

5/1/20–10/31/20

1,2

Ending

Account

Value

10/31/20

Expenses

Paid

During

Period

5/1/20–10/31/20

1,2

a

Net

Annualized

Expense

Ratio

2

A

$1,000

$1,058.70

$4.45

$1,020.82

$4.36

0.86%

C

$1,000

$1,057.20

$6.54

$1,018.78

$6.41

1.26%

R

$1,000

$1,057.70

$5.74

$1,019.56

$5.63

1.11%

R6

$1,000

$1,060.00

$2.49

$1,022.72

$2.44

0.48%

Advisor

$1,000

$1,059.40

$3.22

$1,022.01

$3.16

0.62%

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Adjustable

U.S.

Government

Securities

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

29

a

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

A

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$8.02

$8.10

$8.24

$8.40

$8.55

Income

from

investment

operations

a

:

Net

investment

income

..........................

0.125

b

0.140

b

0.088

b

0.026

0.025

Net

realized

and

unrealized

gains

(losses)

...........

(0.025)

0.021

(0.035)

(0.031)

(0.053)

Total

from

investment

operations

....................

0.100

0.161

0.053

(0.005)

(0.028)

Less

distributions

from:

Net

investment

income

..........................

(0.170)

(0.241)

(0.193)

(0.155)

(0.122)

Net

asset

value,

end

of

year

.......................

$7.95

$8.02

$8.10

$8.24

$8.40

Total

return

c

...................................

1.26%

2.01%

0.65%

(0.06)%

(0.32)%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.97%

0.95%

0.96%

0.95%

0.92%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

0.96%

d

0.94%

d

0.95%

d

0.94%

d

0.91%

d

Net

investment

income

...........................

1.57%

1.73%

1.07%

0.54%

0.43%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$460,621

$393,736

$419,055

$492,319

$667,671

Portfolio

turnover

rate

............................

35.03%

12.72%

11.39%

2.81%

11.49%

a

The

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

repurchas-

es

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Adjustable

U.S.

Government

Securities

Fund

(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

30

a

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

A1

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$8.02

$8.09

$8.24

$8.40

$8.54

Income

from

investment

operations

a

:

Net

investment

income

..........................

0.137

b

0.151

b

0.100

b

0.059

0.049

Net

realized

and

unrealized

gains

(losses)

...........

(0.024)

0.031

(0.044)

(0.051)

(0.054)

Total

from

investment

operations

....................

0.113

0.182

0.056

0.008

(0.005)

Less

distributions

from:

Net

investment

income

..........................

(0.182)

(0.252)

(0.206)

(0.168)

(0.135)

Net

asset

value,

end

of

year

.......................

$7.95

$8.02

$8.09

$8.24

$8.40

Total

return

c

...................................

1.41%

2.29%

0.68%

0.10%

(0.50)%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.82%

0.80%

0.80%

0.79%

0.77%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

0.81%

d

0.79%

d

0.79%

d

0.78%

d

0.76%

d

Net

investment

income

...........................

1.72%

1.88%

1.23%

0.70%

0.58%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$77,910

$86,471

$100,477

$121,012

$160,469

Portfolio

turnover

rate

............................

35.03%

12.72%

11.39%

2.81%

11.49%

a

The

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

repurchas-

es

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Adjustable

U.S.

Government

Securities

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

31

a

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

C

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$8.02

$8.09

$8.24

$8.40

$8.54

Income

from

investment

operations

a

:

Net

investment

income

(loss)

.....................

0.093

b

0.106

b

0.054

b

(0.014)

(0.011)

Net

realized

and

unrealized

gains

(losses)

...........

(0.024)

0.032

(0.044)

(0.024)

(0.041)

Total

from

investment

operations

....................

0.069

0.138

0.010

(0.038)

(0.052)

Less

distributions

from:

Net

investment

income

..........................

(0.138)

(0.208)

(0.160)

(0.122)

(0.088)

Net

asset

value,

end

of

year

.......................

$7.95

$8.02

$8.09

$8.24

$8.40

Total

return

c

...................................

0.86%

1.73%

0.13%

(0.45)%

(0.61)%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

1.37%

1.35%

1.36%

1.35%

1.32%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

1.36%

d

1.34%

d

1.35%

d

1.34%

d

1.31%

d

Net

investment

income

...........................

1.16%

1.33%

0.67%

0.14%

0.03%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$71,212

$84,685

$126,585

$189,634

$266,186

Portfolio

turnover

rate

............................

35.03%

12.72%

11.39%

2.81%

11.49%

a

The

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

repurchas-

es

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Adjustable

U.S.

Government

Securities

Fund

(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

32

a

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

R6

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$8.03

$8.11

$8.25

$8.41

$8.55

Income

from

investment

operations

a

:

Net

investment

income

..........................

0.154

b

0.169

b

0.121

b

0.074

0.066

Net

realized

and

unrealized

gains

(losses)

...........

(0.014)

0.021

(0.037)

(0.046)

(0.053)

Total

from

investment

operations

....................

0.140

0.190

0.084

0.028

0.013

Less

distributions

from:

Net

investment

income

..........................

(0.199)

(0.270)

(0.224)

(0.188)

(0.153)

Net

asset

value,

end

of

year

.......................

$7.97

$8.03

$8.11

$8.25

$8.41

Total

return

....................................

1.75%

2.39%

1.03%

0.34%

0.15%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.64%

0.62%

0.62%

0.58%

0.56%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

0.60%

c

0.58%

c

0.57%

c

0.55%

c

0.55%

c

Net

investment

income

...........................

1.93%

2.09%

1.45%

0.93%

0.79%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$33,530

$31,953

$36,026

$2,196

$2,374

Portfolio

turnover

rate

............................

35.03%

12.72%

11.39%

2.81%

11.49%

a

The

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

repurchas-

es

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Adjustable

U.S.

Government

Securities

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

33

a

Year

Ended

October

31,

2020

2019

2018

2017

2016

Advisor

Class

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$8.03

$8.10

$8.25

$8.41

$8.55

Income

from

investment

operations

a

:

Net

investment

income

..........................

0.146

b

0.160

b

0.108

b

0.052

0.046

Net

realized

and

unrealized

gains

(losses)

...........

(0.025)

0.031

(0.044)

(0.036)

(0.043)

Total

from

investment

operations

....................

0.121

0.191

0.064

0.016

0.003

Less

distributions

from:

Net

investment

income

..........................

(0.190)

(0.261)

(0.214)

(0.176)

(0.143)

Net

asset

value,

end

of

year

.......................

$7.96

$8.03

$8.10

$8.25

$8.41

Total

return

....................................

1.51%

2.39%

0.78%

0.20%

0.05%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.72%

0.70%

0.71%

0.70%

0.67%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

0.71%

c

0.69%

c

0.70%

c

0.69%

c

0.66%

c

Net

investment

income

...........................

1.82%

1.98%

1.32%

0.79%

0.68%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$98,851

$103,639

$112,441

$184,299

$227,599

Portfolio

turnover

rate

............................

35.03%

12.72%

11.39%

2.81%

11.49%

a

The

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

repurchas-

es

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Investors

Securities

Trust

Statement

of

Investments,

October

31,

2020

Franklin

Adjustable

U.S.

Government

Securities

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

34

a

a

Principal

Amount

a

Value

a

a

a

a

a

Commercial

Mortgage-Backed

Securities

1.7%

Diversified

Financial

Services

0.1%

a

GNMA

,

2010-12

,

FD

,

FRN

,

0.746

%

,

(

1-month

USD

LIBOR

+

0.6

%

),

1/16/40

.......

$

1,008,973

$

1,019,370

Thrifts

&

Mortgage

Finance

1.6%

a

FHLMC

,

4845

,

QF

,

FRN

,

0.448

%

,

(

1-month

USD

LIBOR

+

0.3

%

),

12/15/48

........

9,283,279

9,298,438

a

FNMA

,

2019-38

,

CF

,

FRN

,

0.599

%

,

(

1-month

USD

LIBOR

+

0.45

%

),

7/25/49

.......

2,740,823

2,759,358

12,057,796

a

a

a

a

a

Total

Commercial

Mortgage-Backed

Securities

(Cost

$12,971,706)

................

13,077,166

Mortgage-Backed

Securities

88.3%

b

Federal

Home

Loan

Mortgage

Corp.

(FHLMC)

Adjustable

Rate

14.1%

FHLMC,

2.007%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

9/01/35

..............

3,644,078

3,774,388

FHLMC,

3.04%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

7/01/43

...............

5,693,771

5,967,236

FHLMC,

3.106%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

11/01/40

.............

2,711,267

2,858,741

FHLMC,

3.166%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

5/01/45

..............

4,689,829

4,876,802

FHLMC,

3.182%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

7/01/43

..............

5,552,376

5,806,341

FHLMC,

3.392%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

7/01/35

..............

4,814,349

5,085,077

FHLMC,

3.408%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

9/01/37

..............

10,460,123

11,029,069

FHLMC,

3.555%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

6/01/37

..............

4,483,645

4,771,273

FHLMC,

2.134%

-

4.231%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

8/01/33

-

11/01/41

57,973,667

60,872,610

105,041,537

Federal

Home

Loan

Mortgage

Corp.

(FHLMC)

Fixed

Rate

6.6%

FHLMC

Pool,

15

Year,

2.5%,

3/01/35

.....................................

24,459,847

25,999,278

FHLMC

Pool,

15

Year,

2.5%,

3/01/35

.....................................

21,517,146

22,869,375

48,868,653

b

Federal

National

Mortgage

Association

(FNMA)

Adjustable

Rate

52.9%

FNMA,

2.117%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

11/01/34

..............

3,182,637

3,319,361

FNMA,

2.31%,

(6-month

USD

LIBOR

+/-

MBS

Margin),

12/01/34

................

2,964,551

3,070,038

FNMA,

2.526%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

2/01/36

...............

2,677,930

2,808,852

FNMA,

2.542%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

3/01/37

...............

2,643,817

2,766,774

FNMA,

2.617%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

3/01/46

...............

3,289,158

3,427,635

FNMA,

2.719%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

2/01/36

...............

3,837,184

3,996,172

FNMA,

2.828%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

11/01/42

..............

6,550,672

6,867,749

FNMA,

2.839%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

7/01/40

...............

2,414,830

2,549,488

FNMA,

2.858%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

2/01/36

...............

2,621,050

2,743,351

FNMA,

2.87%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

10/01/38

...............

5,224,240

5,491,942

FNMA,

2.875%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

10/01/38

..............

2,552,707

2,683,116

FNMA,

2.886%,

(1-year

CMT

T-Note

+/-

MBS

Margin),

5/01/36

.................

10,241,276

10,802,902

FNMA,

2.888%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

5/01/39

...............

3,782,699

3,939,555

FNMA,

2.932%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

5/01/38

...............

2,787,488

2,941,989

FNMA,

2.947%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

1/01/37

...............

2,914,067

3,074,889

FNMA,

2.96%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

11/01/34

...............

3,536,462

3,714,648

FNMA,

2.976%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

4/01/40

...............

6,353,518

6,681,065

FNMA,

2.977%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

9/01/42

...............

4,558,271

4,778,807

FNMA,

3.035%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

3/01/35

...............

4,687,886

4,917,046

FNMA,

3.064%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

4/01/44

...............

5,580,799

5,843,211

FNMA,

3.07%,

(1-year

CMT

T-Note

+/-

MBS

Margin),

6/01/36

..................

2,482,272

2,614,599

FNMA,

3.103%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

7/01/42

...............

6,705,803

7,059,618

FNMA,

3.114%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

8/01/44

...............

6,655,665

6,971,668

FNMA,

3.129%,

(COFI

11th

District

+/-

MBS

Margin),

4/01/34

..................

12,089,047

12,638,092

FNMA,

3.13%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

2/01/43

................

5,373,047

5,629,670

FNMA,

3.151%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

1/01/36

...............

2,639,309

2,762,886

FNMA,

3.176%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

7/01/42

...............

5,219,546

5,481,543

FNMA,

3.21%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

3/01/41

................

2,889,346

3,029,009

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Adjustable

U.S.

Government

Securities

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

35

a

a

Principal

Amount

a

Value

a

a

a

a

a

Mortgage-Backed

Securities

(continued)

b

Federal

National

Mortgage

Association

(FNMA)

Adjustable

Rate

(continued)

FNMA,

3.342%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

1/01/39

...............

$

3,378,958

$

3,541,736

FNMA,

3.391%,

(1-year

CMT

T-Note

+/-

MBS

Margin),

1/01/38

.................

2,931,551

3,095,638

FNMA,

3.728%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

5/01/40

...............

5,198,664

5,460,730

FNMA,

0.865%

-

6.75%,

(1-month

USD

LIBOR

+/-

MBS

Margin),

1/01/21

-

5/01/48

..

239,665,859

247,450,575

392,154,354

Federal

National

Mortgage

Association

(FNMA)

Fixed

Rate

14.6%

FNMA,

15

Year,

2%,

7/01/35

...........................................

19,299,707

20,023,800

FNMA,

15

Year,

2%,

10/01/35

..........................................

34,773,000

36,084,626

FNMA,

15

Year,

2.5%,

3/01/35

.........................................

11,951,089

12,699,547

FNMA,

15

Year,

2.5%,

6/01/35

.........................................

18,865,319

19,611,615

FNMA,

15

Year,

2.5%,

7/01/35

.........................................

19,256,304

20,055,989

108,475,577

b

Government

National

Mortgage

Association

(GNMA)

Adjustable

Rate

0.1%

GNMA

II,

2.25%

-

3.125%,

(1-year

CMT

T-Note

+/-

MBS

Margin),

9/20/33

-

5/20/36

..

488,748

505,437

505,437

Total

Mortgage-Backed

Securities

(Cost

$656,215,332)

...........................

655,045,558

Total

Long

Term

Investments

(Cost

$669,187,038)

...............................

668,122,724

a

a

a

a

a

Short

Term

Investments

9.4%

Shares

a

Money

Market

Funds

5.0%

c,d

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0%

......................

37,053,731

37,053,731

Total

Money

Market

Funds

(Cost

$37,053,731)

..................................

37,053,731

Principal

Amount

a

a

a

a

e

Repurchase

Agreements

4.4%

Joint

Repurchase

Agreement,

0.058%,

11/02/20

(Maturity

Value

$32,700,425)

BNP

Paribas

Securities

Corp.

(Maturity

Value

$17,641,225)

Deutsche

Bank

Securities,

Inc.

(Maturity

Value

$8,002,775)

HSBC

Securities

(USA),

Inc.

(Maturity

Value

$7,056,425)

Collateralized

by

U.S.

Government

Agency

Securities,

3.5%

-

5%,

9/20/45

-

3/20/50;

U.S.

Treasury

Bonds,

7.13%

-

8.13%,

2/15/21

-

11/15/24;

U.S.

Treasury

Bond,

Index

Linked,

2.38%,

1/15/25;

U.S.

Treasury

Note,

1.63%,

2/20/46;

and

U.S.

Treasury

Note,

Index

Linked,

0.13%,

4/15/21

(valued

at

$33,356,903)

..................

32,700,268

32,700,268

Total

Repurchase

Agreements

(Cost

$32,700,268)

...............................

32,700,268

Total

Short

Term

Investments

(Cost

$69,753,999

)

................................

69,753,999

a

Total

Investments

(Cost

$738,941,037)

99.4%

...................................

$737,876,723

Other

Assets,

less

Liabilities

0.6%

.............................................

4,247,120

Net

Assets

100.0%

...........................................................

$742,123,843

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Adjustable

U.S.

Government

Securities

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

36

See

Abbreviations

on

page

169

.

a

The

coupon

rate

shown

represents

the

rate

inclusive

of

any

caps

or

floors,

if

applicable,

in

effect

at

period

end.

b

Adjustable

Rate

Mortgage-Backed

Security

(ARM);

the

rate

shown

is

the

effective

rate

at

period

end.

ARM

rates

are

not

based

on

a

published

reference

rate

and

spread,

but

instead

pass-through

weighted

average

interest

income

inclusive

of

any

caps

or

floors,

if

applicable,

from

the

underlying

mortgage

loans

in

which

the

majority

of

mortgages

pay

interest

based

on

the

index

shown

at

their

designated

reset

dates

plus

a

spread,

less

the

applicable

servicing

and

guaranty

fee

(MBS

margin).

c

See

Note

3(f)

regarding

investments

in

affiliated

management

investment

companies.

d

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

e

See

Note

1(c)

regarding

joint

repurchase

agreement.

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Floating

Rate

Daily

Access

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

37

a

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

A

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$8.18

$8.70

$8.83

$8.84

$8.61

Income

from

investment

operations

a

:

Net

investment

income

..........................

0.332

b

0.441

b

0.396

0.307

0.401

Net

realized

and

unrealized

gains

(losses)

...........

(0.808)

(0.515)

(0.129)

(0.011)

0.228

Total

from

investment

operations

....................

(0.476)

(0.074)

0.267

0.296

0.629

Less

distributions

from:

Net

investment

income

..........................

(0.355)

(0.446)

(0.397)

(0.306)

(0.399)

Net

asset

value,

end

of

year

.......................

$7.35

$8.18

$8.70

$8.83

$8.84

Total

return

c

...................................

(6.00)%

(0.88)%

2.97%

3.51%

7.60%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.96%

0.89%

0.87%

0.87%

0.88%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

0.93%

d

0.86%

d

0.81%

d

0.82%

d

0.86%

d

Net

investment

income

...........................

4.33%

5.21%

4.53%

3.45%

4.72%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$717,021

$1,049,359

$1,344,473

$1,362,220

$1,359,862

Portfolio

turnover

rate

............................

32.39%

23.23%

e

58.07%

64.21%

34.10%

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

e

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Floating

Rate

Daily

Access

Fund

(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

38

a

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

C

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$8.18

$8.70

$8.83

$8.84

$8.61

Income

from

investment

operations

a

:

Net

investment

income

..........................

0.306

b

0.407

b

0.364

0.271

0.366

Net

realized

and

unrealized

gains

(losses)

...........

(0.804)

(0.514)

(0.131)

(0.010)

0.229

Total

from

investment

operations

....................

(0.498)

(0.107)

0.233

0.261

0.595

Less

distributions

from:

Net

investment

income

..........................

(0.323)

(0.413)

(0.363)

(0.271)

(0.365)

Net

asset

value,

end

of

year

.......................

$7.36

$8.18

$8.70

$8.83

$8.84

Total

return

c

...................................

(6.39)%

(1.39)%

2.68%

3.11%

7.18%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

1.36%

1.29%

1.27%

1.27%

1.28%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

1.33%

d

1.26%

d

1.21%

d

1.22%

d

1.26%

d

Net

investment

income

...........................

3.98%

4.81%

4.13%

3.05%

4.32%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$160,194

$296,134

$438,480

$550,797

$551,726

Portfolio

turnover

rate

............................

32.39%

23.23%

e

58.07%

64.21%

34.10%

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

e

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Floating

Rate

Daily

Access

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

39

a

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

R6

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$8.19

$8.71

$8.84

$8.84

$8.60

Income

from

investment

operations

a

:

Net

investment

income

..........................

0.363

b

0.463

b

0.427

0.338

0.422

Net

realized

and

unrealized

gains

(losses)

...........

(0.804)

(0.508)

(0.130)

(0.002)

0.245

Total

from

investment

operations

....................

(0.441)

(0.045)

0.297

0.336

0.667

Less

distributions

from:

Net

investment

income

..........................

(0.380)

(0.475)

(0.427)

(0.336)

(0.427)

Net

asset

value,

end

of

year

.......................

$7.37

$8.19

$8.71

$8.84

$8.84

Total

return

....................................

(5.69)%

(0.54)%

3.43%

3.85%

7.96%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.69%

0.57%

0.55%

0.52%

0.53%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

0.59%

c

0.53%

c

0.48%

c

0.47%

c

0.51%

c

Net

investment

income

...........................

4.71%

5.54%

4.86%

3.80%

5.07%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$9,568

$18,764

$142,075

$130,180

$12,333

Portfolio

turnover

rate

............................

32.39%

23.23%

d

58.07%

64.21%

34.10%

a

The

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

repurchas-

es

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

d

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Floating

Rate

Daily

Access

Fund

(continued)

franklintempleton.com

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The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

40

a

Year

Ended

October

31,

2020

2019

2018

2017

2016

Advisor

Class

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$8.18

$8.71

$8.84

$8.85

$8.61

Income

from

investment

operations

a

:

Net

investment

income

..........................

0.358

b

0.463

b

0.418

0.327

0.422

Net

realized

and

unrealized

gains

(losses)

...........

(0.806)

(0.525)

(0.129)

(0.010)

0.239

Total

from

investment

operations

....................

(0.448)

(0.062)

0.289

0.317

0.661

Less

distributions

from:

Net

investment

income

..........................

(0.373)

(0.468)

(0.419)

(0.327)

(0.421)

Net

asset

value,

end

of

year

.......................

$7.36

$8.18

$8.71

$8.84

$8.85

Total

return

....................................

(5.78)%

(0.74)%

3.35%

3.64%

8.00%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.71%

0.64%

0.62%

0.62%

0.63%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

0.68%

c

0.61%

c

0.56%

c

0.57%

c

0.61%

c

Net

investment

income

...........................

4.65%

5.46%

4.78%

3.70%

4.97%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$376,997

$858,071

$1,743,880

$1,672,724

$1,108,692

Portfolio

turnover

rate

............................

32.39%

23.23%

d

58.07%

64.21%

34.10%

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

d

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

Franklin

Investors

Securities

Trust

Statement

of

Investments,

October

31,

2020

Franklin

Floating

Rate

Daily

Access

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

41

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

1.5%

Aerospace

&

Defense

0.0%

a,b,c

Remington

Outdoor

Co.,

Inc.

.............................

United

States

1,808,932

$

—

b

Oil,

Gas

&

Consumable

Fuels

0.1%

a,b

Samson

Resources

II

LLC

...............................

United

States

432,778

1,460,626

b

Paper

&

Forest

Products

1.4%

a,b,c,d

Appvion

Operations,

Inc.

................................

United

States

1,219,956

18,106,975

b

Road

&

Rail

0.0%

a

Onsite

Rental

Group

Operations

Pty.

Ltd.

...................

Australia

11,563,612

—

Total

Common

Stocks

(Cost

$87,733,713)

......................................

19,567,601

Management

Investment

Companies

3.0%

Capital

Markets

3.0%

e

Franklin

Floating

Rate

Income

Fund

.......................

United

States

5,149,595

37,437,554

Total

Management

Investment

Companies

(Cost

$50,489,972)

....................

37,437,554

Principal

Amount

*

Corporate

Bonds

3.2%

Airlines

0.5%

f

Delta

Air

Lines,

Inc.

/

SkyMiles

IP

Ltd.

,

Senior

Secured

Note

,

144A,

4.5

%

,

10/20/25

.....................................

United

States

6,000,000

6,094,368

Construction

Materials

0.3%

f

Cemex

SAB

de

CV

,

Senior

Secured

Note

,

144A,

5.2

%

,

9/17/30

...

Mexico

3,875,000

4,098,355

Containers

&

Packaging

0.2%

f

Reynolds

Group

Issuer,

Inc.

/

Reynolds

Group

Issuer

LLC

/

Reynolds

Group

Issuer

Luxembourg

SA

,

Senior

Secured

Note

,

144A,

4

%

,

10/15/27

..........................................

United

States

2,500,000

2,540,625

Food

Products

0.0%

†

f

Chobani

LLC

/

Chobani

Finance

Corp.,

Inc.

,

Senior

Secured

Note

,

144A,

4.625

%

,

11/15/28

...............................

United

States

400,000

402,320

Hotels,

Restaurants

&

Leisure

0.0%

†

f

International

Game

Technology

plc

,

Senior

Secured

Note

,

144A,

5.25

%

,

1/15/29

.....................................

United

States

500,000

495,802

Household

Durables

0.1%

f

Williams

Scotsman

International,

Inc.

,

Senior

Secured

Note

,

144A,

4.625

%

,

8/15/28

.....................................

United

States

500,000

509,138

Media

0.3%

f

Diamond

Sports

Group

LLC

/

Diamond

Sports

Finance

Co.

,

Senior

Secured

Note

,

144A,

5.375

%

,

8/15/26

....................

United

States

3,600,000

2,103,750

f

Univision

Communications,

Inc.

,

Senior

Secured

Note

,

144A,

5.125

%

,

2/15/25

.....................................

United

States

1,555,556

1,531,250

3,635,000

Oil,

Gas

&

Consumable

Fuels

0.2%

f

Cheniere

Energy,

Inc.

,

Senior

Secured

Note

,

144A,

4.625

%

,

10/15/28

..........................................

United

States

2,400,000

2,481,000

Franklin

Investors

Securities

Trust

Statement

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Investments

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Floating

Rate

Daily

Access

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accompanying

notes

are

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integral

part

of

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financial

statements.

42

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Corporate

Bonds

(continued)

Road

&

Rail

1.5%

a,g

Onsite

Rental

Group

Operations

Pty.

Ltd.

,

PIK,

6.1

%

,

10/26/23

...

Australia

21,096,262

$

18,585,180

Wireless

Telecommunication

Services

0.1%

f

Vmed

O2

UK

Financing

I

plc

,

Senior

Secured

Bond

,

144A,

4.25

%

,

1/31/31

...........................................

United

Kingdom

1,430,000

1,433,575

Total

Corporate

Bonds

(Cost

$44,313,006)

......................................

40,275,363

h,i

Senior

Floating

Rate

Interests

83.8%

Aerospace

&

Defense

1.1%

AI

Convoy

(Luxembourg)

SARL,

Facility

USD

Term

Loan,

B,

4.5%,

(2-month

USD

LIBOR

+

3.5%;

6-month

USD

LIBOR

+

3.5%),

1/18/27

...........................................

Luxembourg

3,649,660

3,593,784

g

Alloy

FinCo

Ltd.,

Facility

Term

Loan,

B,

0.5%,

PIK,

(3-month

USD

LIBOR

+

0.5%),

3/06/25

...............................

Jersey

11,751,827

3,122,108

Dynasty

Acquisition

Co.,

Inc.,

2020

Term

Loan

,

B1,

3.72%,

(3-month

USD

LIBOR

+

3.5%),

4/06/26

..........

United

States

5,383,236

4,836,487

B2,

3.72%,

(3-month

USD

LIBOR

+

3.5%),

4/06/26

..........

United

States

2,894,213

2,600,262

14,152,641

a

a

a

a

a

a

Air

Freight

&

Logistics

0.1%

XPO

Logistics,

Inc.,

2018

Refinancing

Term

Loan,

2.148%,

(1-month

USD

LIBOR

+

2%),

2/24/25

............................

United

States

1,420,000

1,395,327

Airlines

2.4%

Allegiant

Travel

Co.,

Replacement

Term

Loan,

3.254%,

(3-month

USD

LIBOR

+

3%),

2/05/24

............................

United

States

14,595,405

13,816,959

American

Airlines,

Inc.,

2017

Term

Loan,

B,

2.148%,

(1-month

USD

LIBOR

+

2%),

12/15/23

...............................

United

States

2,000,000

1,672,730

Delta

Air

Lines,

Inc.

/

SkyMiles

IP

Ltd.,

Initial

Term

Loan,

4.75%,

(6-month

USD

LIBOR

+

3.75%),

10/20/27

.................

United

States

4,371,107

4,362,911

Delta

Air

Lines,

Inc.,

Term

Loan,

4.964%,

(3-month

USD

LIBOR

+

4.75%),

12/30/38

....................................

United

States

2,131,139

2,125,481

JetBlue

Airways

Corp.,

Term

Loan,

6.25%,

(3-month

USD

LIBOR

+

5.25%),

6/17/24

.....................................

United

States

1,302,467

1,298,911

Kestrel

Bidco

,

Inc.,

Term

Loan,

4%,

(3-month

USD

LIBOR

+

3%),

12/11/26

..........................................

Canada

8,114,598

7,185,883

30,462,875

a

a

a

a

a

a

Auto

Components

2.8%

Adient

US

LLC,

Initial

Term

Loan,

4.422%,

(1-month

USD

LIBOR

+

4.25%;

3-month

USD

LIBOR

+

4.25%),

5/06/24

.............

United

States

11,369,509

11,233,075

j,k

Highline

Aftermarket

Acquisition

LLC,

First

Lien,

Term

Loan,

TBD,

10/20/27

..........................................

United

States

2,146,526

2,100,912

Panther

BF

Aggregator

2

LP,

First

Lien,

Initial

Dollar

Term

Loan,

3.648%,

(1-month

USD

LIBOR

+

3.5%),

4/30/26

.............

Canada

12,927,945

12,591,819

TI

Group

Automotive

Systems

LLC,

Initial

US

Term

Loan

(2020),

4.5%,

(3-month

USD

LIBOR

+

3.75%),

12/16/24

.............

United

States

5,421,518

5,401,188

TRICO

Group

LLC,

First

Lien,

Term

Loan,

B3,

8.5%,

(3-month

USD

LIBOR

+

7.5%),

2/02/24

...............................

United

States

4,305,171

4,283,646

35,610,640

a

a

a

a

a

a

Automobiles

0.8%

Thor

Industries,

Inc.,

Initial

USD

Term

Loan,

3.938%,

(1-month

USD

LIBOR

+

3.75%),

2/01/26

..............................

United

States

10,451,927

10,399,668

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Floating

Rate

Daily

Access

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

43

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

h,i

Senior

Floating

Rate

Interests

(continued)

Banks

0.7%

Finastra

Ltd.,

First

Lien,

Dollar

Term

Loan,

4.5%,

(3-month

USD

LIBOR

+

3.5%),

6/13/24

...............................

United

Kingdom

9,775,869

$

9,249,048

Biotechnology

1.4%

Grifols

Worldwide

Operations

Ltd.,

Dollar

Term

Loan,

B,

2.094%,

(1-

week

USD

LIBOR

+

2%),

11/15/27

.......................

Ireland

4,798,851

4,688,789

Horizon

Therapeutics

USA,

Inc.,

Seventh

Amendment

Refinancing

Term

Loan,

2.188%,

(1-month

USD

LIBOR

+

2%),

5/22/26

.....

United

States

12,791,094

12,556,570

17,245,359

a

a

a

a

a

a

Capital

Markets

1.2%

k

Deerfield

Dakota

Holding

LLC,

First

Lien,

Initial

Dollar

Term

Loan,

4.75%,

(1-month

USD

LIBOR

+

3.75%),

4/09/27

.............

United

States

5,967,143

5,882,618

Russell

Investments

US

Institutional

Holdco,

Inc.,

Initial

Term

Loan,

3.75%,

(3-month

USD

LIBOR

+

2.75%),

6/01/23

.............

United

States

5,412,434

5,379,743

Vertical

Midco

GmbH,

USD

Term

Loan,

4.57%,

(6-month

USD

LIBOR

+

4.25%),

6/30/27

..............................

Germany

4,121,729

4,067,653

15,330,014

a

a

a

a

a

a

Chemicals

1.5%

Axalta

Coating

Systems

Dutch

Holding

B

BV

(Axalta

Coating

Systems

U.S.

Holdings,

Inc.),

Dollar

Term

Loan,

B3,

1.97%,

(3-month

USD

LIBOR

+

1.75%),

6/01/24

..................

Netherlands

5,315,044

5,171,086

Cyanco

Intermediate

2

Corp.,

First

Lien,

Initial

Term

Loan,

3.648%,

(1-month

USD

LIBOR

+

3.5%),

3/16/25

...................

United

States

5,482,479

5,390,840

Illuminate

Buyer

LLC,

Term

Loan,

4.148%,

(1-month

USD

LIBOR

+

4%),

6/30/27

.......................................

United

States

1,422,401

1,401,840

Nouryon

Finance

BV,

Initial

Dollar

Term

Loan,

Nouryon

Finance

BV

Note,

3.145%,

(1-month

USD

LIBOR

+

3%),

10/01/25

........

Netherlands

1,989,634

1,932,929

Univar

Solutions

USA,

Inc.,

Term

Loan

,

B3,

2.398%,

(1-month

USD

LIBOR

+

2.25%),

7/01/24

.........

United

States

4,406,001

4,324,776

B5,

2.148%,

(1-month

USD

LIBOR

+

2%),

7/01/26

...........

United

States

1,139,256

1,112,079

19,333,550

a

a

a

a

a

a

Commercial

Services

&

Supplies

1.4%

Allied

Universal

Holdco

LLC,

Initial

Term

Loan,

4.398%,

(1-month

USD

LIBOR

+

4.25%),

7/10/26

..........................

United

States

1,994,975

1,958,277

Harsco

Corp.,

Term

Loan,

B2,

3.25%,

(1-month

USD

LIBOR

+

2.25%),

12/06/24

....................................

United

States

1,254,574

1,250,911

Legalzoom.com,

Inc.,

First

Lien,

2018

Term

Loan,

4.648%,

(1-month

USD

LIBOR

+

4.5%),

11/21/24

..........................

United

States

8,292,738

8,178,713

Prime

Security

Services

Borrower

LLC,

First

Lien,

2019

Refinancing

Term

Loan,

B1,

4.25%,

(1-month

USD

LIBOR

+

3.25%;

3-month

USD

LIBOR

+

3.25%),

9/23/26

..........................

United

States

2,493,703

2,465,836

Staples,

Inc.,

2019

Refinancing

New

Term

Loan,

B1,

5.251%,

(3-month

USD

LIBOR

+

5%),

4/16/26

.....................

United

States

3,974,202

3,664,214

17,517,951

a

a

a

a

a

a

Communications

Equipment

1.1%

CommScope

,

Inc.,

Initial

Term

Loan,

3.398%,

(1-month

USD

LIBOR

+

3.25%),

4/06/26

...................................

United

States

13,879,234

13,440,511

Construction

Materials

0.2%

k

White

Cap

Buyer

LLC,

Initial

Closing

Date

Term

Loan,

4.5%,

(6-month

USD

LIBOR),

10/19/27

........................

United

States

3,000,000

2,961,960

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Floating

Rate

Daily

Access

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

44

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

h,i

Senior

Floating

Rate

Interests

(continued)

Containers

&

Packaging

2.4%

Berry

Global,

Inc.,

Term

Loan,

Y,

2.147%,

(1-month

USD

LIBOR

+

2%),

7/01/26

.......................................

United

States

19,644,058

$

19,047,566

BWay

Holding

Co.,

Initial

Term

Loan,

3.48%,

(3-month

USD

LIBOR

+

3.25%),

4/03/24

.....................................

United

States

10,518,957

9,861,523

Reynolds

Group

Holdings,

Inc.,

Incremental

U.S.

Term

Loan,

B-1,

2.898%,

(1-month

USD

LIBOR

+

2.75%),

2/05/23

............

United

States

844,562

830,251

29,739,340

a

a

a

a

a

a

Distributors

1.2%

Resideo

Funding,

Inc.,

Term

Loan,

A,

2.48%,

(3-month

USD

LIBOR

+

2.25%),

10/25/23

..................................

United

States

15,877,500

14,964,544

Diversified

Consumer

Services

0.1%

Sedgwick

Claims

Management

Services,

Inc.

(Lightning

Cayman

Merger

Sub

Ltd.),

Initial

Term

Loan,

3.398%,

(1-month

USD

LIBOR

+

3.25%),

12/31/25

..................................

United

States

1,695,685

1,631,860

Diversified

Financial

Services

1.1%

First

Eagle

Holdings,

Inc.,

2020

Refinancing

Term

Loan,

2.72%,

(3-month

USD

LIBOR

+

2.5%),

2/01/27

...................

United

States

3,814,119

3,714,265

Jefferies

Finance

LLC,

2020

Term

Loan,

4.5%,

(1-month

USD

LIBOR

+

3.75%),

9/30/27

...................................

United

States

3,000,000

2,973,750

k

Verscend

Holding

Corp.,

Term

Loan,

B,

4.648%,

(1-month

USD

LIBOR

+

4.5%),

8/27/25

...............................

United

States

7,873,820

7,747,130

14,435,145

a

a

a

a

a

a

Diversified

Telecommunication

Services

2.1%

Charter

Communications

Operating

LLC,

Term

Loan,

B2,

1.9%,

(1-month

USD

LIBOR

+

1.75%),

2/01/27

..................

United

States

1,694,981

1,654,598

Global

Tel

Link,

First

Lien,

Term

Loan,

4.398%,

(1-month

USD

LIBOR

+

4.25%),

11/29/25

.............................

United

States

11,453,642

9,993,303

Global

Tel

Link,

Second

Lien,

Term

Loan,

8.398%,

(1-month

USD

LIBOR

+

8.25%),

11/29/26

.............................

United

States

7,895,149

5,487,129

West

Corp.,

Initial

Term

Loan,

LOAN

Note,

B,

5%,

(1-month

USD

LIBOR

+

4%;

3-month

USD

LIBOR

+

4%),

10/10/24

..........

United

States

4,052,250

3,784,437

Zayo

Group

Holdings,

Inc.,

Initial

Dollar

Term

Loan,

3.148%,

(1-month

USD

LIBOR

+

3%),

3/09/27

.....................

United

States

5,870,401

5,668,840

26,588,307

a

a

a

a

a

a

Electric

Utilities

0.2%

EFS

Cogen

Holdings

I

LLC,

Term

Loan,

4.5%,

(3-month

USD

LIBOR

+

3.5%),

10/01/27

...................................

United

States

2,000,000

1,987,810

Entertainment

2.1%

Banijay

Entertainment

SAS,

Facility

USD

Term

Loan,

B,

3.89%,

(1-month

USD

LIBOR

+

3.75%),

3/01/25

..................

France

4,259,000

4,141,877

Diamond

Sports

Group

LLC,

Term

Loan,

3.4%,

(1-month

USD

LIBOR

+

3.25%),

8/24/26

..............................

United

States

12,955,715

8,124,335

Lions

Gate

Capital

Holdings

LLC,

Term

Loan,

A,

1.898%,

(1-month

USD

LIBOR

+

1.75%),

3/22/23

..........................

United

States

15,114,143

14,585,148

26,851,360

a

a

a

a

a

a

Food

&

Staples

Retailing

0.2%

Shearer's

Foods

LLC,

First

Lien,

Term

Loan,

4.75%,

(3-month

USD

LIBOR

+

4%),

9/23/27

................................

United

States

841,438

833,549

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Floating

Rate

Daily

Access

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

45

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

h,i

Senior

Floating

Rate

Interests

(continued)

Food

&

Staples

Retailing

(continued)

Whatabrands

LLC,

2020

Refinancing

Term

Loan,

2.897%,

(1-month

USD

LIBOR

+

2.75%),

7/31/26

..........................

United

States

1,274,563

$

1,246,153

2,079,702

a

a

a

a

a

a

Food

Products

3.2%

CSM

Bakery

Solutions

Ltd.,

First

Lien,

Term

Loan,

7.25%,

(3-month

USD

LIBOR

+

6.25%),

1/04/22

..........................

United

States

21,832,931

21,594,188

CSM

Bakery

Solutions

Ltd.,

Second

Lien,

Term

Loan,

11%,

(3-month

USD

LIBOR

+

10%),

2/04/22

...........................

United

States

7,826,457

7,492,963

JBS

USA

Lux

SA,

New

Term

Loan,

2.148%,

(1-month

USD

LIBOR

+

2%),

5/01/26

.......................................

Luxembourg

11,662,701

11,410,612

40,497,763

a

a

a

a

a

a

Health

Care

Providers

&

Services

6.1%

BrightSpring

Health

Services,

Term

Loan,

(1-month

USD

LIBOR),

3/05/26

...........................................

United

States

3,000,000

2,951,865

j,k

CNT

Holdings

I

Corp.,

First

Lien,

Term

Loan

Facility,

TBD,

10/16/27

United

States

858,610

850,200

DaVita,

Inc.,

Term

Loan,

B1,

1.898%,

(1-month

USD

LIBOR

+

1.75%),

8/12/26

.....................................

United

States

1,926,640

1,888,107

k

eResearchTechnology

,

Inc.,

First

Lien,

Initial

Term

Loan,

5.5%,

(1-month

USD

LIBOR

+

4.5%),

2/04/27

...................

United

States

5,697,812

5,672,884

Gentiva

Health

Services,

Inc.,

First

Lien,

Term

Loan,

B,

3.438%,

(1-month

USD

LIBOR

+

3.25%),

7/02/25

..................

United

States

6,467,500

6,346,234

Global

Medical

Response,

Inc.,

2018

New

Term

Loan,

5.25%,

(3-month

USD

LIBOR

+

4.25%),

3/14/25

..................

United

States

2,879,790

2,790,690

GNC

Holdings,

Inc.,

Second

Lien,

Term

Loan,

6.234%,

(3-month

USD

LIBOR),

10/30/26

................................

United

States

19,629,728

15,213,039

National

Mentor

Holdings,

Inc.,

First

Lien,

Initial

Term

Loan

,

4.4%,

(1-month

USD

LIBOR

+

4.25%),

3/09/26

..............

United

States

11,091,316

10,931,878

C,

4.4%,

(1-month

USD

LIBOR

+

4.25%),

3/09/26

...........

United

States

506,281

499,004

k

Navicure

,

Inc.,

First

Lien,

Initial

Term

Loan,

4.148%,

(1-month

USD

LIBOR

+

4%),

10/22/26

...............................

United

States

12,298,665

12,027,049

k

Pathway

Vet

Alliance

LLC,

First

Lien,

Initial

Term

Loan,

4.148%,

(1-month

USD

LIBOR

+

4%),

3/31/27

.....................

United

States

8,334,548

8,167,857

k

Phoenix

Guarantor,

Inc.,

First

Lien,

Term

Loan,

B1,

3.397%,

(1-month

USD

LIBOR

+

3.25%),

3/05/26

..................

United

States

6,920,761

6,714,592

Radiology

Partners,

Inc.,

First

Lien,

Term

Loan,

B,

4.811%,

(1-month

USD

LIBOR

+

4.25%;

3-month

USD

LIBOR

+

4.25%),

7/09/25

..

United

States

3,000,000

2,839,500

U.S.

Anesthesia

Partners,

Inc.,

First

Lien,

Initial

Term

Loan,

4%,

(3-month

USD

LIBOR

+

3%),

6/23/24

.....................

United

States

793,846

746,926

77,639,825

a

a

a

a

a

a

Health

Care

Technology

0.3%

Inovalon

Holdings,

Inc.,

Refinancing

Date

Term

Loan,

3.188%,

(1-month

USD

LIBOR

+

3%),

4/02/25

.....................

United

States

1,346,580

1,313,475

IQVIA,

Inc.,

Dollar

Term

Loan,

B1,

1.898%,

(1-month

USD

LIBOR

+

1.75%),

3/07/24

.....................................

United

States

2,380,833

2,355,537

3,669,012

a

a

a

a

a

a

Hotels,

Restaurants

&

Leisure

3.6%

1011778

BC

ULC

/

New

Red

Finance,

Inc.,

Term

Loan,

B4,

1.898%,

(1-month

USD

LIBOR

+

1.75%),

11/19/26

..................

Canada

2,984,962

2,871,474

24

Hour

Fitness

Worldwide,

Inc.,

Debtor-in-possession

New

Money

Term

Loan,

11%,

(3-month

USD

LIBOR

+

10%),

6/17/21

.......

United

States

7,606,731

5,958,581

24

Hour

Fitness

Worldwide,

Inc.,

Debtor-in-possession

Roll-Up

Term

Loan,

11%,

(3-month

USD

LIBOR

+

10%),

6/17/21

...........

United

States

6,973,121

5,462,255

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Floating

Rate

Daily

Access

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

46

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

h,i

Senior

Floating

Rate

Interests

(continued)

Hotels,

Restaurants

&

Leisure

(continued)

l

24

Hour

Fitness

Worldwide,

Inc.,

Term

Loan,

(1-month

USD

LIBOR

+

3.5%),

5/30/25

......................................

United

States

18,558,783

$

427,223

Boyd

Gaming

Corp.,

Refinancing

Term

Loan,

B,

2.344%,

(1-week

USD

LIBOR

+

2.25%),

9/15/23

..........................

United

States

9,607,862

9,365,167

Boyd

Gaming

Corp.,

Term

Loan,

A,

3.25%,

(1-week

USD

LIBOR

+

2.75%),

9/15/23

.....................................

United

States

3,958,627

3,916,587

Caesars

Resort

Collection

LLC,

Term

Loan

,

B,

2.898%,

(1-month

USD

LIBOR

+

2.75%),

12/23/24

.........

United

States

8,951,000

8,417,700

B1,

4.649%,

(1-month

USD

LIBOR

+

4.5%),

7/21/25

..........

United

States

1,727,201

1,677,008

Station

Casinos

LLC,

Facility

Term

Loan,

B1,

2.5%,

(1-month

USD

LIBOR

+

2.25%),

2/08/27

..............................

United

States

7,735,949

7,437,458

45,533,453

a

a

a

a

a

a

Household

Durables

0.7%

Playtika

Holding

Corp.,

Term

Loan,

B,

7%,

(3-month

USD

LIBOR

+

6%),

12/10/24

......................................

United

States

9,005,150

9,028,698

Household

Products

3.8%

a

FGI

Operating

Co.

LLC,

Last

Out

Initial

Term

Loan,

13%,

(3-month

USD

LIBOR

+

10%;

3-month

USD

LIBOR

+

11%),

5/17/21

.....

United

States

13,405,115

13,405,115

a,g,l

FGI

Operating

Co.

LLC,

Term

Loan,

PIK,

(3-month

USD

LIBOR

+

11%),

5/16/22

......................................

United

States

49,349,194

32,112,326

Knowlton

Development

Corp.,

Inc.,

2020

Initial

Term

Loan,

3.898%,

(1-month

USD

LIBOR

+

3.75%),

12/22/25

.................

Canada

2,980,559

2,920,948

48,438,389

a

a

a

a

a

a

Insurance

2.5%

Alliant

Holdings

Intermediate

LLC,

2018

Initial

Term

Loan,

2.898%,

(1-month

USD

LIBOR

+

2.75%),

5/09/25

..................

United

States

8,300,133

8,011,496

j,k

Alliant

Holdings

Intermediate

LLC,

Term

Loan,

B3,

TBD,

10/08/27

.

United

States

412,470

409,248

k

AssuredPartners

,

Inc.,

2020

February

Refinancing

Term

Loan,

3.648%,

(1-month

USD

LIBOR

+

3.5%),

2/12/27

.............

United

States

7,258,956

7,019,810

AssuredPartners

,

Inc.,

2020

June

Incremental

Term

Loan,

5.5%,

(1-month

USD

LIBOR

+

4.5%),

2/12/27

...................

United

States

495,938

494,822

Asurion

LLC,

Amendment

No.

14

Replacement

Term

Loan,

B4,

3.148%,

(1-month

USD

LIBOR

+

3%),

8/04/22

..............

United

States

6,486,499

6,394,974

Asurion

LLC,

Replacement

Term

Loan,

B6,

3.148%,

(1-month

USD

LIBOR

+

3%),

11/03/23

...............................

United

States

9,136,745

8,982,608

Asurion

LLC,

Second

Lien,

Replacement

Term

Loan,

B2,

6.648%,

(1-month

USD

LIBOR

+

6.5%),

8/04/25

...................

United

States

158,760

159,197

31,472,155

a

a

a

a

a

a

Internet

&

Direct

Marketing

Retail

0.2%

k

MH

Sub

I

LLC

(Micro

Holding

Corp.),

First

Lien,

Amendment

No.

2

Initial

Term

Loan,

Internet

Brands

Inc

Note,

3.648%,

(1-month

USD

LIBOR

+

3.5%),

9/13/24

...............................

United

States

2,493,573

2,419,938

IT

Services

4.9%

Aventiv

Technologies

LLC,

First

Lien,

Initial

Term

Loan,

5.5%,

(3-month

USD

LIBOR

+

4.5%),

11/01/24

..................

United

States

8,840,909

7,445,460

j,k

Barracuda

Networks,

Inc.,

Term

Loan,

TBD,

2/12/25

...........

United

States

2,958,903

2,914,520

Conduent

,

Inc.,

Term

Loan,

B,

2.648%,

(1-month

USD

LIBOR

+

2.5%),

12/07/23

.....................................

United

States

1,755,586

1,678,050

Go

Daddy

Operating

Co.

LLC,

Term

Loan,

B2,

1.897%,

(1-month

USD

LIBOR

+

1.75%),

2/15/24

..........................

United

States

3,636,747

3,558,339

Informatica

LLC,

Dollar

2020

Term

Loan,

3.398%,

(1-month

USD

LIBOR

+

3.25%),

2/25/27

..............................

United

States

5,343,150

5,178,848

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Floating

Rate

Daily

Access

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

47

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

h,i

Senior

Floating

Rate

Interests

(continued)

IT

Services

(continued)

k

Milano

Acquisition

Corp.,

Term

Loan,

B,

4.75%,

(3-month

USD

LIBOR

+

4%),

10/01/27

...............................

United

States

5,269,452

$

5,194,810

Neustar

,

Inc.,

First

Lien,

Term

Loan,

B5,

5.5%,

(1-month

USD

LIBOR

+

4.5%),

8/08/24

....................................

United

States

6,035,470

5,763,874

Pitney

Bowes,

Inc.,

Incremental

Term

Loan,

B,

5.65%,

(1-month

USD

LIBOR

+

5.5%),

1/07/25

...............................

United

States

6,826,090

6,748,443

TIBCO

Software,

Inc.,

Term

Loan,

B3,

3.9%,

(1-month

USD

LIBOR

+

3.75%),

6/30/26

.....................................

United

States

19,695,785

19,154,151

WEX,

Inc.,

Term

Loan,

B3,

2.398%,

(1-month

USD

LIBOR

+

2.25%),

5/15/26

...........................................

United

States

4,069,756

3,937,489

61,573,984

a

a

a

a

a

a

Leisure

Products

0.5%

NASCAR

Holdings

LLC,

Initial

Term

Loan,

2.902%,

(1-month

USD

LIBOR

+

2.75%),

10/19/26

.............................

United

States

6,798,484

6,631,581

Life

Sciences

Tools

&

Services

0.2%

Syneos

Health,

Inc.,

Replacement

Term

Loan,

B,

1.898%,

(1-month

USD

LIBOR

+

1.75%),

8/01/24

..........................

United

States

2,536,893

2,493,690

Machinery

3.1%

Altra

Industrial

Motion

Corp.,

Term

Loan,

2.148%,

(1-month

USD

LIBOR

+

2%),

10/01/25

...............................

United

States

7,750,659

7,618,665

Navistar,

Inc.,

Term

Loan,

B,

3.65%,

(1-month

USD

LIBOR

+

3.5%),

11/06/24

..........................................

United

States

32,118,794

31,885,933

39,504,598

a

a

a

a

a

a

Media

7.7%

Clear

Channel

Outdoor

Holdings,

Inc.,

Term

Loan,

B,

3.714%,

(2-month

USD

LIBOR

+

3.5%;

3-month

USD

LIBOR

+

3.5%),

8/21/26

...........................................

United

States

5,735,516

5,244,413

CSC

Holdings

LLC,

March

2017

Refinancing

Term

Loan,

2.398%,

(1-month

USD

LIBOR

+

2.25%),

7/17/25

..................

United

States

27,039,837

26,177,942

Gray

Television,

Inc.,

Term

Loan,

B2,

2.399%,

(1-month

USD

LIBOR

+

2.25%),

2/07/24

...................................

United

States

21,687,491

21,201,474

Nexstar

Broadcasting,

Inc.,

Term

Loan

,

B3,

2.402%,

(1-month

USD

LIBOR

+

2.25%),

1/17/24

.........

United

States

7,971,063

7,781,750

B4,

2.899%,

(1-month

USD

LIBOR

+

2.75%),

9/18/26

.........

United

States

1,599,473

1,562,686

Nielsen

Finance

LLC

(VNU,

Inc.),

Term

Loan,

B4,

2.147%,

(1-month

USD

LIBOR

+

2%),

10/04/23

...........................

United

States

3,241,221

3,174,582

Nielsen

Finance

LLC,

Dollar

Term

Loan,

B5,

4.75%,

(1-month

USD

LIBOR

+

3.75%),

6/04/25

..............................

United

States

1,512,595

1,511,839

Radiate

HoldCo

LLC,

Term

Loan,

B,

4.25%,

(1-month

USD

LIBOR

+

3.5%),

9/25/26

......................................

United

States

1,639,165

1,614,463

Sinclair

Television

Group,

Inc.,

Term

Loan,

B,

2.4%,

(1-month

USD

LIBOR

+

2.25%),

1/03/24

..............................

United

States

22,885,466

22,247,991

j,k

Virgin

Media

Bristol

LLC,

Term

Loan,

Q,

TBD,

1/31/29

..........

United

States

3,155,393

3,100,174

WideOpenWest

Finance

LLC,

Eighth

Amendment

Term

Loan,

B,

4.25%,

(1-month

USD

LIBOR

+

3.25%),

8/18/23

.............

United

States

3,890,917

3,824,460

97,441,774

a

a

a

a

a

a

Multiline

Retail

3.2%

g

99

Cents

Only

Stores

LLC,

First

Lien,

Term

Loan,

B2,

7.572%,

PIK,

(3-month

USD

LIBOR

+

6.5%),

1/13/22

...................

United

States

39,962,510

35,709,833

Harbor

Freight

Tools

USA,

Inc.,

Initial

Term

Loan

(2020),

4%,

(1-month

USD

LIBOR

+

3.25%),

10/19/27

.................

United

States

1,217,220

1,201,932

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Floating

Rate

Daily

Access

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

48

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

h,i

Senior

Floating

Rate

Interests

(continued)

Multiline

Retail

(continued)

Michaels

Stores,

Inc.,

2020

Refinancing

Term

Loan,

B,

4.25%,

(1-month

USD

LIBOR

+

3.5%),

10/01/27

..................

United

States

3,123,256

$

3,070,161

39,981,926

a

a

a

a

a

a

Oil,

Gas

&

Consumable

Fuels

2.5%

Centurion

Pipeline

Co.

LLC,

Initial

Term

Loan,

3.398%,

(1-month

USD

LIBOR

+

3.25%),

9/29/25

..........................

United

States

3,403,557

3,354,205

k,m

Fieldwood

Energy

LLC,

Debtor-in-possession

Facility

Term

Loan,

3.675%,

(1-month

USD

LIBOR;

1-month

USD

LIBOR

+

8.75%),

8/04/21

...........................................

United

States

724,518

728,140

l

Fieldwood

Energy

LLC,

First

Lien,

Closing

Date

Term

Loan,

(3-month

USD

LIBOR

+

5.25%),

4/11/22

..........................

United

States

74,275,433

16,340,595

UTEX

Industries,

Inc.,

Debtor-in-possession

Term

Loan,

10%,

(1-month

USD

LIBOR

+

9%),

2/08/21

.....................

United

States

1,961,017

1,970,822

l

UTEX

Industries,

Inc.,

First

Lien,

Initial

Term

Loan,

(3-month

USD

LIBOR

+

5%),

5/21/21

................................

United

States

30,608,607

9,427,451

l

UTEX

Industries,

Inc.,

Second

Lien,

Initial

Term

Loan,

(3-month

USD

LIBOR

+

7.25%),

5/20/22

..............................

United

States

253,504

6,338

31,827,551

a

a

a

a

a

a

Paper

&

Forest

Products

2.3%

c

Appvion

Operations,

Inc.,

Term

Loan,

7%,

(3-month

USD

LIBOR

+

6%),

6/12/26

.......................................

United

States

29,108,946

28,599,539

Personal

Products

0.8%

Coty,

Inc.,

USD

Term

Loan,

B,

2.39%,

(1-month

USD

LIBOR

+

2.25%),

4/07/25

.....................................

United

States

1,989,822

1,751,511

Sunshine

Luxembourg

VII

SARL,

Facility

Term

Loan,

B1,

5.25%,

(3-month

USD

LIBOR

+

4.25%),

10/01/26

.................

Luxembourg

7,781,200

7,720,429

9,471,940

a

a

a

a

a

a

Pharmaceuticals

0.9%

Bausch

Health

Cos.,

Inc.,

Initial

Term

Loan,

3.149%,

(1-month

USD

LIBOR

+

3%),

6/02/25

................................

United

States

11,917,128

11,660,195

Professional

Services

0.2%

k

Dun

&

Bradstreet

Corp.

(The),

Initial

Term

Loan

Borrowing,

3.906%,

(1-month

USD

LIBOR

+

3.75%),

2/06/26

..................

United

States

2,600,000

2,565,329

Real

Estate

Management

&

Development

0.2%

Cushman

&

Wakefield

U.S.

Borrower

LLC,

Replacement

Term

Loan,

2.898%,

(1-month

USD

LIBOR

+

2.75%),

8/21/25

............

United

States

1,990,000

1,910,400

Road

&

Rail

4.1%

Avis

Budget

Car

Rental

LLC,

New

Term

Loan,

B,

2.4%,

(1-month

USD

LIBOR

+

2.25%),

8/06/27

..........................

United

States

10,690,675

9,681,743

Genesee

&

Wyoming,

Inc.,

Initial

Term

Loan,

2.22%,

(3-month

USD

LIBOR

+

2%),

12/30/26

...............................

United

States

1,862,388

1,825,969

Kenan

Advantage

Group

Holdings

Corp.

(The),

Initial

Canadian

Term

Loan,

4%,

(1-month

USD

LIBOR

+

3%),

7/29/22

.............

United

States

1,079,860

1,045,380

Kenan

Advantage

Group

Holdings

Corp.

(The),

Initial

U.S.

Term

Loan,

4%,

(1-month

USD

LIBOR

+

3%),

7/29/22

.............

United

States

4,541,033

4,396,038

a

Onsite

Rental

Group

Operations

Pty.

Ltd.,

Term

Loan,

B,

5.5%,

(1-month

USD

LIBOR

+

4.5%),

10/26/22

..................

Australia

15,430,072

14,180,644

Ventia

Midco

Pty.

Ltd.,

2017

Refinancing

USD

Term

Loan,

B,

5%,

(3-month

USD

LIBOR

+

4%),

5/21/26

.....................

Australia

20,630,311

20,372,432

51,502,206

a

a

a

a

a

a

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Floating

Rate

Daily

Access

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

49

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

h,i

Senior

Floating

Rate

Interests

(continued)

Software

7.7%

k

athenahealth

,

Inc.,

First

Lien,

Term

Loan,

B,

4.75%,

(3-month

USD

LIBOR

+

4.5%),

2/11/26

...............................

United

States

10,221,116

$

10,029,470

k

Blackboard,

Inc.,

First

Lien,

Term

Loan,

B5,

7%,

(3-month

USD

LIBOR

+

6%),

6/30/24

................................

United

States

10,058,514

9,753,640

Ceridian

HCM

Holding,

Inc.,

Initial

Term

Loan,

2.594%,

(1-week

USD

LIBOR

+

2.5%),

4/30/25

...............................

United

States

3,875,417

3,758,554

DCert

Buyer,

Inc.,

First

Lien,

Initial

Term

Loan,

4.148%,

(1-month

USD

LIBOR

+

4%),

10/16/26

...........................

United

States

7,822,858

7,688,383

Epicor

Software

Corp.,

Term

Loan,

B,

5.25%,

(1-month

USD

LIBOR

+

4.25%),

7/30/27

...................................

United

States

2,022,148

2,017,345

j,k

Greeneden

U.S.

Holdings

I

LLC,

Term

Loan,

B,

TBD,

10/08/27

...

United

States

3,906,677

3,851,749

Hyland

Software,

Inc.,

First

Lien,

2018

Refinancing

Term

Loan,

4.25%,

(1-month

USD

LIBOR

+

3.5%),

7/01/24

..............

United

States

9,309,159

9,197,821

Idera

,

Inc.,

First

Lien,

Initial

Term

Loan,

5%,

(3-month

USD

LIBOR

+

4%),

6/28/24

.......................................

United

States

4,101,538

4,042,599

Ivanti

Software,

Inc.,

First

Lien,

Term

Loan,

5.25%,

(1-month

USD

LIBOR

+

4.25%),

1/20/24

..............................

United

States

1,990,267

1,984,356

LogMeIn,

Inc.,

First

Lien,

Initial

Term

Loan,

4.89%,

(1-month

USD

LIBOR

+

4.75%),

8/31/27

..............................

United

States

3,987,009

3,872,403

k

Mitchell

International,

Inc.,

First

Lien,

Amendment

No.

2

New

Term

Loan

Facility,

4.75%,

(1-month

USD

LIBOR

+

4.25%),

11/29/24

.

United

States

4,700,000

4,568,400

Perforce

Software,

Inc.,

First

Lien,

New

Term

Loan,

3.898%,

(1-month

USD

LIBOR

+

3.75%),

7/01/26

..................

United

States

5,656,754

5,526,450

Project

Alpha

Intermediate

Holding,

Inc.,

Term

Loan,

4.5%,

(3-month

USD

LIBOR

+

3.5%),

4/26/24

...........................

United

States

4,893,170

4,818,549

k

Quest

Software

US

Holdings,

Inc.,

First

Lien,

Initial

Term

Loan,

4.464%,

(3-month

USD

LIBOR

+

4.25%),

5/16/25

............

United

States

4,135,938

3,997,652

Solera

LLC

(Solera

Finance,

Inc.),

Dollar

Term

Loan,

2.916%,

(2-month

USD

LIBOR

+

2.75%),

3/03/23

..................

United

States

2,984,375

2,912,437

k

Sophia

LP,

Term

Loan,

B,

4.5%,

(3-month

USD

LIBOR

+

3.75%),

10/07/27

..........................................

United

States

3,885,859

3,829,592

Surf

Holdings

SARL,

First

Lien,

Dollar

Term

Loan,

3.75%,

(3-month

USD

LIBOR

+

3.5%),

3/05/27

...........................

Luxembourg

7,768,909

7,541,668

Ultimate

Software

Group,

Inc.

(The),

First

Lien,

2020

Incremental

Term

Loan,

4.75%,

(3-month

USD

LIBOR

+

4%),

5/04/26

......

United

States

954,506

950,631

Ultimate

Software

Group,

Inc.

(The),

First

Lien,

Initial

Term

Loan,

3.898%,

(1-month

USD

LIBOR

+

3.75%),

5/04/26

............

United

States

4,328,141

4,262,613

k

Veritas

US,

Inc.,

Term

Loan,

B,

6.5%,

(3-month

USD

LIBOR

+

5.5%),

9/01/25

...........................................

United

States

2,209,087

2,167,324

96,771,636

a

a

a

a

a

a

Specialty

Retail

0.3%

k

Petco

Animal

Supplies,

Inc.,

Term

Loan,

4.25%,

(3-month

USD

LIBOR

+

3.25%),

1/26/23

..............................

United

States

989,139

923,361

Wand

NewCo

3,

Inc.,

First

Lien,

Term

Loan,

B1,

3.148%,

(1-month

USD

LIBOR

+

3%),

2/05/26

............................

United

States

3,456,381

3,336,497

4,259,858

a

a

a

a

a

a

Technology

Hardware,

Storage

&

Peripherals

0.5%

Amentum

Government

Services

Holdings

LLC,

First

Lien,

Initial

Term

Loan,

3.648%,

(1-month

USD

LIBOR

+

3.5%),

1/29/27

........

United

States

2,693,250

2,595,054

j,k

Amentum

Government

Services

Holdings

LLC,

Incremental

Term

Loan,

TBD,

1/29/27

..................................

United

States

3,100,650

3,042,513

5,637,567

a

a

a

a

a

a

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Floating

Rate

Daily

Access

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

50

See

Abbreviations

on

page

169

.

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

h,i

Senior

Floating

Rate

Interests

(continued)

Textiles,

Apparel

&

Luxury

Goods

0.2%

Champ

Acquisition

Corp.,

First

Lien,

Initial

Term

Loan,

5.72%,

(3-month

USD

LIBOR

+

5.5%),

12/19/25

..................

United

States

3,021,120

$

2,850,713

Total

Senior

Floating

Rate

Interests

(Cost

$1,206,014,241)

........................

1,058,761,332

Asset-Backed

Securities

2.2%

Diversified

Financial

Services

2.2%

f,n

Alinea

CLO

Ltd.

,

2018-1A

,

C

,

144A,

FRN

,

2.118

%

,

(

3-month

USD

LIBOR

+

1.9

%

),

7/20/31

...............................

United

States

7,000,000

6,795,563

f,n

Dryden

40

Senior

Loan

Fund

,

2015-40A

,

CR

,

144A,

FRN

,

2.38

%

,

(

3-month

USD

LIBOR

+

2.1

%

),

8/15/31

...................

United

States

2,000,000

1,955,767

f,n

Galaxy

XXV

CLO

Ltd.

,

2018-25A

,

C

,

144A,

FRN

,

2.215

%

,

(

3-month

USD

LIBOR

+

2

%

),

10/25/31

...........................

United

States

500,000

485,729

f,n

Madison

Park

Funding

XI

Ltd.

,

2013-11A

,

CR

,

144A,

FRN

,

2.409

%

,

(

3-month

USD

LIBOR

+

2.2

%

),

7/23/29

...................

United

States

2,040,000

2,006,072

f,n

Voya

CLO

Ltd.

,

2018-4A,

B,

144A,

FRN,

2.087%,

(3-month

USD

LIBOR

+

1.85%),

1/15/32

...........................................

United

States

14,285,714

14,114,698

2018-4A,

C1,

144A,

FRN,

2.787%,

(3-month

USD

LIBOR

+

2.55%),

1/15/32

.....................................

United

States

3,000,000

2,971,444

28,329,273

a

a

a

a

a

a

Total

Asset-Backed

Securities

(Cost

$28,827,514)

...............................

28,329,273

Shares/Units

Escrows

and

Litigation

Trusts

0.0%

a

Millennium

Corporate

Claim

Trust,

Escrow

Account

............

United

States

13,585,837

—

a

Millennium

Lender

Claim

Trust,

Escrow

Account

..............

United

States

13,585,837

—

a,c,d

Remington

Outdoor

Co.,

Inc.,

Litigation

Units

.................

United

States

170,300

—

Total

Escrows

and

Litigation

Trusts

(Cost

$–)

...................................

—

Total

Long

Term

Investments

(Cost

$1,417,378,446)

.............................

1,184,371,123

a

Short

Term

Investments

5.5%

a

a

Country

Shares

a

Value

a

Money

Market

Funds

5.5%

e,o

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0%

........

United

States

69,832,875

69,832,875

Total

Money

Market

Funds

(Cost

$69,832,875)

..................................

69,832,875

Total

Short

Term

Investments

(Cost

$69,832,875

)

................................

69,832,875

a

Total

Investments

(Cost

$1,487,211,321)

99.2%

..................................

$1,254,203,998

Other

Assets,

less

Liabilities

0.8%

.............................................

9,576,108

Net

Assets

100.0%

...........................................................

$1,263,780,106

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Floating

Rate

Daily

Access

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

51

*

The

principal

amount

is

stated

in

U.S.

dollars

unless

otherwise

indicated.

†

Rounds

to

less

than

0.1%

of

net

assets.

a

Fair

valued

using

significant

unobservable

inputs.

See

Note

15

regarding

fair

value

measurements.

b

Non-income

producing.

c

See

Note

12

regarding

holdings

of

5%

voting

securities.

d

See

Note

9

regarding

restricted

securities.

e

See

Note

3(f)

regarding

investments

in

affiliated

management

investment

companies.

f

Security

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

a

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

October

31,

2020,

the

aggregate

value

of

these

securities

was

$50,019,456,

representing

4.0%

of

net

assets.

g

Income

may

be

received

in

additional

securities

and/or

cash.

h

See

Note

1(j)

regarding

senior

floating

rate

interests.

i

The

coupon

rate

shown

represents

the

rate

at

period

end.

j

A

portion

or

all

of

the

security

represents

an

unsettled

loan

commitment.

The

coupon

rate

is

to-be

determined

(TBD)

at

the

time

of

the

settlement

and

will

be

based

upon

a

reference

index/floor

plus

a

spread.

k

A

portion

or

all

of

the

security

purchased

on

a

delayed

delivery

basis.

See

Note

1(j).

l

See

Note

7

regarding

defaulted

securities.

m

See

Note

10

regarding

unfunded

loan

commitments.

n

The

coupon

rate

shown

represents

the

rate

inclusive

of

any

caps

or

floors,

if

applicable,

in

effect

at

period

end.

o

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Low

Duration

Total

Return

Fund

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The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

52

a

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

A

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$9.65

$9.60

$9.84

$9.89

$9.91

Income

from

investment

operations

a

:

Net

investment

income

..........................

0.244

b

0.290

0.237

0.170

0.151

Net

realized

and

unrealized

gains

(losses)

...........

(0.079)

0.068

(0.185)

(0.023)

0.031

Total

from

investment

operations

....................

0.165

0.358

0.052

0.147

0.182

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

..

(0.275)

(0.308)

(0.292)

(0.197)

(0.202)

Net

asset

value,

end

of

year

.......................

$9.54

$9.65

$9.60

$9.84

$9.89

Total

return

c

...................................

1.77%

3.78%

0.54%

1.50%

1.88%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.94%

0.94%

0.96%

0.96%

0.95%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

0.67%

d

0.68%

d

0.72%

d

0.80%

d

0.80%

d

Net

investment

income

...........................

2.58%

2.99%

2.43%

1.73%

1.57%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$1,778,666

$1,631,123

$1,499,579

$1,519,902

$1,524,437

Portfolio

turnover

rate

............................

93.23%

51.93%

e

56.12%

50.40%

44.76%

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

....

67.97%

f

51.93%

e,f

44.01%

f

45.29%

f

44.76%

f

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

e

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

f

See

Note

1

(

i

)

regarding

mortgage

dollar

rolls.

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Low

Duration

Total

Return

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

53

a

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

C

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$9.61

$9.56

$9.80

$9.86

$9.90

Income

from

investment

operations

a

:

Net

investment

income

..........................

0.205

b

0.251

0.168

0.121

0.113

Net

realized

and

unrealized

gains

(losses)

...........

(0.074)

0.068

(0.155)

(0.015)

0.024

Total

from

investment

operations

....................

0.131

0.319

0.013

0.106

0.137

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

..

(0.242)

(0.269)

(0.253)

(0.166)

(0.177)

Net

asset

value,

end

of

year

.......................

$9.50

$9.61

$9.56

$9.80

$9.86

Total

return

c

...................................

1.42%

3.38%

0.14%

1.08%

1.41%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

1.34%

1.34%

1.36%

1.36%

1.35%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

1.07%

d

1.08%

d

1.12%

d

1.20%

d

1.20%

d

Net

investment

income

...........................

2.18%

2.59%

2.03%

1.33%

1.17%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$117,893

$135,372

$130,206

$174,754

$218,066

Portfolio

turnover

rate

............................

93.23%

51.93%

e

56.12%

50.40%

44.76%

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

....

67.97%

f

51.93%

e,f

44.01%

f

45.29%

f

44.76%

f

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

e

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

f

See

Note

1

(

i

)

regarding

mortgage

dollar

rolls.

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Low

Duration

Total

Return

Fund

(continued)

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notes

are

an

integral

part

of

these

financial

statements.

54

a

Year

Ended

October

31,

2020

Year

Ended

October

31,

2019

a

Class

R

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

........................................................

$9.65

$9.65

Income

from

investment

operations

b

:

Net

investment

income

...............................................................

0.219

c

0.012

Net

realized

and

unrealized

gains

(losses)

................................................

(0.073)

0.001

Total

from

investment

operations

.........................................................

0.146

0.013

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

.......................................

(0.256)

(0.013)

Net

asset

value,

end

of

year

............................................................

$9.54

$9.65

Total

return

d

........................................................................

1.57%

0.14%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

...........................................

1.17%

1.19%

Expenses

net

of

waiver

and

payments

by

affiliates

............................................

0.90%

e

0.93%

e

Net

investment

income

................................................................

2.33%

2.73%

Supplemental

data

Net

assets,

end

of

year

(000’s)

..........................................................

$95

$18

Portfolio

turnover

rate

.................................................................

93.23%

51.93%

f

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

.........................................

67.97%

g

51.93%

f,g

a

For

the

period

October

15,

2019

(effective

date)

to

October

31,

2019.

b

The

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.

c

Based

on

average

daily

shares

outstanding.

d

Total

return

is

not

annualized

for

periods

less

than

one

year.

e

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

f

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

g

See

Note

1

(

i

)

regarding

mortgage

dollar

rolls.

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Low

Duration

Total

Return

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

55

a

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

R6

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$9.71

$9.66

$9.90

$9.94

$9.95

Income

from

investment

operations

a

:

Net

investment

income

..........................

0.277

b

0.326

0.271

0.214

0.195

Net

realized

and

unrealized

gains

(losses)

...........

(0.071)

0.071

(0.178)

(0.025)

0.021

Total

from

investment

operations

....................

0.206

0.397

0.093

0.189

0.216

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

..

(0.306)

(0.347)

(0.333)

(0.229)

(0.226)

Net

asset

value,

end

of

year

.......................

$9.61

$9.71

$9.66

$9.90

$9.94

Total

return

....................................

2.20%

4.17%

0.96%

1.92%

2.22%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.58%

0.56%

0.55%

0.53%

0.53%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

0.30%

c

0.30%

c

0.31%

c

0.39%

c

0.42%

c

Net

investment

income

...........................

2.92%

3.37%

2.84%

2.14%

1.95%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$553,603

$1,003,208

$1,017,856

$591,622

$553,233

Portfolio

turnover

rate

............................

93.23%

51.93%

d

56.12%

50.40%

44.76%

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

....

67.97%

e

51.93%

d,e

44.01%

e

45.29%

e

44.76%

e

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

d

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

e

See

Note

1

(

i

)

regarding

mortgage

dollar

rolls.

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Low

Duration

Total

Return

Fund

(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

56

a

Year

Ended

October

31,

2020

2019

2018

2017

2016

Advisor

Class

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$9.70

$9.65

$9.89

$9.94

$9.95

Income

from

investment

operations

a

:

Net

investment

income

..........................

0.269

b

0.315

0.264

0.209

0.184

Net

realized

and

unrealized

gains

(losses)

...........

(0.073)

0.069

(0.187)

(0.042)

0.025

Total

from

investment

operations

....................

0.196

0.384

0.077

0.167

0.209

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

..

(0.297)

(0.334)

(0.317)

(0.217)

(0.219)

Net

asset

value,

end

of

year

.......................

$9.60

$9.70

$9.65

$9.89

$9.94

Total

return

....................................

2.10%

4.04%

0.80%

1.70%

2.14%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.69%

0.69%

0.71%

0.71%

0.70%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

0.42%

c

0.43%

c

0.47%

c

0.55%

c

0.55%

c

Net

investment

income

...........................

2.83%

3.24%

2.68%

1.98%

1.82%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$229,233

$254,314

$214,339

$428,838

$224,887

Portfolio

turnover

rate

............................

93.23%

51.93%

d

56.12%

50.40%

44.76%

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

....

67.97%

e

51.93%

d,e

44.01%

e

45.29%

e

44.76%

e

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

d

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

e

See

Note

1

(

i

)

regarding

mortgage

dollar

rolls.

Franklin

Investors

Securities

Trust

Statement

of

Investments,

October

31,

2020

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

57

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

0.0%

Aerospace

&

Defense

0.0%

a,b

Remington

Outdoor

Co.,

Inc.

.............................

United

States

170,787

$

—

b

Multiline

Retail

0.0%

a,b,c

K2016470219

South

Africa

Ltd.,

A

.........................

South

Africa

12,326,925

—

a,b,c

K2016470219

South

Africa

Ltd.,

B

.........................

South

Africa

1,226,701

—

—

Oil,

Gas

&

Consumable

Fuels

0.0%

†

Riviera

Resources,

Inc.

.................................

United

States

2,835

863

Paper

&

Forest

Products

0.0%

†

a,b,c

Appvion

Operations,

Inc.

................................

United

States

24,739

367,190

Verso

Corp.,

A

........................................

United

States

1,387

10,791

377,981

Road

&

Rail

0.0%

a

Onsite

Rental

Group

Operations

Pty.

Ltd.

...................

Australia

190,692

—

Specialty

Retail

0.0%

†

Party

City

Holdings,

Inc.

................................

United

States

57,585

114,594

Total

Common

Stocks

(Cost

$4,279,536)

.......................................

493,438

Management

Investment

Companies

0.7%

Capital

Markets

0.7%

d

Franklin

Floating

Rate

Income

Fund

.......................

United

States

2,389,308

17,370,266

Total

Management

Investment

Companies

(Cost

$23,310,296)

....................

17,370,266

Warrants

Warrants

0.0%

†

Oil,

Gas

&

Consumable

Fuels

0.0%

†

a,b

Battalion

Oil

Corp.,

A,

10/08/22

...........................

United

States

1,093

9

a,b

Battalion

Oil

Corp.,

B,

10/08/22

...........................

United

States

1,366

4

a,b

Battalion

Oil

Corp.,

C,

10/08/22

...........................

United

States

1,757

2

15

Paper

&

Forest

Products

0.0%

†

Verso

Corp.,

7/25/23

...................................

United

States

146

75

Total

Warrants

(Cost

$—)

.....................................................

90

Principal

Amount

*

Corporate

Bonds

22.4%

Air

Freight

&

Logistics

1.1%

FedEx

Corp.

,

Senior

Bond,

3.2%,

2/01/25

............................

United

States

850,000

933,034

Senior

Note,

3.8%,

5/15/25

............................

United

States

13,400,000

15,107,060

United

Parcel

Service,

Inc.

,

Senior

Note

,

3.9

%

,

4/01/25

.........

United

States

12,000,000

13,628,238

29,668,332

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

58

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Corporate

Bonds

(continued)

Auto

Components

0.2%

Aptiv

Corp.

,

Senior

Bond

,

4.15

%

,

3/15/24

...................

United

States

900,000

$

991,156

Goodyear

Tire

&

Rubber

Co.

(The)

,

Senior

Note

,

5.125

%

,

11/15/23

United

States

3,500,000

3,486,455

4,477,611

Banks

5.4%

e

Akbank

T.A.S.

,

Senior

Note

,

144A,

5.125

%

,

3/31/25

...........

Turkey

2,000,000

1,853,380

Bank

of

America

Corp.

,

Senior

Note

,

3.55%

to

3/05/23,

FRN

thereafter

,

3/05/24

...................................

United

States

10,350,000

11,030,763

e

Bank

of

China

Ltd.

,

Senior

Note

,

Reg

S,

2.875

%

,

4/20/22

.......

China

1,000,000

1,026,596

Bank

of

Montreal

,

Senior

Note

,

1.85

%

,

5/01/25

...............

Canada

5,900,000

6,157,082

Barclays

plc

,

Senior

Note

,

4.61%

to

2/15/22,

FRN

thereafter

,

2/15/23

United

Kingdom

6,300,000

6,600,399

e

China

Construction

Bank

Corp.

,

Senior

Note

,

Reg

S,

2.75

%

,

12/04/20

..........................................

China

1,000,000

1,001,540

Citigroup,

Inc.

,

Senior

Note,

2.35%,

8/02/21

...........................

United

States

5,400,000

5,483,312

Senior

Note,

2.9%,

12/08/21

...........................

United

States

6,000,000

6,157,560

Senior

Note,

2.75%,

4/25/22

...........................

United

States

5,800,000

5,988,332

e

Dexia

Credit

Local

SA

,

Senior

Note

,

144A,

2.375

%

,

9/20/22

.....

France

4,800,000

4,979,516

Fifth

Third

Bancorp

,

Senior

Note,

1.625%,

5/05/23

..........................

United

States

4,100,000

4,207,621

Senior

Note,

2.55%,

5/05/27

...........................

United

States

3,500,000

3,733,348

HSBC

Holdings

plc

,

Senior

Bond,

2.848%

to

6/04/30,

FRN

thereafter,

6/04/31

.....

United

Kingdom

3,700,000

3,829,453

Senior

Note,

3.262%

to

3/13/22,

FRN

thereafter,

3/13/23

......

United

Kingdom

1,400,000

1,447,588

Senior

Note,

4.3%,

3/08/26

............................

United

Kingdom

800,000

910,430

Senior

Note,

2.013%

to

9/22/27,

FRN

thereafter,

9/22/28

......

United

Kingdom

7,600,000

7,559,831

Industrial

&

Commercial

Bank

of

China

Ltd.

,

Senior

Note,

2.452%,

10/20/21

.........................

China

1,900,000

1,928,534

Senior

Note,

2.957%,

11/08/22

.........................

China

9,400,000

9,746,449

JPMorgan

Chase

&

Co.

,

Senior

Note,

2.083%

to

4/22/25,

FRN

thereafter,

4/22/26

......

United

States

18,200,000

19,050,082

Sub.

Note,

3.875%,

9/10/24

...........................

United

States

8,400,000

9,304,158

Lloyds

Banking

Group

plc

,

Senior

Note

,

3.87%

to

7/09/24,

FRN

thereafter

,

7/09/25

...................................

United

Kingdom

2,300,000

2,510,720

Regions

Financial

Corp.

,

Senior

Note

,

2.25

%

,

5/18/25

..........

United

States

5,000,000

5,287,661

e

Standard

Chartered

plc

,

Senior

Note

,

144A,

3.885%

to

3/15/23,

FRN

thereafter

,

3/15/24

...................................

United

Kingdom

10,000,000

10,592,761

Wells

Fargo

&

Co.

,

Senior

Note,

2.188%

to

4/30/25,

FRN

thereafter,

4/30/26

......

United

States

8,400,000

8,742,179

Senior

Note,

2.393%

to

6/02/27,

FRN

thereafter,

6/02/28

......

United

States

5,900,000

6,126,856

145,256,151

Beverages

0.3%

Anheuser-Busch

InBev

Worldwide,

Inc.

,

Senior

Bond

,

3.5

%

,

6/01/30

Belgium

4,600,000

5,198,388

Coca-Cola

Co.

(The)

,

Senior

Note

,

1.45

%

,

6/01/27

............

United

States

2,000,000

2,052,285

7,250,673

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

59

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Corporate

Bonds

(continued)

Biotechnology

0.3%

e

AbbVie,

Inc.

,

Senior

Note,

144A,

2.3%,

11/21/22

......................

United

States

7,500,000

$

7,773,268

Senior

Note,

144A,

3.8%,

3/15/25

.......................

United

States

600,000

666,931

Senior

Note,

144A,

2.95%,

11/21/26

.....................

United

States

500,000

546,410

8,986,609

Capital

Markets

0.6%

Bank

of

New

York

Mellon

Corp.

(The)

,

Senior

Note

,

1.6

%

,

4/24/25

.

United

States

6,500,000

6,742,562

Goldman

Sachs

Group,

Inc.

(The)

,

Senior

Note,

2.35%,

11/15/21

..........................

United

States

4,000,000

4,002,667

Senior

Note,

3.75%,

5/22/25

...........................

United

States

1,000,000

1,112,117

Morgan

Stanley

,

Senior

Note,

3.7%,

10/23/24

...........................

United

States

1,400,000

1,556,975

Senior

Note,

2.188%

to

4/28/25,

FRN

thereafter,

4/28/26

......

United

States

1,300,000

1,363,011

14,777,332

Chemicals

0.8%

Air

Products

and

Chemicals,

Inc.

,

Senior

Note

,

1.5

%

,

10/15/25

...

United

States

2,000,000

2,074,450

e,f

Anagram

International,

Inc.

/

Anagram

Holdings

LLC

,

Secured

Note

,

144A,

PIK,

10

%

,

8/15/26

..............................

United

States

305,890

251,849

e

Braskem

Netherlands

Finance

BV

,

Senior

Bond

,

144A,

4.5

%

,

1/31/30

...........................................

Brazil

7,100,000

6,566,080

e

CNAC

HK

Finbridge

Co.

Ltd.

,

Senior

Note

,

Reg

S,

3.875

%

,

6/19/29

China

2,500,000

2,640,162

EI

du

Pont

de

Nemours

and

Co.

,

Senior

Note

,

1.7

%

,

7/15/25

.....

United

States

4,100,000

4,253,860

e

SABIC

Capital

II

BV

,

Senior

Note

,

144A,

4.5

%

,

10/10/28

........

Saudi

Arabia

400,000

472,339

e

TPC

Group,

Inc.

,

Senior

Secured

Note

,

144A,

10.5

%

,

8/01/24

....

United

States

6,000,000

5,021,880

e

Yara

International

ASA

,

Senior

Note

,

144A,

3.148

%

,

6/04/30

.....

Brazil

700,000

746,652

22,027,272

Commercial

Services

&

Supplies

0.1%

RELX

Capital,

Inc.

,

Senior

Note

,

3

%

,

5/22/30

................

United

Kingdom

1,300,000

1,405,436

Consumer

Finance

1.1%

American

Express

Co.

,

Senior

Note

,

3.7

%

,

8/03/23

............

United

States

6,800,000

7,385,539

Capital

One

Financial

Corp.

,

Senior

Note

,

3.05

%

,

3/09/22

.......

United

States

13,800,000

14,256,036

Caterpillar

Financial

Services

Corp.

,

Senior

Note

,

1.45

%

,

5/15/25

.

United

States

1,900,000

1,959,915

e

ICBCIL

Finance

Co.

Ltd.

,

Senior

Note

,

144A,

2.5

%

,

9/29/21

......

China

500,000

505,830

OneMain

Finance

Corp.

,

Senior

Note

,

6.125

%

,

3/15/24

.........

United

States

4,200,000

4,420,302

28,527,622

Containers

&

Packaging

0.1%

e

Owens-Brockway

Glass

Container,

Inc.

,

Senior

Bond,

144A,

5.375%,

1/15/25

.....................

United

States

1,500,000

1,572,968

Senior

Note,

144A,

5.875%,

8/15/23

.....................

United

States

1,000,000

1,054,000

e

Sealed

Air

Corp.

,

Senior

Bond

,

144A,

5.25

%

,

4/01/23

..........

United

States

950,000

1,006,900

3,633,868

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

60

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Corporate

Bonds

(continued)

Diversified

Financial

Services

0.3%

g

Cia

Securitizadora

de

Creditos

Financeiros

Vert-Fintech

,

12

,

Senior

Secured

Note

,

FRN

,

5.96

%

,

(

BZDIOVRA

+

5.75

%

),

2/14/24

....

Brazil

7,676,000

BRL

$

1,508,577

e

EDP

Finance

BV

,

Senior

Note

,

144A,

1.71

%

,

1/24/28

..........

Portugal

6,500,000

6,433,148

7,941,725

Diversified

Telecommunication

Services

0.1%

e

CCO

Holdings

LLC

/

CCO

Holdings

Capital

Corp.

,

Senior

Note

,

144A,

4

%

,

3/01/23

...................................

United

States

1,700,000

1,720,188

Electric

Utilities

1.7%

e

CGNPC

International

Ltd.

,

Senior

Note

,

Reg

S,

3.75

%

,

12/11/27

..

China

2,100,000

2,313,633

Duke

Energy

Corp.

,

Senior

Bond

,

2.45

%

,

6/01/30

.............

United

States

4,100,000

4,292,472

Exelon

Corp.

,

Senior

Bond

,

4.05

%

,

4/15/30

..................

United

States

7,500,000

8,684,886

e

Korea

East-West

Power

Co.

Ltd.

,

Senior

Note,

144A,

3.875%,

7/19/23

.....................

South

Korea

4,800,000

5,215,296

Senior

Note,

144A,

1.75%,

5/06/25

......................

South

Korea

8,500,000

8,788,197

Southern

Co.

(The)

,

Senior

Bond,

3.25%,

7/01/26

...........................

United

States

850,000

946,655

A,

Senior

Bond,

3.7%,

4/30/30

.........................

United

States

12,200,000

13,842,792

e

Three

Gorges

Finance

I

Cayman

Islands

Ltd.

,

Senior

Note

,

144A,

3.7

%

,

6/10/25

......................................

China

2,100,000

2,308,174

46,392,105

Electrical

Equipment

0.1%

Emerson

Electric

Co.

,

Senior

Note

,

1.8

%

,

10/15/27

............

United

States

3,800,000

3,947,791

Electronic

Equipment,

Instruments

&

Components

0.0%

†

FLIR

Systems,

Inc.

,

Senior

Note

,

2.5

%

,

8/01/30

...............

United

States

600,000

618,999

Energy

Equipment

&

Services

0.4%

Baker

Hughes

a

GE

Co.

LLC

/

Baker

Hughes

Co-Obligor,

Inc.

,

Senior

Note,

2.773%,

12/15/22

.........................

United

States

8,800,000

9,204,711

Senior

Note,

4.486%,

5/01/30

..........................

United

States

500,000

567,564

9,772,275

Entertainment

0.5%

e

Banijay

Entertainment

SASU

,

Senior

Secured

Note

,

144A,

5.375

%

,

3/01/25

...........................................

France

3,500,000

3,563,437

Netflix,

Inc.

,

Senior

Bond

,

5.75

%

,

3/01/24

...................

United

States

1,800,000

1,994,625

Walt

Disney

Co.

(The)

,

Senior

Note

,

1.75

%

,

1/13/26

...........

United

States

6,600,000

6,873,355

12,431,417

Equity

Real

Estate

Investment

Trusts

(REITs)

0.5%

AvalonBay

Communities,

Inc.

,

Senior

Bond

,

2.45

%

,

1/15/31

.....

United

States

3,500,000

3,698,905

Simon

Property

Group

LP

,

Senior

Bond

,

3.375

%

,

10/01/24

......

United

States

5,600,000

6,040,269

e

VICI

Properties

LP

/

VICI

Note

Co.,

Inc.

,

Senior

Note

,

144A,

3.5

%

,

2/15/25

...........................................

United

States

3,000,000

2,998,125

12,737,299

Food

&

Staples

Retailing

0.1%

e

Cencosud

SA

,

Senior

Note

,

144A,

4.375

%

,

7/17/27

............

Chile

2,900,000

3,147,650

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

61

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Corporate

Bonds

(continued)

Health

Care

Equipment

&

Supplies

0.0%

†

Edwards

Lifesciences

Corp.

,

Senior

Note

,

4.3

%

,

6/15/28

........

United

States

300,000

$

354,769

Health

Care

Providers

&

Services

0.8%

Anthem,

Inc.

,

Senior

Note,

2.95%,

12/01/22

..........................

United

States

100,000

104,819

Senior

Note,

2.375%,

1/15/25

..........................

United

States

2,400,000

2,546,988

Centene

Corp.

,

Senior

Note

,

3.375

%

,

2/15/30

................

United

States

2,700,000

2,808,634

Cigna

Corp.

,

Senior

Note,

3.75%,

7/15/23

...........................

United

States

2,592,000

2,806,701

Senior

Note,

4.125%,

11/15/25

.........................

United

States

5,600,000

6,410,662

CVS

Health

Corp.

,

Senior

Note

,

3.7

%

,

3/09/23

...............

United

States

3,018,000

3,231,472

Orlando

Health

Obligated

Group

,

3.777

%

,

10/01/28

............

United

States

105,000

116,917

e

Providence

Service

Corp.

(The)

,

Senior

Note

,

144A,

5.875

%

,

11/15/25

..........................................

United

States

2,400,000

2,446,500

Providence

St

Joseph

Health

Obligated

Group

,

H

,

2.746

%

,

10/01/26

United

States

15,000

16,337

Quest

Diagnostics,

Inc.

,

Senior

Bond

,

2.8

%

,

6/30/31

...........

United

States

1,770,000

1,894,819

22,383,849

Independent

Power

and

Renewable

Electricity

Producers

0.1%

e

InterGen

NV

,

Senior

Secured

Bond

,

144A,

7

%

,

6/30/23

.........

Netherlands

1,400,000

1,328,250

Industrial

Conglomerates

0.2%

Honeywell

International,

Inc.

,

Senior

Note

,

1.35

%

,

6/01/25

.......

United

States

5,600,000

5,752,698

Insurance

0.7%

Aflac,

Inc.

,

Senior

Bond

,

3.625

%

,

11/15/24

..................

United

States

8,000,000

8,906,369

e

Athene

Global

Funding

,

Secured

Note

,

144A,

2.75

%

,

6/25/24

....

United

States

1,100,000

1,146,345

e

Jackson

National

Life

Global

Funding

,

Senior

Secured

Note

,

144A,

2.1

%

,

10/25/21

.....................................

United

States

25,000

25,448

Manulife

Financial

Corp.

,

Senior

Note

,

2.484

%

,

5/19/27

.........

Canada

9,200,000

9,800,355

19,878,517

Interactive

Media

&

Services

0.7%

Baidu,

Inc.

,

Senior

Note

,

4.375

%

,

5/14/24

...................

China

6,500,000

7,132,222

e

Tencent

Holdings

Ltd.

,

Senior

Note,

144A,

2.985%,

1/19/23

.....................

China

9,200,000

9,585,526

Senior

Note,

144A,

1.81%,

1/26/26

......................

China

3,000,000

3,045,954

19,763,702

Internet

&

Direct

Marketing

Retail

0.6%

Alibaba

Group

Holding

Ltd.

,

Senior

Note,

2.8%,

6/06/23

............................

China

1,100,000

1,157,912

Senior

Note,

3.6%,

11/28/24

...........................

China

11,000,000

12,047,275

Amazon.com,

Inc.

,

Senior

Note

,

2.4

%

,

2/22/23

...............

United

States

2,550,000

2,665,358

15,870,545

IT

Services

0.2%

Fiserv,

Inc.

,

Senior

Note

,

2.25

%

,

6/01/27

....................

United

States

5,200,000

5,465,786

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

62

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Corporate

Bonds

(continued)

Machinery

0.2%

CNH

Industrial

Capital

LLC

,

Senior

Note

,

3.875

%

,

10/15/21

......

United

States

5,100,000

$

5,237,243

Media

0.6%

Charter

Communications

Operating

LLC

/

Charter

Communications

Operating

Capital

,

Senior

Secured

Bond

,

2.8

%

,

4/01/31

.......

United

States

3,800,000

3,924,640

e

Clear

Channel

International

BV

,

Senior

Secured

Note

,

144A,

6.625

%

,

8/01/25

.....................................

United

States

3,000,000

3,056,250

CSC

Holdings

LLC

,

Senior

Bond

,

5.25

%

,

6/01/24

.............

United

States

2,000,000

2,138,750

e

Sinclair

Television

Group,

Inc.

,

Senior

Bond

,

144A,

5.625

%

,

8/01/24

United

States

3,000,000

2,999,548

e

Univision

Communications,

Inc.

,

Senior

Secured

Note

,

144A,

5.125

%

,

2/15/25

.....................................

United

States

3,700,000

3,642,187

15,761,375

Metals

&

Mining

0.2%

e

Glencore

Finance

Canada

Ltd.

,

Senior

Note

,

144A,

4.95

%

,

11/15/21

Switzerland

3,500,000

3,647,082

e

Glencore

Funding

LLC

,

Senior

Note

,

144A,

3

%

,

10/27/22

.......

Australia

2,200,000

2,278,320

5,925,402

Multiline

Retail

0.0%

†

a,e,f

K2016470219

South

Africa

Ltd.

,

Senior

Secured

Note

,

144A,

PIK,

3

%

,

12/31/22

.......................................

South

Africa

1,006,515

—

a,e,f

K2016470260

South

Africa

Ltd.

,

Senior

Secured

Note

,

144A,

PIK,

25

%

,

12/31/22

......................................

South

Africa

293,781

1,469

1,469

Multi-Utilities

0.1%

Dominion

Energy,

Inc.

,

D

,

Senior

Note

,

2.85

%

,

8/15/26

.........

United

States

1,300,000

1,422,741

Oil,

Gas

&

Consumable

Fuels

2.4%

e

Aker

BP

ASA

,

Senior

Note

,

144A,

4.75

%

,

6/15/24

.............

Norway

1,800,000

1,851,562

Chevron

Corp.

,

Senior

Note

,

1.554

%

,

5/11/25

................

United

States

4,500,000

4,646,984

CNOOC

Finance

2015

USA

LLC

,

Senior

Note

,

3.5

%

,

5/05/25

....

China

1,700,000

1,860,718

Crestwood

Midstream

Partners

LP

/

Crestwood

Midstream

Finance

Corp.

,

Senior

Note

,

6.75

%

,

4/01/23

......................

United

States

3,200,000

3,107,776

EnLink

Midstream

Partners

LP

,

Senior

Bond

,

4.4

%

,

4/01/24

......

United

States

3,800,000

3,453,858

Enterprise

Products

Operating

LLC

,

Senior

Note

,

3.35

%

,

3/15/23

.

United

States

850,000

900,631

Exxon

Mobil

Corp.

,

Senior

Note

,

1.571

%

,

4/15/23

.............

United

States

19,000,000

19,533,308

e

Harvest

Operations

Corp.

,

Senior

Note

,

144A,

4.2

%

,

6/01/23

.....

South

Korea

2,900,000

3,147,268

Kinder

Morgan,

Inc.

,

Senior

Note

,

3.15

%

,

1/15/23

.............

United

States

9,300,000

9,733,829

MPLX

LP

,

Senior

Note

,

4.875

%

,

12/01/24

...................

United

States

6,800,000

7,618,753

Occidental

Petroleum

Corp.

,

Senior

Note

,

3.45

%

,

7/15/24

.......

United

States

3,000,000

2,437,500

Sabine

Pass

Liquefaction

LLC

,

Senior

Secured

Note

,

5.75

%

,

5/15/24

United

States

2,000,000

2,253,187

e

Sinopec

Group

Overseas

Development

2015

Ltd.

,

Senior

Note

,

144A,

3.25

%

,

4/28/25

.................................

China

1,000,000

1,078,875

Williams

Cos.,

Inc.

(The)

,

Senior

Bond

,

3.5

%

,

11/15/30

.........

United

States

2,000,000

2,148,611

63,772,860

Personal

Products

0.2%

Avon

Products,

Inc.

,

Senior

Note

,

6.75

%

,

3/15/23

.............

United

Kingdom

5,835,000

6,312,741

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

63

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Corporate

Bonds

(continued)

Pharmaceuticals

0.5%

e

Bausch

Health

Cos.,

Inc.

,

Senior

Note

,

144A,

5.5

%

,

3/01/23

.....

United

States

3,000,000

$

3,001,875

e

Bayer

US

Finance

II

LLC

,

Senior

Note

,

144A,

3.875

%

,

12/15/23

..

Germany

5,800,000

6,321,400

Bristol-Myers

Squibb

Co.

,

Senior

Note

,

2.9

%

,

7/26/24

..........

United

States

4,000,000

4,320,264

e

Royalty

Pharma

plc

,

Senior

Note

,

144A,

1.75

%

,

9/02/27

........

United

States

700,000

696,143

14,339,682

Real

Estate

Management

&

Development

0.1%

e

China

Overseas

Finance

Cayman

VII

Ltd.

,

Senior

Note

,

Reg

S,

4.25

%

,

4/26/23

.....................................

China

2,500,000

2,663,519

Road

&

Rail

0.2%

e

Kazakhstan

Temir

Zholy

Finance

BV

,

Senior

Bond

,

144A,

6.95

%

,

7/10/42

...........................................

Kazakhstan

2,800,000

3,846,444

a,f

Onsite

Rental

Group

Operations

Pty.

Ltd.

,

PIK,

6.1

%

,

10/26/23

...

Australia

347,593

306,219

4,152,663

Semiconductors

&

Semiconductor

Equipment

0.2%

Maxim

Integrated

Products,

Inc.

,

Senior

Note

,

3.45

%

,

6/15/27

....

United

States

800,000

889,285

Micron

Technology,

Inc.

,

Senior

Note

,

2.497

%

,

4/24/23

.........

United

States

4,500,000

4,685,708

5,574,993

Specialty

Retail

0.0%

†

e,g

Party

City

Holdings,

Inc.

,

Senior

Secured

Note

,

144A,

FRN

,

5.75

%

,

(

6-month

USD

LIBOR

+

5

%

),

7/15/25

.....................

United

States

565,890

398,953

Thrifts

&

Mortgage

Finance

0.4%

e

BPCE

SA

,

Senior

Note

,

144A,

2.375

%

,

1/14/25

...............

France

7,000,000

7,317,459

Radian

Group,

Inc.

,

Senior

Note

,

6.625

%

,

3/15/25

.............

United

States

3,000,000

3,253,125

10,570,584

Tobacco

0.3%

Altria

Group,

Inc.

,

Senior

Note

,

2.35

%

,

5/06/25

...............

United

States

4,200,000

4,433,579

e

Imperial

Brands

Finance

plc

,

Senior

Note,

144A,

3.125%,

7/26/24

.....................

United

Kingdom

700,000

741,537

Senior

Note,

144A,

4.25%,

7/21/25

......................

United

Kingdom

1,695,000

1,888,218

Reynolds

American,

Inc.

,

Senior

Note

,

4.45

%

,

6/12/25

..........

United

Kingdom

100,000

113,022

7,176,356

Wireless

Telecommunication

Services

0.0%

†

e

Sprint

Spectrum

Co.

LLC

/

Sprint

Spectrum

Co.

II

LLC

/

Sprint

Spectrum

Co.

III

LLC

,

Senior

Secured

Note

,

144A,

3.423

%

,

9/20/21

...........................................

United

States

625,000

631,834

Total

Corporate

Bonds

(Cost

$576,863,337)

.....................................

599,460,886

g,h

Senior

Floating

Rate

Interests

3.0%

Aerospace

&

Defense

0.0%

†

f

Alloy

FinCo

Ltd.,

Facility

Term

Loan,

B,

0.5%,

PIK,

(3-month

USD

LIBOR

+

0.5%),

3/06/25

...............................

Jersey

206,523

54,867

Dynasty

Acquisition

Co.,

Inc.,

2020

Term

Loan

,

B1,

3.72%,

(3-month

USD

LIBOR

+

3.5%),

4/06/26

..........

United

States

766,760

688,885

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

64

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

g,h

Senior

Floating

Rate

Interests

(continued)

Aerospace

&

Defense

(continued)

Dynasty

Acquisition

Co.,

Inc.,

2020

Term

Loan,

(continued)

B2,

3.72%,

(3-month

USD

LIBOR

+

3.5%),

4/06/26

..........

United

States

412,237

$

370,368

1,114,120

a

a

a

a

a

a

Airlines

0.1%

Allegiant

Travel

Co.,

Replacement

Term

Loan,

3.254%,

(3-month

USD

LIBOR

+

3%),

2/05/24

............................

United

States

1,688,664

1,598,599

Delta

Air

Lines,

Inc.

/

SkyMiles

IP

Ltd.,

Initial

Term

Loan,

4.75%,

(6-month

USD

LIBOR

+

3.75%),

10/20/27

.................

United

States

344,890

344,244

JetBlue

Airways

Corp.,

Term

Loan,

6.25%,

(3-month

USD

LIBOR

+

5.25%),

6/17/24

.....................................

United

States

145,431

145,034

Kestrel

Bidco,

Inc.,

Term

Loan,

4%,

(3-month

USD

LIBOR

+

3%),

12/11/26

..........................................

Canada

1,847,051

1,635,656

3,723,533

a

a

a

a

a

a

Auto

Components

0.2%

Adient

US

LLC,

Initial

Term

Loan,

4.422%,

(3-month

USD

LIBOR

+

4.25%;

1-month

USD

LIBOR

+

4.25%),

5/06/24

.............

United

States

4,029,050

3,980,701

i,j

Highline

Aftermarket

Acquisition

LLC,

First

Lien,

Term

Loan,

TBD,

10/20/27

..........................................

United

States

138,443

135,501

Panther

BF

Aggregator

2

LP,

First

Lien,

Initial

Dollar

Term

Loan,

3.648%,

(1-month

USD

LIBOR

+

3.5%),

4/30/26

.............

Canada

575,002

560,052

TRICO

Group

LLC,

First

Lien,

Term

Loan,

B3,

8.5%,

(3-month

USD

LIBOR),

2/02/24

.....................................

United

States

735,348

731,671

5,407,925

a

a

a

a

a

a

Automobiles

0.1%

Thor

Industries,

Inc.,

Initial

USD

Term

Loan,

3.938%,

(1-month

USD

LIBOR

+

3.75%),

2/01/26

..............................

United

States

1,692,645

1,684,182

Biotechnology

0.1%

Grifols

Worldwide

Operations

Ltd.,

Dollar

Term

Loan,

B,

2.094%,

(1-

week

USD

LIBOR

+

2%),

11/15/27

.......................

Ireland

1,209,938

1,182,188

Horizon

Therapeutics

USA,

Inc.,

Seventh

Amendment

Refinancing

Term

Loan,

2.188%,

(1-month

USD

LIBOR

+

2%),

5/22/26

.....

United

States

352,527

346,063

1,528,251

a

a

a

a

a

a

Capital

Markets

0.0%

†

Vertical

Midco

GmbH,

USD

Term

Loan,

4.57%,

(6-month

USD

LIBOR),

6/30/27

.....................................

Germany

686,759

677,749

Chemicals

0.1%

Axalta

Coating

Systems

Dutch

Holding

B

BV

(Axalta

Coating

Systems

U.S.

Holdings,

Inc.),

Dollar

Term

Loan,

B3,

1.97%,

(3-month

USD

LIBOR

+

1.75%),

6/01/24

..................

Netherlands

638,522

621,227

Cyanco

Intermediate

2

Corp.,

First

Lien,

Initial

Term

Loan,

3.648%,

(1-month

USD

LIBOR

+

3.5%),

3/16/25

...................

United

States

564,799

555,358

Illuminate

Buyer

LLC,

Term

Loan,

4.148%,

(1-month

USD

LIBOR

+

4%),

6/30/27

.......................................

United

States

236,265

232,850

1,409,435

a

a

a

a

a

a

Commercial

Services

&

Supplies

0.1%

Legalzoom.com,

Inc.,

First

Lien,

2018

Term

Loan,

4.648%,

(1-month

USD

LIBOR

+

4.5%),

11/21/24

..........................

United

States

892,952

880,673

Prime

Security

Services

Borrower

LLC,

First

Lien,

2019

Refinancing

Term

Loan,

B1,

4.25%,

(3-month

USD

LIBOR

+

3.25%;

1-month

USD

LIBOR

+

3.25%),

9/23/26

..........................

United

States

892,990

883,011

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

65

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

g,h

Senior

Floating

Rate

Interests

(continued)

Commercial

Services

&

Supplies

(continued)

Staples,

Inc.,

2019

Refinancing

New

Term

Loan,

B1,

5.251%,

(3-month

USD

LIBOR

+

5%),

4/16/26

.....................

United

States

484,128

$

446,366

2,210,050

a

a

a

a

a

a

Communications

Equipment

0.0%

†

CommScope,

Inc.,

Initial

Term

Loan,

3.398%,

(1-month

USD

LIBOR

+

3.25%),

4/06/26

...................................

United

States

1,191,573

1,153,907

Containers

&

Packaging

0.1%

Berry

Global,

Inc.,

Term

Loan,

Y,

2.147%,

(1-month

USD

LIBOR

+

2%),

7/01/26

.......................................

United

States

990,962

960,872

BWay

Holding

Co.,

Initial

Term

Loan,

3.48%,

(3-month

USD

LIBOR

+

3.25%),

4/03/24

.....................................

United

States

1,224,497

1,147,965

2,108,837

a

a

a

a

a

a

Diversified

Financial

Services

0.1%

First

Eagle

Holdings,

Inc.,

2020

Refinancing

Term

Loan,

2.72%,

(3-month

USD

LIBOR

+

2.5%),

2/01/27

...................

United

States

1,506,206

1,466,774

Jefferies

Finance

LLC,

2020

Term

Loan,

4.5%,

(1-month

USD

LIBOR

+

3.75%),

9/30/27

...................................

United

States

240,442

238,338

j

Verscend

Holding

Corp.,

Term

Loan,

B,

4.648%,

(1-month

USD

LIBOR

+

4.5%),

8/27/25

...............................

United

States

550,000

541,150

2,246,262

a

a

a

a

a

a

Diversified

Telecommunication

Services

0.1%

Global

Tel

Link,

First

Lien,

Term

Loan,

4.398%,

(1-month

USD

LIBOR

+

4.25%),

11/29/25

.............................

United

States

943,530

823,230

Zayo

Group

Holdings,

Inc.,

Initial

Dollar

Term

Loan,

3.148%,

(1-month

USD

LIBOR

+

3%),

3/09/27

.....................

United

States

1,526,165

1,473,765

2,296,995

a

a

a

a

a

a

Entertainment

0.1%

Banijay

Entertainment

SAS,

Facility

USD

Term

Loan,

B,

(1-month

USD

LIBOR

+

3.75%),

3/01/25

..........................

France

1,200,698

1,167,679

Diamond

Sports

Group

LLC,

Term

Loan,

3.4%,

(1-month

USD

LIBOR

+

3.25%),

8/24/26

..............................

United

States

1,736,842

1,089,147

2,256,826

a

a

a

a

a

a

Food

Products

0.1%

B&G

Foods,

Inc.,

Term

Loan,

B4,

2.648%,

(1-month

USD

LIBOR

+

2.5%),

10/10/26

.....................................

United

States

475,034

473,193

CSM

Bakery

Solutions

Ltd.,

Second

Lien,

Term

Loan,

11%,

(3-month

USD

LIBOR

+

10%),

2/04/22

...........................

United

States

433,944

415,453

JBS

USA

Lux

SA,

New

Term

Loan,

2.148%,

(1-month

USD

LIBOR

+

2%),

5/01/26

.......................................

Luxembourg

1,002,290

980,626

1,869,272

a

a

a

a

a

a

Health

Care

Providers

&

Services

0.2%

BrightSpring

Health

Services,

Term

Loan,

(1-month

USD

LIBOR),

3/05/26

...........................................

United

States

540,000

531,336

i,j

CNT

Holdings

I

Corp.,

First

Lien,

Term

Loan

Facility,

TBD,

10/16/27

United

States

71,895

71,191

Gentiva

Health

Services,

Inc.,

First

Lien,

Term

Loan,

B,

3.438%,

(1-month

USD

LIBOR

+

3.25%),

7/02/25

..................

United

States

1,990,000

1,952,688

GNC

Holdings,

Inc.,

Second

Lien,

Term

Loan,

6.234%,

(3-month

USD

LIBOR),

10/30/26

................................

United

States

441,962

342,520

National

Mentor

Holdings,

Inc.,

First

Lien,

Initial

Term

Loan

,

4.4%,

(1-month

USD

LIBOR

+

4.25%),

3/09/26

..............

United

States

368,215

362,922

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

66

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

g,h

Senior

Floating

Rate

Interests

(continued)

Health

Care

Providers

&

Services

(continued)

National

Mentor

Holdings,

Inc.,

First

Lien,

Initial

Term

Loan,

(continued)

C,

4.4%,

(1-month

USD

LIBOR

+

4.25%),

3/09/26

...........

United

States

16,808

$

16,566

j

Pathway

Vet

Alliance

LLC,

First

Lien,

Initial

Term

Loan,

4.148%,

(1-month

USD

LIBOR

+

4%),

3/31/27

.....................

United

States

911,905

893,667

j

Phoenix

Guarantor,

Inc.,

First

Lien,

Term

Loan,

B1,

3.397%,

(1-month

USD

LIBOR

+

3.25%),

3/05/26

..................

United

States

730,798

709,027

4,879,917

a

a

a

a

a

a

Hotels,

Restaurants

&

Leisure

0.1%

Boyd

Gaming

Corp.,

Refinancing

Term

Loan,

B,

2.344%,

(1-week

USD

LIBOR

+

2.25%),

9/15/23

..........................

United

States

1,975,427

1,925,528

Caesars

Resort

Collection

LLC,

Term

Loan

,

B,

2.898%,

(1-month

USD

LIBOR

+

2.75%),

12/23/24

.........

United

States

1,079,572

1,015,251

B1,

4.649%,

(3-month

USD

LIBOR

+

4.5%;

1-month

USD

LIBOR

+

4.5%),

7/21/25

......................................

United

States

88,773

86,193

3,026,972

a

a

a

a

a

a

Household

Durables

0.0%

†

Playtika

Holding

Corp.,

Term

Loan,

B,

7%,

(3-month

USD

LIBOR

+

6%),

12/10/24

......................................

United

States

279,125

279,855

Household

Products

0.1%

a

FGI

Operating

Co.

LLC,

Last

Out

Initial

Term

Loan,

13%,

(3-month

USD

LIBOR

+

10%;

3-month

USD

LIBOR

+

11%

+

7.5%),

5/17/21

United

States

2,140,156

2,140,156

a,f,k

FGI

Operating

Co.

LLC,

Term

Loan,

PIK,

(3-month

USD

LIBOR

+

11%),

5/16/22

......................................

United

States

1,127,822

733,892

2,874,048

a

a

a

a

a

a

Insurance

0.1%

Alliant

Holdings

Intermediate

LLC,

2018

Initial

Term

Loan,

2.898%,

(1-month

USD

LIBOR

+

2.75%),

5/09/25

..................

United

States

998,139

963,429

i,j

Alliant

Holdings

Intermediate

LLC,

Term

Loan,

B3,

TBD,

10/08/27

.

United

States

56,096

55,658

j

AssuredPartners,

Inc.,

2020

February

Refinancing

Term

Loan,

3.648%,

(1-month

USD

LIBOR

+

3.5%),

2/12/27

.............

United

States

1,152,098

1,114,142

2,133,229

a

a

a

a

a

a

IT

Services

0.3%

Aventiv

Technologies

LLC,

First

Lien,

Initial

Term

Loan,

5.5%,

(3-month

USD

LIBOR

+

4.5%),

11/01/24

..................

United

States

344,684

290,279

Aventiv

Technologies

LLC,

Second

Lien,

Initial

Term

Loan,

9.25%,

(6-month

USD

LIBOR

+

8.25%),

11/01/25

..................

United

States

790,636

496,571

i,j

Barracuda

Networks,

Inc.,

Term

Loan,

TBD,

2/12/25

...........

United

States

228,016

224,596

Go

Daddy

Operating

Co.

LLC,

Term

Loan,

B2,

1.897%,

(1-month

USD

LIBOR

+

1.75%),

2/15/24

..........................

United

States

665,936

651,579

j

Milano

Acquisition

Corp.,

Term

Loan,

B,

4.75%,

(3-month

USD

LIBOR

+

4%),

10/01/27

...............................

United

States

673,527

663,986

Pitney

Bowes,

Inc.,

Incremental

Term

Loan,

B,

5.65%,

(1-month

USD

LIBOR

+

5.5%),

1/07/25

...............................

United

States

1,738,397

1,718,622

TIBCO

Software,

Inc.,

Term

Loan,

B3,

3.9%,

(1-month

USD

LIBOR

+

3.75%),

6/30/26

.....................................

United

States

1,103,784

1,073,429

WEX,

Inc.,

Term

Loan,

B3,

2.398%,

(1-month

USD

LIBOR

+

2.25%),

5/15/26

...........................................

United

States

1,687,154

1,632,321

6,751,383

a

a

a

a

a

a

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

67

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

g,h

Senior

Floating

Rate

Interests

(continued)

Leisure

Products

0.1%

Bass

Pro

Group

LLC,

Initial

Term

Loan,

5.75%,

(3-month

USD

LIBOR

+

5%),

9/25/24

................................

United

States

1,069,001

$

1,067,836

NASCAR

Holdings

LLC,

Initial

Term

Loan,

2.902%,

(1-month

USD

LIBOR

+

2.75%),

10/19/26

.............................

United

States

1,422,040

1,387,129

2,454,965

a

a

a

a

a

a

Machinery

0.0%

†

Navistar,

Inc.,

Term

Loan,

B,

3.65%,

(1-month

USD

LIBOR

+

3.5%),

11/06/24

..........................................

United

States

1,332,580

1,322,919

Media

0.1%

Clear

Channel

Outdoor

Holdings,

Inc.,

Term

Loan,

B,

3.714%,

(2-month

USD

LIBOR

+

3.5%;

3-month

USD

LIBOR

+

3.5%),

8/21/26

...........................................

United

States

648,363

592,847

CSC

Holdings

LLC,

March

2017

Refinancing

Term

Loan,

2.398%,

(1-month

USD

LIBOR

+

2.25%),

7/17/25

..................

United

States

1,172,971

1,135,583

Gray

Television,

Inc.,

Term

Loan,

C,

2.649%,

(1-month

USD

LIBOR

+

2.5%),

1/02/26

......................................

United

States

321,812

314,088

Radiate

HoldCo

LLC,

Term

Loan,

B,

4.25%,

(1-month

USD

LIBOR

+

3.5%),

9/25/26

......................................

United

States

337,761

332,671

Univision

Communications,

Inc.,

First

Lien,

2020

Replacement

Term

Loan,

4.75%,

(1-month

USD

LIBOR

+

3.75%),

3/15/26

........

United

States

610,815

596,595

i,j

Virgin

Media

Bristol

LLC,

Term

Loan,

Q,

TBD,

1/31/29

..........

United

States

152,109

149,447

3,121,231

a

a

a

a

a

a

Multiline

Retail

0.0%

†

Harbor

Freight

Tools

USA,

Inc.,

Initial

Term

Loan

(2020),

4%,

(1-month

USD

LIBOR

+

3.25%),

10/19/27

.................

United

States

810,504

800,324

Oil,

Gas

&

Consumable

Fuels

0.1%

Buckeye

Partners

LP,

Initial

Term

Loan,

2.897%,

(1-month

USD

LIBOR

+

2.75%),

11/01/26

.............................

United

States

285,677

281,086

j,l

Fieldwood

Energy

LLC,

Debtor-in-possession

Facility

Term

Loan,

3.675%,

(1-month

USD

LIBOR;

1-month

USD

LIBOR

+

8.75%),

8/04/21

...........................................

United

States

50,796

51,050

k

Fieldwood

Energy

LLC,

First

Lien,

Closing

Date

Term

Loan,

(3-month

USD

LIBOR

+

5.25%),

4/11/22

..........................

United

States

4,260,617

937,336

UTEX

Industries,

Inc.,

Debtor-in-possession

Term

Loan,

10%,

(1-month

USD

LIBOR

+

9%),

2/08/21

.....................

United

States

43,628

43,846

k

UTEX

Industries,

Inc.,

First

Lien,

Initial

Term

Loan,

(3-month

USD

LIBOR

+

5%),

5/21/21

................................

United

States

680,976

209,741

k

UTEX

Industries,

Inc.,

Second

Lien,

Initial

Term

Loan,

(3-month

USD

LIBOR

+

7.25%),

5/20/22

..............................

United

States

71,339

1,783

1,524,842

a

a

a

a

a

a

Paper

&

Forest

Products

0.0%

†

Appvion

Operations,

Inc.,

Term

Loan,

7%,

(3-month

USD

LIBOR

+

6%),

6/12/26

.......................................

United

States

360,146

353,843

Personal

Products

0.1%

Coty,

Inc.,

USD

Term

Loan,

B,

2.39%,

(1-month

USD

LIBOR

+

2.25%),

4/07/25

.....................................

United

States

865,573

761,908

Sunshine

Luxembourg

VII

SARL,

Facility

Term

Loan,

B1,

5.25%,

(3-month

USD

LIBOR

+

4.25%),

10/01/26

.................

Luxembourg

1,985,000

1,969,497

2,731,405

a

a

a

a

a

a

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

68

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

g,h

Senior

Floating

Rate

Interests

(continued)

Pharmaceuticals

0.1%

Bausch

Health

Cos.,

Inc.,

First

Incremental

Term

Loan,

2.899%,

(1-month

USD

LIBOR

+

2.75%),

11/27/25

..................

United

States

1,600,000

$

1,566,336

Bausch

Health

Cos.,

Inc.,

Initial

Term

Loan,

3.149%,

(1-month

USD

LIBOR

+

3%),

6/02/25

................................

United

States

421,547

412,458

Catalent

Pharma

Solutions,

Inc.,

Dollar

Term

Loan,

B2,

3.25%,

(1-month

USD

LIBOR

+

2.25%),

5/18/26

..................

United

States

1,487,585

1,484,178

3,462,972

a

a

a

a

a

a

Real

Estate

Management

&

Development

0.0%

†

Cushman

&

Wakefield

U.S.

Borrower

LLC,

Replacement

Term

Loan,

2.898%,

(1-month

USD

LIBOR

+

2.75%),

8/21/25

............

United

States

1,321,334

1,268,480

Road

&

Rail

0.1%

Avis

Budget

Car

Rental

LLC,

New

Term

Loan,

B,

2.4%,

(1-month

USD

LIBOR

+

2.25%),

8/06/27

..........................

United

States

961,329

870,604

Kenan

Advantage

Group

Holdings

Corp.

(The),

Initial

Canadian

Term

Loan,

4%,

(1-month

USD

LIBOR

+

3%),

7/29/22

.............

United

States

133,627

129,360

Kenan

Advantage

Group

Holdings

Corp.

(The),

Initial

U.S.

Term

Loan,

4%,

(1-month

USD

LIBOR

+

3%),

7/29/22

.............

United

States

561,929

543,986

a

Onsite

Rental

Group

Operations

Pty.

Ltd.,

Term

Loan,

B,

5.5%,

(1-month

USD

LIBOR

+

4.5%),

10/26/22

..................

Australia

254,234

233,647

Ventia

Midco

Pty.

Ltd.,

2017

Refinancing

USD

Term

Loan,

B,

5%,

(3-month

USD

LIBOR

+

4%),

5/21/26

.....................

Australia

645,350

637,283

2,414,880

a

a

a

a

a

a

Semiconductors

&

Semiconductor

Equipment

0.1%

ON

Semiconductor

Corp.,

2019

New

Replacement

Term

Loan,

B4,

2.148%,

(1-month

USD

LIBOR

+

2%),

9/19/26

..............

United

States

1,496,342

1,466,954

Software

0.3%

j

athenahealth,

Inc.,

First

Lien,

Term

Loan,

B,

4.75%,

(3-month

USD

LIBOR

+

4.5%),

2/11/26

...............................

United

States

1,295,606

1,271,314

i,j

Blackboard,

Inc.,

First

Lien,

Term

Loan,

B5,

TBD,

6/30/24

.......

United

States

1,287,708

1,248,677

Ceridian

HCM

Holding,

Inc.,

Initial

Term

Loan,

2.594%,

(1-week

USD

LIBOR

+

2.5%),

4/30/25

...............................

United

States

618,168

599,527

DCert

Buyer,

Inc.,

First

Lien,

Initial

Term

Loan,

4.148%,

(1-month

USD

LIBOR

+

4%),

10/16/26

...........................

United

States

398,000

391,158

Epicor

Software

Corp.,

Term

Loan,

B,

5.25%,

(1-month

USD

LIBOR),

7/30/27

...........................................

United

States

286,896

286,215

i,j

Greeneden

U.S.

Holdings

I

LLC,

Term

Loan,

B,

TBD,

10/08/27

...

United

States

290,345

286,262

LogMeIn,

Inc.,

First

Lien,

Initial

Term

Loan,

4.89%,

(1-month

USD

LIBOR

+

4.75%),

8/31/27

..............................

United

States

369,745

359,117

j

Mitchell

International,

Inc.,

First

Lien,

Amendment

No.

2

New

Term

Loan

Facility,

4.75%,

(1-month

USD

LIBOR),

11/29/24

........

United

States

420,000

408,240

Perforce

Software,

Inc.,

First

Lien,

New

Term

Loan,

3.898%,

(1-month

USD

LIBOR

+

3.75%),

7/01/26

..................

United

States

350,469

342,396

j

Quest

Software

US

Holdings,

Inc.,

First

Lien,

Initial

Term

Loan,

4.464%,

(3-month

USD

LIBOR

+

4.25%),

5/16/25

............

United

States

1,266,768

1,224,414

Solera

LLC

(Solera

Finance,

Inc.),

Dollar

Term

Loan,

2.916%,

(2-month

USD

LIBOR

+

2.75%),

3/03/23

..................

United

States

318,333

310,660

Surf

Holdings

SARL,

First

Lien,

Dollar

Term

Loan,

3.75%,

(3-month

USD

LIBOR

+

3.5%),

3/05/27

...........................

Luxembourg

997,500

968,323

j

Veritas

US,

Inc.,

Term

Loan,

B,

6.5%,

(3-month

USD

LIBOR

+

5.5%),

9/01/25

...........................................

United

States

620,000

608,279

8,304,582

a

a

a

a

a

a

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

69

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

g,h

Senior

Floating

Rate

Interests

(continued)

Technology

Hardware,

Storage

&

Peripherals

0.0%

†

i,j

Amentum

Government

Services

Holdings

LLC,

Incremental

Term

Loan,

TBD,

1/29/27

..................................

United

States

200,000

$

196,250

Cardtronics

USA,

Inc.,

Initial

Term

Loan,

5%,

(1-month

USD

LIBOR

+

4%),

6/29/27

.......................................

United

States

315,913

316,308

512,558

a

a

a

a

a

a

Total

Senior

Floating

Rate

Interests

(Cost

$88,981,803)

..........................

79,372,703

m

Marketplace

Loans

1.0%

Diversified

Financial

Services

1.0%

a

Lending

Club

-

LCX,

6.46%

-

28.8%,

4/24/22

-

4/14/25

.........

United

States

5,381,394

4,735,975

a

Lending

Club,

7.56%

-

28.8%,

9/20/21

-

3/16/25

..............

United

States

18,001,031

16,231,483

a

Square

Capital,

0%,

3/18/22

-

4/27/22

......................

United

States

4,969,783

4,451,177

a

Upgrade,

13.64%

-

30.51%,

9/05/22

-

1/25/25

................

United

States

2,508,209

2,193,723

27,612,358

a

a

a

a

a

a

Total

Marketplace

Loans

(Cost

$31,254,831)

....................................

27,612,358

n

Loan

Participations

and

Assignments

0.2%

b,e

Russian

Railways

Via

RZD

Capital

plc,

Senior

Note,

Reg

S,

5.7%,

4/05/22

...........................................

Russia

5,900,000

6,268,420

Total

Loan

Participations

and

Assignments

(Cost

$6,085,040)

....................

6,268,420

Foreign

Government

and

Agency

Securities

4.9%

e

Angola

Government

Bond

,

Senior

Note

,

144A,

8.25

%

,

5/09/28

...

Angola

5,600,000

4,421,340

e

Banque

Centrale

de

Tunisie

,

Senior

Note

,

Reg

S,

5.625

%

,

2/17/24

Tunisia

4,100,000

EUR

4,117,080

e

Banque

Ouest

Africaine

de

Developpement

,

Senior

Note

,

144A,

5

%

,

7/27/27

...........................................

Supranational

o

3,900,000

4,196,400

e

Belarus

Government

Bond

,

Senior

Note

,

144A,

7.625

%

,

6/29/27

..

Belarus

3,900,000

3,881,670

Brazil

Notas

do

Tesouro

Nacional

,

10

%

,

1/01/21

..............

Brazil

2,350,000

BRL

401,626

Colombia

Government

Bond

,

Senior

Bond,

9.85%,

6/28/27

...........................

Colombia

13,585,000,000

COP

4,557,162

Senior

Bond,

5%,

6/15/45

.............................

Colombia

3,200,000

3,727,200

e

Dominican

Republic

Government

Bond

,

Senior

Note

,

144A,

8.9

%

,

2/15/23

...........................................

Dominican

Republic

218,500,000

DOP

3,781,649

e,p

Electricite

de

France

SA

,

Junior

Sub.

Bond

,

144A,

5.625%

to

1/22/24,

FRN

thereafter

,

Perpetual

.......................

France

2,200,000

2,311,529

Equinor

ASA

,

Senior

Note,

2.875%,

4/06/25

...........................

Norway

15,300,000

16,553,979

Senior

Note,

1.75%,

1/22/26

...........................

Norway

5,400,000

5,607,767

e

Export-Import

Bank

of

China

(The)

,

Senior

Note

,

144A,

3.625

%

,

7/31/24

...........................................

China

2,100,000

2,299,589

e

Export-Import

Bank

of

India

,

Senior

Note

,

144A,

3.875

%

,

2/01/28

.

India

3,400,000

3,589,142

Export-Import

Bank

of

Korea

,

Senior

Note

,

2.875

%

,

1/21/25

.....

South

Korea

2,000,000

2,170,537

e

Gabon

Government

Bond

,

144A,

6.375%,

12/12/24

...............................

Gabon

2,989,022

2,855,637

Senior

Bond,

144A,

6.625%,

2/06/31

.....................

Gabon

4,800,000

4,299,801

e

Iraq

Government

Bond

,

Senior

Bond

,

144A,

5.8

%

,

1/15/28

......

Iraq

8,250,000

7,136,646

e

Israel

Electric

Corp.

Ltd.

,

Senior

Secured

Bond

,

144A,

Reg

S,

4.25

%

,

8/14/28

...........................................

Israel

1,400,000

1,610,189

e

Kazakhstan

Government

Bond

,

Senior

Bond

,

144A,

4.875

%

,

10/14/44

..........................................

Kazakhstan

2,800,000

3,723,832

Korea

Development

Bank

(The)

,

Senior

Note

,

3.375

%

,

3/12/23

...

South

Korea

7,100,000

7,578,860

Mexico

Government

Bond

,

Senior

Note,

4.15%,

3/28/27

...........................

Mexico

6,100,000

6,805,313

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

70

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Foreign

Government

and

Agency

Securities

(continued)

Mexico

Government

Bond,

(continued)

M

20,

Senior

Bond,

8.5%,

5/31/29

.......................

Mexico

130,000,000

MXN

$

7,155,558

Peru

Government

Bond

,

Senior

Bond,

2.783%,

1/23/31

..........................

Peru

800,000

866,600

Senior

Bond,

6.55%,

3/14/37

...........................

Peru

2,600,000

3,943,667

e

Russia

Government

Bond

,

Senior

Note

,

144A,

4.875

%

,

9/16/23

...

Russia

4,400,000

4,825,480

South

Africa

Government

Bond

,

Senior

Bond

,

7

%

,

2/28/31

......

South

Africa

86,800,000

ZAR

4,369,387

e

Turkiye

Vakiflar

Bankasi

TAO

,

Covered

Note

,

Reg

S,

2.375

%

,

5/04/21

...........................................

Turkey

5,600,000

EUR

6,461,394

e

Ukraine

Government

Bond

,

Senior

Bond

,

144A,

7.375

%

,

9/25/32

.

Ukraine

4,500,000

4,330,890

q

Uruguay

Government

Bond

,

Index

Linked,

Senior

Bond

,

3.7

%

,

6/26/37

...........................................

Uruguay

161,663,369

UYU

4,203,248

Total

Foreign

Government

and

Agency

Securities

(Cost

$133,909,839)

............

131,783,172

U.S.

Government

and

Agency

Securities

15.3%

U.S.

Treasury

Notes

,

2.125%,

9/30/21

.....................................

United

States

10,000,000

10,180,609

1.75%,

5/15/22

.....................................

United

States

27,000,000

27,668,672

1.875%,

8/31/22

.....................................

United

States

55,000,000

56,723,047

1.625%,

4/30/23

.....................................

United

States

90,000,000

93,248,437

2.75%,

5/31/23

.....................................

United

States

98,000,000

104,477,187

2.875%,

10/31/23

....................................

United

States

52,000,000

56,162,031

q

0.25%,

1/15/25

.....................................

United

States

1,340,000

1,558,781

q

0.375%,

7/15/25

.....................................

United

States

1,200,000

1,417,434

2.875%,

7/31/25

.....................................

United

States

12,000,000

13,417,969

q,r

0.625%,

1/15/26

.....................................

United

States

23,000,000

27,531,631

q

0.125%,

7/15/26

.....................................

United

States

10,000,000

11,675,825

q

0.375%,

7/15/27

.....................................

United

States

3,840,000

4,493,076

Total

U.S.

Government

and

Agency

Securities

(Cost

$405,944,787)

................

408,554,699

Asset-Backed

Securities

23.0%

Airlines

0.0%

†

American

Airlines

Pass-Through

Trust

,

2016-2

,

AA

,

3.2

%

,

12/15/29

United

States

41,600

38,501

Commercial

Services

&

Supplies

0.9%

e,s

Ares

XLIX

CLO

Ltd.

,

2018-49A

,

C

,

144A,

FRN

,

2.166

%

,

(

3-month

USD

LIBOR

+

1.95

%

),

7/22/30

..........................

United

States

3,100,000

2,984,267

e,s

Armada

Euro

CLO

IV

DAC

,

4A

,

B

,

144A,

FRN

,

1.7

%

,

(

3-month

EURIBOR

+

1.7

%

),

7/15/33

............................

Ireland

12,400,000

EUR

14,332,732

e,s

LCM

XXII

Ltd.

,

22A

,

A2R

,

144A,

FRN

,

1.668

%

,

(

3-month

USD

LIBOR

+

1.45

%

),

10/20/28

.............................

United

States

8,500,000

8,301,094

25,618,093

a

a

a

a

a

a

Consumer

Finance

0.8%

Discover

Card

Execution

Note

Trust

,

s

2019-A2,

A,

FRN,

0.418%,

(1-month

USD

LIBOR

+

0.27%),

12/15/23

..........................................

United

States

9,250,000

9,274,114

2019-A3,

A,

1.89%,

10/15/24

...........................

United

States

13,340,000

13,767,083

23,041,197

a

a

a

a

a

a

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

71

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Asset-Backed

Securities

(continued)

Diversified

Financial

Services

21.2%

e,s

Adagio

CLO

VIII

DAC

,

VIII-A

,

B1

,

144A,

FRN

,

1.65

%

,

(

3-month

EURIBOR

+

1.65

%

),

4/15/32

...........................

Ireland

500,000

EUR

$

576,551

e,s

Alinea

CLO

Ltd.

,

2018-1A

,

B

,

144A,

FRN

,

1.868

%

,

(

3-month

USD

LIBOR

+

1.65

%

),

7/20/31

..............................

United

States

5,300,000

5,192,531

e

American

Homes

4

Rent

Trust

,

2014-SFR3,

A,

144A,

3.678%,

12/17/36

...................

United

States

724,359

777,969

2015-SFR1,

A,

144A,

3.467%,

4/17/52

....................

United

States

5,523,192

5,901,926

s

Ameriquest

Mortgage

Securities,

Inc.

,

2004-R4

,

M1

,

FRN

,

0.974

%

,

(

1-month

USD

LIBOR

+

0.825

%

),

6/25/34

.................

United

States

121,235

124,049

e,s

AMMC

CLO

15

Ltd.

,

2014-15A

,

BRR

,

144A,

FRN

,

2.037

%

,

(

3-month

USD

LIBOR

+

1.8

%

),

1/15/32

...........................

United

States

1,494,355

1,468,158

e,s

AMMC

CLO

21

Ltd.

,

2017-21A

,

C

,

144A,

FRN

,

2.351

%

,

(

3-month

USD

LIBOR

+

2.1

%

),

11/02/30

..........................

United

States

400,000

384,440

e,s

AMMC

CLO

XI

Ltd.

,

2012-11A,

BR2,

144A,

FRN,

1.814%,

(3-month

USD

LIBOR

+

1.6%),

4/30/31

......................................

United

States

1,700,000

1,653,051

2012-11A,

CR2,

144A,

FRN,

2.114%,

(3-month

USD

LIBOR

+

1.9%),

4/30/31

......................................

United

States

1,850,000

1,688,018

e,s

Antares

CLO

Ltd.

,

2018-1A

,

B

,

144A,

FRN

,

1.868

%

,

(

3-month

USD

LIBOR

+

1.65

%

),

4/20/31

..............................

United

States

6,000,000

5,644,285

e,s

Ares

European

CLO

VIII

BV

,

8A

,

BR

,

144A,

FRN

,

1.6

%

,

(

3-month

EURIBOR

+

1.6

%

),

4/17/32

............................

Netherlands

700,000

EUR

805,856

e,s

Ares

L

CLO

Ltd.

,

2018-50A

,

B

,

144A,

FRN

,

1.937

%

,

(

3-month

USD

LIBOR

+

1.7

%

),

1/15/32

...............................

United

States

4,000,000

3,927,924

e,s

Ares

LII

CLO

Ltd.

,

2019-52A

,

C

,

144A,

FRN

,

2.896

%

,

(

3-month

USD

LIBOR

+

2.68

%

),

4/22/31

..............................

United

States

1,000,000

994,259

e,s

Ares

XLVIII

CLO

Ltd.

,

2018-48A,

B,

144A,

FRN,

1.798%,

(3-month

USD

LIBOR

+

1.58%),

7/20/30

.....................................

United

States

1,000,000

981,325

2018-48A,

C,

144A,

FRN,

2.018%,

(3-month

USD

LIBOR

+

1.8%),

7/20/30

...........................................

United

States

3,135,000

2,990,895

e,s

Atrium

XIV

LLC

,

14A,

B,

144A,

FRN,

1.93%,

(3-month

USD

LIBOR

+

1.7%),

8/23/30

...........................................

United

States

2,400,000

2,357,044

14A,

C,

144A,

FRN,

2.18%,

(3-month

USD

LIBOR

+

1.95%),

8/23/30

...........................................

United

States

4,000,000

3,853,482

e,s

Atrium

XV

,

15A

,

B

,

144A,

FRN

,

1.959

%

,

(

3-month

USD

LIBOR

+

1.75

%

),

1/23/31

.....................................

United

States

2,000,000

1,962,946

e,s

Bain

Capital

Credit

CLO

Ltd.

,

2018-1A

,

A1

,

144A,

FRN

,

1.169

%

,

(

3-month

USD

LIBOR

+

0.96

%

),

4/23/31

..................

United

States

2,000,000

1,965,231

e,s

BCC

Middle

Market

CLO

LLC

,

2018-1A

,

A2

,

144A,

FRN

,

2.368

%

,

(

3-month

USD

LIBOR

+

2.15

%

),

10/20/30

.................

United

States

2,100,000

2,005,340

e,s

Betony

CLO

2

Ltd.

,

2018-1A

,

A2

,

144A,

FRN

,

1.814

%

,

(

3-month

USD

LIBOR

+

1.6

%

),

4/30/31

...........................

United

States

3,500,000

3,405,113

e,s

Blackrock

European

CLO

IX

DAC

,

9A,

A,

144A,

FRN,

0.9%,

(3-month

EURIBOR

+

0.9%),

12/15/32

Ireland

3,300,000

EUR

3,824,317

9A,

B,

144A,

FRN,

1.55%,

(3-month

EURIBOR

+

1.55%),

12/15/32

Ireland

1,100,000

EUR

1,262,261

e,s

BlueMountain

CLO

Ltd.

,

2012-2A,

BR2,

144A,

FRN,

1.703%,

(3-month

USD

LIBOR

+

1.45%),

11/20/28

....................................

United

States

2,970,000

2,904,339

2012-2A,

DR2,

144A,

FRN,

3.153%,

(3-month

USD

LIBOR

+

2.9%),

11/20/28

.....................................

United

States

2,000,000

1,844,751

2014-2A,

CR2,

144A,

FRN,

2.418%,

(3-month

USD

LIBOR

+

2.2%),

10/20/30

.....................................

United

States

1,300,000

1,266,526

2018-3A,

B,

144A,

FRN,

1.985%,

(3-month

USD

LIBOR

+

1.77%),

10/25/30

..........................................

United

States

4,000,000

3,938,813

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

72

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Asset-Backed

Securities

(continued)

Diversified

Financial

Services

(continued)

e,s

BlueMountain

CLO

Ltd.,

(continued)

2018-3A,

C,

144A,

FRN,

2.415%,

(3-month

USD

LIBOR

+

2.2%),

10/25/30

..........................................

United

States

1,785,715

$

1,726,427

e,s

BlueMountain

CLO

XXIV

Ltd.

,

2019-24A

,

D

,

144A,

FRN

,

4.118

%

,

(

3-month

USD

LIBOR

+

3.9

%

),

4/20/31

...................

United

States

1,000,000

975,568

e,s

BlueMountain

Fuji

EUR

CLO

V

DAC

,

5A

,

B

,

144A,

FRN

,

1.55

%

,

(

3-month

EURIBOR

+

1.55

%

),

1/15/33

....................

Ireland

4,550,000

EUR

5,215,472

e,s

BlueMountain

Fuji

US

CLO

III

Ltd.

,

2017-3A,

A2,

144A,

FRN,

1.387%,

(3-month

USD

LIBOR

+

1.15%),

1/15/30

.....................................

United

States

1,000,000

984,192

2017-3A,

C,

144A,

FRN,

1.937%,

(3-month

USD

LIBOR

+

1.7%),

1/15/30

...........................................

United

States

500,000

470,648

e,s

Burnham

Park

CLO

Ltd.

,

2016-1A

,

BR

,

144A,

FRN

,

1.718

%

,

(

3-month

USD

LIBOR

+

1.5

%

),

10/20/29

..................

United

States

5,321,575

5,204,706

e,s

Carlyle

Global

Market

Strategies

CLO

Ltd.

,

2014-1A,

A2R2,

144A,

FRN,

1.348%,

(3-month

USD

LIBOR

+

1.13%),

4/17/31

.....................................

United

States

1,200,000

1,167,328

2014-4RA,

A2,

144A,

FRN,

1.837%,

(3-month

USD

LIBOR

+

1.6%),

7/15/30

......................................

United

States

12,000,000

11,662,665

e,s

Carlyle

GMS

Finance

MM

CLO

LLC

,

2015-1A

,

A2R

,

144A,

FRN

,

2.437

%

,

(

3-month

USD

LIBOR

+

2.2

%

),

10/15/31

............

United

States

7,300,000

7,075,106

e,s

Carlyle

US

CLO

Ltd.

,

2017-3A,

B,

144A,

FRN,

2.568%,

(3-month

USD

LIBOR

+

2.35%),

7/20/29

...........................................

United

States

1,250,000

1,223,255

2017-4A,

B,

144A,

FRN,

2.087%,

(3-month

USD

LIBOR

+

1.85%),

1/15/30

...........................................

United

States

1,107,000

1,052,400

2017-4A,

C,

144A,

FRN,

3.037%,

(3-month

USD

LIBOR

+

2.8%),

1/15/30

...........................................

United

States

400,000

354,204

2017-5A,

A2,

144A,

FRN,

1.618%,

(3-month

USD

LIBOR

+

1.4%),

1/20/30

...........................................

United

States

13,440,000

12,899,304

2017-5A,

B,

144A,

FRN,

2.018%,

(3-month

USD

LIBOR

+

1.8%),

1/20/30

...........................................

United

States

2,200,000

2,078,047

e,s

Catamaran

CLO

Ltd.

,

2014-2A

,

BR

,

144A,

FRN

,

3.168

%

,

(

3-month

USD

LIBOR

+

2.95

%

),

10/18/26

.........................

United

States

3,011,300

2,977,618

e

CF

Hippolyta

LLC

,

2020-1

,

A1

,

144A,

1.69

%

,

7/15/60

..........

United

States

3,612,963

3,660,293

e,s

Cole

Park

CLO

Ltd.

,

2015-1A

,

BR

,

144A,

FRN

,

1.818

%

,

(

3-month

USD

LIBOR

+

1.6

%

),

10/20/28

..........................

United

States

2,571,429

2,527,045

e,g,t

Consumer

Loan

Underlying

Bond

Certificate

Issuer

Trust

I

,

2018-14,

PT,

144A,

FRN,

9.91%,

9/16/41

..................

United

States

869,804

822,131

2018-29,

PT,

144A,

FRN,

28.565%,

12/15/43

...............

United

States

394,413

329,683

2018-8,

PT,

144A,

FRN,

7.172%,

6/17/41

..................

United

States

468,268

436,826

2019-26,

PT,

144A,

FRN,

20.123%,

8/15/44

................

United

States

1,596,308

1,360,274

2019-31,

PT,

144A,

FRN,

19.138%,

9/15/44

................

United

States

1,456,696

1,248,168

2019-37,

PT,

144A,

FRN,

20.068%,

10/17/44

...............

United

States

1,411,276

1,250,799

2019-42,

PT,

144A,

FRN,

19.334%,

11/15/44

...............

United

States

1,386,012

1,196,414

2019-51,

PT,

144A,

FRN,

17.231%,

1/15/45

................

United

States

3,641,338

3,170,159

2019-52,

PT,

144A,

FRN,

17.6%,

1/15/45

..................

United

States

4,505,636

3,953,359

2019-S1,

PT,

144A,

FRN,

15.295%,

4/15/44

................

United

States

1,021,868

858,547

2019-S2,

PT,

144A,

FRN,

15.2%,

5/16/44

..................

United

States

785,715

655,672

2019-S3,

PT,

144A,

FRN,

14.692%,

6/15/44

................

United

States

538,037

454,252

2019-S4,

PT,

144A,

FRN,

12.487%,

8/15/44

................

United

States

1,167,682

989,870

2019-S5,

PT,

144A,

FRN,

13.461%,

9/15/44

................

United

States

1,147,335

1,025,644

2019-S6,

PT,

144A,

FRN,

11.881%,

10/17/44

...............

United

States

1,140,294

981,382

2019-S7,

PT,

144A,

FRN,

11.349%,

12/15/44

...............

United

States

2,236,839

1,945,327

2019-S8,

PT,

144A,

FRN,

10.753%,

1/15/45

................

United

States

2,693,600

2,336,219

2020-2,

PT,

144A,

FRN,

17.326%,

3/15/45

.................

United

States

4,393,613

3,800,046

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

73

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Asset-Backed

Securities

(continued)

Diversified

Financial

Services

(continued)

e,g,t

Consumer

Loan

Underlying

Bond

Certificate

Issuer

Trust

I,

(continued)

2020-7,

PT,

144A,

FRN,

17.023%,

4/17/45

.................

United

States

2,636,772

$

2,292,516

e,s

Cook

Park

CLO

Ltd.

,

2018-1A

,

A2

,

144A,

FRN

,

1.338

%

,

(

3-month

USD

LIBOR

+

1.12

%

),

4/17/30

..........................

United

States

1,000,000

971,769

s

CWABS,

Inc.

,

2004-1

,

M1

,

FRN

,

0.899

%

,

(

1-month

USD

LIBOR

+

0.75

%

),

3/25/34

.....................................

United

States

81,595

81,331

e,s

Dorchester

Park

CLO

DAC

,

2015-1A

,

CR

,

144A,

FRN

,

1.968

%

,

(

3-month

USD

LIBOR

+

1.75

%

),

4/20/28

..................

United

States

1,350,000

1,328,128

e,s

Dryden

38

Senior

Loan

Fund

,

2015-38A

,

CR

,

144A,

FRN

,

2.237

%

,

(

3-month

USD

LIBOR

+

2

%

),

7/15/30

.....................

United

States

2,500,000

2,416,267

e,s

Dryden

45

Senior

Loan

Fund

,

2016-45A

,

CR

,

144A,

FRN

,

2.437

%

,

(

3-month

USD

LIBOR

+

2.2

%

),

10/15/30

..................

United

States

1,875,000

1,841,078

e,s

Dryden

55

CLO

Ltd.

,

2018-55A,

C,

144A,

FRN,

2.137%,

(3-month

USD

LIBOR

+

1.9%),

4/15/31

...........................................

United

States

600,000

575,652

2018-55A,

D,

144A,

FRN,

3.087%,

(3-month

USD

LIBOR

+

2.85%),

4/15/31

.....................................

United

States

300,000

266,817

e,s

Dryden

58

CLO

Ltd.

,

2018-58A,

A2,

144A,

FRN,

1.468%,

(3-month

USD

LIBOR

+

1.25%),

7/17/31

.....................................

United

States

1,600,000

1,566,219

2018-58A,

B,

144A,

FRN,

1.718%,

(3-month

USD

LIBOR

+

1.5%),

7/17/31

...........................................

United

States

11,000,000

10,713,939

e,s

Dryden

64

CLO

Ltd.

,

2018-64A

,

C

,

144A,

FRN

,

1.968

%

,

(

3-month

USD

LIBOR

+

1.75

%

),

4/18/31

..........................

United

States

750,000

718,017

e,s

Dryden

70

CLO

Ltd.

,

2018-70A

,

B

,

144A,

FRN

,

1.93

%

,

(

3-month

USD

LIBOR

+

1.7

%

),

1/16/32

...........................

United

States

560,580

552,671

e,s

Eaton

Vance

CLO

Ltd.

,

2014-1RA

,

C

,

144A,

FRN

,

2.337

%

,

(

3-month

USD

LIBOR

+

2.1

%

),

7/15/30

...........................

United

States

789,030

767,146

e,s

Ellington

CLO

III

Ltd.

,

2018-3A

,

A1

,

144A,

FRN

,

1.868

%

,

(

3-month

USD

LIBOR

+

1.65

%

),

7/20/30

..........................

United

States

3,809,321

3,747,447

e,s

Euro-Galaxy

V

CLO

BV

,

2016-5A

,

BR

,

144A,

FRN

,

1.6

%

,

(

3-month

EURIBOR

+

1.6

%

),

11/10/30

...........................

Netherlands

7,400,000

EUR

8,520,224

e

FirstKey

Homes

Trust

,

2020-SFR2

,

A

,

144A,

1.266

%

,

10/19/37

...

United

States

4,230,000

4,221,749

e,s

Flagship

CLO

VIII

Ltd.

,

2014-8A

,

CRR

,

144A,

FRN

,

2.03

%

,

(

3-month

USD

LIBOR

+

1.8

%

),

1/16/26

...........................

United

States

1,400,000

1,384,595

e,s

Galaxy

XXV

CLO

Ltd.

,

2018-25A

,

B

,

144A,

FRN

,

1.865

%

,

(

3-month

USD

LIBOR

+

1.65

%

),

10/25/31

.........................

United

States

2,000,000

1,958,510

e,s

Galaxy

XXVI

CLO

Ltd.

,

2018-26A

,

B

,

144A,

FRN

,

1.956

%

,

(

3-month

USD

LIBOR

+

1.7

%

),

11/22/31

..........................

United

States

2,100,000

2,073,699

e,s

Galaxy

XXVII

CLO

Ltd.

,

2018-27A

,

A

,

144A,

FRN

,

1.3

%

,

(

3-month

USD

LIBOR

+

1.02

%

),

5/16/31

..........................

United

States

1,500,000

1,482,750

e,s

Gilbert

Park

CLO

Ltd.

,

2017-1A

,

B

,

144A,

FRN

,

1.837

%

,

(

3-month

USD

LIBOR

+

1.6

%

),

10/15/30

..........................

United

States

3,000,000

2,932,813

e,s

Halcyon

Loan

Advisors

Funding

Ltd.

,

2018-1A

,

A2

,

144A,

FRN

,

2.018

%

,

(

3-month

USD

LIBOR

+

1.8

%

),

7/21/31

.............

United

States

5,000,000

4,880,100

e,s

Harbor

Park

CLO

18-1

Ltd.

,

2018-1A,

A2,

144A,

FRN,

1.618%,

(3-month

USD

LIBOR

+

1.4%),

1/20/31

...........................................

United

States

1,710,526

1,682,260

2018-1A,

B1,

144A,

FRN,

1.918%,

(3-month

USD

LIBOR

+

1.7%),

1/20/31

...........................................

United

States

466,667

459,771

e,s

Hayfin

Kingsland

IX

Ltd.

,

2018-9A

,

BR

,

144A,

FRN

,

2.022

%

,

(

3-month

USD

LIBOR

+

1.8

%

),

4/28/31

...................

United

States

5,200,000

5,108,832

e,s

Holland

Park

CLO

DAC

,

1A,

A1RR,

144A,

FRN,

0.92%,

(3-month

EURIBOR

+

0.92%),

11/14/32

..........................................

Ireland

15,000,000

EUR

17,320,166

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

74

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Asset-Backed

Securities

(continued)

Diversified

Financial

Services

(continued)

e,s

Holland

Park

CLO

DAC,

(continued)

1A,

A2RR,

144A,

FRN,

1.65%,

(3-month

EURIBOR

+

1.65%),

11/14/32

..........................................

Ireland

7,200,000

EUR

$

8,309,394

e,s

HPS

Loan

Management

Ltd.

,

13A-18,

A2,

144A,

FRN,

1.687%,

(3-month

USD

LIBOR

+

1.45%),

10/15/30

..........................................

United

States

1,400,000

1,382,055

13A-18,

C,

144A,

FRN,

2.387%,

(3-month

USD

LIBOR

+

2.15%),

10/15/30

..........................................

United

States

500,000

482,517

e,s

Invitation

Homes

Trust

,

2018-SFR3,

A,

144A,

FRN,

1.147%,

(1-month

USD

LIBOR

+

1%),

7/17/37

...........................................

United

States

10,522,262

10,560,697

2018-SFR4,

A,

144A,

FRN,

1.247%,

(1-month

USD

LIBOR

+

1.1%),

1/17/38

......................................

United

States

8,704,597

8,736,411

e,s

LCM

26

Ltd.

,

26A,

B,

144A,

FRN,

1.618%,

(3-month

USD

LIBOR

+

1.4%),

1/20/31

...........................................

United

States

4,500,000

4,328,907

26A,

C,

144A,

FRN,

2.018%,

(3-month

USD

LIBOR

+

1.8%),

1/20/31

...........................................

United

States

2,000,000

1,890,220

e,s

LCM

XVI

LP

,

16A

,

BR2

,

144A,

FRN

,

1.987

%

,

(

3-month

USD

LIBOR

+

1.75

%

),

10/15/31

..................................

United

States

1,756,602

1,734,385

e,s

LCM

XVIII

LP

,

18A

,

BR

,

144A,

FRN

,

1.818

%

,

(

3-month

USD

LIBOR

+

1.6

%

),

4/20/31

....................................

United

States

1,210,000

1,175,668

s

Lehman

XS

Trust

,

2005-4

,

1A4

,

FRN

,

0.709

%

,

(

1-month

USD

LIBOR

+

0.56

%

),

10/25/35

..................................

United

States

211,474

211,029

e,s

Long

Point

Park

CLO

Ltd.

,

2017-1A,

A2,

144A,

FRN,

1.593%,

(3-month

USD

LIBOR

+

1.375%),

1/17/30

....................................

United

States

3,400,000

3,291,747

2017-1A,

B,

144A,

FRN,

1.918%,

(3-month

USD

LIBOR

+

1.7%),

1/17/30

...........................................

United

States

2,000,000

1,904,465

e,s

Madison

Park

Euro

Funding

VIII

DAC

,

8A,

ARN,

144A,

FRN,

0.95%,

(3-month

EURIBOR

+

0.95%),

4/15/32

...........................................

Ireland

24,700,000

EUR

28,652,966

8A,

BRN,

144A,

FRN,

1.7%,

(3-month

EURIBOR

+

1.7%),

4/15/32

Ireland

2,800,000

EUR

3,241,476

e,s

Madison

Park

Funding

XIV

Ltd.

,

2014-14A,

BRR,

144A,

FRN,

1.916%,

(3-month

USD

LIBOR

+

1.7%),

10/22/30

.....................................

United

States

2,500,000

2,452,453

2014-14A,

CRR,

144A,

FRN,

2.416%,

(3-month

USD

LIBOR

+

2.2%),

10/22/30

.....................................

United

States

937,500

919,674

e,s

Madison

Park

Funding

XLII

Ltd.

,

13A,

B,

144A,

FRN,

1.709%,

(3-month

USD

LIBOR

+

1.5%),

11/21/30

..........................................

United

States

3,000,000

2,917,725

13A,

C,

144A,

FRN,

2.009%,

(3-month

USD

LIBOR

+

1.8%),

11/21/30

..........................................

United

States

1,600,000

1,535,037

e,s

Madison

Park

Funding

XXII

Ltd.

,

2016-22A

,

CR

,

144A,

FRN

,

2.237

%

,

(

3-month

USD

LIBOR

+

2

%

),

1/15/33

..............

United

States

2,800,000

2,655,790

e,s

Madison

Park

Funding

XXIX

Ltd.

,

2018-29A,

B,

144A,

FRN,

1.968%,

(3-month

USD

LIBOR

+

1.75%),

10/18/30

....................................

United

States

4,000,000

3,937,191

2018-29A,

C,

144A,

FRN,

2.418%,

(3-month

USD

LIBOR

+

2.2%),

10/18/30

..........................................

United

States

995,968

966,391

e,s

Madison

Park

Funding

XXVIII

Ltd.

,

2018-28A,

B,

144A,

FRN,

1.837%,

(3-month

USD

LIBOR

+

1.6%),

7/15/30

...........................................

United

States

2,000,000

1,965,259

2018-28A,

C,

144A,

FRN,

2.087%,

(3-month

USD

LIBOR

+

1.85%),

7/15/30

.....................................

United

States

4,200,000

4,043,154

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

75

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Asset-Backed

Securities

(continued)

Diversified

Financial

Services

(continued)

e,s

Madison

Park

Funding

XXXI

Ltd.

,

2018-31A,

A2A,

144A,

FRN,

1.709%,

(3-month

USD

LIBOR

+

1.5%),

1/23/31

......................................

United

States

3,000,000

$

2,964,604

2018-31A,

B,

144A,

FRN,

1.909%,

(3-month

USD

LIBOR

+

1.7%),

1/23/31

...........................................

United

States

6,000,000

5,895,045

2018-31A,

C,

144A,

FRN,

2.359%,

(3-month

USD

LIBOR

+

2.15%),

1/23/31

.....................................

United

States

2,600,000

2,548,000

e,g,t

Mill

City

Mortgage

Loan

Trust

,

2016-1,

A1,

144A,

FRN,

2.5%,

4/25/57

....................

United

States

3,398,995

3,436,284

2017-1,

A1,

144A,

FRN,

2.75%,

11/25/58

..................

United

States

655,842

666,973

2017-3,

A1,

144A,

FRN,

2.75%,

1/25/61

...................

United

States

4,990,970

5,142,645

2018-1,

A1,

144A,

FRN,

3.25%,

5/25/62

...................

United

States

11,994,023

12,444,402

2018-4,

A1B,

144A,

FRN,

3.5%,

4/25/66

...................

United

States

10,323,962

10,963,488

e,s

Neuberger

Berman

CLO

XVIII

Ltd.

,

2014-18A,

A1BR,

144A,

FRN,

1.609%,

(3-month

USD

LIBOR

+

1.4%),

10/21/30

.....................................

United

States

2,295,000

2,254,936

2014-18A,

BR2,

144A,

FRN,

2.359%,

(3-month

USD

LIBOR

+

2.15%),

10/21/30

....................................

United

States

1,600,000

1,553,075

e,s

Neuberger

Berman

CLO

XVI-S

Ltd.

,

2017-16SA

,

C

,

144A,

FRN

,

1.837

%

,

(

3-month

USD

LIBOR

+

1.6

%

),

1/15/28

.............

United

States

400,000

390,788

e,s

Neuberger

Berman

Loan

Advisers

CLO

26

Ltd.

,

2017-26A

,

C

,

144A,

FRN

,

1.968

%

,

(

3-month

USD

LIBOR

+

1.75

%

),

10/18/30

......

United

States

2,100,000

2,020,951

e,s

Neuberger

Berman

Loan

Advisers

CLO

27

Ltd.

,

2018-27A

,

C

,

144A,

FRN

,

1.937

%

,

(

3-month

USD

LIBOR

+

1.7

%

),

1/15/30

........

United

States

500,000

479,186

e,s

Newark

BSL

CLO

2

Ltd.

,

2017-1A

,

B

,

144A,

FRN

,

2.565

%

,

(

3-month

USD

LIBOR

+

2.35

%

),

7/25/30

..........................

United

States

583,989

575,473

e,s

NZCG

Funding

Ltd.

,

2015-1A

,

A2R

,

144A,

FRN

,

1.784

%

,

(

3-month

USD

LIBOR

+

1.55

%

),

2/26/31

..........................

United

States

7,920,000

7,785,690

e,s

Octagon

Investment

Partners

18-R

Ltd.

,

2018-18A,

A1A,

144A,

FRN,

1.19%,

(3-month

USD

LIBOR

+

0.96%),

4/16/31

.....................................

United

States

1,000,000

983,507

2018-18A,

C,

144A,

FRN,

2.93%,

(3-month

USD

LIBOR

+

2.7%),

4/16/31

...........................................

United

States

1,000,000

886,530

e,s

Octagon

Investment

Partners

26

Ltd.

,

2016-1A,

A2R,

144A,

FRN,

1.587%,

(3-month

USD

LIBOR

+

1.35%),

7/15/30

.....................................

United

States

1,600,000

1,563,036

2016-1A,

BR,

144A,

FRN,

1.837%,

(3-month

USD

LIBOR

+

1.6%),

7/15/30

...........................................

United

States

2,000,000

1,955,167

e,s

Octagon

Investment

Partners

28

Ltd.

,

2016-1A,

A2R,

144A,

FRN,

1.665%,

(3-month

USD

LIBOR

+

1.45%),

10/24/30

....................................

United

States

4,000,000

3,939,596

2016-1A,

BR,

144A,

FRN,

2.015%,

(3-month

USD

LIBOR

+

1.8%),

10/24/30

..........................................

United

States

1,186,282

1,170,320

e,s

Octagon

Investment

Partners

31

LLC

,

2017-1A

,

C

,

144A,

FRN

,

2.618

%

,

(

3-month

USD

LIBOR

+

2.4

%

),

7/20/30

.............

United

States

280,761

276,572

e,s

Octagon

Investment

Partners

33

Ltd.

,

2017-1A,

A2,

144A,

FRN,

1.718%,

(3-month

USD

LIBOR

+

1.5%),

1/20/31

...........................................

United

States

2,000,000

1,944,149

2017-1A,

B,

144A,

FRN,

2.068%,

(3-month

USD

LIBOR

+

1.85%),

1/20/31

...........................................

United

States

500,000

476,269

2017-1A,

C,

144A,

FRN,

2.968%,

(3-month

USD

LIBOR

+

2.75%),

1/20/31

...........................................

United

States

250,000

228,696

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

76

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Asset-Backed

Securities

(continued)

Diversified

Financial

Services

(continued)

e,s

Octagon

Investment

Partners

35

Ltd.

,

2018-1A

,

A1B

,

144A,

FRN

,

1.318

%

,

(

3-month

USD

LIBOR

+

1.1

%

),

1/20/31

.............

United

States

2,000,000

$

1,960,955

e,s

Octagon

Investment

Partners

37

Ltd.

,

2018-2A

,

A2

,

144A,

FRN

,

1.795

%

,

(

3-month

USD

LIBOR

+

1.58

%

),

7/25/30

............

United

States

1,000,000

976,524

e,s

Octagon

Investment

Partners

XVI

Ltd.

,

2013-1A,

BR,

144A,

FRN,

1.818%,

(3-month

USD

LIBOR

+

1.6%),

7/17/30

...........................................

United

States

4,000,000

3,900,070

2013-1A,

CR,

144A,

FRN,

2.068%,

(3-month

USD

LIBOR

+

1.85%),

7/17/30

.....................................

United

States

3,000,000

2,865,603

e,s

Octagon

Investment

Partners

XVII

Ltd.

,

2013-1A

,

BR2

,

144A,

FRN

,

1.615

%

,

(

3-month

USD

LIBOR

+

1.4

%

),

1/25/31

.............

United

States

9,640,000

9,293,651

e,s

Octagon

Investment

Partners

XXII

Ltd.

,

2014-1A

,

CRR

,

144A,

FRN

,

2.116

%

,

(

3-month

USD

LIBOR

+

1.9

%

),

1/22/30

.............

United

States

2,100,000

2,019,023

e,s

Octagon

Investment

Partners

XXIII

Ltd.

,

2015-1A,

BR,

144A,

FRN,

1.437%,

(3-month

USD

LIBOR

+

1.2%),

7/15/27

...........................................

United

States

1,200,000

1,168,558

2015-1A,

DR,

144A,

FRN,

2.787%,

(3-month

USD

LIBOR

+

2.55%),

7/15/27

.....................................

United

States

600,000

563,870

e

Progress

Residential

Trust

,

2017-SFR1,

A,

144A,

2.768%,

8/17/34

....................

United

States

407,577

415,159

2018-SFR2,

A,

144A,

3.712%,

8/17/35

....................

United

States

3,257,000

3,329,310

e,g,t

Prosper

Pass-Thru

Trust

III

,

2020-PT1,

A,

144A,

FRN,

8.796%,

3/15/26

.................

United

States

2,817,898

2,763,870

2020-PT2,

A,

144A,

FRN,

9.444%,

4/15/26

.................

United

States

2,980,181

2,926,590

2020-PT3,

A,

144A,

FRN,

7.183%,

5/15/26

.................

United

States

916,393

929,953

s

RAAC

Trust

,

2004-SP1

,

AII

,

FRN

,

0.849

%

,

(

1-month

USD

LIBOR

+

0.7

%

),

3/25/34

....................................

United

States

180,311

179,078

e,s

Race

Point

X

CLO

Ltd.

,

2016-10A

,

B1R

,

144A,

FRN

,

1.865

%

,

(

3-month

USD

LIBOR

+

1.65

%

),

7/25/31

..................

United

States

700,000

679,573

e,s

TCI-Flatiron

CLO

Ltd.

,

2017-1A,

B,

144A,

FRN,

1.84%,

(3-month

USD

LIBOR

+

1.56%),

11/18/30

..........................................

United

States

2,000,000

1,969,622

2017-1A,

C,

144A,

FRN,

2.13%,

(3-month

USD

LIBOR

+

1.85%),

11/18/30

..........................................

United

States

1,700,000

1,642,180

e

Towd

Point

Mortgage

Trust

,

2015-1,

AE,

144A,

3%,

10/25/53

.........................

United

States

1,958,321

1,991,491

t

2015-2,

1A12,

144A,

FRN,

2.75%,

11/25/60

................

United

States

204,558

206,916

t

2015-2,

2A1,

144A,

FRN,

3.75%,

11/25/57

.................

United

States

156,171

156,905

t

2015-3,

A1A,

144A,

FRN,

3.5%,

3/25/54

...................

United

States

662,304

667,975

t

2015-3,

A1B,

144A,

FRN,

3%,

3/25/54

....................

United

States

305,842

307,901

t

2016-1,

A1,

144A,

FRN,

3.5%,

2/25/55

....................

United

States

4,038,142

4,107,400

t

2016-2,

A1A,

144A,

FRN,

2.75%,

8/25/55

..................

United

States

516,300

529,887

t

2016-3,

A1,

144A,

FRN,

2.25%,

4/25/56

...................

United

States

5,863,937

5,942,244

t

2016-4,

A1,

144A,

FRN,

2.25%,

7/25/56

...................

United

States

8,865,724

9,010,173

t

2016-5,

A1,

144A,

FRN,

2.5%,

10/25/56

...................

United

States

3,103,007

3,172,759

t

2017-1,

A1,

144A,

FRN,

2.75%,

10/25/56

..................

United

States

9,009,348

9,238,008

t

2017-2,

A1,

144A,

FRN,

2.75%,

4/25/57

...................

United

States

9,200,688

9,456,962

s

2017-5,

A1,

144A,

FRN,

0.749%,

(1-month

USD

LIBOR

+

0.6%),

2/25/57

...........................................

United

States

1,931,255

1,928,734

t

2018-1,

A1,

144A,

FRN,

3%,

1/25/58

.....................

United

States

2,723,696

2,845,335

t

2018-3,

A1,

144A,

FRN,

3.75%,

5/25/58

...................

United

States

12,060,748

12,872,204

t

2018-4,

A1,

144A,

FRN,

3%,

6/25/58

.....................

United

States

16,164,342

17,273,656

t

2018-6,

A1A,

144A,

FRN,

3.75%,

3/25/58

..................

United

States

5,474,131

5,782,921

t

2019-1,

A1,

144A,

FRN,

3.75%,

3/25/58

...................

United

States

13,003,650

13,944,126

e,g

Upgrade

Master

Pass-Thru

Trust

,

t

2019-PT1,

A,

144A,

FRN,

12.429%,

6/15/25

................

United

States

613,407

551,768

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

77

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Asset-Backed

Securities

(continued)

Diversified

Financial

Services

(continued)

e,g

Upgrade

Master

Pass-Thru

Trust,

(continued)

2019-PT2,

A,

144A,

7.727%,

2/15/26

.....................

United

States

2,513,656

$

2,464,961

e,s

Voya

CLO

Ltd.

,

2013-2A,

A1R,

144A,

FRN,

1.185%,

(3-month

USD

LIBOR

+

0.97%),

4/25/31

.....................................

United

States

11,800,000

11,591,244

2013-2A,

CR,

144A,

FRN,

2.965%,

(3-month

USD

LIBOR

+

2.75%),

4/25/31

.....................................

United

States

375,000

328,042

2013-3A,

A2RR,

144A,

FRN,

1.918%,

(3-month

USD

LIBOR

+

1.7%),

10/18/31

.....................................

United

States

1,100,000

1,081,292

2014-1A,

BR2,

144A,

FRN,

2.118%,

(3-month

USD

LIBOR

+

1.9%),

4/18/31

......................................

United

States

2,750,000

2,639,774

2014-1A,

CR2,

144A,

FRN,

3.018%,

(3-month

USD

LIBOR

+

2.8%),

4/18/31

......................................

United

States

600,000

524,277

2016-3A,

A2R,

144A,

FRN,

1.618%,

(3-month

USD

LIBOR

+

1.4%),

10/18/31

.....................................

United

States

818,182

804,021

2016-3A,

CR,

144A,

FRN,

3.468%,

(3-month

USD

LIBOR

+

3.25%),

10/18/31

....................................

United

States

1,698,113

1,518,208

2017-3A,

B,

144A,

FRN,

2.568%,

(3-month

USD

LIBOR

+

2.35%),

7/20/30

...........................................

United

States

507,690

502,379

2018-2A,

A2,

144A,

FRN,

1.487%,

(3-month

USD

LIBOR

+

1.25%),

7/15/31

.....................................

United

States

2,500,000

2,440,351

e,s

Webster

Park

CLO

Ltd.

,

2015-1A

,

A2R

,

144A,

FRN

,

1.818

%

,

(

3-month

USD

LIBOR

+

1.6

%

),

7/20/30

...................

United

States

1,750,000

1,706,259

e,s

West

CLO

Ltd.

,

2014-1A

,

BR

,

144A,

FRN

,

2.068

%

,

(

3-month

USD

LIBOR

+

1.85

%

),

7/18/26

..............................

United

States

2,410,000

2,381,211

567,027,882

a

a

a

a

a

a

Thrifts

&

Mortgage

Finance

0.1%

t

Conseco

Finance

Corp.

,

1998-6

,

A8

,

FRN

,

6.66

%

,

6/01/30

......

United

States

1,125,665

1,141,759

t

Conseco

Finance

Securitizations

Corp.

,

2002-2

,

M1

,

FRN

,

7.424

%

,

3/01/33

...........................................

United

States

494,818

521,238

s

Countrywide

Asset-Backed

Certificates

Trust

,

2002-3

,

1A1

,

FRN

,

0.889

%

,

(

1-month

USD

LIBOR

+

0.74

%

),

5/25/32

............

United

States

1,100

1,078

1,664,075

a

a

a

a

a

a

Total

Asset-Backed

Securities

(Cost

$616,149,787)

..............................

617,389,748

g

Commercial

Mortgage-Backed

Securities

18.4%

Capital

Markets

0.1%

s

Merrill

Lynch

Mortgage

Investors

Trust

,

2003-A,

1A,

FRN,

0.889%,

(1-month

USD

LIBOR

+

0.74%),

3/25/28

...........................................

United

States

158,477

154,542

2003-E,

A1,

FRN,

0.769%,

(1-month

USD

LIBOR

+

0.62%),

10/25/28

..........................................

United

States

342,804

340,372

2005-A10,

A,

FRN,

0.359%,

(1-month

USD

LIBOR

+

0.21%),

2/25/36

...........................................

United

States

1,505,950

1,477,711

1,972,625

a

a

a

a

a

a

Diversified

Financial

Services

4.0%

s

American

Home

Mortgage

Investment

Trust

,

2005-1

,

6A

,

FRN

,

2.272

%

,

(

6-month

USD

LIBOR

+

2

%

),

6/25/45

..............

United

States

548,840

556,577

e

BAMLL

Commercial

Mortgage

Securities

Trust

,

2012-PARK,

A,

144A,

2.959%,

12/10/30

...................

United

States

3,300,000

3,452,404

2015-200P,

A,

144A,

3.218%,

4/14/33

....................

United

States

600,000

645,442

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

78

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

g

Commercial

Mortgage-Backed

Securities

(continued)

Diversified

Financial

Services

(continued)

e,s

Bellemeade

Re

Ltd.

,

2018-1A

,

M1B

,

144A,

FRN

,

1.749

%

,

(

1-month

USD

LIBOR

+

1.6

%

),

4/25/28

...........................

United

States

2,684,489

$

2,659,555

e

BRAVO

Residential

Funding

Trust

,

2019-1,

A1C,

144A,

3.5%,

3/25/58

.......................

United

States

5,325,323

5,507,794

t

2019-2,

A3,

144A,

FRN,

3.5%,

10/25/44

...................

United

States

8,003,357

8,468,347

e,s

BX

Commercial

Mortgage

Trust

,

2018-IND,

A,

144A,

FRN,

0.898%,

(1-month

USD

LIBOR

+

0.75%),

11/15/35

..........................................

United

States

3,198,960

3,190,685

2019-XL,

A,

144A,

FRN,

1.068%,

(1-month

USD

LIBOR

+

0.92%),

10/15/36

..........................................

United

States

3,654,797

3,661,086

2020-BXLP,

A,

144A,

FRN,

0.948%,

(1-month

USD

LIBOR

+

0.8%),

12/15/36

.....................................

United

States

11,539,438

11,539,464

2020-FOX,

A,

144A,

FRN,

Zero

Cpn.,

(1-month

USD

LIBOR

+

1%),

11/15/32

..........................................

United

States

13,470,000

13,486,838

e

BXP

Trust

,

2017-GM

,

A

,

144A,

3.379

%

,

6/13/39

..............

United

States

2,000,000

2,215,923

t

CHL

Mortgage

Pass-Through

Trust

,

2004-11

,

2A1

,

FRN

,

2.605

%

,

7/25/34

...........................................

United

States

1,030,752

1,034,091

e,g,t

CIM

Trust

,

2018-INV1,

A4,

144A,

FRN,

4%,

8/25/48

..................

United

States

4,935,378

5,124,798

2019-INV1,

A1,

144A,

FRN,

4%,

2/25/49

..................

United

States

811,903

843,064

2019-INV2,

A3,

144A,

FRN,

4%,

5/25/49

..................

United

States

7,467,556

7,724,631

g

Commercial

Mortgage

Trust

,

t

2006-GG7,

AJ,

FRN,

6.012%,

7/10/38

....................

United

States

866,388

779,966

e,t

2014-277P,

A,

144A,

FRN,

3.611%,

8/10/49

................

United

States

3,880,000

4,135,019

e

2015-3BP,

A,

144A,

3.178%,

2/10/35

.....................

United

States

600,000

640,812

Credit

Suisse

First

Boston

Mortgage

Securities

Corp.

,

2004-6

,

3A1

,

5

%

,

9/25/19

........................................

United

States

159,923

135,115

e,t

CSMC

Trust

,

2014-IVR3

,

A1

,

144A,

FRN

,

3.5

%

,

7/25/44

........

United

States

1,063,314

1,104,193

e,s

DBCG

Mortgage

Trust

,

2017-BBG

,

A

,

144A,

FRN

,

0.848

%

,

(

1-month

USD

LIBOR

+

0.7

%

),

6/15/34

...........................

United

States

1,500,000

1,491,883

e,t

Eleven

Madison

Mortgage

Trust

,

2015-11MD

,

A

,

144A,

FRN

,

3.555

%

,

9/10/35

.....................................

United

States

2,005,000

2,183,812

e,t

Flagstar

Mortgage

Trust

,

2018-6RR

,

1A3

,

144A,

FRN

,

4

%

,

10/25/48

United

States

2,963,033

2,998,028

t

GE

Commercial

Mortgage

Corp.

Trust

,

2007-C1

,

AM

,

FRN

,

5.606

%

,

12/10/49

..........................................

United

States

524,139

288,501

t

GSR

Mortgage

Loan

Trust

,

2005-AR1

,

1A1

,

FRN

,

3.422

%

,

1/25/35

United

States

156,842

150,713

e,t

J.P.

Morgan

Chase

Commercial

Mortgage

Securities

Trust

,

2016-

NINE

,

A

,

144A,

FRN

,

2.854

%

,

9/06/38

....................

United

States

600,000

643,331

t

J.P.

Morgan

Mortgage

Trust

,

2004-A1

,

5A1

,

FRN

,

3.967

%

,

2/25/34

United

States

30,233

31,600

MASTR

Alternative

Loan

Trust

,

2003-1,

3A1,

5%,

6/24/23

..............................

United

States

12,999

13,720

2003-6,

2A1,

5%,

8/24/25

..............................

United

States

23,224

23,226

e

Morgan

Stanley

Capital

I

Trust

,

2014-150E

,

A

,

144A,

3.912

%

,

9/09/32

...........................................

United

States

450,000

480,426

e,s

OBX

Trust

,

2018-1

,

A2

,

144A,

FRN

,

0.799

%

,

(

1-month

USD

LIBOR

+

0.65

%

),

6/25/57

.....................................

United

States

1,837,896

1,837,933

e,g,t

Provident

Funding

Mortgage

Trust

,

2019-1,

A3,

144A,

FRN,

3%,

12/25/49

....................

United

States

3,339,431

3,385,955

2020-1,

A3,

144A,

FRN,

3%,

2/25/50

.....................

United

States

4,278,689

4,359,027

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

79

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

g

Commercial

Mortgage-Backed

Securities

(continued)

Diversified

Financial

Services

(continued)

e,s

Radnor

Re

Ltd.

,

2018-1

,

M1

,

144A,

FRN

,

1.549

%

,

(

1-month

USD

LIBOR

+

1.4

%

),

3/25/28

...............................

United

States

251,998

$

251,901

e,t

Sequoia

Mortgage

Trust

,

2016-2

,

A4

,

144A,

FRN

,

3.5

%

,

8/25/46

..

United

States

6,630,038

6,723,030

s

Structured

Asset

Mortgage

Investments

II

Trust

,

2004-AR6

,

A1A

,

FRN

,

0.847

%

,

(

1-month

USD

LIBOR

+

0.7

%

),

2/19/35

........

United

States

950,097

922,633

s

Thornburg

Mortgage

Securities

Trust

,

2004-3

,

A

,

FRN

,

0.889

%

,

(

1-month

USD

LIBOR

+

0.74

%

),

9/25/34

..................

United

States

453,863

445,925

e,t

Wells

Fargo

Mortgage

Backed

Securities

Trust

,

2018-1

,

A3

,

144A,

FRN

,

3.5

%

,

7/25/47

..................................

United

States

2,587,489

2,614,525

105,751,973

a

a

a

a

a

a

Thrifts

&

Mortgage

Finance

14.3%

Banc

of

America

Commercial

Mortgage

Trust

,

2015-UBS7

,

A4

,

3.705

%

,

9/15/48

.....................................

United

States

100,000

110,349

FHLMC

,

4402

,

PE

,

3.5

%

,

3/15/43

.........................

United

States

883,837

907,331

s

FHLMC

Structured

Agency

Credit

Risk

Debt

Notes

,

2013-DN2,

M2,

FRN,

4.399%,

(1-month

USD

LIBOR

+

4.25%),

11/25/23

..........................................

United

States

6,678,478

6,151,834

2014-DN1,

M2,

FRN,

2.349%,

(1-month

USD

LIBOR

+

2.2%),

2/25/24

...........................................

United

States

168,003

168,209

2014-DN2,

M3,

FRN,

3.749%,

(1-month

USD

LIBOR

+

3.6%),

4/25/24

...........................................

United

States

14,725,437

13,973,206

2014-DN3,

M3,

FRN,

4.149%,

(1-month

USD

LIBOR

+

4%),

8/25/24

...........................................

United

States

2,561,533

2,591,044

2014-DN4,

M3,

FRN,

4.699%,

(1-month

USD

LIBOR

+

4.55%),

10/25/24

..........................................

United

States

5,465,940

5,573,998

2014-HQ1,

M3,

FRN,

4.249%,

(1-month

USD

LIBOR

+

4.1%),

8/25/24

...........................................

United

States

5,718,576

5,796,192

2014-HQ2,

M2,

FRN,

2.349%,

(1-month

USD

LIBOR

+

2.2%),

9/25/24

...........................................

United

States

56,118

56,146

2014-HQ2,

M3,

FRN,

3.899%,

(1-month

USD

LIBOR

+

3.75%),

9/25/24

...........................................

United

States

14,560,000

14,927,455

2014-HQ3,

M3,

FRN,

4.899%,

(1-month

USD

LIBOR

+

4.75%),

10/25/24

..........................................

United

States

1,710,279

1,735,245

2015-DN1,

M3,

FRN,

4.299%,

(1-month

USD

LIBOR

+

4.15%),

1/25/25

...........................................

United

States

4,896,559

4,958,237

2015-DNA1,

M3,

FRN,

3.449%,

(1-month

USD

LIBOR

+

3.3%),

10/25/27

..........................................

United

States

5,879,395

6,075,880

2015-DNA2,

M3,

FRN,

4.049%,

(1-month

USD

LIBOR

+

3.9%),

12/25/27

..........................................

United

States

10,770,796

10,928,317

2015-DNA3,

M3,

FRN,

4.849%,

(1-month

USD

LIBOR

+

4.7%),

4/25/28

...........................................

United

States

8,896,661

9,307,155

2015-HQ1,

M3,

FRN,

3.949%,

(1-month

USD

LIBOR

+

3.8%),

3/25/25

...........................................

United

States

2,146,437

2,152,709

2015-HQ2,

M3,

FRN,

3.399%,

(1-month

USD

LIBOR

+

3.25%),

5/25/25

...........................................

United

States

8,360,000

8,502,766

2015-HQA1,

M3,

FRN,

4.849%,

(1-month

USD

LIBOR

+

4.7%),

3/25/28

...........................................

United

States

13,631,597

14,205,365

2015-HQA2,

M3,

FRN,

4.949%,

(1-month

USD

LIBOR

+

4.8%),

5/25/28

...........................................

United

States

1,581,737

1,628,005

2016-DNA1,

M3,

FRN,

5.699%,

(1-month

USD

LIBOR

+

5.55%),

7/25/28

...........................................

United

States

11,339,667

11,971,596

2016-DNA2,

M3,

FRN,

4.799%,

(1-month

USD

LIBOR

+

4.65%),

10/25/28

..........................................

United

States

12,665,159

13,210,569

2016-HQA2,

M3,

FRN,

5.299%,

(1-month

USD

LIBOR

+

5.15%),

11/25/28

..........................................

United

States

10,068,326

10,537,737

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

80

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

g

Commercial

Mortgage-Backed

Securities

(continued)

Thrifts

&

Mortgage

Finance

(continued)

s

FHLMC

Structured

Agency

Credit

Risk

Debt

Notes,

(continued)

2016-HQA3,

M2,

FRN,

1.499%,

(1-month

USD

LIBOR

+

1.35%),

3/25/29

...........................................

United

States

200,338

$

200,433

2017-DNA1,

M2,

FRN,

3.399%,

(1-month

USD

LIBOR

+

3.25%),

7/25/29

...........................................

United

States

2,806,207

2,898,709

2017-DNA2,

M2,

FRN,

3.599%,

(1-month

USD

LIBOR

+

3.45%),

10/25/29

..........................................

United

States

16,080,000

16,601,561

2017-DNA3,

M2,

FRN,

2.649%,

(1-month

USD

LIBOR

+

2.5%),

3/25/30

...........................................

United

States

10,350,000

10,508,154

2017-HQA1,

M2,

FRN,

3.699%,

(1-month

USD

LIBOR

+

3.55%),

8/25/29

...........................................

United

States

20,043,353

20,471,345

2017-HQA3,

M2,

FRN,

2.499%,

(1-month

USD

LIBOR

+

2.35%),

4/25/30

...........................................

United

States

183,391

185,895

s

FNMA

Connecticut

Avenue

Securities

,

2013-C01,

M2,

FRN,

5.399%,

(1-month

USD

LIBOR

+

5.25%),

10/25/23

..........................................

United

States

14,282,740

14,158,852

2014-C01,

M2,

FRN,

4.549%,

(1-month

USD

LIBOR

+

4.4%),

1/25/24

...........................................

United

States

2,433,740

2,316,254

2014-C02,

1M2,

FRN,

2.749%,

(1-month

USD

LIBOR

+

2.6%),

5/25/24

...........................................

United

States

11,284,556

9,983,564

2014-C02,

2M2,

FRN,

2.749%,

(1-month

USD

LIBOR

+

2.6%),

5/25/24

...........................................

United

States

2,530,400

2,485,300

2014-C03,

1M2,

FRN,

3.149%,

(1-month

USD

LIBOR

+

3%),

7/25/24

...........................................

United

States

17,979,434

16,015,118

2014-C03,

2M2,

FRN,

3.049%,

(1-month

USD

LIBOR

+

2.9%),

7/25/24

...........................................

United

States

13,882,733

13,871,357

2014-C04,

1M2,

FRN,

5.049%,

(1-month

USD

LIBOR

+

4.9%),

11/25/24

..........................................

United

States

10,019,926

10,426,777

2014-C04,

2M2,

FRN,

5.149%,

(1-month

USD

LIBOR

+

5%),

11/25/24

..........................................

United

States

3,288,497

3,375,011

2015-C01,

1M2,

FRN,

4.449%,

(1-month

USD

LIBOR

+

4.3%),

2/25/25

...........................................

United

States

7,151,742

7,288,885

2015-C01,

2M2,

FRN,

4.699%,

(1-month

USD

LIBOR

+

4.55%),

2/25/25

...........................................

United

States

2,141,209

2,175,270

b

2015-C02,

1M2,

FRN,

4.149%,

(1-month

USD

LIBOR

+

4%),

5/25/25

...........................................

United

States

8,004,183

8,094,468

2015-C02,

2M2,

FRN,

4.149%,

(1-month

USD

LIBOR

+

4%),

5/25/25

...........................................

United

States

3,250,472

3,304,065

2015-C03,

1M2,

FRN,

5.149%,

(1-month

USD

LIBOR

+

5%),

7/25/25

...........................................

United

States

8,470,243

8,656,069

2015-C03,

2M2,

FRN,

5.149%,

(1-month

USD

LIBOR

+

5%),

7/25/25

...........................................

United

States

3,304,107

3,390,772

2016-C01,

1M2,

FRN,

6.899%,

(1-month

USD

LIBOR

+

6.75%),

8/25/28

...........................................

United

States

1,347,434

1,440,762

2016-C01,

2M2,

FRN,

7.099%,

(1-month

USD

LIBOR

+

6.95%),

8/25/28

...........................................

United

States

4,175,335

4,513,050

2016-C02,

1M2,

FRN,

6.149%,

(1-month

USD

LIBOR

+

6%),

9/25/28

...........................................

United

States

117,679

124,217

2016-C04,

1M2,

FRN,

4.399%,

(1-month

USD

LIBOR

+

4.25%),

1/25/29

...........................................

United

States

11,465,419

11,895,388

2016-C05,

2M2,

FRN,

4.599%,

(1-month

USD

LIBOR

+

4.45%),

1/25/29

...........................................

United

States

8,850,978

9,184,341

2016-C06,

1M2,

FRN,

4.399%,

(1-month

USD

LIBOR

+

4.25%),

4/25/29

...........................................

United

States

3,536,645

3,671,457

2016-C07,

2M2,

FRN,

4.499%,

(1-month

USD

LIBOR

+

4.35%),

5/25/29

...........................................

United

States

7,588,666

7,925,008

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

81

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

g

Commercial

Mortgage-Backed

Securities

(continued)

Thrifts

&

Mortgage

Finance

(continued)

s

FNMA

Connecticut

Avenue

Securities,

(continued)

2017-C01,

1M2,

FRN,

3.699%,

(1-month

USD

LIBOR

+

3.55%),

7/25/29

...........................................

United

States

14,942,991

$

15,418,408

2017-C02,

2M2,

FRN,

3.799%,

(1-month

USD

LIBOR

+

3.65%),

9/25/29

...........................................

United

States

2,311,488

2,341,390

2017-C03,

1M2,

FRN,

3.149%,

(1-month

USD

LIBOR

+

3%),

10/25/29

..........................................

United

States

2,545,429

2,574,819

2017-C04,

2M2,

FRN,

2.999%,

(1-month

USD

LIBOR

+

2.85%),

11/25/29

..........................................

United

States

494,784

496,558

2017-C06,

1M2,

FRN,

2.799%,

(1-month

USD

LIBOR

+

2.65%),

2/25/30

...........................................

United

States

10,008,285

9,977,779

GS

Mortgage

Securities

Trust

,

2016-GS3,

A4,

2.85%,

10/10/49

.........................

United

States

600,000

648,351

2017-GS6,

A3,

3.433%,

5/10/50

.........................

United

States

2,000,000

2,238,767

JPMBB

Commercial

Mortgage

Securities

Trust

,

2015-C30,

A5,

3.822%,

7/15/48

.........................

United

States

1,500,000

1,666,712

2016-C1,

A5,

3.576%,

3/15/49

..........................

United

States

1,500,000

1,674,135

s

New

York

Mortgage

Trust

,

2005-3

,

M1

,

FRN

,

0.824

%

,

(

1-month

USD

LIBOR

+

0.675

%

),

2/25/36

.............................

United

States

139,006

131,177

Wells

Fargo

Commercial

Mortgage

Trust

,

2016-NXS6

,

A2

,

2.399

%

,

11/15/49

..........................................

United

States

6,534,000

6,596,121

384,395,644

a

a

a

a

a

a

Total

Commercial

Mortgage-Backed

Securities

(Cost

$520,932,147)

...............

492,120,242

Mortgage-Backed

Securities

2.8%

u

Federal

Home

Loan

Mortgage

Corp.

(FHLMC)

Adjustable

Rate

0.0%

†

FHLMC,

3.555%

-

3.707%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

10/01/36

-

6/01/37

...................................

United

States

1,111,035

1,163,139

1,163,139

Federal

Home

Loan

Mortgage

Corp.

(FHLMC)

Fixed

Rate

0.0%

†

FHLMC

Gold

Pools,

15

Year,

5%,

10/01/23

..................

United

States

38,579

40,734

FHLMC

Gold

Pools,

15

Year,

6%,

6/01/23

...................

United

States

5,924

6,158

FHLMC

Gold

Pools,

30

Year,

5%,

1/01/39

...................

United

States

84,331

97,275

144,167

u

Federal

National

Mortgage

Association

(FNMA)

Adjustable

Rate

0.4%

FNMA,

1.225%

-

5.624%,

(1-month

USD

LIBOR

+/-

MBS

Margin),

5/01/21

-

10/01/44

...................................

United

States

9,975,007

10,281,810

10,281,810

Federal

National

Mortgage

Association

(FNMA)

Fixed

Rate

2.4%

FNMA,

15

Year,

3.5%,

10/01/25

...........................

United

States

457,040

483,143

FNMA,

15

Year,

4%,

12/01/25

............................

United

States

675,534

716,524

FNMA,

15

Year,

4.5%,

5/01/23

-

6/01/25

....................

United

States

412,796

436,326

FNMA,

30

Year,

5%,

3/01/38

.............................

United

States

12,994

14,640

v

FNMA,

Single-family,

15

Year,

1.5%,

11/25/35

................

United

States

6,090,000

6,216,082

v

FNMA,

Single-family,

15

Year,

2%,

11/25/35

.................

United

States

53,862,000

55,852,370

63,719,085

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

82

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Mortgage-Backed

Securities

(continued)

u

Government

National

Mortgage

Association

(GNMA)

Adjustable

Rate

0.0%

†

GNMA

II,

2.25%

-

2.875%,

(1-year

CMT

T-Note

+/-

MBS

Margin),

4/20/26

-

9/20/26

....................................

United

States

11,672

$

11,845

11,845

Total

Mortgage-Backed

Securities

(Cost

$75,420,522)

............................

75,320,046

Municipal

Bonds

3.1%

California

1.0%

San

Jose

Redevelopment

Agency

Successor

Agency

,

Tax

Allocation,

Senior

Lien,

2017A-T,

Refunding,

2.48%,

8/01/21

United

States

1,595,000

1,620,999

Tax

Allocation,

Senior

Lien,

2017A-T,

Refunding,

2.63%,

8/01/22

United

States

5,320,000

5,529,874

Tax

Allocation,

Senior

Lien,

2017A-T,

Refunding,

3.226%,

8/01/27

United

States

190,000

207,493

State

of

California,

GO,

2.375%,

10/01/26

...................

United

States

18,195,000

19,551,255

26,909,621

Colorado

0.0%

†

Board

of

Governors

of

Colorado

State

University

System,

Revenue,

2015E-2,

5%,

3/01/25

................................

United

States

100,000

119,066

Florida

0.0%

†

Citizens

Property

Insurance,

Inc.,

Revenue,

2015A-1,

5%,

6/01/22

United

States

125,000

131,275

Hawaii

0.1%

City

&

County

Honolulu,

Wastewater

System,

Revenue,

2019

B,

Refunding,

2.233%,

7/01/24

............................

United

States

2,470,000

2,586,263

Massachusetts

0.1%

Massachusetts

State

College

Building

Authority,

Revenue,

2019

C,

Refunding,

2.256%,

5/01/26

............................

United

States

2,635,000

2,754,945

New

York

1.5%

Metropolitan

Transportation

Authority

,

Revenue,

2019

D-1,

5%,

9/01/22

........................

United

States

9,690,000

9,858,606

w

Revenue,

2020

E,

Refunding,

4%,

11/15/45

................

United

States

830,000

834,764

New

York

State

Urban

Development

Corp.,

State

of

New

York

Sales

Tax,

Revenue,

2019

B,

Refunding,

2.25%,

3/15/26

...........

United

States

8,750,000

9,089,150

State

of

New

York,

GO,

2019B,

Refunding,

2.12%,

2/15/25

......

United

States

18,195,000

19,001,221

38,783,741

Ohio

0.0%

†

City

of

Cincinnati,

GO,

2015A,

Refunding,

5%,

12/01/25

........

United

States

100,000

120,889

Teays

Valley

Local

School

District,

GO,

2015,

Refunding,

4%,

12/01/26

..........................................

United

States

100,000

109,883

230,772

Oregon

0.1%

State

of

Oregon,

Department

of

Transportation,

Revenue,

Senior

Lien,

2019

B,

Refunding,

2.18%,

11/15/25

.................

United

States

3,640,000

3,888,648

Texas

0.3%

State

of

Texas,

GO,

2016

A,

5%,

4/01/21

....................

United

States

2,690,000

2,742,805

Texas

State

University

System,

Revenue,

2019

B,

Refunding,

2.351%,

3/15/26

.....................................

United

States

4,825,000

5,106,201

7,849,006

Total

Municipal

Bonds

(Cost

$79,698,412)

......................................

83,253,337

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

83

a

a

Country

Shares/Units

a

Value

a

a

a

a

a

a

Escrows

and

Litigation

Trusts

0.0%

†

a

Millennium

Corporate

Claim

Trust,

Escrow

Account

............

United

States

477,205

$

—

a

Millennium

Lender

Claim

Trust,

Escrow

Account

..............

United

States

477,205

—

a,c

Remington

Outdoor

Co.,

Inc.,

Litigation

Units

.................

United

States

16,078

—

b

Sanchez

Energy

Corp.,

Escrow

Account

....................

United

States

1,900,000

19,000

Total

Escrows

and

Litigation

Trusts

(Cost

$–)

...................................

19,000

Total

Long

Term

Investments

(Cost

$2,562,830,337)

.............................

2,539,018,405

a

Short

Term

Investments

7.4%

a

a

Country

Shares

a

Value

a

Money

Market

Funds

7.4%

d,x

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0%

........

United

States

197,465,127

197,465,127

Total

Money

Market

Funds

(Cost

$197,465,127)

.................................

197,465,127

Total

Short

Term

Investments

(Cost

$197,465,127

)

...............................

197,465,127

a

Total

Investments

(Cost

$2,760,295,464)

102.2%

................................

$2,736,483,532

Other

Assets,

less

Liabilities

(2.2)%

...........................................

(56,993,309)

Net

Assets

100.0%

...........................................................

$2,679,490,223

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

84

See

Abbreviations

on

page

169

.

*

The

principal

amount

is

stated

in

U.S.

dollars

unless

otherwise

indicated.

†

Rounds

to

less

than

0.1%

of

net

assets.

a

Fair

valued

using

significant

unobservable

inputs.

See

Note

15

regarding

fair

value

measurements.

b

Non-income

producing.

c

See

Note

9

regarding

restricted

securities.

d

See

Note

3(f)

regarding

investments

in

affiliated

management

investment

companies.

e

Security

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

a

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

October

31,

2020,

the

aggregate

value

of

these

securities

was

$915,085,958,

representing

34.2%

of

net

assets.

f

Income

may

be

received

in

additional

securities

and/or

cash.

g

The

coupon

rate

shown

represents

the

rate

at

period

end.

h

See

Note

1(j)

regarding

senior

floating

rate

interests.

i

A

portion

or

all

of

the

security

represents

an

unsettled

loan

commitment.

The

coupon

rate

is

to-be

determined

(TBD)

at

the

time

of

the

settlement

and

will

be

based

upon

a

reference

index/floor

plus

a

spread.

j

A

portion

or

all

of

the

security

purchased

on

a

delayed

delivery

basis.

See

Note

1(j)

k

See

Note

7

regarding

defaulted

securities.

l

See

Note

10

regarding

unfunded

loan

commitments.

m

See

Note

1(k)

regarding

Marketplace

Lending.

n

See

Note

1(f)

regarding

loan

participations

and

assignments.

o

A

supranational

organization

is

an

entity

formed

by

two

or

more

central

governments

through

international

treaties.

p

Perpetual

security

with

no

stated

maturity

date.

q

Principal

amount

of

security

is

adjusted

for

inflation.

See

Note

1(m).

r

A

portion

or

all

of

the

security

has

been

segregated

as

collateral

for

securities

sold

short,

open

forward

exchange

contracts

and/or

open

written

options

contracts.

At

October

31,

2020,

the

aggregate

value

of

these

securities

pledged

amounted

to

$7,112,918,

representing

0.3%

of

net

assets.

s

The

coupon

rate

shown

represents

the

rate

inclusive

of

any

caps

or

floors,

if

applicable,

in

effect

at

period

end.

t

Adjustable

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.

u

Adjustable

Rate

Mortgage-Backed

Security

(ARM);

the

rate

shown

is

the

effective

rate

at

period

end.

ARM

rates

are

not

based

on

a

published

reference

rate

and

spread,

but

instead

pass-through

weighted

average

interest

income

inclusive

of

any

caps

or

floors,

if

applicable,

from

the

underlying

mortgage

loans

in

which

the

majority

of

mortgages

pay

interest

based

on

the

index

shown

at

their

designated

reset

dates

plus

a

spread,

less

the

applicable

servicing

and

guaranty

fee

(MBS

margin).

v

Security

purchased

on

a

to-be-announced

(TBA)

basis.

See

Note

1(d).

w

Security

purchased

on

a

when-issued

basis.

See

Note

1(d).

x

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

85

At

October

31,

2020,

the

Fund

had

the

following futures

contracts

outstanding.

See

Note

1(e). 

At

October

31,

2020,

the

Fund

had

the

following

forward

exchange

contracts

outstanding.

See

Note

1

(

e

). 

At

October

31,

2020,

the

Fund

had

the

following credit

default

swap

contracts outstanding.

See

Note

1

(

e

). 

Futures

Contracts

Description

Type

Number

of

Contracts

Notional

Amount

*

Expiration

Date

Value/

Unrealized

Appreciation

(Depreciation)

Interest

rate

contracts

Australia

3

Year

Bonds

........................

Long

433

$

35,747,967

12/15/20

$

144,356

Canada

10

Year

Bonds

........................

Long

544

61,676,745

12/18/20

(358,887)

U.S.

Treasury

10

Year

Notes

....................

Short

2,011

277,957,906

12/21/20

1,513,215

U.S.

Treasury

10

Year

Ultra

Notes

................

Short

124

19,502,875

12/21/20

191,567

U.S.

Treasury

2

Year

Notes

.....................

Long

4,027

889,337,781

12/31/20

1,618

U.S.

Treasury

5

Year

Notes

.....................

Short

458

57,525,516

12/31/20

69,840

U.S.

Treasury

Long

Bonds

.....................

Short

95

16,384,531

12/21/20

227,717

U.S.

Treasury

Ultra

Bonds

......................

Short

22

4,730,000

12/21/20

83,155

Total

Futures

Contracts

......................................................................

$1,872,581

*

As

of

period

end.

Forward

Exchange

Contracts

Currency

Counter-

party

a

Type

Quantity

Contract

Amount

*

Settlement

Date

Unrealized

Appreciation

Unrealized

Depreciation

a

a

a

a

a

a

a

a

OTC

Forward

Exchange

Contracts

Brazilian

Real

......

JPHQ

Buy

2,520,623

448,111

11/09/20

$

—

$

(8,863)

Brazilian

Real

......

JPHQ

Sell

2,520,623

471,784

11/09/20

32,536

—

Japanese

Yen

......

JPHQ

Buy

338,900,000

3,208,308

11/12/20

28,740

—

Brazilian

Real

......

JPHQ

Sell

4,945,000

898,486

11/30/20

37,446

—

Indonesian

Rupiah

..

JPHQ

Buy

47,801,500,000

3,274,075

12/07/20

—

(50,629)

Australian

Dollar

....

JPHQ

Buy

3,300,000

2,341,211

12/24/20

—

(20,983)

Australian

Dollar

....

JPHQ

Sell

17,920,000

12,334,694

12/24/20

—

(264,848)

Japanese

Yen

......

JPHQ

Buy

1,392,700,000

13,059,999

1/13/21

255,990

—

Japanese

Yen

......

JPHQ

Sell

1,378,063,789

13,059,999

1/13/21

—

(116,049)

Canadian

Dollar

....

JPHQ

Sell

17,700,000

13,040,211

1/14/21

—

(251,340)

Mexican

Peso

......

JPHQ

Buy

48,650,000

2,107,051

1/14/21

167,765

—

Singapore

Dollar

....

JPHQ

Sell

18,100,000

1,392,252,000

JPY

2/04/21

64,019

—

Brazilian

Real

......

JPHQ

Sell

2,520,623

446,959

2/08/21

9,126

—

Japanese

Yen

......

JPHQ

Buy

1,089,785,650

10,289,733

3/08/21

137,619

—

South

Korean

Won

..

JPHQ

Sell

3,920,000,000

3,309,637

3/10/21

—

(139,363)

Turkish

Lira

........

JPHQ

Buy

12,510,000

1,518,757

4/06/21

—

(136,279)

Total

Forward

Exchange

Contracts

...................................................

$733,241

$(988,354)

Net

unrealized

appreciation

(depreciation)

............................................

$(255,113)

*

In

U.S.

dollars

unless

otherwise

indicated.

a

May

be

comprised

of

multiple

contracts

with

the

same

counterparty,

currency

and

settlement

date.

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

86

Credit

Default

Swap

Contracts

Description

Periodic

Payment

Rate

Received

(Paid)

Payment

Frequency

Counter-

party

Maturity

Date

Notional

Amount

(a)

Value

Unamortized

Upfront

Payments

(Receipts)

Unrealized

Appreciation

(Depreciation)

Rating

(b)

Centrally

Cleared

Swap

Contracts

Contracts

to

Sell

Protection

(c)(d)

Traded

Index

CDX.NA.IG.31

......

1.00%

Quarterly

12/20/21

$

74,600,000

$

434,088

$

460,751

$

(26,663)

Investment

Grade

CDX.NA.IG.33

......

1.00%

Quarterly

12/20/24

35,400,000

229,875

354,357

(124,482)

Investment

Grade

Total

Centrally

Cleared

Swap

Contracts

.....................................

$663,963

$815,108

$(151,145)

OTC

Swap

Contracts

Contracts

to

Buy

Protection

(c)

Single

Name

AES

Corp.

(The)

....

(5.00)%

Quarterly

CITI

3/20/21

2,750,000

(66,876)

(44,890)

(21,986)

Ally

Financial,

Inc.

...

(5.00)%

Quarterly

JPHQ

12/20/24

13,600,000

(2,246,328)

(2,101,799)

(144,529)

Avon

Products,

Inc.

..

(5.00)%

Quarterly

CITI

3/20/23

5,835,000

(502,710)

(404,452)

(98,258)

CenturyLink,

Inc.

....

(5.00)%

Quarterly

BZWS

6/20/21

4,700,000

(150,388)

(70,578)

(79,810)

Energy

Transfer

LP

..

(5.00)%

Quarterly

MSCO

12/20/20

750,000

(8,916)

(4,235)

(4,681)

HCA,

Inc.

.........

(5.00)%

Quarterly

FBCO

3/20/22

2,050,000

(139,652)

(103,648)

(36,004)

Italy

Government

Bond

(1.00)%

Quarterly

BZWS

6/20/23

4,800,000

(59,602)

27,549

(87,151)

Nabors

Industries,

Inc.

(1.00)%

Quarterly

CITI

12/20/21

6,200,000

1,460,422

102,423

1,357,999

Contracts

to

Sell

Protection

(c)(d)

Single

Name

Goldman

Sachs

Group,

Inc.

(The)

.......

1.00%

Quarterly

JPHQ

12/20/24

13,600,000

269,091

193,699

75,392

BBB+

Indonesia

Government

Bond

..........

1.00%

Quarterly

CITI

12/20/25

3,900,000

6,699

(20,066)

26,765

NR

Italy

Government

Bond

1.00%

Quarterly

BZWS

6/20/23

4,800,000

29,981

(120,807)

150,788

NR

Morgan

Stanley

.....

1.00%

Quarterly

JPHQ

12/20/24

13,600,000

305,988

212,596

93,392

BBB+

Nabors

Industries,

Inc.

1.00%

Quarterly

CITI

12/20/23

6,200,000

(3,946,599)

(581,690)

(3,364,909)

CC

Traded

Index

(e)

BNP

Paribas

Bespoke

Rodez

Index,

Mezzanine

Tranche

5-7%

..........

2.00%

Quarterly

BNDP

12/20/20

4,100,000

(142,138)

—

(142,139)

Non-

Investment

Grade

(e)

BNP

Paribas

Bespoke

Rodez2

Index,

Mezzanine

Tranche

5-7%

..........

3.20%

Quarterly

BNDP

12/20/20

2,340,000

(46,380)

—

(46,380)

Non-

Investment

Grade

(e)

Citibank

Bespoke

Palma

Index,

Mezzanine

Tranche

5-7%

..........

2.30%

Quarterly

CITI

6/20/21

4,910,000

(123,153)

—

(123,153)

Non-

Investment

Grade

(e)

Citibank

Bespoke

Phoenix

Index,

Mezzanine

Tranche

5-7%

..........

2.90%

Quarterly

CITI

12/20/21

3,500,000

(282,445)

—

(282,445)

Non-

Investment

Grade

MCDX.NA.30

......

1.00%

Quarterly

CITI

6/20/28

2,000,000

11,189

15,401

(4,212)

Investment

Grade

MCDX.NA.31

......

1.00%

Quarterly

CITI

12/20/23

12,200,000

(71,942)

78,825

(150,767)

Investment

Grade

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

87

At

October

31,

2020,

the

Fund

had

the

following cross-currency

swap

contracts outstanding.

See

Note

1

(

e

). 

Credit

Default

Swap

Contracts

(continued)

Description

Periodic

Payment

Rate

Received

(Paid)

Payment

Frequency

Counter-

party

Maturity

Date

Notional

Amount

(a)

Value

Unamortized

Upfront

Payments

(Receipts)

Unrealized

Appreciation

(Depreciation)

Rating

(b)

OTC

Swap

Contracts

(continued)

Contracts

to

Sell

Protection

(c)(d)

(continued)

Traded

Index

(continued)

(e)

Morgan

Stanley

Bespoke

Pecan

Index,

Mezzanine

Tranche

5-10%

...

4.10%

Quarterly

MSCO

12/20/21

$

3,700,000

$

(960,511)

$

—

$

(960,511)

Non-

Investment

Grade

(e)

Morgan

Stanley

Bespoke

Pecan

Index,

Mezzanine

Tranche

5-10%

...

3.98%

Quarterly

MSCO

12/20/21

3,700,000

(965,352)

—

(965,352)

Non-

Investment

Grade

Total

OTC

Swap

Contracts

..............................................

$(7,629,622)

$(2,821,671)

$(4,807,951)

Total

Credit

Default

Swap

Contracts

....................................

$(6,965,659)

$

(2,006,563)

$(4,959,096)

(a)

In

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.

(b)

Based

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.

(c)

Performance

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.

(d)

The

fund

enters

contracts

to

sell

protection

to

create

a

long

credit

position.

(e)

Represents

a

custom

index

comprised

of

a

basket

of

underlying

instruments.

Cross-Currency

Swap

Contracts

Description

Payment

Frequency

Counter-

party

Maturity

Date

Notional

Amount

Value/

Unrealized

Appreciation

(Depreciation)

aA

aaa

aaa

aaa

OTC

Swap

Contracts

Receive

Floating

3-month

USD

LIBOR

+

1.85%

.....

Quarterly

617,500

USD

Pay

Fixed

1.5%

.............................

Annual

CITI

5/04/21

500,000

EUR

$

33,622

Receive

Floating

3-month

USD

LIBOR

+

1.894%

.....

Quarterly

2,460,000

USD

Pay

Fixed

1.5%

.............................

Annual

CITI

5/04/21

2,000,000

EUR

125,155

Receive

Floating

3-month

USD

LIBOR

+

1.303%

.....

Quarterly

496,000

USD

Pay

Fixed

1%

..............................

Annual

JPHQ

5/04/21

400,000

EUR

29,208

Receive

Floating

3-month

USD

LIBOR

+

1.175%

.....

Quarterly

41,106,000

USD

Pay

Floating

3-month

EURIBOR

+

1.05%

.........

Quarterly

CITI

11/22/21

37,200,000

EUR

(2,165,894)

Receive

Floating

3-month

USD

LIBOR

+

1.175%

.....

Quarterly

4,862,000

USD

Pay

Floating

3-month

EURIBOR

+

1.05%

.........

Quarterly

CITI

11/22/21

4,400,000

EUR

(256,181)

Receive

Floating

3-month

USD

LIBOR

+

1.174%

.....

Quarterly

30,525,000

USD

Pay

Floating

3-month

EURIBOR

+

1.05%

.........

Quarterly

CITI

12/10/21

27,500,000

EUR

(1,475,268)

Receive

Floating

3-month

USD

LIBOR

+

1.318%

.....

Quarterly

13,930,500

USD

Pay

Floating

3-month

EURIBOR

+

1.2%

..........

Quarterly

CITI

12/12/21

12,550,000

EUR

(677,103)

Receive

Floating

3-month

USD

LIBOR

+

0.849%

.....

Quarterly

3,472,000

USD

Pay

Fixed

0.75%

............................

Annual

DBAB

9/14/22

2,800,000

EUR

182,394

Total

Cross

Currency

Swap

Contracts

...........................................................

$(4,204,067)

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

88

At

October

31,

2020,

the

Fund

had

the

following inflation index

swap

contracts outstanding.

See

Note

1

(

e

). 

At

October

31,

2020,

the

Fund

had

the

following total

return swap

contracts

outstanding.

See

Note

1(e). 

Inflation

Index

Swap

Contracts

Description

Payment

Frequency

Counter-

party

Maturity

Date

Notional

Amount

Value

Unamortized

Upfront

Payments

(Receipts)

Unrealized

Appreciation

(Depreciation)

Centrally

Cleared

Swap

Contracts

Receive

variable

change

  in

USCPI

............

At

Maturity

Pay

Fixed

2.079%

.....

At

Maturity

9/18/24

$

1,770,000

$

(47,662)

$

—

$

(47,662)

Receive

variable

change

  in

USCPI

............

At

Maturity

Pay

Fixed

1.893%

.....

At

Maturity

1/15/27

74,700,000

(983,969)

—

(983,969)

Receive

variable

change

  in

USCPI

............

At

Maturity

Pay

Fixed

2.313%

.....

At

Maturity

6/01/28

1,400,000

(81,267)

—

(81,267)

Total

Inflation

Index

Swap

Contracts

..................................

$(1,112,898)

$—

$(1,112,898)

Total

Return

Swap

Contracts

Underlying

Instruments

Financing

Rate

Payment

Frequency

Counter-

party

Maturity

Date

Notional

Value

*

Value/

Unrealized

Appreciation

(Depreciation)

OTC

Swap

Contracts

Long

(a)

Markit

iBoxx

USD

Liquid

Leveraged

Loans

Total

Return

Index

...........................

3-month

USD

LIBOR

Quarterly

MSCO

12/21/20

14,000,000

$

(284,410)

Markit

iBoxx

USD

Liquid

Leveraged

Loans

Total

Return

Index

...........................

3-month

USD

LIBOR

Quarterly

MSCO

12/21/20

10,125,000

(205,690)

Total

Return

Swap

Contracts

....................................................................

$(490,100)

*

In

U.S.

dollars

unless

otherwise

indicated.

(a)

The

Fund

receives

the

total

return

on

the

underlying

instrument

and

pays

a

variable

financing

rate.

Franklin

Investors

Securities

Trust

Consolidated

Financial

Highlights

Franklin

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

89

a

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

A

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$9.92

$9.31

$9.84

$9.93

$9.87

Income

from

investment

operations

a

:

Net

investment

income

..........................

0.257

b

0.302

b

0.269

0.251

b

0.231

Net

realized

and

unrealized

gains

(losses)

...........

0.170

0.618

(0.518)

(0.110)

0.107

Total

from

investment

operations

....................

0.427

0.920

(0.249)

0.141

0.338

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

..

(0.306)

(0.310)

(0.275)

(0.231)

(0.278)

Tax

return

of

capital

............................

—

—

(0.006)

—

—

Total

distributions

...............................

(0.306)

(0.310)

(0.281)

(0.231)

(0.278)

Net

asset

value,

end

of

year

.......................

$10.04

$9.92

$9.31

$9.84

$9.93

Total

return

c

...................................

4.38%

10.01%

(2.57)%

1.47%

3.53%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.90%

0.90%

0.91%

0.91%

0.90%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

0.85%

d

0.86%

d

0.88%

d

0.87%

d

0.85%

d

Net

investment

income

...........................

2.59%

3.12%

2.91%

2.58%

2.32%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$4,031,242

$3,422,747

$2,763,774

$3,153,751

$3,623,035

Portfolio

turnover

rate

............................

228.24%

169.95%

e

151.77%

101.07%

287.38%

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

....

137.82%

f

98.83%

e,f

84.86%

f

78.46%

f

146.15%

f

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

e

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

f

See

Note

1

(

i

)

regarding

mortgage

dollar

rolls.

Franklin

Investors

Securities

Trust

Consolidated

Financial

Highlights

Franklin

Total

Return

Fund

(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

90

a

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

C

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$9.85

$9.25

$9.77

$9.87

$9.84

Income

from

investment

operations

a

:

Net

investment

income

..........................

0.216

b

0.262

b

0.183

0.212

b

0.189

Net

realized

and

unrealized

gains

(losses)

...........

0.171

0.609

(0.457)

(0.109)

0.100

Total

from

investment

operations

....................

0.387

0.871

(0.274)

0.103

0.289

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

..

(0.267)

(0.271)

(0.241)

(0.203)

(0.259)

Tax

return

of

capital

............................

—

—

(0.005)

—

—

Total

distributions

...............................

(0.267)

(0.271)

(0.246)

(0.203)

(0.259)

Net

asset

value,

end

of

year

.......................

$9.97

$9.85

$9.25

$9.77

$9.87

Total

return

c

...................................

4.01%

9.52%

(2.84)%

0.98%

3.13%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

1.30%

1.30%

1.31%

1.31%

1.30%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

1.25%

d

1.26%

d

1.28%

d

12.70%

d

1.25%

d

Net

investment

income

...........................

2.20%

2.72%

2.51%

2.18%

1.92%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$208,947

$236,838

$243,068

$354,269

$449,274

Portfolio

turnover

rate

............................

228.24%

169.95%

e

151.77%

101.07%

287.38%

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

....

137.82%

f

98.83%

e,f

84.86%

f

78.46%

f

146.15%

f

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

e

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

f

See

Note

1

(

i

)

regarding

mortgage

dollar

rolls.

Franklin

Investors

Securities

Trust

Consolidated

Financial

Highlights

Franklin

Total

Return

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

91

a

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

R

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$9.88

$9.27

$9.80

$9.90

$9.85

Income

from

investment

operations

a

:

Net

investment

income

..........................

0.232

b

0.277

b

0.182

0.228

b

0.199

Net

realized

and

unrealized

gains

(losses)

...........

0.171

0.619

(0.453)

(0.115)

0.117

Total

from

investment

operations

....................

0.403

0.896

(0.271)

0.113

0.316

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

..

(0.282)

(0.286)

(0.253)

(0.213)

(0.266)

Tax

return

of

capital

............................

—

—

(0.006)

—

—

Total

distributions

...............................

(0.282)

(0.286)

(0.259)

(0.213)

(0.266)

Net

asset

value,

end

of

year

.......................

$10.00

$9.88

$9.27

$9.80

$9.90

Total

return

....................................

4.14%

9.66%

(2.70)%

1.19%

3.31%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

1.15%

1.15%

1.16%

1.16%

1.15%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

1.10%

c

1.11%

c

1.13%

c

1.12%

c

1.10%

c

Net

investment

income

...........................

2.36%

2.87%

2.66%

2.33%

2.07%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$17,274

$21,223

$23,620

$36,337

$58,715

Portfolio

turnover

rate

............................

228.24%

169.95%

d

151.77%

101.07%

287.38%

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

....

137.82%

e

98.83%

d,e

84.86%

e

78.46%

e

146.15%

e

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

d

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

e

See

Note

1

(

i

)

regarding

mortgage

dollar

rolls.

Franklin

Investors

Securities

Trust

Consolidated

Financial

Highlights

Franklin

Total

Return

Fund

(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

92

a

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

R6

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$9.99

$9.38

$9.90

$9.98

$9.91

Income

from

investment

operations

a

:

Net

investment

income

..........................

0.294

b

0.340

b

0.308

0.296

b

0.195

Net

realized

and

unrealized

gains

(losses)

...........

0.168

0.617

(0.512)

(0.117)

0.173

Total

from

investment

operations

....................

0.462

0.957

(0.204)

0.179

0.368

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

..

(0.341)

(0.347)

(0.309)

(0.259)

(0.298)

Tax

return

of

capital

............................

—

—

(0.007)

—

—

Total

distributions

...............................

(0.341)

(0.347)

(0.316)

(0.259)

(0.298)

Net

asset

value,

end

of

year

.......................

$10.11

$9.99

$9.38

$9.90

$9.98

Total

return

....................................

4.72%

10.35%

(2.10)%

1.75%

3.94%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.54%

0.53%

0.54%

0.50%

0.51%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

0.48%

c

0.49%

c

0.49%

c

0.48%

c

0.46%

c

Net

investment

income

...........................

2.95%

3.49%

3.30%

2.97%

2.71%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$547,075

$481,399

$430,637

$398,732

$93,892

Portfolio

turnover

rate

............................

228.24%

169.95%

d

151.77%

101.07%

287.38%

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

....

137.82%

e

98.83%

d,e

84.86%

e

78.46%

e

146.15%

e

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

d

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

e

See

Note

1

(

i

)

regarding

mortgage

dollar

rolls.

Franklin

Investors

Securities

Trust

Consolidated

Financial

Highlights

Franklin

Total

Return

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

93

a

Year

Ended

October

31,

2020

2019

2018

2017

2016

Advisor

Class

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$9.98

$9.37

$9.89

$9.98

$9.91

Income

from

investment

operations

a

:

Net

investment

income

..........................

0.281

b

0.328

b

0.291

0.275

b

0.218

Net

realized

and

unrealized

gains

(losses)

...........

0.169

0.618

(0.507)

(0.116)

0.142

Total

from

investment

operations

....................

0.450

0.946

(0.216)

0.159

0.360

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

..

(0.329)

(0.336)

(0.297)

(0.249)

(0.290)

Tax

return

of

capital

............................

—

—

(0.007)

—

—

Total

distributions

...............................

(0.329)

(0.336)

(0.304)

(0.249)

(0.290)

Net

asset

value,

end

of

year

.......................

$10.10

$9.98

$9.37

$9.89

$9.98

Total

return

....................................

4.60%

10.23%

(2.22)%

1.65%

3.75%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.64%

0.65%

0.66%

0.66%

0.65%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

0.60%

c

0.61%

c

0.63%

c

0.62%

c

0.60%

c

Net

investment

income

...........................

2.84%

3.37%

3.16%

2.83%

2.57%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$293,080

$863,516

$620,803

$595,239

$740,046

Portfolio

turnover

rate

............................

228.24%

169.95%

d

151.77%

101.07%

287.38%

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

....

137.82%

e

98.83%

d,e

8.49%

e

78.46%

e

146.15%

e

a

The

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.

b

Based

on

average

daily

shares

outstanding.

c

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

d

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

e

See

Note

1

(

i

)

regarding

mortgage

dollar

rolls.

Franklin

Investors

Securities

Trust

Consolidated

Statement

of

Investments,

October

31,

2020

Franklin

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

94

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

0.0%

Aerospace

&

Defense

0.0%

a,b

Remington

Outdoor

Co.,

Inc.

.............................

United

States

52,019

$

—

b

Energy

Equipment

&

Services

0.0%

†

b

Weatherford

International

plc

.............................

United

States

34,108

71,286

b

Entertainment

0.0%

†

AMC

Entertainment

Holdings,

Inc.

.........................

United

States

1,725

4,071

Hotels,

Restaurants

&

Leisure

0.0%

†

a,b,c

Turtle

Bay

Resort

LLC

..................................

United

States

1,550,568

34,112

b

Multiline

Retail

0.0%

a,b,d

K2016470219

South

Africa

Ltd.,

A

.........................

South

Africa

28,762,824

—

a,b,d

K2016470219

South

Africa

Ltd.,

B

.........................

South

Africa

2,862,311

—

—

Oil,

Gas

&

Consumable

Fuels

0.0%

†

Riviera

Resources,

Inc.

.................................

United

States

12,605

3,838

Paper

&

Forest

Products

0.0%

†

a,b,d

Appvion

Operations,

Inc.

................................

United

States

13,033

193,437

Verso

Corp.,

A

........................................

United

States

6,954

54,102

247,539

Road

&

Rail

0.0%

a

Onsite

Rental

Group

Operations

Pty.

Ltd.

...................

Australia

100,554

—

Specialty

Retail

0.0%

†

Party

City

Holdings,

Inc.

................................

United

States

112,955

224,781

Total

Common

Stocks

(Cost

$3,419,082)

.......................................

585,627

Management

Investment

Companies

13.1%

Capital

Markets

13.1%

e

Franklin

Floating

Rate

Income

Fund

.......................

United

States

1,549,310

11,263,485

e

Franklin

Liberty

High

Yield

Corporate

ETF

...................

United

States

5,830,000

147,928,671

e

Franklin

Liberty

Investment

Grade

Corporate

ETF

.............

United

States

18,335,000

487,160,950

e

Franklin

Liberty

Senior

Loan

ETF

.........................

United

States

914,900

21,950,830

668,303,936

Total

Management

Investment

Companies

(Cost

$648,335,900)

...................

668,303,936

Preferred

Stocks

0.1%

Banks

0.1%

Citigroup

Capital

XIII,

6.586%

............................

United

States

93,000

2,548,200

Total

Preferred

Stocks

(Cost

$2,325,000)

.......................................

2,548,200

Warrants

Warrants

0.0%

†

Oil,

Gas

&

Consumable

Fuels

0.0%

†

a,b

Battalion

Oil

Corp.,

A,

10/08/22

...........................

United

States

2,551

20

a,b

Battalion

Oil

Corp.,

B,

10/08/22

...........................

United

States

3,189

11

a,b

Battalion

Oil

Corp.,

C,

10/08/22

...........................

United

States

4,100

4

35

Franklin

Investors

Securities

Trust

Consolidated

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

Annual

Report

95

a

a

Country

Warrants

a

Value

a

a

a

a

a

a

Warrants

(continued)

Paper

&

Forest

Products

0.0%

†

Verso

Corp.,

7/25/23

...................................

United

States

732

$

377

Total

Warrants

(Cost

$—)

.....................................................

412

Principal

Amount

*

Corporate

Bonds

27.8%

Aerospace

&

Defense

0.2%

Lockheed

Martin

Corp.

,

Senior

Bond,

3.55%,

1/15/26

...........................

United

States

3,300,000

3,733,021

Senior

Bond,

4.07%,

12/15/42

..........................

United

States

1,700,000

2,109,948

Northrop

Grumman

Corp.

,

Senior

Bond

,

5.25

%

,

5/01/50

........

United

States

3,500,000

4,996,550

10,839,519

Air

Freight

&

Logistics

0.8%

FedEx

Corp.

,

Senior

Bond,

4.05%,

2/15/48

...........................

United

States

2,000,000

2,302,670

Senior

Note,

3.8%,

5/15/25

............................

United

States

19,900,000

22,435,111

United

Parcel

Service,

Inc.

,

Senior

Bond

,

5.3

%

,

4/01/50

........

United

States

10,000,000

14,396,907

39,134,688

Airlines

0.2%

f

Delta

Air

Lines,

Inc.

/

SkyMiles

IP

Ltd.

,

Senior

Secured

Note

,

144A,

4.5

%

,

10/20/25

.....................................

United

States

10,500,000

10,665,144

Auto

Components

0.1%

f

Adient

US

LLC

,

Senior

Secured

Note

,

144A,

7

%

,

5/15/26

.......

United

States

3,000,000

3,205,095

f

Allison

Transmission,

Inc.

,

Senior

Bond

,

144A,

5.875

%

,

6/01/29

..

United

States

2,500,000

2,733,112

5,938,207

Banks

2.9%

f

Akbank

T.A.S.

,

Senior

Note

,

144A,

5.125

%

,

3/31/25

...........

Turkey

5,600,000

5,189,464

Bank

of

America

Corp.

,

Senior

Bond,

2.592%

to

4/29/30,

FRN

thereafter,

4/29/31

.....

United

States

6,700,000

7,019,943

Sub.

Bond,

6.11%,

1/29/37

............................

United

States

2,800,000

3,951,617

f

BDO

Unibank,

Inc.

,

Senior

Note

,

Reg

S,

2.95

%

,

3/06/23

........

Philippines

1,600,000

1,663,700

f

BNP

Paribas

SA

,

Senior

Note

,

144A,

2.219%

to

6/09/25,

FRN

thereafter

,

6/09/26

...................................

France

5,900,000

6,107,350

Capital

One

Bank

USA

NA

,

Sub.

Note

,

3.375

%

,

2/15/23

........

United

States

6,000,000

6,356,727

Citigroup,

Inc.

,

Senior

Bond,

2.572%

to

6/03/30,

FRN

thereafter,

6/03/31

.....

United

States

10,500,000

10,939,992

Senior

Bond,

4.65%,

7/23/48

...........................

United

States

3,700,000

4,797,668

g

Comerica,

Inc.

,

Junior

Sub.

Bond

,

5.625%

to

10/01/25,

FRN

thereafter

,

Perpetual

.................................

United

States

3,800,000

4,066,000

Credit

Suisse

Group

Funding

Guernsey

Ltd.

,

Senior

Bond

,

4.875

%

,

5/15/45

...........................................

Switzerland

3,100,000

4,068,302

HSBC

Holdings

plc

,

Senior

Bond,

2.848%

to

6/04/30,

FRN

thereafter,

6/04/31

.....

United

Kingdom

10,600,000

10,970,866

Senior

Bond,

2.357%

to

8/18/30,

FRN

thereafter,

8/18/31

.....

United

Kingdom

3,800,000

3,776,827

Senior

Note,

2.013%

to

9/22/27,

FRN

thereafter,

9/22/28

......

United

Kingdom

12,400,000

12,334,461

JPMorgan

Chase

&

Co.

,

Senior

Bond,

4.493%

to

3/24/30,

FRN

thereafter,

3/24/31

.....

United

States

32,100,000

38,844,251

Sub.

Bond,

4.95%,

6/01/45

............................

United

States

1,600,000

2,139,525

Franklin

Investors

Securities

Trust

Consolidated

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

96

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Corporate

Bonds

(continued)

Banks

(continued)

Lloyds

Banking

Group

plc

,

Senior

Note

,

3.87%

to

7/09/24,

FRN

thereafter

,

7/09/25

...................................

United

Kingdom

2,500,000

$

2,729,044

SVB

Financial

Group

,

Senior

Note,

3.5%,

1/29/25

............................

United

States

6,000,000

6,489,259

Senior

Note,

3.125%,

6/05/30

..........................

United

States

3,600,000

3,936,981

Toronto-Dominion

Bank

(The)

,

Senior

Note

,

3.25

%

,

3/11/24

......

Canada

1,900,000

2,061,525

Wells

Fargo

&

Co.

,

Senior

Note

,

2.393%

to

6/02/27,

FRN

thereafter

,

6/02/28

...........................................

United

States

9,900,000

10,280,656

147,724,158

Beverages

0.5%

Anheuser-Busch

Cos.

LLC

/

Anheuser-Busch

InBev

Worldwide,

Inc.

,

Senior

Bond,

4.7%,

2/01/36

............................

Belgium

1,800,000

2,205,887

Senior

Bond,

4.9%,

2/01/46

............................

Belgium

3,400,000

4,173,455

Anheuser-Busch

InBev

Worldwide,

Inc.

,

Senior

Bond

,

3.5

%

,

6/01/30

Belgium

18,400,000

20,793,552

27,172,894

Biotechnology

1.3%

AbbVie,

Inc.

,

Senior

Bond,

4.25%,

11/14/28

..........................

United

States

1,800,000

2,125,008

Senior

Bond,

4.7%,

5/14/45

............................

United

States

3,200,000

3,906,235

f

Senior

Note,

144A,

3.8%,

3/15/25

.......................

United

States

1,900,000

2,111,947

f

Senior

Note,

144A,

3.2%,

11/21/29

......................

United

States

18,000,000

19,883,075

Amgen,

Inc.

,

Senior

Note

,

2.2

%

,

2/21/27

....................

United

States

5,600,000

5,892,090

Biogen,

Inc.

,

Senior

Bond,

5.2%,

9/15/45

............................

United

States

21,200,000

27,496,374

Senior

Note,

2.25%,

5/01/30

...........................

United

States

3,500,000

3,533,970

Regeneron

Pharmaceuticals,

Inc.

,

Senior

Bond

,

1.75

%

,

9/15/30

..

United

States

1,400,000

1,350,753

66,299,452

Capital

Markets

0.5%

Goldman

Sachs

Group,

Inc.

(The)

,

Senior

Bond,

6.25%,

2/01/41

...........................

United

States

2,800,000

4,188,423

Senior

Note,

3.75%,

2/25/26

...........................

United

States

6,300,000

7,087,529

Senior

Note,

2.6%,

2/07/30

............................

United

States

10,000,000

10,558,297

Morgan

Stanley

,

Senior

Note

,

2.188%

to

4/28/25,

FRN

thereafter

,

4/28/26

...........................................

United

States

2,200,000

2,306,634

24,140,883

Chemicals

0.6%

Air

Products

and

Chemicals,

Inc.

,

Senior

Bond

,

2.05

%

,

5/15/30

...

United

States

4,900,000

5,115,127

f,h

Anagram

International,

Inc.

/

Anagram

Holdings

LLC

,

Secured

Note

,

144A,

PIK,

10

%

,

8/15/26

..............................

United

States

600,015

494,012

f

Braskem

Netherlands

Finance

BV

,

Senior

Bond

,

144A,

4.5

%

,

1/31/30

...........................................

Brazil

11,800,000

10,912,640

f

CNAC

HK

Finbridge

Co.

Ltd.

,

Senior

Note

,

Reg

S,

3.875

%

,

6/19/29

China

7,100,000

7,498,062

Westlake

Chemical

Corp.

,

Senior

Note

,

3.375

%

,

6/15/30

........

United

States

3,500,000

3,754,711

f

Yara

International

ASA

,

Senior

Note

,

144A,

3.148

%

,

6/04/30

.....

Brazil

1,700,000

1,813,297

29,587,849

Commercial

Services

&

Supplies

0.1%

f

Harsco

Corp.

,

Senior

Note

,

144A,

5.75

%

,

7/31/27

.............

United

States

2,500,000

2,560,937

Franklin

Investors

Securities

Trust

Consolidated

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

Annual

Report

97

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Corporate

Bonds

(continued)

Commercial

Services

&

Supplies

(continued)

f

Harsco

Corp.,

Senior

Note,

144A,

5.75%,

7/31/27

Communications

Equipment

0.1%

f

CommScope

Technologies

LLC

,

Senior

Note

,

144A,

5

%

,

3/15/27

..

United

States

3,000,000

$

2,814,375

Consumer

Finance

0.5%

Capital

One

Financial

Corp.

,

Senior

Note,

3.75%,

3/09/27

...........................

United

States

2,000,000

2,236,105

Senior

Note,

3.65%,

5/11/27

...........................

United

States

12,900,000

14,302,121

Senior

Note,

3.8%,

1/31/28

............................

United

States

3,700,000

4,160,512

OneMain

Finance

Corp.

,

Senior

Bond

,

5.375

%

,

11/15/29

........

United

States

3,000,000

3,090,000

23,788,738

Containers

&

Packaging

0.7%

Amcor

Finance

USA,

Inc.

,

Senior

Note

,

3.625

%

,

4/28/26

........

United

States

11,800,000

13,082,218

Bemis

Co.,

Inc.

,

Senior

Note

,

2.63

%

,

6/19/30

................

United

States

2,800,000

2,936,637

f

CCL

Industries,

Inc.

,

Senior

Note

,

144A,

3.05

%

,

6/01/30

........

Canada

6,600,000

7,016,682

f

Mauser

Packaging

Solutions

Holding

Co.

,

Senior

Note

,

144A,

7.25

%

,

4/15/25

...........................................

United

States

3,000,000

2,897,850

f

Plastipak

Holdings,

Inc.

,

Senior

Note

,

144A,

6.25

%

,

10/15/25

....

United

States

3,000,000

3,009,375

f

Reynolds

Group

Issuer,

Inc.

/

Reynolds

Group

Issuer

LLC

/

Reynolds

Group

Issuer

Luxembourg

SA

,

Senior

Secured

Note

,

144A,

4

%

,

10/15/27

..........................................

United

States

2,300,000

2,337,375

WRKCo,

Inc.

,

Senior

Bond

,

3

%

,

6/15/33

....................

United

States

4,700,000

5,008,629

36,288,766

Diversified

Financial

Services

0.2%

f

EDP

Finance

BV

,

Senior

Note

,

144A,

1.71

%

,

1/24/28

..........

Portugal

10,500,000

10,392,008

Shell

International

Finance

BV

,

Senior

Bond

,

4.55

%

,

8/12/43

.....

Netherlands

1,700,000

2,068,080

12,460,088

Diversified

Telecommunication

Services

0.7%

f

Altice

France

SA

,

Senior

Secured

Note

,

144A,

5.5

%

,

1/15/28

....

France

3,000,000

3,043,125

AT&T,

Inc.

,

Senior

Bond,

3.4%,

5/15/25

............................

United

States

1,900,000

2,095,232

Senior

Bond,

4.3%,

2/15/30

............................

United

States

18,000,000

20,994,660

Senior

Note,

2.3%,

6/01/27

............................

United

States

3,600,000

3,740,872

Bell

Canada,

Inc.

,

Senior

Bond

,

4.464

%

,

4/01/48

..............

Canada

3,600,000

4,492,705

f

CCO

Holdings

LLC

/

CCO

Holdings

Capital

Corp.

,

Senior

Bond

,

144A,

5

%

,

2/01/28

...................................

United

States

1,500,000

1,581,000

Orange

SA

,

Senior

Bond

,

8.75

%

,

3/01/31

...................

France

1,300,000

2,107,167

38,054,761

Electric

Utilities

2.1%

Commonwealth

Edison

Co.

,

Senior

Bond

,

6.45

%

,

1/15/38

.......

United

States

700,000

1,066,512

Duke

Energy

Corp.

,

Senior

Bond,

3.75%,

9/01/46

...........................

United

States

2,000,000

2,252,204

Senior

Note,

3.15%,

8/15/27

...........................

United

States

15,400,000

16,916,268

Franklin

Investors

Securities

Trust

Consolidated

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

98

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Corporate

Bonds

(continued)

Electric

Utilities

(continued)

Duke

Energy

Florida

LLC

,

Senior

Bond

,

6.4

%

,

6/15/38

.........

United

States

1,300,000

$

1,975,363

Exelon

Corp.

,

Senior

Bond

,

4.05

%

,

4/15/30

..................

United

States

16,900,000

19,569,944

Georgia

Power

Co.

,

Senior

Bond

,

4.3

%

,

3/15/42

..............

United

States

9,000,000

10,703,223

Southern

Co.

(The)

,

Senior

Bond,

3.25%,

7/01/26

...........................

United

States

9,850,000

10,970,055

Senior

Bond,

4.4%,

7/01/46

............................

United

States

2,000,000

2,394,471

A,

Senior

Bond,

3.7%,

4/30/30

.........................

United

States

13,900,000

15,771,706

f

State

Grid

Overseas

Investment

2016

Ltd.

,

Senior

Note,

144A,

3.5%,

5/04/27

.......................

China

10,700,000

11,898,134

Senior

Note,

144A,

4.25%,

5/02/28

......................

China

6,700,000

7,845,406

f

TNB

Global

Ventures

Capital

Bhd.

,

Senior

Note

,

Reg

S,

3.244

%

,

10/19/26

..........................................

Malaysia

4,300,000

4,629,659

Virginia

Electric

and

Power

Co.

,

Senior

Bond

,

6.35

%

,

11/30/37

...

United

States

520,000

767,316

106,760,261

Electrical

Equipment

0.0%

†

Emerson

Electric

Co.

,

Senior

Bond

,

2.75

%

,

10/15/50

...........

United

States

2,400,000

2,426,310

Electronic

Equipment,

Instruments

&

Components

0.4%

CDW

LLC

/

CDW

Finance

Corp.

,

Senior

Note

,

3.25

%

,

2/15/29

....

United

States

3,000,000

3,000,000

Flex

Ltd.

,

Senior

Note

,

4.875

%

,

5/12/30

.....................

United

States

14,200,000

16,437,248

FLIR

Systems,

Inc.

,

Senior

Note

,

2.5

%

,

8/01/30

...............

United

States

3,000,000

3,094,996

22,532,244

Energy

Equipment

&

Services

0.1%

Baker

Hughes

a

GE

Co.

LLC

/

Baker

Hughes

Co-Obligor,

Inc.

,

Senior

Bond,

4.08%,

12/15/47

..........................

United

States

1,200,000

1,185,016

Senior

Note,

4.486%,

5/01/30

..........................

United

States

800,000

908,102

i

Valaris

plc

,

Senior

Bond

,

5.75

%

,

10/01/44

...................

Saudi

Arabia

700,000

34,125

f

Weatherford

International

Ltd.

,

Senior

Note

,

144A,

11

%

,

12/01/24

.

United

States

1,032,000

613,152

2,740,395

Entertainment

0.2%

f

AMC

Entertainment

Holdings,

Inc.

,

h

Secured

Note,

144A,

PIK,

12%,

6/15/26

..................

United

States

589,000

20,026

Senior

Secured

Note,

144A,

10.5%,

4/24/26

...............

United

States

69,000

35,535

f

Netflix,

Inc.

,

Senior

Bond

,

144A,

5.375

%

,

11/15/29

............

United

States

3,000,000

3,517,500

Walt

Disney

Co.

(The)

,

Senior

Note,

2.2%,

1/13/28

............................

United

States

6,400,000

6,693,768

Senior

Note,

2%,

9/01/29

.............................

United

States

2,000,000

2,049,757

12,316,586

Equity

Real

Estate

Investment

Trusts

(REITs)

0.4%

AvalonBay

Communities,

Inc.

,

Senior

Bond

,

2.45

%

,

1/15/31

.....

United

States

5,900,000

6,235,298

Equinix,

Inc.

,

Senior

Note

,

3.2

%

,

11/18/29

...................

United

States

3,500,000

3,807,378

National

Retail

Properties,

Inc.

,

Senior

Bond

,

4.3

%

,

10/15/28

.....

United

States

9,700,000

10,841,475

20,884,151

Franklin

Investors

Securities

Trust

Consolidated

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

Annual

Report

99

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Corporate

Bonds

(continued)

Food

&

Staples

Retailing

0.3%

f

Cencosud

SA

,

Senior

Note

,

144A,

4.375

%

,

7/17/27

............

Chile

9,700,000

$

10,528,347

Costco

Wholesale

Corp.

,

Senior

Note

,

1.375

%

,

6/20/27

.........

United

States

6,900,000

7,034,715

17,563,062

Food

Products

0.5%

B&G

Foods,

Inc.

,

Senior

Note

,

5.25

%

,

9/15/27

...............

United

States

3,000,000

3,107,820

Bunge

Ltd.

Finance

Corp.

,

Senior

Note

,

3.25

%

,

8/15/26

.........

United

States

12,000,000

12,968,209

Kraft

Heinz

Foods

Co.

,

Senior

Note

,

3

%

,

6/01/26

..............

United

States

3,100,000

3,152,570

f

Post

Holdings,

Inc.

,

Senior

Bond

,

144A,

4.625

%

,

4/15/30

.......

United

States

3,000,000

3,082,500

Unilever

Capital

Corp.

,

Senior

Note

,

2.6

%

,

5/05/24

............

United

Kingdom

4,500,000

4,793,736

27,104,835

Health

Care

Equipment

&

Supplies

0.0%

†

Edwards

Lifesciences

Corp.

,

Senior

Note

,

4.3

%

,

6/15/28

........

United

States

1,700,000

2,010,357

Health

Care

Providers

&

Services

2.2%

Anthem,

Inc.

,

Senior

Bond,

2.25%,

5/15/30

...........................

United

States

14,500,000

14,952,384

Senior

Bond,

4.65%,

1/15/43

...........................

United

States

3,100,000

3,876,432

Senior

Note,

4.101%,

3/01/28

..........................

United

States

1,800,000

2,077,240

Centene

Corp.

,

Senior

Note

,

4.25

%

,

12/15/27

................

United

States

2,000,000

2,109,630

CHS/Community

Health

Systems,

Inc.

,

Senior

Secured

Note

,

6.25

%

,

3/31/23

...........................................

United

States

3,000,000

2,977,500

Cigna

Corp.

,

Senior

Note,

4.125%,

11/15/25

.........................

United

States

5,900,000

6,754,091

Senior

Note,

4.375%,

10/15/28

.........................

United

States

5,000,000

5,926,561

Senior

Note,

2.4%,

3/15/30

............................

United

States

10,000,000

10,368,562

CVS

Health

Corp.

,

Senior

Bond,

4.3%,

3/25/28

............................

United

States

20,600,000

23,887,974

Senior

Bond,

4.78%,

3/25/38

...........................

United

States

3,200,000

3,857,719

Kaiser

Foundation

Hospitals

,

2019

,

Senior

Bond

,

3.266

%

,

11/01/49

United

States

11,270,000

12,221,127

Orlando

Health

Obligated

Group

,

3.777

%

,

10/01/28

............

United

States

2,810,000

3,128,910

Providence

St

Joseph

Health

Obligated

Group

,

H

,

2.746

%

,

10/01/26

United

States

8,875,000

9,666,068

Quest

Diagnostics,

Inc.

,

Senior

Bond

,

2.8

%

,

6/30/31

...........

United

States

11,200,000

11,989,813

113,794,011

Hotels,

Restaurants

&

Leisure

0.1%

f

Wynn

Las

Vegas

LLC

/

Wynn

Las

Vegas

Capital

Corp.

,

Senior

Note

,

144A,

5.25

%

,

5/15/27

.................................

United

States

3,000,000

2,779,275

Household

Durables

0.5%

f

Ashton

Woods

USA

LLC

/

Ashton

Woods

Finance

Co.

,

Senior

Note

,

144A,

6.75

%

,

8/01/25

.................................

United

States

3,000,000

3,100,935

Mohawk

Industries,

Inc.

,

Senior

Note

,

3.625

%

,

5/15/30

.........

United

States

19,400,000

21,079,696

24,180,631

Franklin

Investors

Securities

Trust

Consolidated

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

100

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Corporate

Bonds

(continued)

Independent

Power

and

Renewable

Electricity

Producers

0.2%

f

Calpine

Corp.

,

Senior

Note

,

144A,

5.125

%

,

3/15/28

............

United

States

2,500,000

$

2,581,300

f

Colbun

SA

,

Senior

Note

,

144A,

3.15

%

,

3/06/30

...............

Chile

4,400,000

4,606,360

f

InterGen

NV

,

Senior

Secured

Bond

,

144A,

7

%

,

6/30/23

.........

Netherlands

2,500,000

2,371,875

f

Talen

Energy

Supply

LLC

,

Senior

Secured

Note

,

144A,

7.25

%

,

5/15/27

...........................................

United

States

3,000,000

3,011,250

12,570,785

Insurance

1.8%

Aflac,

Inc.

,

Senior

Note

,

3.6

%

,

4/01/30

.....................

United

States

6,000,000

6,958,537

Athene

Holding

Ltd.

,

Senior

Bond

,

3.5

%

,

1/15/31

..............

United

States

15,300,000

15,406,347

f

Liberty

Mutual

Group,

Inc.

,

Senior

Note

,

144A,

4.569

%

,

2/01/29

..

United

States

12,000,000

14,486,941

Marsh

&

McLennan

Cos.,

Inc.

,

Senior

Bond,

4.375%,

3/15/29

..........................

United

States

4,900,000

5,891,877

Senior

Bond,

2.25%,

11/15/30

..........................

United

States

5,500,000

5,723,511

f

Metropolitan

Life

Global

Funding

I

,

Senior

Secured

Note

,

144A,

2.95

%

,

4/09/30

.....................................

United

States

17,700,000

19,730,580

Prudential

plc

,

Senior

Note

,

3.125

%

,

4/14/30

.................

United

Kingdom

18,000,000

20,083,900

Willis

North

America,

Inc.

,

Senior

Note

,

2.95

%

,

9/15/29

.........

United

States

4,600,000

5,012,600

93,294,293

Interactive

Media

&

Services

0.3%

f

Tencent

Holdings

Ltd.

,

Senior

Note

,

144A,

2.39

%

,

6/03/30

.......

China

15,000,000

15,184,844

Internet

&

Direct

Marketing

Retail

0.4%

Alibaba

Group

Holding

Ltd.

,

Senior

Note

,

3.4

%

,

12/06/27

.......

China

18,400,000

20,513,626

IT

Services

0.5%

Fiserv,

Inc.

,

Senior

Bond,

3.85%,

6/01/25

...........................

United

States

9,300,000

10,446,496

Senior

Bond,

2.65%,

6/01/30

...........................

United

States

8,600,000

9,138,120

Senior

Note,

3.5%,

7/01/29

............................

United

States

1,800,000

2,020,720

f

Presidio

Holdings,

Inc.

,

Senior

Note

,

144A,

8.25

%

,

2/01/28

......

United

States

3,000,000

3,189,375

24,794,711

Machinery

0.6%

Caterpillar,

Inc.

,

Senior

Bond,

3.25%,

4/09/50

...........................

United

States

2,000,000

2,226,743

Senior

Note,

2.6%,

4/09/30

............................

United

States

17,800,000

19,291,885

CNH

Industrial

NV

,

Senior

Note

,

3.85

%

,

11/15/27

.............

United

Kingdom

4,600,000

4,996,158

Westinghouse

Air

Brake

Technologies

Corp.

,

Senior

Note

,

3.2

%

,

6/15/25

...........................................

United

States

2,300,000

2,452,565

28,967,351

Media

1.1%

Charter

Communications

Operating

LLC

/

Charter

Communications

Operating

Capital

,

Senior

Secured

Bond,

2.8%,

4/01/31

.....................

United

States

18,200,000

18,796,960

Senior

Secured

Note,

4.464%,

7/23/22

...................

United

States

1,900,000

2,014,133

Comcast

Corp.

,

Senior

Bond,

4.25%,

1/15/33

...........................

United

States

10,000,000

12,261,702

Senior

Bond,

4.2%,

8/15/34

............................

United

States

1,700,000

2,089,243

Senior

Bond,

4.049%,

11/01/52

.........................

United

States

2,000,000

2,446,350

Franklin

Investors

Securities

Trust

Consolidated

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

Annual

Report

101

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Corporate

Bonds

(continued)

Media

(continued)

f

Diamond

Sports

Group

LLC

/

Diamond

Sports

Finance

Co.

,

Senior

Secured

Note

,

144A,

5.375

%

,

8/15/26

....................

United

States

3,200,000

$

1,870,000

DISH

DBS

Corp.

,

Senior

Note

,

5.875

%

,

11/15/24

..............

United

States

2,500,000

2,518,750

Fox

Corp.

,

Senior

Bond,

5.476%,

1/25/39

..........................

United

States

3,000,000

3,976,720

Senior

Note,

4.03%,

1/25/24

...........................

United

States

1,900,000

2,085,483

f

Nexstar

Broadcasting,

Inc.

,

Senior

Note

,

144A,

5.625

%

,

7/15/27

..

United

States

2,000,000

2,088,130

Time

Warner

Entertainment

Co.

LP

,

Senior

Secured

Bond

,

8.375

%

,

3/15/23

...........................................

United

States

1,700,000

1,991,187

f

Univision

Communications,

Inc.

,

Senior

Secured

Note

,

144A,

5.125

%

,

2/15/25

.....................................

United

States

3,000,000

2,953,125

55,091,783

Metals

&

Mining

0.1%

f

Novelis

Corp.

,

Senior

Bond

,

144A,

4.75

%

,

1/30/30

............

United

States

2,500,000

2,539,975

f

SunCoke

Energy

Partners

LP

/

SunCoke

Energy

Partners

Finance

Corp.

,

Senior

Note

,

144A,

7.5

%

,

6/15/25

..................

United

States

1,100,000

986,562

3,526,537

Multiline

Retail

0.4%

Dollar

Tree,

Inc.

,

Senior

Bond,

4.2%,

5/15/28

............................

United

States

11,700,000

13,691,118

Senior

Note,

3.7%,

5/15/23

............................

United

States

1,900,000

2,038,034

a,f,h

K2016470219

South

Africa

Ltd.

,

Senior

Secured

Note

,

144A,

PIK,

3

%

,

12/31/22

.......................................

South

Africa

2,348,536

—

a,f,h

K2016470260

South

Africa

Ltd.

,

Senior

Secured

Note

,

144A,

PIK,

25

%

,

12/31/22

......................................

South

Africa

685,492

3,427

Target

Corp.

,

Senior

Bond

,

3.375

%

,

4/15/29

.................

United

States

1,800,000

2,092,830

17,825,409

Multi-Utilities

0.4%

Berkshire

Hathaway

Energy

Co.

,

Senior

Bond

,

6.125

%

,

4/01/36

..

United

States

2,700,000

3,859,330

Dominion

Energy,

Inc.

,

Senior

Note,

4.25%,

6/01/28

...........................

United

States

10,000,000

11,768,439

C,

Senior

Note,

3.375%,

4/01/30

........................

United

States

4,351,000

4,903,490

20,531,259

Oil,

Gas

&

Consumable

Fuels

2.1%

f

Aker

BP

ASA

,

Senior

Bond,

144A,

4%,

1/15/31

........................

Norway

10,400,000

10,192,438

Senior

Note,

144A,

4.75%,

6/15/24

......................

Norway

3,400,000

3,497,396

BP

Capital

Markets

America,

Inc.

,

Senior

Note

,

3.937

%

,

9/21/28

..

United

States

3,400,000

3,894,972

Canadian

Natural

Resources

Ltd.

,

Senior

Note

,

3.85

%

,

6/01/27

...

Canada

10,000,000

10,577,747

Cheniere

Corpus

Christi

Holdings

LLC

,

Senior

Secured

Note,

7%,

6/30/24

.......................

United

States

4,500,000

5,160,506

Senior

Secured

Note,

5.875%,

3/31/25

...................

United

States

1,600,000

1,812,340

f

Cheniere

Energy,

Inc.

,

Senior

Secured

Note

,

144A,

4.625

%

,

10/15/28

..........................................

United

States

1,700,000

1,757,375

Chevron

Corp.

,

Senior

Note,

2.355%,

12/05/22

.........................

United

States

4,500,000

4,669,048

Senior

Note,

2.895%,

3/03/24

..........................

United

States

1,900,000

2,032,535

Franklin

Investors

Securities

Trust

Consolidated

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

102

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Corporate

Bonds

(continued)

Oil,

Gas

&

Consumable

Fuels

(continued)

Enable

Midstream

Partners

LP

,

Senior

Bond,

5.25%,

5/15/44

...........................

United

States

1,200,000

$

989,837

Senior

Note,

4.15%,

5/15/24

...........................

United

States

3,600,000

3,539,109

Energy

Transfer

Operating

LP

,

Senior

Bond,

4.75%,

1/15/26

...........................

United

States

4,500,000

4,823,965

Senior

Bond,

5.15%,

2/01/43

...........................

United

States

6,000,000

5,595,101

EnLink

Midstream

LLC

,

Senior

Bond

,

5.375

%

,

6/01/29

.........

United

States

400,000

343,200

Enterprise

Products

Operating

LLC

,

Senior

Bond

,

3.125

%

,

7/31/29

United

States

2,000,000

2,157,906

EOG

Resources,

Inc.

,

Senior

Note

,

4.375

%

,

4/15/30

...........

United

States

1,100,000

1,294,901

Exxon

Mobil

Corp.

,

Senior

Bond,

2.61%,

10/15/30

..........................

United

States

6,100,000

6,477,831

Senior

Bond,

3.452%,

4/15/51

..........................

United

States

2,000,000

2,119,527

f

Harvest

Operations

Corp.

,

Senior

Note

,

144A,

4.2

%

,

6/01/23

.....

South

Korea

3,800,000

4,124,007

f

Martin

Midstream

Partners

LP

/

Martin

Midstream

Finance

Corp.

,

Secured

Note,

144A,

11.5%,

2/28/25

.....................

United

States

689,984

629,611

Senior

Secured

Note,

144A,

10%,

2/29/24

.................

United

States

151,936

153,835

MPLX

LP

,

Senior

Bond,

4.7%,

4/15/48

............................

United

States

2,000,000

1,974,361

Senior

Note,

4%,

2/15/25

.............................

United

States

4,600,000

5,002,474

Senior

Note,

4.875%,

6/01/25

..........................

United

States

4,500,000

5,084,160

f

Rattler

Midstream

LP

,

Senior

Note

,

144A,

5.625

%

,

7/15/25

......

United

States

900,000

926,437

Sunoco

Logistics

Partners

Operations

LP

,

Senior

Note

,

4.25

%

,

4/01/24

...........................................

United

States

3,000,000

3,152,258

Total

Capital

International

SA

,

Senior

Note

,

3.455

%

,

2/19/29

.....

France

1,800,000

2,047,130

TransCanada

PipeLines

Ltd.

,

Senior

Bond

,

4.25

%

,

5/15/28

......

Canada

3,400,000

3,886,200

f

Tullow

Oil

plc

,

Senior

Note

,

144A,

7

%

,

3/01/25

...............

Ghana

600,000

316,500

Williams

Cos.,

Inc.

(The)

,

Senior

Bond,

3.75%,

6/15/27

...........................

United

States

3,600,000

3,923,875

Senior

Bond,

3.5%,

11/15/30

...........................

United

States

3,200,000

3,437,777

105,594,359

Personal

Products

0.2%

Avon

Products,

Inc.

,

Senior

Note

,

6.75

%

,

3/15/23

.............

United

Kingdom

8,800,000

9,520,500

Pharmaceuticals

0.3%

Bristol-Myers

Squibb

Co.

,

Senior

Note

,

3.9

%

,

2/20/28

..........

United

States

1,700,000

1,995,721

Perrigo

Finance

Unlimited

Co.

,

Senior

Note

,

3.15

%

,

6/15/30

.....

United

States

4,600,000

4,747,262

f

Royalty

Pharma

plc

,

Senior

Note

,

144A,

1.75

%

,

9/02/27

........

United

States

3,400,000

3,381,268

Takeda

Pharmaceutical

Co.

Ltd.

,

Senior

Note

,

2.05

%

,

3/31/30

....

Japan

6,400,000

6,442,411

16,566,662

Real

Estate

Management

&

Development

0.0%

†

f

Five

Point

Operating

Co.

LP

/

Five

Point

Capital

Corp.

,

Senior

Note

,

144A,

7.875

%

,

11/15/25

...............................

United

States

600,000

601,125

Road

&

Rail

0.5%

Burlington

Northern

Santa

Fe

LLC

,

Senior

Bond,

4.9%,

4/01/44

............................

United

States

1,600,000

2,147,106

Senior

Bond,

4.15%,

4/01/45

...........................

United

States

5,100,000

6,221,218

Senior

Bond,

3.9%,

8/01/46

............................

United

States

5,000,000

5,932,957

Franklin

Investors

Securities

Trust

Consolidated

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

Annual

Report

103

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Corporate

Bonds

(continued)

Road

&

Rail

(continued)

f

Kazakhstan

Temir

Zholy

Finance

BV

,

Senior

Bond

,

144A,

6.95

%

,

7/10/42

...........................................

Kazakhstan

7,500,000

$

10,302,975

a,h

Onsite

Rental

Group

Operations

Pty.

Ltd.

,

Secured

Note

,

PIK,

6.1

%

,

10/26/23

..........................................

Australia

183,113

161,317

24,765,573

Semiconductors

&

Semiconductor

Equipment

0.6%

Intel

Corp.

,

Senior

Note,

3.75%,

3/25/27

...........................

United

States

1,800,000

2,077,921

Senior

Note,

3.9%,

3/25/30

............................

United

States

3,100,000

3,709,601

Maxim

Integrated

Products,

Inc.

,

Senior

Note

,

3.375

%

,

3/15/23

...

United

States

22,000,000

23,244,174

29,031,696

Software

0.1%

Microsoft

Corp.

,

Senior

Note

,

3.3

%

,

2/06/27

.................

United

States

5,000,000

5,688,182

Specialty

Retail

0.2%

AutoNation,

Inc.

,

Senior

Bond

,

4.75

%

,

6/01/30

...............

United

States

2,400,000

2,815,524

Home

Depot,

Inc.

(The)

,

Senior

Bond

,

2.7

%

,

4/15/30

...........

United

States

5,400,000

5,951,603

Murphy

Oil

USA,

Inc.

,

Senior

Note

,

4.75

%

,

9/15/29

............

United

States

2,700,000

2,834,500

f,j

Party

City

Holdings,

Inc.

,

Senior

Secured

Note

,

144A,

FRN

,

5.75

%

,

(

6-month

USD

LIBOR

+

5

%

),

7/15/25

.....................

United

States

1,110,015

782,561

12,384,188

Textiles,

Apparel

&

Luxury

Goods

0.1%

NIKE,

Inc.

,

Senior

Bond,

2.375%,

11/01/26

.........................

United

States

3,400,000

3,704,866

Senior

Bond,

3.875%,

11/01/45

.........................

United

States

1,700,000

2,088,049

5,792,915

Thrifts

&

Mortgage

Finance

0.1%

f

BPCE

SA

,

Sub.

Bond

,

144A,

4.5

%

,

3/15/25

..................

France

4,500,000

5,001,108

Tobacco

0.6%

Altria

Group,

Inc.

,

Senior

Note

,

3.4

%

,

5/06/30

................

United

States

15,100,000

16,412,790

Reynolds

American,

Inc.

,

Senior

Bond,

5.7%,

8/15/35

............................

United

Kingdom

9,300,000

11,433,295

Senior

Bond,

5.85%,

8/15/45

...........................

United

Kingdom

300,000

365,809

28,211,894

Trading

Companies

&

Distributors

0.2%

f

Ahern

Rentals,

Inc.

,

Secured

Note

,

144A,

7.375

%

,

5/15/23

......

United

States

400,000

258,250

Aircastle

Ltd.

,

Senior

Note

,

4.25

%

,

6/15/26

..................

United

States

2,800,000

2,636,293

f

Beacon

Roofing

Supply,

Inc.

,

Senior

Note

,

144A,

4.875

%

,

11/01/25

United

States

3,100,000

3,046,727

f

WESCO

Distribution,

Inc.

,

Senior

Note,

144A,

7.125%,

6/15/25

.....................

United

States

1,100,000

1,186,707

Senior

Note,

144A,

7.25%,

6/15/28

......................

United

States

1,900,000

2,082,581

9,210,558

Franklin

Investors

Securities

Trust

Consolidated

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

104

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Corporate

Bonds

(continued)

Transportation

Infrastructure

0.2%

f

Transurban

Finance

Co.

Pty.

Ltd.

,

Senior

Secured

Bond

,

144A,

4.125

%

,

2/02/26

.....................................

Australia

7,200,000

$

8,066,376

Wireless

Telecommunication

Services

0.6%

f

T-Mobile

USA,

Inc.

,

Senior

Secured

Bond,

144A,

4.375%,

4/15/40

..............

United

States

3,400,000

3,930,366

Senior

Secured

Bond,

144A,

3.3%,

2/15/51

................

United

States

5,700,000

5,512,812

Senior

Secured

Note,

144A,

3.5%,

4/15/25

................

United

States

1,900,000

2,083,559

Senior

Secured

Note,

144A,

3.875%,

4/15/30

..............

United

States

18,000,000

20,242,980

31,769,717

Total

Corporate

Bonds

(Cost

$1,343,956,029)

...................................

1,417,068,028

j,k

Senior

Floating

Rate

Interests

2.2%

Aerospace

&

Defense

0.0%

†

h

Alloy

FinCo

Ltd.,

Facility

Term

Loan,

B,

0.5%,

PIK,

(3-month

USD

LIBOR

+

0.5%),

3/06/25

...............................

Jersey

108,797

28,904

Dynasty

Acquisition

Co.,

Inc.,

2020

Term

Loan

,

B1,

3.72%,

(3-month

USD

LIBOR

+

3.5%),

4/06/26

..........

United

States

1,184,997

1,064,643

B2,

3.72%,

(3-month

USD

LIBOR

+

3.5%),

4/06/26

..........

United

States

637,095

572,389

1,665,936

a

a

a

a

a

a

Airlines

0.1%

Allegiant

Travel

Co.,

Replacement

Term

Loan,

3.254%,

(3-month

USD

LIBOR

+

3%),

2/05/24

............................

United

States

2,075,748

1,965,038

Delta

Air

Lines,

Inc.

/

SkyMiles

IP

Ltd.,

Initial

Term

Loan,

4.75%,

(6-month

USD

LIBOR

+

3.75%),

10/20/27

.................

United

States

518,715

517,742

JetBlue

Airways

Corp.,

Term

Loan,

6.25%,

(3-month

USD

LIBOR

+

5.25%),

6/17/24

.....................................

United

States

163,819

163,372

Kestrel

Bidco,

Inc.,

Term

Loan,

4%,

(3-month

USD

LIBOR

+

3%),

12/11/26

..........................................

Canada

837,203

741,385

3,387,537

a

a

a

a

a

a

Auto

Components

0.1%

Adient

US

LLC,

Initial

Term

Loan,

4.422%,

(3-month

USD

LIBOR

+

4.25%;

1-month

USD

LIBOR

+

4.25%),

5/06/24

.............

United

States

4,053,712

4,005,068

l,m

Highline

Aftermarket

Acquisition

LLC,

First

Lien,

Term

Loan,

TBD,

10/20/27

..........................................

United

States

228,432

223,577

Panther

BF

Aggregator

2

LP,

First

Lien,

Initial

Dollar

Term

Loan,

3.648%,

(1-month

USD

LIBOR

+

3.5%),

4/30/26

.............

Canada

955,088

930,255

TRICO

Group

LLC,

First

Lien,

Term

Loan,

B3,

8.5%,

(3-month

USD

LIBOR),

2/02/24

.....................................

United

States

765,157

761,332

5,920,232

a

a

a

a

a

a

Automobiles

0.1%

Thor

Industries,

Inc.,

Initial

USD

Term

Loan,

3.938%,

(1-month

USD

LIBOR

+

3.75%),

2/01/26

..............................

United

States

2,811,382

2,797,325

Biotechnology

0.1%

Grifols

Worldwide

Operations

Ltd.,

Dollar

Term

Loan,

B,

2.094%,

(1-

week

USD

LIBOR

+

2%),

11/15/27

.......................

Ireland

729,502

712,771

Horizon

Therapeutics

USA,

Inc.,

Seventh

Amendment

Refinancing

Term

Loan,

2.188%,

(1-month

USD

LIBOR

+

2%),

5/22/26

.....

United

States

1,079,283

1,059,494

1,772,265

a

a

a

a

a

a

Franklin

Investors

Securities

Trust

Consolidated

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

Annual

Report

105

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

j,k

Senior

Floating

Rate

Interests

(continued)

Capital

Markets

0.0%

†

Vertical

Midco

GmbH,

USD

Term

Loan,

4.57%,

(6-month

USD

LIBOR),

6/30/27

.....................................

Germany

757,803

$

747,861

Chemicals

0.0%

†

Cyanco

Intermediate

2

Corp.,

First

Lien,

Initial

Term

Loan,

3.648%,

(1-month

USD

LIBOR

+

3.5%),

3/16/25

...................

United

States

973,791

957,514

Illuminate

Buyer

LLC,

Term

Loan,

4.148%,

(1-month

USD

LIBOR

+

4%),

6/30/27

.......................................

United

States

266,137

262,290

1,219,804

a

a

a

a

a

a

Commercial

Services

&

Supplies

0.1%

Legalzoom.com,

Inc.,

First

Lien,

2018

Term

Loan,

4.648%,

(1-month

USD

LIBOR

+

4.5%),

11/21/24

..........................

United

States

2,618,802

2,582,794

Prime

Security

Services

Borrower

LLC,

First

Lien,

2019

Refinancing

Term

Loan,

B1,

4.25%,

(3-month

USD

LIBOR

+

3.25%;

1-month

USD

LIBOR

+

3.25%),

9/23/26

..........................

United

States

2,221,592

2,196,766

Staples,

Inc.,

2019

Refinancing

New

Term

Loan,

B1,

5.251%,

(3-month

USD

LIBOR

+

5%),

4/16/26

.....................

United

States

472,025

435,207

5,214,767

a

a

a

a

a

a

Communications

Equipment

0.0%

†

CommScope,

Inc.,

Initial

Term

Loan,

3.398%,

(1-month

USD

LIBOR

+

3.25%),

4/06/26

...................................

United

States

1,650,000

1,597,843

Containers

&

Packaging

0.0%

†

BWay

Holding

Co.,

Initial

Term

Loan,

3.48%,

(3-month

USD

LIBOR

+

3.25%),

4/03/24

.....................................

United

States

1,701,567

1,595,219

Diversified

Financial

Services

0.1%

First

Eagle

Holdings,

Inc.,

2020

Refinancing

Term

Loan,

2.72%,

(3-month

USD

LIBOR

+

2.5%),

2/01/27

...................

United

States

3,316,625

3,229,796

Jefferies

Finance

LLC,

2020

Term

Loan,

4.5%,

(1-month

USD

LIBOR

+

3.75%),

9/30/27

...................................

United

States

280,515

278,061

m

Verscend

Holding

Corp.,

Term

Loan,

B,

4.648%,

(1-month

USD

LIBOR

+

4.5%),

8/27/25

...............................

United

States

696,200

684,998

4,192,855

a

a

a

a

a

a

Diversified

Telecommunication

Services

0.1%

Global

Tel

Link,

First

Lien,

Term

Loan,

4.398%,

(1-month

USD

LIBOR

+

4.25%),

11/29/25

.............................

United

States

1,042,026

909,168

Zayo

Group

Holdings,

Inc.,

Initial

Dollar

Term

Loan,

3.148%,

(1-month

USD

LIBOR

+

3%),

3/09/27

.....................

United

States

2,479,520

2,394,386

3,303,554

a

a

a

a

a

a

Entertainment

0.1%

Banijay

Entertainment

SAS,

Facility

USD

Term

Loan,

B,

3.89%,

(1-month

USD

LIBOR

+

3.75%),

3/01/25

..................

France

1,691,049

1,644,546

Diamond

Sports

Group

LLC,

Term

Loan,

3.4%,

(1-month

USD

LIBOR

+

3.25%),

8/24/26

..............................

United

States

4,838,906

3,034,405

Lions

Gate

Capital

Holdings

LLC,

Term

Loan,

A,

1.898%,

(1-month

USD

LIBOR

+

1.75%),

3/22/23

..........................

United

States

764,008

737,268

5,416,219

a

a

a

a

a

a

Food

Products

0.1%

B&G

Foods,

Inc.,

Term

Loan,

B4,

2.648%,

(1-month

USD

LIBOR

+

2.5%),

10/10/26

.....................................

United

States

929,333

925,731

CSM

Bakery

Solutions

Ltd.,

Second

Lien,

Term

Loan,

11%,

(3-month

USD

LIBOR

+

10%),

2/04/22

...........................

United

States

141,102

135,089

Franklin

Investors

Securities

Trust

Consolidated

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

106

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

j,k

Senior

Floating

Rate

Interests

(continued)

Food

Products

(continued)

JBS

USA

Lux

SA,

New

Term

Loan,

2.148%,

(1-month

USD

LIBOR

+

2%),

5/01/26

.......................................

Luxembourg

944,146

$

923,739

1,984,559

a

a

a

a

a

a

Health

Care

Providers

&

Services

0.1%

BrightSpring

Health

Services,

Term

Loan,

(1-month

USD

LIBOR),

3/05/26

...........................................

United

States

50,000

49,198

l,m

CNT

Holdings

I

Corp.,

First

Lien,

Term

Loan

Facility,

TBD,

10/16/27

United

States

107,842

106,786

DaVita,

Inc.,

Term

Loan,

B1,

1.898%,

(1-month

USD

LIBOR

+

1.75%),

8/12/26

.....................................

United

States

1,087,657

1,065,903

m

eResearchTechnology,

Inc.,

First

Lien,

Initial

Term

Loan,

5.5%,

(1-month

USD

LIBOR

+

4.5%),

2/04/27

...................

United

States

221,264

220,296

GNC

Holdings,

Inc.,

Second

Lien,

Term

Loan,

6.234%,

(3-month

USD

LIBOR),

10/30/26

................................

United

States

423,996

328,597

National

Mentor

Holdings,

Inc.,

First

Lien,

Initial

Term

Loan

,

4.4%,

(1-month

USD

LIBOR

+

4.25%),

3/09/26

..............

United

States

398,900

393,166

C,

4.4%,

(1-month

USD

LIBOR

+

4.25%),

3/09/26

...........

United

States

18,208

17,947

m

Navicure,

Inc.,

First

Lien,

Initial

Term

Loan,

4.148%,

(1-month

USD

LIBOR

+

4%),

10/22/26

...............................

United

States

995,000

973,025

m

Pathway

Vet

Alliance

LLC,

First

Lien,

Initial

Term

Loan,

4.148%,

(1-month

USD

LIBOR

+

4%),

3/31/27

.....................

United

States

1,582,229

1,550,584

m

Phoenix

Guarantor,

Inc.,

First

Lien,

Term

Loan,

B1,

3.397%,

(1-month

USD

LIBOR

+

3.25%),

3/05/26

..................

United

States

1,658,036

1,608,643

6,314,145

a

a

a

a

a

a

Hotels,

Restaurants

&

Leisure

0.1%

24

Hour

Fitness

Worldwide,

Inc.,

Debtor-in-possession

New

Money

Term

Loan,

11%,

(12-month

USD

LIBOR;

3-month

USD

LIBOR),

6/17/21

...........................................

United

States

987,549

773,577

24

Hour

Fitness

Worldwide,

Inc.,

Debtor-in-possession

Roll-Up

Term

Loan,

11%,

(3-month

USD

LIBOR

+

10%),

6/17/21

...........

United

States

905,290

709,141

i

24

Hour

Fitness

Worldwide,

Inc.,

Term

Loan,

(1-month

USD

LIBOR

+

3.5%),

5/30/25

......................................

United

States

2,409,407

55,465

Caesars

Resort

Collection

LLC,

Term

Loan

,

B,

2.898%,

(1-month

USD

LIBOR

+

2.75%),

12/23/24

.........

United

States

1,336,761

1,257,117

B1,

4.649%,

(3-month

USD

LIBOR

+

4.5%;

1-month

USD

LIBOR

+

4.5%),

7/21/25

......................................

United

States

120,105

116,614

2,911,914

a

a

a

a

a

a

Household

Durables

0.0%

†

Playtika

Holding

Corp.,

Term

Loan,

B,

7%,

(3-month

USD

LIBOR

+

6%),

12/10/24

......................................

United

States

1,434,125

1,437,875

Household

Products

0.0%

†

a

FGI

Operating

Co.

LLC,

Last

Out

Initial

Term

Loan,

13%,

(3-month

USD

LIBOR

+

10%;

3-month

USD

LIBOR

+

11%

+

7.5%),

5/17/21

United

States

1,127,442

1,127,443

a,h,i

FGI

Operating

Co.

LLC,

Term

Loan,

PIK,

(3-month

USD

LIBOR

+

11%),

5/16/22

......................................

United

States

594,141

386,617

1,514,060

a

a

a

a

a

a

Insurance

0.1%

Alliant

Holdings

Intermediate

LLC,

2018

Initial

Term

Loan,

2.898%,

(1-month

USD

LIBOR

+

2.75%),

5/09/25

..................

United

States

1,538,328

1,484,833

l,m

Alliant

Holdings

Intermediate

LLC,

Term

Loan,

B3,

TBD,

10/08/27

.

United

States

41,672

41,346

Franklin

Investors

Securities

Trust

Consolidated

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

Annual

Report

107

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

j,k

Senior

Floating

Rate

Interests

(continued)

Insurance

(continued)

m

AssuredPartners,

Inc.,

2020

February

Refinancing

Term

Loan,

3.648%,

(1-month

USD

LIBOR

+

3.5%),

2/12/27

.............

United

States

1,999,962

$

1,934,074

3,460,253

a

a

a

a

a

a

IT

Services

0.1%

Aventiv

Technologies

LLC,

Second

Lien,

Initial

Term

Loan,

9.25%,

(6-month

USD

LIBOR

+

8.25%),

11/01/25

..................

United

States

416,510

261,595

l,m

Barracuda

Networks,

Inc.,

Term

Loan,

TBD,

2/12/25

...........

United

States

345,281

340,102

Go

Daddy

Operating

Co.

LLC,

Term

Loan,

B2,

1.897%,

(1-month

USD

LIBOR

+

1.75%),

2/15/24

..........................

United

States

788,382

771,385

m

Milano

Acquisition

Corp.,

Term

Loan,

B,

4.75%,

(3-month

USD

LIBOR

+

4%),

10/01/27

...............................

United

States

1,047,579

1,032,740

Pitney

Bowes,

Inc.,

Incremental

Term

Loan,

B,

5.65%,

(1-month

USD

LIBOR

+

5.5%),

1/07/25

...............................

United

States

2,431,634

2,403,974

TIBCO

Software,

Inc.,

Term

Loan,

B3,

3.9%,

(1-month

USD

LIBOR

+

3.75%),

6/30/26

.....................................

United

States

1,895,250

1,843,131

6,652,927

a

a

a

a

a

a

Leisure

Products

0.1%

Bass

Pro

Group

LLC,

Initial

Term

Loan,

5.75%,

(3-month

USD

LIBOR

+

5%),

9/25/24

................................

United

States

1,237,245

1,235,896

NASCAR

Holdings

LLC,

Initial

Term

Loan,

2.902%,

(1-month

USD

LIBOR

+

2.75%),

10/19/26

.............................

United

States

2,217,702

2,163,258

3,399,154

a

a

a

a

a

a

Machinery

0.1%

Altra

Industrial

Motion

Corp.,

Term

Loan,

2.148%,

(1-month

USD

LIBOR

+

2%),

10/01/25

...............................

United

States

1,454,707

1,429,933

Navistar,

Inc.,

Term

Loan,

B,

3.65%,

(1-month

USD

LIBOR

+

3.5%),

11/06/24

..........................................

United

States

3,396,345

3,371,722

4,801,655

a

a

a

a

a

a

Media

0.1%

Clear

Channel

Outdoor

Holdings,

Inc.,

Term

Loan,

B,

3.714%,

(2-month

USD

LIBOR

+

3.5%;

3-month

USD

LIBOR

+

3.5%),

8/21/26

...........................................

United

States

748,111

684,054

Gray

Television,

Inc.,

Term

Loan,

C,

2.649%,

(1-month

USD

LIBOR

+

2.5%),

1/02/26

......................................

United

States

2,181,175

2,128,827

Nielsen

Finance

LLC

(VNU,

Inc.),

Term

Loan,

B4,

2.147%,

(1-month

USD

LIBOR

+

2%),

10/04/23

...........................

United

States

1,283,144

1,256,762

Radiate

HoldCo

LLC,

Term

Loan,

B,

4.25%,

(1-month

USD

LIBOR

+

3.5%),

9/25/26

......................................

United

States

138,482

136,395

Sinclair

Television

Group,

Inc.,

Term

Loan,

B,

2.4%,

(1-month

USD

LIBOR

+

2.25%),

1/03/24

..............................

United

States

984,655

957,227

Univision

Communications,

Inc.,

First

Lien,

2020

Replacement

Term

Loan,

(1-month

USD

LIBOR

+

3.75%),

3/15/26

..............

United

States

1,067,694

1,042,839

l,m

Virgin

Media

Bristol

LLC,

Term

Loan,

Q,

TBD,

1/31/29

..........

United

States

60,844

59,779

6,265,883

a

a

a

a

a

a

Multiline

Retail

0.0%

†

Harbor

Freight

Tools

USA,

Inc.,

Initial

Term

Loan

(2020),

4%,

(1-month

USD

LIBOR

+

3.25%),

10/19/27

.................

United

States

1,196,515

1,181,487

Oil,

Gas

&

Consumable

Fuels

0.1%

Buckeye

Partners

LP,

Initial

Term

Loan,

2.897%,

(1-month

USD

LIBOR

+

2.75%),

11/01/26

.............................

United

States

1,363,150

1,341,244

Franklin

Investors

Securities

Trust

Consolidated

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

108

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

j,k

Senior

Floating

Rate

Interests

(continued)

Oil,

Gas

&

Consumable

Fuels

(continued)

m,n

Fieldwood

Energy

LLC,

Debtor-in-possession

Facility

Term

Loan,

3.675%,

(1-month

USD

LIBOR;

1-month

USD

LIBOR

+

8.75%),

8/04/21

...........................................

United

States

70,077

$

70,427

i

Fieldwood

Energy

LLC,

First

Lien,

Closing

Date

Term

Loan,

(3-month

USD

LIBOR

+

5.25%),

4/11/22

..........................

United

States

5,877,828

1,293,122

UTEX

Industries,

Inc.,

Debtor-in-possession

Term

Loan,

10%,

(1-month

USD

LIBOR

+

9%),

2/08/21

.....................

United

States

22,984

23,099

i

UTEX

Industries,

Inc.,

First

Lien,

Initial

Term

Loan,

(3-month

USD

LIBOR

+

5%),

5/21/21

................................

United

States

358,741

110,492

i

UTEX

Industries,

Inc.,

Second

Lien,

Initial

Term

Loan,

(3-month

USD

LIBOR

+

7.25%),

5/20/22

..............................

United

States

37,581

940

2,839,324

a

a

a

a

a

a

Paper

&

Forest

Products

0.0%

†

Appvion

Operations,

Inc.,

Term

Loan,

7%,

(3-month

USD

LIBOR

+

6%),

6/12/26

.......................................

United

States

189,726

186,406

Personal

Products

0.0%

†

Coty,

Inc.,

USD

Term

Loan,

B,

2.39%,

(1-month

USD

LIBOR

+

2.25%),

4/07/25

.....................................

United

States

1,014,809

893,271

Pharmaceuticals

0.1%

Bausch

Health

Cos.,

Inc.,

First

Incremental

Term

Loan,

2.899%,

(1-month

USD

LIBOR

+

2.75%),

11/27/25

..................

United

States

2,400,000

2,349,504

Bausch

Health

Cos.,

Inc.,

Initial

Term

Loan,

3.149%,

(1-month

USD

LIBOR

+

3%),

6/02/25

................................

United

States

270,994

265,152

Catalent

Pharma

Solutions,

Inc.,

Dollar

Term

Loan,

B2,

3.25%,

(1-month

USD

LIBOR

+

2.25%),

5/18/26

..................

United

States

1,147,013

1,144,386

3,759,042

a

a

a

a

a

a

Real

Estate

Management

&

Development

0.0%

†

Cushman

&

Wakefield

U.S.

Borrower

LLC,

Replacement

Term

Loan,

2.898%,

(1-month

USD

LIBOR

+

2.75%),

8/21/25

............

United

States

696,500

668,640

Road

&

Rail

0.1%

Avis

Budget

Car

Rental

LLC,

New

Term

Loan,

B,

2.4%,

(1-month

USD

LIBOR

+

2.25%),

8/06/27

..........................

United

States

2,822,574

2,556,194

Kenan

Advantage

Group

Holdings

Corp.

(The),

Initial

Canadian

Term

Loan,

4%,

(1-month

USD

LIBOR

+

3%),

7/29/22

.............

United

States

187,288

181,308

Kenan

Advantage

Group

Holdings

Corp.

(The),

Initial

U.S.

Term

Loan,

4%,

(1-month

USD

LIBOR

+

3%),

7/29/22

.............

United

States

787,584

762,437

a

Onsite

Rental

Group

Operations

Pty.

Ltd.,

Term

Loan,

B,

5.5%,

(1-month

USD

LIBOR

+

4.5%),

10/26/22

..................

Australia

133,931

123,086

Ventia

Midco

Pty.

Ltd.,

2017

Refinancing

USD

Term

Loan,

B,

5%,

(3-month

USD

LIBOR

+

4%),

5/21/26

.....................

Australia

2,642,676

2,609,642

6,232,667

a

a

a

a

a

a

Semiconductors

&

Semiconductor

Equipment

0.0%

†

ON

Semiconductor

Corp.,

2019

New

Replacement

Term

Loan,

B4,

2.148%,

(1-month

USD

LIBOR

+

2%),

9/19/26

..............

United

States

853,908

837,137

Software

0.3%

m

athenahealth,

Inc.,

First

Lien,

Term

Loan,

B,

4.75%,

(3-month

USD

LIBOR

+

4.5%),

2/11/26

...............................

United

States

1,492,424

1,464,441

l,m

Blackboard,

Inc.,

First

Lien,

Term

Loan,

B5,

TBD,

6/30/24

.......

United

States

1,746,751

1,693,807

Ceridian

HCM

Holding,

Inc.,

Initial

Term

Loan,

2.594%,

(1-week

USD

LIBOR

+

2.5%),

4/30/25

...............................

United

States

797,455

773,408

DCert

Buyer,

Inc.,

First

Lien,

Initial

Term

Loan,

4.148%,

(1-month

USD

LIBOR

+

4%),

10/16/26

...........................

United

States

1,880,550

1,848,223

Franklin

Investors

Securities

Trust

Consolidated

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

Annual

Report

109

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

j,k

Senior

Floating

Rate

Interests

(continued)

Software

(continued)

Epicor

Software

Corp.,

Term

Loan,

B,

5.25%,

(1-month

USD

LIBOR),

7/30/27

...........................................

United

States

358,620

$

357,768

l,m

Greeneden

U.S.

Holdings

I

LLC,

Term

Loan,

B,

TBD,

10/08/27

...

United

States

338,735

333,973

Hyland

Software,

Inc.,

First

Lien,

2018

Refinancing

Term

Loan,

4.25%,

(1-month

USD

LIBOR

+

3.5%),

7/01/24

..............

United

States

568,108

561,313

LogMeIn,

Inc.,

First

Lien,

Initial

Term

Loan,

4.89%,

(1-month

USD

LIBOR

+

4.75%),

8/31/27

..............................

United

States

328,662

319,215

m

Mitchell

International,

Inc.,

First

Lien,

Amendment

No.

2

New

Term

Loan

Facility,

4.75%,

(1-month

USD

LIBOR),

11/29/24

........

United

States

630,000

612,360

Perforce

Software,

Inc.,

First

Lien,

New

Term

Loan,

3.898%,

(1-month

USD

LIBOR

+

3.75%),

7/01/26

..................

United

States

528,399

516,227

m

Quest

Software

US

Holdings,

Inc.,

First

Lien,

Initial

Term

Loan,

4.464%,

(3-month

USD

LIBOR

+

4.25%),

5/16/25

............

United

States

2,024,835

1,957,134

Solera

LLC

(Solera

Finance,

Inc.),

Dollar

Term

Loan,

2.916%,

(2-month

USD

LIBOR

+

2.75%),

3/03/23

..................

United

States

3,252,453

3,174,053

Surf

Holdings

SARL,

First

Lien,

Dollar

Term

Loan,

3.75%,

(3-month

USD

LIBOR

+

3.5%),

3/05/27

...........................

Luxembourg

1,561,983

1,516,295

Ultimate

Software

Group,

Inc.

(The),

First

Lien,

2020

Incremental

Term

Loan,

4.75%,

(3-month

USD

LIBOR

+

4%),

5/04/26

......

United

States

157,604

156,964

m

Veritas

US,

Inc.,

Term

Loan,

B,

6.5%,

(3-month

USD

LIBOR

+

5.5%),

9/01/25

...........................................

United

States

820,000

804,498

16,089,679

a

a

a

a

a

a

Technology

Hardware,

Storage

&

Peripherals

0.0%

†

l,m

Amentum

Government

Services

Holdings

LLC,

Incremental

Term

Loan,

TBD,

1/29/27

..................................

United

States

300,000

294,375

Cardtronics

USA,

Inc.,

Initial

Term

Loan,

5%,

(1-month

USD

LIBOR

+

4%),

6/29/27

.......................................

United

States

201,036

201,287

495,662

a

a

a

a

a

a

Total

Senior

Floating

Rate

Interests

(Cost

$122,102,373)

.........................

110,757,157

o

Marketplace

Loans

0.2%

Diversified

Financial

Services

0.2%

a

Lending

Club

-

LCX,

6.46%

-

25.65%,

7/15/22

-

4/14/25

.........

United

States

5,158,780

4,734,948

a

Lending

Club,

8.46%

-

20.74%,

10/07/23

-

10/29/25

...........

United

States

470,396

470,347

a

Upgrade,

13.64%

-

30.99%,

9/30/22

-

6/14/25

................

United

States

3,352,994

2,915,884

8,121,179

a

a

a

a

a

a

Total

Marketplace

Loans

(Cost

$8,982,169)

.....................................

8,121,179

p

Loan

Participations

and

Assignments

0.2%

b,f

Russian

Railways

Via

RZD

Capital

plc,

Senior

Note,

Reg

S,

5.7%,

4/05/22

...........................................

Russia

11,600,000

12,324,350

Total

Loan

Participations

and

Assignments

(Cost

$11,958,701)

...................

12,324,350

Foreign

Government

and

Agency

Securities

5.2%

f

Angola

Government

Bond

,

Senior

Note

,

144A,

8.25

%

,

5/09/28

...

Angola

14,700,000

11,606,018

f

Banque

Centrale

de

Tunisie

,

Senior

Note

,

Reg

S,

5.625

%

,

2/17/24

Tunisia

11,200,000

EUR

11,246,658

f

Banque

Ouest

Africaine

de

Developpement

,

Senior

Note

,

144A,

5

%

,

7/27/27

...........................................

Supranational

q

10,700,000

11,513,200

f

Belarus

Government

Bond

,

Senior

Note

,

144A,

7.625

%

,

6/29/27

..

Belarus

13,300,000

13,237,490

Colombia

Government

Bond

,

Senior

Bond,

9.85%,

6/28/27

...........................

Colombia

37,486,000,000

COP

12,574,883

Senior

Bond,

5%,

6/15/45

.............................

Colombia

8,800,000

10,249,800

Franklin

Investors

Securities

Trust

Consolidated

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

110

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Foreign

Government

and

Agency

Securities

(continued)

f

Dominican

Republic

Government

Bond

,

Senior

Note

,

144A,

8.9

%

,

2/15/23

...........................................

Dominican

Republic

610,400,000

DOP

$

10,564,388

f,g

Electricite

de

France

SA

,

Junior

Sub.

Bond

,

144A,

5.25%

to

1/29/23,

FRN

thereafter

,

Perpetual

.............................

France

24,000,000

24,890,160

f

Gabon

Government

Bond

,

144A,

6.375%,

12/12/24

...............................

Gabon

5,878,488

5,616,160

Senior

Bond,

144A,

6.625%,

2/06/31

.....................

Gabon

11,000,000

9,853,711

f

Indonesia

Government

Bond

,

Senior

Bond

,

144A,

4.35

%

,

1/08/27

.

Indonesia

9,100,000

10,429,829

f

Iraq

Government

Bond

,

Senior

Bond

,

144A,

5.8

%

,

1/15/28

......

Iraq

16,218,750

14,029,997

f

Israel

Electric

Corp.

Ltd.

,

Senior

Secured

Bond

,

144A,

Reg

S,

4.25

%

,

8/14/28

...........................................

Israel

6,700,000

7,705,904

f

Kazakhstan

Government

Bond

,

Senior

Bond

,

144A,

4.875

%

,

10/14/44

..........................................

Kazakhstan

7,500,000

9,974,550

Mexico

Government

Bond

,

Senior

Note,

4.15%,

3/28/27

...........................

Mexico

17,200,000

19,188,750

M

20,

Senior

Bond,

8.5%,

5/31/29

.......................

Mexico

350,000,000

MXN

19,264,965

Peru

Government

Bond

,

Senior

Bond,

2.783%,

1/23/31

..........................

Peru

8,000,000

8,666,000

Senior

Bond,

6.55%,

3/14/37

...........................

Peru

2,900,000

4,398,706

f

Russia

Government

Bond

,

Senior

Note

,

144A,

4.875

%

,

9/16/23

...

Russia

11,600,000

12,721,720

South

Africa

Government

Bond

,

Senior

Bond

,

7

%

,

2/28/31

......

South

Africa

240,600,000

ZAR

12,111,458

f

Ukraine

Government

Bond

,

Senior

Note,

144A,

7.75%,

9/01/21

.......................

Ukraine

229,000

236,300

Senior

Note,

144A,

7.75%,

9/01/22

.......................

Ukraine

229,000

239,195

Senior

Note,

144A,

7.75%,

9/01/23

.......................

Ukraine

229,000

238,857

Senior

Note,

144A,

7.75%,

9/01/24

.......................

Ukraine

229,000

237,612

Senior

Note,

144A,

7.75%,

9/01/25

.......................

Ukraine

229,000

235,166

Senior

Bond,

144A,

7.75%,

9/01/26

......................

Ukraine

229,000

232,213

Senior

Bond,

144A,

7.75%,

9/01/27

......................

Ukraine

229,000

231,241

Senior

Bond,

144A,

7.375%,

9/25/32

.....................

Ukraine

12,400,000

11,934,008

j,r

VRI,

GDP

Linked

Security,

Senior

Bond,

144A,

Reg

S,

FRN,

5/31/40

...........................................

Ukraine

474,000

412,110

s

Uruguay

Government

Bond

,

Index

Linked,

Senior

Bond

,

3.7

%

,

6/26/37

...........................................

Uruguay

426,689,902

UYU

11,093,937

Total

Foreign

Government

and

Agency

Securities

(Cost

$273,310,651)

............

264,934,986

U.S.

Government

and

Agency

Securities

14.1%

U.S.

Treasury

Bonds

,

s

1.75%,

1/15/28

.....................................

United

States

25,000,000

37,387,058

s

3.625%,

4/15/28

.....................................

United

States

6,000,000

13,067,627

1.125%,

5/15/40

.....................................

United

States

26,000,000

24,712,188

3.125%,

11/15/41

....................................

United

States

14,500,000

18,989,336

2.25%,

8/15/46

.....................................

United

States

34,800,000

39,640,734

2.75%,

11/15/47

.....................................

United

States

25,500,000

31,930,781

3.125%,

5/15/48

.....................................

United

States

10,500,000

14,066,719

3%,

8/15/48

........................................

United

States

17,000,000

22,317,148

2.875%,

5/15/49

.....................................

United

States

14,000,000

18,029,375

2.25%,

8/15/49

.....................................

United

States

39,000,000

44,504,180

1.25%,

5/15/50

.....................................

United

States

18,500,000

16,707,813

U.S.

Treasury

Notes

,

s

0.125%,

4/15/22

.....................................

United

States

8,000,000

8,653,038

s

0.125%,

7/15/22

.....................................

United

States

6,200,000

7,147,617

0.125%,

8/31/22

.....................................

United

States

25,000,000

24,990,234

s

0.125%,

1/15/23

.....................................

United

States

6,300,000

7,272,244

s

0.625%,

1/15/24

.....................................

United

States

7,500,000

8,833,921

s

0.125%,

7/15/24

.....................................

United

States

8,500,000

9,784,202

Franklin

Investors

Securities

Trust

Consolidated

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

Annual

Report

111

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

U.S.

Government

and

Agency

Securities

(continued)

U.S.

Treasury

Notes,

(continued)

s

0.25%,

1/15/25

.....................................

United

States

4,000,000

$

4,653,077

1.125%,

2/28/25

.....................................

United

States

50,000,000

51,742,187

0.25%,

6/30/25

.....................................

United

States

80,000,000

79,625,000

0.25%,

7/31/25

.....................................

United

States

90,000,000

89,532,422

0.25%,

8/31/25

.....................................

United

States

55,000,000

54,690,625

0.25%,

9/30/25

.....................................

United

States

50,000,000

49,697,266

s

0.625%,

1/15/26

.....................................

United

States

13,500,000

16,159,870

0.375%,

7/31/27

.....................................

United

States

22,200,000

21,843,586

Total

U.S.

Government

and

Agency

Securities

(Cost

$688,283,265)

................

715,978,248

Asset-Backed

Securities

12.6%

Commercial

Services

&

Supplies

0.1%

f,t

Armada

Euro

CLO

IV

DAC

,

4A

,

B

,

144A,

FRN

,

1.7

%

,

(

3-month

EURIBOR

+

1.7

%

),

7/15/33

............................

Ireland

5,100,000

EUR

5,894,914

f,t

LCM

XXII

Ltd.

,

22A,

A2R,

144A,

FRN,

1.668%,

(3-month

USD

LIBOR

+

1.45%),

10/20/28

..........................................

United

States

1,000,000

976,599

22A,

CR,

144A,

FRN,

3.018%,

(3-month

USD

LIBOR

+

2.8%),

10/20/28

..........................................

United

States

1,000,000

893,525

7,765,038

a

a

a

a

a

a

Diversified

Financial

Services

12.5%

f,t

Adagio

CLO

VIII

DAC

,

VIII-A

,

B1

,

144A,

FRN

,

1.65

%

,

(

3-month

EURIBOR

+

1.65

%

),

4/15/32

...........................

Ireland

2,050,000

EUR

2,363,859

t

Ameriquest

Mortgage

Securities,

Inc.

,

2004-R4

,

M1

,

FRN

,

0.974

%

,

(

1-month

USD

LIBOR

+

0.825

%

),

6/25/34

.................

United

States

652,856

668,006

f,t

AMMC

CLO

15

Ltd.

,

2014-15A

,

BRR

,

144A,

FRN

,

2.037

%

,

(

3-month

USD

LIBOR

+

1.8

%

),

1/15/32

...........................

United

States

922,984

906,803

f,t

AMMC

CLO

21

Ltd.

,

2017-21A

,

C

,

144A,

FRN

,

2.351

%

,

(

3-month

USD

LIBOR

+

2.1

%

),

11/02/30

..........................

United

States

1,000,000

961,101

f,t

AMMC

CLO

XI

Ltd.

,

2012-11A,

BR2,

144A,

FRN,

1.814%,

(3-month

USD

LIBOR

+

1.6%),

4/30/31

......................................

United

States

5,050,000

4,910,535

2012-11A,

CR2,

144A,

FRN,

2.114%,

(3-month

USD

LIBOR

+

1.9%),

4/30/31

......................................

United

States

2,750,000

2,509,216

f,t

Antares

CLO

Ltd.

,

2018-1A

,

B

,

144A,

FRN

,

1.868

%

,

(

3-month

USD

LIBOR

+

1.65

%

),

4/20/31

..............................

United

States

12,900,000

12,135,213

f,t

Ares

European

CLO

VIII

BV

,

8A

,

BR

,

144A,

FRN

,

1.6

%

,

(

3-month

EURIBOR

+

1.6

%

),

4/17/32

............................

Netherlands

2,900,000

EUR

3,338,545

f,t

Ares

LII

CLO

Ltd.

,

2019-52A,

A2,

144A,

FRN,

1.866%,

(3-month

USD

LIBOR

+

1.65%),

4/22/31

.....................................

United

States

1,382,114

1,377,153

2019-52A,

C,

144A,

FRN,

2.896%,

(3-month

USD

LIBOR

+

2.68%),

4/22/31

.....................................

United

States

2,500,000

2,485,648

f,t

Ares

XLVIII

CLO

Ltd.

,

2018-48A

,

D

,

144A,

FRN

,

2.918

%

,

(

3-month

USD

LIBOR

+

2.7

%

),

7/20/30

...........................

United

States

2,000,000

1,806,850

f,t

Atrium

XIV

LLC

,

14A

,

A2A

,

144A,

FRN

,

1.68

%

,

(

3-month

USD

LIBOR

+

1.45

%

),

8/23/30

..............................

United

States

7,400,000

7,350,162

f,t

Bain

Capital

Credit

CLO

Ltd.

,

2018-1A,

A1,

144A,

FRN,

1.169%,

(3-month

USD

LIBOR

+

0.96%),

4/23/31

.....................................

United

States

12,000,000

11,791,384

2018-1A,

A2,

144A,

FRN,

1.359%,

(3-month

USD

LIBOR

+

1.15%),

4/23/31

.....................................

United

States

5,100,000

5,022,315

2020-4A,

B,

144A,

FRN,

Zero

Cpn.,

(3-month

USD

LIBOR

+

1.95%),

10/20/33

....................................

United

States

8,350,000

8,350,000

Franklin

Investors

Securities

Trust

Consolidated

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

112

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Asset-Backed

Securities

(continued)

Diversified

Financial

Services

(continued)

f,t

BCC

Middle

Market

CLO

LLC

,

2018-1A

,

A2

,

144A,

FRN

,

2.368

%

,

(

3-month

USD

LIBOR

+

2.15

%

),

10/20/30

.................

United

States

5,100,000

$

4,870,111

f,t

Blackrock

European

CLO

IX

DAC

,

9A,

A,

144A,

FRN,

0.9%,

(3-month

EURIBOR

+

0.9%),

12/15/32

Ireland

17,350,000

EUR

20,106,635

9A,

B,

144A,

FRN,

1.55%,

(3-month

EURIBOR

+

1.55%),

12/15/32

Ireland

5,250,000

EUR

6,024,429

f,t

BlueMountain

CLO

Ltd.

,

2014-2A,

CR2,

144A,

FRN,

2.418%,

(3-month

USD

LIBOR

+

2.2%),

10/20/30

.....................................

United

States

4,700,000

4,578,977

2016-3A,

CR,

144A,

FRN,

2.48%,

(3-month

USD

LIBOR

+

2.2%),

11/15/30

..........................................

United

States

500,000

482,735

2018-1A,

B,

144A,

FRN,

1.914%,

(3-month

USD

LIBOR

+

1.7%),

7/30/30

...........................................

United

States

272,725

266,262

2018-3A,

B,

144A,

FRN,

1.985%,

(3-month

USD

LIBOR

+

1.77%),

10/25/30

..........................................

United

States

2,000,000

1,969,407

2018-3A,

C,

144A,

FRN,

2.415%,

(3-month

USD

LIBOR

+

2.2%),

10/25/30

..........................................

United

States

1,071,430

1,035,857

f,t

BlueMountain

Fuji

EUR

CLO

V

DAC

,

5A

,

B

,

144A,

FRN

,

1.55

%

,

(

3-month

EURIBOR

+

1.55

%

),

1/15/33

....................

Ireland

6,250,000

EUR

7,164,110

f,t

BlueMountain

Fuji

US

CLO

III

Ltd.

,

2017-3A,

C,

144A,

FRN,

1.937%,

(3-month

USD

LIBOR

+

1.7%),

1/15/30

...........................................

United

States

2,300,000

2,164,983

2017-3A,

D,

144A,

FRN,

2.637%,

(3-month

USD

LIBOR

+

2.4%),

1/15/30

...........................................

United

States

1,600,000

1,432,487

f,t

Burnham

Park

CLO

Ltd.

,

2016-1A

,

BR

,

144A,

FRN

,

1.718

%

,

(

3-month

USD

LIBOR

+

1.5

%

),

10/20/29

..................

United

States

1,488,189

1,455,506

f,t

Buttermilk

Park

CLO

Ltd.

,

2018-1A

,

C

,

144A,

FRN

,

2.337

%

,

(

3-month

USD

LIBOR

+

2.1

%

),

10/15/31

..................

United

States

1,452,380

1,411,150

f,t

Carlyle

Global

Market

Strategies

CLO

Ltd.

,

2014-1A,

A1R2,

144A,

FRN,

1.188%,

(3-month

USD

LIBOR

+

0.97%),

4/17/31

.....................................

United

States

722,802

710,979

2014-1A,

A2R2,

144A,

FRN,

1.348%,

(3-month

USD

LIBOR

+

1.13%),

4/17/31

.....................................

United

States

6,300,000

6,128,472

f,t

Carlyle

GMS

Finance

MM

CLO

LLC

,

2015-1A

,

A2R

,

144A,

FRN

,

2.437

%

,

(

3-month

USD

LIBOR

+

2.2

%

),

10/15/31

............

United

States

10,000,000

9,691,926

f,t

Carlyle

US

CLO

Ltd.

,

2017-3A,

B,

144A,

FRN,

2.568%,

(3-month

USD

LIBOR

+

2.35%),

7/20/29

...........................................

United

States

1,000,000

978,604

2017-4A,

C,

144A,

FRN,

3.037%,

(3-month

USD

LIBOR

+

2.8%),

1/15/30

...........................................

United

States

545,000

482,603

2017-5A,

A2,

144A,

FRN,

1.618%,

(3-month

USD

LIBOR

+

1.4%),

1/20/30

...........................................

United

States

2,740,000

2,629,769

2017-5A,

B,

144A,

FRN,

2.018%,

(3-month

USD

LIBOR

+

1.8%),

1/20/30

...........................................

United

States

7,000,000

6,611,968

f,t

Catamaran

CLO

Ltd.

,

2014-2A,

BR,

144A,

FRN,

3.168%,

(3-month

USD

LIBOR

+

2.95%),

10/18/26

....................................

United

States

6,401,000

6,329,404

2015-1A,

C2R,

144A,

FRN,

2.166%,

(3-month

USD

LIBOR

+

1.95%),

4/22/27

.....................................

United

States

7,600,000

7,368,466

f

CF

Hippolyta

LLC

,

2020-1

,

A1

,

144A,

1.69

%

,

7/15/60

..........

United

States

6,534,922

6,620,530

f,t

Cole

Park

CLO

Ltd.

,

2015-1A

,

BR

,

144A,

FRN

,

1.818

%

,

(

3-month

USD

LIBOR

+

1.6

%

),

10/20/28

..........................

United

States

2,571,428

2,527,044

f,j,u

Consumer

Loan

Underlying

Bond

Certificate

Issuer

Trust

I

,

2018-14,

PT,

144A,

FRN,

9.91%,

9/16/41

..................

United

States

1,336,255

1,263,017

2018-29,

PT,

144A,

FRN,

28.565%,

12/15/43

...............

United

States

970,862

811,527

2019-26,

PT,

144A,

FRN,

20.123%,

8/15/44

................

United

States

4,655,898

3,967,466

2019-31,

PT,

144A,

FRN,

19.138%,

9/15/44

................

United

States

4,248,696

3,640,490

Franklin

Investors

Securities

Trust

Consolidated

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

Annual

Report

113

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Asset-Backed

Securities

(continued)

Diversified

Financial

Services

(continued)

f,j,u

Consumer

Loan

Underlying

Bond

Certificate

Issuer

Trust

I,

(continued)

2019-37,

PT,

144A,

FRN,

20.068%,

10/17/44

...............

United

States

4,747,020

$

4,207,235

2019-42,

PT,

144A,

FRN,

19.334%,

11/15/44

...............

United

States

5,405,448

4,666,016

2019-51,

PT,

144A,

FRN,

17.231%,

1/15/45

................

United

States

6,707,727

5,839,766

2019-52,

PT,

144A,

FRN,

17.6%,

1/15/45

..................

United

States

6,698,645

5,877,560

2019-S1,

PT,

144A,

FRN,

15.295%,

4/15/44

................

United

States

2,895,291

2,432,550

2019-S2,

PT,

144A,

FRN,

15.2%,

5/16/44

..................

United

States

2,357,144

1,967,016

2019-S3,

PT,

144A,

FRN,

14.692%,

6/15/44

................

United

States

3,231,412

2,725,516

2019-S4,

PT,

144A,

FRN,

12.487%,

8/15/44

................

United

States

3,715,351

3,149,585

2019-S5,

PT,

144A,

FRN,

13.461%,

9/15/44

................

United

States

3,754,915

3,356,652

2019-S6,

PT,

144A,

FRN,

11.881%,

10/17/44

...............

United

States

3,731,869

3,211,795

2019-S7,

PT,

144A,

FRN,

11.349%,

12/15/44

...............

United

States

4,026,310

3,501,588

2019-S8,

PT,

144A,

FRN,

10.753%,

1/15/45

................

United

States

4,961,895

4,303,561

2020-2,

PT,

144A,

FRN,

17.326%,

3/15/45

.................

United

States

6,788,408

5,871,309

2020-7,

PT,

144A,

FRN,

17.023%,

4/17/45

.................

United

States

4,532,737

3,940,945

f,t

Cook

Park

CLO

Ltd.

,

2018-1A

,

A2

,

144A,

FRN

,

1.338

%

,

(

3-month

USD

LIBOR

+

1.12

%

),

4/17/30

..........................

United

States

6,000,000

5,830,617

t

CWABS,

Inc.

,

2004-1

,

M1

,

FRN

,

0.899

%

,

(

1-month

USD

LIBOR

+

0.75

%

),

3/25/34

.....................................

United

States

440,403

438,982

f,t

Dryden

42

Senior

Loan

Fund

,

2016-42A

,

DR

,

144A,

FRN

,

3.167

%

,

(

3-month

USD

LIBOR

+

2.93

%

),

7/15/30

..................

United

States

800,000

742,259

f,t

Dryden

45

Senior

Loan

Fund

,

2016-45A

,

CR

,

144A,

FRN

,

2.437

%

,

(

3-month

USD

LIBOR

+

2.2

%

),

10/15/30

..................

United

States

1,250,000

1,227,385

f,t

Dryden

55

CLO

Ltd.

,

2018-55A

,

D

,

144A,

FRN

,

3.087

%

,

(

3-month

USD

LIBOR

+

2.85

%

),

4/15/31

..........................

United

States

2,000,000

1,778,778

f,t

Ellington

CLO

III

Ltd.

,

2018-3A

,

A1

,

144A,

FRN

,

1.868

%

,

(

3-month

USD

LIBOR

+

1.65

%

),

7/20/30

..........................

United

States

5,274,445

5,188,773

f

FirstKey

Homes

Trust

,

2020-SFR2

,

A

,

144A,

1.266

%

,

10/19/37

...

United

States

11,610,000

11,587,352

f,t

Galaxy

XXVII

CLO

Ltd.

,

2018-27A,

A,

144A,

FRN,

1.3%,

(3-month

USD

LIBOR

+

1.02%),

5/16/31

...........................................

United

States

1,000,000

988,500

2018-27A,

C,

144A,

FRN,

2.08%,

(3-month

USD

LIBOR

+

1.8%),

5/16/31

...........................................

United

States

4,000,000

3,845,121

f,t

Gilbert

Park

CLO

Ltd.

,

2017-1A

,

B

,

144A,

FRN

,

1.837

%

,

(

3-month

USD

LIBOR

+

1.6

%

),

10/15/30

..........................

United

States

1,000,000

977,604

f,t

Halcyon

Loan

Advisors

Funding

Ltd.

,

2018-1A

,

A2

,

144A,

FRN

,

2.018

%

,

(

3-month

USD

LIBOR

+

1.8

%

),

7/21/31

.............

United

States

4,500,000

4,392,090

f,t

Harbor

Park

CLO

18-1

Ltd.

,

2018-1A

,

A2

,

144A,

FRN

,

1.618

%

,

(

3-month

USD

LIBOR

+

1.4

%

),

1/20/31

...................

United

States

657,895

647,024

f,t

Hayfin

Kingsland

IX

Ltd.

,

2018-9A

,

BR

,

144A,

FRN

,

2.022

%

,

(

3-month

USD

LIBOR

+

1.8

%

),

4/28/31

...................

United

States

14,500,000

14,245,781

f,t

Highbridge

Loan

Management

Ltd.

,

2013-2A

,

BR

,

144A,

FRN

,

2.118

%

,

(

3-month

USD

LIBOR

+

1.9

%

),

10/20/29

............

United

States

700,000

667,039

f,t

Holland

Park

CLO

DAC

,

1A,

A1RR,

144A,

FRN,

0.92%,

(3-month

EURIBOR

+

0.92%),

11/14/32

..........................................

Ireland

50,450,000

EUR

58,253,492

1A,

A2RR,

144A,

FRN,

1.65%,

(3-month

EURIBOR

+

1.65%),

11/14/32

..........................................

Ireland

9,700,000

EUR

11,194,601

f,t

HPS

Loan

Management

Ltd.

,

13A-18,

A2,

144A,

FRN,

1.687%,

(3-month

USD

LIBOR

+

1.45%),

10/15/30

..........................................

United

States

8,600,000

8,489,767

13A-18,

C,

144A,

FRN,

2.387%,

(3-month

USD

LIBOR

+

2.15%),

10/15/30

..........................................

United

States

3,000,000

2,895,103

f,t

LCM

26

Ltd.

,

26A,

B,

144A,

FRN,

1.618%,

(3-month

USD

LIBOR

+

1.4%),

1/20/31

...........................................

United

States

2,000,000

1,923,959

Franklin

Investors

Securities

Trust

Consolidated

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

114

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Asset-Backed

Securities

(continued)

Diversified

Financial

Services

(continued)

f,t

LCM

26

Ltd.,

(continued)

26A,

C,

144A,

FRN,

2.018%,

(3-month

USD

LIBOR

+

1.8%),

1/20/31

...........................................

United

States

9,600,000

$

9,073,057

26A,

D,

144A,

FRN,

2.718%,

(3-month

USD

LIBOR

+

2.5%),

1/20/31

...........................................

United

States

600,000

516,977

f,t

LCM

XVIII

LP

,

18A,

BR,

144A,

FRN,

1.818%,

(3-month

USD

LIBOR

+

1.6%),

4/20/31

...........................................

United

States

1,090,000

1,059,073

18A,

CR,

144A,

FRN,

2.068%,

(3-month

USD

LIBOR

+

1.85%),

4/20/31

...........................................

United

States

2,000,000

1,895,430

f,t

Long

Point

Park

CLO

Ltd.

,

2017-1A,

A2,

144A,

FRN,

1.593%,

(3-month

USD

LIBOR

+

1.375%),

1/17/30

....................................

United

States

5,800,000

5,615,334

2017-1A,

B,

144A,

FRN,

1.918%,

(3-month

USD

LIBOR

+

1.7%),

1/17/30

...........................................

United

States

2,700,000

2,571,028

2017-1A,

C,

144A,

FRN,

2.618%,

(3-month

USD

LIBOR

+

2.4%),

1/17/30

...........................................

United

States

3,100,000

2,721,654

f,t

Madison

Park

Euro

Funding

VIII

DAC

,

8A,

ARN,

144A,

FRN,

0.95%,

(3-month

EURIBOR

+

0.95%),

4/15/32

...........................................

Ireland

41,450,000

EUR

48,083,621

8A,

BRN,

144A,

FRN,

1.7%,

(3-month

EURIBOR

+

1.7%),

4/15/32

Ireland

4,600,000

EUR

5,325,282

f,t

Madison

Park

Funding

XLII

Ltd.

,

13A,

B,

144A,

FRN,

1.709%,

(3-month

USD

LIBOR

+

1.5%),

11/21/30

..........................................

United

States

2,700,000

2,625,952

13A,

C,

144A,

FRN,

2.009%,

(3-month

USD

LIBOR

+

1.8%),

11/21/30

..........................................

United

States

3,753,500

3,601,101

13A,

D,

144A,

FRN,

2.909%,

(3-month

USD

LIBOR

+

2.7%),

11/21/30

..........................................

United

States

5,500,000

5,170,000

f,t

Madison

Park

Funding

XXII

Ltd.

,

2016-22A

,

CR

,

144A,

FRN

,

2.237

%

,

(

3-month

USD

LIBOR

+

2

%

),

1/15/33

..............

United

States

7,790,000

7,388,787

f,t

Madison

Park

Funding

XXIX

Ltd.

,

2018-29A

,

C

,

144A,

FRN

,

2.418

%

,

(

3-month

USD

LIBOR

+

2.2

%

),

10/18/30

..................

United

States

1,072,581

1,040,728

f,t

Madison

Park

Funding

XXXI

Ltd.

,

2018-31A,

B,

144A,

FRN,

1.909%,

(3-month

USD

LIBOR

+

1.7%),

1/23/31

...........................................

United

States

1,500,000

1,473,761

2018-31A,

C,

144A,

FRN,

2.359%,

(3-month

USD

LIBOR

+

2.15%),

1/23/31

.....................................

United

States

650,000

637,000

f,u

Mill

City

Mortgage

Loan

Trust

,

2018-4

,

A1B

,

144A,

FRN

,

3.5

%

,

4/25/66

...........................................

United

States

12,995,082

13,800,073

f,t

Neuberger

Berman

CLO

XVIII

Ltd.

,

2014-18A

,

A1BR

,

144A,

FRN

,

1.609

%

,

(

3-month

USD

LIBOR

+

1.4

%

),

10/21/30

............

United

States

1,700,000

1,670,323

f,t

Neuberger

Berman

CLO

XVI-S

Ltd.

,

2017-16SA,

C,

144A,

FRN,

1.837%,

(3-month

USD

LIBOR

+

1.6%),

1/15/28

......................................

United

States

2,350,000

2,295,882

2017-16SA,

D,

144A,

FRN,

2.737%,

(3-month

USD

LIBOR

+

2.5%),

1/15/28

......................................

United

States

650,000

622,648

Franklin

Investors

Securities

Trust

Consolidated

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

Annual

Report

115

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Asset-Backed

Securities

(continued)

Diversified

Financial

Services

(continued)

f,t

Neuberger

Berman

Loan

Advisers

CLO

27

Ltd.

,

2018-27A

,

C

,

144A,

FRN

,

1.937

%

,

(

3-month

USD

LIBOR

+

1.7

%

),

1/15/30

........

United

States

4,900,000

$

4,696,024

f,t

Newark

BSL

CLO

2

Ltd.

,

2017-1A

,

B

,

144A,

FRN

,

2.565

%

,

(

3-month

USD

LIBOR

+

2.35

%

),

7/25/30

..........................

United

States

3,069,687

3,024,924

f,t

NZCG

Funding

Ltd.

,

2015-1A

,

A2R

,

144A,

FRN

,

1.784

%

,

(

3-month

USD

LIBOR

+

1.55

%

),

2/26/31

..........................

United

States

12,390,000

12,179,886

f,t

Octagon

Investment

Partners

18-R

Ltd.

,

2018-18A

,

C

,

144A,

FRN

,

2.93

%

,

(

3-month

USD

LIBOR

+

2.7

%

),

4/16/31

..............

United

States

9,050,000

8,023,097

f,t

Octagon

Investment

Partners

28

Ltd.

,

2016-1A

,

A2R

,

144A,

FRN

,

1.665

%

,

(

3-month

USD

LIBOR

+

1.45

%

),

10/24/30

...........

United

States

1,000,000

984,899

f,t

Octagon

Investment

Partners

31

LLC

,

2017-1A

,

C

,

144A,

FRN

,

2.618

%

,

(

3-month

USD

LIBOR

+

2.4

%

),

7/20/30

.............

United

States

1,707,068

1,681,596

f,t

Octagon

Investment

Partners

33

Ltd.

,

2017-1A,

A2,

144A,

FRN,

1.718%,

(3-month

USD

LIBOR

+

1.5%),

1/20/31

...........................................

United

States

400,000

388,830

2017-1A,

C,

144A,

FRN,

2.968%,

(3-month

USD

LIBOR

+

2.75%),

1/20/31

...........................................

United

States

2,800,000

2,561,391

f,t

Octagon

Investment

Partners

35

Ltd.

,

2018-1A,

A1B,

144A,

FRN,

1.318%,

(3-month

USD

LIBOR

+

1.1%),

1/20/31

......................................

United

States

3,325,000

3,260,088

2018-1A,

B,

144A,

FRN,

1.918%,

(3-month

USD

LIBOR

+

1.7%),

1/20/31

...........................................

United

States

450,000

430,810

f,t

Octagon

Investment

Partners

36

Ltd.

,

2018-1A,

A1,

144A,

FRN,

1.207%,

(3-month

USD

LIBOR

+

0.97%),

4/15/31

.....................................

United

States

18,000,000

17,743,556

2018-1A,

A2,

144A,

FRN,

1.437%,

(3-month

USD

LIBOR

+

1.2%),

4/15/31

...........................................

United

States

8,500,000

8,222,724

f,t

Octagon

Investment

Partners

37

Ltd.

,

2018-2A

,

C

,

144A,

FRN

,

3.065

%

,

(

3-month

USD

LIBOR

+

2.85

%

),

7/25/30

............

United

States

2,000,000

1,842,303

f,t

Octagon

Investment

Partners

38

Ltd.

,

2018-1A

,

C

,

144A,

FRN

,

3.168

%

,

(

3-month

USD

LIBOR

+

2.95

%

),

7/20/30

............

United

States

4,000,000

3,678,896

f,t

Octagon

Investment

Partners

XVII

Ltd.

,

2013-1A,

BR2,

144A,

FRN,

1.615%,

(3-month

USD

LIBOR

+

1.4%),

1/25/31

......................................

United

States

4,020,000

3,875,568

2013-1A,

CR2,

144A,

FRN,

1.915%,

(3-month

USD

LIBOR

+

1.7%),

1/25/31

......................................

United

States

5,250,000

4,980,905

f,t

Octagon

Investment

Partners

XXIII

Ltd.

,

2015-1A

,

BR

,

144A,

FRN

,

1.437

%

,

(

3-month

USD

LIBOR

+

1.2

%

),

7/15/27

.............

United

States

1,170,000

1,139,344

f,t

Octagon

Loan

Funding

Ltd.

,

2014-1A

,

CRR

,

144A,

FRN

,

2.47

%

,

(

3-month

USD

LIBOR

+

2.2

%

),

11/18/31

..................

United

States

750,000

730,150

f,j,u

Prosper

Pass-Thru

Trust

III

,

2020-PT1,

A,

144A,

FRN,

8.796%,

3/15/26

.................

United

States

4,303,495

4,220,984

2020-PT2,

A,

144A,

FRN,

9.444%,

4/15/26

.................

United

States

4,957,685

4,868,533

2020-PT3,

A,

144A,

FRN,

7.183%,

5/15/26

.................

United

States

1,603,376

1,627,102

f,t

Race

Point

X

CLO

Ltd.

,

2016-10A

,

B1R

,

144A,

FRN

,

1.865

%

,

(

3-month

USD

LIBOR

+

1.65

%

),

7/25/31

..................

United

States

3,600,000

3,494,945

f,t

Strata

CLO

I

Ltd.

,

2018-1A

,

B

,

144A,

FRN

,

2.437

%

,

(

3-month

USD

LIBOR

+

2.2

%

),

1/15/31

...............................

United

States

11,000,000

10,422,405

f,t

TCI-Flatiron

CLO

Ltd.

,

2017-1A,

B,

144A,

FRN,

1.84%,

(3-month

USD

LIBOR

+

1.56%),

11/18/30

..........................................

United

States

3,500,000

3,446,838

2017-1A,

C,

144A,

FRN,

2.13%,

(3-month

USD

LIBOR

+

1.85%),

11/18/30

..........................................

United

States

2,800,000

2,704,768

f,j,u

Towd

Point

Mortgage

Trust

,

2017-1,

A1,

144A,

FRN,

2.75%,

10/25/56

..................

United

States

5,659,620

5,803,263

2017-1,

A2,

144A,

FRN,

3.5%,

10/25/56

...................

United

States

8,862,000

9,529,718

Franklin

Investors

Securities

Trust

Consolidated

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

116

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Asset-Backed

Securities

(continued)

Diversified

Financial

Services

(continued)

f,j,u

Towd

Point

Mortgage

Trust,

(continued)

2017-2,

A1,

144A,

FRN,

2.75%,

4/25/57

...................

United

States

2,669,538

$

2,743,895

f,j

Upgrade

Master

Pass-Thru

Trust

,

u

2019-PT1,

A,

144A,

FRN,

12.429%,

6/15/25

................

United

States

1,840,219

1,655,305

2019-PT2,

A,

144A,

7.727%,

2/15/26

.....................

United

States

3,606,550

3,536,682

f,t

Voya

CLO

Ltd.

,

2013-2A,

CR,

144A,

FRN,

2.965%,

(3-month

USD

LIBOR

+

2.75%),

4/25/31

.....................................

United

States

1,650,000

1,443,385

2013-3A,

A2RR,

144A,

FRN,

1.918%,

(3-month

USD

LIBOR

+

1.7%),

10/18/31

.....................................

United

States

990,000

973,163

2014-1A,

BR2,

144A,

FRN,

2.118%,

(3-month

USD

LIBOR

+

1.9%),

4/18/31

......................................

United

States

1,000,000

959,918

2014-1A,

CR2,

144A,

FRN,

3.018%,

(3-month

USD

LIBOR

+

2.8%),

4/18/31

......................................

United

States

3,750,000

3,276,734

2016-3A,

CR,

144A,

FRN,

3.468%,

(3-month

USD

LIBOR

+

3.25%),

10/18/31

....................................

United

States

2,547,170

2,277,312

2017-3A,

B,

144A,

FRN,

2.568%,

(3-month

USD

LIBOR

+

2.35%),

7/20/30

...........................................

United

States

3,091,704

3,059,361

2018-2A,

A2,

144A,

FRN,

1.487%,

(3-month

USD

LIBOR

+

1.25%),

7/15/31

.....................................

United

States

1,500,000

1,464,210

2018-2A,

C1,

144A,

FRN,

2.087%,

(3-month

USD

LIBOR

+

1.85%),

7/15/31

.....................................

United

States

700,000

668,980

f,t

Webster

Park

CLO

Ltd.

,

2015-1A

,

BR

,

144A,

FRN

,

2.018

%

,

(

3-month

USD

LIBOR

+

1.8

%

),

7/20/30

...........................

United

States

2,000,000

1,907,001

635,784,229

a

a

a

a

a

a

Road

&

Rail

0.0%

†

Burlington

Northern

and

Santa

Fe

Railway

Co.

Pass-Through

Trust

,

1999-2

,

7.57

%

,

1/02/21

...............................

United

States

4,060

4,089

Union

Pacific

Railroad

Co.

Pass-Through

Trust

,

2005-1

,

5.082

%

,

1/02/29

...........................................

United

States

93,392

103,455

107,544

a

a

a

a

a

a

Total

Asset-Backed

Securities

(Cost

$653,952,565)

..............................

643,656,811

Commercial

Mortgage-Backed

Securities

9.3%

Capital

Markets

0.0%

†

t

Merrill

Lynch

Mortgage

Investors

Trust

,

2003-A

,

1A

,

FRN

,

0.889

%

,

(

1-month

USD

LIBOR

+

0.74

%

),

3/25/28

..................

United

States

461,111

449,663

Diversified

Financial

Services

1.6%

f,t

Bellemeade

Re

Ltd.

,

2018-1A

,

M1B

,

144A,

FRN

,

1.749

%

,

(

1-month

USD

LIBOR

+

1.6

%

),

4/25/28

...........................

United

States

3,677,639

3,643,479

f

BRAVO

Residential

Funding

Trust

,

2019-1,

A1C,

144A,

3.5%,

3/25/58

.......................

United

States

11,827,380

12,232,643

u

2019-2,

A3,

144A,

FRN,

3.5%,

10/25/44

...................

United

States

10,259,541

10,855,615

f,j,u

CIM

Trust

,

2018-INV1,

A4,

144A,

FRN,

4%,

8/25/48

..................

United

States

6,297,505

6,539,204

2019-INV1,

A1,

144A,

FRN,

4%,

2/25/49

..................

United

States

6,679,370

6,935,724

2019-INV2,

A3,

144A,

FRN,

4%,

5/25/49

..................

United

States

11,241,005

11,627,983

Franklin

Investors

Securities

Trust

Consolidated

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

Annual

Report

117

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Commercial

Mortgage-Backed

Securities

(continued)

Diversified

Financial

Services

(continued)

f,u

Citigroup

Mortgage

Loan

Trust

,

2013-A

,

A

,

144A,

FRN

,

3

%

,

5/25/42

United

States

354,915

$

355,156

u

Commercial

Mortgage

Trust

,

2006-GG7

,

AJ

,

FRN

,

6.012

%

,

7/10/38

United

States

1,634,240

1,471,225

Credit

Suisse

First

Boston

Mortgage

Securities

Corp.

,

2004-6

,

3A1

,

5

%

,

9/25/19

........................................

United

States

116,184

98,161

f,t

DBCG

Mortgage

Trust

,

2017-BBG

,

A

,

144A,

FRN

,

0.848

%

,

(

1-month

USD

LIBOR

+

0.7

%

),

6/15/34

...........................

United

States

9,840,000

9,786,751

f,u

Eleven

Madison

Mortgage

Trust

,

2015-11MD

,

A

,

144A,

FRN

,

3.555

%

,

9/10/35

.....................................

United

States

3,255,000

3,545,291

u

GE

Commercial

Mortgage

Corp.

Trust

,

2007-C1

,

AM

,

FRN

,

5.606

%

,

12/10/49

..........................................

United

States

1,030,409

567,166

f,j,u

Provident

Funding

Mortgage

Trust

,

2019-1,

A2,

144A,

FRN,

3%,

12/25/49

....................

United

States

6,736,792

6,950,234

2020-1,

A3,

144A,

FRN,

3%,

2/25/50

.....................

United

States

9,698,361

9,880,461

f,t

Radnor

Re

Ltd.

,

2018-1

,

M1

,

144A,

FRN

,

1.549

%

,

(

1-month

USD

LIBOR

+

1.4

%

),

3/25/28

...............................

United

States

257,376

257,276

84,746,369

a

a

a

a

a

a

Thrifts

&

Mortgage

Finance

7.7%

t

FHLMC

Structured

Agency

Credit

Risk

Debt

Notes

,

2014-DN1,

M2,

FRN,

2.349%,

(1-month

USD

LIBOR

+

2.2%),

2/25/24

...........................................

United

States

229,582

229,864

2014-DN3,

M3,

FRN,

4.149%,

(1-month

USD

LIBOR

+

4%),

8/25/24

...........................................

United

States

9,697,628

9,809,355

2014-DN4,

M3,

FRN,

4.699%,

(1-month

USD

LIBOR

+

4.55%),

10/25/24

..........................................

United

States

5,139,792

5,241,401

2014-HQ1,

M3,

FRN,

4.249%,

(1-month

USD

LIBOR

+

4.1%),

8/25/24

...........................................

United

States

1,366,276

1,384,819

2015-DN1,

M3,

FRN,

4.299%,

(1-month

USD

LIBOR

+

4.15%),

1/25/25

...........................................

United

States

3,604,623

3,650,027

2015-DNA2,

M3,

FRN,

4.049%,

(1-month

USD

LIBOR

+

3.9%),

12/25/27

..........................................

United

States

14,852,448

15,069,662

2015-DNA3,

M3,

FRN,

4.849%,

(1-month

USD

LIBOR

+

4.7%),

4/25/28

...........................................

United

States

3,128,393

3,272,738

2015-HQ1,

M3,

FRN,

3.949%,

(1-month

USD

LIBOR

+

3.8%),

3/25/25

...........................................

United

States

4,451,267

4,464,273

2015-HQ2,

M3,

FRN,

3.399%,

(1-month

USD

LIBOR

+

3.25%),

5/25/25

...........................................

United

States

4,580,000

4,658,214

2016-DNA1,

M3,

FRN,

5.699%,

(1-month

USD

LIBOR

+

5.55%),

7/25/28

...........................................

United

States

18,098,621

19,107,208

2016-DNA2,

M3,

FRN,

4.799%,

(1-month

USD

LIBOR

+

4.65%),

10/25/28

..........................................

United

States

14,025,223

14,629,203

2016-HQA2,

M3,

FRN,

5.299%,

(1-month

USD

LIBOR

+

5.15%),

11/25/28

..........................................

United

States

23,280,842

24,366,253

2016-HQA3,

M2,

FRN,

1.499%,

(1-month

USD

LIBOR

+

1.35%),

3/25/29

...........................................

United

States

173,369

173,452

2017-DNA1,

M2,

FRN,

3.399%,

(1-month

USD

LIBOR

+

3.25%),

7/25/29

...........................................

United

States

14,300,045

14,771,424

2017-DNA2,

M2,

FRN,

3.599%,

(1-month

USD

LIBOR

+

3.45%),

10/25/29

..........................................

United

States

26,327,007

27,180,934

2017-DNA3,

M2,

FRN,

2.649%,

(1-month

USD

LIBOR

+

2.5%),

3/25/30

...........................................

United

States

13,500,000

13,706,288

2017-HQA1,

M2,

FRN,

3.699%,

(1-month

USD

LIBOR

+

3.55%),

8/25/29

...........................................

United

States

18,938,846

19,343,253

2017-HQA2,

M2,

FRN,

2.799%,

(1-month

USD

LIBOR

+

2.65%),

12/25/29

..........................................

United

States

7,242,629

7,226,071

2017-HQA3,

M2,

FRN,

2.499%,

(1-month

USD

LIBOR

+

2.35%),

4/25/30

...........................................

United

States

7,268,889

7,368,144

Franklin

Investors

Securities

Trust

Consolidated

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

118

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Commercial

Mortgage-Backed

Securities

(continued)

Thrifts

&

Mortgage

Finance

(continued)

t

FNMA

,

2005-122

,

FN

,

FRN

,

0.499

%

,

(

1-month

USD

LIBOR

+

0.35

%

),

1/25/36

.....................................

United

States

380,188

$

368,834

t

FNMA

Connecticut

Avenue

Securities

,

2013-C01,

M2,

FRN,

5.399%,

(1-month

USD

LIBOR

+

5.25%),

10/25/23

..........................................

United

States

7,267,990

7,204,948

2014-C02,

1M2,

FRN,

2.749%,

(1-month

USD

LIBOR

+

2.6%),

5/25/24

...........................................

United

States

17,016,220

15,054,427

2014-C02,

2M2,

FRN,

2.749%,

(1-month

USD

LIBOR

+

2.6%),

5/25/24

...........................................

United

States

5,597,591

5,497,826

2014-C03,

1M2,

FRN,

3.149%,

(1-month

USD

LIBOR

+

3%),

7/25/24

...........................................

United

States

19,928,642

17,751,368

2014-C03,

2M2,

FRN,

3.049%,

(1-month

USD

LIBOR

+

2.9%),

7/25/24

...........................................

United

States

1,921,583

1,920,008

2014-C04,

1M2,

FRN,

5.049%,

(1-month

USD

LIBOR

+

4.9%),

11/25/24

..........................................

United

States

14,851,468

15,454,500

2014-C04,

2M2,

FRN,

5.149%,

(1-month

USD

LIBOR

+

5%),

11/25/24

..........................................

United

States

2,172,480

2,229,634

2015-C01,

1M2,

FRN,

4.449%,

(1-month

USD

LIBOR

+

4.3%),

2/25/25

...........................................

United

States

1,915,338

1,952,067

2015-C01,

2M2,

FRN,

4.699%,

(1-month

USD

LIBOR

+

4.55%),

2/25/25

...........................................

United

States

4,452,320

4,523,146

2015-C02,

1M2,

FRN,

4.149%,

(1-month

USD

LIBOR

+

4%),

5/25/25

...........................................

United

States

9,366,478

9,472,129

2015-C02,

2M2,

FRN,

4.149%,

(1-month

USD

LIBOR

+

4%),

5/25/25

...........................................

United

States

1,819,789

1,849,793

2015-C03,

1M2,

FRN,

5.149%,

(1-month

USD

LIBOR

+

5%),

7/25/25

...........................................

United

States

6,526,914

6,670,106

2015-C03,

2M2,

FRN,

5.149%,

(1-month

USD

LIBOR

+

5%),

7/25/25

...........................................

United

States

1,875,078

1,924,260

2016-C04,

1M2,

FRN,

4.399%,

(1-month

USD

LIBOR

+

4.25%),

1/25/29

...........................................

United

States

11,551,476

11,984,672

2016-C05,

2M2,

FRN,

4.599%,

(1-month

USD

LIBOR

+

4.45%),

1/25/29

...........................................

United

States

11,064,967

11,481,718

2016-C07,

2M2,

FRN,

4.499%,

(1-month

USD

LIBOR

+

4.35%),

5/25/29

...........................................

United

States

7,925,193

8,276,449

2017-C01,

1M2,

FRN,

3.699%,

(1-month

USD

LIBOR

+

3.55%),

7/25/29

...........................................

United

States

11,636,427

12,006,645

2017-C02,

2M2,

FRN,

3.799%,

(1-month

USD

LIBOR

+

3.65%),

9/25/29

...........................................

United

States

8,075,764

8,180,235

2017-C03,

1M2,

FRN,

3.149%,

(1-month

USD

LIBOR

+

3%),

10/25/29

..........................................

United

States

25,335,261

25,627,787

2017-C04,

2M2,

FRN,

2.999%,

(1-month

USD

LIBOR

+

2.85%),

11/25/29

..........................................

United

States

5,317,495

5,336,563

2017-C05,

1M2,

FRN,

2.349%,

(1-month

USD

LIBOR

+

2.2%),

1/25/30

...........................................

United

States

20,840,081

20,668,138

a

Weyerhaeuser

Mortgage

Co.

of

Texas

,

7.43

%

,

1/01/24

.........

United

States

7,781

7,781

391,095,617

a

a

a

a

a

a

Total

Commercial

Mortgage-Backed

Securities

(Cost

$499,387,772)

...............

476,291,649

Mortgage-Backed

Securities

21.0%

v

Federal

Home

Loan

Mortgage

Corp.

(FHLMC)

Adjustable

Rate

0.0%

†

FHLMC,

1.903%,

(COFI

11th

District

+/-

MBS

Margin),

11/01/27

..

United

States

987,048

991,416

Federal

Home

Loan

Mortgage

Corp.

(FHLMC)

Fixed

Rate

0.2%

FHLMC

Gold

Pools,

15

Year,

5.5%,

11/01/22

.................

United

States

31,329

31,608

FHLMC

Gold

Pools,

15

Year,

6%,

10/01/21

-

9/01/22

...........

United

States

51,224

52,427

Franklin

Investors

Securities

Trust

Consolidated

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

Annual

Report

119

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Mortgage-Backed

Securities

(continued)

Federal

Home

Loan

Mortgage

Corp.

(FHLMC)

Fixed

Rate

(continued)

FHLMC

Gold

Pools,

30

Year,

4.5%,

3/01/39

..................

United

States

1,057,474

$

1,187,555

FHLMC

Gold

Pools,

30

Year,

5%,

8/01/33

-

2/01/39

............

United

States

6,680,906

7,700,118

FHLMC

Gold

Pools,

30

Year,

5.5%,

1/01/35

-

12/01/37

.........

United

States

546,026

632,809

FHLMC

Gold

Pools,

30

Year,

6%,

5/01/33

-

4/01/38

............

United

States

717,668

838,134

FHLMC

Gold

Pools,

30

Year,

6.5%,

8/01/25

-

3/01/39

..........

United

States

628,626

727,267

FHLMC

Gold

Pools,

30

Year,

7%,

1/01/28

-

7/01/32

............

United

States

44,887

51,073

FHLMC

Gold

Pools,

30

Year,

7.5%,

3/01/32

..................

United

States

10,350

12,441

FHLMC

Gold

Pools,

30

Year,

8%,

2/01/30

...................

United

States

13,160

15,354

FHLMC

Gold

Pools,

30

Year,

8.5%,

10/01/24

-

8/01/30

.........

United

States

3,541

3,957

11,252,743

v

Federal

National

Mortgage

Association

(FNMA)

Adjustable

Rate

0.1%

FNMA,

1.904%

-

4.105%,

(COFI

11th

District

+/-

MBS

Margin),

12/01/24

-

3/01/37

...................................

United

States

2,822,218

2,908,612

2,908,612

Federal

National

Mortgage

Association

(FNMA)

Fixed

Rate

17.8%

FNMA,

15

Year,

5.5%,

12/01/22

-

12/01/23

..................

United

States

41,569

42,809

FNMA,

15

Year,

6%,

9/01/22

.............................

United

States

22,840

23,227

FNMA,

30

Year,

3%,

9/01/48

.............................

United

States

27,702,106

29,312,531

FNMA,

30

Year,

3%,

11/01/48

............................

United

States

66,765,488

70,574,192

FNMA,

30

Year,

3%,

9/01/50

.............................

United

States

29,347,841

30,769,674

FNMA,

30

Year,

5%,

6/01/36

-

5/01/39

......................

United

States

1,324,275

1,519,515

FNMA,

30

Year,

5.5%,

6/01/33

-

8/01/37

....................

United

States

4,012,337

4,609,440

FNMA,

30

Year,

6%,

9/01/32

-

9/01/38

......................

United

States

4,496,734

5,292,132

FNMA,

30

Year,

6.5%,

8/01/28

-

5/01/37

....................

United

States

143,902

163,595

FNMA,

30

Year,

7%,

11/01/25

............................

United

States

2,396

2,405

FNMA,

30

Year,

7.5%,

1/01/30

...........................

United

States

7,980

9,309

FNMA,

30

Year,

8.5%,

4/01/30

-

5/01/32

....................

United

States

41,234

49,303

FNMA,

30

Year,

9%,

11/01/26

-

5/01/27

.....................

United

States

20,601

21,276

w

FNMA,

Single-family,

15

Year,

1.5%,

11/25/35

................

United

States

53,649,000

54,759,702

w

FNMA,

Single-family,

15

Year,

2%,

11/25/35

.................

United

States

158,170,000

164,014,877

w

FNMA,

Single-family,

30

Year,

2%,

11/25/50

.................

United

States

177,993,000

183,520,516

w

FNMA,

Single-family,

30

Year,

2.5%,

11/25/50

................

United

States

348,659,000

363,299,951

907,984,454

v

Government

National

Mortgage

Association

(GNMA)

Adjustable

Rate

0.0%

†

GNMA

II,

3%

-

3.125%,

(1-year

CMT

T-Note

+/-

MBS

Margin),

1/20/23

-

10/20/26

...................................

United

States

18,141

18,704

18,704

Government

National

Mortgage

Association

(GNMA)

Fixed

Rate

2.9%

GNMA

I,

30

Year,

7%,

10/15/27

-

6/15/31

....................

United

States

14,716

17,644

GNMA

I,

Single-family,

30

Year,

6%,

1/15/39

.................

United

States

98,190

115,265

GNMA

I,

Single-family,

30

Year,

6.5%,

10/15/31

-

7/15/38

........

United

States

17,343

19,764

GNMA

I,

Single-family,

30

Year,

7%,

3/15/28

-

4/15/28

..........

United

States

6,568

6,780

GNMA

I,

Single-family,

30

Year,

7.5%,

2/15/22

-

5/15/26

........

United

States

18,399

18,980

GNMA

I,

Single-family,

30

Year,

9%,

9/15/25

.................

United

States

34

34

GNMA

II,

Single-family,

30

Year,

2%,

10/20/50

................

United

States

70,357,000

73,093,367

GNMA

II,

Single-family,

30

Year,

2.5%,

10/20/50

..............

United

States

69,670,000

73,050,169

GNMA

II,

Single-family,

30

Year,

6%,

5/20/31

.................

United

States

2,517

2,839

GNMA

II,

Single-family,

30

Year,

6.5%,

3/20/28

-

7/20/38

........

United

States

253,564

297,854

GNMA

II,

Single-family,

30

Year,

7.5%,

8/20/30

-

1/20/33

........

United

States

29,769

34,271

146,656,967

Total

Mortgage-Backed

Securities

(Cost

$1,061,694,473)

.........................

1,069,812,896

Franklin

Investors

Securities

Trust

Consolidated

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

120

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Municipal

Bonds

4.0%

California

1.2%

California

Health

Facilities

Financing

Authority

,

State

of

California

Personal

Income

Tax,

Revenue,

Senior

Lien,

2019,

2.934%,

6/01/32

..............................

United

States

6,810,000

$

7,124,690

State

of

California

Personal

Income

Tax,

Revenue,

Senior

Lien,

2019,

2.984%,

6/01/33

..............................

United

States

5,870,000

6,153,639

State

of

California

Personal

Income

Tax,

Revenue,

Senior

Lien,

2019,

3.034%,

6/01/34

..............................

United

States

4,445,000

4,613,421

City

of

San

Francisco,

Public

Utilities

Commission

Water,

Revenue,

2019

A,

Refunding,

3.473%,

11/01/43

.....................

United

States

2,640,000

2,769,914

Foothill-Eastern

Transportation

Corridor

Agency,

Revenue,

2019A,

Refunding,

4.094%,

1/15/49

............................

United

States

3,470,000

3,628,995

Gilroy

Unified

School

District,

GO,

2019,

Refunding,

3.364%,

8/01/47

United

States

7,220,000

7,475,444

Industry

Public

Facilities

Authority,

Tax

Allocation,

B,

Refunding,

AGMC

Insured,

4.294%,

1/01/23

........................

United

States

8,450,000

8,661,757

x

Los

Angeles

Community

College

District,

GO,

2020,

Refunding,

2.106%,

8/01/32

.....................................

United

States

3,050,000

3,043,686

San

Jose

Redevelopment

Agency

Successor

Agency,

Tax

Allocation,

Senior

Lien,

2017A-T,

Refunding,

3.226%,

8/01/27

...........

United

States

6,150,000

6,716,231

University

of

California,

Revenue,

2015

J,

Refunding,

4.131%,

5/15/45

...........................................

United

States

10,750,000

12,587,390

62,775,167

Colorado

0.1%

Metro

Wastewater

Reclamation

District,

Revenue,

2019

B,

Refunding,

3.158%,

4/01/41

............................

United

States

5,600,000

5,879,328

Florida

0.1%

County

of

Broward,

Airport

System,

Revenue,

2019C,

Refunding,

3.477%,

10/01/43

....................................

United

States

7,145,000

7,116,063

Hawaii

0.0%

†

City

&

County

Honolulu,

Wastewater

System,

Revenue,

2019

B,

Refunding,

2.585%,

7/01/28

............................

United

States

1,350,000

1,434,442

Illinois

0.0%

†

Chicago

Transit

Authority

Sales

Tax

Receipts

Fund,

Revenue,

2008A,

6.899%,

12/01/40

..............................

United

States

800,000

1,116,968

Massachusetts

0.2%

Massachusetts

School

Building

Authority,

Revenue,

2019

B,

Refunding,

3.395%,

10/15/40

...........................

United

States

6,760,000

7,060,482

Massachusetts

State

College

Building

Authority,

Revenue,

2019

C,

Refunding,

3.373%,

5/01/43

............................

United

States

5,900,000

5,938,232

12,998,714

Minnesota

0.1%

State

of

Minnesota,

GO,

2013F,

Refunding,

4%,

10/01/24

.......

United

States

5,760,000

6,381,504

Missouri

0.2%

Metropolitan

St.

Louis

Sewer

District,

Revenue,

2019

C,

Refunding,

3.259%,

5/01/45

.....................................

United

States

7,640,000

8,083,808

New

Jersey

0.1%

New

Jersey

Transportation

Trust

Fund

Authority,

Revenue,

2019

B,

Refunding,

4.131%,

6/15/42

............................

United

States

4,060,000

3,801,662

New

York

0.4%

x

Metropolitan

Transportation

Authority,

Revenue,

2020

E,

Refunding,

4%,

11/15/45

.......................................

United

States

4,105,000

4,128,563

Franklin

Investors

Securities

Trust

Consolidated

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

Annual

Report

121

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Municipal

Bonds

(continued)

New

York

(continued)

New

York

State

Dormitory

Authority,

State

University

of

New

York,

Revenue,

2019B,

Refunding,

3.142%,

7/01/43

..............

United

States

3,605,000

$

3,744,441

Port

Authority

of

New

York

&

New

Jersey

,

Revenue,

191,

4.823%,

6/01/45

.........................

United

States

4,570,000

5,112,962

Revenue,

192,

4.81%,

10/15/65

.........................

United

States

5,000,000

6,461,300

19,447,266

Ohio

0.4%

Greenville

City

School

District,

GO,

2019,

Refunding,

3.541%,

1/01/51

...........................................

United

States

16,585,000

16,626,960

State

of

Ohio,

Cleveland

Clinic

Health

System

Obligated

Group,

Revenue,

2019G,

Refunding,

3.276%,

1/01/42

..............

United

States

2,265,000

2,449,711

19,076,671

Oregon

0.1%

State

of

Oregon,

Department

of

Transportation,

Revenue,

Senior

Lien,

2019

B,

Refunding,

3.168%,

11/15/38

................

United

States

4,510,000

4,856,188

Pennsylvania

0.1%

University

of

Pittsburgh-of

the

Commonwealth

System

of

Higher

Education,

Revenue,

2017

C,

Refunding,

3.005%,

9/15/41

.....

United

States

6,315,000

6,560,969

Texas

0.8%

City

of

Austin,

Electric

Utility,

Revenue,

2008,

Refunding,

AGMC

Insured,

6.262%,

11/15/32

.............................

United

States

13,140,000

16,825,113

Permanent

University

Fund

-

Texas

A&M

University

System,

Revenue,

2019,

3.1%,

7/01/49

..........................

United

States

9,020,000

9,350,583

State

of

Texas,

GO,

2019,

Refunding,

3.211%,

4/01/44

.........

United

States

6,760,000

7,191,220

Texas

State

University

System

,

Revenue,

2019

B,

Refunding,

2.938%,

3/15/33

..............

United

States

2,655,000

2,866,073

Revenue,

2019

B,

Refunding,

3.289%,

3/15/40

..............

United

States

2,255,000

2,421,103

38,654,092

Utah

0.2%

Salt

Lake

City

Corp.,

Revenue,

2019B,

Refunding,

3.102%,

4/01/38

United

States

3,155,000

3,359,286

Utah

Transit

Authority,

Revenue,

Senior

Lien,

2019

B,

Refunding,

3.443%,

12/15/42

....................................

United

States

4,510,000

4,626,899

7,986,185

Total

Municipal

Bonds

(Cost

$197,235,383)

.....................................

206,169,027

Shares/Units

Escrows

and

Litigation

Trusts

0.0%

†

a

Millennium

Corporate

Claim

Trust,

Escrow

Account

............

United

States

73,753

—

a

Millennium

Lender

Claim

Trust,

Escrow

Account

..............

United

States

73,753

—

a,b

Motors

Liquidation

Co.,

Escrow

Account,

Convertible

Preferred,

C

.

United

States

43,500

—

a,d

Remington

Outdoor

Co.,

Inc.,

Litigation

Units

.................

United

States

4,897

—

b

Sanchez

Energy

Corp.,

Escrow

Account

....................

United

States

3,000,000

30,000

Total

Escrows

and

Litigation

Trusts

(Cost

$–)

...................................

30,000

Total

Long

Term

Investments

(Cost

$5,514,943,363)

.............................

5,596,582,506

a

Franklin

Investors

Securities

Trust

Consolidated

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

122

See

Abbreviations

on

page

169

.

a

a

Number

of

Contracts

Notional

Amount

#

a

Value

a

a

a

a

aa

a

a

Options

Purchased

0.1%

Puts

-

Over-the-Counter

Interest

Rate

Swaptions

0.1%

Receive

Floating

3-month

USD

LIBOR,

Pay

Fixed

1%,

Counterparty

CITI,

Expires

4/01/21

.................................

1

258,200,000

$

3,695,910

Total

Options

Purchased

(Cost

$2,246,340)

.....................................

3,695,910

Short

Term

Investments

4.4%

a

a

Country

Shares

a

Value

a

Money

Market

Funds

4.4%

e,y

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0%

........

United

States

226,741,557

226,741,557

Total

Money

Market

Funds

(Cost

$226,741,557)

.................................

226,741,557

Total

Short

Term

Investments

(Cost

$226,741,557

)

...............................

226,741,557

a

Total

Investments

(Cost

$5,743,931,260)

114.3%

.................................

$5,827,019,973

Other

Assets,

less

Liabilities

(14.3)%

..........................................

(729,401,469)

Net

Assets

100.0%

...........................................................

$5,097,618,504

Franklin

Investors

Securities

Trust

Consolidated

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

Annual

Report

123

#

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.

*

The

principal

amount

is

stated

in

U.S.

dollars

unless

otherwise

indicated.

†

Rounds

to

less

than

0.1%

of

net

assets.

a

Fair

valued

using

significant

unobservable

inputs.

See

Note

15

regarding

fair

value

measurements.

b

Non-income

producing.

c

The

security

is

owned

by

FT

Holdings

Corp.

I,

a

wholly-owned

subsidiary

of

the

Fund.

See

Note

1(h).

d

See

Note

9

regarding

restricted

securities.

e

See

Note

3(f)

regarding

investments

in

affiliated

management

investment

companies.

f

Security

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

a

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

October

31,

2020,

the

aggregate

value

of

these

securities

was

$1,224,423,765,

representing

24.0%

of

net

assets.

g

Perpetual

security

with

no

stated

maturity

date.

h

Income

may

be

received

in

additional

securities

and/or

cash.

i

See

Note

7

regarding

defaulted

securities.

j

The

coupon

rate

shown

represents

the

rate

at

period

end.

k

See

Note

1(j)

regarding

senior

floating

rate

interests.

l

A

portion

or

all

of

the

security

represents

an

unsettled

loan

commitment.

The

coupon

rate

is

to-be

determined

(TBD)

at

the

time

of

the

settlement

and

will

be

based

upon

a

reference

index/floor

plus

a

spread.

m

A

portion

or

all

of

the

security

purchased

on

a

delayed

delivery

basis.

See

Note

1(j)

n

See

Note

10

regarding

unfunded

loan

commitments.

o

See

Note

1(k)

regarding

Marketplace

Lending.

p

See

Note

1(f)

regarding

loan

participations

and

assignments.

q

A

supranational

organization

is

an

entity

formed

by

two

or

more

central

governments

through

international

treaties.

r

The

principal

represents

the

notional

amount.

See

Note

1(d)

regarding

value

recovery

instruments.

s

Principal

amount

of

security

is

adjusted

for

inflation.

See

Note

1(m).

t

The

coupon

rate

shown

represents

the

rate

inclusive

of

any

caps

or

floors,

if

applicable,

in

effect

at

period

end.

u

Adjustable

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.

v

Adjustable

Rate

Mortgage-Backed

Security

(ARM);

the

rate

shown

is

the

effective

rate

at

period

end.

ARM

rates

are

not

based

on

a

published

reference

rate

and

spread,

but

instead

pass-through

weighted

average

interest

income

inclusive

of

any

caps

or

floors,

if

applicable,

from

the

underlying

mortgage

loans

in

which

the

majority

of

mortgages

pay

interest

based

on

the

index

shown

at

their

designated

reset

dates

plus

a

spread,

less

the

applicable

servicing

and

guaranty

fee

(MBS

margin).

w

Security

purchased

on

a

to-be-announced

(TBA)

basis.

See

Note

1(d).

x

Security

purchased

on

a

when-issued

basis.

See

Note

1(d).

y

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

Franklin

Investors

Securities

Trust

Consolidated

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

124

At

October

31,

2020,

the

Fund

had

the

following futures

contracts

outstanding.

See

Note

1(e). 

At

October

31,

2020,

the

Fund

had

the

following

forward

exchange

contracts

outstanding.

See

Note

1

(

e

). 

At

October

31,

2020,

the

Fund

had

the

following credit

default

swap

contracts outstanding.

See

Note

1

(

e

). 

Futures

Contracts

Description

Type

Number

of

Contracts

Notional

Amount

*

Expiration

Date

Value/

Unrealized

Appreciation

(Depreciation)

Interest

rate

contracts

Australia

3

Year

Bonds

........................

Long

1,265

$

104,436,902

12/15/20

$

421,769

Canada

10

Year

Bonds

........................

Long

1,902

215,641,856

12/18/20

(1,254,785)

U.S.

Treasury

10

Year

Notes

....................

Long

630

87,077,812

12/21/20

(522,582)

U.S.

Treasury

10

Year

Ultra

Notes

................

Short

1,925

302,766,406

12/21/20

3,372,274

U.S.

Treasury

2

Year

Notes

.....................

Long

1,699

375,213,531

12/31/20

20,014

U.S.

Treasury

5

Year

Notes

.....................

Long

3,425

430,185,353

12/31/20

(730,715)

U.S.

Treasury

Long

Bonds

.....................

Long

682

117,623,688

12/21/20

(2,573,844)

U.S.

Treasury

Ultra

Bonds

......................

Long

599

128,785,000

12/21/20

(4,460,507)

Total

Futures

Contracts

......................................................................

$(5,728,376)

*

As

of

period

end.

Forward

Exchange

Contracts

Currency

Counter-

party

a

Type

Quantity

Contract

Amount

*

Settlement

Date

Unrealized

Appreciation

Unrealized

Depreciation

a

a

a

a

a

a

a

a

OTC

Forward

Exchange

Contracts

Indonesian

Rupiah

..

DBAB

Buy

139,844,100,000

9,566,896

12/07/20

$

—

$

(136,649)

Indonesian

Rupiah

..

JPHQ

Buy

92,000,000,000

6,255,817

12/07/20

—

(51,889)

Australian

Dollar

....

JPHQ

Sell

34,750,000

23,919,120

12/24/20

—

(513,587)

Japanese

Yen

......

JPHQ

Buy

6,888,000,000

64,591,996

1/13/21

1,266,073

—

Japanese

Yen

......

JPHQ

Sell

1,580,898,414

14,850,600

1/13/21

—

(264,806)

Canadian

Dollar

....

JPHQ

Sell

15,200,000

11,198,373

1/14/21

—

(215,840)

Euro

.............

JPHQ

Sell

930,686

1,068,838

1/14/21

—

(17,025)

Australian

Dollar

....

JPHQ

Sell

16,600,000

11,866,676

1/28/21

193,258

—

Singapore

Dollar

....

JPHQ

Sell

68,000,000

5,230,560,000

JPY

2/04/21

240,513

—

Canadian

Dollar

....

JPHQ

Sell

50,180,000

38,172,759

3/09/21

487,977

—

Euro

.............

DBAB

Sell

2,178,384

2,582,117

3/09/21

37,490

—

Euro

.............

JPHQ

Sell

2,550,000

3,022,824

3/09/21

44,103

—

South

Korean

Won

..

JPHQ

Sell

14,000,000,000

11,820,132

3/10/21

—

(497,727)

Turkish

Lira

........

JPHQ

Buy

72,700,000

8,826,029

4/06/21

—

(791,963)

Total

Forward

Exchange

Contracts

...................................................

$2,269,414

$(2,489,486)

Net

unrealized

appreciation

(depreciation)

............................................

$(220,072)

*

In

U.S.

dollars

unless

otherwise

indicated.

a

May

be

comprised

of

multiple

contracts

with

the

same

counterparty,

currency

and

settlement

date.

Franklin

Investors

Securities

Trust

Consolidated

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

Annual

Report

125

Credit

Default

Swap

Contracts

Description

Periodic

Payment

Rate

Received

(Paid)

Payment

Frequency

Counter-

party

Maturity

Date

Notional

Amount

(a)

Value

Unamortized

Upfront

Payments

(Receipts)

Unrealized

Appreciation

(Depreciation)

Rating

(b)

OTC

Swap

Contracts

Contracts

to

Buy

Protection

(c)

Single

Name

Ally

Financial,

Inc.

...

(5.00)%

Quarterly

JPHQ

12/20/24

$

20,750,000

$

(3,427,302)

$

(3,206,790)

$

(220,512)

Avon

Products,

Inc.

..

(5.00)%

Quarterly

CITI

3/20/23

8,800,000

(758,158)

(609,974)

(148,184)

Italy

Government

Bond

(1.00)%

Quarterly

BZWS

6/20/23

10,600,000

(131,620)

60,837

(192,457)

Nabors

Industries,

Inc.

(1.00)%

Quarterly

CITI

12/20/21

10,225,000

2,408,519

168,920

2,239,599

Contracts

to

Sell

Protection

(c)(d)

Single

Name

Goldman

Sachs

Group,

Inc.

(The)

.......

1.00%

Quarterly

JPHQ

12/20/24

20,750,000

410,562

295,535

115,027

BBB+

Italy

Government

Bond

1.00%

Quarterly

BZWS

6/20/23

10,600,000

66,208

(266,781)

332,989

NR

Morgan

Stanley

.....

1.00%

Quarterly

JPHQ

12/20/24

20,750,000

466,856

324,366

142,490

BBB+

Nabors

Industries,

Inc.

1.00%

Quarterly

CITI

12/20/23

10,225,000

(6,508,705)

(959,339)

(5,549,366)

CC

Traded

Index

(e)

BNP

Paribas

Bespoke

Rodez

Index,

Mezzanine

Tranche

5-7%

..........

2.00%

Quarterly

BNDP

12/20/20

5,300,000

(183,740)

—

(183,740)

Non-

Investment

Grade

(e)

BNP

Paribas

Bespoke

Rodez2

Index,

Mezzanine

Tranche

5-7%

..........

3.20%

Quarterly

BNDP

12/20/20

2,700,000

(53,515)

—

(53,515)

Non-

Investment

Grade

(e)

Citibank

Bespoke

Palma

Index,

Mezzanine

Tranche

5-7%

..........

2.30%

Quarterly

CITI

6/20/21

5,900,000

(147,984)

—

(147,984)

Non-

Investment

Grade

(e)

Citibank

Bespoke

Phoenix

Index,

Mezzanine

Tranche

5-7%

..........

2.90%

Quarterly

CITI

12/20/21

7,800,000

(629,448)

—

(629,448)

Non-

Investment

Grade

MCDX.NA.MAIN.31

..

1.00%

Quarterly

CITI

12/20/23

2,325,000

(13,710)

14,753

(28,463)

Investment

Grade

(e)

Morgan

Stanley

Bespoke

Pecan

Index,

Mezzanine

Tranche

5-10%

...

4.10%

Quarterly

MSCO

12/20/21

8,300,000

(2,154,661)

—

(2,154,661)

Non-

Investment

Grade

(e)

Morgan

Stanley

Bespoke

Pecan

Index,

Mezzanine

Tranche

5-10%

...

3.98%

Quarterly

MSCO

12/20/21

8,300,000

(2,165,518)

—

(2,165,518)

Non-

Investment

Grade

Total

OTC

Swap

Contracts

..............................................

$(12,822,216)

$(4,178,473)

$(8,643,743)

Total

Credit

Default

Swap

Contracts

....................................

$(12,822,216)

$

(4,178,473)

$(8,643,743)

(a)

In

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.

(b)

Based

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.

(c)

Performance

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.

(d)

The

fund

enters

contracts

to

sell

protection

to

create

a

long

credit

position.

(e)

Represents

a

custom

index

comprised

of

a

basket

of

underlying

instruments.

Franklin

Investors

Securities

Trust

Consolidated

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

126

At

October

31,

2020,

the

Fund

had

the

following cross-currency

swap

contracts outstanding.

See

Note

1

(

e

). 

At

October

31,

2020,

the

Fund

had

the

following inflation index

swap

contracts outstanding.

See

Note

1

(

e

). 

Cross-Currency

Swap

Contracts

Description

Payment

Frequency

Counter-

party

Maturity

Date

Notional

Amount

Value/

Unrealized

Appreciation

(Depreciation)

aA

aaa

aaa

aaa

OTC

Swap

Contracts

Receive

Floating

3-month

USD

LIBOR

+

1.334%

.....

Quarterly

8,176,000

USD

Pay

Floating

3-month

EURIBOR

+

1.12%

.........

Quarterly

CITI

7/10/21

7,300,000

EUR

$

(318,079)

Receive

Floating

3-month

USD

LIBOR

+

1.23%

.....

Quarterly

2,830,500

USD

Pay

Floating

3-month

EURIBOR

+

1.07%

.........

Quarterly

CITI

9/17/21

2,550,000

EUR

(136,058)

Receive

Floating

3-month

USD

LIBOR

+

1.87%

.....

Quarterly

6,160,000

USD

Pay

Floating

3-month

EURIBOR

+

1.7%

..........

Quarterly

CITI

10/15/21

5,600,000

EUR

(361,476)

Receive

Floating

3-month

USD

LIBOR

+

1.175%

.....

Quarterly

66,465,750

USD

Pay

Floating

3-month

EURIBOR

+

1.05%

.........

Quarterly

CITI

11/22/21

60,150,000

EUR

(3,502,112)

Receive

Floating

3-month

USD

LIBOR

+

1.174%

.....

Quarterly

51,115,500

USD

Pay

Floating

3-month

EURIBOR

+

1.05%

.........

Quarterly

CITI

12/10/21

46,050,000

EUR

(2,470,403)

Receive

Floating

3-month

USD

LIBOR

+

1.318%

.....

Quarterly

26,862,000

USD

Pay

Floating

3-month

EURIBOR

+

1.2%

..........

Quarterly

CITI

12/12/21

24,200,000

EUR

(1,305,650)

Total

Cross

Currency

Swap

Contracts

...........................................................

$(8,093,778)

Inflation

Index

Swap

Contracts

Description

Payment

Frequency

Counter-

party

Maturity

Date

Notional

Amount

Value

Unamortized

Upfront

Payments

(Receipts)

Unrealized

Appreciation

(Depreciation)

Centrally

Cleared

Swap

Contracts

Receive

variable

change

  in

USA

CPI-U

........

At

Maturity

Pay

Fixed

1.913%

.....

At

Maturity

1/14/29

$

37,900,000

$

(343,694)

$

—

$

(343,694)

Receive

variable

change

  in

USA

CPI-U

........

At

Maturity

Pay

Fixed

1.943%

.....

At

Maturity

1/15/29

98,100,000

(1,181,453)

—

(1,181,453)

Total

Inflation

Index

Swap

Contracts

..................................

$(1,525,147)

$—

$(1,525,147)

Franklin

Investors

Securities

Trust

Financial

Statements

Statements

of

Assets

and

Liabilities

October

31,

2020

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

127

Franklin

Adjustable

U.S.

Government

Securities

Fund

Franklin

Floating

Rate

Daily

Access

Fund

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

a

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

................

$669,187,038

$1,251,973,181

$2,539,520,041

$4,868,853,803

Cost

-

Controlled

affiliates

(Note

3

f

and

12

)

...

—

—

—

633,222,023

Cost

-

Non-controlled

affiliates

(Note

3

f

and

12

)

37,053,731

235,238,140

220,775,423

241,855,434

Cost

-

Unaffiliated

repurchase

agreements

...

32,700,268

—

—

—

Value

-

Unaffiliated

issuers

...............

$668,122,724

$1,100,227,055

$2,521,648,139

$4,931,974,480

Value

-

Controlled

affiliates

(Note

3

f

and

12

)

..

—

—

—

657,040,451

Value

-

Non-controlled

affiliates

(Note

3

f

and

12

)

37,053,731

153,976,943

214,835,393

238,005,042

Value

-

Unaffiliated

repurchase

agreements

...

32,700,268

—

—

—

Cash

.................................

23,484

17,509,039

5,454,200

9,607,588

Receivables:

Investment

securities

sold

................

3,049,170

40,691,137

3,838,119

30,901,665

Capital

shares

sold

.....................

1,516,982

224,566

6,739,857

9,763,716

Dividends

and

interest

..................

1,830,196

4,029,689

13,114,464

26,709,362

Deposits

with

brokers

for:

OTC

derivative

contracts

...............

—

—

11,021,420

17,904,852

TBA

transactions

.....................

—

—

—

1,286,000

Futures

contracts

.....................

—

—

4,891,517

14,268,086

Centrally

cleared

swap

contracts

.........

—

—

97,217

2,570,679

Variation

margin

on

futures

contracts

........

—

—

362,976

—

Variation

margin

on

centrally

cleared

swap

contracts

............................

—

—

2,033,409

1,442,088

OTC

swap

contracts

(upfront

payments

$–,

$–,

$1,445,759

and

$864,546,

respectively)

.......

—

—

630,493

864,412

Unrealized

appreciation

on

OTC

forward

exchange

contracts

..............................

—

—

733,241

2,269,414

Unrealized

appreciation

on

OTC

swap

contracts

.

—

—

2,074,715

2,830,105

Unrealized

appreciation

on

unfunded

loan

commitments

...........................

—

235,087

16,309

22,418

FT

Subsidiary

deferred

tax

benefit

(Note

1

h

)

....

—

—

—

101,634

Other

assets

...........................

232

667

1,195

1,832

Total

assets

.......................

744,296,787

1,316,894,183

2,787,492,664

5,947,563,824

Liabilities:

Payables:

Investment

securities

purchased

...........

—

47,163,447

84,046,814

811,276,297

Capital

shares

redeemed

................

1,335,904

2,671,345

6,075,659

6,105,341

Management

fees

......................

295,775

606,315

222,531

1,453,909

Distribution

fees

.......................

141,880

244,123

436,820

973,480

Transfer

agent

fees

.....................

132,650

262,268

282,153

838,163

Distributions

to

shareholders

..............

50,820

846,726

501,175

1,139,921

Variation

margin

on

futures

contracts

........

—

—

—

511,347

Due

to

brokers

..........................

—

1,117,475

—

—

OTC

swap

contracts

(upfront

receipts

$–,

$–,

$3,467,727

and

$5,042,973)

...............

—

—

3,452,165

5,042,884

Unrealized

depreciation

on

OTC

swap

contracts

.

—

—

11,576,833

19,567,626

Unrealized

depreciation

on

OTC

forward

exchange

contracts

..............................

—

—

988,354

2,489,486

Deferred

tax

............................

—

—

10,693

25,553

Unrealized

depreciation

on

unfunded

loan

commitments

...........................

—

999

—

—

Accrued

expenses

and

other

liabilities

........

215,915

201,379

409,244

521,313

Total

liabilities

......................

2,172,944

53,114,077

108,002,441

849,945,320

Net

assets,

at

value

..............

$742,123,843

$1,263,780,106

$2,679,490,223

$5,097,618,504

Franklin

Investors

Securities

Trust

Financial

Statements

Statements

of

Assets

and

Liabilities

(continued)

October

31,

2020

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

128

Franklin

Adjustable

U.S.

Government

Securities

Fund

Franklin

Floating

Rate

Daily

Access

Fund

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

a

Net

assets

consist

of:

Paid-in

capital

..........................

$876,714,522

$1,881,238,202

$2,878,631,595

$5,129,337,681

Total

distributable

earnings

(losses)

..........

(134,590,679)

(617,458,096)

(199,141,372)

(31,719,17

7)

Net

assets,

at

value

..............

$742,123,843

$1,263,780,106

$2,679,490,223

$5,097,618,504

a

Consolidated

financial

statement.

See

Note

1

(

h

)

Franklin

Investors

Securities

Trust

Financial

Statements

Statements

of

Assets

and

Liabilities

(continued)

October

31,

2020

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

129

Franklin

Adjustable

U.S.

Government

Securities

Fund

Franklin

Floating

Rate

Daily

Access

Fund

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

a

Class

A:

Net

assets,

at

value

....................

$460,620,645

$717,021,289

$1,778,665,704

$4,031,242,362

Shares

outstanding

.....................

57,912,265

97,532,923

186,365,594

401,424,565

Net

asset

value

per

share

b

...............

$7.95

$7.35

$9.54

$10.04

Maximum

offering

price

per

share

(net

asset

value

per

share

÷

97.75%,

97.75%,

97.75%

and

96.25%,

respectively)

...................

$8.13

$7.52

$9.76

$10.43

Class

A1:

Net

assets,

at

value

....................

$77,910,393

$—

$—

$—

Shares

outstanding

.....................

9,797,804

—

—

—

Net

asset

value

per

share

b

...............

$7.95

$—

$—

$—

Maximum

offering

price

per

share

(net

asset

value

per

share

÷

97.75%,

—%,

—%

and

—%)

$8.13

$—

$—

$—

Class

C:

Net

assets,

at

value

....................

$71,211,705

$160,193,935

$117,893,341

$208,946,868

Shares

outstanding

.....................

8,958,949

21,775,701

12,409,482

20,965,390

Net

asset

value

and

maximum

offering

price

per

share

b

...............................

$7.95

$7.36

$9.50

$9.97

Class

R:

Net

assets,

at

value

....................

$—

$—

$94,893

$17,274,001

Shares

outstanding

.....................

—

—

9,945

1,727,715

Net

asset

value

and

maximum

offering

price

per

share

...............................

$—

$—

$9.54

$10.00

Class

R6:

Net

assets,

at

value

....................

$33,529,770

$9,567,627

$553,603,014

$547,075,387

Shares

outstanding

.....................

4,207,850

1,298,384

57,635,382

54,087,832

Net

asset

value

and

maximum

offering

price

per

share

...............................

$7.97

$7.37

$9.61

$10.11

Advisor

Class:

Net

assets,

at

value

....................

$98,851,330

$376,997,255

$229,233,271

$293,079,886

Shares

outstanding

.....................

12,415,967

51,231,522

23,887,744

29,009,466

Net

asset

value

and

maximum

offering

price

per

share

...............................

$7.96

$7.36

$9.60

$10.10

a

Consolidated

financial

statement.

See

Note

1

(

h

)

Franklin

Investors

Securities

Trust

Financial

Statements

Statements

of

Operations

for

the

year

ended

October

31,

2020

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

130

Franklin

Adjustable

U.S.

Government

Securities

Fund

Franklin

Floating

Rate

Daily

Access

Fund

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

a

Investment

income:

Dividends:

Unaffiliated

issuers

.....................

$—

$436,486

$1,059,011

$468,301

Controlled

affiliates

(Note

3

f

and

12

)

........

—

—

—

21,995,654

Non-controlled

affiliates

(Note

3

f

and

12

)

.....

163,447

2,963,422

1,564,640

1,263,986

Interest:

(net

of

foreign

taxes

withheld

$–,

$–,

$–

and

$4,157,

respectively)

Unaffiliated

issuers

:

Paydown

gain

(loss)

..................

(3,944,133)

281,596

(5,339,156)

(8,867,035)

Paid

in

cash

b

........................

22,121,090

79,812,370

100,232,123

159,509,372

Non-controlled

affiliates

(Note

3

f

and

12

)

.....

—

2,771,031

—

—

Income

from

securities

loaned:

Unaffiliated

entities

(net

of

fees

and

rebates)

..

—

—

207,154

71

Non-controlled

affiliates

(Note

3

f

)

..........

—

—

18,274

—

Total

investment

income

................

18,340,404

86,264,905

97,742,046

174,370,349

Expenses:

Management

fees

(Note

3

a

)

................

3,625,747

9,082,004

14,781,815

23,704,292

Distribution

fees:

(Note

3c

)

    Class

A

.............................

1,057,888

2,110,335

4,222,267

9,230,950

    Class

A1

............................

81,374

—

—

—

    Class

C

.............................

501,950

1,436,936

847,817

1,528,352

    Class

R

.............................

—

—

540

92,880

Transfer

agent

fees:

(Note

3e

)

    Class

A

.............................

608,368

998,074

2,225,709

5,219,751

    Class

A1

............................

117,671

—

—

—

    Class

C

.............................

111,836

262,602

173,644

332,694

    Class

R

.............................

—

—

135

26,446

    Class

R6

............................

20,993

14,057

238,076

149,943

    Advisor

Class

.........................

160,924

662,650

296,881

877,264

Custodian

fees

(Note

4

)

...................

3,913

9,968

80,716

112,406

Reports

to

shareholders

...................

88,229

172,643

327,302

615,239

Registration

and

filing

fees

.................

123,518

92,347

205,233

230,657

Professional

fees

........................

82,106

147,487

202,315

190,613

Trustees'

fees

and

expenses

...............

7,542

21,435

34,254

53,387

Marketplace

lending

fees

(Note

1k)

..........

—

—

821,833

499,936

Other

.................................

268,285

61,344

300,642

313,288

Total

expenses

......................

6,860,344

15,071,882

24,759,179

43,178,098

Expense

reductions

(Note

4

)

............

(28)

(18,964)

(46,508)

(53,341)

Expenses

waived/paid

by

affiliates

(Note

3

f

and

3

g

)

...........................

(102,169)

(476,258)

(8,100,125)

(2,536,009)

Net

expenses

......................

6,758,147

14,576,660

16,612,546

40,588,748

Net

investment

income

.............

11,582,257

71,688,245

81,129,500

133,781,601

Franklin

Investors

Securities

Trust

Financial

Statements

Statements

of

Operations

(continued)

for

the

year

ended

October

31,

2020

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

131

Franklin

Adjustable

U.S.

Government

Securities

Fund

Franklin

Floating

Rate

Daily

Access

Fund

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

a

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

Unaffiliated

issuers

...................

(1,630,151)

(112,721,660)

(16,009,024)

59,058,465

Non-controlled

affiliates

(Note

3

f

and

12

)

...

—

(4,285,771)

—

—

Written

options

........................

—

—

(5,271,978)

(6,248,482)

Foreign

currency

transactions

.............

—

—

993,488

(6,211,492)

Forward

exchange

contracts

..............

—

—

(2,467,838)

(21,821,423)

Futures

contracts

......................

—

—

(3,827,667)

57,319,219

TBA

sale

commitments

..................

—

—

(25,205)

80,425

Swap

contracts

........................

—

(203,888)

(12,128,867)

(33,716,338)

Capital

gain

distributions

from

management

investment

companies:

Controlled

affiliates

(Note

3

f

)

............

—

—

—

1,041,978

Net

realized

gain

(loss)

...............

(1,630,151)

(117,211,319)

(38,737,091)

49,502,352

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

...................

(754,301)

(65,815,706)

536,747

11,014,145

Controlled

affiliates

(Note

3

f

)

............

—

—

—

13,303,860

Non-controlled

affiliates

(Note

3

f

and

12

)

...

—

(3,085,773)

(2,389,309)

(1,549,310)

Translation

of

other

assets

and

liabilities

denominated

in

foreign

currencies

........

—

—

(247,819)

5,704,539

Forward

exchange

contracts

..............

—

—

105,189

1,788,464

Futures

contracts

......................

—

—

3,104,127

7,926,651

Swap

contracts

........................

—

369,172

(9,491,399)

(15,847,226)

Change

in

deferred

taxes

on

unrealized

appreciation

..........................

—

—

(6,761)

(16,672)

Net

change

in

unrealized

appreciation

(depreciation)

......................

(754,301)

(68,532,307)

(8,389,225)

22,324,451

Net

realized

and

unrealized

gain

(loss)

.........

(2,384,452)

(185,743,626)

(47,126,316)

71,826,803

Net

increase

(decrease)

in

net

assets

resulting

from

operations

...............................

$9,197,805

$(114,055,381)

$34,003,184

$205,608,404

a

Consolidated

financial

statement.

See

Note

1

(

h

)

b

Includes

amortization

of

premium

and

accretion

of

discount.

Franklin

Investors

Securities

Trust

Financial

Statements

Statements

of

Changes

in

Net

Assets

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

132

Franklin

Adjustable

U.S.

Government

Securities

Fund

Franklin

Floating

Rate

Daily

Access

Fund

Year

Ended

October

31,

2020

Year

Ended

October

31,

2019

Year

Ended

October

31,

2020

Year

Ended

October

31,

2019

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

............

$11,582,257

$13,215,775

$71,688,245

$161,201,518

Net

realized

gain

(loss)

............

(1,630,151)

—

(117,211,319)

(72,522,962)

Net

change

in

unrealized

appreciation

(depreciation)

.................

(754,301)

2,476,828

(68,532,307)

(111,443,489)

Net

increase

(decrease)

in

net

assets

resulting

from

operations

.

9,197,805

15,692,603

(114,055,381)

(22,764,933)

Distributions

to

shareholders:

Class

A

........................

(8,897,340)

(12,001,795)

(39,489,904)

(64,119,132)

Class

A1

.......................

(1,864,934)

(2,915,661)

—

—

Class

C

........................

(1,350,734)

(2,843,324)

(9,486,664)

(18,210,835)

Class

R6

.......................

(788,720)

(1,199,781)

(677,256)

(3,994,879)

Advisor

Class

...................

(2,630,546)

(3,815,385)

(27,632,187)

(77,201,443)

Total

distributions

to

shareholders

.....

(15,532,274)

(22,775,946)

(77,286,011)

(163,526,289)

Capital

share

transactions:

(Note

2

)

Class

A

........................

70,494,497

(21,579,949)

(233,315,055)

(220,170,584)

Class

A1

.......................

(7,859,324)

(13,138,172)

—

—

Class

C

........................

(12,754,011)

(40,864,972)

(109,798,686)

(119,511,218)

Class

R6

.......................

1,855,199

(3,739,246)

(7,604,281)

(118,338,106)

Advisor

Class

...................

(3,762,005)

(7,695,018)

(416,487,193)

(802,269,979)

Total

capital

share

transactions

.......

47,974,356

(87,017,357)

(767,205,215)

(1,260,289,887)

Net

increase

(decrease)

in

net

assets

.....................

41,639,887

(94,100,700)

(958,546,607)

(1,446,581,109)

Net

assets:

Beginning

of

year

..................

700,483,956

794,584,656

2,222,326,713

3,668,907,822

End

of

year

......................

$742,123,843

$700,483,956

$1,263,780,106

$2,222,326,713

Franklin

Investors

Securities

Trust

Financial

Statements

Statements

of

Changes

in

Net

Assets

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

133

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

a

Year

Ended

October

31,

2020

Year

Ended

October

31,

2019

Year

Ended

October

31,

2020

Year

Ended

October

31,

2019

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

............

$81,129,500

$95,790,942

$133,781,601

$138,007,986

Net

realized

gain

(loss)

............

(38,737,091)

11,354,598

49,502,352

110,171,716

Net

change

in

unrealized

appreciation

(depreciation)

.................

(8,389,225)

9,929,361

22,324,451

162,522,506

Net

increase

(decrease)

in

net

assets

resulting

from

operations

.

34,003,184

117,074,901

205,608,404

410,702,208

Distributions

to

shareholders:

Class

A

........................

(48,969,878)

(52,306,023)

(112,806,584)

(92,537,289)

Class

C

........................

(3,380,036)

(3,709,440)

(6,432,576)

(6,711,287)

Class

R

........................

(2,772)

(7)

(545,953)

(667,734)

Class

R6

.......................

(32,873,199)

(38,208,441)

(17,343,719)

(15,990,733)

Advisor

Class

...................

(7,090,816)

(8,102,666)

(22,371,427)

(25,772,639)

Total

distributions

to

shareholders

.....

(92,316,701)

(102,326,577)

(159,500,259)

(141,679,682)

Capital

share

transactions:

(Note

2

)

Class

A

........................

168,718,534

123,680,413

569,003,350

479,864,224

Class

C

........................

(15,065,931)

4,489,729

(30,617,403)

(21,014,946)

Class

R

........................

74,287

18,305

(4,067,761)

(3,811,785)

Class

R6

.......................

(418,721,668)

(19,707,867)

59,823,951

22,963,552

Advisor

Class

...................

(21,237,380)

38,827,472

(568,354,934)

196,798,568

Total

capital

share

transactions

.......

(286,232,158)

147,308,052

25,787,203

674,799,613

Net

increase

(decrease)

in

net

assets

.....................

(344,545,675)

162,056,376

71,895,348

943,822,139

Net

assets:

Beginning

of

year

..................

3,024,035,898

2,861,979,522

5,025,723,156

4,081,901,017

End

of

year

......................

$2,679,490,223

$3,024,035,898

$5,097,618,504

$5,025,723,156

a

Consolidated

financial

statement.

See

Note

1

(

h

)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

134

franklintempleton.com

Annual

Report

1.

Organization

and

Significant

Accounting

Policies

Franklin

Investors

Securities

Trust (Trust)

is

registered

under

the

Investment

Company

Act

of

1940

(1940

Act)

as

an

open-

end

management

investment

company,

consisting

of

seven

separate

funds,

four

of

which

are

included

in

this

report

(Funds)

and

applies

the

specialized

accounting

and

reporting

guidance

in

U.S.

Generally

Accepted

Accounting

Principles

(U.S.

GAAP).

The

classes

of

shares

offered

within

each

of

the

Funds

are

indicated

below.

Class

C

shares

automatically

convert

to

Class

A

shares

after

they

have

been

held

for

10

years.

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.

Class

A,

Class

A1,

Class

C,

Class

R6

&

Advisor

Class

Franklin

Adjustable

U.S.

Government

Securities

Fund

Class

A,

Class

C,

Class

R6

&

Advisor

Class

Franklin

Floating

Rate

Daily

Access

Fund

Class

A,

Class

C,

Class

R,

Class

R6

&

Advisor

Class

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

The

following

summarizes

the Funds'

significant

accounting

policies

. 

a.

Financial

Instrument

Valuation 

The Funds'

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 Funds calculate 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

Funds' administrator

has

responsibility

for

oversight

of

valuation,

including

leading

the

cross-functional

Valuation

Committee

(VC).

The

Funds

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

Funds'

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

Funds' 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

Funds' net

benefit

or

obligation

under

the

derivative

contract,

as

measured

by

the

fair

value

of

the

contract,

is

included

in

net

assets.

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

135

franklintempleton.com

Annual

Report

The

Funds

have

procedures

to

determine

the

fair

value

of

financial

instruments

for

which

market

prices

are

not

reliable

or

readily

available.

Under

these

procedures,

the

Funds

primarily

employ

a

market-based

approach

which

may

use

related

or

comparable

assets

or

liabilities,

recent

transactions,

market

multiples,

book

values,

and

other

relevant

information

for

the

investment

to

determine

the

fair

value

of

the

investment.

An

income-based

valuation

approach

may

also

be

used

in

which

the

anticipated

future

cash

flows

of

the

investment

are

discounted

to

calculate

fair

value.

Discounts

may

also

be

applied

due

to

the

nature

or

duration

of

any

restrictions

on

the

disposition

of

the

investments.

Due

to

the

inherent

uncertainty

of

valuations

of

such

investments,

the

fair

values

may

differ

significantly

from

the

values

that

would

have

been

used

had

an

active

market

existed.

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

Funds'

business

day.

Occasionally,

events

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

Funds.

As

a

result,

differences

may

arise

between

the

value

of

the

Funds'

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'

securities

to

the

latest

indications

of

fair

value

at

4

p.m.

Eastern

time

month

end.

At

October

31,

2020,

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.

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

Funds'

NAV

is

not

calculated,

which

could

result

in

differences

between

the

value

of

the

Funds'

portfolio

securities

on

the

last

business

day

and

the

last

calendar

day

of

the

reporting

period.

Any

security

valuation

changes

due

to

an

open

foreign

market

are

adjusted

and

reflected

by

the

Funds

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

Funds

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

Funds

do

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

Statements

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

Certain

or

all

Funds

enter

into

a

joint

repurchase

agreement

whereby

their

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

Funds'

custodian.

1.

Organization

and

Significant

Accounting

Policies

(continued)

a.

Financial

Instrument

Valuation 

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

136

franklintempleton.com

Annual

Report

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

Funds,

certain

MRAs

may

permit

the

non-defaulting

party

to

net

and

close-out

all

transactions,

if

any,

traded

under

such

agreements.

The

Funds

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

Funds

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

Funds

at

year

end,

as

indicated

in

the

Statements

of

Investments,

had

been

entered

into

on

October

30,

2020.

d.

Securities

Purchased

on

a

When-Issued

or

Delayed

Delivery

and

TBA

Basis

Certain

or

all

Funds

purchase

securities

on

a

when-issued

or

delayed

delivery

and

to-be-announced

(TBA)

basis,

with

payment

and

delivery

scheduled

for

a

future

date.

These

transactions

are

subject

to

market

fluctuations

and

are

subject

to

the

risk

that

the

value

at

delivery

may

be

more

or

less

than

the

trade

date

purchase

price.

Although

the

Funds

will

generally

purchase

these

securities

with

the

intention

of

holding

the

securities,

they

may

sell

the

securities

before

the

settlement

date.

Sufficient

assets

have

been

segregated

for

these

securities

and

collateral

has

been

pledged

and/or

received

for

open

TBA

trades.

e.

Derivative

Financial

Instruments

Certain

or

all

Funds

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

Statements

of

Assets

and

Liabilities.

Realized

gain

and

loss

and

unrealized

appreciation

and

depreciation

on

these

contracts

for

the

period

are

included

in

the

Statements

of

Operations.

Derivative

counterparty

credit

risk

is

managed

through

a

formal

evaluation

of

the

creditworthiness

of

all

potential

counterparties.

Certain

or

all

Funds

attempt

to

reduce

their 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

Funds

include

failure

of

the

Funds

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

Statements

of

Assets

and

Liabilities.

Early

termination

by

the

counterparty

may

result

in

an

immediate

payment

by

the Funds

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

1.

Organization

and

Significant

Accounting

Policies

(continued)

c.

Joint

Repurchase

Agreement

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

137

franklintempleton.com

Annual

Report

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

Funds'

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.

Certain

or

all

Funds

entered

into

exchange

traded

futures

contracts

primarily

to

manage

and/or

gain

exposure

to

interest

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,

and

the

daily

change

in

fair

value

is

accounted

for

as

a

variation

margin

payable

or

receivable

in

the

Statements

of

Assets

and

Liabilities.

Certain

or

all

Funds

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. 

Certain

or

all

Funds

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

Statements

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 Statements

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

Statements

of

Operations.

Certain

or

all

Funds entered

into

OTC

cross

currency

swap

contracts

primarily

to

manage

and/or

gain

exposure

to

certain

foreign

currencies.

A

cross

currency

swap

is

an

agreement

between

the

Fund

and

a

counterparty

to

exchange

cash

flows

(determined

using

either

a

fixed

or

floating

rate)

based

on

the

notional

amounts

of

two

different

currencies.

The

notional

amounts

are

typically

determined

based

on

the

spot

exchange

rates

at

the

opening

of

the

contract.

Cross

currency

swaps

may

require

the

exchange

of

notional

amounts

at

the

opening

and/or

closing

of

the

contract.

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.

Upfront

payments

and

receipts

are

reflected

in

the

Statements

of

Assets

and

Liabilities

and

represent

compensating

factors

between

stated

terms

of

the

cross

currency

swap

contract

and

prevailing

market

conditions

(interest

rate

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

Statements

of

Operations.

Certain

or

all

Funds

entered

into

inflation

index

swap

contracts

primarily

to

manage

and/or

gain

exposure

to

inflation

risk.

An

inflation

index

swap

is

an

agreement

between

the

Fund

and

a

counterparty

to

exchange

cash

flows

whereby

one

party

makes

payments

based

on

the

1.

Organization

and

Significant

Accounting

Policies

(continued)

e.

Derivative

Financial

Instruments

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

138

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percentage

change

in

an

index

that

serves

as

a

measure

of

inflation

and

the

other

party

makes

a

regular

payment

based

on

a

compounded

fixed

rate,

applied

to

a

notional

amount.

These

agreements

may

be

privately

negotiated

in

the

over-the-counter

market

(OTC

inflation

index

swap)

or

may

be

executed

on

a

registered

exchange

(centrally

cleared

inflation

index

swap).

For

centrally

cleared

inflation

index

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.

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.

Typically,

an

inflation

index

swap

has

payment

obligations

netted

and

exchanged

upon

maturity.

Certain

or

all

Funds

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

Statements

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.

Certain

or

all

Funds

entered

into

OTC

total

return

swap

contracts

primarily

to

manage

and/or

gain

exposure

to

credit

and

other

market

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.

Certain

or

all

Funds

purchased

or

wrote

exchange

traded

and/or

OTC

option

contracts

primarily

to

manage

and/or

gain

exposure

to

interest

rate

and

credit

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.

Certain

or

all

Funds

invest

in

value

recovery

instruments

(VRI)

primarily

to

gain

exposure

to

economic

growth.

Periodic

payments

from

VRI

are

dependent

on

established

benchmarks

for

underlying

variables.

VRI

has

a

notional

amount,

which

is

used

to

calculate

amounts

of

payments

to

holders.

Payments

are

recorded

upon

receipt

as

realized

gains

in

the

Statements

of

Operations.

The

risks

of

investing

in

VRI

include

growth

risk,

liquidity,

and

the

potential

loss

of

investment.

See

Note

11 regarding

other

derivative

information.

f.

Loan

Participation

Notes

Certain

or

all

Funds

invest

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

Funds.

Participations

typically

result

in

the

Fund

having

a

contractual

relationship

only

with

the

Lender

and

not

with

the

borrower.

The

Funds

have

the

right

to

receive

from

the

Lender

any

payments

of

principal,

interest

and

fees

which

the

Lender

received

from

the

borrower.

The

Funds generally

have 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

Funds

assume

the

credit

risk

of

both

the

borrower

and

the

Lender

that

is

1.

Organization

and

Significant

Accounting

Policies

(continued)

e.

Derivative

Financial

Instruments

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

139

franklintempleton.com

Annual

Report

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.

g.

Securities

Lending

Certain

or

all

Funds

participate

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

Funds.

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

Statements

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

obligations

to

the

Fund.

If

the

borrower

defaults

on

its

obligation

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.

At

October

31,

2020,

the

Franklin

Low

Duration

Total

Return

Fund

had

no

securities

on

loan.

h.

Investments

in

FT

Holdings

Corporation

I

(FT

Subsidiary)

Franklin

Total

Return

Fund

invests

in

certain

financial

instruments

through

its

investment

in

FT

Subsidiary.

FT

Subsidiary

is

a

Delaware

Corporation,

is

a

wholly-owned

subsidiary

of

the

Fund,

and

is

able

to

invest

in

certain

financial

instruments

consistent

with

the

investment

objective

of

the

Fund.

At

October

31,

2020,

FT

Subsidiary’s

investment,

Turtle

Bay

Resort,

as

well

as

any

other

assets

and

liabilities

of

FT

Subsidiary

are

reflected

in

the

Fund’s

Consolidated

Statement

of

Investments

and

Consolidated

Statement

of

Assets

and

Liabilities.

At

October

31,

2020,

FT

Subsidiary,

which

is

a

tax

paying

entity,

recognized

an

unrealized

loss

on

its

Turtle

Bay

investment.

An

estimated

deferred

tax

asset

based

on

such

unrealized

loss

is

reflected

as

FT

Subsidiary

deferred

tax

benefit

in

the

Consolidated

Statement

of

Assets

and

Liabilities.

The

estimated

benefit

was

calculated

using

a

federal

rate

of

21%.

When

the

Turtle

Bay

investment

liquidates,

FT

Subsidiary

will

recognize

a

capital

loss

which

can

be

carried-back

to

offset

prior

year

capital

gains,

resulting

in

a

tax

refund

which

will

relieve

the

deferred

tax

asset.

The

financial

statements

have

been

consolidated

and

include

the

accounts

of

the

Fund

and

FT

Subsidiary.

All

intercompany

transactions

and

balances

have

been

eliminated.

At

October

31,

2020,

the

net

assets

of

FT

Subsidiary

were

$5,155,025,

representing

0.1%

of

the

Fund’s

consolidated

net

assets.

The

Fund’s

investment

in

FT

Subsidiary

is

limited

to

25%

of

consolidated

assets.

i.

Mortgage

Dollar

Rolls

Certain

or

all

Funds

enter

into

mortgage

dollar

rolls,

typically

on

a

TBA

basis.

Mortgage

dollar

rolls

are

agreements

between

the

Fund

and

a

financial

institution

where

the

Fund

sells

(or

buys)

mortgage-backed

securities

for

delivery

on

a

specified

date

and

simultaneously

contracts

to

repurchase

(or

sell)

substantially

similar

(same

type,

coupon,

and

maturity)

securities

at

a

future

date

and

at

a

predetermined

price.

Gains

or

losses

are

realized

on

the

initial

sale,

and

the

difference

between

the

repurchase

price

and

the

sale

price

is

recorded

as

an

unrealized

gain

or

loss

to

the

Fund

upon

entering

into

the

mortgage

dollar

roll.

In

addition,

the

Fund

may

invest

the

cash

proceeds

that

are

received

from

the

initial

sale.

During

the

period

between

the

sale

and

repurchase,

the

Fund

is

not

entitled

to

principal

and

interest

paid

on

the

mortgage

backed

securities.

Transactions

in

mortgage

dollar

rolls

are

accounted

for

as

purchases

and

sales

and

may

result

in

an

increase

to

the

Fund's

portfolio

turnover

rate.

The

risks

of

mortgage

dollar

roll

transactions

include

the

potential

inability

of

the

counterparty

to

fulfill

its

obligations.

1.

Organization

and

Significant

Accounting

Policies

(continued)

f.

Loan

Participation

Notes

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

140

franklintempleton.com

Annual

Report

j.

Senior

Floating

Rate

Interests

Certain

or

all

Funds

invest

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

Funds

invest

are

generally

readily

marketable,

but

may

be

subject

to

certain

restrictions

on

resale.

On

July

27,

2017,

the

United

Kingdom's

Financial

Conduct

Authority

announced

its

intention

to

cease

sustaining

LIBOR

after

2021.

There

remains

uncertainty

regarding

the

future

utilization

of

LIBOR

and

the

nature

of

any

replacement

rate.

As

such,

the

potential

effect

of

a

transition

away

from

LIBOR

on

the

Fund

or

the

Fund's

investments

that

use

or

may

use

a

floating

rate

based

on

LIBOR

cannot

yet

be

determined.

k.

Marketplace

Lending

Certain

or

all

Funds

invest in

loans

obtained

through

marketplace

lending.

Marketplace

lending,

sometimes

referred

to

as

peer-to-peer

lending,

is

a

method

of

financing

in

which

a

platform

facilitates

the

borrowing

and

lending

of

money.

It

is

considered

an

alternative

to

more

traditional

forms

of

debt

financing.

Prospective

borrowers

are

required

to

provide

certain

financial

information

to

the

platform,

including,

but

not

limited

to,

the

intended

purpose

of

the

loan,

income,

employment

information,

credit

score,

debt-

to-income

ratio,

credit

history

(including

defaults

and

delinquencies)

and

home

ownership

status.

Based

on

this

and

other

information,

the

platform

assigns

its

own

credit

rating

to

the

borrower

and

sets

the

interest

rate

for

the

requested

loan.

The

platform

then

posts

the

borrowing

requests

online,

giving

investors

the

opportunity

to

purchase

the

loans

based

on

factors

such

as

the

interest

rates

and

expected

yields

of

the

loans,

the

borrower

background

data,

and

the

credit

rating

assigned

by

the

platform.

When

the

Funds

invest

in

these

loans,

they

usually

purchase

all

rights,

title

and

interest

in

the

loans

pursuant

to

a

loan

purchase

agreement

directly

from

the

platform.

The

platform

or

a

third-party

servicer

typically

continues

to

service

the

loans,

collecting

payments

and

distributing

them

to

the

Funds,

less

any

servicing

fees

assessed.

The

servicer

is

typically

responsible

for

taking

actions

against

a

borrower

in

the

event

of

a

default

on

the

loan.

Servicing

fees,

along

with

other

administration

fees,

are

included

in

marketplace

lending

fees

in

the

Statements

of

Operations.

The

Funds,

as

investors

in

a

loan,

would

be

entitled

to

receive

payment

only

from

the

borrower

and

would

not

be

able

to

recover

any

deficiency

from

the

platform,

except

under

very

narrow

circumstances.

The

loans

in

which

the

Funds

may

invest

are

unsecured.

l.

Income

and

Deferred

Taxes

It

is each

Fund's

policy

to

qualify

as

a

regulated

investment

company

under

the

Internal

Revenue

Code. Each

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

Funds

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

the

Funds

invest.

Foreign

taxes,

if

any,

are

recorded

based

on

the

tax

regulations

and

rates

that

exist

in

the

foreign

markets

in

which

the

Funds

invest.

When

a

capital

gain

tax

is

determined

to

apply,

certain

or

all

Funds

record

an

estimated

deferred

tax

liability

in

an

amount

that

would

be

payable

if

the

securities

were

disposed

of

on

the

valuation

date.

Each

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

October

31,

2020, each

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. 

m.

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

1.

Organization

and

Significant

Accounting

Policies

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

141

franklintempleton.com

Annual

Report

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/separately

on

the

Statements

of

Operations.

Facility

fees

are

recognized

as

income

over

the

expected

term

of

the

loan.

Dividend

income

and

realized

gain

distributions

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

Funds.

Dividends

from

net

investment

income

are

normally

declared

daily;

these

dividends

may

be

reinvested

or

paid

monthly

to

shareholders.

Distributions

from

realized

capital

gains

and

other

distributions,

if

any,

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.

Net

investment

income,

excluding

class

specific

expenses,

is

allocated

daily

to

each

class

of

shares

based

upon

the

relative

value

of

the

settled

shares

of

each

class.

Realized

and

unrealized

gains

and

losses

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.

Inflation-indexed

bonds

are

adjusted

for

inflation

through

periodic

increases

or

decreases

in

the

security's

interest

accruals,

face

amount,

or

principal

redemption

value,

by

amounts

corresponding

to

the

rate

of

inflation

as

measured

by

an

index.

Any

increase

or

decrease

in

the

face

amount

or

principal

redemption

value

will

be

included

as

interest

income

in

the

Statements

of

Operations.

n.

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.

o.

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

Funds,

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.

1.

Organization

and

Significant

Accounting

Policies

(continued)

m.

Security

Transactions,

Investment

Income,

Expenses

and

Distributions

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

142

franklintempleton.com

Annual

Report

2.

Shares

of

Beneficial

Interest

At

October

31,

2020,

there

were

an

unlimited

number

of

shares

authorized

(without

par

value).

Transactions

in

the

Funds'

shares

were

as

follows:

Franklin

Adjustable

U.S.

Government

Securities

Fund

Franklin

Floating

Rate

Daily

Access

Fund

Shares

Amount

Shares

Amount

Class

A

Class

A

Shares:

Year

ended

October

31,

2020

Shares

sold

a

...................................

29,319,870

$233,754,345

14,261,908

$109,784,278

Shares

issued

in

reinvestment

of

distributions

..........

1,060,012

8,448,342

4,774,925

36,575,361

Shares

redeemed

...............................

(21,555,825)

(171,708,190)

(49,816,612)

(379,674,694)

Net

increase

(decrease)

..........................

8,824,057

$70,494,497

(30,779,779)

$(233,315,055)

Year

ended

October

31,

2019

Shares

sold

a

...................................

18,451,688

$148,737,677

24,396,121

$207,005,295

Shares

issued

in

reinvestment

of

distributions

..........

1,420,216

11,437,638

7,091,086

59,838,783

Shares

redeemed

...............................

(22,545,484)

(181,755,264)

(57,649,550)

(487,014,662)

Net

increase

(decrease)

..........................

(2,673,580)

$(21,579,949)

(26,162,343)

$(220,170,584)

Class

A1

Class

A1

Shares:

Year

ended

October

31,

2020

Shares

sold

...................................

630,558

$5,032,029

—

$—

Shares

issued

in

reinvestment

of

distributions

..........

219,982

1,753,217

—

—

Shares

redeemed

...............................

(1,836,277)

(14,644,570)

—

—

Net

increase

(decrease)

..........................

(985,737)

$(7,859,324)

—

$—

Year

ended

October

31,

2019

Shares

sold

...................................

644,638

$5,198,030

—

$—

Shares

issued

in

reinvestment

of

distributions

..........

341,392

2,748,361

—

—

Shares

redeemed

...............................

(2,617,010)

(21,084,563)

—

—

Net

increase

(decrease)

..........................

(1,630,980)

$(13,138,172)

—

$—

Class

C

Class

C

Shares:

Year

ended

October

31,

2020

Shares

sold

...................................

6,685,112

$53,248,452

1,855,251

$14,370,413

Shares

issued

in

reinvestment

of

distributions

..........

161,318

1,284,855

1,147,597

8,815,655

Shares

redeemed

a

..............................

(8,452,569)

(67,287,318)

(17,431,322)

(132,984,754)

Net

increase

(decrease)

..........................

(1,606,139)

$(12,754,011)

(14,428,474)

$(109,798,686)

Year

ended

October

31,

2019

Shares

sold

...................................

2,141,425

$17,258,372

4,867,026

$41,398,389

Shares

issued

in

reinvestment

of

distributions

..........

328,535

2,643,522

2,007,653

16,956,492

Shares

redeemed

a

..............................

(7,551,249)

(60,766,866)

(21,042,279)

(177,866,099)

Net

increase

(decrease)

..........................

(5,081,289)

$(40,864,972)

(14,167,600)

$(119,511,218)

Class

R6

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

143

franklintempleton.com

Annual

Report

Franklin

Adjustable

U.S.

Government

Securities

Fund

Franklin

Floating

Rate

Daily

Access

Fund

Shares

Amount

Shares

Amount

Class

R6

Shares:

Year

ended

October

31,

2020

Shares

sold

...................................

1,651,869

$13,195,653

379,211

$2,925,166

Shares

issued

in

reinvestment

of

distributions

..........

98,718

788,182

79,724

613,123

Shares

redeemed

...............................

(1,519,520)

(12,128,636)

(1,450,536)

(11,142,570)

Net

increase

(decrease)

..........................

231,067

$1,855,199

(991,601)

$(7,604,281)

Year

ended

October

31,

2019

Shares

sold

...................................

1,808,708

$14,620,360

6,237,102

$53,203,518

Shares

issued

in

reinvestment

of

distributions

..........

148,766

1,199,760

449,623

3,806,996

Shares

redeemed

...............................

(2,423,068)

(19,559,366)

(20,715,643)

(175,348,620)

Net

increase

(decrease)

..........................

(465,594)

$(3,739,246)

(14,028,918)

$(118,338,106)

Advisor

Class

Advisor

Class

Shares:

Year

ended

October

31,

2020

Shares

sold

...................................

15,132,077

$120,880,680

19,953,277

$151,517,101

Shares

issued

in

reinvestment

of

distributions

..........

298,147

2,378,608

2,394,865

18,413,377

Shares

redeemed

...............................

(15,921,572)

(127,021,293)

(75,991,098)

(586,417,671)

Net

increase

(decrease)

..........................

(491,348)

$(3,762,005)

(53,642,956)

$(416,487,193)

Year

ended

October

31,

2019

Shares

sold

...................................

9,661,245

$78,040,579

49,968,193

$425,681,497

Shares

issued

in

reinvestment

of

distributions

..........

409,290

3,300,024

5,583,560

47,203,015

Shares

redeemed

...............................

(11,037,539)

(89,035,621)

(150,952,054)

(1,275,154,491)

Net

increase

(decrease)

..........................

(967,004)

$(7,695,018)

(95,400,301)

$(802,269,979)

a

May

include

a

portion

of

Class

C

shares

that

were

automatically

converted

to

Class

A.

2.

Shares

of

Beneficial

Interest

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

144

franklintempleton.com

Annual

Report

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

Shares

Amount

Shares

Amount

Class

A

Class

A

Shares:

Year

ended

October

31,

2020

Shares

sold

a

...................................

74,248,622

$702,878,333

107,109,340

$1,064,630,931

Shares

issued

in

reinvestment

of

distributions

..........

4,752,298

44,996,700

10,315,985

102,130,026

Shares

issued

on

reorganization

....................

186,443

1,803,150

10,674,554

105,907,423

Shares

redeemed

...............................

(61,905,583)

(580,959,649)

(71,745,647)

(703,665,030)

Net

increase

(decrease)

..........................

17,281,780

$168,718,534

56,354,232

$569,003,350

Year

ended

October

31,

2019

Shares

sold

a

...................................

79,629,462

$767,009,943

100,587,834

$983,059,322

Shares

issued

in

reinvestment

of

distributions

..........

4,538,511

43,788,521

9,364,951

90,862,421

Shares

redeemed

...............................

(71,313,399)

(687,118,051)

(61,650,157)

(594,057,519)

Net

increase

(decrease)

..........................

12,854,574

$123,680,413

48,302,628

$479,864,224

Class

C

Class

C

Shares:

Year

ended

October

31,

2020

Shares

sold

...................................

6,965,271

$65,452,033

7,126,989

$69,953,158

Shares

issued

in

reinvestment

of

distributions

..........

321,028

3,026,044

624,127

6,125,237

Shares

issued

on

reorganization

....................

38,777

373,470

1,574,396

15,495,570

Shares

redeemed

a

..............................

(9,007,037)

(83,917,478)

(12,412,817)

(122,191,368)

Net

increase

(decrease)

..........................

(1,681,961)

$(15,065,931)

(3,087,305)

$(30,617,403)

Year

ended

October

31,

2019

Shares

sold

...................................

5,751,967

$55,153,027

5,400,892

$52,080,169

Shares

issued

in

reinvestment

of

distributions

..........

330,448

3,174,573

655,873

6,311,021

Shares

redeemed

a

..............................

(5,611,766)

(53,837,871)

(8,294,058)

(79,406,136)

Net

increase

(decrease)

..........................

470,649

$4,489,729

(2,237,293)

$(21,014,946)

Class

R

Class

R

Shares:

Year

ended

October

31,

2020

Shares

sold

...................................

8,591

$77,725

443,366

$4,387,783

Shares

issued

in

reinvestment

of

distributions

..........

282

2,666

53,260

524,757

Shares

issued

on

reorganization

....................

8,625

83,506

—

—

Shares

redeemed

...............................

(9,450)

(89,610)

(917,555)

(8,980,301)

Net

increase

(decrease)

..........................

8,048

$74,287

(420,929)

$(4,067,761)

Year

ended

October

31,

2019

Shares

sold

...................................

1,897

$18,305

333,857

$3,227,561

Shares

issued

in

reinvestment

of

distributions

..........

—

—

65,347

630,599

Shares

redeemed

...............................

—

—

(797,352)

(7,669,945)

Net

increase

(decrease)

..........................

1,897

$18,305

(398,148)

$(3,811,785)

Class

R6

2.

Shares

of

Beneficial

Interest

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

145

franklintempleton.com

Annual

Report

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:

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

Shares

Amount

Shares

Amount

Class

R6

Shares:

Year

ended

October

31,

2020

Shares

sold

...................................

16,043,261

$150,613,959

16,602,479

$165,691,686

Shares

issued

in

reinvestment

of

distributions

..........

2,409,232

22,969,432

1,578,248

15,737,331

Shares

issued

on

reorganization

....................

41,091,087

399,882,794

387,849

3,874,914

Shares

redeemed

...............................

(105,259,843)

(992,187,853)

(12,681,525)

(125,479,980)

Net

increase

(decrease)

..........................

(45,716,263)

$(418,721,668)

5,887,051

$59,823,951

Year

ended

October

31,

2019

Shares

sold

...................................

48,117,630

$466,169,000

11,319,959

$110,557,913

Shares

issued

in

reinvestment

of

distributions

..........

3,421,634

33,223,142

1,474,135

14,399,466

Shares

redeemed

...............................

(53,573,761)

(519,100,009)

(10,523,386)

(101,993,827)

Net

increase

(decrease)

..........................

(2,034,497)

$(19,707,867)

2,270,708

$22,963,552

Advisor

Class

Advisor

Class

Shares:

Year

ended

October

31,

2020

Shares

sold

...................................

13,568,900

$128,810,324

18,484,714

$184,926,398

Shares

issued

in

reinvestment

of

distributions

..........

655,249

6,243,259

2,114,517

20,943,629

Shares

issued

on

reorganization

....................

41,394

402,833

878,914

8,772,333

Shares

redeemed

...............................

(16,601,709)

(156,693,796)

(78,998,259)

(782,997,294)

Net

increase

(decrease)

..........................

(2,336,166)

$(21,237,380)

(57,520,114)

$(568,354,934)

Year

ended

October

31,

2019

Shares

sold

...................................

18,103,769

$175,348,265

45,881,218

$444,031,555

Shares

issued

in

reinvestment

of

distributions

..........

730,667

7,086,653

2,450,870

23,965,092

Shares

redeemed

...............................

(14,823,774)

(143,607,446)

(28,072,302)

(271,198,079)

Net

increase

(decrease)

..........................

4,010,662

$38,827,472

20,259,786

$196,798,568

a

May

include

a

portion

of

Class

C

shares

that

were

automatically

converted

to

Class

A.

Subsidiary

Affiliation

Franklin

Advisers,

Inc.

(Advisers)

Investment

manager

Franklin

Templeton

Institutional,

LLC

(FT

Institutional)

Investment

manager

Franklin

Templeton

Services,

LLC

(FT

Services)

Administrative

manager

Franklin

Templeton

Distributors,

Inc.

(Distributors)

Principal

underwriter

Franklin

Templeton

Investor

Services,

LLC

(Investor

Services)

Transfer

agent

2.

Shares

of

Beneficial

Interest

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

146

franklintempleton.com

Annual

Report

a.

Management

Fees

Franklin

Adjustable

U.S.

Government

Securities

Fund

pays

an

investment

management

fee

to

Advisers

based

on

the

average

daily

net

assets

of

the

Fund

as

follows:

Franklin

Floating

Rate

Daily

Access

Fund

pays

an

investment

management

fee

to

Advisers

based

on

the

average

daily

net

assets

of

the

Fund

as

follows:

Franklin

Low

Duration

Total

Return

Fund

and

Franklin

Total

Return

Fund

pay

an

investment

management

fee

to

Advisers

based

on

the

average

daily

net

assets

of

each

of

the

Funds

as

follows:

For

the

year

ended

October

31,

2020,

each

Fund's

gross

effective

investment

management

fee

rate

based

on

average

daily

net

assets

was

as

follows:

Annualized

Fee

Rate

Net

Assets

0.500%

Up

to

and

including

$5

billion

0.440%

Over

$5

billion,

up

to

and

including

$10

billion

0.410%

Over

$10

billion,

up

to

and

including

$15

billion

0.380%

In

excess

of

$15

billion

Annualized

Fee

Rate

Net

Assets

0.650%

Up

to

and

including

$500

million

0.550%

Over

$500

million,

up

to

and

including

$1

billion

0.500%

Over

$1

billion,

up

to

and

including

$1.5

billion

0.450%

Over

$1.5

billion,

up

to

and

including

$6.5

billion

0.425%

Over

$6.5

billion,

up

to

and

including

$11.5

billion

0.400%

Over

$11.5

billion,

up

to

and

including

$16.5

billion

0.390%

Over

$16.5

billion,

up

to

and

including

$19

billion

0.380%

Over

$19

billion,

up

to

and

including

$21.5

billion

0.370%

In

excess

of

$21.5

billion

Annualized

Fee

Rate

Net

Assets

0.625%

Up

to

and

including

$500

million

0.525%

Over

$500

million,

up

to

and

including

$1

billion

0.480%

Over

$1

billion,

up

to

and

including

$1.5

billion

0.435%

Over

$1.5

billion,

up

to

and

including

$6.5

billion

0.415%

Over

$6.5

billion,

up

to

and

including

$11.5

billion

0.400%

Over

$11.5

billion,

up

to

and

including

$16.5

billion

0.390%

Over

$16.5

billion,

up

to

and

including

$19

billion

0.380%

Over

$19

billion,

up

to

and

including

$21.5

billion

0.370%

In

excess

of

$21.5

billion

Franklin

Adjustable

U.S.

Government

Securities

Fund

Franklin

Floating

Rate

Daily

Access

Fund

Franklin

Low

Duration

Total

Return

Fund

Gross

effective

investment

management

fee

rate

........

0.500%

0.557%

0.491%

2.

Shares

of

Beneficial

Interest

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

147

franklintempleton.com

Annual

Report

Under

a

subadvisory

agreement,

FT

Institutional,

an

affiliate

of

Advisers,

provides

subadvisory

services

to

Franklin

Total

Return

Fund.

The

subadvisory

fee

is

paid

by

Advisers

based

on

the

Fund's

average

daily

net

assets,

and

is

not

an

additional

expense

of

the

Fund.

Effective

October

31,

2019,

the

subadvisory

agreement

was

terminated

for

Franklin

Total

Return

Fund.

b.

Administrative

Fees

Under

an

agreement

with

Advisers,

FT

Services

provides

administrative

services

to

the

Funds.

The

fee

is

paid

by

Advisers

based

on

each

of

the

Funds’

average

daily

net

assets,

and

is

not

an

additional

expense

of

the

Funds.

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

Funds’

Class

A

and

A1

reimbursement

distribution

plans,

the

Funds reimburse

Distributors

for

costs

incurred

in

connection

with

the

servicing,

sale

and

distribution

of each

Fund's

shares

up

to

the

maximum

annual

plan

rate

for

each

class.

Under

the

Class

A

and

A1

reimbursement

distribution

plans,

costs

exceeding

the

maximum

for

the

current

plan

year

cannot

be

reimbursed

in

subsequent

periods.

In

addition,

under

the

Funds’

Class

C

and

R

compensation

distribution

plans,

the

Funds

pay

Distributors

for

costs

incurred

in

connection

with

the

servicing,

sale

and

distribution

of

each

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

for

each

Fund.

The

maximum

annual

plan

rates,

based

on

the

average

daily

net

assets,

for

each

class,

are

as

follows:

Franklin

Total

Return

Fund

Gross

effective

investment

management

fee

rate

........

0.467%

Franklin

Adjustable

U.S.

Government

Securities

Fund

Franklin

Floating

Rate

Daily

Access

Fund

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

Reimbursement

Plans:

Class

A

...............................

0.25%

0.25%

0.25%

0.25%

Class

A1

..............................

0.10%

—%

—%

—%

Compensation

Plans:

Class

C

...............................

0.65%

0.65%

0.65%

0.65%

Class

R

...............................

—%

—%

0.50%

0.50%

3.

Transactions

with

Affiliates

(continued)

a.

Management

Fees

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

148

franklintempleton.com

Annual

Report

d.

Sales

Charges/Underwriting

Agreements

Front-end

sales

charges

and

contingent

deferred

sales

charges

(CDSC)

do

not

represent

expenses

of

the

Funds.

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

Funds

of

the

following

commission

transactions

related

to

the

sales

and

redemptions

of

the

Funds'

shares

for

the

year:

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

year

ended

October

31,

2020,

the

Funds

paid

transfer

agent

fees

as

noted

in

the

Statements

of

Operations

of

which

the

following

amounts

were

retained

by

Investor

Services:

f.

Investments

in

Affiliated

Management

Investment

Companies

Certain

or

all

Funds

invest

in

one

or

more

affiliated

management

investment

companies

for

purposes

other

than

exercising

a

controlling

influence

over

the

management

or

policies.

Management

fees

paid

by

the

Funds

are

waived

on

assets

invested

in

the

affiliated

management

investment

companies,

as

noted

in

the

Statements

of

Operations,

in

an

amount

not

to

exceed

the

management

and

administrative

fees

paid

directly

or

indirectly

by

each

affiliate.

During

the

year

ended

October

31,

2020,

investments

in

affiliated

management

investment

companies

were

as

follows:

Franklin

Adjustable

U.S.

Government

Securities

Fund

Franklin

Floating

Rate

Daily

Access

Fund

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

Sales

charges

retained

net

of

commissions

paid

to

unaffiliated

brokers/dealers

..................

$8,284

$10,452

$61,840

$552,515

CDSC

retained

...........................

$33,276

$40,479

$158,521

$41,048

Franklin

Adjustable

U.S.

Government

Securities

Fund

Franklin

Floating

Rate

Daily

Access

Fund

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

Transfer

agent

fees

........................

$490,843

$877,913

$1,109,120

$2,253,251

a

Value

at

Beginning

of

Year

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Year

Number

of

Shares

Held

at

End

of

Year

Investment

Income

a

a

a

a

a

a

a

a

a

Franklin

Adjustable

U.S.

Government

Securities

Fund

Non-Controlled

Affiliates

Dividends

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0%

.........

$35,052,748

$44,231,406

$(42,230,423)

$—

$—

$37,053,731

37,053,731

$163,447

Total

Affiliated

Securities

....

$35,052,748

$44,231,406

$(42,230,423)

$—

$—

$37,053,731

$163,447

3.

Transactions

with

Affiliates

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

149

franklintempleton.com

Annual

Report

a

Value

at

Beginning

of

Year

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Year

Number

of

Shares

Held

at

End

of

Year

Investment

Income

Franklin

Floating

Rate

Daily

Access

Fund

Non-Controlled

Affiliates

Dividends

Franklin

Floating

Rate

Income

Fund

$56,546,081

$—

$(12,675,246)

$(4,306,028)

$(2,127,253)

$37,437,554

5,149,595

$2,574,650

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0%

.........

103,958,277

302,088,668

(336,214,070)

—

—

69,832,875

69,832,875

388,772

Total

Affiliated

Securities

....

$160,504,358

$302,088,668

$(348,889,316)

$(4,306,028)

$(2,127,253)

$107,270,429

$2,963,422

Franklin

Low

Duration

Total

Return

Fund

Non-Controlled

Affiliates

Dividends

Franklin

Floating

Rate

Income

Fund

$19,759,574

$—

$—

$—

$(2,389,308)

$17,370,266

2,389,308

$974,082

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0%

.........

108,041,040

1,917,175,251

(1,827,751,164)

—

—

197,465,127

197,465,127

590,558

Total

Non-Controlled

Affiliates

$127,800,614

$1,917,175,251

$(1,827,751,164)

$

—

$

(2,389,308)

$214,835,393

$

1,564,640

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0%

.........

$—

$51,223,000

$(51,223,000)

$

—

$

—

$—

—

$18,274

Total

Affiliated

Securities

....

$127,800,614

$1,968,398,251

$(1,878,974,164)

$—

$(2,389,308)

$214,835,394

$1,582,914

Franklin

Total

Return

Fund

Controlled

Affiliates

Dividends

Franklin

Liberty

High

Yield

Corporate

ETF

............

$—

$151,486,725

$—

$

—

$

(3,558,054)

$

147,928,671

5,830,000

$

4,593,672

Franklin

Liberty

Investment

Grade

Corporate

ETF

............

369,960,975

99,558,200

—

—

17,641,775

487,160,950

18,335,000

16,656,504

Franklin

Liberty

Senior

Loan

ETF

22,730,691

—

—

—

(779,861)

21,950,830

914,900

745,478

Total

Controlled

Affiliates

....

$392,691,666

$251,044,925

$—

$

—

$

13,303,860

$657,040,451

$

21,995,654

Non-Controlled

Affiliates

Dividends

Franklin

Floating

Rate

Income

Fund

$12,812,795

$—

$—

$—

$(1,549,310)

$11,263,485

1,549,310

$628,495

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0%

.........

373,627,760

2,808,775,509

(2,955,661,712)

—

—

226,741,557

226,741,557

635,491

Total

Affiliated

Securities

....

$779,132,221

$3,059,820,434

$(2,955,661,712)

$—

$11,754,550

$895,045,493

$23,259,640

3.

Transactions

with

Affiliates

(continued)

f.

Investments

in

Affiliated

Management

Investment

Companies

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

150

franklintempleton.com

Annual

Report

g.

Waiver

and

Expense

Reimbursements

Advisers

and

Investor

Services

have

contractually

agreed

in

advance

to

waive

or

limit

their

respective

fees

and

to

assume

as

their

own

expense

certain

expenses

otherwise

payable

by

Franklin

Low

Duration

Total

Return

Fund

and

Franklin

Total

Return

Fund

so

that

the

operating expenses

(excluding

distribution

fees and

acquired

fund

fees

and

expenses

and

certain

non-

routine

expenses

or

costs,

including

those

relating

to

litigation,

indemnification,

reorganizations,

and

liquidations)

and

acquired

fund

fees

and

expenses for

Class

A,

Class

C,

Class

R,

and

Advisor

Class

of

the

Funds

do not

exceed

0.44%,

and

0.60%,

respectively,

and

for

Class

R6

do

not

exceed

0.30%

and

0.48%,

respectively,

based

on

the

average

net

assets

of

each

class

until

February

28,

2021.

Total

expenses

waived

or

paid

are

not

subject

to

recapture

subsequent

to

the

Funds’

fiscal

year

end.

Prior

to

March

1,

2020,

expenses

(excluding

certain

fees

and

expenses

as

previously

disclosed)

for

Franklin

Total

Return

Fund

for

Class

R6

were

limited

to

0.49%

based

on

the

average

net

assets

of

the

class.

For

Franklin

Adjustable

U.S.

Government

Securities

Fund

and

Franklin

Floating

Rate

Daily

Access

Fund,

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

February

28,

2021.

h.

Other

Affiliated

Transactions

At

October

31,

2020,

one

or

more

of

the

Funds

in

Franklin

Fund

Allocator

Series

owned

5.4%

of

Franklin

Low

Duration

Total

Return

Fund

outstanding

shares.

4.

Expense

Offset

Arrangement

The

Funds

have entered

into

an

arrangement

with

their

custodian

whereby

credits

realized

as

a

result

of

uninvested

cash

balances

are

used

to

reduce

a

portion

of

the

Funds'

custodian

expenses.

During

the year

ended

October

31,

2020 the

custodian

fees

were

reduced

as

noted

in

the

Statements

of

Operations.

5.

Income

Taxes

For

tax

purposes,

capital

losses

may

be

carried

over

to

offset

future

capital

gains.

At

October

31,

2020,

the

capital

loss

carryforwards

were

as

follows:

During

the

year

ended

October

31,

2020,

the

following

Funds

utilized

capital

loss

carryforwards

as

follows:

Franklin

Adjustable

U.S.

Government

Securities

Fund

Franklin

Floating

Rate

Daily

Access

Fund

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

1

1

1

1

1

Capital

loss

carryforwards

not

subject

to

expiration:

Short

term

.............................

$

22,295,670

$

31,872,530

$

63,375,277

$

19,991,441

Long

term

.............................

111,328,300

348,944,293

109,112,463

93,869,817

Total

capital

loss

carryforwards

............

$133,623,970

$380,816,823

$172,487,740

$113,861,258

Franklin

Adjustable

U.S.

Government

Securities

Fund

Franklin

Floating

Rate

Daily

Access

Fund

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

Capital

loss

utilized

carryforwards

....

$

 —

$

 —

$

 —

$35,676,600

3.

Transactions

with

Affiliates

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

151

franklintempleton.com

Annual

Report

The

tax

character

of

distributions

paid

during

the

years

ended

October

31,

2020

and

October

31,

2019,

was

as

follows:

At

October

31,

2020,

the

cost

of

investments,

net

unrealized

appreciation

(depreciation)

and

undistributed

ordinary

income

for

income

tax

purposes

were

as

follows:

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,

pass-through

entity

income,

paydown

losses,

defaulted

bonds,

wash

sales,

bond

discounts

and

premiums

and

swaps.

6.

Investment

Transactions

Purchases

and

sales

of

investments

(excluding

short

term

securities)

for

the

year

ended

October

31,

2020,

were

as

follows:

Franklin

Adjustable

U.S.

Government

Securities

Fund

Franklin

Floating

Rate

Daily

Access

Fund

2020

2019

2020

2019

Distributions

paid

from:

Ordinary

income

........................

$15,532,274

$22,775,946

$77,286,011

$163,526,289

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

2020

2019

2020

2019

Distributions

paid

from:

Ordinary

income

........................

$92,3

16,701

$102,326,577

$159,500,259

$141,679,682

Franklin

Adjustable

U.S.

Government

Securities

Fund

Franklin

Floating

Rate

Daily

Access

Fund

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

a

a

a

a

a

Cost

of

investments

.......................

$738,941,037

$1,498,023,777

$2,766,994,678

$5,750,781,967

Unrealized

appreciation

.....................

$4,387,433

$9,086,698

$55,443,165

$196,303,300

Unrealized

depreciation

.....................

(5,451,747)

(252,906,475)

(85,954,311)

(120,065,294)

Net

unrealized

appreciation

(depreciation)

.......

$(1,064,314)

$(243,819,777)

$(30,511,146)

$76,238,006

Distributable

earnings:

Undistributed

ordinary

income

................

$148,425

$7,970,157

$12,858,611

$26,700,479

Franklin

Adjustable

U.S.

Government

Securities

Fund

Franklin

Floating

Rate

Daily

Access

Fund

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

Purchases

..............................

$264,926,834

$488,015,816

$2,716,573,576

$12,507,735,640

Sales

..................................

$242,290,206

$1,211,535,936

$3,454,189,108

$12,064,024,774

5.

Income

Taxes

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

152

franklintempleton.com

Annual

Report

7.

Credit Risk

and

Defaulted

Securities

At

October

31,

2020,

Franklin

Floating

Rate

Daily

Access

Fund,

Franklin

Low

Duration

and

Franklin

Total

Return

had

85.6%,

16.6%

and

15.7%,

respectively,

of

their

portfolio

invested

in

high

yield

securities,

senior

secured

floating

rate

loans,

or

other

securities

rated

below

investment

grade 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.

Certain

or

all

Funds

held

defaulted

securities

and/or

other

securities

for

which

the

income

has

been

deemed

uncollectible.

The

Funds

discontinue

accruing

income

on

securities

for

which

income

has

been

deemed

uncollectible

and

provide

an

estimate

for

losses

on

interest

receivable.

The

securities

have

been

identified

in

the

accompanying

Statements

of

Investments.

At

October

31,

2020,

the

aggregate

value

of

these

securities

was

as

follows:

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

Funds, their ability

to

buy

and

sell

fund

investments

at

appropriate

valuations

and their ability

to

achieve their investment

objectives.

9.

Restricted

Securities

Certain

or

all

Funds

invest

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

Funds

may

have

registration

rights

for

restricted

securities.

The

issuer

generally

incurs

all

registration

costs.

At

October

31,

2020,

investments

in

restricted

securities,

excluding

securities

exempt

from

registration

under

the

1933

Act,

were

as

follows:

Value

Percentage

of

Net

Assets

Franklin

Floating

Rate

Daily

Access

Fund

.........................................

$

58,313,933

4.6%

Franklin

Low

Duration

Total

Return

Fund

..........................................

1,

882,752

0.1%

Franklin

Total

Return

Fund

....................................................

1,

880,761

0.0%

†

†

Rounds

to

less

than

0.1%

of

net

assets.

Principal

Amount

*

/

Shares

/

Units

Issuer

Acquisition

Date

Cost

Value

Franklin

Floating

Rate

Daily

Access

Fund

1,219,956

a

Appvion

Operations,

Inc.

......................

6/14/18

–

4/12/19

$

12,791,766

$

18,106,975

170,300

Remington

Outdoor

Co.,

Inc.,

Litigation

Units

.......

5/16/18

–

4/12/19

—

—

Total

Restricted

Securities

(Value

is

1.43%

of

Net

Assets)

.............

$12,791,766

$18,106,975

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

153

franklintempleton.com

Annual

Report

10.

Unfunded

Loan

Commitments

Certain

or

all

Funds

enter

into

certain

credit

agreements,

all

or

a

portion

of

which

may

be

unfunded.

The

Funds

are

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

Statements

of

Assets

and

Liabilities

and

the Statements

of

Operations.

Funded

portions

of

credit

agreements

are

presented

in

the

Statements

of

Investments.

At

October

31,

2020,

unfunded

commitments

were

as

follows:

Principal

Amount

*

/

Shares

/

Units

Issuer

Acquisition

Date

Cost

Value

Franklin

Low

Duration

Total

Return

Fund

24,739

b

Appvion

Operations,

Inc.

......................

4/12/19

$

334,607

$

367,190

12,326,925

c

K2016470219

South

Africa

Ltd.,

A

...............

4/15/13

–

2/01/17

92,077

—

1,226,701

c

K2016470219

South

Africa

Ltd.,

B

...............

2/01/17

911

—

16,078

Remington

Outdoor

Co.,

Inc.,

Litigation

Units

.......

5/16/18

–

4/12/19

—

—

Total

Restricted

Securities

(Value

is

0.01%

of

Net

Assets)

.............

$427,595

$367,190

Principal

Amount

*

/

Shares

/

Units

Issuer

Acquisition

Date

Cost

Value

Franklin

Total

Return

Fund

13,033

d

Appvion

Operations,

Inc.

......................

4/12/19

$

176,272

$

193,437

28,762,824

e

K2016470219

South

Africa

Ltd.,

A

...............

4/15/13

–

2/01/17

221,469

—

2,862,311

e

K2016470219

South

Africa

Ltd.,

B

...............

2/01/17

2,125

—

4,897

Remington

Outdoor

Co.,

Inc.,

Litigation

Units

.......

4/12/19

—

—

Total

Restricted

Securities

(Value

is

0.01%

of

Net

Assets)

.............

$399,866

$193,437

*

In

U.S.

dollars

unless

otherwise

indicated.

a

The

Fund

also

invests

in

unrestricted

securities

of

the

issuer,

valued

at

$28,599,539

as

of

October

31,

2020.

b

The

Fund

also

invests

in

unrestricted

securities

of

the

issuer,

valued

at

$353,843

as

of

October

31,

2020.

c

The

Fund

also

invests

in

unrestricted

securities

of

the

issuer,

valued

at

$1,469

as

of

October

31,

2020

d

The

Fund

also

invests

in

unrestricted

securities

of

the

issuer,

valued

at

$186,406

as

of

October

31,

2020.

e

The

Fund

also

invests

in

unrestricted

securities

of

the

issuer,

valued

at

$3,427

as

of

October

31,

2020.

Borrower

Unfunded

Commitment

Franklin

Floating

Rate

Daily

Access

Fund

Fieldwood

Energy

LLC

$6,553,264

Pathway

Vet

Alliance

LLC

667,158

UTEX

Industries,

Inc

1,379,575

$8,599,997

Franklin

Low

Duration

Total

Return

Fund

Fieldwood

Energy

LLC

$459,450

Pathway

Vet

Alliance

LLC

72,996

UTEX

Industries,

Inc

30,693

$563,139

9.

Restricted

Securities

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

154

franklintempleton.com

Annual

Report

11.

Other

Derivative

Information

At

October

31,

2020,

investments

in

derivative

contracts

are

reflected

in

the

Statements

of

Assets

and

Liabilities

as

follows:

Franklin

Total

Return

Fund

Fieldwood

Energy

LLC

$633,845

Pathway

Vet

Alliance

LLC

126,653

UTEX

Industries,

Inc

16,169

$776,667

Asset

Derivatives

Liability

Derivatives

Derivative

Contracts

Not

Accounted

for

as

Hedging

Instruments

Statement(s)

of

Assets

and

Liabilities

Location

Fair

Value

Statement(s)

of

Assets

and

Liabilities

Location

Fair

Value

Franklin

Low

Duration

Total

Return

Fund

Interest

rate

contracts

.......

Variation

margin

on

futures

contracts

$

2,231,468

a

Variation

margin

on

futures

contracts

$

358,887

a

Unrealized

appreciation

on

OTC

swap

contracts

370,379

Unrealized

depreciation

on

OTC

swap

contracts

4,574,446

Foreign

exchange

contracts

..

Unrealized

appreciation

on

OTC

forward

exchange

contracts

733,241

Unrealized

depreciation

on

OTC

forward

exchange

contracts

988,354

Credit

contracts

............

Variation

margin

on

centrally

cleared

swap

contracts

—

Variation

margin

on

centrally

cleared

swap

contracts

151,145

b

OTC

swap

contracts

(upfront

payments)

630,493

OTC

swap

contracts

(upfront

receipts)

3,452,165

Unrealized

appreciation

on

OTC

swap

contracts

1,704,336

Unrealized

depreciation

on

OTC

swap

contracts

7,002,387

Inflation

contracts

..........

Variation

margin

on

centrally

cleared

swap

contracts

—

Variation

margin

on

centrally

cleared

swap

contracts

1,112,898

b

Total

....................

$5,669,917

$17,640,282

Franklin

Total

Return

Fund

Interest

rate

contracts

.......

Investments

in

securities,

at

value

3,695,910

c

Options

written,

at

value

—

Variation

margin

on

futures

contracts

3,814,057

a

Variation

margin

on

futures

contracts

9,542,433

a

Unrealized

appreciation

on

OTC

swap

contracts

—

Unrealized

depreciation

on

OTC

swap

contracts

8,093,778

Foreign

exchange

contracts

..

Unrealized

appreciation

on

OTC

forward

exchange

contracts

2,269,414

Unrealized

depreciation

on

OTC

forward

exchange

contracts

2,489,486

Credit

contracts

............

OTC

swap

contracts

(upfront

payments)

864,411

OTC

swap

contracts

(upfront

receipts)

5,042,884

Unrealized

appreciation

on

OTC

swap

contracts

2,830,105

Unrealized

depreciation

on

OTC

swap

contracts

11,473,848

10.

Unfunded

Loan

Commitments

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

155

franklintempleton.com

Annual

Report

For

the

year

ended

October

31,

2020,

the

effect

of

derivative

contracts

in

the

Statements

of

Operations

was

as

follows:

Asset

Derivatives

Liability

Derivatives

Derivative

Contracts

Not

Accounted

for

as

Hedging

Instruments

Statement(s)

of

Assets

and

Liabilities

Location

Fair

Value

Statement(s)

of

Assets

and

Liabilities

Location

Fair

Value

Franklin

Total

Return

Fund

(continued)

Inflation

contracts

..........

Variation

margin

on

centrally

cleared

swap

contracts

$

—

Variation

margin

on

centrally

cleared

swap

contracts

$

1,525,147

b

Value

recovery

instruments

...

Investments

in

securities,

at

value

412,110

d

Investments

in

securities,

at

value

—

Total

....................

$13,886,007

$38,167,576

a

This

amount

reflects

the

cumulative

appreciation

(depreciation)

of

futures

contracts

as

reported

in

the

Statements

of

Investments.

Only

the

variation

margin

receivable/payable

at

year

end

is

separately

reported

within

the

Statements

of

Assets

and

Liabilities.

Prior

variation

margin

movements

were

recorded

to

cash

upon

receipt

or

payment.

b

This

amount

reflects

the

cumulative

appreciation

(depreciation)

of

centrally

cleared

swap

contracts

as

reported

in

the

Statements

of

Investments.

Only

the

variation

margin

receivable/payable

at

year

end

is

separately

reported

within

the

Statements

of

Assets

and

Liabilities.

Prior

variation

margin

movements

were

recorded

to

cash

upon

receipt

or

payment.

c

Purchased

option

contracts

are

included

in

investments

in

securities,

at

value

in

the

Statements

of

Assets

and

Liabilities.

d

VRI

are

included

in

investments

in

securities,

at

value

in

the

Statements

of

Assets

and

Liabilities.

Derivative

Contracts

Not

Accounted

for

as

Hedging

Instruments

Statement

of

Operations

Location

Net

Realized

Gain

(Loss)

for

the

Year

Statement

of

Operations

Location

Net

Change

in

Unrealized

Appreciation

(Depreciation)

for

the

Year

Net

realized

gain

(loss)

from:

Net

change

in

unrealized

  appreciation

(depreciation)

on:

Franklin

Floating

Rate

Daily

Access

Fund

Credit

contracts

............

Swaps

contracts

$(203,888)

Swap

contracts

$369,172

Total

....................

$(203,888)

$369,172

Franklin

Low

Duration

Total

Return

Fund

Interest

rate

contracts

.......

Written

options

(5,410,636)

Written

options

—

Futures

contracts

(3,827,667)

Futures

contracts

3,104,127

Swap

contracts

(3,002,695)

Swap

contracts

(3,446,316)

Foreign

exchange

contracts

..

Forward

exchange

contracts

(2,467,838)

Forward

exchange

contracts

105,189

Credit

contracts

............

Written

Options

138,658

Written

Options

—

Swaps

contracts

(9,126,146)

Swap

contracts

(5,322,562)

Inflation

contracts

..........

Swap

contracts

(26)

Swap

contracts

(722,521)

Total

....................

$(23,696,350)

$(6,282,083)

11.

Other

Derivative

Information

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

156

franklintempleton.com

Annual

Report

For

the year

ended

October

31,

2020,

the

average

month

end

notional

amount

of

futures

contracts,

options

and

swap

contracts,

and

the

average

month

end

contract

value

for

forward

exchange

contracts,

and

average

month

end

fair

value

of

VRI,

were

as

follows:

At

October

31,

2020,

the

Funds'

OTC

derivative

assets

and

liabilities

are

as

follows:

Derivative

Contracts

Not

Accounted

for

as

Hedging

Instruments

Statement

of

Operations

Location

Net

Realized

Gain

(Loss)

for

the

Year

Statement

of

Operations

Location

Net

Change

in

Unrealized

Appreciation

(Depreciation)

for

the

Year

Franklin

Total

Return

Fund

Interest

rate

contracts

.......

Investments

(5,933,615)

a

Investments

1,449,570

a

Written

options

2,382,098

Written

options

—

Futures

contracts

57,319,219

Futures

contracts

7,926,651

Swap

contracts

(316,390)

Swap

contracts

(6,765,993)

Foreign

exchange

contracts

..

Investments

1,011,927

a

Investments

—

Forward

exchange

contracts

(21,821,423)

Forward

exchange

contracts

1,788,464

Credit

contracts

............

Written

options

(8,630,580)

Written

options

—

Swaps

contracts

(33,399,911)

Swap

contracts

(7,790,758)

Inflation

contracts

..........

Swap

contracts

(37)

Swap

contracts

(1,290,476)

Value

recovery

instruments

Investments

—

Investments

$(34,422)

b

Total

....................

$(9,388,712)

$(4,716,964)

a

Purchased

option

contracts

are

included

in

net

realized

gain

(loss)

from

investments

and

net

change

in

unrealized

appreciation

(depreciation)

on

investments

in

the

Statements

of

Operations.

b

VRI

are

included

in

net

realized

gain

(loss)

from

investments

and

net

change

in

unrealized

appreciation

(depreciation)

on

investments

in

the

Statements

of

Operations.

.

Franklin

Floating

Rate

Daily

Access

Fund

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

Futures

contracts

........................................................

$—

$969,992,837

$1,686,010,799

Swap

Contracts

..........................................................

4,888,000

636,905,305

745,718,631

Forward

exchange

contracts

......................................

—

423,059,154

684,272,510

Options

.......................................................................

—

78,106,077

75,584,615

VRI

..............................................................................

—

—

426,794

11.

Other

Derivative

Information

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

157

franklintempleton.com

Annual

Report

At

October

31,

2020,

OTC

derivative

assets,

which

may

be

offset

against

OTC

derivative

liabilities

and

collateral

received

from

the

counterparty,

are

as

follows:

Gross

Amounts

of

Assets

and

Liabilities

Presented

in

the

Statement

of

Assets

and

Liabilities

Assets

a

Liabilities

a

Derivatives

Franklin

Low

Duration

Total

Return

Fund

Forward

exchange

contracts

.............................

$

733,24

1

$

988,35

4

Swap

contracts

.......................................

2,705,20

8

15,028,99

8

Total

.............................................

$3,438,449

$16,017,352

Franklin

Total

Return

Fund

Forward

exchange

contracts

.............................

2,269,414

2,489,48

6

Options

purchased

.....................................

3,695,910

—

Swap

contracts

.......................................

3,694,516

24,610,51

0

Total

.............................................

$9,659,840

$27,099,996

a

Absent

an

event

of

default

or

early

termination,

OTC

derivative

assets

and

liabilities

are

presented

gross

and

not

offset

in

the

Statements

of

Assets

and

Liabilities.

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

a,b

Cash

Collateral

Received

Net

Amount

(Not

less

than

zero)

Franklin

Low

Duration

Total

Return

Fund

Counterparty

BNDP

...................

$—

$—

$—

$—

$—

BZWS

...................

178,337

(178,337)

—

—

—

CITI

.....................

1,740,190

(1,740,190)

—

—

—

DBAB

...................

182,394

—

(129,947)

—

52,447

FBCO

...................

—

—

—

—

—

JPHQ

...................

1,337,528

(1,337,528)

—

—

—

MSCO

...................

—

—

—

—

—

Total

...................

$3,438,449

$(3,256,055)

$

(129,947)

$—

$52,447

Franklin

Total

Return

Fund

Counterparty

BNDP

...................

—

—

—

—

—

BZWS

...................

393,826

(393,826)

—

—

—

CITI

.....................

6,119,182

(6,119,182)

—

—

—

DBAB

...................

37,490

(37,490)

—

—

—

JPHQ

...................

3,109,342

(3,109,342)

—

—

—

MSCO

...................

—

—

—

—

—

Total

...................

$9,659,840

$(9,659,840)

—

$—

$—

2

11.

Other

Derivative

Information

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

158

franklintempleton.com

Annual

Report

At

October

31,

2020,

OTC

derivative

liabilities,

which

may

be

offset

against

OTC

derivative

assets

and

collateral

pledged

to

the

counterparty,

are

as

follows:

See

Note

1(e)

regarding

derivative

financial

instruments. 

See

Abbreviations

on

page

169.

12.

Holdings

of

5%

Voting

Securities

of

Portfolio

Companies

The

1940

Act

defines

"affiliated

companies"

to

include

investments

in

portfolio

companies

in

which

a

fund

owns

5%

or

more

of

the

outstanding

voting

securities.

During

the

year

ended

October

31,

2020,

investments

in

“affiliated

companies”

were

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

Pledged

a

Net

Amount

(Not

less

than

zero)

Franklin

Low

Duration

Total

Return

Fund

Counterparty

BNDP

...................

$188,519

$—

$—

$(188,519)

$—

BZWS

...................

358,345

(178,337)

—

—

180,009

CITI

.....................

9,671,274

(1,740,190)

—

(7,931,084)

—

DBAB

...................

—

—

—

—

—

FBCO

...................

139,652

—

—

(130,000)

9,652

JPHQ

...................

3,234,682

(1,337,528)

—

(1,897,154)

—

MSCO

...................

2,424,879

—

—

(2,424,879)

—

Total

...................

$16,017,351

$(3,256,055)

$—

$(12,571,636)

$189,661

Franklin

Total

Return

Fund

Counterparty

BNDP

...................

237,255

—

—

(237,255)

—

BZWS

...................

459,238

(393,826)

—

(65,412)

—

CITI

.....................

16,166,536

(6,119,182)

—

(10,047,354)

—

DBAB

...................

136,649

(37,490)

—

(80,000)

19,159

JPHQ

...................

5,780,139

(3,109,342)

—

(2,650,000)

20,798

MSCO

...................

4,320,179

—

—

(4,320,179)

—

Total

...................

27,099,996

(9,659,840)

—

(17,400,200)

39,956

a

In

some

instances,

the

collateral

amounts

disclosed

in

the

table

above

were

adjusted

due

to

the

requirement

to

limit

collateral

amounts

to

avoid

of

over

collateralization. Actual

collateral

received

and/or

pledged

may

be

more

than

the

amounts

disclosed

herein.

b

At

October

31,

2020,

the

Fund

received

U.S

Treasury

Bills,

Bonds

and

Notes

as

collateral

for

derivatives.

11.

Other

Derivative

Information

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

159

franklintempleton.com

Annual

Report

13.

Reorganization

On

December

6,

2019,

Franklin

Low

Duration

Total

Return

Fund

(Surviving

Fund),

pursuant

to

a

plan

of

reorganization

approved

on

October

18,

2019,

by

shareholders

of

Franklin

Flexible

Alpha

Bond

Fund

(Acquired

Fund),

a

series

of

Franklin

Strategic

Series,

acquired

100%

of

the

Acquired

Fund’s

net

assets,

primarily

made

up

of

investment

securities,

which

included

$1,720,998

of

unrealized

depreciation,

through

a

tax-free

exchange

of

41,366,326

shares

of

the

Surviving

Fund

(valued

at

$402,545,753).

Immediately

after

the

completion

of

the

reorganization,

the

combined

net

assets

of

the

Surviving

Fund

were

$3,385,783,187.

The

primary

purpose

for

the

reorganization

was

to

combine

the

Acquired

Fund

with

a

larger

that

has

lower

annual

fund

operating

expense

ratios,

better

overall

historical

performance,

similar

investment

goals

and

similar

principal

investment

strategies/risks.

The

estimated

cost

of

the

reorganization

was

$103,000

of

which

the

Surviving

Fund

and

the

Acquired

Fund

each

paid

25%

and

Advisers

paid

50%.

The

allocated

portion

of

the

Surviving

Fund's

reorganization

expenses

is

included

with

other

expenses

in

the

Statement

of

Operations.

Assuming

the

reorganization

had

been

completed

on

November

1,

2019,

the

Fund’s

pro

forma

results

of

operations,

would

have

been

as

follows:

Value

at

Beginning

of

Year

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Year

Number

of

Shares/Principal

Amount

Held

at

End

of

Year

Investment

Income

Franklin

Floating

Rate

Daily

Access

Fund

Non-Controlled

Affiliates

Dividends

Appvion

Operations,

Inc.

....

$

16,265,063

$

—

$

—

$

—

$

1,841,912

$

18,106,975

1,219,956

$

—

Remington

Outdoor

Co.,

Inc.

.

1,808,932

—

—

—

(1,808,932)

—

1,808,932

—

Remington

Outdoor

Co.,

Inc.,

Litigation

Units

.........

—

—

—

—

—

—

170,300

—

Interest

Appvion

Operations,

Inc.,

Term

Loan,

7%,

(3-month

USD

LIBOR

+

6%),

6/12/26

..........

45,636,106

7,997

a

(16,073,321)

a

20,257

(991,500)

28,599,539

29,108,946

2,771,031

b

Total

Affiliated

Securities

(Value

is

3.7%

of

Net

Assets)

$63,710,101

$7,997

$(16,073,321)

20,257

(958,520)

$46,706,514

$2,771,031

a

May

include

accretion,

amortization,

partnership

adjustments,

and/or

corporate

actions.

b

Includes

non-cash

dividend/interest

received.

Period

Net

Investment

income

Net

Realized

and

Unrealized

Gain

(Loss)

Net

Increase

(Decrease)

in

Net

Assets

from

Operations

For

the

period

November

1,

2019,

through

October

31,

2020

........

$82,248,946

$(46,065,520)

$36,183,426

12.

Holdings

of

5%

Voting

Securities

of

Portfolio

Companies

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

160

franklintempleton.com

Annual

Report

Subsequent

to

the

reorganization,

the

Surviving

Fund

has

been

managed

as

a

single

entity.

Accordingly,

it

is

impracticable

to

identify

the

amounts

of

investment

income

and

net

investment

income

attributable

to

the

Acquired

Fund’s

assets

after

the

completion

of

the

reorganization.

On

January

31,

2020

Franklin

Total

Return

Fund

(Surviving

Fund),

pursuant

to

a

plan

of

reorganization

approved

on

November

22,

2019

by

shareholders

of

Franklin

Real

Return

Fund

(Acquired

Fund),

a

series

of

Franklin

Investors

Trust,

acquired

100%

of

the

Acquired

Fund’s

net

assets,

primarily

made

up

of

investment

securities,

which

included

$1,332,218

of

unrealized

appreciation,

through

a

tax-free

exchange

of

13,515,713

shares

of

the

Surviving

Fund

(valued

at

$134,050,240).

Immediately

after

the

completion

of

the

reorganization,

the

combined

net

assets

of

the

Surviving

Fund

were

$5,377,252,553.

The

primary

purpose

for

the

reorganization

was

to

combine

the

Acquired

Fund

with

a

larger

fund

that

had

lower

annual

fund

operating

expense

ratios,

better

overall

historical

performance

and

similar

principal

investment

strategies/risks.

The

estimated

cost

of

the

reorganization

was

$200,000

of

which

the

Surviving

Fund

and

the

Acquired

Fund

each

paid

25%

and

Advisers

paid

50%.

The

allocated

portion

of

the

Surviving

Fund's

reorganization

expenses

is

included

with

other

expenses

in

the

Statement

of

Operations.

Assuming

the

reorganization

had

been

completed

on

November

1,

2019,

the

Fund’s

pro

forma

results

of

operations,

would

have

been

as

follows:

Subsequent

to

the

reorganization,

the

Surviving

Fund

has

been

managed

as

a

single

entity.

Accordingly,

it

is

impracticable

to

identify

the

amounts

of

investment

income

and

net

investment

income

attributable

to

the

Acquired

Fund’s

assets

after

the

completion

of

the

reorganization.

14.

Credit

Facility

The

Funds,

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

billion

(Global

Credit

Facility)

which

matures

on

February

5,

2021.

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

Funds

shall,

in

addition

to

interest

charged

on

any

borrowings

made

by

the

Funds

and

other

costs

incurred

by

the

Funds,

pay

their

share

of

fees

and

expenses

incurred

in

connection

with

the

implementation

and

maintenance

of

the

Global

Credit

Facility,

based

upon

their

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

Statements

of

Operations.

During

the

year

ended

October

31,

2020,

the Funds

did

not

use

the

Global

Credit

Facility.

15.

Fair

Value

Measurements

The Funds

follow

a

fair

value

hierarchy

that

distinguishes

between

market

data

obtained

from

independent

sources

(observable

inputs)

and

the Funds'

own

market

assumptions

(unobservable

inputs).

These

inputs

are

used

in

determining

the

value

of

the Funds' financial

instruments

and

are

summarized

in

the

following

fair

value

hierarchy:

Level

1

–

quoted

prices

in

active

markets

for

identical

financial

instruments

Period

Net

Investment

income

Net

Realized

and

Unrealized

Gain

(Loss)

Net

Increase

(Decrease)

in

Net

Assets

from

Operations

For

the

period

November

1,

2019,

through

October

31,

2020

........

$134,229,097

$74,016,636

$208,245,733

13.

Reorganization

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

161

franklintempleton.com

Annual

Report

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 Funds'

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

October

31,

2020,

in

valuing

the

Funds’

assets

and

liabilities

carried

at

fair

value,

is

as

follows:

Level

1

Level

2

Level

3

Total

Franklin

Adjustable

U.S.

Government

Securities

Fund

Assets:

Investments

in

Securities:

a

Commercial

Mortgage-Backed

Securities

......

$

—

$

13,077,166

$

—

$

13,077,166

Mortgage-Backed

Securities

................

—

655,045,558

—

655,045,558

Short

Term

Investments

...................

37,053,731

32,700,268

—

69,753,999

Total

Investments

in

Securities

...........

$37,053,731

$700,822,992

$—

$737,876,723

Franklin

Floating

Rate

Daily

Access

Fund

Assets:

Investments

in

Securities:

a

Common

Stocks

........................

—

—

19,567,601

b

19,567,601

Management

Investment

Companies

.........

37,437,554

—

—

37,437,554

Corporate

Bonds

:

Airlines

..............................

—

6,094,368

—

6,094,368

Construction

Materials

..................

—

4,098,355

—

4,098,355

Containers

&

Packaging

.................

—

2,540,625

—

2,540,625

Food

Products

........................

—

402,320

—

402,320

Hotels,

Restaurants

&

Leisure

.............

—

495,802

—

495,802

Household

Durables

....................

—

509,138

—

509,138

Media

...............................

—

3,635,000

—

3,635,000

Oil,

Gas

&

Consumable

Fuels

.............

—

2,481,000

—

2,481,000

Road

&

Rail

..........................

—

—

18,585,180

18,585,180

Wireless

Telecommunication

Services

.......

—

1,433,575

—

1,433,575

Senior

Floating

Rate

Interests

...............

—

999,063,24

7

59,698,085

1,058,761,33

2

Asset-Backed

Securities

..................

—

28,329,273

—

28,329,273

Escrows

and

Litigation

Trusts

...............

—

—

—

b

—

Short

Term

Investments

...................

69,832,875

—

—

69,832,875

Total

Investments

in

Securities

...........

$107,270,429

$1,049,082,703

$97,850,866

$1,254,203,998

Other

Financial

Instruments:

Unfunded

Loan

Commitments

..............

$

—

$

235,087

$

—

$

235,087

Total

Other

Financial

Instruments

.........

$—

$235,087

$—

$235,087

Liabilities:

Other

Financial

Instruments:

Unfunded

Loan

Commitments

...............

—

999

—

999

$—

$—

$—

$—

Franklin

Low

Duration

Total

Return

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Aerospace

&

Defense

...................

—

—

—

b

—

Multiline

Retail

........................

—

—

—

b

—

Oil,

Gas

&

Consumable

Fuels

.............

863

—

—

863

Paper

&

Forest

Products

.................

10,791

—

367,190

377,981

Road

&

Rail

..........................

—

—

—

b

—

Specialty

Retail

........................

114,594

—

—

114,594

15.

Fair

Value

Measurements

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

162

franklintempleton.com

Annual

Report

Level

1

Level

2

Level

3

Total

Franklin

Low

Duration

Total

Return

Fund

(continued)

Assets:

Investments

in

Securities:

Management

Investment

Companies

.........

$

17,370,266

$

—

$

—

$

17,370,266

Warrants

:

Oil,

Gas

&

Consumable

Fuels

.............

—

—

15

15

Paper

&

Forest

Products

.................

—

75

—

75

Corporate

Bonds

:

Air

Freight

&

Logistics

...................

—

29,668,332

—

29,668,332

Auto

Components

......................

—

4,477,611

—

4,477,611

Banks

...............................

—

145,256,151

—

145,256,151

Beverages

...........................

—

7,250,673

—

7,250,673

Biotechnology

.........................

—

8,986,609

—

8,986,609

Capital

Markets

........................

—

14,777,332

—

14,777,332

Chemicals

...........................

—

22,027,272

—

22,027,272

Commercial

Services

&

Supplies

...........

—

1,405,436

—

1,405,436

Consumer

Finance

.....................

—

28,527,622

—

28,527,622

Containers

&

Packaging

.................

—

3,633,868

—

3,633,868

Diversified

Financial

Services

.............

—

7,941,725

—

7,941,725

Diversified

Telecommunication

Services

.....

—

1,720,188

—

1,720,188

Electric

Utilities

........................

—

46,392,105

—

46,392,105

Electrical

Equipment

....................

—

3,947,791

—

3,947,791

Electronic

Equipment,

Instruments

&

Components

........................

—

618,999

—

618,999

Energy

Equipment

&

Services

.............

—

9,772,275

—

9,772,275

Entertainment

.........................

—

12,431,417

—

12,431,417

Equity

Real

Estate

Investment

Trusts

(REITs)

.

—

12,737,299

—

12,737,299

Food

&

Staples

Retailing

.................

—

3,147,650

—

3,147,650

Health

Care

Equipment

&

Supplies

.........

—

354,769

—

354,769

Health

Care

Providers

&

Services

..........

—

22,383,849

—

22,383,849

Independent

Power

and

Renewable

Electricity

Producers

..........................

—

1,328,250

—

1,328,250

Industrial

Conglomerates

................

—

5,752,698

—

5,752,698

Insurance

............................

—

19,878,517

—

19,878,517

Interactive

Media

&

Services

..............

—

19,763,702

—

19,763,702

Internet

&

Direct

Marketing

Retail

..........

—

15,870,545

—

15,870,545

IT

Services

...........................

—

5,465,786

—

5,465,786

Machinery

............................

—

5,237,243

—

5,237,243

Media

...............................

—

15,761,375

—

15,761,375

Metals

&

Mining

.......................

—

5,925,402

—

5,925,402

Multiline

Retail

........................

—

—

1,469

b

1,469

Multi-Utilities

..........................

—

1,422,741

—

1,422,741

Oil,

Gas

&

Consumable

Fuels

.............

—

63,772,860

—

63,772,860

Personal

Products

.....................

—

6,312,741

—

6,312,741

Pharmaceuticals

.......................

—

14,339,682

—

14,339,682

Real

Estate

Management

&

Development

....

—

2,663,519

—

2,663,519

Road

&

Rail

..........................

—

3,846,444

306,219

4,152,663

Semiconductors

&

Semiconductor

Equipment

.

—

5,574,993

—

5,574,993

Specialty

Retail

........................

—

398,953

—

398,953

Thrifts

&

Mortgage

Finance

...............

—

10,570,584

—

10,570,584

Tobacco

.............................

—

7,176,356

—

7,176,356

Wireless

Telecommunication

Services

.......

—

631,834

—

631,834

Senior

Floating

Rate

Interests

...............

—

76,265,008

3,107,695

79,372,703

Marketplace

Loans

......................

—

—

27,612,358

27,612,358

Loan

Participations

and

Assignments

.........

—

6,268,420

—

6,268,420

Foreign

Government

and

Agency

Securities

....

—

131,783,172

—

131,783,172

U.S.

Government

and

Agency

Securities

.......

—

408,554,699

—

408,554,699

15.

Fair

Value

Measurements

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

163

franklintempleton.com

Annual

Report

Level

1

Level

2

Level

3

Total

Franklin

Low

Duration

Total

Return

Fund

(continued)

Assets:

Investments

in

Securities:

Asset-Backed

Securities

..................

$

—

$

617,389,748

$

—

$

617,389,748

Commercial

Mortgage-Backed

Securities

......

—

492,120,242

—

492,120,242

Mortgage-Backed

Securities

................

—

75,320,046

—

75,320,046

Municipal

Bonds

.........................

—

83,253,337

—

83,253,337

Escrows

and

Litigation

Trusts

...............

—

19,000

—

b

19,000

Short

Term

Investments

...................

197,465,127

—

—

197,465,127

Total

Investments

in

Securities

...........

$214,961,641

$2,490,126,945

$31,394,946

$2,736,483,532

Other

Financial

Instruments:

Forward

exchange

contracts

...............

—

733,241

—

733,241

Futures

contracts

........................

2,231,468

—

—

2,231,468

Swap

contracts

.........................

—

2,074,714

—

2,074,714

Unfunded

Loan

Commitments

..............

—

16,309

—

16,309

Total

Other

Financial

Instruments

.........

$2,231,468

$2,824,264

$—

$5,055,732

Liabilities:

Other

Financial

Instruments:

Forward

exchange

contracts

................

—

988,354

—

988,354

Futures

contracts

........................

358,887

—

—

358,887

Swap

contracts

..........................

—

12,840,875

—

12,840,875

Total

Other

Financial

Instruments

.........

$358,887

$13,829,229

$—

$14,188,116

Franklin

Total

Return

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Aerospace

&

Defense

...................

—

—

—

b

—

Energy

Equipment

&

Services

.............

71,286

—

—

71,286

Entertainment

.........................

4,071

—

—

4,071

Hotels,

Restaurants

&

Leisure

.............

—

—

34,112

34,112

Multiline

Retail

........................

—

—

—

b

—

Oil,

Gas

&

Consumable

Fuels

.............

3,838

—

—

3,838

Paper

&

Forest

Products

.................

54,102

—

193,437

247,539

Road

&

Rail

..........................

—

—

—

b

—

Specialty

Retail

........................

224,781

—

—

224,781

Management

Investment

Companies

.........

668,303,936

—

—

668,303,936

Preferred

Stocks

........................

2,548,200

—

—

2,548,200

Warrants

:

Oil,

Gas

&

Consumable

Fuels

.............

—

—

35

35

Paper

&

Forest

Products

.................

—

377

—

377

Corporate

Bonds

:

Aerospace

&

Defense

...................

—

10,839,519

—

10,839,519

Air

Freight

&

Logistics

...................

—

39,134,688

—

39,134,688

Airlines

..............................

—

10,665,144

—

10,665,144

Auto

Components

......................

—

5,938,207

—

5,938,207

Banks

...............................

—

147,724,158

—

147,724,158

Beverages

...........................

—

27,172,894

—

27,172,894

Biotechnology

.........................

—

66,299,452

—

66,299,452

Capital

Markets

........................

—

24,140,883

—

24,140,883

Chemicals

...........................

—

29,587,849

—

29,587,849

Commercial

Services

&

Supplies

...........

—

2,560,937

—

2,560,937

Communications

Equipment

..............

—

2,814,375

—

2,814,375

Consumer

Finance

.....................

—

23,788,738

—

23,788,738

Containers

&

Packaging

.................

—

36,288,766

—

36,288,766

Diversified

Financial

Services

.............

—

12,460,088

—

12,460,088

Diversified

Telecommunication

Services

.....

—

38,054,761

—

38,054,761

15.

Fair

Value

Measurements

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

164

franklintempleton.com

Annual

Report

Level

1

Level

2

Level

3

Total

Franklin

Total

Return

Fund

(continued)

Assets:

Investments

in

Securities:

Corporate

Bonds:

Electric

Utilities

........................

$

—

$

106,760,261

$

—

$

106,760,261

Electrical

Equipment

....................

—

2,426,310

—

2,426,310

Electronic

Equipment,

Instruments

&

Components

........................

—

22,532,244

—

22,532,244

Energy

Equipment

&

Services

.............

—

2,740,395

—

2,740,395

Entertainment

.........................

—

12,316,586

—

12,316,586

Equity

Real

Estate

Investment

Trusts

(REITs)

.

—

20,884,151

—

20,884,151

Food

&

Staples

Retailing

.................

—

17,563,062

—

17,563,062

Food

Products

........................

—

27,104,835

—

27,104,835

Health

Care

Equipment

&

Supplies

.........

—

2,010,357

—

2,010,357

Health

Care

Providers

&

Services

..........

—

113,794,011

—

113,794,011

Hotels,

Restaurants

&

Leisure

.............

—

2,779,275

—

2,779,275

Household

Durables

....................

—

24,180,631

—

24,180,631

Independent

Power

and

Renewable

Electricity

Producers

..........................

—

12,570,785

—

12,570,785

Insurance

............................

—

93,294,293

—

93,294,293

Interactive

Media

&

Services

..............

—

15,184,844

—

15,184,844

Internet

&

Direct

Marketing

Retail

..........

—

20,513,626

—

20,513,626

IT

Services

...........................

—

24,794,711

—

24,794,711

Machinery

............................

—

28,967,351

—

28,967,351

Media

...............................

—

55,091,783

—

55,091,783

Metals

&

Mining

.......................

—

3,526,537

—

3,526,537

Multiline

Retail

........................

—

17,821,982

3,427

b

17,825,409

Multi-Utilities

..........................

—

20,531,259

—

20,531,259

Oil,

Gas

&

Consumable

Fuels

.............

—

105,594,359

—

105,594,359

Personal

Products

.....................

—

9,520,500

—

9,520,500

Pharmaceuticals

.......................

—

16,566,662

—

16,566,662

Real

Estate

Management

&

Development

....

—

601,125

—

601,125

Road

&

Rail

..........................

—

24,604,256

161,317

24,765,573

Semiconductors

&

Semiconductor

Equipment

.

—

29,031,696

—

29,031,696

Software

.............................

—

5,688,182

—

5,688,182

Specialty

Retail

........................

—

12,384,188

—

12,384,188

Textiles,

Apparel

&

Luxury

Goods

..........

—

5,792,915

—

5,792,915

Thrifts

&

Mortgage

Finance

...............

—

5,001,108

—

5,001,108

Tobacco

.............................

—

28,211,894

—

28,211,894

Trading

Companies

&

Distributors

..........

—

9,210,558

—

9,210,558

Transportation

Infrastructure

..............

—

8,066,376

—

8,066,376

Wireless

Telecommunication

Services

.......

—

31,769,717

—

31,769,717

Senior

Floating

Rate

Interests

...............

—

109,120,011

1,637,146

110,757,157

Marketplace

Loans

......................

—

—

8,121,179

8,121,179

Loan

Participations

and

Assignments

.........

—

12,324,350

—

12,324,350

Foreign

Government

and

Agency

Securities

....

—

264,934,986

—

264,934,986

U.S.

Government

and

Agency

Securities

.......

—

715,978,248

—

715,978,248

Asset-Backed

Securities

..................

—

643,656,811

—

643,656,811

Commercial

Mortgage-Backed

Securities

:

Capital

Markets

........................

—

449,663

—

449,663

Diversified

Financial

Services

.............

—

84,746,369

—

84,746,369

Thrifts

&

Mortgage

Finance

...............

—

391,087,836

7,781

391,095,617

Mortgage-Backed

Securities

................

—

1,069,812,896

—

1,069,812,896

Municipal

Bonds

.........................

—

206,169,027

—

206,169,027

Escrows

and

Litigation

Trusts

...............

—

30,000

—

b

30,000

Options

purchased

.......................

—

3,695,910

—

3,695,910

Short

Term

Investments

...................

226,741,557

—

—

226,741,557

15.

Fair

Value

Measurements

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

165

franklintempleton.com

Annual

Report

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 year.

At

October

31,

2020,

the

reconciliation is

as follows:

Level

1

Level

2

Level

3

Total

Franklin

Total

Return

Fund

(continued)

Assets:

Investments

in

Securities:

Short

Term

Investments

Total

Investments

in

Securities

...........

$897,951,771

$4,918,909,768

$10,158,434

$5,827,019,973

Other

Financial

Instruments:

Forward

exchange

contracts

...............

$

—

$

2,269,414

$

—

$

2,269,414

Futures

contracts

........................

3,814,057

—

—

3,814,057

Swap

contracts

.........................

—

2,830,10

5

—

2,830,10

5

Unfunded

Loan

Commitments

..............

—

22,418

—

22,418

Total

Other

Financial

Instruments

.........

$3,814,057

$5,121,937

$—

$8,935,994

Liabilities:

Other

Financial

Instruments:

Forward

exchange

contracts

................

—

2,489,486

—

2,489,486

Futures

contracts

........................

9,542,433

—

—

9,542,433

Swap

contracts

..........................

—

21,092,775

—

21,092,775

Total

Other

Financial

Instruments

.........

$9,542,433

$23,582,261

$—

$33,124,694

a

For

detailed

categories,

see

the

accompanying

Statement

of

Investments.

b

Includes

securities

determined

to

have

no

value

at

October

31,

2020.

Balance

at

Beginning

of

Year

Purchases

Sales

Transfer

Into

Level

3

a

Transfer

Out

of

Level

3

Cost

Basis

Adjust-

ments

b

Net

Realized

Gain

(Loss)

Net

Unr

ealized

Appreciatio

n

(

Depreciation

)

Balance

at

End

of

Year

Net

Change

in

Unrealized

Appreciation

(Depreciation)

on

Assets

Held

at

Year

End

a

a

a

a

a

a

a

a

a

a

a

Franklin

Floating

Rate

Daily

Access

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Aerospace

&

Defense

.

$

1,808,932

$

—

$

—

$

—

$

—

$

—

$

—

$

(1,808,932)

$

—

c

$

(1,808,932)

Oil,

Gas

&

Consumable

Fuels

..........

—

—

—

1,460,626

—

—

—

—

1,460,626

—

Paper

&

Forest

Products

16,265,063

—

—

—

—

—

—

1,841,912

18,106,975

1,841,912

Road

&

Rail

.......

—

—

c

—

—

—

—

—

—

—

c

—

Corporate

Bonds

:

Road

&

Rail

.......

—

—

—

17,602,299

—

672,377

—

310,504

18,585,180

310,504

Senior

Floating

Rate

Interests

:

Household

Products

..

61,403,599

—

—

—

—

245,781

—

(16,131,939)

45,517,441

(16,131,939)

Road

&

Rail

.......

—

—

—

14,890,020

—

(121,687)

—

(587,689)

14,180,644

(587,689)

Escrows

and

Litigation

Trusts

...........

—

c

—

—

—

—

(1,277,251)

1,277,251

—

—

c

—

Total

Investments

in

Securities

.

$79,477,594

$—

$—

$33,952,945

$—

$(480,780)

$1,277,251

$(16,376,144)

$97,850,866

$(16,376,144)

Franklin

Low

Duration

Total

Return

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Aerospace

&

Defense

.

170,787

—

—

—

—

—

—

(170,787)

—

c

(170,787)

Multiline

Retail

......

8,967

—

—

—

—

—

—

(8,967)

—

c

(8,967)

15.

Fair

Value

Measurements

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

166

franklintempleton.com

Annual

Report

Significant

unobservable

valuation

inputs

for

material

Level

3 assets

and/or

liabilities and

impact

to

fair

value

as

a

result

of

changes

in

unobservable

valuation

inputs

as

of

October

31,

2020,

are

as

follows:

Balance

at

Beginning

of

Year

Purchases

Sales

Transfer

Into

Level

3

a

Transfer

Out

of

Level

3

Cost

Basis

Adjust-

ments

b

Net

Realized

Gain

(Loss)

Net

Unrealized

Appreciation

(Depreciation)

Balance

at

End

of

Year

Net

Change

in

Unrealized

Appreciation

(Depreciation)

on

Assets

Held

at

Year

End

a

a

a

a

a

a

a

a

a

a

a

Franklin

Low

Duration

Total

Return

Fund

(continued)

Assets:

Investments

in

Securities:

Common

Stocks:

Oil,

Gas

&

Consumable

Fuels

..........

$

4,511

$

—

$

(2,406)

$

—

$

—

$

—

$

(1,877,948)

$

1,875,843

$

—

$

—

Paper

&

Forest

Products

329,838

—

—

—

—

—

—

37,352

367,190

37,352

Road

&

Rail

.......

—

—

c

—

—

—

—

—

—

—

c

—

Warrants

:

Oil,

Gas

&

Consumable

Fuels

..........

—

—

c

—

—

—

—

—

15

15

15

Corporate

Bonds

:

Multiline

Retail

......

2,280

—

—

—

—

(128,527)

—

127,716

1,469

127,716

Road

&

Rail

.......

—

—

—

290,023

—

1,673

—

14,523

306,219

14,523

Senior

Floating

Rate

Interests

:

Household

Products

..

3,233,528

—

—

—

—

13,539

—

(373,019)

2,874,048

(373,019)

Road

&

Rail

.......

—

—

—

186,862

—

—

—

46,785

233,647

46,785

Marketplace

Loans

:

Diversified

Financial

Services

........

24,471,922

70,573,672

(61,780,908)

—

—

(121,588)

(364)

(5,530,376)

27,612,358

(5,530,376)

Escrows

and

Litigation

Trusts

...........

—

c

—

—

—

—

(7,705)

7,705

—

—

c

—

Total

Investments

in

Securities

.

$28,221,833

$70,573,672

$(61,783,314)

$476,885

$—

$(242,608)

$(1,870,607)

$(3,980,915)

$31,394,946

$(5,856,758)

a

Transferred

into

level

3

as

a

result

of

the

unavailability

of

a

quoted

market

price

in

an

active

market

for

identical

securities

and

other

significant

observable

valuation

inputs.

May

include

amounts

related

to

a

corporate

action.

b

May

include

accretion,

amortization,

partnership

adjustments,

and/or

other

cost

basis

adjustments.

c

Includes

securities

determined

to

have

no

value.

15.

Fair

Value

Measurements

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

167

franklintempleton.com

Annual

Report

Description

Fair

Value

at

End

of

Period

Valuation

Technique

Unobservable

Inputs

Amount

/

Range

(Weighted

Average)

a

Impact

to

Fair

Value

if

Input

Increases

b

Franklin

Floating

Rate

Daily

Access

Fund

Assets:

Investments

in

Securities:

Common

Stocks:

Paper

&

Forest

Products

....

$18,106,975

Discounted

cash

flow

Weighted

average

cost

of

capital

20.5%

Decrease

c

Free

cash

flow

$141.4

mil

Increase

Discount

for

lack

of

marketability

20.0%

Decrease

d

Long

term

growth

0.0%

Increase

Corporate

Bonds:

Road

&

Rail

.............

18,585,180

Discounted

cash

flow

Discount

rate

15.8%

Decrease

c

Free

cash

flow

$20.4

mil

Increase

Senior

Floating

Rate

Interests:

Household

...............

45,517,441

Recovery

value

Asset

value

estimate

$220.0

mil

Increase

c

Road

&

Rail

14,180,644 

Discounted

cash

flow

Discount

rate

10.4%

Decrease

c

......................

Free

cash

flow

17.1

mil

Increase

All

other

Investments

(

e

)

..........

1,460,626

f

Total

.......................

$97,850,866

Franklin

Low

Duration

Total

Return

Fund

Assets:

Investments

in

Securities:

Marketplace

Loans:

Lending

Club

............

$16,231,483

Discounted

cash

flow

Loss-Adjusted

Discount

rate

7.4%

Decrease

d

Projected

Loss

rate

27.7%

Decrease

d

Lending

Club

LCX

........

4,735,975

Discounted

cash

flow

Loss-Adjusted

Discount

rate

9.0%

Decrease

d

Projected

Loss

rate

20.5%

Decrease

d

Square

Capital

...........

4,451,177

Discounted

cash

flow

Loss-Adjusted

Discount

rate

6.1%

Decrease

d

Projected

Loss

rate

6.3%

Decrease

d

All

other

investments

(

e

)

..........

5,976,311

f

Total

.......................

$31,394,946

a

Weighted

based

on

the

relative

fair

value

of

the

financial

instruments

b

Represents

the

directional

change

in

the

fair

value

that

would

result

from

a

significant

and

reasonable

increase

in

the

corresponding

input.

A

significant

and

reasonable

decrease

in

the

input

would

have

the

opposite

effect.

Significant

impacts,

if

any,

to

fair

value

and/or

net

assets

have

been

indicated.

c

Represents

a

significant

impact

to

fair

value

and

net

assets.

d

Represents

a

significant

impact

to

fair

value

but

not

net

assets.

e

Includes

fair

value

of

immaterial

assets

and/or

liabilities

developed

using

various

valuation

techniques

and

unobservable

inputs.

May

also

include

values

derived

using

private

transaction

prices

or

non-public

third

party

pricing

information

which

is

unobservable.

f

Includes

securities

determined

to

have

no

value

at

October

31,

2020

15.

Fair

Value

Measurements

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

168

franklintempleton.com

Annual

Report

16.

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.

The

amendments

in

the

ASU

provides

optional

temporary

financial

reporting

relief

from

the

effect

of

certain

types

of

contract

modifications

due

to

the

planned

discontinuation

of

the

London

Interbank

Offered

Rate

(LIBOR)

and

other

interbank-offered

based

reference

rates

as

of

the

end

of

2021.

The

ASU

is

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

this

ASU

will

not

have

a

material

impact

on

the

financial

statements.

17.

Subsequent

Events

The

Funds

have

evaluated

subsequent

events

through

the

issuance

of

the

financial

statements

and

determined

that

no

events

have

occurred

that

require

disclosure.

Abbreviations

Counterparty

BNDP

BNP

Paribas

SA

BZWS

Barclays

Bank

plc

CITI

Citibank

NA

DBAB

Deutsche

Bank

AG

FBCO

Credit

Suisse

Group

AG

JPHQ

JPMorgan

Chase

Bank

NA

MSCO

Morgan

Stanley

Currency

BRL

Brazilian

Real

COP

Colombian

Peso

DOP

Dominican

Peso

EUR

Euro

MXN

Mexican

Peso

USD

United

States

Dollar

UYU

Uruguayan

Peso

ZAR

South

African

Rand

Selected

Portfolio

AGMC

Assured

Guaranty

Municipal

Corp.

BZDIOVRA

Brazil

Inter-Bank

Deposit

Rate

CLO

Collateralized

Loan

Obligation

CMT

Constant

Monthly

U.S.

Treasury

Securities

Yield

Curve

Rate

Index

COFI

Cost

of

Funds

Index

ETF

Exchange-Traded

Fund

EURIBOR

Euro

Inter-Bank

Offer

Rate

FHLMC

Federal

Home

Loan

Mortgage

Corp.

FNMA

Federal

National

Mortgage

Association

FRN

Floating

Rate

Note

GDP

Gross

Domestic

Product

GNMA

Government

National

Mortgage

Association

GO

General

Obligation

H15BDI

U.S.

Treasury

Bill

Auction

High

Discount

Rate

LIBOR

London

Inter-Bank

Offered

Rate

MBS

Mortgage-Backed

Security

PIK

Payment-In-Kind

SOFR

Secured

Overnight

Financing

Rate

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

169

franklintempleton.com

Annual

Report

TBD

To

Be

Determined

T-Note

Treasury

Note

VRI

Value

Recovery

Instrument

Abbreviations

(continued)

Franklin

Investors

Securities

Trust

Report

of

Independent

Registered

Public

Accounting

Firm

170

franklintempleton.com

Annual

Report

To

the

Board

of

Trustees

of

Franklin

Investors

Securities

Trust

and

Shareholders

of

Franklin

Adjustable

U.S.

Government

Securities

Fund,

Franklin

Floating

Rate

Daily

Access

Fund,

Franklin

Low

Duration

Total

Return

Fund,

and

Franklin

Total

Return

Fund.

Opinions

on

the

Financial

Statements

We

have

audited

the

accompanying

statements

of

assets

and

liabilities,

including

the

statements

of

investments,

of

Franklin

Adjustable

U.S.

Government

Securities

Fund,

Franklin

Floating

Rate

Daily

Access

Fund,

Franklin

Low

Duration

Total

Return

Fund,

and

Franklin

Total

Return

Fund

(four

of

the

funds

constituting

Franklin

Investors

Securities

Trust,

hereafter

collectively

referred

to

as

the

"Funds")

as

of

October

31,

2020,

the

related

statements

of

operations

for

the

year

ended

October

31,

2020,

the

statements

of

changes

in

net

assets

for

each

of

the

two

years

in

the

period

ended

October

31,

2020,

including

the

related

notes,

and

the

financial

highlights

for

each

of

the

periods

indicated

therein

(collectively

referred

to

as

the

“financial

statements”).

In

our

opinion,

the

financial

statements

present

fairly,

in

all

material

respects,

the

financial

position

of

each

of

the

Funds

as

of

October

31,

2020,

the

results

of

each

of

their

operations

for

the

year

then

ended,

the

changes

in

each

of

their

net

assets

for

each

of

the

two

years

in

the

period

ended

October

31,

2020

and

each

of

the

financial

highlights

for

each

of

the

periods

indicated

therein

in

conformity

with

accounting

principles

generally

accepted

in

the

United

States

of

America.

Basis

for

Opinions

These

financial

statements

are

the

responsibility

of

the

Funds’

management.

Our

responsibility

is

to

express

an

opinion

on

the

Funds’

financial

statements

based

on

our

audits.

We

are

a

public

accounting

firm

registered

with

the

Public

Company

Accounting

Oversight

Board

(United

States)

(PCAOB)

and

are

required

to

be

independent

with

respect

to

the

Funds

in

accordance

with

the

U.S.

federal

securities

laws

and

the

applicable

rules

and

regulations

of

the

Securities

and

Exchange

Commission

and

the

PCAOB.

We

conducted

our

audits

of

these

financial

statements

in

accordance

with

the

standards

of

the

PCAOB.

Those

standards

require

that

we

plan

and

perform

the

audit

to

obtain

reasonable

assurance

about

whether

the

financial

statements

are

free

of

material

misstatement,

whether

due

to

error

or

fraud.

Our

audits

included

performing

procedures

to

assess

the

risks

of

material

misstatement

of

the

financial

statements,

whether

due

to

error

or

fraud,

and

performing

procedures

that

respond

to

those

risks.

Such

procedures

included

examining,

on

a

test

basis,

evidence

regarding

the

amounts

and

disclosures

in

the

financial

statements.

Our

audits

also

included

evaluating

the

accounting

principles

used

and

significant

estimates

made

by

management,

as

well

as

evaluating

the

overall

presentation

of

the

financial

statements.

Our

procedures

included

confirmation

of

securities

owned

as

of

October

31,

2020

by

correspondence

with

the

custodian,

transfer

agent

and

brokers;

when

replies

were

not

received

from

brokers,

we

performed

other

auditing

procedures.

We

believe

that

our

audits

provide

a

reasonable

basis

for

our

opinions.

PricewaterhouseCoopers

LLP

San

Francisco,

California

December

22,

2020

We

have

served

as

the

auditor

of

one

or

more

investment

companies

in

the

Franklin

Templeton

Group

of

Funds

since

1948.

Franklin

Investors

Securities

Trust

Tax

Information

(unaudited)

171

franklintempleton.com

Annual

Report

Under

Section

871(k)(1)(C)

of

the

Internal

Revenue

Code,

the

Funds

hereby

report

the

maximum

amount

allowable

but

no

less

than

the

following

amounts

as

interest

related

dividends

for

purposes

of

the

tax

imposed

under

Section

871(a)(1)(A)

of

the

Internal

Revenue

Code

for

the

fiscal

year

ended

October

31,

2020:

Franklin

Adjustable

U.S.

Government

Securities

Fund

Franklin

Floating

Rate

Daily

Access

Fund

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

$15,432,945

$75,250,763

$70,200,021

$106,251,319

Franklin

Investors

Securities

Trust

Board

Members

and

Officers

172

franklintempleton.com

Annual

Report

The

name,

year

of

birth

and

address

of

the

officers

and

board

members,

as

well

as

their

affiliations,

positions

held

with

the

Trust,

principal

occupations

during

at

least

the

past

five

years

and

number

of

U.S.

registered

portfolios

overseen

in

the

Franklin

Templeton

fund

complex,

are

shown

below.

Generally,

each

board

member

serves

until

that

person’s

successor

is

elected

and

qualified.

Independent

Board

Members

Name,

Year

of

Birth

and

Address

Position

Length

of

Time

Served

Number

of

Portfolios

in

Fund

Complex

Overseen

by

Board

Member*

Other

Directorships

Held

During

at

Least

the

Past

5

Years

Harris

J.

Ashton

(1932)

Trustee

Since

1986

126

Bar-S

Foods

(meat

packing

company)

(1981-2010).

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Director

of

various

companies;

and

formerly

,

Director,

RBC

Holdings,

Inc.

(bank

holding

company)

(until

2002);

and

President,

Chief

Executive

Officer

and

Chairman

of

the

Board,

General

Host

Corporation

(nursery

and

craft

centers)

(until

1998).

Terrence

J.

Checki

(1945)

Trustee

Since

2017

107

Hess

Corporation

(exploration

of

oil

and

gas)

(2014-present).

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Member

of

the

Council

on

Foreign

Relations

(1996-present);

Member

of

the

National

Committee

on

U.S.-China

Relations

(1999-present);

member

of

the

board

of

trustees

of

the

Economic

Club

of

New

York

(2013-present);

member

of

the

board

of

trustees

of

the

Foreign

Policy

Association

(2005-present);

member

of

the

board

of

directors

of

Council

of

the

Americas

(2007-present)

and

the

Tallberg

Foundation

(2018–

present);

and

formerly

,

Executive

Vice

President

of

the

Federal

Reserve

Bank

of

New

York

and

Head

of

its

Emerging

Markets

and

Internal

Affairs

Group

and

Member

of

Management

Committee

(1995-2014);

and

Visiting

Fellow

at

the

Council

on

Foreign

Relations

(2014).

Mary

C.

Choksi

(1950)

Trustee

Since

2014

126

Omnicom

Group

Inc.

(advertising

and

marketing

communications

services)

(2011-present)

and

White

Mountains

Insurance

Group,

Ltd.

(holding

company)

(2017-present);

and

formerly

,

Avis

Budget

Group

Inc.

(car

rental)

(2007-May

2020).

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Director

of

various

companies;

and

formerly

,

Founder

and

Senior

Advisor,

Strategic

Investment

Group

(investment

management

group)

(2015-2017);

Founding

Partner

and

Senior

Managing

Director,

Strategic

Investment

Group

(1987–2015);

Founding

Partner

and

Managing

Director,

Emerging

Markets

Management

LLC

(investment

management

firm)

(1987-2011);

and

Loan

Officer/Senior

Loan

Officer/Senior

Pension

Investment

Officer,

World

Bank

Group

(international

financial

institution)

(1977-1987).

Franklin

Investors

Securities

Trust

173

franklintempleton.com

Annual

Report

Name,

Year

of

Birth

and

Address

Position

Length

of

Time

Served

Number

of

Portfolios

in

Fund

Complex

Overseen

by

Board

Member*

Other

Directorships

Held

During

at

Least

the

Past

5

Years

Edith

E.

Holiday

(1952)

Lead

Independent

Trustee

Trustee

since

1998

and

Lead

Independent

Trustee

since

2019

126

Hess

Corporation

(exploration

of

oil

and

gas)

(1993-present),

Canadian

National

Railway

(railroad)

(2001-present),

White

Mountains

Insurance

Group,

Ltd.

(holding

company)

(2004-present),

Santander

Consumer

USA

Holdings,

Inc.

(consumer

finance)

(2016-present);

Santander

Holdings

USA.

(holding

company)

(2019-present);

and

formerly

,

RTI

International

Metals,

Inc.

(manufacture

and

distribution

of

titanium)

(1999-2015)

and

H.J.

Heinz

Company

(processed

foods

and

allied

products)

(1994-2013).

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Director

or

Trustee

of

various

companies

and

trusts;

and

formerly

,

Assistant

to

the

President

of

the

United

States

and

Secretary

of

the

Cabinet

(1990-1993);

General

Counsel

to

the

United

States

Treasury

Department

(1989-1990);

and

Counselor

to

the

Secretary

and

Assistant

Secretary

for

Public

Affairs

and

Public

Liaison-United

States

Treasury

Department

(1988-1989).

J.

Michael

Luttig

(1954)

Trustee

Since

2009

126

Boeing

Capital

Corporation

(aircraft

financing)

(2006-2010).

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Private

investor;

and

formerly

,

Counselor

and

Senior

Advisor

to

the

Chairman,

CEO,

and

Board

of

Directors,

of

The

Boeing

Company

(aerospace

company),

and

member

of

the

Executive

Council

(May

2019-January

1,

2020);

Executive

Vice

President,

General

Counsel

and

member

of

the

Executive

Council,

The

Boeing

Company

(2006-2019);

and

Federal

Appeals

Court

Judge,

United

States

Court

of

Appeals

for

the

Fourth

Circuit

(1991-2006).

Larry

D.

Thompson

(1945)

Trustee

Since

2007

126

Graham

Holdings

Company

(education

and

media

organization)

(2011-present);

and

formerly

,

The

Southern

Company

(energy

company)

(2014-May

2020;

previously

2010-2012),

Cbeyond,

Inc.

(business

communications

provider)

(2010-2012).

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Director

of

various

companies;

Counsel,

Finch

McCranie,

LLP

(law

firm)

(2015-present);

John

A.

Sibley

Professor

of

Corporate

and

Business

Law,

University

of

Georgia

School

of

Law

(2015-present;

previously

2011-2012);

and

formerly

,

Independent

Compliance

Monitor

and

Auditor,

Volkswagen

AG

(manufacturer

of

automobiles

and

commercial

vehicles)

(2017

–

September

2020);

Executive

Vice

President

-

Government

Affairs,

General

Counsel

and

Corporate

Secretary,

PepsiCo,

Inc.

(consumer

products)

(2012-2014);

Senior

Vice

President

-

Government

Affairs,

General

Counsel

and

Secretary,

PepsiCo,

Inc.

(2004-2011);

Senior

Fellow

of

The

Brookings

Institution

(2003-2004);

Visiting

Professor,

University

of

Georgia

School

of

Law

(2004);

and

Deputy

Attorney

General,

U.S.

Department

of

Justice

(2001-2003).

Independent

Board

Members

(continued)

Franklin

Investors

Securities

Trust

174

franklintempleton.com

Annual

Report

Interested

Board

Members

and

Officers

Name,

Year

of

Birth

and

Address

Position

Length

of

Time

Served

Number

of

Portfolios

in

Fund

Complex

Overseen

by

Board

Member*

Other

Directorships

Held

During

at

Least

the

Past

5

Years

**Gregory

E.

Johnson

(1961)

Trustee

Since

2013

137

None

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Executive

Chairman,

Chairman

of

the

Board

and

Director,

Franklin

Resources,

Inc.;

officer

and/or

director

or

trustee,

as

the

case

may

be,

of

some

of

the

other

subsidiaries

of

Franklin

Resources,

Inc.

and

of

39

of

the

investment

companies

in

Franklin

Templeton;

Vice

Chairman,

Investment

Company

Institute;

and

formerly

,

Chief

Executive

Officer

(2013-2020)

and

President

(1994-2015),

Franklin

Resources,

Inc.

**Rupert

H.

Johnson,

Jr.

(1940)

Chairman

of

the

Board,

Trustee

and

Vice

President

Chairman

of

the

Board

since

2013,

Trustee

since

1987

and

Vice

President

since

1986

126

None

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Director

(Vice

Chairman),

Franklin

Resources,

Inc.;

Director,

Franklin

Advisers,

Inc.;

and

officer

and/or

director

or

trustee,

as

the

case

may

be,

of

some

of

the

other

subsidiaries

of

Franklin

Resources,

Inc.

and

of

37

of

the

investment

companies

in

Franklin

Templeton.

Reema

Agarwal

(1974)

Vice

President

Since

2019

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Senior

Vice

President,

Franklin

Advisers,

Inc.;

and

officer

of

two

of

the

investment

companies

in

Franklin

Templeton.

Alison

E.

Baur

(1964)

Vice

President

Since

2012

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Deputy

General

Counsel,

Franklin

Templeton;

and

officer

of

some

of

the

other

subsidiaries

of

Franklin

Resources,

Inc.

and

of

41

of

the

investment

companies

in

Franklin

Templeton.

Breda

M.

Beckerle

(1958)

Chief

Compliance

Officer

Since

October

2020

Not

Applicable

Not

Applicable

280

Park

Avenue

New

York,

NY

10017

Principal

Occupation

During

at

Least

the

Past

5

Years:

Chief

Compliance

Officer,

Fiduciary

Investment

Management

International,

Inc.,

Franklin

Advisers,

Inc.,

Franklin

Advisory

Services,

LLC,

Franklin

Mutual

Advisers,

LLC,

Franklin

Templeton

Institutional,

LLC;

and

officer

of

41

of

the

investment

companies

in

Franklin

Templeton.

Gaston

Gardey

(1967)

Treasurer,

Chief

Financial

Officer

and

Chief

Accounting

Officer

Since

2009

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Treasurer,

U.S.

Fund

Administration

&

Reporting

and

officer

of

24

of

the

investment

companies

in

Franklin

Templeton.

Steven

J.

Gray

(1955)

Vice

President

and

Co-Secretary

Vice

President

since

2009

and

Co-Secretary

since

2019

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Senior

Associate

General

Counsel,

Franklin

Templeton;

Vice

President,

Franklin

Templeton

Distributors,

Inc.

and

FASA,

LLC;

and

officer

of

41

of

the

investment

companies

in

Franklin

Templeton.

Franklin

Investors

Securities

Trust

175

franklintempleton.com

Annual

Report

*We

base

the

number

of

portfolios

on

each

separate

series

of

the

U.S.

registered

investment

companies

within

the

Franklin

Templeton

fund

complex.

These

portfolios

have

a

common

investment

manager

or

affiliated

investment

managers.

**Gregory

E.

Johnson

is

considered

to

be

an

interested

person

of

the

Fund

under

the

federal

securities

laws

due

to

his

position

as

an

officer

and

director

of

Franklin

Resources,

Inc.

(Resources),

which

is

the

parent

company

of

the

Fund’s

investment

manager

and

distributor.

Rupert

H.

Johnson,

Jr.

is

considered

to

be

an

interested

person

of

the

Fund

under

the

federal

securities

laws

due

to

his

position

as

an

officer

and

director

and

major

shareholder

of

Resources.

Note

1:

Rupert

H.

Johnson,

Jr.

is

the

uncle

of

Gregory

E.

Johnson.

Note

2:

Officer

information

is

current

as

of

the

date

of

this

report.

It

is

possible

that

after

this

date,

information

about

officers

may

change.

Name,

Year

of

Birth

and

Address

Position

Length

of

Time

Served

Number

of

Portfolios

in

Fund

Complex

Overseen

by

Board

Member*

Other

Directorships

Held

During

at

Least

the

Past

5

Years

Matthew

T.

Hinkle

(1971)

Chief

Executive

Officer

–

Finance

and

Administration

Since

2017

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Senior

Vice

President,

Franklin

Templeton

Services,

LLC;

officer

of

41

of

the

investment

companies

in

Franklin

Templeton;

and

formerly

,

Vice

President,

Global

Tax

(2012-April

2017)

and

Treasurer/Assistant

Treasurer,

Franklin

Templeton

(2009-2017).

Robert

Lim

(1948)

Vice

President

–

AML

Compliance

Since

2016

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Vice

President,

Franklin

Templeton

Companies,

LLC;

Chief

Compliance

Officer,

Franklin

Templeton

Distributors,

Inc.

and

Franklin

Templeton

Investor

Services,

LLC;

and

officer

of

41

of

the

investment

companies

in

Franklin

Templeton.

Edward

D.

Perks

(1970)

President

and

Chief

Executive

Officer

–

Investment

Management

Since

2018

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

President

and

Director,

Franklin

Advisers,

Inc.;

and

officer

of

eight

of

the

investment

companies

in

Franklin

Templeton

(since

December

2018).

Navid

J.

Tofigh

(1972)

Vice

President

Since

2015

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Associate

General

Counsel

and

officer

of

41

of

the

investment

companies

in

Franklin

Templeton.

Craig

S.

Tyle

(1960)

Vice

President

Since

2005

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

General

Counsel

and

Executive

Vice

President,

Franklin

Resources,

Inc.;

and

officer

of

some

of

the

other

subsidiaries

of

Franklin

Resources,

Inc.

and

of

41

of

the

investment

companies

in

Franklin

Templeton.

Lori

A.

Weber

(1964)

Vice

President

and

Co-Secretary

Vice

President

since

2011

and

Co-Secretary

since

2019

Not

Applicable

Not

Applicable

300

S.E.

2nd

Street

Fort

Lauderdale,

FL

33301-

1923

Principal

Occupation

During

at

Least

the

Past

5

Years:

Senior

Associate

General

Counsel,

Franklin

Templeton;

Assistant

Secretary,

Franklin

Resources,

Inc.;

Vice

President

and

Secretary,

Templeton

Investment

Counsel,

LLC;

and

officer

of

41

of

the

investment

companies

in

Franklin

Templeton.

Interested

Board

Members

and

Officers

(continued)

Franklin

Investors

Securities

Trust

176

franklintempleton.com

Annual

Report

The

Sarbanes-Oxley

Act

of

2002

and

Rules

adopted

by

the

Securities

and

Exchange

Commission

require

the

Fund

to

disclose

whether

the

Fund’s

Audit

Committee

includes

at

least

one

member

who

is

an

audit

committee

financial

expert

within

the

meaning

of

such

Act

and

Rules.

The

Fund’s

Board

has

determined

that

there

is

at

least

one

such

financial

expert

on

the

Audit

Committee

and

has

designated

Mary

C.

Choksi

as

its

audit

committee

financial

expert.

The

Board

believes

that

Ms.

Choksi

qualifies

as

such

an

expert

in

view

of

her

extensive

business

background

and

experience.

She

served

as

a

director

of

Avis

Budget

Group,

Inc.

(2007-May

2020)

and

formerly,

Founder

and

Senior

Advisor,

Strategic

Investment

Group

(1987

to

2017).

Ms.

Choksi

has

been

a

Member

of

the

Fund’s

Audit

Committee

since

2014.

As

a

result

of

such

background

and

experience,

the

Board

believes

that

Ms.

Choksi

has

acquired

an

understanding

of

generally

accepted

accounting

principles

and

financial

statements,

the

general

application

of

such

principles

in

connection

with

the

accounting

estimates,

accruals

and

reserves,

and

analyzing

and

evaluating

financial

statements

that

present

a

breadth

and

level

of

complexity

of

accounting

issues

generally

comparable

to

those

of

the

Fund,

as

well

as

an

understanding

of

internal

controls

and

procedures

for

financial

reporting

and

an

understanding

of

audit

committee

functions.

Ms.

Choksi

is

an

independent

Board

member

as

that

term

is

defined

under

the

relevant

Securities

and

Exchange

Commission

Rules

and

Releases.

The

Statement

of

Additional

Information

(SAI)

includes

additional

information

about

the

board

members

and

is

available,

without

charge,

upon

request.

Shareholders

may

call

(800)

DIAL

BEN/342-5236

to

request

the

SAI.

Interested

Board

Members

and

Officers

(continued)

Franklin

Investors

Securities

Trust

Shareholder

Information

177

franklintempleton.com

Annual

Report

Liquidity

Risk

Management

Program

–

Funds

no

HLIM

Franklin

Adjustable

U.S.

Government

Securities

Fund

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

Each

of

the

Funds

has

adopted

and

implemented

a

written

Liquidity

Risk

Management

Program

(the

“LRMP”)

as

required

by

Rule

22e-4

under

the

Investment

Company

Act

of

1940

(the

“Liquidity

Rule”).

The

LRMP

is

designed

to

assess

and

manage

each

Fund’s

liquidity

risk,

which

is

defined

as

the

risk

that

the

Fund

could

not

meet

requests

to

redeem

shares

issued

by

the

Fund

without

significant

dilution

of

remaining

investors’

interests

in

the

Fund.

In

accordance

with

the

Liquidity

Rule,

the

LRMP

includes

policies

and

procedures

that

provide

for:

(1)

assessment,

management,

and

review

(no

less

frequently

than

annually)

of

each

Fund’s

liquidity

risk;

(2)

classification

of

each

Fund’s

portfolio

holdings

into

one

of

four

liquidity

categories

(Highly

Liquid,

Moderately

Liquid,

Less

Liquid,

and

Illiquid);

(3)

for

Funds

that

do

not

primarily

hold

assets

that

are

Highly

Liquid,

establishing

and

maintaining

a

minimum

percentage

of

the

Fund’s

net

assets

in

Highly

Liquid

investments

(called

a

“Highly

Liquid

Investment

Minimum”

or

“HLIM”);

and

(4)

prohibiting

the

Fund’s

acquisition

of

Illiquid

investments

that

would

result

in

the

Fund

holding

more

than

15%

of

its

net

assets

in

Illiquid

assets.

The

LRMP

also

requires

reporting

to

the

Securities

and

Exchange

Commission

(“SEC”)

(on

a

non-public

basis)

and

to

the

Board

if

the

Fund’s

holdings

of

Illiquid

assets

exceed

15%

of

the

Fund’s

net

assets.

Funds

with

HLIMs

must

have

procedures

for

addressing

HLIM

shortfalls,

including

reporting

to

the

Board

and,

with

respect

to

HLIM

shortfalls

lasting

more

than

seven

consecutive

calendar

days,

reporting

to

the

SEC

(on

a

non-public

basis).

The

Funds’

Board

of

Trustees

approved

the

appointment

of

the

Director

of

Liquidity

Risk

within

the

Investment

Risk

Management

Group

(the

“IRMG”)

as

the

Administrator

of

the

LRMP.

The

IRMG

maintains

the

Investment

Liquidity

Committee

(the

“ILC”)

to

provide

oversight

and

administration

of

policies

and

procedures

governing

liquidity

risk

management

for

FT

products

and

portfolios.

The

ILC

includes

representatives

from

Franklin

Templeton’s

Risk,

Trading,

Global

Compliance,

Investment

Compliance,

Investment

Operations,

Valuation

Committee

and

Product

Management

groups.

In

assessing

and

managing

each

Fund’s

liquidity

risk,

the

ILC

considers,

as

relevant,

a

variety

of

factors,

including

the

Fund’s

investment

strategy

and

the

liquidity

of

its

portfolio

investments

during

both

normal

and

reasonably

foreseeable

stressed

conditions;

its

short

and

long-term

cash

flow

projections;

and

its

cash

holdings

and

access

to

other

funding

sources

including

the

Funds’

interfund

lending

facility

and

line

of

credit.

Classification

of

the

Fund’s

portfolio

holdings

in

the

four

liquidity

categories

is

based

on

the

number

of

days

it

is

reasonably

expected

to

take

to

convert

the

investment

to

cash

(for

Highly

Liquid

and

Moderately

Liquid

holdings)

or

sell

or

dispose

of

the

investment

(for

Less

Liquid

and

Illiquid

investments),

in

current

market

conditions

without

significantly

changing

the

investment’s

market

value.

Each

Fund

primarily

holds

liquid

assets

that

are

defined

under

the

Liquidity

Rule

as

"Highly

Liquid

Investments,"

and

therefore

is

not

required

to

establish

an

HLIM.

Highly

Liquid

Investments

are

defined

as

cash

and

any

investment

reasonably

expected

to

be

convertible

to

cash

in

current

market

conditions

in

three

business

days

or

less

without

the

conversion

to

cash

significantly

changing

the

market

value

of

the

investment.

At

meetings

of

the

Funds’

Board

of

Trustees

held

in

May

2020,

the

Program

Administrator

provided

a

written

report

to

the

Board

addressing

the

adequacy

and

effectiveness

of

the

program

during

the

period

December

1,

2018

to

December

31,

2019.

The

Program

Administrator

report

concluded

that

(i.)

the

LRMP,

as

adopted

and

implemented,

remains

reasonably

designed

to

assess

and

manage

each

Fund’s

liquidity

risk;

(ii.)

the

LRMP,

including

the

Highly

Liquid

Investment

Minimum

(“HLIM”)

where

applicable,

was

implemented

and

operated

effectively

to

achieve

the

goal

of

assessing

and

managing

each

Fund’s

liquidity

risk;

and

(iii.)

each

Fund

was

able

to

meet

requests

for

redemption

without

significant

dilution

of

remaining

investors’

interests

in

the

Fund.

At

the

same

time,

the

Program

Administrator

also

presented

the

Fund

Board

of

Trustees

an

update

on

liquidity

during

the

first

quarter

of

2020

in

relation

to

the

COVID-19

pandemic.

Liquidity

Risk

Management

Program

Franklin

Floating

Rate

Daily

Access

Fund

Each

of

the

Funds

has

adopted

and

implemented

a

written

Liquidity

Risk

Management

Program

(the

“LRMP”)

as

required

by

Rule

22e-4

under

the

Investment

Company

Act

of

1940

(the

“Liquidity

Rule”).

The

LRMP

is

designed

Franklin

Investors

Securities

Trust

Shareholder

Information

178

franklintempleton.com

Annual

Report

to

assess

and

manage

each

Fund’s

liquidity

risk,

which

is

defined

as

the

risk

that

the

Fund

could

not

meet

requests

to

redeem

shares

issued

by

the

Fund

without

significant

dilution

of

remaining

investors’

interests

in

the

Fund.

In

accordance

with

the

Liquidity

Rule,

the

LRMP

includes

policies

and

procedures

that

provide

for:

(1)

assessment,

management,

and

review

(no

less

frequently

than

annually)

of

each

Fund’s

liquidity

risk;

(2)

classification

of

each

Fund’s

portfolio

holdings

into

one

of

four

liquidity

categories

(Highly

Liquid,

Moderately

Liquid,

Less

Liquid,

and

Illiquid);

(3)

for

Funds

that

do

not

primarily

hold

assets

that

are

Highly

Liquid,

establishing

and

maintaining

a

minimum

percentage

of

the

Fund’s

net

assets

in

Highly

Liquid

investments

(called

a

“Highly

Liquid

Investment

Minimum”

or

“HLIM”);

and

(4)

prohibiting

the

Fund’s

acquisition

of

Illiquid

investments

that

would

result

in

the

Fund

holding

more

than

15%

of

its

net

assets

in

Illiquid

assets.

The

LRMP

also

requires

reporting

to

the

SEC

(on

a

non-public

basis)

and

to

the

Board

if

the

Fund’s

holdings

of

Illiquid

assets

exceed

15%

of

the

Fund’s

net

assets.

Funds

with

HLIMs

must

have

procedures

for

addressing

HLIM

shortfalls,

including

reporting

to

the

Board

and,

with

respect

to

HLIM

shortfalls

lasting

more

than

seven

consecutive

calendar

days,

reporting

to

the

Securities

and

Exchange

Commission

(“SEC”)

(on

a

non-public

basis).

The

Funds’

Board

of

Trustees

approved

the

appointment

of

the

Director

of

Liquidity

Risk

within

the

Investment

Risk

Management

Group

(the

“IRMG”)

as

the

Administrator

of

the

LRMP.

The

IRMG

maintains

the

Investment

Liquidity

Committee

(the

“ILC”)

to

provide

oversight

and

administration

of

policies

and

procedures

governing

liquidity

risk

management

for

FT

products

and

portfolios.

The

ILC

includes

representatives

from

Franklin

Templeton’s

Risk,

Trading,

Global

Compliance,

Investment

Compliance,

Investment

Operations,

Valuation

Committee

and

Product

Management

groups.

In

assessing

and

managing

each

Fund’s

liquidity

risk,

the

ILC

considers,

as

relevant,

a

variety

of

factors,

including

the

Fund’s

investment

strategy

and

the

liquidity

of

its

portfolio

investments

during

both

normal

and

reasonably

foreseeable

stressed

conditions;

its

short

and

long-term

cash

flow

projections;

and

its

cash

holdings

and

access

to

other

funding

sources

including

the

Funds’

interfund

lending

facility

and

line

of

credit..

Classification

of

the

Fund’s

portfolio

holdings

in

the

four

liquidity

categories

is

based

on

the

number

of

days

it

is

reasonably

expected

to

take

to

convert

the

investment

to

cash

(for

Highly

Liquid

and

Moderately

Liquid

holdings)

or

sell

or

dispose

of

the

investment

(for

Less

Liquid

and

Illiquid

investments),

in

current

market

conditions

without

significantly

changing

the

investment’s

market

value.

Each

Fund

primarily

holds

investments

where

the

time

required

to

settle

a

sale

of

the

investment

may

exceed

7

calendar

days

and

are

classified

as

“Less

Liquid

Investments”.

Less

liquid

Investments

are

defined

as

any

investment

reasonably

expected

to

be

sold

or

disposed

of

in

current

market

conditions

in

seven

calendar

days

or

less

without

the

sale

or

disposition

significantly

changing

the

market

value

of

the

investment,

but

where

the

sale

or

disposition

is

reasonably

expected

to

settle

in

more

than

seven

calendar

days.

The

Fund

established

and

maintained

a

HLIM.

During

the

reporting

period,

the

Fund

maintained

the

necessary

level

of

Highly

Liquid

Investments

and

did

not

experience

any

HLIM

shortfalls.

At

meetings

of

the

Funds’

Board

of

Trustees

held

in

May

2020,

the

Program

Administrator

provided

a

written

report

to

the

Board

addressing

the

adequacy

and

effectiveness

of

the

program

during

the

period

December

1,

2018

to

December

31,

2019.

The

Program

Administrator

report

concluded

that

(i.)

the

LRMP,

as

adopted

and

implemented,

remains

reasonably

designed

to

assess

and

manage

each

Fund’s

liquidity

risk;

(ii.)

the

LRMP,

including

the

Highly

Liquid

Investment

Minimum

(“HLIM”)

where

applicable,

was

implemented

and

operated

effectively

to

achieve

the

goal

of

assessing

and

managing

each

Fund’s

liquidity

risk;

and

(iii.)

each

Fund

was

able

to

meet

requests

for

redemption

without

significant

dilution

of

remaining

investors’

interests

in

the

Fund.

At

the

same

time,

the

Program

Administrator

also

presented

the

Fund

Board

of

Trustees

an

update

on

liquidity

during

the

first

quarter

of

2020

in

relation

to

the

COVID-19

pandemic.

Proxy

Voting

Policies

and

Procedures

The

Trust’s

investment

manager

has

established

Proxy

Voting

Policies

and

Procedures

(Policies)

that

the

Trust

uses

to

determine

how

to

vote

proxies

relating

to

portfolio

securities.

Shareholders

may

view

the

Trust’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

Trust’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.

Franklin

Investors

Securities

Trust

Shareholder

Information

179

franklintempleton.com

Annual

Report

Quarterly

Statement

of

Investments

The

Trust

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

each

Fund’s

financial

reports

every

six

months

as

well

as

an

annual

updated

summary

prospectus

(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

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.

FIST2

A

12/20

©

2020

Franklin

Templeton

Investments.

All

rights

reserved.

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.

Annual

Report

and

Shareholder

Letter

Franklin

Investors

Securities

Trust

Investment

Manager

Distributor

Shareholder

Services

Franklin

Advisers,

Inc.

Franklin

Templeton

Distributors,

Inc.

(800)

DIAL

BEN

®

/

342-5236

franklintempleton.com

(800)

632-2301

Item 2. Code of Ethics.

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

(c) N/A

(d) N/A

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

Item 3. Audit Committee Financial Expert.

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

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

Item 4. Principal Accountant Fees and Services.

(a)      Audit Fees

The aggregate fees paid to the principal accountant for professional services rendered by the principal accountant for the audit of the registrant’s annual financial statements or for services that are normally provided by the principal accountant in connection with statutory and regulatory filings or engagements were $450,897 for the fiscal year ended October 31, 2020 and $575,194 for the fiscal year ended October 31, 2019.

(b)      Audit-Related Fees

There were no fees paid to the principal accountant for assurance and related services rendered by the principal accountant to the registrant that are reasonably related to the performance of the audit of the registrant's financial statements and are not reported under paragraph (a) of Item 4.

There were no fees paid to the principal accountant for assurance and related services rendered by the principal accountant to the registrant's investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant that are reasonably related to the performance of the audit of their financial statements.  

(c)      Tax Fees

There were no fees paid to the principal accountant for professional services rendered by the principal accountant to the registrant for tax compliance, tax advice and tax planning.   

The aggregate fees paid to the principal accountant for professional services rendered by the principal accountant to the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant for tax compliance, tax advice and tax planning were $199,302 for the fiscal year ended October 31, 2020 and $210,000 for the fiscal year ended October 31, 2019. The services for which these fees were paid included tax compliance services related to year end, professional fees in connection with tax treatment of equipment lease transactions, and professional fees in connection with an Indonesia withholding tax refund claim.

(d)      All Other Fees

The aggregate fees paid to the principal accountant for products and services rendered by the principal accountant to the registrant not reported in paragraphs (a)-(c) of Item 4 were $0 for the fiscal year ended October 31, 2020 and $8,703 for the fiscal year ended October 31, 2019. The services for which these fees were paid included review of materials provided to the fund Board in connection with the investment management contract renewal process.

The aggregate fees paid to the principal accountant for products and services rendered by the principal accountant to the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant not reported in paragraphs (a)-(c) of Item 4 were $42,222 for the fiscal year ended October 31, 2020 and $160,144 for the fiscal year ended October 31, 2019. The services for which these fees were paid included valuation services related to fair value engagement, the issuance of an Auditors’ Certificate for South Korean regulatory shareholder disclosures, benchmarking services in connection with the ICI TA survey, compliance examination for Investment Advisor Act rule 204-2 and 206-4 (2), and professional fees in connection with determining the feasibility of a U.S. direct lending structure.

(e) (1) The registrant’s audit committee is directly responsible for approving the services to be provided by the auditors, including:

      (i)   pre-approval of all audit and audit related services;

      (ii)  pre-approval of all non-audit related services to be provided to the Fund by the auditors;

      (iii) pre-approval of all non-audit related services to be provided to the registrant by the auditors to the registrant’s investment adviser or to any entity that controls, is controlled by or is under common control with the registrant’s investment adviser and that provides ongoing services to the registrant where the non-audit services relate directly to the operations or financial reporting of the registrant; and

      (iv)  establishment by the audit committee, if deemed necessary or appropriate, as an alternative to committee pre-approval of services to be provided by the auditors, as required by paragraphs (ii) and (iii) above, of policies and procedures to permit such services to be pre-approved by other means, such as through establishment of guidelines or by action of a designated member or members of the committee; provided the policies and procedures are detailed as to the particular service and the committee is informed of each service and such policies and procedures do not include delegation of audit committee responsibilities, as contemplated under the Securities Exchange Act of 1934, to management; subject, in the case of (ii) through (iv), to any waivers, exceptions or exemptions that may be available under applicable law or rules.

(e) (2) None of the services provided to the registrant described in paragraphs (b)-(d) of Item 4 were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of regulation S-X.

(f) No disclosures are required by this Item 4(f).

(g) The aggregate non-audit fees paid to the principal accountant for services rendered by the principal accountant to the registrant and the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant were $241,524 for the fiscal year ended October 31, 2020 and $378,847 for the fiscal year ended October 31, 2019.

(h) The registrant’s audit committee of the board has considered whether the provision of non-audit services that were rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.

Item 5.  Audit Committee

 

of Listed Registrants. N/A

Item 6.  Schedule of Investments. N/A

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

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

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

Affiliated Purchasers. N/A

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

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

Item 11. Controls and Procedures.

(a)

 Evaluation of Disclosure Controls and Procedures. The Registrant maintains disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in the Registrant’s filings under the Securities Exchange Act of 1934, as amended, and the Investment Company Act of 1940 is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. Such information is accumulated and communicated to the Registrant’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Registrant’s management, including the principal executive officer and the principal financial officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

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

(b)

 Changes in Internal Controls. During the period covered by this report, a third-party service provider commenced performing certain accounting and administrative services for the Registrant that are subject to Franklin Templeton’s oversight.

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

Item 13. Exhibits.

(a) (1) Code of Ethics

Code of Ethics

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

Section 302

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

Section 906

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

FRANKLIN

INVESTORS SECURITIES TRUST

By __S\MATTHEW T. HINKLE_________________________

      Matthew T. Hinkle

      Chief Executive Officer - Finance and Administration

Date  December 28, 2020

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

By __S\MATTHEW T. HINKLE__________________________

      Matthew T. Hinkle

      Chief Executive Officer - Finance and Administration

Date  December 28, 2020

By __S\GASTON GARDEY______________________________

Gaston Gardey

      Chief Financial Officer and Chief Accounting Officer

Date  December 28, 2020