N-CSRS

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM N-CSRS

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: 4/30/21

Item 1. Reports to Stockholders.

a.)

The following is a copy of the report transmitted to shareholders pursuant to Rule30e-1 under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30e-1.)

b.)

Include a copy of each notice transmitted to stockholders in reliance on Rule 30e-3 under the Act (17 CFR 270.30e-3) that contains disclosures specified by paragraph (c)(3) of that rule.

Not Applicable

.

SEMIANNUAL

REPORT

AND

SHAREHOLDER

LETTER

Franklin

Investors

Securities

Trust

April

30,

2021

Sign

up

for

electronic

delivery

at

franklintempleton.com/edelivery

Franklin

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

Franklin

Managed

Income

Fund

Not

FDIC

Insured

May

Lose

Value

No

Bank

Guarantee

franklintempleton.com

Not

part

of

the

semiannual

report

1

Shareholder

Letter

Dear

Shareholder:

During

the

six

months

ended

April

30,

2021,

the

U.S.

economy

continued

to

recover

from

the

effects

of

the

novel

coronavirus

(COVID-19)

pandemic.

U.S.

gross

domestic

product

(GDP)

reported

for

2020’s

third

and

fourth

quarters

showed

a

substantial

recovery

from

the

contraction

experienced

in

2020’s

first

half,

based

on

increased

business

and

residential

investment

and

consumer

spending.

U.S.

economic

growth

accelerated

during

2021’s

first

quarter

as

the

reopening

of

businesses,

widespread

COVID-19

vaccinations

and

federal

assistance

programs

boosted

consumer

spending.

Before

the

reporting

period,

the

U.S.

Federal

Reserve

lowered

the

federal

funds

rate

twice

in

March

2020

and

implemented

broad

quantitative

easing

measures

to

support

credit

markets.

During

the

reporting

period,

the

Federal

Reserve

held

its

key

rate

unchanged

at

0.25%

and

continued

quantitative

easing

and

its

adjusted

policy

since

August

to

allow

more

flexibility

to

keep

interest

rates

low,

while

maintaining

a

2%

average

inflation

target.

The

10-year

U.S.

Treasury

yield

was

0.88%

on

October

31,

2020,

and

it

increased

to

1.65%

by

the

end

of

April

2021.

In

this

environment,

the

prices

of

U.S.

stocks,

as

measured

by

the

Standard

&

Poor’s

®

500

Index

(S&P

500

®

),

rose

27.87%,

(the

index

increasing

from

3,269.96

to

4,181.17).

1

,2

Investment-grade

bonds,

as

measured

by

the

Bloomberg

Barclays

U.S.

Aggregate

Bond

Index

(Bloomberg

Index),

posted

a

-1.52%

total

return

(an

index

decrease

from

2,365.52

to

2,329.61),

which

includes

reinvestment

of

income

and

distributions.

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

professionals

in

today’s

markets

and

encourage

investors

to

continue

to

seek

their

advice.

Amid

changing

markets

and

economic

conditions,

we

are

confident

investors

with

a

well-diversified

portfolio

and

a

patient,

long-term

outlook

should

be

well-positioned

for

the

years

ahead.

Franklin

Investors

Securities

Trust’s

semiannual

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

April

30,

2021,

unless

otherwise

indicated.

The

information

is

not

a

complete

analysis

of

every

aspect

of

any

market,

country,

industry,

security

or

fund.

Statements

of

fact

are

from

sources

considered

reliable.

1.

Source:

Copyright

©

2021,

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

+28.85%

(index

total

return

resulting

in

an

increase

from

6,734.84

to

8,678.16).

3.

Sources:

Morningstar

and

Bloomberg

Barclays

indexes.

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

Semiannual

Report

2

Contents

Semiannual

Report

Economic

and

Market

Overview

3

Franklin

Convertible

Securities

Fund

4

Franklin

Equity

Income

Fund

10

Franklin

Managed

Income

Fund

15

Financial

Highlights

and

Statements

of

Investments

21

Financial

Statements

52

Notes

to

Financial

Statements

58

Shareholder

Information

77

Visit

franklintempleton.com

for

fund

updates,

to

access

your

account,

or

to

find

helpful

financial

planning

tools.

3

franklintempleton.com

Semiannual

Report

SEMIANNUAL

REPORT

Economic

and

Market

Overview

U.S.

equities,

as

measured

by

the

Standard

&

Poor’s

500

Index

(S&P

500),

advanced

strongly

during

the

six

months

ended

April

30,

2021.

Stocks

continued

to

recover

from

the

shock

of

the

novel

coronavirus

(COVID-19)

pandemic

amid

a

rebound

in

economic

activity

as

many

investors

anticipated

a

continued

return

to

normalcy.

Two

additional

fiscal

stimulus

measures,

which

included

direct

payments

to

many

individuals

and

programs

designed

to

help

small

businesses

keep

employees

on

the

payroll,

passed

in

December

2020

and

March

2021,

further

supporting

stock

prices.

In

November

2020,

news

that

several

vaccines

showed

high

efficacy

rates

bolstered

investor

confidence.

Additionally,

the

implementation

of

mass

vaccination

programs

in

early

2021,

a

significant

decline

in

the

U.S.

infection

rate

and

continued

economic

reopening

led

U.S.

equities

to

reach

all-time

price

highs

in

April

2021.

The

U.S.

economic

recovery

accelerated

in

2021’s

first

quarter

after

moderating

in

2020’s

last

quarter.

Toward

period-end,

the

total

economic

output

nearly

reached

pre-pandemic

levels,

as

a

notable

increase

in

consumer

spending

bolstered

growth.

The

unemployment

rate

declined

from

6.9%

in

October

2020

to

6.1%

in

April

2021,

as

jobless

claims

fell

and

employment

openings

rose.

1

In

an

effort

to

support

the

economy,

the

U.S.

Federal

Reserve

(Fed)

kept

the

federal

funds

target

rate

at

a

record-low

range

of

0.00%–0.25%.

The

Fed

also

continued

quantitative

easing

measures

aimed

at

ensuring

credit

flows

to

borrowers

and

supporting

credit

markets

with

open-ended

bond

purchasing.

Furthermore,

the

Fed

reiterated

that

interest

rates

would

potentially

remain

low,

even

if

inflation

moderately

exceeded

its

2%

target.

The

combination

of

stimulus

payments,

increasing

asset

prices

and

generally

rising

savings

during

lockdowns

led

to

the

strengthening

of

overall

household

balance

sheets.

The

higher

overall

household

wealth

and

pent-up

consumer

demand

led

to

stronger

consumer

spending

in

2021’s

first

quarter

that,

along

with

the

shortages

of

some

materials

and

supplies,

drove

many

investors’

inflation

expectations

to

increase

significantly

near

period-end.

The

foregoing

information

reflects

our

analysis

and

opinions

as

of

April

30,

2021.

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

Semiannual

Report

Franklin

Convertible

Securities

Fund

This

semiannual

report

for

Franklin

Convertible

Securities

Fund

covers

the

period

ended

April

30,

2021.

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

six

months

under

review,

the

Fund’s

Class

A

shares

posted

a

+21.34%

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

+25.42%

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

During

the

six

months

under

review,

the

Fund’s

absolute

returns

were

lifted

by

all

of

the

portfolio’s

sector

allocations,

with

the

bulk

of

the

overall

return

from

convertibles

issued

by

information

technology

(IT),

consumer

discretionary

and

communications

services

companies.

Three

other,

smaller

sector

exposures

produced

six-month

gains

of

roughly

50%

or

more,

including

financials,

materials

and

energy.

Our

limited

exposure

to

industrials

companies

also

posted

a

solid

gain

that

was

well

above

the

Fund’s

overall

return

for

the

reporting

period,

while

the

rest—health

care,

utilities,

consumer

staples

and

real

estate—tracked

below

that

level.

IT

companies

represented

about

39%

of

the

portfolio,

and

nearly

all

related

holdings

advanced

with

double-digit

percentage

gains,

including

top

contributors

HubSpot

(inbound

marketing

software-as-a-service

provider),

Microchip

Technology

(semiconductors,

integrated

circuits

and

semiconductor

equipment),

RealPage

(real

estate

and

property

management

software),

Square

(point-of-sale

digital

payment

processing

specialist

for

small

businesses)

and

Twilio

(a

comprehensive

cloud

communications

platform

provider

we

purchased

during

the

period).

In

particular,

cloud-based

marketing

services

software

provider

HubSpot

reported

its

largest

quarterly

rise

in

revenue

growth

in

nearly

three

years,

while

management’s

forward

guidance

projected

significant

growth

during

2021.

We

think

HubSpot

offers

a

formidable

competitive

moat

in

its

business

niche

within

a

sizable

market.

Property-management

technology

platform

Portfolio

Composition

4/30/21

%

of

Total

Net

Assets

Convertible

Bonds

78.5%

Convertible

Preferred

Stocks

20.5%

Other

0.3%

Short-Term

Investments

&

Other

Net

Assets

0.7%

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

25

.

Franklin

Convertible

Securities

Fund

5

franklintempleton.com

Semiannual

Report

company

RealPage

agreed

to

be

acquired

by

private

equity

firm

Thoma

Bravo

at

a

substantial

premium

to

its

equity

value.

Thoma

Bravo,

which

focuses

on

the

technology-

enabled

services

sector,

is

not

a

Fund

holding.

In

the

consumer

discretionary

sector,

all

of

our

related

holdings

advanced,

but

the

best

results

stemmed

from

several

e-commerce

companies

and

traditional

“brick

and

mortar”

retailers

that

successfully

moved

more

of

their

operations

online

during

the

COVID-19

pandemic.

Top

contributor

RH,

the

holding

company

for

Restoration

Hardware,

offers

furniture,

lighting

and

a

wide

range

of

other

home

goods,

and

was

a

prime

example

of

the

latter

as

the

Fund

saw

the

value

of

its

investments

(in

three

separate

convertible

bonds)

nearly

double

over

the

reporting

period

amid

a

significant

spike

in

its

e-commerce

sales.

In

March

2020,

RH

reported

better-than-expected

fiscal

fourth-quarter

results

both

on

revenue

and

profitability,

backed

largely

by

strong

demand

trends,

particularly

in

the

luxury

home

furnishing

market.

For

its

current

fiscal

year,

RH

expects

topline

growth

to

be

well

above

consensus,

with

at

least

half

of

the

contribution

expected

to

come

from

gross

margin

expansion.

Our

position

in

key

contributor

Pinduoduo

also

saw

a

solid

gain.

Pinduoduo,

which

is

China’s

first

social

e-commerce

platform,

has

been

growing

its

revenue

at

an

impressive

pace

as

China’s

consumers

embrace

its

user-

friendly

interface

and

bulk-purchase

model,

which

allows

customers

to

form

groups

to

buy

products

at

a

discount.

As

the

second-largest

e-commerce

company

in

China,

Pinduoduo

appears

well-positioned

to

benefit

from

the

country’s

overall

economic

expansion

and

higher

penetration

for

online

shopping.

Although

camera-based

social

media

platform

Snap

was

the

top

contributor

in

the

communication

services

sector

due

to

the

fact

that

it

was

our

single-largest

position

in

the

group,

none

had

a

higher

absolute

return

than

second-best

contributor

Sea.

Snap

delivered

solid

quarterly

financial

metrics

on

several

key

fronts,

including

increased

demand

from

both

new

and

existing

advertisers;

sharply

increased

average

prices

per

ad

impression;

a

significant

increase

in

active

daily

users;

higher

user

retention;

higher

average

time

spent

on

its

core

Snapchat

app;

and

stronger

adoption

of

its

camera

products—all

of

which

enabled

the

company

to

beat

analysts’

revenue

and

earnings

estimates

by

a

wide

margin.

Singapore-based

mobile

platform

Sea,

which

has

an

unusual

business

model

that

has

catalyzed

a

tremendous

spike

in

demand

across

the

three

highly

popular

segments

in

which

it

operates:

digital

gaming/entertainment,

e-commerce

and

digital

financial

services.

Sea’s

equity

value

increased

significantly

from

its

pandemic

lows

through

year-end

2020

and

continued

to

rise

through

April

2021

as

its

gaming

division

(Garena)

has

emerged

as

the

dominant

player

in

Southeast

Asia

and

Taiwan,

while

its

online

shopping

platform

(Shopee)

is

now

the

e-commerce

leader

in

that

region,

having

surpassed

industry

giant

Alibaba

(not

a

Fund

holding)

along

the

way.

Sea

also

saw

its

financial

technology

push

gain

traction,

with

growing

total

payment

volumes

and

numbers

of

consumers

using

Sea’s

mobile

wallet

services.

Sea

also

secured

a

digital

banking

license

in

Singapore,

paving

the

way

for

it

to

become

a

leading

regional

financial

services

player.

Elsewhere

in

the

portfolio,

we

saw

a

rally

for

our

position

in

Lyft,

particularly

in

late

2020.

Although

Lyft

is

often

discussed

as

a

technology

company

due

to

its

popular

ride-hailing

mobile

app

and

its

heavy

investments

in

autonomous

driving

technology,

it

is

officially

listed

as

an

industrials

sector

company,

and

it

was

by

far

our

top

performer

within

the

group.

Although

the

pandemic

continued

to

hurt

Lyft’s

core

platform

business—revenues

were

down

substantially

year

over

year

in

2020’s

third

quarter—it

saw

a

gradual

recovery

in

ride

demand

from

the

pandemic

lows

and

its

equity

value

surged

following

the

November

2020

passage

of

California

Proposition

22,

which

prevented

meaningful

cost

increases

by

keeping

its

“gig

economy”

drivers

designated

as

independent

contractors

(as

opposed

to

treating

them

like

employees

with

full

benefits).

The

company

also

continued

to

cut

costs

into

2021,

when

it

saw

a

more

pronounced

uptick

in

ridership

amid

economic

reopening

and

less

restrictive

Top

10

Holdings

4/30/21

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

RH

2.4%

Specialty

Retail,

United

States

Snap,

Inc.

2.3%

Interactive

Media

&

Services,

United

States

HubSpot

,

Inc.

2.3%

Software,

United

States

Zendesk

,

Inc.

2.3%

Software,

United

States

Okta

,

Inc.

2.2%

IT

Services,

United

States

Danaher

Corp.

2.1%

Health

Care

Equipment

&

Supplies,

United

States

AXA

SA

2.0%

Insurance,

France

Etsy,

Inc.

2.0%

Internet

&

Direct

Marketing

Retail,

United

States

Broadcom,

Inc.

2.0%

Semiconductors

&

Semiconductor

Equipment,

United

States

KKR

&

Co.,

Inc.

1.9%

Capital

Markets,

United

States

Franklin

Convertible

Securities

Fund

6

franklintempleton.com

Semiannual

Report

social

distancing

measures.

Lyft

also

managed

to

improve

its

average

revenue

per

rider,

a

key

metric

for

the

company’s

operations.

Given

the

strength

and

breadth

of

the

Fund’s

semiannual

performance,

there

were

only

a

few

detractors

of

consequence

scattered

across

the

portfolio,

and

their

combined

impact

on

absolute

returns

was

mild.

In

the

IT

sector,

overall

gains

were

slightly

reduced

by

losses

for

Splunk

and

Alteryx,

both

of

which

operate

in

the

increasingly

competitive

data

sciences

and

analytics

software

niche.

In

December

2020,

Splunk

announced

that

its

fiscal

2021

third

quarter

(the

three

months

ended

October

31,

2020)

fell

shy

of

expectations

given

that

year-over-year

revenue

fell

well

below

recent

management

guidance.

Splunk’s

chief

executive

officer

said

some

large

customers

were

hesitating

to

commit

to

long-term

contracts

due

to

ongoing

uncertainty

in

the

economy,

while

others

were

experiencing

complications

related

to

the

company’s

rapid

migration

to

modern

cloud-based

software.

We

remained

positive

on

the

company’s

longer-term

prospects

even

though

it

expected

recent

challenges

with

some

of

its

customer

renewals

to

persist.

In

the

communication

services

sector,

our

convertible

investment

in

China-based

online

video

platform

iQIYI

posted

a

modest

decline

as

it

tracked

the

company’s

equity

value

to

near

a

three-year

low.

iQIYI,

one

of

the

biggest

streaming-media

sites

in

the

world

(based

on

the

number

of

active

users

and

hours

spent

on

its

service

each

month),

saw

a

loss

in

subscribers

versus

key

competitor

Tencent

(not

a

Fund

holding).

In

addition

to

the

reversal

in

its

growth,

iQIYI

has

shown

a

lack

of

profits

(though

it

continued

to

narrow

its

net

losses

on

a

quarter-over-quarter

basis)

and

rising

leverage,

and

the

company

has

also

been

impacted

by

a

wave

of

large

“block”

sales

by

several

institutional

investors.

China’s

technology

and

digital

entertainment

companies

have

been

squeezed

by

regulators

in

both

China

and

the

U.S.

recently;

companies

such

as

iQIYI

face

the

potential

for

being

delisted

from

U.S.

exchanges.

Executives

say

they

have

a

plan

for

boosting

profitability,

including

iQIYI’s

latest

moves

into

new

content

offerings

like

original

movies,

which

may

help

it

return

to

subscriber

growth

in

the

coming

months.

Elsewhere

in

the

portfolio,

the

only

other

notable

detractors

were

three

health

care

companies

that

failed

to

advance

for

the

semiannual

period:

Haemonetics

(purchased

during

the

period),

a

global

provider

of

blood

and

plasma

supplies

and

services;

PTC

Therapeutics,

a

pharmaceutical

company

focused

on

small

molecule

drugs

and

gene

therapies

to

control

certain

rare

diseases;

and

Neurocrine

Biosciences,

a

biopharmaceutical

company

that

develops

treatments

for

neurological

and

endocrine-related

diseases

and

disorders.

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

April

30,

2021,

the

end

of

the

reporting

period.

The

way

we

implement

our

main

investment

strategies

and

the

resulting

portfolio

holdings

may

change

depending

on

factors

such

as

market

and

economic

conditions.

These

opinions

may

not

be

relied

upon

as

investment

advice

or

an

offer

for

a

particular

security.

The

information

is

not

a

complete

analysis

of

every

aspect

of

any

market,

country,

industry,

security

or

the

Fund.

Statements

of

fact

are

from

sources

considered

reliable,

but

the

investment

manager

makes

no

representation

or

warranty

as

to

their

completeness

or

accuracy.

Although

historical

performance

is

no

guarantee

of

future

results,

these

insights

may

help

you

understand

our

investment

management

philosophy.

CFA

®

is

a

trademark

owned

by

CFA

Institute.

Performance

Summary

as

of

April

30,

2021

Franklin

Convertible

Securities

Fund

7

franklintempleton.com

Semiannual

Report

The

performance

tables

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

4/30/21

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

1

Average

Annual

Total

Return

2

–

A

3

6-Month

+21.34%

+14.66%

1-Year

+57.04%

+48.37%

5-Year

+149.91%

+18.75%

10-Year

+221.48%

+11.75%

Advisor

6-Month

+21.53%

+21.53%

1-Year

+57.47%

+57.47%

5-Year

+153.17%

+20.42%

10-Year

+229.70%

+12.67%

Share

Class

Distribution

Rate

4

30-Day

Standardized

Yield

5

A

0.92%

0.37%

Advisor

1.20%

0.64%

See

page

8

for

Performance

Summary

footnotes.

Franklin

Convertible

Securities

Fund

Performance

Summary

8

franklintempleton.com

Semiannual

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.

Events

such

as

the

spread

of

deadly

diseases,

disasters,

and

financial,

political

or

social

disruptions,

may

heighten

risks

and

adversely

affect

performance.

The

Fund’s

prospectus

also

includes

a

description

of

the

main

investment

risks.

1.

Cumulative

total

return

represents

the

change

in

value

of

an

investment

over

the

periods

indicated.

2.

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.

3.

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%.

4.

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

4/30/21.

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.

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

(11/1/20–4/30/21)

Share

Class

Net

Investment

Income

Short-Term

Capital

Gain

Long-Term

Capital

Gain

Total

A

$0.1672

$0.3098

$2.6152

$3.0922

C

$0.0601

$0.3098

$2.6152

$2.9851

R6

$0.2148

$0.3098

$2.6152

$3.1398

Advisor

$0.2039

$0.3098

$2.6152

$3.1289

Total

Annual

Operating

Expenses

6

Share

Class

A

0.84%

Advisor

0.59%

Your

Fund’s

Expenses

Franklin

Convertible

Securities

Fund

9

franklintempleton.com

Semiannual

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

181/365

to

reflect

the

one-half

year

period.

2.

Reflects

expenses

after

fee

waivers

and

expense

reimbursements.

Does

not

include

acquired

fund

fees

and

expenses.

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Share

Class

Beginning

Account

Value

11/1/20

Ending

Account

Value

4/30/21

Expenses

Paid

During

Period

11/1/20–4/30/21

1,

2

Ending

Account

Value

4/30/21

Expenses

Paid

During

Period

11/1/20–4/30/21

1,

2

a

Net

Annualized

Expense

Ratio

2

A

$1,000

$1,213.45

$4.46

$1,020.76

$4.07

0.82%

C

$1,000

$1,209.23

$8.55

$1,017.05

$7.81

1.56%

R6

$1,000

$1,215.84

$2.74

$1,022.32

$2.50

0.50%

Advisor

$1,000

$1,215.33

$3.09

$1,022.00

$2.82

0.57%

10

franklintempleton.com

Semiannual

Report

Franklin

Equity

Income

Fund

This

semiannual

report

for

Franklin

Equity

Income

Fund

covers

the

period

ended

April

30,

2021.

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.

Performance

Overview

For

the

six

months

under

review,

the

Fund’s

Class

A

shares

posted

a

+27.13%

cumulative

total

return.

In

comparison,

the

Fund’s

primary

benchmark,

the

Russell

1000

®

Value

Index,

which

measures

performance

of

those

Russell

1000

®

Index

companies

with

relatively

lower

price-to-book

ratios

and

lower

forecasted

growth

values,

posted

a

+36.30%

total

return.

1

The

Fund’s

secondary

benchmark,

the

Standard

&

Poor’s

500

Index,

which

tracks

the

broad

U.S.

stock

market,

posted

a

+28.85%

total

return.

1

You

can

find

the

Fund’s

long-term

performance

data

in

the

Performance

Summary

beginning

on

page

12

.

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

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

Fund’s

semiannual

performance

benefited

from

the

financials

sector,

which

was

the

portfolio’s

largest

weighting

over

the

period.

Four

of

the

Fund’s

top

five

contributors

were

financials

holdings

and

included

JPMorgan

Chase,

Morgan

Stanley,

Bank

of

America

and

Citigroup.

The

improved

economic

outlook

has

been

a

boost

for

economically

sensitive

sectors

including

financials.

Portfolio

Composition

4/30/21

%

of

Total

Net

Assets

Banks

12.2%

Capital

Markets

7.7%

Electric

Utilities

6.5%

Health

Care

Equipment

&

Supplies

5.8%

Pharmaceuticals

5.1%

Oil,

Gas

&

Consumable

Fuels

4.8%

Chemicals

4.5%

Semiconductors

&

Semiconductor

Equipment

4.0%

Aerospace

&

Defense

3.9%

Beverages

3.8%

Machinery

3.4%

Multiline

Retail

3.4%

Specialty

Retail

3.2%

Health

Care

Providers

&

Services

3.1%

Other

27.5%

Short-Term

Investments

&

Other

Net

Assets

1.1%

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

30

.

Franklin

Equity

Income

Fund

11

franklintempleton.com

Semiannual

Report

The

industrials

sector

also

supported

Fund

performance

from

a

position

in

Raytheon

Technologies,

which

recently

merged

with

United

Technologies.

Raytheon

is

the

engine

supplier

for

Airbus

(not

a

Fund

holding)

airplanes

and

is

uniquely

positioned

to

benefit

from

the

airplane

manufacturer’s

dominant

market

position

following

Boeing’s

(not

a

Fund

holding)

issues

with

its

737

MAX

aircraft.

The

Fund

lacked

any

sector

detractors

and

its

only

noteworthy

holding

that

dampened

performance

was

Xcel

Energy

in

the

utilities

sector,

despite

the

company

not

reporting

any

news

that

served

as

a

catalyst

for

its

stock

price

decline.

Xcel

continues

to

transition

its

business

to

renewable

energy,

an

industry

that

may

get

a

boost

from

the

pro-environment

Biden

administration,

in

our

view.

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

April

30,

2021,

the

end

of

the

reporting

period.

The

way

we

implement

our

main

investment

strategies

and

the

resulting

portfolio

holdings

may

change

depending

on

factors

such

as

market

and

economic

conditions.

These

opinions

may

not

be

relied

upon

as

investment

advice

or

an

offer

for

a

particular

security.

The

information

is

not

a

complete

analysis

of

every

aspect

of

any

market,

country,

industry,

security

or

the

Fund.

Statements

of

fact

are

from

sources

considered

reliable,

but

the

investment

manager

makes

no

representation

or

warranty

as

to

their

completeness

or

accuracy.

Although

historical

performance

is

no

guarantee

of

future

results,

these

insights

may

help

you

understand

our

investment

management

philosophy.

Top

10

Holdings

4/30/21

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

JPMorgan

Chase

&

Co.

4.3%

Banks,

United

States

Bank

of

America

Corp.

4.2%

Banks,

United

States

Morgan

Stanley

3.4%

Capital

Markets,

United

States

Johnson

&

Johnson

2.9%

Pharmaceuticals,

United

States

Medtronic

plc

2.9%

Health

Care

Equipment

&

Supplies,

United

States

Raytheon

Technologies

Corp.

2.9%

Aerospace

&

Defense,

United

States

Duke

Energy

Corp.

2.8%

Electric

Utilities,

United

States

United

Parcel

Service,

Inc.

2.7%

Air

Freight

&

Logistics,

United

States

Target

Corp.

2.6%

Multiline

Retail,

United

States

Procter

&

Gamble

Co.

(The)

2.4%

Household

Products,

United

States

Performance

Summary

as

of

April

30,

2021

Franklin

Equity

Income

Fund

12

franklintempleton.com

Semiannual

Report

The

performance

tables

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

4/30/21

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

6-Month

+27.13%

+20.13%

1-Year

+37.26%

+29.72%

5-Year

+78.18%

+10.99%

10-Year

+169.53%

+9.80%

Advisor

6-Month

+27.28%

+27.28%

1-Year

+37.58%

+37.58%

5-Year

+80.39%

+12.52%

10-Year

+176.49%

+10.71%

30-Day

Standardized

Yield

6

Share

Class

Distribution

Rate

5

(with

fee

waiver)

(without

fee

waiver)

A

1.96%

1.21%

1.21%

Advisor

2.30%

1.53%

1.53%

See

page

13

for

Performance

Summary

footnotes.

Franklin

Equity

Income

Fund

Performance

Summary

13

franklintempleton.com

Semiannual

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.

Investments

in

ELNs

often

have

risks

similar

to

their

underlying

securities,

which

could

include

management

risk,

market

risk

and,

as

applicable,

foreign

securities

and

currency

risks.

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.

The

Fund’s

investment

in

foreign

securities

also

involves

special

risks,

including

currency

fluctuations

and

economic

as

well

as

political

uncertainty.

Events

such

as

the

spread

of

deadly

diseases,

disasters,

and

financial,

political

or

social

disruptions,

may

heighten

risks

and

adversely

affect

performance.

The

Fund’s

prospectus

also

includes

a

description

of

the

main

investment

risks.

1.

The

Fund

has

a

fee

waiver

associated

with

any

investment

it

makes

in

a

Franklin

Templeton

money

fund

and/or

other

Franklin

Templeton

fund,

contractually

guaranteed

through

2/28/22.

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.

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

4/30/21.

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.

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

(11/1/20–4/30/21)

Share

Class

Net

Investment

Income

Long-Term

Capital

Gain

Total

A

$0.3067

$0.2184

$0.5251

C

$0.2064

$0.2184

$0.4248

R

$0.2763

$0.2184

$0.4947

R6

$0.3500

$0.2184

$0.5684

Advisor

$0.3402

$0.2184

$0.5586

Total

Annual

Operating

Expenses

7

Share

Class

With

Fee

Waiver

Without

Fee

Waiver

A

0.85%

0.86%

Advisor

0.60%

0.61%

Your

Fund’s

Expenses

Franklin

Equity

Income

Fund

14

franklintempleton.com

Semiannual

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

181/365

to

reflect

the

one-half

year

period.

2.

Reflects

expenses

after

fee

waivers

and

expense

reimbursements.

Does

not

include

acquired

fund

fees

and

expenses.

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Share

Class

Beginning

Account

Value

11/1/20

Ending

Account

Value

4/30/21

Expenses

Paid

During

Period

11/1/20–4/30/21

1,2

Ending

Account

Value

4/30/21

Expenses

Paid

During

Period

11/1/20–4/30/21

1,2

a

Net

Annualized

Expense

Ratio

2

A

$1,000

$1,271.27

$4.75

$1,020.61

$4.23

0.84%

C

$1,000

$1,266.75

$8.95

$1,016.90

$7.96

1.59%

R

$1,000

$1,269.67

$6.07

$1,019.44

$5.40

1.08%

R6

$1,000

$1,273.09

$2.89

$1,022.25

$2.57

0.51%

Advisor

$1,000

$1,272.76

$3.35

$1,021.85

$2.98

0.60%

15

franklintempleton.com

Semiannual

Report

Franklin

Managed

Income

Fund

This

semiannual

report

for

Franklin

Managed

Income

Fund

covers

the

period

ended

April

30,

2021.

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

six

months

under

review,

the

Fund’s

Class

A

shares

posted

a

cumulative

total

return

of

+17.93%.

In

comparison,

the

Fund’s

primary

benchmark,

the

Standard

&

Poor’s

500

Index,

which

is

a

broad

measure

of

U.S.

stock

performance,

posted

a

+28.85%

total

return.

1

The

Fund’s

secondary

benchmark,

the

Bloomberg

Barclays

U.S.

Aggregate

Bond

Index,

which

tracks

the

U.S.

investment-grade,

taxable

bond

market,

posted

a

-1.52%

total

return.

1

The

Fund’s

third

benchmark,

the

blended

50%

MSCI

USA

High

Dividend

Yield

Index,

25%

ICE

BofA

U.S.

Corporate

&

High

Yield

Index

and

25%

Bloomberg

Barclays

U.S.

Aggregate

Index

(Blended

Benchmark),

which

is

a

combination

of

leading

stock

and

bond

indexes,

posted

a

+11.47%

total

return.

2

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

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.

You

can

find

the

Fund’s

long-term

performance

data

in

the

Performance

Summary

beginning

on

page

18

.

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.

The

Fund

also

invests

in

equity-linked

notes,

which

are

hybrid

derivative-type

instruments

designed

to

combine

the

characteristics

of

one

or

more

securities

(usually

a

single

stock,

a

stock

index

or

a

basket

of

stocks)

and

a

related

equity

derivative.

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.

Portfolio

Composition

4/30/21

%

of

Total

Net

Assets

Common

Stocks

41.9%

Corporate

Bonds

22.9%

Equity-Linked

Securities

17.1%

Convertible

Preferred

Stocks

10.8%

Management

Investment

Companies

2.6%

U.S.

Government

and

Agency

Securities

1.9%

Other

1.4%

Short-Term

Investments

&

Other

Net

Assets

1.4%

1.

Source:

Morningstar.

2.

Source:

FactSet.

The

Blended

Benchmark

was

calculated

internally.

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

45

.

Franklin

Managed

Income

Fund

16

franklintempleton.com

Semiannual

Report

These

purposes

include

enhancing

Fund

returns,

increasing

liquidity,

gaining

exposure

to

securities

or

markets

in

more

efficient

or

less

expensive

ways

and/or

hedging

risks.

Manager’s

Discussion

During

the

six-month

period,

the

Fund

exhibited

strong

performance

across

equity

and

fixed

income

sectors.

Increased

Fund

exposure

to

the

equity

markets

helped

drive

strong

returns

while

lower

exposure

to

interest-rate

sensitive

fixed

income

securities

led

to

strong

Fund

performance

relative

to

its

blended

benchmark.

Dividend

stocks,

particularly

those

in

value-oriented

sectors,

outperformed

during

the

period

under

review,

and

the

equity

component

of

the

Fund’s

blended

benchmark

increased,

with

the

MSCI

USA

High

Dividend

Yield

Index

posting

a

+24.15%

return

for

the

six-month

period.

1

The

Fund’s

equity

positions

exceeded

these

returns

during

the

period.

Corporate

credit

spreads

continued

to

narrow

as

economic

reopening

and

the

lingering

positive

effects

of

the

record

fiscal

and

monetary

accommodation

continued

to

support

markets.

Offsetting

narrowing

credit

spreads

were

rising

interest

rates,

which

weighed

on

the

more

duration-sensitive

portions

of

the

Fund’s

benchmark.

Fixed

income

returns

for

the

Fund

during

the

period

also

exceeded

the

Fund’s

blended

fixed

income

benchmark

(Bloomberg

Barclays

U.S.

Aggregate

Bond

Index

and

ICE

BofAML

U.S.

Corporate

&

High

Yield

Index).

The

Fund

entered

the

period

with

roughly

a

two-to-one

ratio

of

equities

to

fixed

income

and

a

modest

cash

position

after

making

a

meaningful

asset-mix

shift

earlier

in

2020,

which

resulted

in

a

reduction

in

the

fixed

income

weighting

and

an

increase

in

equity

weighting.

This

shift

continued

over

the

period

under

review,

with

the

equity

weighting

ending

the

period

at

close

to

three

quarters

of

the

Fund’s

assets,

and

fixed

income

exposure

down

to

around

one

quarter

of

assets

(while

further

decreasing

cash

equivalents).

Fixed

income

holdings

posted

positive

returns

during

the

period

with

outperformance

relative

to

the

Fund’s

blended

fixed

income

benchmark.

The

Fund’s

duration

positioning

at

the

front

end

of

the

yield

curve

in

the

face

of

rising

interest

rates

during

the

period

was

a

key

source

driving

the

outperformance

(U.S.

10-year

Treasury

yields

increased

from

0.88%

at

the

start

of

the

period

to

1.65%

at

period-

end).

As

an

asset

class,

fixed

income

underperformed

the

equity

asset

class,

which

benefited

the

Fund

given

our

underweighted

allocation

to

fixed

income

relative

to

the

Fund’s

blended

benchmark.

Energy

was

the

largest

absolute

sector

performer

in

the

period

under

review

along

with

strong

performance

from

the

health

care,

consumer

discretionary

and

information

technology

(IT)

sectors

relative

to

the

Fund’s

blended

benchmark.

Our

holdings

in

agency

mortgage-backed

securities

(MBS)

and

select

investment-grade

corporate

bonds

were

minor

absolute

detractors

during

the

period,

and

there

were

no

notable

detractors

at

the

sector

level

relative

to

the

Fund’s

blended

benchmark.

Rising

U.S.

Treasury

yields

during

the

period

were

a

headwind

to

higher-quality

exposures

within

the

investment-

grade

market

(both

Treasuries

and

corporates).

Corporate

credit

spreads

continued

to

narrow

during

the

period

under

review,

which

particularly

benefited

the

Fund’s

high-yield

exposures.

High-yield

corporate

bonds

are

generally

lower

in

duration

than

investment-grade

corporate

bonds.

Narrowing

credit

spreads

and

a

greater

than

0.75%

increase

in

10-year

Treasury

yields

certainly

favored

high-yield

performance

in

the

fixed

income

asset

class.

Within

health

care,

the

largest

contributor

to

performance

was

high-yield

rated

hospital

company

CHS/Community

Health

Systems.

The

company

moved

past

COVID-19

induced

disruptions,

in

our

view,

and

was

able

to

access

both

the

debt

and

equity

markets

during

the

period

to

reduce

interest

expense

and

improve

the

health

of

its

balance

sheet,

which

led

to

strong

performance.

Community

represented

the

largest

fixed

income

issuer

in

the

Fund

during

the

period.

Regarding

other

health

care

companies,

high-yield

hospital

peer

Tenet

Healthcare,

pharmaceutical

company

Bausch

Health

and

managed

care

company

Centene

also

benefited

Fund

performance.

The

other

large

sector

contributor

to

fixed

income

performance

during

the

period

came

from

debt

securities

in

the

energy

sector.

Strong

commodity

price

performance,

increased

demand

outlooks

as

the

market

looked

past

the

lockdown

environments,

as

well

as

company-specific

drivers,

led

to

strong

performance

in

Calumet

Specialty

Products

Partners

and

Occidental

Petroleum.

Within

the

consumer

Top

Five

Equity

Holdings

4/30/21

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

JPMorgan

Chase

&

Co.

2.5%

Banks

,

United

States

BNP

Paribas

Issuance

BV

into

Texas

Instruments,

Inc.

2.4%

Semiconductors

&

Semiconductor

Equipment

,

United

States

Bank

of

America

Corp.

2.1%

Banks

,

United

States

Dominion

Energy,

Inc.

2.1%

Multi-Utilities

,

United

States

Procter

&

Gamble

Co.

(The)

2.0%

Household

Products

,

United

States

Franklin

Managed

Income

Fund

17

franklintempleton.com

Semiannual

Report

discretionary

sector,

the

strength

of

the

consumer

and

the

outlook

for

an

economic

reopening

led

to

strong

performance

from

bonds

of

Ford

Motor

Credit,

United

Airlines,

Wynn

Las

Vegas

and

Las

Vegas

Sands.

Agency

MBS

holdings

were

small

absolute

detractors

during

the

period

as

described

above.

Other

detractors

during

the

period

were

mostly

bonds

of

investment-grade

companies

with

intermediate

maturity/duration

profiles.

Some

of

these

included

bonds

of

consumer

staples

companies

Walmart,

Anheuser-Busch

and

Clorox

(not

held

at

period-end).

Another

minor

detractor

was

Vistra

Energy,

which

was

negatively

impacted

by

heavy

winter

storm

weather

in

Texas

during

the

period.

Equity

holdings

increased

over

the

reporting

period.

As

an

asset

class,

equities

outperformed

fixed

income

during

the

period.

We

used

considerable

equity

market

weakness

earlier

in

2020

to

shift

assets

out

of

fixed

income

and

into

equities.

Dividend-paying

companies,

which

had

lagged

leading

up

to

the

period

under

review,

were

strong

performers

during

the

period.

We

continued

to

selectively

add

to

positions

across

the

equity

markets

during

the

period,

including

common

stocks,

convertible

securities

and

equity

linked

notes.

All

equity

sectors

were

positive

absolute

contributors

to

Fund

performance

during

the

period.

Financials

and

energy

holdings

were

large

positive

absolute

contributors

(also

large

contributors

relative

to

the

Fund’s

equity

benchmark),

and

the

Fund’s

industrials,

materials,

IT

and

consumer

discretionary

holdings

provided

notable

positive

contributions

as

well.

All

the

Fund’s

equity

positions

in

the

financials

sector

were

positive

contributors

during

the

period

amid

rising

interest

rates.

Holdings

in

Bank

of

America,

JPMorgan

Chase

and

Morgan

Stanley

led

returns.

Other

notable

contributors

included

Truist

Financial,

U.S.

Bancorp

and

Citigroup.

Energy

peers

Chevron

and

Exxon

were

notable

positive

contributors

during

the

period,

as

a

much

better

supply

and

demand

forecast

for

the

industry

led

to

strong

performance

from

depressed

valuations.

Top

performers

in

the

Fund

outside

of

financials

and

energy

were

Raytheon

Technology

and

Honeywell

International

within

the

industrials

sector

as

well

as

IT

company

Cisco

Systems.

Despite

positive

absolute

contributions,

equity

holdings

in

the

consumer

staples

and

health

care

sectors

were

modest

detractors

during

the

period

relative

to

the

Fund’s

equity

benchmark.

At

the

individual

security

level,

we

had

minor

negative

performance

from

consumer

staples

giant

Procter

&

Gamble

and

electric

utility

company

American

Electric

Power.

There

were

no

other

notable

individual

detractors

from

absolute

performance.

During

the

period,

the

Fund

used

derivatives

such

as

equity

call

and

put

options

to

sell

and

reduce

positions

and/or

to

initiate

and

add

to

positions

which

generated

gains

during

the

period

under

review.

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

April

30,

2021,

the

end

of

the

reporting

period.

The

way

we

implement

our

main

investment

strategies

and

the

resulting

portfolio

holdings

may

change

depending

on

factors

such

as

market

and

economic

conditions.

These

opinions

may

not

be

relied

upon

as

investment

advice

or

an

offer

for

a

particular

security.

The

information

is

not

a

complete

analysis

of

every

aspect

of

any

market,

country,

industry,

security

or

the

Fund.

Statements

of

fact

are

from

sources

considered

reliable,

but

the

investment

manager

makes

no

representation

or

warranty

as

to

their

completeness

or

accuracy.

Although

historical

performance

is

no

guarantee

of

future

results,

these

insights

may

help

you

understand

our

investment

management

philosophy.

Top

Five

Fixed

Income

Holdings

4/30/21

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

CHS/Community

Health

Systems

Inc

2.0%

Health

Care

Providers

&

Services

,

United

States

United

States

of

America

1.9%

Diversified

Financial

Services

,

United

States

Centene

Corp

0.9%

Health

Care

Providers

&

Services

,

United

States

CVS

Health

Corp

0.8%

Health

Care

Providers

&

Services

,

United

States

Government

National

Mortgage

Association

0.8%

Diversified

Financial

Services

,

United

States

Performance

Summary

as

of

April

30,

2021

Franklin

Managed

Income

Fund

18

franklintempleton.com

Semiannual

Report

The

performance

tables

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

4/30/21

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

6-Month

+17.93%

+11.47%

1-Year

+23.03%

+16.24%

5-Year

+52.47%

+7.58%

10-Year

+106.27%

+6.91%

Advisor

6-Month

+18.12%

+18.12%

1-Year

+23.38%

+23.38%

5-Year

+54.47%

+9.09%

10-Year

+111.96%

+7.80%

30-Day

Standardized

Yield

6

Share

Class

Distribution

Rate

5

(with

fee

waiver)

(without

fee

waiver)

A

3.33%

1.46%

1.46%

Advisor

3.75%

1.80%

1.80%

See

page

19

for

Performance

Summary

footnotes.

Franklin

Managed

Income

Fund

Performance

Summary

19

franklintempleton.com

Semiannual

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.

Events

such

as

the

spread

of

deadly

diseases,

disasters,

and

financial,

political

or

social

disruptions,

may

heighten

risks

and

adversely

affect

perfor-

mance.

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

2/28/22.

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

April

dividend

and

the

maximum

offering

price

(NAV

for

Advisor

Class)

per

share

on

4/30/21.

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.

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.

Net

Asset

Value

Share

Class

(Symbol)

4/30/21

10/31/20

Change

A

(FBLAX)

$13.49

$11.73

+$1.76

C

(FBMCX)

$13.35

$11.61

+$1.74

R

(FBFQX)

$13.54

$11.76

+$1.78

R6

(FBFRX)

$13.54

$11.76

+$1.78

Advisor

(FBFZX)

$13.53

$11.76

+$1.77

Distributions

(11/1/20–4/30/21)

Share

Class

Net

Investment

Income

Long-Term

Capital

Gain

Total

A

$0.2370

$0.0860

$0.3230

C

$0.1874

$0.0860

$0.2734

R

$0.2216

$0.0860

$0.3076

R6

$0.2586

$0.0860

$0.3446

Advisor

$0.2534

$0.0860

$0.3394

Total

Annual

Operating

Expenses

7

Share

Class

With

Fee

Waiver

Without

Fee

Waiver

A

0.93%

0.94%

Advisor

0.68%

0.69%

Your

Fund’s

Expenses

Franklin

Managed

Income

Fund

20

franklintempleton.com

Semiannual

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

181/365

to

reflect

the

one-half

year

period.

2.

Reflects

expenses

after

fee

waivers

and

expense

reimbursements.

Does

not

include

acquired

fund

fees

and

expenses.

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Share

Class

Beginning

Account

Value

11/1/20

Ending

Account

Value

4/30/21

Expenses

Paid

During

Period

11/1/20–4/30/2

1,

2

Ending

Account

Value

4/30/21

Expenses

Paid

During

Period

11/1/20–4/30/21

1,

2

a

Net

Annualized

Expense

Ratio

2

A

$1,000

$1,179.30

$4.90

$1,020.30

$4.54

0.91%

C

$1,000

$1,174.88

$8.91

$1,016.60

$8.26

1.66%

R

$1,000

$1,179.16

$6.24

$1,019.07

$5.78

1.16%

R6

$1,000

$1,182.52

$3.17

$1,021.89

$2.94

0.59%

Advisor

$1,000

$1,181.20

$3.55

$1,021.54

$3.29

0.67%

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Convertible

Securities

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

21

Ratio

a

Six

Months

Ended

April

30,

2021

(unaudited)

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

A

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$27.11

$22.13

$20.65

$20.68

$18.24

$18.00

Income

from

investment

operations

a

:

Net

investment

income

b

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

0.10

0.22

0.21

0.16

0.27

0.25

Net

realized

and

unrealized

gains

(losses)

5.49

6.67

2.47

1.35

2.98

0.85

Total

from

investment

operations

........

5.59

6.89

2.68

1.51

3.25

1.10

Less

distributions

from:

Net

investment

income

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

(0.17)

(0.30)

(0.45)

(0.49)

(0.47)

(0.50)

Net

realized

gains

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

(2.93)

(1.61)

(0.75)

(1.05)

(0.34)

(0.36)

Total

distributions

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

(3.10)

(1.91)

(1.20)

(1.54)

(0.81)

(0.86)

Net

asset

value,

end

of

period

..........

$29.60

$27.11

$22.13

$20.65

$20.68

$18.24

Total

return

c

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

21.34%

33.49%

13.84%

7.65%

18.39%

6.41%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

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

0.82%

0.83%

0.85%

0.86%

0.85%

0.86%

Expenses

net

of

waiver

and

payments

by

affiliates

e

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

0.82%

f

0.83%

f

0.83%

0.84%

0.84%

0.85%

Net

investment

income

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

0.72%

0.96%

0.97%

0.76%

1.39%

1.44%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$1,581,098

$1,385,821

$1,169,928

$1,153,875

$815,491

$768,553

Portfolio

turnover

rate

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

24.50%

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

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,

and

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

f

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

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

22

a

Six

Months

Ended

April

30,

2021

(unaudited)

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

C

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$26.66

$21.77

$20.31

$20.37

$17.98

$17.75

Income

from

investment

operations

a

:

Net

investment

income

(loss)

b

........

(—)

c

0.05

0.04

(—)

c

0.12

0.12

Net

realized

and

unrealized

gains

(losses)

5.39

6.56

2.45

1.33

2.93

0.84

Total

from

investment

operations

........

5.39

6.61

2.49

1.33

3.05

0.96

Less

distributions

from:

Net

investment

income

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

(0.06)

(0.11)

(0.28)

(0.34)

(0.32)

(0.37)

Net

realized

gains

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

(2.93)

(1.61)

(0.75)

(1.05)

(0.34)

(0.36)

Total

distributions

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

(2.99)

(1.72)

(1.03)

(1.39)

(0.66)

(0.73)

Net

asset

value,

end

of

period

..........

$29.06

$26.66

$21.77

$20.31

$20.37

$17.98

Total

return

d

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

20.92%

32.48%

13.03%

6.84%

17.49%

5.65%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

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

1.56%

1.59%

1.60%

1.61%

1.60%

1.61%

Expenses

net

of

waiver

and

payments

by

affiliates

f

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

1.56%

g

1.58%

1.58%

1.59%

1.59%

1.60%

Net

investment

income

(loss)

..........

(0.03)%

0.21%

0.22%

0.01%

0.64%

0.69%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$243,666

$233,295

$256,075

$299,716

$303,243

$293,038

Portfolio

turnover

rate

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

24.50%

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

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

Amount

rounds

to

less

than

$0.01

per

share.

d

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable,

and

is

not

annualized

for

periods

less

than

one

year.

e

Ratios

are

annualized

for

periods

less

than

one

year.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

g

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.

Semiannual

Report

23

a

Six

Months

Ended

April

30,

2021

(unaudited)

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

R6

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$27.29

$22.28

$20.78

$20.79

$18.33

$18.09

Income

from

investment

operations

a

:

Net

investment

income

b

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

0.15

0.31

0.28

0.24

0.34

0.33

Net

realized

and

unrealized

gains

(losses)

5.53

6.69

2.50

1.36

3.00

0.84

Total

from

investment

operations

........

5.68

7.00

2.78

1.60

3.34

1.17

Less

distributions

from:

Net

investment

income

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

(0.21)

(0.38)

(0.53)

(0.56)

(0.54)

(0.57)

Net

realized

gains

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

(2.93)

(1.61)

(0.75)

(1.05)

(0.34)

(0.36)

Total

distributions

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

(3.14)

(1.99)

(1.28)

(1.61)

(0.88)

(0.93)

Net

asset

value,

end

of

period

..........

$29.83

$27.29

$22.28

$20.78

$20.79

$18.33

Total

return

c

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

21.58%

33.89%

14.26%

8.07%

18.84%

6.78%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

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

0.52%

0.55%

0.54%

0.55%

0.49%

0.50%

Expenses

net

of

waiver

and

payments

by

affiliates

e

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

0.50%

0.50%

0.49%

0.49%

0.48%

0.49%

Net

investment

income

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

1.03%

1.30%

1.31%

1.11%

1.75%

1.80%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$128,424

$113,642

$51,791

$57,824

$22,950

$7,154

Portfolio

turnover

rate

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

24.50%

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

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

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Convertible

Securities

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

24

a

Six

Months

Ended

April

30,

2021

(unaudited)

Year

Ended

October

31,

2020

2019

2018

2017

2016

Advisor

Class

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$27.11

$22.14

$20.65

$20.68

$18.24

$18.00

Income

from

investment

operations

a

:

Net

investment

income

b

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

0.14

0.28

0.26

0.21

0.32

0.30

Net

realized

and

unrealized

gains

(losses)

5.49

6.66

2.49

1.35

2.98

0.85

Total

from

investment

operations

........

5.63

6.94

2.75

1.56

3.30

1.15

Less

distributions

from:

Net

investment

income

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

(0.20)

(0.36)

(0.51)

(0.54)

(0.52)

(0.55)

Net

realized

gains

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

(2.93)

(1.61)

(0.75)

(1.05)

(0.34)

(0.36)

Total

distributions

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

(3.13)

(1.97)

(1.26)

(1.59)

(0.86)

(0.91)

Net

asset

value,

end

of

period

..........

$29.61

$27.11

$22.14

$20.65

$20.68

$18.24

Total

return

c

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

21.53%

33.80%

14.18%

7.91%

18.69%

6.68%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

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

0.57%

0.58%

0.60%

0.61%

0.60%

0.61%

Expenses

net

of

waiver

and

payments

by

affiliates

e

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

0.57%

f

0.58%

f

0.58%

0.59%

0.59%

0.60%

Net

investment

income

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

0.97%

1.20%

1.22%

1.01%

1.64%

1.69%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$3,281,608

$2,773,524

$2,379,435

$2,189,462

$1,542,254

$1,080,346

Portfolio

turnover

rate

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

24.50%

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

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

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

f

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited),

April

30,

2021

Franklin

Convertible

Securities

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

25

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

0.3%

Gas

Utilities

0.3%

South

Jersey

Industries,

Inc.

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

United

States

613,259

$

15,178,160

Total

Common

Stocks

(Cost

$18,974,979)

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

15,178,160

Convertible

Preferred

Stocks

20.5%

Auto

Components

1.7%

Aptiv

plc,

5.5%,

A

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

United

States

530,000

86,549,000

Capital

Markets

1.9%

KKR

&

Co.,

Inc.,

6%,

C

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

United

States

1,360,000

101,972,800

Chemicals

1.1%

International

Flavors

&

Fragrances,

Inc.,

6%

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

United

States

1,192,242

59,075,591

Electric

Utilities

3.5%

American

Electric

Power

Co.,

Inc.,

6.125%

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

United

States

440,000

22,083,600

American

Electric

Power

Co.,

Inc.,

6.125%

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

United

States

600,000

30,708,000

NextEra

Energy,

Inc.,

5.279%

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

United

States

1,100,000

55,407,000

PG&E

Corp.,

5.5%

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

United

States

430,000

47,467,700

Southern

Co.

(The),

6.75%,

2019

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

United

States

550,000

28,820,000

184,486,300

Food

Products

1.4%

Bunge

Ltd.,

4.875%

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

United

States

630,000

74,340,000

Health

Care

Equipment

&

Supplies

2.1%

Danaher

Corp.,

4.75%,

A

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

United

States

54,000

92,529,540

a

Danaher

Corp.,

5%,

B

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

United

States

14,045

19,884,209

112,413,749

Health

Care

Technology

0.4%

Change

Healthcare,

Inc.,

6%

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

United

States

300,000

22,962,000

Life

Sciences

Tools

&

Services

1.6%

Avantor

,

Inc.,

6.25%,

A

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

United

States

820,000

81,048,800

Machinery

0.7%

Fortive

Corp.,

5%,

A

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

United

States

34,350

34,126,725

Multi-Utilities

2.1%

DTE

Energy

Co.,

6.25%

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

United

States

800,000

40,592,000

b

NiSource,

Inc.,

7.75%

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

United

States

450,000

48,190,500

Sempra

Energy,

6.75%,

B

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

United

States

206,000

21,617,640

110,400,140

Semiconductors

&

Semiconductor

Equipment

2.0%

Broadcom,

Inc.,

8%,

A

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

United

States

71,100

103,055,895

Water

Utilities

0.9%

Essential

Utilities,

Inc.,

6%

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

United

States

770,000

45,514,700

Wireless

Telecommunication

Services

1.1%

b,c

2020

Cash

Mandatory

Exchangeable

Trust,

144A,

5.25%

.......

United

States

48,000

56,487,840

b

Total

Convertible

Preferred

Stocks

(Cost

$853,432,993)

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

1,072,433,540

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Convertible

Securities

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

26

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Convertible

Bonds

78.5%

Biotechnology

2.4%

Intercept

Pharmaceuticals,

Inc.

,

Senior

Note

,

2

%

,

5/15/26

.......

United

States

21,000,000

$

13,799,385

Neurocrine

Biosciences,

Inc.

,

Senior

Note

,

2.25

%

,

5/15/24

......

United

States

44,750,000

59,237,812

c

PTC

Therapeutics,

Inc.

,

Senior

Note

,

144A,

1.5

%

,

9/15/26

.......

United

States

48,000,000

51,878,400

124,915,597

Communications

Equipment

1.5%

Viavi

Solutions,

Inc.

,

Senior

Note,

1.75%,

6/01/23

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

United

States

40,969,000

52,721,982

Senior

Note,

1%,

3/01/24

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

United

States

20,000,000

26,937,500

79,659,482

Energy

Equipment

&

Services

0.5%

c

Oil

States

International,

Inc.

,

Senior

Note

,

144A,

4.75

%

,

4/01/26

..

United

States

28,000,000

25,606,360

Entertainment

3.4%

iQIYI

,

Inc.

,

Senior

Note,

3.75%,

12/01/23

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

China

40,000,000

39,671,809

Senior

Note,

2%,

4/01/25

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

China

26,000,000

24,050,000

c

Sea

Ltd.

,

Senior

Note

,

144A,

2.375

%

,

12/01/25

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

Taiwan

26,000,000

74,018,750

c

Zynga,

Inc.

,

Senior

Note

,

144A,

Zero

Cpn

.,

12/15/26

...........

United

States

37,000,000

40,191,250

177,931,809

Equity

Real

Estate

Investment

Trusts

(REITs)

0.6%

Pebblebrook

Hotel

Trust

,

Senior

Note

,

1.75

%

,

12/15/26

.........

United

States

26,000,000

29,822,000

Health

Care

Equipment

&

Supplies

3.9%

c

DexCom

,

Inc.

,

Senior

Note

,

144A,

0.25

%

,

11/15/25

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

United

States

79,000,000

79,395,000

c

Haemonetics

Corp.

,

Senior

Note

,

144A,

Zero

Cpn

.,

3/01/26

......

United

States

37,500,000

31,174,842

Insulet

Corp.

,

Senior

Note

,

0.375

%

,

9/01/26

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

United

States

65,000,000

93,478,125

204,047,967

Health

Care

Providers

&

Services

0.9%

c

Accolade,

Inc.

,

Senior

Note

,

144A,

0.5

%

,

4/01/26

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

United

States

19,000,000

23,199,267

c

Guardant

Health,

Inc.

,

Senior

Note

,

144A,

Zero

Cpn

.,

11/15/27

...

United

States

20,000,000

26,312,500

49,511,767

Hotels,

Restaurants

&

Leisure

2.4%

Booking

Holdings,

Inc.

,

Senior

Note,

0.9%,

9/15/21

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

United

States

37,500,000

45,750,000

c

Senior

Note,

144A,

0.75%,

5/01/25

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

United

States

19,000,000

28,823,000

c

Vail

Resorts,

Inc.

,

Senior

Note

,

144A,

Zero

Cpn

.,

1/01/26

........

United

States

48,000,000

51,150,000

125,723,000

Insurance

2.0%

c

AXA

SA

,

Senior

Note

,

144A,

7.25

%

,

5/15/21

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

France

71,500,000

105,373,125

Interactive

Media

&

Services

4.7%

Snap,

Inc.

,

Senior

Note,

0.75%,

8/01/26

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

United

States

27,300,000

75,040,875

c

Senior

Note,

144A,

Zero

Cpn

.,

5/01/27

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

United

States

46,000,000

47,293,750

Weibo

Corp.

,

Senior

Note

,

1.25

%

,

11/15/22

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

China

63,000,000

61,897,500

Zillow

Group,

Inc.

,

Senior

Note

,

2.75

%

,

5/15/25

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

United

States

31,500,000

65,224,687

249,456,812

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Convertible

Securities

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

27

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Convertible

Bonds

(continued)

Internet

&

Direct

Marketing

Retail

6.5%

c

Etsy,

Inc.

,

Senior

Note

,

144A,

0.125

%

,

9/01/27

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

United

States

80,000,000

$

103,750,000

MercadoLibre

,

Inc.

,

Senior

Note

,

2

%

,

8/15/28

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

Argentina

5,000,000

17,818,750

Pinduoduo

,

Inc.

,

Senior

Note

,

Zero

Cpn

.,

12/01/25

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

China

93,000,000

97,557,000

c

RealReal

,

Inc.

(The)

,

Senior

Note

,

144A,

1

%

,

3/01/28

..........

United

States

30,000,000

31,539,000

c

Wayfair,

Inc.

,

Senior

Note

,

144A,

0.625

%

,

10/01/25

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

United

States

85,000,000

88,559,375

339,224,125

IT

Services

7.2%

Okta

,

Inc.

,

Senior

Note

,

0.125

%

,

9/01/25

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

United

States

73,000,000

112,739,375

c

Repay

Holdings

Corp.

,

Senior

Note

,

144A,

Zero

Cpn

.,

2/01/26

....

United

States

19,000,000

18,465,625

c

Shift4

Payments,

Inc.

,

Senior

Note

,

144A,

Zero

Cpn

.,

12/15/25

...

United

States

36,000,000

50,716,800

c

Square,

Inc.

,

Senior

Note,

144A,

Zero

Cpn

.,

5/01/26

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

United

States

39,500,000

45,622,500

Senior

Note,

144A,

0.25%,

11/01/27

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

United

States

45,000,000

53,100,000

Wix.com

Ltd.

,

Senior

Note,

Zero

Cpn

.,

7/01/23

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

Israel

34,800,000

78,517,500

c

Senior

Note,

144A,

Zero

Cpn

.,

8/15/25

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

Israel

15,400,000

16,997,750

376,159,550

Life

Sciences

Tools

&

Services

1.7%

Illumina,

Inc.

,

Senior

Note,

0.5%,

6/15/21

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

United

States

32,500,000

50,151,562

a

Senior

Note,

Zero

Cpn

.,

8/15/23

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

United

States

25,750,000

30,996,563

NeoGenomics

,

Inc.

,

Senior

Note

,

0.25

%

,

1/15/28

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

United

States

9,500,000

9,642,718

90,790,843

Machinery

0.8%

Fortive

Corp.

,

Senior

Note

,

0.875

%

,

2/15/22

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

United

States

40,270,000

40,753,240

Media

4.0%

c

Cable

One,

Inc.

,

Senior

Note,

144A,

Zero

Cpn

.,

3/15/26

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

United

States

48,750,000

47,604,375

Senior

Note,

144A,

1.125%,

3/15/28

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

United

States

26,250,000

26,078,655

c

Liberty

Broadband

Corp.

,

Senior

Bond,

144A,

1.25%,

9/30/50

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

United

States

57,000,000

56,743,500

Senior

Bond,

144A,

2.75%,

9/30/50

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

United

States

34,500,000

35,590,860

Liberty

Media

Corp.

,

Senior

Bond,

2.25%,

9/30/46

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

United

States

37,000,000

17,438,100

Senior

Note,

1.375%,

10/15/23

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

United

States

21,200,000

27,691,178

211,146,668

Metals

&

Mining

1.4%

c

Ivanhoe

Mines

Ltd.

,

Senior

Note

,

144A,

2.5

%

,

4/15/26

..........

Canada

60,000,000

71,928,000

Pharmaceuticals

2.3%

Jazz

Investments

I

Ltd.

,

Senior

Note,

1.5%,

8/15/24

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

United

States

39,750,000

43,188,633

c

Senior

Note,

144A,

2%,

6/15/26

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

United

States

35,000,000

44,931,250

Revance

Therapeutics,

Inc.

,

Senior

Note

,

1.75

%

,

2/15/27

.......

United

States

27,000,000

31,134,375

119,254,258

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Convertible

Securities

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

28

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Convertible

Bonds

(continued)

Road

&

Rail

2.5%

c

Lyft,

Inc.

,

Senior

Note

,

144A,

1.5

%

,

5/15/25

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

United

States

61,000,000

$

97,783,000

c

Uber

Technologies,

Inc.

,

Senior

Note

,

144A,

Zero

Cpn

.,

12/15/25

..

United

States

30,000,000

31,620,814

129,403,814

Semiconductors

&

Semiconductor

Equipment

4.1%

Inphi

Corp.

,

Senior

Note

,

0.75

%

,

4/15/25

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

United

States

4,000,000

5,862,500

c

MACOM

Technology

Solutions

Holdings,

Inc.

,

Senior

Note

,

144A,

0.25

%

,

3/15/26

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

United

States

31,000,000

31,038,750

Microchip

Technology,

Inc.

,

Senior

Sub.

Bond

,

1.625

%

,

2/15/27

...

United

States

39,750,000

88,285,332

c

Silicon

Laboratories,

Inc.

,

Senior

Note

,

144A,

0.625

%

,

6/15/25

...

United

States

68,000,000

89,168,400

214,354,982

Software

21.7%

Alteryx

,

Inc.

,

Senior

Note,

0.5%,

8/01/24

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

United

States

20,000,000

18,700,000

Senior

Note,

1%,

8/01/26

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

United

States

20,000,000

17,962,500

Atlassian

,

Inc.

,

Senior

Note

,

0.625

%

,

5/01/23

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

United

States

21,500,000

62,524,688

c

Bill.com

Holdings,

Inc.

,

Senior

Note

,

144A,

Zero

Cpn

.,

12/01/25

...

United

States

66,000,000

80,272,500

Blackline,

Inc.

,

Senior

Note

,

0.125

%

,

8/01/24

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

United

States

9,500,000

15,817,500

c

Coupa

Software,

Inc.

,

Senior

Note

,

144A,

0.375

%

,

6/15/26

......

United

States

74,000,000

85,655,000

c

DocuSign,

Inc.

,

Senior

Note

,

144A,

Zero

Cpn

.,

1/15/24

.........

United

States

76,000,000

74,907,500

Envestnet

,

Inc.

,

Senior

Note,

1.75%,

6/01/23

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

United

States

51,500,000

62,958,750

c

Senior

Note,

144A,

0.75%,

8/15/25

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

United

States

11,500,000

11,489,496

Guidewire

Software,

Inc.

,

Senior

Note

,

1.25

%

,

3/15/25

.........

United

States

44,000,000

50,297,500

c

HubSpot

,

Inc.

,

Senior

Note

,

144A,

0.375

%

,

6/01/25

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

United

States

63,000,000

122,062,500

Palo

Alto

Networks,

Inc.

,

Senior

Note

,

0.75

%

,

7/01/23

..........

United

States

43,000,000

60,630,000

Pluralsight

,

Inc.

,

Senior

Note

,

0.375

%

,

3/01/24

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

United

States

39,000,000

39,253,500

c

Q2

Holdings,

Inc.

,

Senior

Note

,

144A,

0.125

%

,

11/15/25

........

United

States

56,000,000

56,827,496

RealPage

,

Inc.

,

Senior

Note,

1.5%,

11/15/22

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

United

States

35,850,000

76,138,230

Senior

Note,

1.5%,

5/15/25

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

United

States

18,750,000

24,445,312

Splunk

,

Inc.

,

Senior

Note,

1.125%,

9/15/25

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

United

States

22,500,000

25,396,875

c

Senior

Note,

144A,

1.125%,

6/15/27

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

United

States

6,500,000

6,024,688

Workday,

Inc.

,

Senior

Note

,

0.25

%

,

10/01/22

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

United

States

57,500,000

98,146,750

Workiva

,

Inc.

,

Senior

Note

,

1.125

%

,

8/15/26

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

United

States

22,000,000

29,857,083

c

Zendesk

,

Inc.

,

Senior

Note

,

144A,

0.625

%

,

6/15/25

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

United

States

80,000,000

117,800,000

1,137,167,868

Specialty

Retail

4.0%

c

Burlington

Stores,

Inc.

,

Senior

Note

,

144A,

2.25

%

,

4/15/25

......

United

States

53,000,000

84,833,125

RH

,

Senior

Note,

Zero

Cpn

.,

6/15/23

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

United

States

13,000,000

46,069,400

Senior

Note,

Zero

Cpn

.,

9/15/24

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

United

States

24,000,000

78,158,739

209,061,264

Total

Convertible

Bonds

(Cost

$3,182,825,301)

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

4,111,292,531

Total

Long

Term

Investments

(Cost

$4,055,233,273)

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

5,198,904,231

a

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Convertible

Securities

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

29

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,

0.01%

.....

United

States

30,360,613

$

30,360,613

Total

Money

Market

Funds

(Cost

$30,360,613)

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

30,360,613

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,

0.01%

.....

United

States

28,711,000

28,711,000

Principal

Amount

*

Repurchase

Agreements

0.1%

g

Joint

Repurchase

Agreement,

BofA

Securities,

Inc.,

0%,

5/03/21

(Maturity

Value

$7,178,301)

Collateralized

by

U.S.

Treasury

Note,

1.5%,

11/30/24

(valued

at

$7,321,874)

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

7,178,301

7,178,301

Total

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

(Cost

$35,889,301)

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

35,889,301

Total

Short

Term

Investments

(Cost

$66,249,914

)

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

66,249,914

a

Total

Investments

(Cost

$4,121,483,187)

100.6%

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

$5,265,154,145

Other

Assets,

less

Liabilities

(0.6)%

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

(30,358,569)

Net

Assets

100.0%

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

$5,234,795,576

See

Abbreviations

on

page

76

.

*

The

principal

amount

is

stated

in

U.S.

dollars

unless

otherwise

indicated.

a

A

portion

or

all

of

the

security

is

on

loan

at

April

30,

2021.

See

Note

1(f).

b

Non-income

producing.

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

April

30,

2021,

the

aggregate

value

of

these

securities

was

$2,222,015,043,

representing

42.4%

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

Franklin

Equity

Income

Fund

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

30

a

Six

Months

Ended

April

30,

2021

(unaudited)

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

A

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$24.22

$26.23

$24.86

$25.06

$22.50

$22.99

Income

from

investment

operations

a

:

Net

investment

income

b

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

0.24

0.49

0.46

0.42

0.48

0.47

Net

realized

and

unrealized

gains

(losses)

6.28

(1.11)

2.49

0.58

3.55

0.24

Total

from

investment

operations

........

6.52

(0.62)

2.95

1.00

4.03

0.71

Less

distributions

from:

Net

investment

income

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

(0.31)

(0.63)

(0.58)

(0.57)

(0.58)

(0.60)

Net

realized

gains

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

(0.22)

(0.76)

(1.00)

(0.63)

(0.89)

(0.60)

Total

distributions

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

(0.53)

(1.39)

(1.58)

(1.20)

(1.47)

(1.20)

Net

asset

value,

end

of

period

..........

$30.21

$24.22

$26.23

$24.86

$25.06

$22.50

Total

return

c

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

27.13%

(2.43)%

12.73%

3.98%

18.55%

3.31%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

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

0.84%

0.86%

0.86%

0.85%

0.86%

0.87%

Expenses

net

of

waiver

and

payments

by

affiliates

e

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

0.84%

f

0.85%

0.85%

0.84%

0.86%

f

0.87%

f

Net

investment

income

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

1.76%

1.98%

1.85%

1.66%

2.02%

2.13%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$2,562,204

$1,953,985

$2,017,910

$1,752,181

$1,753,135

$1,700,712

Portfolio

turnover

rate

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

14.91%

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

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,

and

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

f

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.

Semiannual

Report

31

a

Six

Months

Ended

April

30,

2021

(unaudited)

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

C

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$24.03

$26.01

$24.64

$24.86

$22.32

$22.85

Income

from

investment

operations

a

:

Net

investment

income

b

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

0.14

0.30

0.28

0.26

0.30

0.30

Net

realized

and

unrealized

gains

(losses)

6.23

(1.10)

2.47

0.53

3.54

0.23

Total

from

investment

operations

........

6.37

(0.80)

2.75

0.79

3.84

0.53

Less

distributions

from:

Net

investment

income

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

(0.21)

(0.42)

(0.38)

(0.38)

(0.41)

(0.46)

Net

realized

gains

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

(0.22)

(0.76)

(1.00)

(0.63)

(0.89)

(0.60)

Total

distributions

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

(0.43)

(1.18)

(1.38)

(1.01)

(1.30)

(1.06)

Net

asset

value,

end

of

period

..........

$29.97

$24.03

$26.01

$24.64

$24.86

$22.32

Total

return

c

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

26.67%

(3.19)%

11.91%

3.16%

17.73%

2.51%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

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

1.59%

1.61%

1.61%

1.60%

1.61%

1.62%

Expenses

net

of

waiver

and

payments

by

affiliates

e

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

1.59%

f

1.60%

1.60%

1.59%

1.61%

f

1.62%

f

Net

investment

income

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

1.01%

1.23%

1.10%

0.91%

1.27%

1.38%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$209,686

$161,707

$208,734

$204,402

$267,450

$257,156

Portfolio

turnover

rate

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

14.91%

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

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,

and

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

f

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

Semiannual

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accompanying

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are

an

integral

part

of

these

financial

statements.

32

a

Six

Months

Ended

April

30,

2021

(unaudited)

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

R

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$24.24

$26.23

$24.85

$25.05

$22.49

$22.99

Income

from

investment

operations

a

:

Net

investment

income

b

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

0.21

0.43

0.41

0.36

0.42

0.41

Net

realized

and

unrealized

gains

(losses)

6.27

(1.10)

2.49

0.58

3.56

0.24

Total

from

investment

operations

........

6.48

(0.67)

2.90

0.94

3.98

0.65

Less

distributions

from:

Net

investment

income

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

(0.27)

(0.56)

(0.52)

(0.51)

(0.53)

(0.55)

Net

realized

gains

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

(0.22)

(0.76)

(1.00)

(0.63)

(0.89)

(0.60)

Total

distributions

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

(0.49)

(1.32)

(1.52)

(1.14)

(1.42)

(1.15)

Net

asset

value,

end

of

period

..........

$30.23

$24.24

$26.23

$24.85

$25.05

$22.49

Total

return

c

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

26.97%

(2.62)%

12.50%

3.75%

18.29%

3.05%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

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

1.08%

1.08%

1.09%

1.08%

1.09%

1.11%

Expenses

net

of

waiver

and

payments

by

affiliates

e

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

1.08%

f

1.08%

f

1.08%

1.07%

1.09%

f

1.11%

f

Net

investment

income

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

1.52%

1.75%

1.62%

1.43%

1.79%

1.89%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$8,372

$5,795

$7,284

$6,750

$7,074

$6,395

Portfolio

turnover

rate

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

14.91%

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

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

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

f

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.

Semiannual

Report

33

a

Six

Months

Ended

April

30,

2021

(unaudited)

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

R6

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$24.27

$26.29

$24.91

$25.11

$22.54

$23.01

Income

from

investment

operations

a

:

Net

investment

income

b

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

0.29

0.57

0.54

0.50

0.56

0.43

Net

realized

and

unrealized

gains

(losses)

6.28

(1.11)

2.50

0.59

3.57

0.37

Total

from

investment

operations

........

6.57

(0.54)

3.04

1.09

4.13

0.80

Less

distributions

from:

Net

investment

income

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

(0.35)

(0.72)

(0.66)

(0.66)

(0.67)

(0.67)

Net

realized

gains

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

(0.22)

(0.76)

(1.00)

(0.63)

(0.89)

(0.60)

Total

distributions

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

(0.57)

(1.48)

(1.66)

(1.29)

(1.56)

(1.27)

Net

asset

value,

end

of

period

..........

$30.27

$24.27

$26.29

$24.91

$25.11

$22.54

Total

return

c

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

27.31%

(2.07)%

13.12%

4.35%

19.00%

3.72%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

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

0.53%

0.52%

0.53%

0.52%

0.49%

0.49%

Expenses

net

of

waiver

and

payments

by

affiliates

e

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

0.51%

0.51%

0.51%

0.50%

0.49%

f

0.49%

f

Net

investment

income

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

2.09%

2.32%

2.19%

2.00%

2.39%

2.51%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$132,096

$97,565

$96,406

$81,171

$12,728

$10,537

Portfolio

turnover

rate

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

14.91%

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

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

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

f

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

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

34

a

Six

Months

Ended

April

30,

2021

(unaudited)

Year

Ended

October

31,

2020

2019

2018

2017

2016

Advisor

Class

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$24.26

$26.27

$24.90

$25.10

$22.53

$23.02

Income

from

investment

operations

a

:

Net

investment

income

b

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

0.28

0.55

0.50

0.46

0.50

0.45

Net

realized

and

unrealized

gains

(losses)

6.28

(1.11)

2.51

0.60

3.60

0.31

Total

from

investment

operations

........

6.56

(0.56)

3.01

1.06

4.10

0.76

Less

distributions

from:

Net

investment

income

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

(0.34)

(0.69)

(0.64)

(0.63)

(0.64)

(0.65)

Net

realized

gains

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

(0.22)

(0.76)

(1.00)

(0.63)

(0.89)

(0.60)

Total

distributions

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

(0.56)

(1.45)

(1.64)

(1.26)

(1.53)

(1.25)

Net

asset

value,

end

of

period

..........

$30.26

$24.26

$26.27

$24.90

$25.10

$22.53

Total

return

c

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

27.28%

(2.18)%

13.04%

4.22%

18.88%

3.53%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

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

0.60%

0.61%

0.61%

0.60%

0.61%

0.62%

Expenses

net

of

waiver

and

payments

by

affiliates

e

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

0.60%

f

0.60%

0.60%

0.59%

0.61%

f

0.62%

f

Net

investment

income

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

2.00%

2.21%

2.10%

1.91%

2.27%

2.38%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$319,433

$219,362

$173,739

$109,435

$147,681

$80,422

Portfolio

turnover

rate

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

14.91%

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

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

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

f

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited),

April

30,

2021

Franklin

Equity

Income

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

35

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

83.3%

Aerospace

&

Defense

3.9%

Lockheed

Martin

Corp.

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

United

States

82,000

$

31,205,920

Raytheon

Technologies

Corp.

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

United

States

1,128,500

93,936,340

125,142,260

Air

Freight

&

Logistics

2.7%

United

Parcel

Service,

Inc.,

B

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

United

States

427,000

87,048,220

Banks

11.4%

Bank

of

America

Corp.

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

United

States

2,740,000

111,052,200

Citigroup,

Inc.

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

United

States

817,500

58,238,700

JPMorgan

Chase

&

Co.

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

United

States

899,000

138,275,190

Truist

Financial

Corp.

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

United

States

1,050,000

62,275,500

369,841,590

Beverages

3.8%

Coca-Cola

Co.

(The)

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

United

States

1,230,000

66,395,400

PepsiCo,

Inc.

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

United

States

388,000

55,934,080

122,329,480

Capital

Markets

7.7%

a

Apollo

Global

Management,

Inc.

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

United

States

825,000

45,680,250

Ares

Management

Corp.

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

United

States

802,000

42,121,040

BlackRock,

Inc.

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

United

States

61,800

50,632,740

Morgan

Stanley

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

United

States

1,350,000

111,442,500

249,876,530

Chemicals

3.2%

BASF

SE

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

Germany

355,000

28,611,120

Huntsman

Corp.

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

United

States

680,000

19,495,600

Linde

plc

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

United

Kingdom

95,500

27,297,720

Sherwin-Williams

Co.

(The)

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

United

States

107,000

29,304,090

104,708,530

Commercial

Services

&

Supplies

1.5%

Republic

Services,

Inc.

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

United

States

467,000

49,642,100

Communications

Equipment

0.6%

Cisco

Systems,

Inc.

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

United

States

375,000

19,091,250

Diversified

Telecommunication

Services

2.1%

TELUS

Corp.

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

Canada

645,000

13,380,110

Verizon

Communications,

Inc.

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

United

States

950,000

54,900,500

68,280,610

Electric

Utilities

6.5%

Duke

Energy

Corp.

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

United

States

888,500

89,463,065

Entergy

Corp.

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

United

States

285,000

31,147,650

NextEra

Energy,

Inc.

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

United

States

961,250

74,506,487

Xcel

Energy,

Inc.

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

United

States

192,500

13,725,250

208,842,452

Electrical

Equipment

1.5%

Eaton

Corp.

plc

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

United

States

152,500

21,796,825

Emerson

Electric

Co.

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

United

States

305,000

27,599,450

49,396,275

Equity

Real

Estate

Investment

Trusts

(REITs)

1.3%

Prologis,

Inc.

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

United

States

240,000

27,967,200

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Equity

Income

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

36

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Equity

Real

Estate

Investment

Trusts

(REITs)

(continued)

Public

Storage

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

United

States

50,000

$

14,058,000

42,025,200

Food

&

Staples

Retailing

1.3%

Walmart,

Inc.

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

United

States

300,500

42,042,955

Food

Products

0.2%

Nestle

SA

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

Switzerland

53,000

6,324,874

Health

Care

Equipment

&

Supplies

2.9%

Medtronic

plc

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

United

States

723,000

94,655,160

Health

Care

Providers

&

Services

2.3%

HCA

Healthcare,

Inc.

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

United

States

138,000

27,746,280

UnitedHealth

Group,

Inc.

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

United

States

115,000

45,862,000

73,608,280

Hotels,

Restaurants

&

Leisure

1.6%

McDonald's

Corp.

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

United

States

223,000

52,645,840

Household

Products

2.4%

Procter

&

Gamble

Co.

(The)

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

United

States

585,000

78,050,700

Insurance

0.6%

Arthur

J

Gallagher

&

Co.

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

United

States

131,500

19,060,925

IT

Services

0.6%

Visa,

Inc.,

A

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

United

States

76,000

17,750,560

Machinery

1.3%

Illinois

Tool

Works,

Inc.

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

United

States

100,000

23,046,000

Stanley

Black

&

Decker,

Inc.

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

United

States

85,000

17,575,450

40,621,450

Media

1.9%

Comcast

Corp.,

A

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

United

States

1,085,000

60,922,750

Multiline

Retail

2.7%

Target

Corp.

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

United

States

412,500

85,494,750

Oil,

Gas

&

Consumable

Fuels

4.8%

Canadian

Natural

Resources

Ltd.

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

Canada

715,000

21,721,700

Chevron

Corp.

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

United

States

612,500

63,130,375

a

Royal

Dutch

Shell

plc,

ADR,

A

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

Netherlands

843,500

32,053,000

Suncor

Energy,

Inc.

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

Canada

1,760,000

37,699,200

154,604,275

Pharmaceuticals

5.1%

Johnson

&

Johnson

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

United

States

585,000

95,197,050

Merck

&

Co.,

Inc.

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

United

States

355,500

26,484,750

Pfizer,

Inc.

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

United

States

1,145,000

44,254,250

165,936,050

Road

&

Rail

1.8%

Norfolk

Southern

Corp.

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

United

States

203,500

56,825,340

Semiconductors

&

Semiconductor

Equipment

2.7%

Analog

Devices,

Inc.

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

United

States

165,000

25,271,400

Broadcom,

Inc.

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

United

States

43,500

19,844,700

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Equity

Income

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

37

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Semiconductors

&

Semiconductor

Equipment

(continued)

Texas

Instruments,

Inc.

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

United

States

233,000

$

42,058,830

87,174,930

Software

1.7%

Microsoft

Corp.

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

United

States

147,000

37,070,460

Oracle

Corp.

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

United

States

225,000

17,052,750

54,123,210

Specialty

Retail

2.6%

Lowe's

Cos.,

Inc.

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

United

States

240,000

47,100,000

TJX

Cos.,

Inc.

(The)

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

United

States

530,000

37,630,000

84,730,000

Technology

Hardware,

Storage

&

Peripherals

0.6%

Apple,

Inc.

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

United

States

156,800

20,612,928

Total

Common

Stocks

(Cost

$1,693,136,382)

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

2,691,409,474

b

Equity-Linked

Securities

9.2%

Banks

0.8%

c

Royal

Bank

of

Canada

into

Bank

of

America

Corp.,

144A,

7.75%,

11/01/21

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

United

States

902,000

27,116,779

Chemicals

1.3%

c

Citigroup

Global

Markets

Holdings,

Inc.

into

Sherwin-Williams

Co.

(The),

144A,

6.5%,

7/09/21

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

United

States

30,200

20,380,898

c

Goldman

Sachs

International

Bank

into

Linde

plc,

144A,

6.5%,

10/25/21

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

United

Kingdom

80,150

21,319,783

41,700,681

Electrical

Equipment

0.5%

c

Royal

Bank

of

Canada

into

Eaton

Corp.

plc,

144A,

7%,

8/30/21

...

United

States

118,600

16,080,959

Equity

Real

Estate

Investment

Trusts

(REITs)

0.7%

c

Royal

Bank

of

Canada

into

Healthpeak

Properties,

Inc.,

144A,

9.5%,

12/01/21

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

United

States

660,000

22,469,083

Food

&

Staples

Retailing

0.7%

c

Citigroup

Global

Markets

Holdings,

Inc.

into

Tesco

plc,

144A,

6.5%,

1/10/22

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

United

Kingdom

149,700

24,039,131

Health

Care

Providers

&

Services

0.8%

c

Royal

Bank

of

Canada

into

HCA

Healthcare,

Inc.,

144A,

7%,

6/30/21

United

States

128,400

24,310,105

Internet

&

Direct

Marketing

Retail

1.0%

c

Credit

Suisse

AG

into

Amazon.com,

Inc.,

144A,

5%,

4/22/22

.....

United

States

9,650

32,458,786

IT

Services

0.5%

c

Credit

Suisse

AG

into

Visa,

Inc.,

144A,

5%,

11/30/21

...........

United

States

70,500

15,961,194

Machinery

0.8%

c

Credit

Suisse

AG

into

Stanley

Black

&

Decker,

Inc.,

144A,

6.5%,

3/31/22

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

United

States

133,000

27,308,128

Multiline

Retail

0.7%

c

Barclays

Bank

plc

into

Dollar

Tree,

Inc.,

144A,

5.5%,

1/14/22

.....

United

States

185,800

21,305,165

Software

0.8%

c

Barclays

Bank

plc

into

Oracle

Corp.,

144A,

7%,

7/30/21

........

United

States

354,500

24,333,424

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Equity

Income

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

38

a

a

Country

Shares

a

Value

a

a

a

a

a

a

b

Equity-Linked

Securities

(continued)

Specialty

Retail

0.6%

c

Citigroup

Global

Markets

Holdings,

Inc.

into

TJX

Cos.,

Inc.

(The),

144A,

6.5%,

9/14/21

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

United

States

321,500

$

20,934,083

Total

Equity-Linked

Securities

(Cost

$264,962,943)

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

298,017,518

Convertible

Preferred

Stocks

6.4%

Health

Care

Equipment

&

Supplies

2.9%

Becton

Dickinson

and

Co.,

6%,

B

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

United

States

665,000

36,727,950

Boston

Scientific

Corp.,

5.5%,

A

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

United

States

110,000

12,933,800

Danaher

Corp.,

4.75%,

A

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

United

States

22,500

38,553,975

Danaher

Corp.,

5%,

B

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

United

States

4,652

6,586,069

94,801,794

Machinery

1.3%

Fortive

Corp.,

5%,

A

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

United

States

44,050

43,763,675

Semiconductors

&

Semiconductor

Equipment

1.3%

Broadcom,

Inc.,

8%,

A

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

United

States

28,200

40,874,490

Water

Utilities

0.9%

Essential

Utilities,

Inc.,

6%

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

United

States

475,000

28,077,250

Total

Convertible

Preferred

Stocks

(Cost

$174,013,848)

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

207,517,209

Total

Long

Term

Investments

(Cost

$2,132,113,173)

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

3,196,944,201

a

Short

Term

Investments

1.7%

a

a

Country

Shares

a

Value

a

Money

Market

Funds

1.0%

d,e

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

32,889,832

32,889,832

Total

Money

Market

Funds

(Cost

$32,889,832)

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

32,889,832

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,

0.01%

.....

United

States

18,317,000

18,317,000

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Equity

Income

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

39

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,

BofA

Securities,

Inc.,

0%,

5/03/21

(Maturity

Value

$4,579,721)

Collateralized

by

U.S.

Treasury

Note,

1.5%,

11/30/24

(valued

at

$4,671,320)

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

4,579,721

$

4,579,721

Total

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

(Cost

$22,896,721)

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

22,896,721

Total

Short

Term

Investments

(Cost

$55,786,553

)

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

55,786,553

a

Total

Investments

(Cost

$2,187,899,726)

100.6%

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

$3,252,730,754

Other

Assets,

less

Liabilities

(0.6)%

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

(20,939,813)

Net

Assets

100.0%

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

$3,231,790,941

See

Abbreviations

on

page

76

.

*

The

principal

amount

is

stated

in

U.S.

dollars

unless

otherwise

indicated.

a

A

portion

or

all

of

the

security

is

on

loan

at

April

30,

2021.

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

April

30,

2021,

the

aggregate

value

of

these

securities

was

$298,017,518,

representing

9.2%

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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Fund

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Semiannual

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The

accompanying

notes

are

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integral

part

of

these

financial

statements.

40

a

Six

Months

Ended

April

30,

2021

(unaudited)

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

A

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$11.73

$12.80

$11.89

$12.36

$11.65

$11.40

Income

from

investment

operations

a

:

Net

investment

income

b

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

0.16

0.31

0.29

0.27

0.33

0.30

Net

realized

and

unrealized

gains

(losses)

1.93

(0.44)

1.17

(0.16)

0.91

0.31

Total

from

investment

operations

........

2.09

(0.13)

1.46

0.11

1.24

0.61

Less

distributions

from:

Net

investment

income

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

(0.24)

(0.46)

(0.41)

(0.38)

(0.36)

(0.36)

Net

realized

gains

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

(0.09)

(0.48)

(0.14)

(0.20)

(0.17)

(—)

c

Total

distributions

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

(0.33)

(0.94)

(0.55)

(0.58)

(0.53)

(0.36)

Net

asset

value,

end

of

period

..........

$13.49

$11.73

$12.80

$11.89

$12.36

$11.65

Total

return

d

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

17.93%

(1.06)%

12.64%

0.89%

10.88%

5.54%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

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

0.91%

0.93%

0.96%

1.02%

1.02%

1.02%

Expenses

net

of

waiver

and

payments

by

affiliates

f

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

0.91%

g

0.91%

0.94%

1.01%

1.00%

1.01%

Net

investment

income

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

2.46%

2.55%

2.36%

2.22%

2.72%

2.62%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$3,333,888

$2,860,390

$2,966,899

$2,586,246

$2,646,599

$2,532,459

Portfolio

turnover

rate

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

20.30%

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

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

Amount

rounds

to

less

than

$0.01

per

share.

d

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable,

and

is

not

annualized

for

periods

less

than

one

year.

e

Ratios

are

annualized

for

periods

less

than

one

year.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

g

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Managed

Income

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

41

a

Six

Months

Ended

April

30,

2021

(unaudited)

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

C

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$11.61

$12.67

$11.78

$12.25

$11.55

$11.31

Income

from

investment

operations

a

:

Net

investment

income

b

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

0.11

0.22

0.20

0.19

0.24

0.21

Net

realized

and

unrealized

gains

(losses)

1.91

(0.43)

1.15

(0.17)

0.90

0.31

Total

from

investment

operations

........

2.02

(0.21)

1.35

0.02

1.14

0.52

Less

distributions

from:

Net

investment

income

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

(0.19)

(0.37)

(0.32)

(0.29)

(0.27)

(0.28)

Net

realized

gains

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

(0.09)

(0.48)

(0.14)

(0.20)

(0.17)

(—)

c

Total

distributions

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

(0.28)

(0.85)

(0.46)

(0.49)

(0.44)

(0.28)

Net

asset

value,

end

of

period

..........

$13.35

$11.61

$12.67

$11.78

$12.25

$11.55

Total

return

d

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

17.49%

(1.79)%

11.79%

0.14%

10.06%

4.73%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

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

1.66%

1.68%

1.71%

1.76%

1.77%

1.77%

Expenses

net

of

waiver

and

payments

by

affiliates

f

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

1.66%

g

1.66%

1.69%

1.75%

1.75%

1.76%

Net

investment

income

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

1.73%

1.84%

1.61%

1.48%

1.97%

1.87%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$344,602

$341,521

$491,751

$493,762

$633,108

$630,110

Portfolio

turnover

rate

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

20.30%

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

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

Amount

rounds

to

less

than

$0.01

per

share.

d

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable,

and

is

not

annualized

for

periods

less

than

one

year.

e

Ratios

are

annualized

for

periods

less

than

one

year.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

g

Benefit

of

waiver

and

payments

by

affiliates

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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accompanying

notes

are

an

integral

part

of

these

financial

statements.

42

a

Six

Months

Ended

April

30,

2021

(unaudited)

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

R

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$11.76

$12.84

$11.92

$12.39

$11.67

$11.42

Income

from

investment

operations

a

:

Net

investment

income

b

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

0.14

0.28

0.26

0.26

0.30

0.27

Net

realized

and

unrealized

gains

(losses)

1.95

(0.45)

1.18

(0.18)

0.92

0.32

Total

from

investment

operations

........

2.09

(0.17)

1.44

0.08

1.22

0.59

Less

distributions

from:

Net

investment

income

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

(0.22)

(0.43)

(0.38)

(0.35)

(0.33)

(0.34)

Net

realized

gains

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

(0.09)

(0.48)

(0.14)

(0.20)

(0.17)

(—)

c

Total

distributions

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

(0.31)

(0.91)

(0.52)

(0.55)

(0.50)

(0.34)

Net

asset

value,

end

of

period

..........

$13.54

$11.76

$12.84

$11.92

$12.39

$11.67

Total

return

d

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

17.92%

(1.38)%

12.43%

0.63%

10.66%

5.28%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

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

1.16%

1.18%

1.21%

1.27%

1.27%

1.27%

Expenses

net

of

waiver

and

payments

by

affiliates

f

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

1.16%

g

1.16%

1.19%

1.26%

1.25%

1.26%

Net

investment

income

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

2.23%

2.33%

2.11%

1.97%

2.47%

2.37%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$3,341

$3,093

$4,081

$3,371

$4,763

$4,482

Portfolio

turnover

rate

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

20.30%

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

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

Amount

rounds

to

less

than

$0.01

per

share.

d

Total

return

is

not

annualized

for

periods

less

than

one

year.

e

Ratios

are

annualized

for

periods

less

than

one

year.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

g

Benefit

of

waiver

and

payments

by

affiliates

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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accompanying

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an

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part

of

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financial

statements.

Semiannual

Report

43

`

a

Six

Months

Ended

April

30,

2021

(unaudited)

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

R6

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$11.76

$12.85

$11.93

$12.39

$11.67

$11.42

Income

from

investment

operations

a

:

Net

investment

income

b

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

0.18

0.35

0.33

0.31

0.41

0.34

Net

realized

and

unrealized

gains

(losses)

1.95

(0.45)

1.18

(0.14)

0.88

0.31

Total

from

investment

operations

........

2.13

(0.10)

1.51

0.17

1.29

0.65

Less

distributions

from:

Net

investment

income

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

(0.26)

(0.51)

(0.45)

(0.43)

(0.40)

(0.40)

Net

realized

gains

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

(0.09)

(0.48)

(0.14)

(0.20)

(0.17)

(—)

c

Total

distributions

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

(0.35)

(0.99)

(0.59)

(0.63)

(0.57)

(0.40)

Net

asset

value,

end

of

period

..........

$13.54

$11.76

$12.85

$11.93

$12.39

$11.67

Total

return

d

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

18.25%

(0.86)%

13.14%

1.23%

11.33%

5.90%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

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

0.60%

0.60%

0.63%

0.68%

0.71%

0.73%

Expenses

net

of

waiver

and

payments

by

affiliates

f

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

0.59%

0.58%

0.61%

0.66%

0.64%

0.66%

Net

investment

income

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

2.79%

2.87%

2.69%

2.56%

3.08%

2.97%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$178,359

$155,563

$159,877

$138,923

$342

$233

Portfolio

turnover

rate

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

20.30%

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

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

Amount

rounds

to

less

than

$0.01

per

share.

d

Total

return

is

not

annualized

for

periods

less

than

one

year.

e

Ratios

are

annualized

for

periods

less

than

one

year.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Investors

Securities

Trust

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Highlights

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Managed

Income

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(continued)

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accompanying

notes

are

an

integral

part

of

these

financial

statements.

44

a

Six

Months

Ended

April

30,

2021

(unaudited)

Year

Ended

October

31,

2020

2019

2018

2017

2016

Advisor

Class

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$11.76

$12.84

$11.92

$12.39

$11.67

$11.42

Income

from

investment

operations

a

:

Net

investment

income

b

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

0.17

0.34

0.32

0.30

0.35

0.29

Net

realized

and

unrealized

gains

(losses)

1.94

(0.44)

1.18

(0.16)

0.93

0.35

Total

from

investment

operations

........

2.11

(0.10)

1.50

0.14

1.28

0.64

Less

distributions

from:

Net

investment

income

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

(0.25)

(0.50)

(0.44)

(0.41)

(0.39)

(0.39)

Net

realized

gains

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

(0.09)

(0.48)

(0.14)

(0.20)

(0.17)

(—)

c

Total

distributions

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

(0.34)

(0.98)

(0.58)

(0.61)

(0.56)

(0.39)

Net

asset

value,

end

of

period

..........

$13.53

$11.76

$12.84

$11.92

$12.39

$11.67

Total

return

d

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

18.12%

(0.86)%

12.96%

1.14%

11.21%

5.79%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

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

0.67%

0.68%

0.71%

0.77%

0.77%

0.77%

Expenses

net

of

waiver

and

payments

by

affiliates

f

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

0.67%

g

0.66%

0.69%

0.76%

0.75%

0.76%

Net

investment

income

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

2.72%

2.79%

2.61%

2.47%

2.97%

2.87%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$200,519

$166,947

$180,882

$124,265

$243,674

$138,111

Portfolio

turnover

rate

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

20.30%

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

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

Amount

rounds

to

less

than

$0.01

per

share.

d

Total

return

is

not

annualized

for

periods

less

than

one

year.

e

Ratios

are

annualized

for

periods

less

than

one

year.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

g

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited),

April

30,

2021

Franklin

Managed

Income

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

45

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

41.9%

Aerospace

&

Defense

1.1%

Lockheed

Martin

Corp.

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

United

States

75,000

$

28,542,000

Northrop

Grumman

Corp.

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

United

States

42,900

15,205,476

43,747,476

Air

Freight

&

Logistics

0.9%

United

Parcel

Service,

Inc.,

B

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

United

States

175,000

35,675,500

Banks

7.4%

Bank

of

America

Corp.

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

United

States

2,150,000

87,139,500

Citigroup,

Inc.

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

United

States

350,000

24,934,000

JPMorgan

Chase

&

Co.

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

United

States

650,000

99,976,500

Truist

Financial

Corp.

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

United

States

700,100

41,522,931

US

Bancorp

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

United

States

800,000

47,480,000

301,052,931

Beverages

2.3%

Coca-Cola

Co.

(The)

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

United

States

785,000

42,374,300

PepsiCo,

Inc.

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

United

States

350,000

50,456,000

92,830,300

Biotechnology

1.3%

AbbVie,

Inc.

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

United

States

475,000

52,962,500

Capital

Markets

0.7%

Morgan

Stanley

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

United

States

350,000

28,892,500

Chemicals

0.4%

Air

Products

and

Chemicals,

Inc.

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

United

States

50,000

14,424,000

Diversified

Telecommunication

Services

2.5%

BCE,

Inc.

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

Canada

450,000

21,269,066

Deutsche

Telekom

AG

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

Germany

1,200,000

23,095,025

Verizon

Communications,

Inc.

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

United

States

1,000,000

57,790,000

102,154,091

Electric

Utilities

3.1%

Duke

Energy

Corp.

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

United

States

450,000

45,310,500

Edison

International

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

United

States

500,000

29,725,000

FirstEnergy

Corp.

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

United

States

1,000,000

37,920,000

Southern

Co.

(The)

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

United

States

175,000

11,579,750

124,535,250

Food

Products

0.7%

Nestle

SA

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

Switzerland

250,000

29,687,500

Health

Care

Providers

&

Services

2.3%

CVS

Health

Corp.

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

United

States

520,000

39,728,000

Quest

Diagnostics,

Inc.

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

United

States

400,000

52,752,000

92,480,000

Household

Products

2.0%

Procter

&

Gamble

Co.

(The)

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

United

States

600,000

80,052,000

Industrial

Conglomerates

1.6%

Honeywell

International,

Inc.

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

United

States

300,000

66,912,000

Insurance

0.4%

Travelers

Cos.,

Inc.

(The)

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

United

States

100,000

15,466,000

IT

Services

0.7%

International

Business

Machines

Corp.

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

United

States

200,000

28,376,000

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Managed

Income

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

46

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Multiline

Retail

0.5%

Target

Corp.

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

United

States

100,000

$

20,726,000

Multi-Utilities

2.7%

Dominion

Energy,

Inc.

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

United

States

500,000

39,950,000

DTE

Energy

Co.

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

United

States

200,000

28,004,000

Sempra

Energy

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

United

States

300,000

41,271,000

109,225,000

Oil,

Gas

&

Consumable

Fuels

4.1%

BP

plc,

ADR

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

United

Kingdom

500,000

12,580,000

Chevron

Corp.

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

United

States

500,000

51,535,000

Exxon

Mobil

Corp.

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

United

States

1,250,000

71,550,000

Royal

Dutch

Shell

plc,

ADR,

A

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

Netherlands

350,000

13,300,000

TOTAL

SE,

ADR

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

France

400,000

17,712,000

166,677,000

Personal

Products

0.6%

Unilever

plc

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

United

Kingdom

400,000

23,431,695

Pharmaceuticals

4.3%

a

AstraZeneca

plc,

ADR

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

United

Kingdom

550,000

29,188,500

Bristol-Myers

Squibb

Co.

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

United

States

600,000

37,452,000

Eli

Lilly

&

Co.

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

United

States

125,000

22,846,250

Johnson

&

Johnson

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

United

States

250,000

40,682,500

Merck

&

Co.,

Inc.

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

United

States

600,000

44,700,000

174,869,250

Road

&

Rail

1.1%

Union

Pacific

Corp.

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

United

States

205,000

45,528,450

Specialty

Retail

1.2%

Home

Depot,

Inc.

(The)

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

United

States

150,000

48,550,500

Total

Common

Stocks

(Cost

$1,313,483,917)

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

1,698,255,943

Management

Investment

Companies

2.6%

Capital

Markets

2.6%

b

Franklin

FTSE

United

Kingdom

ETF

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

United

States

1,500,000

37,170,000

a,b

Franklin

Liberty

Systematic

Style

Premia

ETF

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

United

States

1,175,000

23,312,000

b

Franklin

Liberty

U.S.

Low

Volatility

ETF

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

United

States

1,000,000

45,817,800

106,299,800

Total

Management

Investment

Companies

(Cost

$100,268,313)

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

106,299,800

c

Equity-Linked

Securities

17.1%

Aerospace

&

Defense

1.6%

d

Societe

Generale

SA

into

Raytheon

Technologies

Corp.,

144A,

8%,

6/01/21

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

United

States

832,000

66,242,151

Capital

Markets

1.7%

d

Credit

Suisse

AG

into

Charles

Schwab

Corp.

(The),

144A,

6.5%,

5/18/21

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

United

States

1,007,000

51,981,234

d

UBS

AG

into

Morgan

Stanley,

144A,

8.5%,

2/11/22

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

United

States

220,000

17,835,375

69,816,609

Chemicals

0.6%

d

National

Bank

of

Canada

into

Air

Products

and

Chemicals,

Inc.,

144A,

8.5%,

4/13/22

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

United

States

86,000

25,185,567

Communications

Equipment

1.4%

d

Royal

Bank

of

Canada

into

Cisco

Systems,

Inc.,

144A,

7.5%,

8/04/21

United

States

1,077,000

55,006,766

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Managed

Income

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

47

a

a

Country

Shares

a

Value

a

a

a

a

a

a

c

Equity-Linked

Securities

(continued)

Energy

Equipment

&

Services

0.6%

d

Royal

Bank

of

Canada

into

Schlumberger

NV,

144A,

10%,

3/01/22

United

States

850,000

$

23,734,652

IT

Services

0.8%

d

Barclays

Bank

plc

into

Fidelity

National

Information

Services,

Inc.,

144A,

7.5%,

6/02/21

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

United

States

222,000

33,924,863

Media

0.9%

d

Merrill

Lynch

International

&

Co.

CV

into

Comcast

Corp.,

144A,

7%,

8/09/21

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

United

States

744,000

36,585,470

Multiline

Retail

0.8%

d

Societe

Generale

SA

into

Target

Corp.,

144A,

8%,

12/20/21

......

United

States

168,000

32,615,340

Pharmaceuticals

1.4%

d

Credit

Suisse

AG

into

Pfizer,

Inc.,

144A,

8%,

8/27/21

...........

United

States

1,493,000

58,261,649

Semiconductors

&

Semiconductor

Equipment

5.0%

d

Barclays

Bank

plc

into

Intel

Corp.,

144A,

8%,

8/16/21

..........

United

States

1,054,000

62,101,166

d

BNP

Paribas

Issuance

BV

into

Texas

Instruments,

Inc.,

144A,

8.5%,

6/01/21

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

United

States

715,000

99,311,733

d

Royal

Bank

of

Canada

into

Analog

Devices,

Inc.,

144A,

8%,

2/01/22

United

States

246,000

39,441,249

200,854,148

Software

0.8%

d

Merrill

Lynch

International

&

Co.

CV

into

Oracle

Corp.,

144A,

8%,

11/08/21

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

United

States

470,000

31,396,583

Technology

Hardware,

Storage

&

Peripherals

0.5%

d

BNP

Paribas

Issuance

BV

into

Apple,

Inc.,

144A,

10%,

12/22/21

..

United

States

164,000

21,582,543

Trading

Companies

&

Distributors

1.0%

d

JPMorgan

Chase

Bank

NA

into

Fastenal

Co.,

144A,

7.5%,

12/03/21

United

States

770,000

39,745,050

Total

Equity-Linked

Securities

(Cost

$617,476,604)

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

694,951,391

Convertible

Preferred

Stocks

10.8%

Capital

Markets

0.4%

a

KKR

&

Co.,

Inc.,

6%,

C

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

United

States

200,000

14,996,000

Chemicals

0.6%

a

International

Flavors

&

Fragrances,

Inc.,

6%

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

United

States

500,000

24,775,000

Electric

Utilities

3.8%

American

Electric

Power

Co.,

Inc.,

6.125%

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

United

States

700,000

35,133,000

NextEra

Energy,

Inc.,

5.279%

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

United

States

1,200,000

60,444,000

Southern

Co.

(The),

6.75%,

2019

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

United

States

1,150,000

60,260,000

155,837,000

Health

Care

Equipment

&

Supplies

1.8%

Boston

Scientific

Corp.,

5.5%,

A

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

United

States

250,000

29,395,000

a

Danaher

Corp.,

5%,

B

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

United

States

30,000

42,472,500

71,867,500

Health

Care

Technology

0.5%

Change

Healthcare,

Inc.,

6%

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

United

States

250,000

19,135,000

Multi-Utilities

2.6%

Dominion

Energy,

Inc.,

7.25%,

A

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

United

States

450,000

46,417,500

DTE

Energy

Co.,

6.25%

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

United

States

750,000

38,055,000

a

Sempra

Energy,

6.75%,

B

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

United

States

200,000

20,988,000

105,460,500

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Managed

Income

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

48

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Convertible

Preferred

Stocks

(continued)

Semiconductors

&

Semiconductor

Equipment

1.1%

Broadcom,

Inc.,

8%,

A

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

United

States

32,000

$

46,382,400

Total

Convertible

Preferred

Stocks

(Cost

$369,217,386)

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

438,453,400

Principal

Amount

*

Corporate

Bonds

22.9%

Automobiles

0.3%

General

Motors

Co.

,

Senior

Note

,

5.4

%

,

10/02/23

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

United

States

10,000,000

11,067,081

Banks

1.6%

Bank

of

America

Corp.

,

Senior

Bond,

3.419%

to

12/20/27,

FRN

thereafter,

12/20/28

...

United

States

15,000,000

16,256,571

L,

Sub.

Bond,

4.183%,

11/25/27

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

United

States

10,000,000

11,193,705

Barclays

plc

,

Senior

Bond

,

3.65

%

,

3/16/25

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

United

Kingdom

15,000,000

16,232,256

Citigroup,

Inc.

,

Sub.

Bond

,

4.125

%

,

7/25/28

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

United

States

20,000,000

22,428,958

66,111,490

Beverages

0.3%

Anheuser-Busch

Cos.

LLC

/

Anheuser-Busch

InBev

Worldwide,

Inc.

,

Senior

Bond

,

4.9

%

,

2/01/46

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

Belgium

10,000,000

11,965,768

Capital

Markets

0.8%

Goldman

Sachs

Group,

Inc.

(The)

,

Senior

Bond

,

3.5

%

,

11/16/26

..

United

States

15,000,000

16,380,007

Morgan

Stanley

,

Sub.

Bond

,

4.35

%

,

9/08/26

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

United

States

15,000,000

16,985,968

33,365,975

Chemicals

0.6%

DuPont

de

Nemours,

Inc.

,

Senior

Note

,

4.493

%

,

11/15/25

.......

United

States

20,000,000

22,733,047

Communications

Equipment

0.4%

d

CommScope

Technologies

LLC

,

Senior

Bond

,

144A,

5

%

,

3/15/27

.

United

States

15,000,000

14,879,063

Consumer

Finance

1.2%

Capital

One

Financial

Corp.

,

Senior

Bond,

3.75%,

3/09/27

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

United

States

10,000,000

11,111,014

Sub.

Bond,

3.75%,

7/28/26

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

United

States

10,000,000

10,975,495

Ford

Motor

Credit

Co.

LLC

,

Senior

Bond

,

5.113

%

,

5/03/29

.......

United

States

25,000,000

27,351,500

49,438,009

Containers

&

Packaging

0.2%

d

Ardagh

Metal

Packaging

Finance

USA

LLC

/

Ardagh

Metal

Packaging

Finance

plc

,

Senior

Note

,

144A,

4

%

,

9/01/29

.......

United

States

10,000,000

9,968,900

Diversified

Telecommunication

Services

0.6%

d

CCO

Holdings

LLC

/

CCO

Holdings

Capital

Corp.

,

Senior

Bond

,

144A,

5.125

%

,

5/01/27

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

United

States

15,000,000

15,720,588

Verizon

Communications,

Inc.

,

Senior

Bond

,

2.55

%

,

3/21/31

.....

United

States

10,000,000

10,032,254

25,752,842

Electric

Utilities

0.8%

Duke

Energy

Corp.

,

Senior

Bond

,

3.15

%

,

8/15/27

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

United

States

10,000,000

10,794,928

d

Vistra

Operations

Co.

LLC

,

Senior

Secured

Bond

,

144A,

4.3

%

,

7/15/29

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

United

States

20,000,000

21,056,769

31,851,697

Equity

Real

Estate

Investment

Trusts

(REITs)

0.4%

American

Tower

Corp.

,

Senior

Bond

,

3.375

%

,

10/15/26

.........

United

States

15,000,000

16,324,480

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Managed

Income

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

49

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Corporate

Bonds

(continued)

Food

&

Staples

Retailing

0.5%

Walmart,

Inc.

,

Senior

Bond

,

3.25

%

,

7/08/29

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

United

States

20,000,000

$

22,191,484

Food

Products

0.4%

d

Post

Holdings,

Inc.

,

Senior

Bond

,

144A,

4.5

%

,

9/15/31

.........

United

States

15,000,000

14,910,750

Health

Care

Equipment

&

Supplies

0.3%

Edwards

Lifesciences

Corp.

,

Senior

Bond

,

4.3

%

,

6/15/28

.......

United

States

9,700,000

11,054,793

Health

Care

Providers

&

Services

4.8%

Centene

Corp.

,

Senior

Bond,

3%,

10/15/30

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

United

States

15,000,000

14,906,250

Senior

Note,

4.625%,

12/15/29

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

United

States

20,000,000

21,676,900

d

CHS/Community

Health

Systems,

Inc.

,

Secured

Note,

144A,

8.125%,

6/30/24

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

United

States

6,000,000

6,277,500

Secured

Note,

144A,

6.875%,

4/15/29

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

United

States

20,000,000

20,929,100

Senior

Secured

Note,

144A,

6.625%,

2/15/25

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

United

States

25,000,000

26,401,750

Senior

Secured

Note,

144A,

8%,

3/15/26

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

United

States

25,000,000

26,968,750

Cigna

Corp.

,

Senior

Note,

3.75%,

7/15/23

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

United

States

7,216,000

7,707,791

Senior

Note,

3.4%,

3/01/27

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

United

States

15,000,000

16,400,048

CVS

Health

Corp.

,

Senior

Bond,

3.875%,

7/20/25

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

United

States

15,000,000

16,629,081

Senior

Bond,

5.05%,

3/25/48

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

United

States

15,000,000

18,474,450

Tenet

Healthcare

Corp.

,

Senior

Secured

Note

,

4.625

%

,

7/15/24

...

United

States

17,000,000

17,277,950

193,649,570

Hotels,

Restaurants

&

Leisure

0.8%

Las

Vegas

Sands

Corp.

,

Senior

Bond

,

3.9

%

,

8/08/29

...........

United

States

10,000,000

10,440,641

d

Vail

Resorts,

Inc.

,

Senior

Note

,

144A,

6.25

%

,

5/15/25

..........

United

States

10,000,000

10,625,000

d

Wynn

Las

Vegas

LLC

/

Wynn

Las

Vegas

Capital

Corp.

,

Senior

Bond

,

144A,

5.5

%

,

3/01/25

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

United

States

10,000,000

10,691,050

31,756,691

Insurance

0.4%

d

Liberty

Mutual

Group,

Inc.

,

Senior

Note

,

144A,

4.95

%

,

5/01/22

...

United

States

7,100,000

7,408,803

Prudential

Financial,

Inc.

,

Junior

Sub.

Bond

,

3.7%

to

10/01/30,

FRN

thereafter

,

10/01/50

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

United

States

10,000,000

10,337,500

17,746,303

IT

Services

0.6%

Fiserv,

Inc.

,

Senior

Bond

,

4.2

%

,

10/01/28

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

United

States

20,000,000

22,720,165

Machinery

0.2%

CNH

Industrial

NV

,

Senior

Bond

,

3.85

%

,

11/15/27

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

United

Kingdom

7,500,000

8,326,285

Media

0.3%

DISH

DBS

Corp.

,

Senior

Note

,

5.875

%

,

7/15/22

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

United

States

12,000,000

12,579,000

Metals

&

Mining

0.8%

d

Cleveland-Cliffs,

Inc.

,

Senior

Secured

Note

,

144A,

9.875

%

,

10/17/25

United

States

6,620,000

7,778,500

d

FMG

Resources

August

2006

Pty.

Ltd.

,

Senior

Bond

,

144A,

4.375

%

,

4/01/31

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

Australia

15,000,000

15,601,650

Freeport-McMoRan,

Inc.

,

Senior

Bond

,

5.25

%

,

9/01/29

.........

United

States

10,000,000

11,099,150

34,479,300

Multiline

Retail

0.3%

Dollar

General

Corp.

,

Senior

Bond

,

3.875

%

,

4/15/27

...........

United

States

10,000,000

11,216,478

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Managed

Income

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

50

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Corporate

Bonds

(continued)

Oil,

Gas

&

Consumable

Fuels

0.7%

d

Calumet

Specialty

Products

Partners

LP

/

Calumet

Finance

Corp.

,

Senior

Note

,

144A,

11

%

,

4/15/25

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

United

States

15,000,000

$

16,380,600

Occidental

Petroleum

Corp.

,

Senior

Note

,

6.375

%

,

9/01/28

......

United

States

10,000,000

11,212,900

27,593,500

Pharmaceuticals

2.7%

d

Bausch

Health

Cos.,

Inc.

,

Senior

Note,

144A,

5%,

2/15/29

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

United

States

10,000,000

10,027,900

Senior

Secured

Note,

144A,

5.5%,

11/01/25

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

United

States

10,000,000

10,325,000

d

Bayer

US

Finance

II

LLC

,

Senior

Note

,

144A,

4.25

%

,

12/15/25

...

Germany

15,000,000

16,755,575

Bristol-Myers

Squibb

Co.

,

Senior

Note

,

3.4

%

,

7/26/29

..........

United

States

10,000,000

11,039,672

d

Endo

Luxembourg

Finance

Co.

I

SARL

/

Endo

US,

Inc.

,

Senior

Secured

Note

,

144A,

6.125

%

,

4/01/29

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

United

States

15,000,000

14,868,750

d

Jazz

Securities

DAC

,

Senior

Secured

Note

,

144A,

4.375

%

,

1/15/29

United

States

25,000,000

25,593,750

Mylan,

Inc.

,

Senior

Note

,

4.55

%

,

4/15/28

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

United

States

19,000,000

21,575,859

110,186,506

Road

&

Rail

0.5%

d

Ashtead

Capital,

Inc.

,

Senior

Note

,

144A,

4.125

%

,

8/15/25

......

United

Kingdom

21,000,000

21,630,000

Semiconductors

&

Semiconductor

Equipment

0.4%

Microchip

Technology,

Inc.

,

Senior

Secured

Note

,

4.333

%

,

6/01/23

United

States

15,000,000

16,091,153

Tobacco

0.8%

BAT

Capital

Corp.

,

Senior

Note

,

3.557

%

,

8/15/27

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

United

Kingdom

15,000,000

15,990,105

Reynolds

American,

Inc.

,

Senior

Bond

,

4.45

%

,

6/12/25

.........

United

Kingdom

15,000,000

16,706,882

32,696,987

Wireless

Telecommunication

Services

1.2%

Sprint

Corp.

,

Senior

Note

,

7.625

%

,

2/15/25

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

United

States

10,000,000

11,887,500

d

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

8,053,125

d

T-Mobile

USA,

Inc.

,

Senior

Secured

Bond

,

144A,

3.875

%

,

4/15/30

.

United

States

25,000,000

27,263,750

47,204,375

Total

Corporate

Bonds

(Cost

$850,779,152)

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

929,491,692

U.S.

Government

and

Agency

Securities

1.9%

U.S.

Treasury

Notes

,

2.75%,

9/15/21

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

United

States

25,000,000

25,250,930

2.875%,

10/31/23

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

United

States

50,000,000

53,273,437

Total

U.S.

Government

and

Agency

Securities

(Cost

$74,939,809)

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

78,524,367

Asset-Backed

Securities

0.6%

Airlines

0.6%

United

Airlines

Pass-Through

Trust

,

2020-1,

A,

5.875%,

10/15/27

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

United

States

9,516,500

10,548,410

2020-1,

B,

4.875%,

7/15/27

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

United

States

11,646,000

12,183,779

22,732,189

a

a

a

a

a

a

Total

Asset-Backed

Securities

(Cost

$21,162,500)

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

22,732,189

Mortgage-Backed

Securities

0.8%

Federal

National

Mortgage

Association

(FNMA)

Fixed

Rate

0.0%

†

FNMA,

30

Year,

4%,

8/01/49

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

United

States

1,979,501

2,161,317

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Managed

Income

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

51

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Mortgage-Backed

Securities

(continued)

Government

National

Mortgage

Association

(GNMA)

Fixed

Rate

0.8%

GNMA

II,

Single-family,

30

Year,

3%,

1/20/51

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

United

States

30,589,346

$

32,039,585

Total

Mortgage-Backed

Securities

(Cost

$34,727,262)

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

34,200,902

Total

Long

Term

Investments

(Cost

$3,382,054,943)

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

4,002,909,684

a

Short

Term

Investments

1.5%

a

a

Country

Shares

a

Value

a

Money

Market

Funds

1.2%

b,e

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

47,004,418

47,004,418

Total

Money

Market

Funds

(Cost

$47,004,418)

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

47,004,418

f

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

0.3%

a

a

a

a

a

Money

Market

Funds

0.2%

b,e

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

8,000,000

8,000,000

Principal

Amount

*

Repurchase

Agreements

0.1%

g

Joint

Repurchase

Agreement,

BofA

Securities,

Inc.,

0%,

5/03/21

(Maturity

Value

$4,074,758)

Collateralized

by

U.S.

Treasury

Note,

1.5%,

11/30/24

(valued

at

$4,156,257)

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

4,074,758

4,074,758

Total

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

(Cost

$12,074,758)

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

12,074,758

Total

Short

Term

Investments

(Cost

$59,079,176

)

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

59,079,176

a

Total

Investments

(Cost

$3,441,134,119)

100.1%

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

$4,061,988,860

Other

Assets,

less

Liabilities

(0.1)%

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

(1,279,975)

Net

Assets

100.0%

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

$4,060,708,885

See

Abbreviations

on

page

76

.

*

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

on

loan

at

April

30,

2021.

See

Note

1(f).

b

See

Note

3(f)

regarding

investments

in

affiliated

management

investment

companies.

c

See

Note

1(e)

regarding

equity-linked

securities.

d

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

April

30,

2021,

the

aggregate

value

of

these

securities

was

$1,055,068,014,

representing

26.0%

of

net

assets.

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

Statements

Statements

of

Assets

and

Liabilities

April

30,

2021

(unaudited)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

52

Franklin

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

Franklin

Managed

Income

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

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

$4,055,233,273

$2,132,113,173

$3,281,786,630

Cost

-

Controlled

affiliates

(Note

3f)

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

—

—

66,567,063

Cost

-

Non-controlled

affiliates

(Note

3f)

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

59,071,613

51,206,832

88,705,668

Cost

-

Unaffiliated

repurchase

agreements

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

7,178,301

4,579,721

4,074,758

Value

-

Unaffiliated

issuers

(Includes

securities

loaned

of

$39,260,433,

$22,036,934

and

$31,847,980

respectively)

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

$5,198,904,231

$3,196,944,201

$3,896,609,884

Value

-

Controlled

affiliates

(Note

3f)

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

—

—

69,129,800

Value

-

Non-controlled

affiliates

(Note

3f)

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

59,071,613

51,206,832

92,174,418

Value

-

Unaffiliated

repurchase

agreements

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

7,178,301

4,579,721

4,074,758

Cash

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

—

398,012

—

Receivables:

Investment

securities

sold

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

—

3,306,990

—

Capital

shares

sold

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

5,445,318

4,079,614

3,239,128

Dividends

and

interest

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

11,284,620

3,995,378

14,792,231

European

Union

tax

reclaims

(Note

1

g

)

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

—

554,592

847,551

Total

assets

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

5,281,884,083

3,265,065,340

4,080,867,770

Liabilities:

Payables:

Investment

securities

purchased

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

—

4,811,651

—

Capital

shares

redeemed

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

7,782,599

3,067,850

4,444,554

Management

fees

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

1,981,595

1,204,944

1,872,508

Distribution

fees

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

528,082

688,218

964,513

Transfer

agent

fees

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

670,129

445,004

539,099

Payable

upon

return

of

securities

loaned

(Note

1

f

)

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

35,889,301

22,896,721

12,074,758

Accrued

expenses

and

other

liabilities

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

236,801

160,011

263,453

Total

liabilities

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

47,088,507

33,274,399

20,158,885

Net

assets,

at

value

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

$5,234,795,576

$3,231,790,941

$4,060,708,885

Net

assets

consist

of:

Paid-in

capital

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

$3,426,023,313

$2,040,054,571

$3,345,605,412

Total

distributable

earnings

(losses)

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

1,808,772,263

1,191,736,370

715,103,473

Net

assets,

at

value

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

$5,234,795,576

$3,231,790,941

$4,060,708,885

Franklin

Investors

Securities

Trust

Financial

Statements

Statements

of

Assets

and

Liabilities

(continued)

April

30,

2021

(unaudited)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

53

Franklin

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

Franklin

Managed

Income

Fund

Class

A:

Net

assets,

at

value

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

$1,581,098,247

$2,562,204,074

$3,333,887,594

Shares

outstanding

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

53,411,569

84,804,292

247,051,663

Net

asset

value

per

share

a

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

$29.60

$30.21

$13.49

Maximum

offering

price

per

share

(net

asset

value

per

share

÷

94.50%,

94.50%

and

94.50%,

respectively)

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

$31.32

$31.97

$14.28

Class

C:

Net

assets,

at

value

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

$243,665,746

$209,685,524

$344,602,170

Shares

outstanding

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

8,386,358

6,997,106

25,804,998

Net

asset

value

and

maximum

offering

price

per

share

a

...........

$29.06

$29.97

$13.35

Class

R:

Net

assets,

at

value

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

$—

$8,372,116

$3,340,534

Shares

outstanding

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

—

276,971

246,796

Net

asset

value

and

maximum

offering

price

per

share

...........

$—

$30.23

$13.54

Class

R6:

Net

assets,

at

value

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

$128,423,944

$132,096,230

$178,359,397

Shares

outstanding

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

4,305,582

4,363,447

13,173,936

Net

asset

value

and

maximum

offering

price

per

share

...........

$29.83

$30.27

$13.54

Advisor

Class:

Net

assets,

at

value

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

$3,281,607,639

$319,432,997

$200,519,190

Shares

outstanding

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

110,836,203

10,555,357

14,820,867

Net

asset

value

and

maximum

offering

price

per

share

...........

$29.61

$30.26

$13.53

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

six

months

ended

April

30,

2021

(unaudited)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

54

Franklin

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

Franklin

Managed

Income

Fund

Investment

income:

Dividends:

(net

of

foreign

taxes

of

$–,

$508,032

and

$249,987,

respectively)

Unaffiliated

issuers

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

$23,773,391

$36,590,827

$38,723,404

Controlled

affiliates

(Note

3f)

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

—

—

347,154

Non-controlled

affiliates

(Note

3f)

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

1,502

613

416,084

Interest:

Unaffiliated

issuers

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

15,188,377

685,830

24,865,562

Income

from

securities

loaned:

Unaffiliated

entities

(net

of

fees

and

rebates)

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

115,140

6,440

23,820

Non-controlled

affiliates

(Note

3

f

)

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

411

132

48

Other

income

(Note

1

g

)

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

—

4,675

237,945

Total

investment

income

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

39,078,821

37,288,517

64,614,017

Expenses:

Management

fees

(Note

3

a

)

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

11,701,295

6,667,255

10,480,554

Distribution

fees:

(Note

3c

)

    Class

A

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

1,944,882

2,842,844

3,909,207

    Class

C

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

1,252,218

945,327

1,728,003

    Class

R

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

—

17,593

7,866

Transfer

agent

fees:

(Note

3e

)

    Class

A

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

738,490

1,269,235

1,573,138

    Class

C

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

118,893

105,511

174,979

    Class

R

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

—

4,031

1,589

    Class

R6

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

33,096

25,928

31,092

    Advisor

Class

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

1,495,877

150,531

92,168

Custodian

fees

(Note

4

)

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

12,409

9,329

15,762

Reports

to

shareholders

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

134,435

96,262

138,060

Registration

and

filing

fees

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

61,152

71,301

87,928

Professional

fees

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

38,244

39,286

40,506

Trustees'

fees

and

expenses

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

20,445

12,693

19,452

Other

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

41,032

26,011

37,726

Total

expenses

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

17,592,468

12,283,137

18,338,030

Expense

reductions

(Note

4

)

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

(227)

(106)

(16,254)

Expenses

waived/paid

by

affiliates

(Note

3

f

and

3

g

)

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

(67,982)

(23,767)

(144,145)

Net

expenses

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

17,524,259

12,259,264

18,177,631

Net

investment

income

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

21,554,562

25,029,253

46,436,386

Franklin

Investors

Securities

Trust

Financial

Statements

Statements

of

Operations

(continued)

for

the

six

months

ended

April

30,

2021

(unaudited)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

55

Franklin

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

Franklin

Managed

Income

Fund

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

Unaffiliated

issuers

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

694,684,649

130,103,654

121,327,284

Written

options

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

—

—

4,401,972

Foreign

currency

transactions

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

—

(33,280)

(66,988)

Capital

gain

distributions

from

management

investment

companies:

Non-controlled

affiliates

(Note

3

f

)

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

—

—

1,805,826

Net

realized

gain

(loss)

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

694,684,649

130,070,374

127,468,094

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

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

238,842,427

515,144,986

438,300,734

Controlled

affiliates

(Note

3f)

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

—

—

5,711,195

Non-controlled

affiliates

(Note

3f)

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

—

—

9,500,850

Translation

of

other

assets

and

liabilities

denominated

in

foreign

currencies

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

—

34,716

36,543

Written

options

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

—

—

37,871

Net

change

in

unrealized

appreciation

(depreciation)

..........

238,842,427

515,179,702

453,587,193

Net

realized

and

unrealized

gain

(loss)

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

933,527,076

645,250,076

581,055,287

Net

increase

(decrease)

in

net

assets

resulting

from

operations

........

$955,081,638

$670,279,329

$627,491,673

Franklin

Investors

Securities

Trust

Financial

Statements

Statements

of

Changes

in

Net

Assets

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

56

Franklin

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

Six

Months

Ended

April

30,

2021

(unaudited)

Year

Ended

October

31,

2020

Six

Months

Ended

April

30,

2021

(unaudited)

Year

Ended

October

31,

2020

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

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

$21,554,562

$42,939,240

$25,029,253

$47,722,036

Net

realized

gain

(loss)

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

694,684,649

564,693,488

130,070,374

35,390,855

Net

change

in

unrealized

appreciation

(depreciation)

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

238,842,427

507,214,078

515,179,702

(149,216,848)

Net

increase

(decrease)

in

net

assets

resulting

from

operations

.

955,081,638

1,114,846,806

670,279,329

(66,103,957)

Distributions

to

shareholders:

Class

A

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

(157,578,834)

(100,126,924)

(42,933,562)

(108,336,733)

Class

C

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

(25,406,482)

(19,635,749)

(2,885,956)

(9,211,870)

Class

R

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

—

—

(125,693)

(349,918)

Class

R6

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

(13,419,797)

(8,435,869)

(2,341,678)

(5,610,985)

Advisor

Class

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

(320,636,812)

(205,378,395)

(5,278,018)

(10,606,257)

Total

distributions

to

shareholders

.....

(517,041,925)

(333,576,937)

(53,564,907)

(134,115,763)

Capital

share

transactions:

(Note

2

)

Class

A

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

60,704,414

(32,527,936)

116,537,296

97,596,429

Class

C

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

(11,866,700)

(71,327,737)

7,174,371

(30,492,088)

Class

R

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

—

—

1,039,347

(937,037)

Class

R6

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

3,305,440

42,503,124

9,612,007

9,077,163

Advisor

Class

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

238,329,658

(70,863,853)

42,299,908

59,317,042

Total

capital

share

transactions

.......

290,472,812

(132,216,402)

176,662,929

134,561,509

Net

increase

(decrease)

in

net

assets

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

728,512,525

649,053,467

793,377,351

(65,658,211)

Net

assets:

Beginning

of

period

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

4,506,283,051

3,857,229,584

2,438,413,590

2,504,071,801

End

of

period

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

$5,234,795,576

$4,506,283,051

$3,231,790,941

$2,438,413,590

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.

Semiannual

Report

57

Franklin

Managed

Income

Fund

Six

Months

Ended

April

30,

2021

(unaudited)

Year

Ended

October

31,

2020

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

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

$46,436,386

$91,288,516

Net

realized

gain

(loss)

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

127,468,094

74,815,248

Net

change

in

unrealized

appreciation

(depreciation)

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

453,587,193

(218,412,724)

Net

increase

(decrease)

in

net

assets

resulting

from

operations

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

627,491,673

(52,308,960)

Distributions

to

shareholders:

Class

A

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

(79,015,835)

(224,726,464)

Class

C

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

(7,598,603)

(31,740,281)

Class

R

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

(76,650)

(279,688)

Class

R6

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

(4,512,297)

(12,745,644)

Advisor

Class

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

(4,884,543)

(14,013,214)

Total

distributions

to

shareholders

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

(96,087,928)

(283,505,291)

Capital

share

transactions:

(Note

2

)

Class

A

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

40,387,892

158,395,068

Class

C

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

(46,086,360)

(109,248,688)

Class

R

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

(201,587)

(658,458)

Class

R6

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

(551,306)

10,102,120

Advisor

Class

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

8,242,674

1,247,711

Total

capital

share

transactions

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

1,791,313

59,837,753

Net

increase

(decrease)

in

net

assets

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

533,195,058

(275,976,498)

Net

assets:

Beginning

of

period

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

3,527,513,827

3,803,490,325

End

of

period

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

$4,060,708,885

$3,527,513,827

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

58

franklintempleton.com

Semiannual

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,

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

(unaudited)

59

franklintempleton.com

Semiannual

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

April

30,

2021,

certain

securities

may

have

been

fair

valued

using

these

procedures,

in

which

case

the

securities

were

categorized

as

Level

2

inputs

within

the

fair

value

hierarchy

(referred

to

as

“market

level

fair

value”).

See

the

Fair

Value

Measurements

note

for

more

information.

When

the

last

day

of

the

reporting

period

is

a

non-business

day,

certain

foreign

markets

may

be

open

on

those

days

that

the

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

(unaudited)

60

franklintempleton.com

Semiannual

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

period

end,

as

indicated

in

the

Statements

of

Investments,

had

been

entered

into

on

April

30,

2021.

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

in

the

Statements

of

Assets

and

Liabilities.

Additionally,

the

Franklin

Convertible

Securities

Fund

and

Franklin

Managed

Income

received

$4,397,254

and

$23,684,467

respectively,

in

U.S.

Government

and

Agency

securities

as

collateral.

These

securities

received

as

collateral

are

held

in

segregated

accounts

with

the

Funds’

custodian.

The

Fund

cannot

repledge

or

resell

these

securities

received

as

collateral.

As

such,

the

non-

cash

collateral

is

excluded

from

the

Statements

of

Assets

and

Liabilities.

The

Fund

may

receive

income

from

the

investment

of

cash

collateral,

in

addition

to

lending

fees

and

rebates

paid

by

the

borrower.

Income

from

securities

loaned,

net

of

fees

paid

to

the

securities

lending

agent

and/or

third-

party

vendor,

is

reported

separately

in

the

Statements

of

Operations.

The

Fund

bears

the

market

risk

with

respect

1.

Organization

and

Significant

Accounting

Policies

(continued)

c.

Joint

Repurchase

Agreement

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

61

franklintempleton.com

Semiannual

Report

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.

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). 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

amount

of

foreign

taxes

Fund

shareholders

can

use

as

tax

deductions

or credits

on

their 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

April

30,

2021, 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.

1.

Organization

and

Significant

Accounting

Policies

(continued)

f.

Securities

Lending

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

62

franklintempleton.com

Semiannual

Report

Common

expenses

incurred

by

the

Trust

are

allocated

among

the

Funds

based

on

the

ratio

of

net

assets

of

each

Fund

to

the

combined

net

assets

of

the

Trust

or

based

on

the

ratio

of

number

of

shareholders

of

each

Fund

to

the

combined

number

of

shareholders

of

the

Trust.

Fund

specific

expenses

are

charged

directly

to

the

Fund

that

incurred

the

expense.

Realized

and

unrealized

gains

and

losses

and

net

investment

income,

excluding

class

specific

expenses,

are

allocated

daily

to

each

class

of

shares

based

upon

the

relative

proportion

of

net

assets

of

each

class.

Differences

in

per

share

distributions

by

class

are

generally

due

to

differences

in

class

specific

expenses.

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.

1.

Organization

and

Significant

Accounting

Policies

(continued)

h.

Security

Transactions,

Investment

Income,

Expenses

and

Distributions

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

63

franklintempleton.com

Semiannual

Report

2.

Shares

of

Beneficial

Interest

At

April

30,

2021,

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:

Six

Months

ended

April

30,

2021

Shares

sold

a

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

2,493,957

$72,962,140

9,018,411

$252,063,726

Shares

issued

in

reinvestment

of

distributions

..........

5,330,367

148,577,518

1,528,354

41,967,683

Shares

redeemed

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

(5,536,029)

(160,835,244)

(6,404,727)

(177,494,113)

Net

increase

(decrease)

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

2,288,295

$60,704,414

4,142,038

$116,537,296

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

Class

C

Class

C

Shares:

Six

Months

ended

April

30,

2021

Shares

sold

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

244,306

$6,980,306

1,334,902

$36,702,108

Shares

issued

in

reinvestment

of

distributions

..........

888,773

24,309,964

105,176

2,857,900

Shares

redeemed

a

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

(1,498,417)

(43,156,970)

(1,171,539)

(32,385,637)

Net

increase

(decrease)

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

(365,338)

$(11,866,700)

268,539

$7,174,371

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)

Class

R

Class

R

Shares:

Six

Months

ended

April

30,

2021

Shares

sold

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

—

$—

46,337

$1,273,766

Shares

issued

in

reinvestment

of

distributions

..........

—

—

4,566

125,447

Shares

redeemed

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

—

—

(13,008)

(359,866)

Net

increase

(decrease)

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

—

$—

37,895

$1,039,347

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)

Class

R6

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

64

franklintempleton.com

Semiannual

Report

Franklin

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

Shares

Amount

Shares

Amount

Class

R6

Shares:

Six

Months

ended

April

30,

2021

Shares

sold

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

770,212

$22,423,937

831,227

$23,210,467

Shares

issued

in

reinvestment

of

distributions

..........

472,375

13,265,883

69,022

1,900,738

Shares

redeemed

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

(1,100,624)

(32,384,380)

(556,910)

(15,499,198)

Net

increase

(decrease)

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

141,963

$3,305,440

343,339

$9,612,007

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

Advisor

Class

Advisor

Class

Shares:

Six

Months

ended

April

30,

2021

Shares

sold

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

13,726,327

$400,611,267

2,614,601

$72,889,023

Shares

issued

in

reinvestment

of

distributions

..........

9,715,774

270,920,915

182,512

5,029,743

Shares

redeemed

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

(14,904,653)

(433,202,524)

(1,283,054)

(35,618,858)

Net

increase

(decrease)

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

8,537,448

$238,329,658

1,514,059

$42,299,908

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

Franklin

Managed

Income

Fund

Shares

Amount

Class

A

Class

A

Shares:

Six

Months

ended

April

30,

2021

Shares

sold

a

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

17,359,035

$223,230,664

Shares

issued

in

reinvestment

of

distributions

..........

5,990,556

76,802,878

Shares

redeemed

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

(20,225,869)

(259,645,650)

Net

increase

(decrease)

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

3,123,722

$40,387,892

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

Class

C

2.

Shares

of

Beneficial

Interest

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

65

franklintempleton.com

Semiannual

Report

Franklin

Managed

Income

Fund

Shares

Amount

Class

C

Shares:

Six

Months

ended

April

30,

2021

Shares

sold

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

1,452,405

$18,547,047

Shares

issued

in

reinvestment

of

distributions

..........

591,470

7,489,439

Shares

redeemed

a

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

(5,667,094)

(72,122,846)

Net

increase

(decrease)

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

(3,623,219)

$(46,086,360)

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)

Class

R

Class

R

Shares:

Six

Months

ended

April

30,

2021

Shares

sold

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

33,761

$438,874

Shares

issued

in

reinvestment

of

distributions

..........

5,951

76,455

Shares

redeemed

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

(55,913)

(716,916)

Net

increase

(decrease)

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

(16,201)

$(201,587)

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)

Class

R6

Class

R6

Shares:

Six

Months

ended

April

30,

2021

Shares

sold

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

1,240,704

$16,074,499

Shares

issued

in

reinvestment

of

distributions

..........

349,662

4,499,347

Shares

redeemed

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

(1,639,540)

(21,125,152)

Net

increase

(decrease)

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

(49,174)

$(551,306)

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

Advisor

Class

2.

Shares

of

Beneficial

Interest

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

66

franklintempleton.com

Semiannual

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

Managed

Income

Fund

Shares

Amount

Advisor

Class

Shares:

Six

Months

ended

April

30,

2021

Shares

sold

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

2,472,925

$32,000,658

Shares

issued

in

reinvestment

of

distributions

..........

331,457

4,262,002

Shares

redeemed

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

(2,184,306)

(28,019,986)

Net

increase

(decrease)

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

620,076

$8,242,674

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

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

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

2.

Shares

of

Beneficial

Interest

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

67

franklintempleton.com

Semiannual

Report

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:

For

the

period

ended

April

30,

2021,

each

Fund's

annualized

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:

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

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

Franklin

Managed

Income

Fund

Gross

effective

investment

management

fee

rate

........

0.459%

0.466%

0.547%

3.

Transactions

with

Affiliates

(continued)

a.

Management

Fees

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

68

franklintempleton.com

Semiannual

Report

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.

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

period

ended

April

30,

2021,

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.

As

defined

in

the

1940

Act,

an

investment

is

deemed

to

be

a

“Controlled

Affiliate”

of

a

fund

when

a

fund

owns,

either

directly

or

indirectly,

25%

or

more

of

the

affiliated

fund’s

outstanding

shares

or

has

the

power

to

exercise

control

over

management

or

policies

of

such

fund.

The

Funds

do

not

invest

for

purposes

of

exercising

a

controlling

influence

over

the

management

or

policies.

Management

fees

paid

by

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%

Franklin

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

Franklin

Managed

Income

Fund

Sales

charges

retained

net

of

commissions

paid

to

unaffiliated

brokers/dealers

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

$20,673

$245,296

$273,258

CDSC

retained

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

$2,841

$12,169

$17,298

Franklin

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

Franklin

Managed

Income

Fund

Transfer

agent

fees

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

$775,887

$639,361

$792,922

3.

Transactions

with

Affiliates

(continued)

c.

Distribution

Fees

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

69

franklintempleton.com

Semiannual

Report

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

period

ended

April

30,

2021,

investments

in

affiliated

management

investment

companies

were

as

follows:

    aa

Value

at

Beginning

of

Period

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Period

Number

of

Shares

Held

at

End

of

Period

Investment

Income

a      

a  

a  

a  

a  

a  

a  

a  

Franklin

Convertible

Securities

Fund

Non-Controlled

Affiliates

Dividends

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.......

$211,356,904

$401,792,022

$(582,788,313)

$—

$—

$30,360,613

30,360,613

$1,502

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.......

$6,200,000

$115,677,000

$(93,166,000)

$

—

$

—

$28,711,000

28,711,000

$411

Total

Affiliated

Securities

....

$217,556,904

$517,469,022

$(675,954,313)

$—

$—

$59,071,613

$1,913

Franklin

Equity

Income

Fund

Non-Controlled

Affiliates

Dividends

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.......

$13,813,242

$311,233,866

$(292,157,276)

$—

$—

$32,889,832

32,889,832

$613

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.......

$14,180,000

$57,219,000

$(53,082,000)

$

—

$

—

$18,317,000

18,317,000

$132

Total

Affiliated

Securities

....

$27,993,242

$368,452,866

$(345,239,276)

$—

$—

$51,206,832

$745

Franklin

Managed

Income

Fund

Controlled

Affiliates

Dividends

Franklin

Liberty

Systematic

Style

Premia

ETF

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

$25,719,105

$—

$—

$

—

$

(2,407,105)

$

23,312,000

1,175,000

$

1,805,826

a

Franklin

Liberty

U.S.

Low

Volatility

ETF

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

37,699,500

—

—

—

8,118,300

45,817,800

1,000,000

347,154

Total

Controlled

Affiliates

....

$63,418,605

$—

$—

$

—

$

5,711,195

$69,129,800

$

2,152,980

Non-Controlled

Affiliates

Dividends

Franklin

FTSE

United

Kingdom

ETF

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

$27,669,150

$—

$—

$—

$9,500,850

$37,170,000

1,500,000

$415,062

3.

Transactions

with

Affiliates

(continued)

f.

Investments

in

Affiliated

Management

Investment

Companies

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

70

franklintempleton.com

Semiannual

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g.

Waiver

and

Expense

Reimbursements

Advisers

has

contractually

agreed

in

advance

to

waive

or

limit

its

respective

fees

and

to

assume

as

its

own

expense

certain

expenses

otherwise

payable

by

Franklin

Managed

Income

Fund

so

that

the

operating

expenses

(excluding

distribution

fees,

acquired

fund

fees

and

expenses

and

certain

non-routine

expenses

or

costs,

including

those

relating

to

litigation,

indemnification,

reorganizations,

and

liquidations)

for

each

class

of

the

Fund

does

not

exceed

0.68%

based

on

the

average

net

assets

of

each

class

until

February

28,

2022.

Total

expenses

waived

or

paid

are

not

subject

to

recapture

subsequent

to

the

Fund’s

fiscal

year

end.

Investor

Services

has

contractually

agreed

in

advance

to

waive

or

limit

its

fees

so

that

the

Class

R6

transfer

agent

fees

do

not

exceed

0.03%

based

on

the

average

net

assets

of

the

class

until

February

28,

2022.

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 period

ended

April

30,

2021, the

custodian

fees

were

reduced

as

noted

in

the

Statements

of

Operations.

    aa

Value

at

Beginning

of

Period

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Period

Number

of

Shares

Held

at

End

of

Period

Investment

Income

Franklin

Managed

Income

Fund

(continued)

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.......

28,554,890

626,542,220

(608,092,692)

—

—

47,004,418

47,004,418

1,022

Total

Non-Controlled

Affiliates

$56,224,040

$626,542,220

$(608,092,692)

$

—

$

9,500,850

$84,174,418

$

416,084

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.......

$2,956,000

$41,970,000

$(36,926,000)

—

—

$8,000,000

8,000,000

$48

Total

Affiliated

Securities

....

$122,598,645

$668,512,220

$(645,018,692)

$—

$15,212,045

$161,304,218

$2,569,112

a

Dividend

income

includes

capital

gain

distributions

received,

if

any,

from

underlying

funds,

and

are

presented

in

corresponding

line

item

in

the

Statement

of

Operations.

3.

Transactions

with

Affiliates

(continued)

f.

Investments

in

Affiliated

Management

Investment

Companies

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

71

franklintempleton.com

Semiannual

Report

5.

Income

Taxes

At

April

30,

2021,

the

cost

of

investments

and

net

unrealized

appreciation

(depreciation)

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.

6.

Investment

Transactions

Purchases

and

sales

of

investments

(excluding

short

term

securities)

for

the

period

ended

April

30,

2021,

were

as

follows:

At

April

30,

2021,

in

connection

with

securities

lending

transactions,

certain

or

all

Funds

loaned

investments

and

received

cash

collateral

as

follows:

7.

Credit Risk

At

April

30,

2021,

Franklin

Convertible

Securities

Fund

and

Franklin

Managed

Income

Fund

had

84.8%

and

9.5%,

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

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

$4,148,350,972

$2,188,178,576

$3,451,051,741

Unrealized

appreciation

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

$1,194,463,553

$1,079,204,453

$639,757,944

Unrealized

depreciation

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

(77,660,380)

(14,652,275)

(28,820,825)

Net

unrealized

appreciation

(depreciation)

.......

$1,116,803,173

$1,064,552,178

$610,937,119

Franklin

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

Franklin

Managed

Income

Fund

Purchases

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

$1,206,706,308

$559,905,788

$781,747,434

Sales

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

$1,226,651,268

$419,668,368

$760,914,350

Franklin

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

Franklin

Managed

Income

Fund

Securities

lending

transactions

a

:

Equity

investments

b

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

$35,889,301

$22,896,721

$12,074,758

a

The

agreements

can

be

terminated

at

any

time.

b

The

gross

amount

of

recognized

liability

for

such

transactions

is

included

in

payable

upon

return

of

securities

loaned

in

the

Statements

of

Assets

and

Liabilities.

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

72

franklintempleton.com

Semiannual

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

For

the

period

ended

April

30,

2021,

the

effect

of

derivative

contracts

in

the

Statements

of

Operations

was

as

follows:

For

the

period

ended

April

30,

2021,

the

average

month

end

notional

amount

of

options

contracts

represented

688,414

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

$2.675

billion

(Global

Credit

Facility)

which

matures

on

February

4,

2022.

This

Global

Credit

Facility

provides

a

source

of

funds

to

the

Borrowers

for

temporary

and

emergency

purposes,

including

the

ability

to

meet

future

unanticipated

or

unusually

large

redemption

requests.

Under

the

terms

of

the

Global

Credit

Facility,

the

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

period ended

April

30,

2021,

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.)

Derivative

Contracts

Not

Accounted

for

as

Hedging

Instruments

Statement

of

Operations

Location

Net

Realized

Gain

(Loss)

for

the

Period

Statement

of

Operations

Location

Net

Change

in

Unrealized

Appreciation

(Depreciation)

for

the

Period

Franklin

Managed

Income

Fund

Net

realized

gain

(loss)

from:

Net

change

in

unrealized

  appreciation

(depreciation)

on:

Equity

Contracts

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

Written

options

$4,401,972

Written

options

$37,871

Total

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

$4,401,972

$37,871

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

73

franklintempleton.com

Semiannual

Report

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

April

30,

2021,

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:

Common

Stocks

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

$

15,178,160

$

—

$

—

$

15,178,160

Convertible

Preferred

Stocks

:

Auto

Components

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

86,549,000

—

—

86,549,000

Capital

Markets

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

101,972,800

—

—

101,972,800

Chemicals

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

59,075,591

—

—

59,075,591

Electric

Utilities

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

184,486,300

—

—

184,486,300

Food

Products

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

74,340,000

—

—

74,340,000

Health

Care

Equipment

&

Supplies

.........

112,413,749

—

—

112,413,749

Health

Care

Technology

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

22,962,000

—

—

22,962,000

Life

Sciences

Tools

&

Services

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

81,048,800

—

—

81,048,800

Machinery

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

34,126,725

—

—

34,126,725

Multi-Utilities

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

110,400,140

—

—

110,400,140

Semiconductors

&

Semiconductor

Equipment

.

103,055,895

—

—

103,055,895

Water

Utilities

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

45,514,700

—

—

45,514,700

Wireless

Telecommunication

Services

.......

—

56,487,840

—

56,487,840

Convertible

Bonds

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

—

4,111,292,531

—

4,111,292,531

Short

Term

Investments

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

59,071,613

7,178,301

—

66,249,914

Total

Investments

in

Securities

...........

$1,090,195,473

$4,174,958,672

$—

$5,265,154,145

Franklin

Equity

Income

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Aerospace

&

Defense

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

125,142,260

—

—

125,142,260

Air

Freight

&

Logistics

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

87,048,220

—

—

87,048,220

Banks

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

369,841,590

—

—

369,841,590

Beverages

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

122,329,480

—

—

122,329,480

Capital

Markets

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

249,876,530

—

—

249,876,530

Chemicals

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

76,097,410

28,611,120

—

104,708,530

Commercial

Services

&

Supplies

...........

49,642,100

—

—

49,642,100

Communications

Equipment

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

19,091,250

—

—

19,091,250

Diversified

Telecommunication

Services

.....

68,280,610

—

—

68,280,610

Electric

Utilities

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

208,842,452

—

—

208,842,452

Electrical

Equipment

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

49,396,275

—

—

49,396,275

Equity

Real

Estate

Investment

Trusts

(REITs)

.

42,025,200

—

—

42,025,200

Food

&

Staples

Retailing

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

42,042,955

—

—

42,042,955

Food

Products

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

—

6,324,874

—

6,324,874

Health

Care

Equipment

&

Supplies

.........

94,655,160

—

—

94,655,160

Health

Care

Providers

&

Services

..........

73,608,280

—

—

73,608,280

Hotels,

Restaurants

&

Leisure

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

52,645,840

—

—

52,645,840

Household

Products

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

78,050,700

—

—

78,050,700

Insurance

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

19,060,925

—

—

19,060,925

IT

Services

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

17,750,560

—

—

17,750,560

Machinery

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

40,621,450

—

—

40,621,450

Media

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

60,922,750

—

—

60,922,750

Multiline

Retail

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

85,494,750

—

—

85,494,750

Oil,

Gas

&

Consumable

Fuels

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

154,604,275

—

—

154,604,275

11.

Fair

Value

Measurements

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

74

franklintempleton.com

Semiannual

Report

Level

1

Level

2

Level

3

Total

Franklin

Equity

Income

Fund

(continued)

Assets:

(continued)

Investments

in

Securities:

Common

Stocks:

Pharmaceuticals

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

$

165,936,050

$

—

$

—

$

165,936,050

Road

&

Rail

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

56,825,340

—

—

56,825,340

Semiconductors

&

Semiconductor

Equipment

.

87,174,930

—

—

87,174,930

Software

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

54,123,210

—

—

54,123,210

Specialty

Retail

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

84,730,000

—

—

84,730,000

Technology

Hardware,

Storage

&

Peripherals

.

20,612,928

—

—

20,612,928

Equity-Linked

Securities

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

—

298,017,518

—

298,017,518

Convertible

Preferred

Stocks

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

207,517,209

—

—

207,517,209

Short

Term

Investments

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

51,206,832

4,579,721

—

55,786,553

Total

Investments

in

Securities

...........

$2,915,197,521

$337,533,233

a

$—

$3,252,730,754

Franklin

Managed

Income

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Aerospace

&

Defense

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

43,747,476

—

—

43,747,476

Air

Freight

&

Logistics

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

35,675,500

—

—

35,675,500

Banks

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

301,052,931

—

—

301,052,931

Beverages

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

92,830,300

—

—

92,830,300

Biotechnology

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

52,962,500

—

—

52,962,500

Capital

Markets

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

28,892,500

—

—

28,892,500

Chemicals

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

14,424,000

—

—

14,424,000

Diversified

Telecommunication

Services

.....

79,059,066

23,095,025

—

102,154,091

Electric

Utilities

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

124,535,250

—

—

124,535,250

Food

Products

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

29,687,500

—

—

29,687,500

Health

Care

Providers

&

Services

..........

92,480,000

—

—

92,480,000

Household

Products

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

80,052,000

—

—

80,052,000

Industrial

Conglomerates

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

66,912,000

—

—

66,912,000

Insurance

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

15,466,000

—

—

15,466,000

IT

Services

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

28,376,000

—

—

28,376,000

Multiline

Retail

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

20,726,000

—

—

20,726,000

Multi-Utilities

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

109,225,000

—

—

109,225,000

Oil,

Gas

&

Consumable

Fuels

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

166,677,000

—

—

166,677,000

Personal

Products

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

—

23,431,695

—

23,431,695

Pharmaceuticals

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

174,869,250

—

—

174,869,250

Road

&

Rail

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

45,528,450

—

—

45,528,450

Specialty

Retail

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

48,550,500

—

—

48,550,500

Management

Investment

Companies

.........

106,299,800

—

—

106,299,800

Equity-Linked

Securities

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

—

694,951,391

—

694,951,391

Convertible

Preferred

Stocks

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

438,453,400

—

—

438,453,400

Corporate

Bonds

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

—

929,491,692

—

929,491,692

U.S.

Government

and

Agency

Securities

.......

—

78,524,367

—

78,524,367

Asset-Backed

Securities

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

—

22,732,189

—

22,732,189

Mortgage-Backed

Securities

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

—

34,200,902

—

34,200,902

Short

Term

Investments

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

55,004,418

4,074,758

—

59,079,176

Total

Investments

in

Securities

...........

$2,251,486,841

$1,810,502,019

b

$—

$4,061,988,860

a

Includes

foreign

securities

valued

at

$34,935,994,

which

were

categorized

as

Level

2

as

a

result

of

the

application

of

market

level

fair

value

procedures.

See

the

Financial

Instrument

Valuation

note

for

more

information.

b

Includes

foreign

securities

valued

at

$46,526,720,

which

were

categorized

as

Level

2

as

a

result

of

the

application

of

market

level

fair

value

procedures.

See

the

Financial

Instrument

Valuation

note

for

more

information.

11.

Fair

Value

Measurements

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

75

franklintempleton.com

Semiannual

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 period.

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.

11.

Fair

Value

Measurements

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

76

franklintempleton.com

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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

Franklin

Investors

Securities

Trust

Shareholder

Information

77

franklintempleton.com

Semiannual

Report

Board

Approval

of

Investment

Management

Agreements

FRANKLIN

INVESTORS

SECURITIES

TRUST

Franklin

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

Franklin

Managed

Income

Fund

(each

a

Fund)

At

a

meeting

held

on

February

23,

2021

(Meeting),

the

Board

of

Trustees

(Board)

of

Franklin

Investors

Securities

Trust

(Trust),

including

a

majority

of

the

trustees

who

are

not

“interested

persons”

as

defined

in

the

Investment

Company

Act

of

1940

(Independent

Trustees),

reviewed

and

approved

the

continuance

of

the

investment

management

agreement

between

Franklin

Advisers,

Inc.

(Manager)

and

the

Trust,

on

behalf

of

each

Fund

(each

a

Management

Agreement)

for

an

additional

one-year

period.

The

Independent

Trustees

received

advice

from

and

met

separately

with

Independent

Trustee

counsel

in

considering

whether

to

approve

the

continuation

of

each

Management

Agreement.

Although

the

Management

Agreements

for

the

Funds

were

considered

at

the

same

Board

meeting,

the

Board

considered

the

information

provided

to

it

about

the

Funds

together

and

with

respect

to

each

Fund

separately

as

the

Board

deemed

appropriate.

In

considering

the

continuation

of

each

Management

Agreement,

the

Board

reviewed

and

considered

information

provided

by

the

Manager

at

the

Meeting

and

throughout

the

year

at

meetings

of

the

Board

and

its

committees.

The

Board

also

reviewed

and

considered

information

provided

in

response

to

a

detailed

set

of

requests

for

information

submitted

to

the

Manager

by

Independent

Trustee

counsel

on

behalf

of

the

Independent

Trustees

in

connection

with

the

annual

contract

renewal

process.

In

addition,

prior

to

the

Meeting,

the

Independent

Trustees

held

a

telephonic

contract

renewal

meeting

at

which

the

Independent

Trustees

conferred

amongst

themselves

and

Independent

Trustee

counsel

about

contract

renewal

matters

and,

in

some

cases,

requested

additional

information

from

the

Manager

relating

to

the

contract.

The

Board

reviewed

and

considered

all

of

the

factors

it

deemed

relevant

in

approving

the

continuance

of

each

Management

Agreement,

including,

but

not

limited

to:

(i)

the

nature,

extent

and

quality

of

the

services

provided

by

the

Manager;

(ii)

the

investment

performance

of

each

Fund;

(iii)

the

costs

of

the

services

provided

and

profits

realized

by

the

Manager

and

its

affiliates

from

the

relationship

with

each

Fund;

(iv)

the

extent

to

which

economies

of

scale

are

realized

as

each

Fund

grows;

and

(v)

whether

fee

levels

reflect

these

economies

of

scale

for

the

benefit

of

Fund

investors.

In

approving

the

continuance

of

each

Management

Agreement,

the

Board,

including

a

majority

of

the

Independent

Trustees,

determined

that

the

terms

of

the

Management

Agreement

are

fair

and

reasonable

and

that

the

continuance

of

such

Management

Agreement

is

in

the

best

interests

of

the

applicable

Fund

and

its

shareholders.

While

attention

was

given

to

all

information

furnished,

the

following

discusses

some

primary

factors

relevant

to

the

Board’s

determination.

Nature,

Extent

and

Quality

of

Services

The

Board

reviewed

and

considered

information

regarding

the

nature,

extent

and

quality

of

investment

management

services

provided

by

the

Manager

and

its

affiliates

to

the

Funds

and

their

shareholders.

This

information

included,

among

other

things,

the

qualifications,

background

and

experience

of

the

senior

management

and

investment

personnel

of

the

Manager,

as

well

as

information

on

succession

planning

where

appropriate;

the

structure

of

investment

personnel

compensation;

oversight

of

third-

party

service

providers;

investment

performance

reports

and

related

financial

information

for

each

Fund;

reports

on

expenses

and

shareholder

services;

legal

and

compliance

matters;

risk

controls;

pricing

and

other

services

provided

by

the

Manager

and

its

affiliates;

and

management

fees

charged

by

the

Manager

and

its

affiliates

to

US

funds

and

other

accounts,

including

management’s

explanation

of

differences

among

accounts

where

relevant.

The

Board

also

reviewed

and

considered

an

annual

report

on

payments

made

by

Franklin

Templeton

(FT)

or

the

Funds

to

financial

intermediaries,

as

well

as

a

memorandum

relating

to

third-

party

servicing

arrangements,

which

included

discussion

of

the

changing

distribution

landscape

for

the

Funds.

The

Board

noted

management’s

continuing

efforts

and

expenditures

in

establishing

effective

business

continuity

plans

and

developing

strategies

to

address

areas

of

heightened

concern

in

the

mutual

fund

industry,

such

as

cybersecurity

in

the

current

work-from-home

environment

and

liquidity

risk

management.

The

Board

also

reviewed

and

considered

the

benefits

provided

to

Fund

shareholders

of

investing

in

a

fund

that

is

part

of

the

FT

family

of

funds.

The

Board

noted

the

financial

position

of

Franklin

Resources,

Inc.

(FRI),

the

Manager’s

parent,

and

its

commitment

to

the

mutual

fund

Franklin

Investors

Securities

Trust

Shareholder

Information

78

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Report

business

as

evidenced

by

its

reassessment

of

the

fund

offerings

in

response

to

the

market

environment

and

project

initiatives

and

capital

investments

relating

to

the

services

provided

to

the

Funds

by

the

FT

organization.

The

Board

specifically

noted

FT’s

commitment

to

enhancing

services

and

controlling

costs,

as

reflected

in

its

outsourcing

of

certain

administrative

functions,

and

growth

opportunities,

as

evidenced

by

its

recent

acquisition

of

the

Legg

Mason

companies.

The

Board

also

noted

FT’s

attention

focused

on

expanding

the

distribution

opportunities

for

all

funds

in

the

FT

family

of

funds.

Following

consideration

of

such

information,

the

Board

was

satisfied

with

the

nature,

extent

and

quality

of

services

provided

by

the

Manager

and

its

affiliates

to

the

Funds

and

their

shareholders.

Fund

Performance

The

Board

reviewed

and

considered

the

performance

results

of

each

Fund

over

various

time

periods

ended

November

30,

2020.

The

Board

considered

the

performance

returns

for

each

Fund

in

comparison

to

the

performance

returns

of

mutual

funds

deemed

comparable

to

the

Fund

included

in

a

universe

(Performance

Universe)

selected

by

Broadridge

Financial

Solutions,

Inc.

(Broadridge),

an

independent

provider

of

investment

company

data.

The

Board

received

a

description

of

the

methodology

used

by

Broadridge

to

select

the

mutual

funds

included

in

a

Performance

Universe.

The

Board

also

reviewed

and

considered

Fund

performance

reports

provided

and

discussions

that

occurred

with

portfolio

managers

at

Board

meetings

throughout

the

year.

A

summary

of

each

Fund’s

performance

results

is

below.

Franklin

Convertible

Securities

Fund

–

The

Performance

Universe

for

the

Fund

included

the

Fund

and

all

retail

and

institutional

convertible

securities

funds.

The

Board

noted

that

the

Fund’s

annualized

income

return

for

the

one-

and

five-year

periods

was

below

the

median

of

its

Performance

Universe,

but

for

the

three-year

period

was

equal

to

the

median

of

its

Performance

Universe

and

for

the

10-year

period

was

above

the

median

of

its

Performance

Universe.

The

Board

also

noted

that

the

Fund’s

annualized

total

return

for

the

one-year,

three-,

five-

and

10-year

periods

was

above

the

median

of

its

Performance

Universe.

The

Board

concluded

that

the

Fund’s

performance

was

satisfactory.

Franklin

Equity

Income

Fund

–

The

Performance

Universe

for

the

Fund

included

the

Fund

and

all

retail

and

institutional

equity

income

funds.

The

Board

noted

that

the

Fund’s

annualized

income

return

and

annualized

total

return

for

the

one-,

three-,

five-

and

10-year

periods

were

above

the

medians

of

its

Performance

Universe.

The

Board

concluded

that

the

Fund’s

performance

was

satisfactory.

Franklin

Managed

Income

Fund

–

The

Performance

Universe

for

the

Fund

included

the

Fund

and

all

retail

and

institutional

mixed-asset

target

allocation

moderate

funds.

The

Board

noted

that

the

Fund’s

annualized

income

return

for

the

one-,

three-,

five-

and

10-year

periods

was

above

the

median

and

in

the

first

quintile

(best)

of

its

Performance

Universe.

The

Board

also

noted

that

the

Fund’s

annualized

total

return

for

the

one-

and

three-year

periods

was

below

the

median

of

its

Performance

Universe,

but

for

the

five-

and

10-year

periods

was

above

the

median

of

its

Performance

Universe.

The

Board

considered

that

the

income-oriented

investment

objective

of

the

Fund

is

the

primary

focus

for

the

Fund’s

portfolio

management

team

and

that

the

evaluation

of

the

Fund’s

performance

relative

to

the

Fund’s

peers

on

an

annualized

income

return

basis

is

consistent

with

investor

expectations

and

the

Fund’s

investment

goals.

Given

the

Fund’s

income-oriented

investment

objective,

the

Board

concluded

that

the

Fund’s

performance

was

satisfactory.

Comparative

Fees

and

Expenses

The

Board

reviewed

and

considered

information

regarding

each

Fund’s

actual

total

expense

ratio

and

its

various

components,

including,

as

applicable,

management

fees;

transfer

agent

expenses;

underlying

fund

expenses;

Rule

12b-1

and

non-Rule

12b-1

service

fees;

and

other

non-

management

fees.

The

Board

also

noted

the

quarterly

and

annual

reports

it

receives

on

all

marketing

support

payments

made

by

FT

to

financial

intermediaries.

The

Board

considered

the

actual

total

expense

ratio

and,

separately,

the

contractual

management

fee

rate,

without

the

effect

of

fee

waivers,

if

any

(Management

Rate)

of

each

Fund

in

comparison

to

the

median

expense

ratio

and

median

Management

Rate,

respectively,

of

other

mutual

funds

deemed

comparable

to

and

with

a

similar

expense

structure

to

the

Fund

selected

by

Broadridge

(Expense

Group).

Broadridge

fee

and

expense

data

is

based

upon

information

taken

from

each

fund’s

most

recent

annual

report,

which

reflects

historical

asset

levels

that

may

be

quite

different

from

those

currently

existing,

particularly

in

a

period

of

market

volatility.

While

recognizing

such

inherent

limitation

and

the

fact

that

expense

ratios

and

Management

Rates

generally

increase

as

assets

decline

and

decrease

as

assets

grow,

the

Board

believed

the

independent

analysis

conducted

by

Broadridge

to

be

an

appropriate

measure

of

comparative

fees

and

expenses.

The

Broadridge

Management

Rate

includes

administrative

charges,

and

the

actual

total

expense

ratio,

for

comparative

consistency,

was

shown

for

Class

A

shares

for

each

Fund

and

for

each

of

the

other

funds

in

each

respective

Expense

Group.

The

Board

received

a

description

of

the

methodology

used

by

Broadridge

to

select

the

mutual

funds

included

in

an

Expense

Group.

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Securities

Trust

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Information

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Franklin

Convertible

Securities

Fund

and

Franklin

Equity

Income

Fund

–

The

Expense

Group

for

the

Franklin

Convertible

Securities

Fund

included

the

Fund

and

nine

other

convertible

securities

funds.

The

Expense

Group

for

the

Franklin

Equity

Income

Fund

included

the

Fund

and

16

other

equity

income

funds.

The

Board

noted

that

the

Management

Rates

and

actual

total

expense

ratios

for

the

Funds

were

below

the

medians

of

their

respective

Expense

Groups.

The

Board

concluded

that

the

Management

Rates

charged

to

the

Funds

are

reasonable.

Franklin

Managed

Income

Fund

–

The

Expense

Group

for

the

Fund

included

the

Fund

and

eight

other

mixed-asset

target

allocation

moderate

funds.

The

Board

noted

that

the

Management

Rate

for

the

Fund

was

slightly

above

the

median

of

its

Expense

Group.

The

Board

also

noted

that

the

actual

total

expense

ratio

for

the

Fund

was

below

the

median

and

in

the

second

quintile

of

its

Expense

Group.

The

Board

further

noted

that

the

actual

total

expense

ratio

for

the

Fund

reflected

a

fee

waiver

from

management.

The

Board

concluded

that

the

Management

Rate

charged

to

the

Fund

is

reasonable.

Profitability

The

Board

reviewed

and

considered

information

regarding

the

profits

realized

by

the

Manager

and

its

affiliates

in

connection

with

the

operation

of

each

Fund.

In

this

respect,

the

Board

considered

the

Fund

profitability

analysis

provided

by

the

Manager

that

addresses

the

overall

profitability

of

FT’s

US

fund

business,

as

well

as

its

profits

in

providing

investment

management

and

other

services

to

each

of

the

individual

funds

during

the

12-month

period

ended

September

30,

2020,

being

the

most

recent

fiscal

year-

end

for

FRI.

The

Board

noted

that

although

management

continually

makes

refinements

to

its

methodologies

used

in

calculating

profitability

in

response

to

organizational

and

product-related

changes,

the

overall

methodology

has

remained

consistent

with

that

used

in

the

Funds’

profitability

report

presentations

from

prior

years.

The

Board

further

noted

management’s

representation

that

the

profitability

analysis

excluded

the

impact

of

the

recent

acquisition

of

the

Legg

Mason

companies

and

that

management

expects

to

incorporate

the

legacy

Legg

Mason

companies

into

the

profitability

analysis

beginning

next

year.

The

Board

also

noted

that

PricewaterhouseCoopers

LLP,

auditor

to

FRI

and

certain

FT

funds,

has

been

engaged

by

the

Manager

to

periodically

review

and

assess

the

allocation

methodologies

to

be

used

solely

by

the

Funds’

Board

with

respect

to

the

profitability

analysis.

The

Board

noted

management’s

belief

that

costs

incurred

in

establishing

the

infrastructure

necessary

for

the

type

of

mutual

fund

operations

conducted

by

the

Manager

and

its

affiliates

may

not

be

fully

reflected

in

the

expenses

allocated

to

each

Fund

in

determining

its

profitability,

as

well

as

the

fact

that

the

level

of

profits,

to

a

certain

extent,

reflected

operational

cost

savings

and

efficiencies

initiated

by

management.

As

part

of

this

evaluation,

the

Board

considered

management’s

outsourcing

of

certain

operations,

which

effort

has

required

considerable

upfront

expenditures

by

the

Manager

but,

over

the

long

run

is

expected

to

result

in

greater

efficiencies.

The

Board

also

noted

management’s

expenditures

in

improving

shareholder

services

provided

to

the

Funds,

as

well

as

the

need

to

implement

systems

and

meet

additional

regulatory

and

compliance

requirements

resulting

from

recent

US

Securities

and

Exchange

Commission

and

other

regulatory

requirements.

The

Board

also

considered

the

extent

to

which

the

Manager

and

its

affiliates

might

derive

ancillary

benefits

from

fund

operations,

including

revenues

generated

from

transfer

agent

services,

potential

benefits

resulting

from

personnel

and

systems

enhancements

necessitated

by

fund

growth,

as

well

as

increased

leverage

with

service

providers

and

counterparties.

Based

upon

its

consideration

of

all

these

factors,

the

Board

concluded

that

the

level

of

profits

realized

by

the

Manager

and

its

affiliates

from

providing

services

to

each

Fund

was

not

excessive

in

view

of

the

nature,

extent,

and

quality

of

services

provided

to

each

Fund.

Economies

of

Scale

The

Board

reviewed

and

considered

the

extent

to

which

the

Manager

may

realize

economies

of

scale,

if

any,

as

each

Fund

grows

larger

and

whether

each

Fund’s

management

fee

structure

reflects

any

economies

of

scale

for

the

benefit

of

shareholders.

With

respect

to

possible

economies

of

scale,

the

Board

noted

the

existence

of

management

fee

breakpoints,

which

operate

generally

to

share

any

economies

of

scale

with

a

Fund’s

shareholders

by

reducing

the

Fund’s

effective

management

fees

as

the

Fund

grows

in

size.

The

Board

considered

the

Manager’s

view

that

any

analyses

of

potential

economies

of

scale

in

managing

a

particular

fund

are

inherently

limited

in

light

of

the

joint

and

common

costs

and

investments

the

Manager

incurs

across

the

FT

family

of

funds

as

a

whole.

The

Board

concluded

that

to

the

extent

economies

of

scale

may

be

realized

by

the

Manager

and

its

affiliates,

each

Fund’s

management

fee

structure

provided

a

sharing

of

benefits

with

the

Fund

and

its

shareholders

as

the

Fund

grows.

Franklin

Investors

Securities

Trust

Shareholder

Information

80

franklintempleton.com

Semiannual

Report

Conclusion

Based

on

its

review,

consideration

and

evaluation

of

all

factors

it

believed

relevant,

including

the

above-described

factors

and

conclusions,

the

Board

unanimously

approved

the

continuation

of

each

Management

Agreement

for

an

additional

one-year

period.

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.

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

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by

calling

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SEC-0330.

Householding

of

Reports

and

Prospectuses

You

will

receive,

or

receive

notice

of

the

availability

of,

each

Fund's

financial

reports

every

six

months.

In

addition,

you

will

receive

an

annual

updated

summary

prospectus

(detail

prospectus

available

upon

request).

To

reduce

Fund

expenses,

we

try

to

identify

related

shareholders

in

a

household

and

send

only

one

copy

of

the

financial

reports

(to

the

extent

received

by

mail)

and

summary

prospectus.

This

process,

called

“householding,”

will

continue

indefinitely

unless

you

instruct

us

otherwise.

If

you

prefer

not

to

have

these

documents

householded,

please

call

us

at

(800)

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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

S

06/21

©

2021

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.

Semiannual

Report

and

Shareholder

Letter

Franklin

Investors

Securities

Trust

Investment

Manager

Distributor

Shareholder

Services

Franklin

Advisers,

Inc.

Franklin

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Distributors,

Inc.

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DIAL

BEN

®

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franklintempleton.com

(800)

632-2301

SEMIANNUAL

REPORT

AND

SHAREHOLDER

LETTER

Franklin

Investors

Securities

Trust

April

30,

2021

Sign

up

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electronic

delivery

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Franklin

Adjustable

U.S.

Government

Securi-

ties

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Franklin

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the

semiannual

report

1

Shareholder

Letter

Dear

Shareholder:

During

the

six

months

ended

April

30,

2021,

the

U.S.

economy

continued

to

recover

from

the

effects

of

the

novel

coronavirus

(COVID-19)

pandemic.

U.S.

gross

domestic

product

(GDP)

reported

for

2020’s

third

and

fourth

quarters

showed

a

substantial

recovery

from

the

contraction

experienced

in

2020’s

first

half,

based

on

increased

business

and

residential

investment

and

consumer

spending.

U.S.

economic

growth

accelerated

during

2021’s

first

quarter

as

the

reopening

of

businesses,

widespread

COVID-19

vaccinations

and

federal

assistance

programs

boosted

consumer

spending.

Before

the

reporting

period,

the

U.S.

Federal

Reserve

lowered

the

federal

funds

rate

twice

in

March

2020

and

implemented

broad

quantitative

easing

measures

to

support

credit

markets.

During

the

reporting

period,

the

Federal

Reserve

held

its

key

rate

unchanged

at

0.25%

and

continued

quantitative

easing

and

its

adjusted

policy

since

August

to

allow

more

flexibility

to

keep

interest

rates

low,

while

maintaining

a

2%

average

inflation

target.

The

10-year

U.S.

Treasury

yield

was

0.88%

on

October

31,

2020,

and

it

increased

to

1.65%

by

the

end

of

April

2021.

In

this

environment,

the

prices

of

U.S.

stocks,

as

measured

by

the

Standard

&

Poor’s

®

500

Index

(S&P

500

®

),

rose

27.87%,

(the

index

increasing

from

3,269.96

to

4,181.17).

1,2

Investment-grade

bonds,

as

measured

by

the

Bloomberg

Barclays

U.S.

Aggregate

Bond

Index

(Bloomberg

Index),

posted

a

-1.52%

total

return

(an

index

decrease

from

2,365.52

to

2,329.61),

which

includes

reinvestment

of

income

and

distributions.

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

professionals

in

today’s

markets

and

encourage

investors

to

continue

to

seek

their

advice.

Amid

changing

markets

and

economic

conditions,

we

are

confident

investors

with

a

well-diversified

portfolio

and

a

patient,

long-term

outlook

should

be

well-positioned

for

the

years

ahead.

Franklin

Investors

Securities

Trust’s

semiannual

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

April

30,

2021,

unless

otherwise

indicated.

The

information

is

not

a

complete

analysis

of

every

aspect

of

any

market,

country,

industry,

security

or

fund.

Statements

of

fact

are

from

sources

considered

reliable.

1.

Source:

Copyright

©

2021,

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

+28.85%

(index

total

return

resulting

in

an

increase

from

6,734.84

to

8,678.16).

3.

Sources:

Morningstar

and

Bloomberg

Barclays

indexes.

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

Semiannual

Report

2

Contents

Semiannual

Report

Economic

and

Market

Overview

3

Franklin

Adjustable

U.S.

Government

Securities

Fund

4

Franklin

Floating

Rate

Daily

Access

Fund

9

Franklin

Low

Duration

Total

Return

Fund

15

Franklin

Total

Return

Fund

20

Financial

Highlights

and

Statements

of

Investments

25

Financial

Statements

110

Notes

to

Financial

Statements

117

Shareholder

Information

152

Visit

franklintempleton.com

for

fund

updates,

to

access

your

account,

or

to

find

helpful

financial

planning

tools.

3

franklintempleton.com

Semiannual

Report

SEMIANNUAL

REPORT

Economic

and

Market

Overview

The

U.S.

bond

market,

as

measured

by

the

Bloomberg

Barclays

U.S.

Aggregate

Bond

Index,

posted

negative

total

returns

during

the

six

months

ended

April

30,

2021,

as

continued

economic

recovery

and

additional

government

stimulus

led

to

higher

yields

(which

move

inversely

to

prices)

for

most

bonds.

As

the

period

began,

investors

continued

to

adjust

to

the

disruption

caused

by

the

novel

coronavirus

(COVID-19)

pandemic.

Before

the

period,

investor

flight

to

perceived

safety

had

driven

the

10-year

U.S.

Treasury

yield

to

near

record

lows.

During

the

period,

however,

the

implementation

of

mass

vaccination

programs

alongside

improving

economic

indicators

prompted

investors

to

anticipate

that

increased

inflation

would

lead

to

higher

interest

rates.

The

U.S.

Federal

Reserve

(Fed)

maintained

the

federal

funds

target

rate

at

a

range

of

0.00%–0.25%

and

continued

its

program

of

open-ended

purchasing

of

government-

backed

and

corporate

bonds

as

necessary

to

provide

liquidity

to

bond

markets.

Furthermore,

the

Fed

reiterated

that

interest

rates

would

potentially

remain

low,

even

if

inflation

moderately

exceeded

the

Fed’s

2%

target

for

some

time.

U.S.

Treasury

bonds,

as

measured

by

the

Bloomberg

Barclays

U.S.

Treasury

Index,

also

posted

negative

total

returns

for

the

period.

The

10-year

U.S.

Treasury

yield,

which

began

the

reporting

period

at

a

relatively

low

level

by

historical

standards,

rose

notably

amid

a

significant

U.S.

federal

budget

deficit

and

high

levels

of

issuance.

The

Fed’s

inflation

policy

also

pressured

Treasuries,

as

renewed

economic

strength

prompted

investors

to

increase

their

inflation

expectations.

Mortgage-backed

securities

(MBS),

as

measured

by

the

Bloomberg

Barclays

MBS

Index,

posted

marginally

negative

total

returns

for

the

period

despite

Fed

support,

as

low

interest

rates

led

to

accelerated

prepayments

from

mortgage

refinancing.

U.S.

corporate

bond

performance

varied

significantly

based

on

credit

rating,

reflecting

the

recovery

of

credit

markets

following

the

onset

of

the

pandemic.

While

the

strengthening

economy

pressured

corporate

bonds

generally,

it

also

had

the

effect

of

tempering

concerns

about

credit

quality,

which

benefited

lower-rated

bonds.

Consequently,

high-

yield

corporate

bonds,

as

represented

by

the

Bloomberg

Barclays

U.S.

Corporate

High

Yield

Bond

Index,

posted

strong

total

returns,

while

investment-grade

corporate

bonds,

as

represented

by

the

Bloomberg

Barclays

U.S.

Corporate

Bond

Index,

slightly

negative

total

returns.

The

foregoing

information

reflects

our

analysis

and

opinions

as

of

April

30,

2021.

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

Semiannual

Report

Franklin

Adjustable

U.S.

Government

Securities

Fund

This

semiannual

report

for

Franklin

Adjustable

U.S.

Government

Securities

Fund

covers

the

period

ended

April

30,

2021.

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

+0.43%

cumulative

total

return

for

the

six

months

under

review.

In

comparison,

the

Fund’s

benchmark,

the

Bloomberg

Barclays

U.S.

Government

Index:

1-2

Year

Component

posted

a

+0.12%

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

remained

invested

in

seasoned,

shorter-maturity,

high-quality

ARMs

that

tend

to

be

less

sensitive

to

interest-rate

changes,

which

supported

performance.

We

also

deployed

capital

into

the

agency

collateralized

mortgage

obligation

(CMO)

floater

and

15-year

fixed-rate

mortgage-backed

security

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

3.0%

with

larger

loan

counts

as

well

as

sequential

CMO

floaters

backed

by

seasoned

hybrid

ARM

collateral.

Secondary

activity

remained

fairly

muted

in

post

reset

hybrids

with

CMO

trading

desks

having

been

better

buyers

of

the

underlying

collateral.

Portfolio

Composition

4/30/21

%

of

Total

Net

Assets

Mortgage-Backed

Securities

83.2%

Commercial

Mortgage-Backed

Securities

8.6%

Short-Term

Investments

&

Other

Net

Assets

8.2%

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

30

.

Franklin

Adjustable

U.S.

Government

Securities

Fund

5

franklintempleton.com

Semiannual

Report

Underlying

coupons

continued

to

reset

lower

with

the

London

Interbank

Offered

Rate

(LIBOR)

4

declining

over

the

period.

With

absolute

prepayments

remaining

elevated,

given

the

historically

low

level

of

mortgage

rates

and

securities

trading

at

significant

premiums,

we

remain

cautious

on

high

premium

post

resets

going

forward.

Our

preference

remains

towards

bonds

linked

to

the

LIBOR

index,

which

would

have

slower

speeds

relative

to

those

indexed

off

the

One-Year

Constant

Maturity

Treasury.

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

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

Portfolio

Manager

The

foregoing

information

reflects

our

analysis,

opinions

and

portfolio

holdings

as

of

April

30,

2021,

the

end

of

the

reporting

period.

The

way

we

implement

our

main

investment

strategies

and

the

resulting

portfolio

holdings

may

change

depending

on

factors

such

as

market

and

economic

conditions.

These

opinions

may

not

be

relied

upon

as

investment

advice

or

an

offer

for

a

particular

security.

The

information

is

not

a

complete

analysis

of

every

aspect

of

any

market,

country,

industry,

security

or

the

Fund.

Statements

of

fact

are

from

sources

considered

reliable,

but

the

investment

manager

makes

no

representation

or

warranty

as

to

their

completeness

or

accuracy.

Although

historical

performance

is

no

guarantee

of

future

results,

these

insights

may

help

you

understand

our

investment

management

philosophy.

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

April

30,

2021

Franklin

Adjustable

U.S.

Government

Securities

Fund

6

franklintempleton.com

Semiannual

Report

The

performance

tables

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

4/30/21

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

6-Month

+0.43%

-1.79%

1-Year

+1.44%

-0.81%

5-Year

+4.79%

+0.49%

10-Year

+6.87%

+0.44%

Advisor

6-Month

+0.56%

+0.56%

1-Year

+1.69%

+1.69%

5-Year

+6.11%

+1.19%

10-Year

+9.58%

+0.92%

30-Day

Standardized

Yield

5

Share

Class

Distribution

Rate

4

(with

fee

waiver)

(without

fee

waiver)

A

0.93%

0.76%

0.69%

Advisor

1.20%

1.02%

0.95%

See

page

7

for

Performance

Summary

footnotes.

Franklin

Adjustable

U.S.

Government

Securities

Fund

Performance

Summary

7

franklintempleton.com

Semiannual

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.

Events

such

as

the

spread

of

deadly

diseases,

disasters,

and

financial,

political

or

social

disruptions,

may

heighten

risks

and

adversely

affect

performance.

The

Fund’s

prospectus

also

includes

a

description

of

the

main

investment

risks.

1.

The

Fund

has

a

fee

waiver

associated

with

any

investment

it

makes

in

a

Franklin

Templeton

money

fund

and/or

other

Franklin

Templeton

fund,

contractually

guaranteed

through

2/28/22.

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

4/30/21.

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.

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

(11/1/20–4/30/21)

Share

Class

Net

Investment

Income

A

$0.044155

A1

$0.050106

C

$0.028380

R6

$0.058337

Advisor

$0.054062

Total

Annual

Operating

Expenses

6

Share

Class

With

Fee

Waiver

Without

Fee

Waiver

A

0.98%

0.99%

Advisor

0.73%

0.74%

Your

Fund’s

Expenses

Franklin

Adjustable

U.S.

Government

Securities

Fund

8

franklintempleton.com

Semiannual

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

181/365

to

reflect

the

one-half

year

period.

2.

Reflects

expenses

after

fee

waivers

and

expense

reimbursements.

Does

not

include

acquired

fund

fees

and

expenses.

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Share

Class

Beginning

Account

Value

11/1/20

Ending

Account

Value

4/30/21

Expenses

Paid

During

Period

11/1/20–4/30/21

1,2

Ending

Account

Value

4/30/21

Expenses

Paid

During

Period

11/1/20–4/30/21

1,2

a

Net

Annualized

Expense

Ratio

2

A

$1,000

$1,004.30

$4.67

$1,020.14

$4.70

0.94%

A1

$1,000

$1,005.06

$3.93

$1,020.88

$3.96

0.79%

C

$1,000

$1,002.32

$6.67

$1,018.13

$6.73

1.34%

R6

$1,000

$1,006.09

$2.87

$1,021.94

$2.89

0.58%

Advisor

$1,000

$1,005.55

$3.42

$1,021.38

$3.45

0.69%

9

franklintempleton.com

Semiannual

Report

Franklin

Floating

Rate

Daily

Access

Fund

This

semiannual

report

for

Franklin

Floating

Rate

Daily

Access

Fund

covers

the

period

ended

April

30,

2021

.

Your

Fund’s

Goal

and

Main

Investments

The

Fund

seeks

to

provide

a

high

level

of

current

income.

A

secondary

goal

is

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

+6.68%

cumulative

total

return

for

the

six

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

+6.07%

total

return.

1

You

can

find

more

of

the

Fund’s

performance

data

in

the

Performance

Summary

beginning

on

page

12

.

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

Technical

conditions

in

the

loan

market

strengthened

during

the

period,

driven

by

positive

developments

on

the

COVID-19

vaccines

and

heightened

expectations

for

meaningful

fiscal

stimulus.

Inflows

into

retail

loan

investment

vehicles

accelerated

and

a

significant

increase

in

collateralized

loan

obligation

(CLO)

issuance

contributed

to

the

rally.

The

more

favorable

environment

supported

stronger

demand

for

lower-rated

loans

trading

at

deeper

discounts

to

par,

especially

those

in

industries

that

were

expected

to

benefit

from

a

reopening

economy.

Following

consecutive

months

of

outflows,

retail

loan

investment

vehicle

flows

reversed

course

during

December

2020.

The

turnaround

in

flows

were

initially

driven

by

loan

exchange

traded

funds,

but

inflows

eventually

spread

to

actively

managed

loan

mutual

funds

as

more

investors

looked

to

the

asset

class

in

response

to

rising

U.S.

Treasury

yields

and

potential

inflation.

Despite

the

increase

in

flows,

assets

remained

lower

than

its

most

recent

peak

in

2018.

Technical

conditions

in

the

loan

market

remained

robust

as

demand

from

CLOs

also

bolstered

support

for

loan

prices.

Liability

spreads

tightened

amid

renewed

investor

interest

in

floating-rate

assets,

as

new

issue

CLO

spreads

for

some

tranches

reached

the

tightest

levels

since

the

global

financial

crisis.

Issuance

of

new

CLOs

increased

in

early

2021,

outpacing

the

rate

from

the

prior

year,

leading

to

stronger

demand

for

loans

as

new

vehicles

launched.

Positive

flows

and

CLO

issuance

led

to

an

increasing

loan

supply

and

demand

imbalance

at

the

beginning

of

2021,

resulting

in

a

majority

of

the

market

trading

above

par.

Arrangers

launched

more

repricing

deals

to

reduce

spreads

on

existing

loans

after

those

deals

were

largely

absent

from

the

market

for

most

of

2020.

Net

new

volume

eventually

rose,

driven

by

an

increase

in

deals

to

finance

mergers

and

acquisitions.

More

new

loans

flexed

pricing

tighter

in

syndication

as

many

deals

garnered

strong

interest.

The

primary

market

also

saw

an

increase

in

opportunistic

deals

for

second

lien

loans

or

those

to

finance

dividends.

Issuance

of

B-rated

loans

exceeded

the

pace

from

prior

periods,

leading

to

a

further

shift

in

the

ratings

mix

within

the

loan

market.

Default

activity

declined

during

the

period,

amid

improving

fundamental

conditions

and

better

investor

sentiment.

The

gradual

decline

in

defaults

led

the

default

rate

to

fall

below

the

historical

average

by

the

end

of

the

period.

While

bifurcation

persisted

between

those

in

industries

less

impacted

by

the

COVID-19

crisis

and

those

affected

by

continued

virus

fears,

the

percentage

of

loans

trading

at

distressed

levels

sharply

declined.

Credit

rating

agencies

also

responded

to

improved

earnings

and

outlook,

leading

to

rating

upgrades

significantly

outpacing

downgrades.

Portfolio

Composition

4/30/21

%

of

Total

Net

Assets

Senior

Floating

Rate

Interests

84.4%

Corporate

Bonds

4.8%

Management

Investment

Companies

3.5%

Common

Stocks

3.2%

Other

1.2%

Short-Term

Investments

&

Other

Net

Assets

2.9%

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

37

.

Franklin

Floating

Rate

Daily

Access

Fund

10

franklintempleton.com

Semiannual

Report

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

six-month

period

under

review,

the

Fund

outperformed

its

benchmark,

the

CS

LLI.

Upper

tier

loans

in

the

index

returned

3.43%,

middle

tier

returned

5.67%,

and

lower

tier

returned

18.06%,

according

to

the

CS

LLI.

Fund

outperformance

was

primarily

driven

by

a

handful

of

lower-

rated

loans

in

the

portfolio

that

traded

higher

from

deeply

discounted

levels

over

the

period.

Among

the

top

contributors

were

issuers

that

would

benefit

from

a

reopening

economy

and/or

recently

underwent

restructurings

that

led

to

higher

expected

recoveries.

Stronger

economic

growth

and

rising

oil

prices

were

expected

to

result

in

a

higher

enterprise

valuation

for

Fieldwood

Energy

(a

producer

of

oil

and

gas)

as

the

company

worked

on

its

reorganization

plan.

Appvion

Operations

(a

manufacturer

of

carbonless

paper)

also

contributed

to

performance

as

an

asset

sale

resulted

in

a

partial

paydown

of

the

company’s

debt.

Alloy

FinCo

(a

manufacturer

of

components

for

the

aerospace

and

industrial

markets)

contributed

to

performance

as

the

company

continued

to

execute

on

its

turnaround

strategy

and

investors

expected

a

higher

recovery

for

its

term

loan.

Conversely,

FGI

Operating

(a

manufacturer

of

guns

and

ammunition)

detracted

from

performance

as

the

term

loan

was

marked

down

due

to

reduced

recovery

estimates.

24

Hour

Fitness

Worldwide

(a

fitness

club

owner

and

operator)

also

detracted

from

performance

as

the

company

continued

to

be

negatively

impacted

by

club

closures.

During

the

period,

we

continued

to

invest

in

a

diversified

set

of

middle

tier

loans,

while

reducing

higher

priced,

tighter

spread

upper

tier

loans.

The

Fund

shifted

its

overweight

position

in

upper

tier

loans

to

underweight

by

the

end

of

the

period.

The

largest

additions

to

the

portfolio

included

higher

spread

loans

that

launched

in

the

primary

market,

including

loans

in

the

service,

healthcare,

and

information

technology

industries.

We

increased

our

weightings

in

the

information

technology

and

service

sectors,

while

we

reduced

our

weightings

in

the

forest

products

and

automotive

industries.

During

the

period,

we

continued

to

add

secured

high-yield

bonds,

which

contributed

to

increased

potential

for

income

generation

and

principal

appreciation,

while

we

reduced

our

weighting

in

CLO

tranches.

We

maintained

the

Fund’s

investment

in

the

Franklin

Floating

Rate

Income

Fund

and

added

exposure

to

the

Invesco

Senior

Loan

ETF

for

continued

exposure

to

credit

and

improved

settlement

liquidity.

The

Fund

had

no

exposure

to

derivatives

during

the

period.

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

April

30,

2021,

the

end

of

the

reporting

period.

The

way

we

implement

our

main

investment

strategies

and

the

resulting

portfolio

holdings

may

change

depending

on

factors

such

as

market

and

Top

10

Holdings

4/30/21

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

Appvion

Operations,

Inc.

3.1%

Paper

&

Forest

Products,

United

States

Franklin

Floating

Rate

Income

Fund

3.0%

Capital

Markets,

United

States

Fieldwood

Energy

LLC

3.0%

Oil,

Gas

&

Consumable

Fuels,

United

States

Onsite

Rental

Group

Operations

Pty.

Ltd.

2.9%

Road

&

Rail,

Australia

Navistar,

Inc.

1.8%

Machinery,

United

States

Ventia

Midco

Pty.

Ltd.

1.7%

Road

&

Rail,

Australia

Global

Tel

Link

1.7%

Diversified

Telecommunication

Services,

United

States

CSC

Holdings

LLC

1.4%

Media,

United

States

GNC

Holdings,

Inc.

1.4%

Food

&

Staples

Retailing,

United

States

FGI

Operating

Co.

LLC

1.3%

Household

Products,

United

States

CFA

®

is

a

trademark

owned

by

CFA

Institute.

Franklin

Floating

Rate

Daily

Access

Fund

11

franklintempleton.com

Semiannual

Report

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

April

30,

2021

Franklin

Floating

Rate

Daily

Access

Fund

12

franklintempleton.com

Semiannual

Report

The

performance

tables

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

4/30/21

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

6-Month

+6.68%

+4.26%

1-Year

+10.99%

+8.43%

5-Year

+12.67%

+1.94%

10-Year

+28.02%

+2.27%

Advisor

6-Month

+6.81%

+6.81%

1-Year

+11.25%

+11.25%

5-Year

+14.06%

+2.67%

10-Year

+31.24%

+2.76%

30-Day

Standardized

Yield

5

Share

Class

Distribution

Rate

4

(with

fee

waiver)

(without

fee

waiver)

A

3.63%

3.17%

3.15%

Advisor

3.96%

3.49%

3.48%

See

page

13

for

Performance

Summary

footnotes.

Franklin

Floating

Rate

Daily

Access

Fund

Performance

Summary

13

franklintempleton.com

Semiannual

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

and

may

be

subject

to

resale

restrictions.

Investing

in

higher-yielding,

lower-rated,

floating-rate

loans

and

debt

securities

involves

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.

Events

such

as

the

spread

of

deadly

diseases,

disasters,

and

financial,

political

or

social

disruptions,

may

heighten

risks

and

adversely

affect

performance.

The

Fund’s

prospectus

also

includes

a

description

of

the

main

investment

risks.

1.

The

Fund

has

a

fee

waiver

associated

with

any

investment

it

makes

in

a

Franklin

Templeton

money

fund

and/or

other

Franklin

Templeton

fund,

contractually

guaranteed

through

2/28/22.

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

4/30/21.

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.

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

(11/1/20–4/30/21)

Share

Class

Net

Investment

Income

A

$0.176392

C

$0.161283

R6

$0.189889

Advisor

$0.185809

Total

Annual

Operating

Expenses

6

Share

Class

With

Fee

Waiver

Without

Fee

Waiver

A

0.96%

0.99%

Advisor

0.71%

0.74%

Your

Fund’s

Expenses

Franklin

Floating

Rate

Daily

Access

Fund

14

franklintempleton.com

Semiannual

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

181/365

to

reflect

the

one-half

year

period.

2.

Reflects

expenses

after

fee

waivers

and

expense

reimbursements.

Does

not

include

acquired

fund

fees

and

expenses.

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Share

Class

Beginning

Account

Value

11/1/20

Ending

Account

Value

4/30/21

Expenses

Paid

During

Period

11/1/20–4/30/21

1,2

Ending

Account

Value

4/30/21

Expenses

Paid

During

Period

11/1/20–4/30/21

1,2

a

Net

Annualized

Expense

Ratio

2

A

$1,000

$1,066.78

$5.05

$1,019.90

$4.94

0.99%

C

$1,000

$1,064.65

$7.10

$1,017.92

$6.94

1.39%

R6

$1,000

$1,069.95

$3.20

$1,021.70

$3.13

0.63%

Advisor

$1,000

$1,068.09

$3.78

$1,021.14

$3.69

0.74%

15

franklintempleton.com

Semiannual

Report

Franklin

Low

Duration

Total

Return

Fund

This

semiannual

report

for

Franklin

Low

Duration

Total

Return

Fund

covers

the

period

ended

April

30,

2021

.

Your

Fund’s

Goal

and

Main

Investments

The

Fund

seeks

a

high

level

of

current

income

as

is

consistent

with

prudent

investing,

while

seeking

preservation

of

capital.

Under

normal

market

conditions,

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

+2.56%

cumulative

total

return

for

the

six

months

under

review.

In

comparison,

the

Fund’s

benchmark,

the

Bloomberg

Barclays

U.S.

Government/Credit

Index:

1-3

Year

Component,

posted

a

+0.23%

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

17

.

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

*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

As

U.S.

Treasury

(UST)

yields

increased

during

the

period

and

investors

debated

potential

inflation

concerns

related

to

monetary

and

fiscal

stimulus,

fixed

income

total

return

performance

was

mixed.

However,

all

fixed

income

markets

posted

positive

excess

returns

over

the

period

and

outperformed

USTs.

High-yield

corporate

credit,

Treasury

Inflation-Protected

Securities

(TIPS),

emerging

market

bonds,

senior

secured

floating-rate

loans

and

non-agency

residential

mortgage-backed

securities

(RMBS)

were

the

top

performers

on

an

excess

returns

basis.

Additionally,

fixed

income

spreads

tightened

across

asset

classes

over

the

period.

During

the

period,

the

Fund’s

overweight

allocation

relative

to

the

benchmark

in

RMBS

was

the

primary

contributor

to

the

Fund’s

relative

performance.

Corporate

credit

allocation

also

boosted

returns

with

an

overweight

allocation

and

security

selection

in

collateralized

loan

obligations

(CLOs),

high-yield

corporate

credit

and

senior

securitized

floating-

rate

loans.

Positive

security

selection

in

investment-grade

corporate

credit

more

than

offset

negative

performance

from

allocation

to

the

sector.

In

contrast,

the

Fund’s

U.S.

yield

curve

positioning

detracted

from

performance,

primarily

from

Portfolio

Composition

4/30/21

%

of

Total

Net

Assets

U.S.

Government

and

Agency

Securities

24.5%

Corporate

Bonds

19.9%

Asset-Backed

Securities*

17.8%

Residential

Mortgage-Backed

Securities

7.7%

Foreign

Government

and

Agency

Securities

5.7%

Management

Investment

Companies

4.1%

Municipal

Bonds

3.2%

Mortgage-Backed

Securities

2.7%

Commercial

Mortgage-Backed

Securities

2.3%

Marketplace

Loans

1.1%

Other

0.5%

Short-Term

Investments

&

Other

Net

Assets

10.5%

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

54

.

Franklin

Low

Duration

Total

Return

Fund

16

franklintempleton.com

Semiannual

Report

long

exposure

on

the

5-year

part

of

the

curve.

The

Fund’s

foreign

currency

exposure

also

detracted

as

negative

returns

mainly

from

our

long

Japanese

yen

and

Australian

dollar

and

short

Canadian

dollar

positions

offset

performance

gains

from

our

long

Mexican

and

Colombian

peso

positions,

which

the

portfolio

exited

over

the

period.

USTs

were

the

Fund’s

largest

absolute

allocation

at

period-

end,

but

the

portfolio

remained

underweight

the

sector

relative

to

the

benchmark

given

the

potential

for

a

further

steepening

of

the

yield

curve

and

better

relative

opportunities

in

other

asset

classes.

Investment-grade

corporate

credit

remained

another

of

the

Fund’s

larger

allocations

and,

while

we

remained

generally

comfortable

with

fundamentals

and

market

technical

conditions,

given

tighter

valuations

the

portfolio

held

an

underweight

allocation

to

the

sector

relative

to

the

benchmark

and

reduced

allocation

over

the

period.

Given

our

view

that

longer-term

interest

rates

were

likely

to

trend

higher

over

time,

we

generally

favored

less

interest-rate

sensitive

sectors

such

as

CLOs,

and

RMBS.

The

portfolio

utilized

interest-rate

derivatives

to

adjust

the

duration

profile.

We

reduced

our

exposure

to

RMBS,

investment-grade

corporate

credit

and

TIPS,

while

adding

to

USTs,

high-

yield

corporate

credit

and

commercial

mortgage-backed

securities.

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

April

30,

2021,

the

end

of

the

reporting

period.

The

way

we

implement

our

main

investment

strategies

and

the

resulting

portfolio

holdings

may

change

depending

on

factors

such

as

market

and

economic

conditions.

These

opinions

may

not

be

relied

upon

as

investment

advice

or

an

offer

for

a

particular

security.

The

information

is

not

a

complete

analysis

of

every

aspect

of

any

market,

country,

industry,

security

or

the

Fund.

Statements

of

fact

are

from

sources

considered

reliable,

but

the

investment

manager

makes

no

representation

or

warranty

as

to

their

completeness

or

accuracy.

Although

historical

performance

is

no

guarantee

of

future

results,

these

insights

may

help

you

understand

our

investment

management

philosophy.

Performance

Summary

as

of

April

30,

2021

Franklin

Low

Duration

Total

Return

Fund

17

franklintempleton.com

Semiannual

Report

The

performance

tables

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

4/30/21

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

6-Month

+2.56%

+0.25%

1-Year

+9.17%

+6.70%

5-Year

+12.17%

+1.85%

10-Year

+18.20%

+1.46%

Advisor

6-Month

+2.56%

+2.56%

1-Year

+9.36%

+9.36%

5-Year

+13.51%

+2.57%

10-Year

+21.10%

+1.93%

30-Day

Standardized

Yield

5

Share

Class

Distribution

Rate

4

(with

fee

waiver)

(without

fee

waiver)

A

2.38%

0.64%

0.39%

Advisor

2.67%

0.90%

0.65%

See

page

18

for

Performance

Summary

footnotes.

Franklin

Low

Duration

Total

Return

Fund

Performance

Summary

18

franklintempleton.com

Semiannual

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.

Events

such

as

the

spread

of

deadly

diseases,

disasters,

and

financial,

political

or

social

disruptions,

may

heighten

risks

and

adversely

affect

performance.

The

Fund’s

prospectus

also

includes

a

description

of

the

main

investment

risks.

1.

The

Fund

has

an

expense

reduction

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

2/28/22.

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

4/30/21.

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.

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

(11/1/20–4/30/21)

Share

Class

Net

Investment

Income

A

$0.163200

C

$0.144183

R

$0.151247

R6

$0.180648

Advisor

$0.175161

Total

Annual

Operating

Expenses

6

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

19

franklintempleton.com

Semiannual

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

181/365

to

reflect

the

one-half

year

period.

2.

Reflects

expenses

after

fee

waivers

and

expense

reimbursements.

Does

not

include

acquired

fund

fees

and

expenses.

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Share

Class

Beginning

Account

Value

11/1/20

Ending

Account

Value

4/30/21

Expenses

Paid

During

Period

11/1/20–4/30/21

1,2

Ending

Account

Value

4/30/21

Expenses

Paid

During

Period

11/1/20–4/30/21

1,2

a

Net

Annualized

Expense

Ratio

2

A

$1,000

$1,025.60

$3.33

$1,021.51

$3.32

0.66%

C

$1,000

$1,022.60

$5.36

$1,019.50

$5.35

1.06

%

R

$1,000

$1,023.30

$4.56

$1,020.29

$4.55

0.91%

R6

$1,000

$1,026.20

$1.50

$1,023.32

$1.49

0.30%

Advisor

$1,000

$1,025.60

$2.07

$1,022.75

$2.07

0.41%

20

franklintempleton.com

Semiannual

Report

Franklin

Total

Return

Fund

This

semiannual

report

for

Franklin

Total

Return

Fund

covers

the

period

ended

April

30,

2021.

Your

Fund’s

Goal

and

Main

Investments

The

Fund

seeks

to

provide

high

current

income,

consistent

with

preservation

of

capital.

As

a

secondary

goal,

capital

appreciation

over

the

long

term.

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.

Performance

Overview

The

Fund’s

Class

A

shares

posted

a

+0.55%

cumulative

total

return

for

the

six

months

under

review.

In

comparison,

the

Fund’s

benchmark,

the

Bloomberg

Barclays

U.S.

Aggregate

Bond

Index

posted

a

-1.52%

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

22

.

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,

*Includes

non-agency

residential

mortgage-backed

securities,

collateralized

loan

obligations

and

consumer

loan

certificates.

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

As

U.S.

Treasury

(UST)

yields

increased

during

the

period

and

investors

debated

potential

inflation

concerns

related

to

monetary

and

fiscal

stimulus,

fixed

income

total

return

performance

was

mixed.

However,

all

fixed

income

markets

posted

positive

excess

returns

over

the

period

and

outperformed

USTs.

High-yield

corporate

credit,

Treasury

Inflation-Protected

Securities

(TIPS)

and

emerging

market

bonds

were

the

top

performers

on

an

excess

return

basis.

Additionally,

fixed

income

spreads

tightened

across

asset

classes

over

the

period.

During

the

period,

the

Fund’s

corporate

credit

allocations

were

the

primary

contributor

to

the

Fund’s

performance

relative

to

its

benchmark

as

an

overweight

allocation

and

security

selection

in

high-yield

corporate

credit,

collateralized

loan

obligations

(CLOs)

and

senior

secured

floating-

rate

loans

benefited

returns.

Positive

attribution

from

an

underweight

allocation

to

investment-grade

corporate

credit

more

than

offset

negative

security

selection

in

the

sector.

Taxable

municipal

bonds

and

non-agency

residential

mortgage-backed

securities

(RMBS)

also

contributed.

In

contrast,

the

Fund’s

U.S.

yield

curve

positioning

detracted

from

performance,

primarily

from

long

exposure

on

the

5-year

part

of

the

curve.

The

Fund’s

foreign

currency

exposure

also

detracted

as

negative

returns

mainly

from

our

Portfolio

Composition

4/30/21

%

of

Total

Net

Assets

U.S.

Government

and

Agency

Securities

23.3%

Corporate

Bonds

21.2%

Management

Investment

Companies

18.0%

Mortgage-Backed

Securities

15.2%

Asset-Backed

Securities*

12.2%

Residential

Mortgage-Backed

Securities

8.0%

Municipal

Bonds

4.6%

Foreign

Government

and

Agency

Securities

4.3%

Other

1.7%

Short-Term

Investments

&

Other

Net

Assets

-8.5%

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

82

.

Franklin

Total

Return

Fund

21

franklintempleton.com

Semiannual

Report

long

Japanese

yen

and

Australian

dollar

and

short

Canadian

dollar

positions

offset

performance

gains

from

our

long

Mexican

and

Colombian

peso

positions,

which

the

portfolio

exited

over

the

period.

The

Fund’s

largest

allocation

was

in

investment-grade

corporate

credit,

and

while

we

remained

generally

comfortable

with

fundamentals

and

market

technical

conditions,

given

tighter

valuations

the

portfolio

decreased

allocation

over

the

period

and

held

an

underweight

allocation

to

the

sector

relative

to

the

benchmark.

USTs

were

another

of

the

Fund’s

larger

allocations,

but

the

portfolio

remained

underweight

the

sector

relative

to

the

benchmark

given

the

potential

for

a

further

steepening

of

the

yield

curve

and

better

relative

opportunities

in

other

asset

classes.

Given

our

view

that

longer-term

interest

rates

were

likely

to

trend

higher

over

time,

we

generally

favored

less

interest-rate

sensitive

sectors

such

as

CLOs,

high-yield,

and

non-agency

residential

mortgage-backed

securities.

The

portfolio

utilized

interest-rate

derivatives

to

adjust

the

duration

profile.

We

reduced

our

exposure

to

investment-grade

corporate

credit,

fixed-rate

agency

mortgage-backed

securities

and

TIPS,

while

adding

to

USTs,

high-yield

corporate

credit

and

senior

secured

floating-rate

loans.

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

April

30,

2021,

the

end

of

the

reporting

period.

The

way

we

implement

our

main

investment

strategies

and

the

resulting

portfolio

holdings

may

change

depending

on

factors

such

as

market

and

economic

conditions.

These

opinions

may

not

be

relied

upon

as

investment

advice

or

an

offer

for

a

particular

security.

The

information

is

not

a

complete

analysis

of

every

aspect

of

any

market,

country,

industry,

security

or

the

Fund.

Statements

of

fact

are

from

sources

considered

reliable,

but

the

investment

manager

makes

no

representation

or

warranty

as

to

their

completeness

or

accuracy.

Although

historical

performance

is

no

guarantee

of

future

results,

these

insights

may

help

you

understand

our

investment

management

philosophy.

Performance

Summary

as

of

April

30,

2021

Franklin

Total

Return

Fund

22

franklintempleton.com

Semiannual

Report

The

performance

tables

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

4/30/21

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

6-Month

+0.55%

-3.21%

1-Year

+6.45%

+2.50%

5-Year

+16.72%

+2.35%

10-Year

+36.48%

+2.77%

Advisor

6-Month

+0.67%

+0.67%

1-Year

+6.65%

+6.65%

5-Year

+18.12%

+3.39%

10-Year

+40.00%

+3.42%

30-Day

Standardized

Yield

6

Share

Class

Distribution

Rate

5

(with

fee

waiver)

(without

fee

waiver)

A

2.26%

1.56%

1.50%

Advisor

2.58%

1.85%

1.79%

See

page

23

for

Performance

Summary

footnotes.

Franklin

Total

Return

Fund

Performance

Summary

23

franklintempleton.com

Semiannual

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.

Events

such

as

the

spread

of

deadly

diseases,

disasters,

and

financial,

political

or

social

disruptions,

may

heighten

risks

and

adversely

affect

performance.

The

Fund’s

prospectus

also

includes

a

description

of

the

main

investment

risks.

1.

The

Fund

has

an

expense

reduction

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

2/28/22.

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

4/30/21.

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.

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

(11/1/20–4/30/21)

Share

Class

Net

Investment

Income

A

$0.167362

C

$0.147583

R

$0.155024

R6

$0.185349

Advisor

$0.179899

Total

Annual

Operating

Expenses

7

Share

Class

With

Fee

Waiver

Without

Fee

Waiver

A

0.90%

0.95%

Advisor

0.65%

0.70%

Your

Fund’s

Expenses

Franklin

Total

Return

Fund

24

franklintempleton.com

Semiannual

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

181/365

to

reflect

the

one-half

year

period.

2.

Reflects

expenses

after

fee

waivers

and

expense

reimbursements.

Does

not

include

acquired

fund

fees

and

expenses.

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Share

Class

Beginning

Account

Value

11/1/20

Ending

Account

Value

4/30/21

Expenses

Paid

During

Period

11/1/20–4/30/21

1,2

Ending

Account

Value

4/30/21

Expenses

Paid

During

Period

11/1/20–4/30/21

1,2

a

Net

Annualized

Expense

Ratio

2

A

$1,000

$1,005.50

$4.16

$1,020.65

$4.19

0.84%

C

$1,000

$1,002.60

$6.16

$1,018.64

$6.21

1.24%

R

$1,000

$1,004.30

$5.41

$1,019.40

$5.45

1.09%

R6

$1,000

$1,007.30

$2.36

$1,022.45

$2.38

0.47%

Advisor

$1,000

$1,006.70

$2.91

$1,021.90

$2.93

0.58%

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.

Semiannual

Report

25

a

Six

Months

Ended

April

30,

2021

(unaudited)

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

A

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$7.95

$8.02

$8.10

$8.24

$8.40

$8.55

Income

from

investment

operations

a

:

Net

investment

income

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

0.003

b

0.125

b

0.140

b

0.088

b

0.026

0.025

Net

realized

and

unrealized

gains

(losses)

0.031

(0.025)

0.021

(0.035)

(0.031)

(0.053)

Total

from

investment

operations

........

0.034

0.100

0.161

0.053

(0.005)

(0.028)

Less

distributions

from:

Net

investment

income

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

(0.044)

(0.170)

(0.241)

(0.193)

(0.155)

(0.122)

Net

asset

value,

end

of

period

..........

$7.94

$7.95

$8.02

$8.10

$8.24

$8.40

Total

return

c

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

0.43%

1.26%

2.01%

0.65%

(0.06)%

(0.32)%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

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

0.97%

0.97%

0.95%

0.96%

0.95%

0.92%

Expenses

net

of

waiver

and

payments

by

affiliates

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

0.94%

0.96%

e

0.94%

e

0.95%

e

0.94%

e

0.91%

e

Net

investment

income

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

0.09%

1.57%

1.73%

1.07%

0.54%

0.43%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$440,099

$460,621

$393,736

$419,055

$492,319

$667,671

Portfolio

turnover

rate

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

33.08%

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,

and

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

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

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

26

a

Six

Months

Ended

April

30,

2021

(unaudited)

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

A1

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$7.95

$8.02

$8.09

$8.24

$8.40

$8.54

Income

from

investment

operations

a

:

Net

investment

income

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

0.009

b

0.137

b

0.151

b

0.100

b

0.059

0.049

Net

realized

and

unrealized

gains

(losses)

0.031

(0.024)

0.031

(0.044)

(0.051)

(0.054)

Total

from

investment

operations

........

0.040

0.113

0.182

0.056

0.008

(0.005)

Less

distributions

from:

Net

investment

income

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

(0.050)

(0.182)

(0.252)

(0.206)

(0.168)

(0.135)

Net

asset

value,

end

of

period

..........

$7.94

$7.95

$8.02

$8.09

$8.24

$8.40

Total

return

c

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

0.51%

1.41%

2.29%

0.68%

0.10%

(0.50)%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

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

0.82%

0.82%

0.80%

0.80%

0.79%

0.77%

Expenses

net

of

waiver

and

payments

by

affiliates

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

0.79%

0.81%

e

0.79%

e

0.79%

e

0.78%

e

0.76%

e

Net

investment

income

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

0.24%

1.72%

1.88%

1.23%

0.70%

0.58%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$72,960

$77,910

$86,471

$100,477

$121,012

$160,469

Portfolio

turnover

rate

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

33.08%

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,

and

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

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.

Semiannual

Report

27

a

Six

Months

Ended

April

30,

2021

(unaudited)

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

C

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$7.95

$8.02

$8.09

$8.24

$8.40

$8.54

Income

from

investment

operations

a

:

Net

investment

income

(loss)

.........

(0.012)

b

0.093

b

0.106

b

0.054

b

(0.014)

(0.011)

Net

realized

and

unrealized

gains

(losses)

0.030

(0.024)

0.032

(0.044)

(0.024)

(0.041)

Total

from

investment

operations

........

0.018

0.069

0.138

0.010

(0.038)

(0.052)

Less

distributions

from:

Net

investment

income

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

(0.028)

(0.138)

(0.208)

(0.160)

(0.122)

(0.088)

Net

asset

value,

end

of

period

..........

$7.94

$7.95

$8.02

$8.09

$8.24

$8.40

Total

return

c

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

0.23%

0.86%

1.73%

0.13%

(0.45)%

(0.61)%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

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

1.37%

1.37%

1.35%

1.36%

1.35%

1.32%

Expenses

net

of

waiver

and

payments

by

affiliates

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

1.34%

1.36%

e

1.34%

e

1.35%

e

1.34%

e

1.31%

e

Net

investment

income

(loss)

..........

(0.31)%

1.16%

1.33%

0.67%

0.14%

0.03%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$54,423

$71,212

$84,685

$126,585

$189,634

$266,186

Portfolio

turnover

rate

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

33.08%

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,

and

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

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

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

28

a

Six

Months

Ended

April

30,

2021

(unaudited)

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

R6

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$7.97

$8.03

$8.11

$8.25

$8.41

$8.55

Income

from

investment

operations

a

:

Net

investment

income

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

0.017

b

0.154

b

0.169

b

0.121

b

0.074

0.066

Net

realized

and

unrealized

gains

(losses)

0.031

(0.014)

0.021

(0.037)

(0.046)

(0.053)

Total

from

investment

operations

........

0.048

0.140

0.190

0.084

0.028

0.013

Less

distributions

from:

Net

investment

income

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

(0.058)

(0.199)

(0.270)

(0.224)

(0.188)

(0.153)

Net

asset

value,

end

of

period

..........

$7.96

$7.97

$8.03

$8.11

$8.25

$8.41

Total

return

c

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

0.61%

1.75%

2.39%

1.03%

0.34%

0.15%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

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

0.63%

0.64%

0.62%

0.62%

0.58%

0.56%

Expenses

net

of

waiver

and

payments

by

affiliates

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

0.58%

0.60%

e

0.58%

e

0.57%

e

0.55%

e

0.55%

e

Net

investment

income

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

0.43%

1.93%

2.09%

1.45%

0.93%

0.79%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$38,925

$33,530

$31,953

$36,026

$2,196

$2,374

Portfolio

turnover

rate

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

33.08%

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

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

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.

Semiannual

Report

29

a

Six

Months

Ended

April

30,

2021

(unaudited)

Year

Ended

October

31,

2020

2019

2018

2017

2016

Advisor

Class

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$7.96

$8.03

$8.10

$8.25

$8.41

$8.55

Income

from

investment

operations

a

:

Net

investment

income

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

0.013

b

0.146

b

0.160

b

0.108

b

0.052

0.046

Net

realized

and

unrealized

gains

(losses)

0.031

(0.025)

0.031

(0.044)

(0.036)

(0.043)

Total

from

investment

operations

........

0.044

0.121

0.191

0.064

0.016

0.003

Less

distributions

from:

Net

investment

income

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

(0.054)

(0.190)

(0.261)

(0.214)

(0.176)

(0.143)

Net

asset

value,

end

of

period

..........

$7.95

$7.96

$8.03

$8.10

$8.25

$8.41

Total

return

c

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

0.56%

1.51%

2.39%

0.78%

0.20%

0.05%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

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

0.72%

0.72%

0.70%

0.71%

0.70%

0.67%

Expenses

net

of

waiver

and

payments

by

affiliates

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

0.69%

0.71%

e

0.69%

e

0.70%

e

0.69%

e

0.66%

e

Net

investment

income

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

0.34%

1.82%

1.98%

1.32%

0.79%

0.68%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$93,006

$98,851

$103,639

$112,441

$184,299

$227,599

Portfolio

turnover

rate

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

33.08%

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

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

annualized

for

periods

less

than

one

year.

e

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited),

April

30,

2021

Franklin

Adjustable

U.S.

Government

Securities

Fund

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

30

a

a

Principal

Amount

a

Value

a

a

a

a

a

Commercial

Mortgage-Backed

Securities

8.6%

Diversified

Financial

Services

0.1%

a

GNMA

,

2010-12

,

FD

,

FRN

,

0.716

%

,

(

1-month

USD

LIBOR

+

0.6

%

),

1/16/40

.......

$

896,605

$

908,279

Thrifts

&

Mortgage

Finance

8.5%

a

FHLMC

,

4988,

AF,

FRN,

0.465%,

(1-month

USD

LIBOR

+

0.35%),

10/15/37

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

9,295,409

9,341,364

343,

F4,

FRN,

0.465%,

Strip,

(1-month

USD

LIBOR

+

0.35%),

10/15/37

.........

9,458,542

9,520,027

4197,

KF,

FRN,

0.415%,

(1-month

USD

LIBOR

+

0.3%),

9/15/37

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

4,117,259

4,140,303

4107,

KF,

FRN,

0.505%,

(1-month

USD

LIBOR

+

0.39%),

6/15/38

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

4,577,261

4,613,775

4215,

KF,

FRN,

0.415%,

(1-month

USD

LIBOR

+

0.3%),

2/15/40

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

3,924,687

3,944,182

4845,

QF,

FRN,

0.415%,

(1-month

USD

LIBOR

+

0.3%),

12/15/48

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

8,061,894

8,100,583

4730,

WF,

FRN,

0.465%,

(1-month

USD

LIBOR

+

0.35%),

8/15/38

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

7,396,914

7,448,785

a

FNMA

,

2019-38,

CF,

FRN,

0.556%,

(1-month

USD

LIBOR

+

0.45%),

7/25/49

...........

2,318,074

2,340,261

2020-54,

WF,

FRN,

0.565%,

(1-month

USD

LIBOR

+

0.45%),

8/25/50

..........

9,815,359

9,920,028

59,369,308

a

a

a

a

a

Total

Commercial

Mortgage-Backed

Securities

(Cost

$60,114,248)

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

60,277,587

Mortgage-Backed

Securities

83.2%

b

Federal

Home

Loan

Mortgage

Corp.

(FHLMC)

Adjustable

Rate

14.4%

FHLMC,

2.011%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

9/01/35

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

3,156,458

3,307,885

FHLMC,

2.049%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

10/01/43

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

4,819,470

5,090,066

FHLMC,

2.164%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

5/01/45

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

3,798,990

3,965,093

FHLMC,

2.331%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

9/01/37

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

9,066,077

9,647,327

FHLMC,

2.497%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

7/01/43

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

4,707,566

4,992,811

FHLMC,

2.513%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

7/01/43

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

4,490,485

4,752,851

FHLMC,

2.517%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

7/01/35

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

3,933,595

4,186,053

FHLMC,

2.597%,

(1-year

CMT

T-Note

+/-

MBS

Margin),

3/01/35

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

2,146,410

2,287,898

FHLMC,

2.708%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

6/01/37

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

3,962,327

4,242,793

FHLMC,

2.932%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

1/01/44

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

5,002,319

5,282,647

FHLMC,

1.7%

-

3.727%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

8/01/33

-

11/01/41

49,984,962

52,773,944

100,529,368

Federal

Home

Loan

Mortgage

Corp.

(FHLMC)

Fixed

Rate

10.3%

FHLMC

Pool,

15

Year,

2%,

12/01/35

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

26,952,059

27,870,239

FHLMC

Pool,

15

Year,

2.5%,

3/01/35

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

22,113,648

23,369,845

FHLMC

Pool,

15

Year,

2.5%,

3/01/35

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

19,588,527

20,679,074

71,919,158

b

Federal

National

Mortgage

Association

(FNMA)

Adjustable

Rate

49.1%

FNMA,

1.754%,

(6-month

USD

LIBOR

+/-

MBS

Margin),

12/01/34

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

2,680,587

2,787,801

FNMA,

1.903%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

2/01/36

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

3,339,712

3,508,160

FNMA,

2.035%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

3/01/35

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

4,126,327

4,353,240

FNMA,

2.046%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

1/01/36

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

2,137,395

2,256,863

FNMA,

2.081%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

1/01/39

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

3,094,369

3,260,955

FNMA,

2.101%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

3/01/37

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

2,343,940

2,476,328

FNMA,

2.197%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

2/01/36

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

2,169,316

2,291,173

FNMA,

2.23%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

2/01/36

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

2,209,572

2,339,939

FNMA,

2.245%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

4/01/47

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

4,872,941

5,142,127

FNMA,

2.257%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

7/01/42

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

5,740,037

6,082,810

FNMA,

2.258%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

4/01/40

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

5,555,778

5,885,548

FNMA,

2.304%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

8/01/44

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

5,649,232

5,974,718

FNMA,

2.309%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

11/01/34

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

3,207,698

3,395,647

FNMA,

2.323%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

10/01/38

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

2,300,214

2,436,822

FNMA,

2.344%,

(1-year

CMT

T-Note

+/-

MBS

Margin),

1/01/38

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

2,380,337

2,534,122

FNMA,

2.37%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

7/01/42

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

3,943,408

4,177,532

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Adjustable

U.S.

Government

Securities

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

31

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,

2.371%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

9/01/42

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

$

3,989,289

$

4,226,554

FNMA,

2.394%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

4/01/44

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

75,671,623

80,349,216

FNMA,

2.432%,

(1-year

CMT

T-Note

+/-

MBS

Margin),

6/01/36

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

2,095,449

2,225,967

FNMA,

2.483%,

(1-year

CMT

T-Note

+/-

MBS

Margin),

5/01/36

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

9,217,624

9,814,889

FNMA,

2.559%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

1/01/37

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

2,474,121

2,628,161

FNMA,

3.017%,

(COFI

11th

District

+/-

MBS

Margin),

4/01/34

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

10,554,576

11,284,484

FNMA,

0.865%

-

6.75%,

(1-month

USD

LIBOR

+/-

MBS

Margin),

7/01/21

-

5/01/48

..

168,582,128

174,146,686

343,579,742

Federal

National

Mortgage

Association

(FNMA)

Fixed

Rate

9.3%

FNMA,

15

Year,

2%,

10/01/35

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

17,677,133

18,273,752

FNMA,

15

Year,

2%,

12/01/35

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

26,858,746

27,765,336

FNMA,

15

Year,

2.5%,

3/01/35

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

11,042,717

11,630,827

FNMA,

15

Year,

2.5%,

4/01/36

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

6,962,785

7,311,303

64,981,218

b

Government

National

Mortgage

Association

(GNMA)

Adjustable

Rate

0.1%

GNMA

II,

2%

-

2.875%,

(1-year

CMT

T-Note

+/-

MBS

Margin),

9/20/33

-

5/20/36

....

429,739

443,522

443,522

Total

Mortgage-Backed

Securities

(Cost

$579,906,509)

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

581,453,008

Total

Long

Term

Investments

(Cost

$640,020,757)

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

641,730,595

a

a

a

a

a

Short

Term

Investments

7.8%

Shares

a

Money

Market

Funds

5.0%

c,d

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

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

34,975,191

34,975,191

Total

Money

Market

Funds

(Cost

$34,975,191)

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

34,975,191

Principal

Amount

Repurchase

Agreements

2.8%

e

Joint

Repurchase

Agreement,

0.005%,

5/03/21

(Maturity

Value

$19,737,235)

BNP

Paribas

Securities

Corp.

(Maturity

Value

$14,261,731)

Deutsche

Bank

Securities,

Inc.

(Maturity

Value

$1,745,561)

HSBC

Securities

(USA),

Inc.

(Maturity

Value

$3,729,943)

Collateralized

by

U.S.

Government

Agency

Securities,

3%

-

4.5%,

5/20/46

-

11/20/50;

and

U.S.

Treasury

Notes,

1.38%

-

2.88%,

5/31/21

-

3/31/26

(valued

at

$20,131,495)

19,737,227

19,737,227

Total

Repurchase

Agreements

(Cost

$19,737,227)

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

19,737,227

Total

Short

Term

Investments

(Cost

$54,712,418

)

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

54,712,418

a

Total

Investments

(Cost

$694,733,175)

99.6%

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

$696,443,013

Other

Assets,

less

Liabilities

0.4%

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

2,971,726

Net

Assets

100.0%

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

$699,414,739

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Adjustable

U.S.

Government

Securities

Fund

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

32

See

Abbreviations

on

page

151

.

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.

Semiannual

Report

33

a

Six

Months

Ended

April

30,

2021

(unaudited)

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

A

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$7.35

$8.18

$8.70

$8.83

$8.84

$8.61

Income

from

investment

operations

a

:

Net

investment

income

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

0.152

b

0.332

b

0.441

b

0.396

0.307

0.401

Net

realized

and

unrealized

gains

(losses)

0.324

(0.808)

(0.515)

(0.129)

(0.011)

0.228

Total

from

investment

operations

........

0.476

(0.476)

(0.074)

0.267

0.296

0.629

Less

distributions

from:

Net

investment

income

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

(0.176)

(0.355)

(0.446)

(0.397)

(0.306)

(0.399)

Net

asset

value,

end

of

period

..........

$7.65

$7.35

$8.18

$8.70

$8.83

$8.84

Total

return

c

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

6.68%

(6.00)%

(0.88)%

2.97%

3.51%

7.60%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

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

1.01%

0.96%

0.89%

0.87%

0.87%

0.88%

Expenses

net

of

waiver

and

payments

by

affiliates

e

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

0.99%

0.93%

0.86%

0.81%

0.82%

0.86%

Net

investment

income

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

4.06%

4.33%

5.21%

4.53%

3.45%

4.72%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$709,675

$717,021

$1,049,359

$1,344,473

$1,362,220

$1,359,862

Portfolio

turnover

rate

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

36.97%

32.39%

23.23%

f

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,

and

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

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.

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Floating

Rate

Daily

Access

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

34

a

Six

Months

Ended

April

30,

2021

(unaudited)

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

C

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$7.36

$8.18

$8.70

$8.83

$8.84

$8.61

Income

from

investment

operations

a

:

Net

investment

income

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

0.137

b

0.306

b

0.407

b

0.364

0.271

0.366

Net

realized

and

unrealized

gains

(losses)

0.324

(0.804)

(0.514)

(0.131)

(0.010)

0.229

Total

from

investment

operations

........

0.461

(0.498)

(0.107)

0.233

0.261

0.595

Less

distributions

from:

Net

investment

income

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

(0.161)

(0.323)

(0.413)

(0.363)

(0.271)

(0.365)

Net

asset

value,

end

of

period

..........

$7.66

$7.36

$8.18

$8.70

$8.83

$8.84

Total

return

c

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

6.46%

(6.39)%

(1.39)%

2.68%

3.11%

7.18%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

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

1.41%

1.36%

1.29%

1.27%

1.27%

1.28%

Expenses

net

of

waiver

and

payments

by

affiliates

e

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

1.39%

1.33%

1.26%

1.21%

1.22%

1.26%

Net

investment

income

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

3.66%

3.98%

4.81%

4.13%

3.05%

4.32%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$139,096

$160,194

$296,134

$438,480

$550,797

$551,726

Portfolio

turnover

rate

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

36.97%

32.39%

23.23%

f

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,

and

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

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.

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.

Semiannual

Report

35

a

Six

Months

Ended

April

30,

2021

(unaudited)

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

R6

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$7.37

$8.19

$8.71

$8.84

$8.84

$8.60

Income

from

investment

operations

a

:

Net

investment

income

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

0.163

b

0.363

b

0.463

b

0.427

0.338

0.422

Net

realized

and

unrealized

gains

(losses)

0.327

(0.804)

(0.508)

(0.130)

(0.002)

0.245

Total

from

investment

operations

........

0.490

(0.441)

(0.045)

0.297

0.336

0.667

Less

distributions

from:

Net

investment

income

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

(0.190)

(0.380)

(0.475)

(0.427)

(0.336)

(0.427)

Net

asset

value,

end

of

period

..........

$7.67

$7.37

$8.19

$8.71

$8.84

$8.84

Total

return

c

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

6.99%

(5.69)%

(0.54)%

3.43%

3.85%

7.96%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

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

0.79%

0.69%

0.57%

0.55%

0.52%

0.53%

Expenses

net

of

waiver

and

payments

by

affiliates

e

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

0.63%

0.59%

0.53%

0.48%

0.47%

0.51%

Net

investment

income

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

4.34%

4.71%

5.54%

4.86%

3.80%

5.07%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$16,211

$9,568

$18,764

$142,075

$130,180

$12,333

Portfolio

turnover

rate

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

36.97%

32.39%

23.23%

f

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

Total

return

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

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.

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Floating

Rate

Daily

Access

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

36

a

Six

Months

Ended

April

30,

2021

(unaudited)

Year

Ended

October

31,

2020

2019

2018

2017

2016

Advisor

Class

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$7.36

$8.18

$8.71

$8.84

$8.85

$8.61

Income

from

investment

operations

a

:

Net

investment

income

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

0.161

b

0.358

b

0.463

b

0.418

0.327

0.422

Net

realized

and

unrealized

gains

(losses)

0.325

(0.806)

(0.525)

(0.129)

(0.010)

0.239

Total

from

investment

operations

........

0.486

(0.448)

(0.062)

0.289

0.317

0.661

Less

distributions

from:

Net

investment

income

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

(0.186)

(0.373)

(0.468)

(0.419)

(0.327)

(0.421)

Net

asset

value,

end

of

period

..........

$7.66

$7.36

$8.18

$8.71

$8.84

$8.85

Total

return

c

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

6.81%

(5.78)%

(0.74)%

3.35%

3.64%

8.00%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

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

0.76%

0.71%

0.64%

0.62%

0.62%

0.63%

Expenses

net

of

waiver

and

payments

by

affiliates

e

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

0.74%

0.68%

0.61%

0.56%

0.57%

0.61%

Net

investment

income

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

4.30%

4.65%

5.46%

4.78%

3.70%

4.97%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$327,130

$376,997

$858,071

$1,743,880

$1,672,724

$1,108,692

Portfolio

turnover

rate

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

36.97%

32.39%

23.23%

f

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

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

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.

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited),

April

30,

2021

Franklin

Floating

Rate

Daily

Access

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

37

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

3.2%

Hotels,

Restaurants

&

Leisure

0.1%

a

24

Hour

Fitness

Worldwide,

Inc.

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

United

States

287,830

$

767,499

Machinery

0.9%

a

UTEX

Industries,

Inc.

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

United

States

261,340

10,355,597

Paper

&

Forest

Products

2.2%

a,b,c,d

Appvion

Operations,

Inc.

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

United

States

1,219,956

26,667,280

Road

&

Rail

0.0%

a,b

Onsite

Rental

Group

Operations

Pty.

Ltd.

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

Australia

11,563,612

—

Total

Common

Stocks

(Cost

$40,046,446)

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

37,790,376

Management

Investment

Companies

3.5%

Capital

Markets

3.5%

e

Franklin

Floating

Rate

Income

Fund

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

United

States

4,630,114

35,929,683

Invesco

Senior

Loan

ETF

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

United

States

280,416

6,211,215

42,140,898

Total

Management

Investment

Companies

(Cost

$51,562,905)

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

42,140,898

Preferred

Stocks

0.2%

Hotels,

Restaurants

&

Leisure

0.2%

a

24

Hour

Fitness

Worldwide,

Inc.

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

United

States

681,685

1,959,844

a

Total

Preferred

Stocks

(Cost

$919,936)

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

1,959,844

Warrants

Warrants

0.0%

†

Machinery

0.0%

†

a,b

UTEX

Industries,

Inc.,

2/20/49

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

United

States

634

709

Total

Warrants

(Cost

$—)

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

709

Principal

Amount

*

Corporate

Bonds

4.8%

Airlines

1.1%

f

American

Airlines

Inc

/

AAdvantage

Loyalty

IP

Ltd.

,

Senior

Secured

Note

,

144A,

5.5

%

,

4/20/26

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

United

States

5,800,000

6,097,250

f

Delta

Air

Lines,

Inc.

/

SkyMiles

IP

Ltd.

,

Senior

Secured

Note

,

144A,

4.5

%

,

10/20/25

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

United

States

6,000,000

6,438,602

f

United

Airlines,

Inc.

,

Senior

Secured

Note

,

144A,

4.375

%

,

4/15/26

.

United

States

585,000

607,798

13,143,650

Chemicals

0.3%

f

SCIH

Salt

Holdings,

Inc.

,

Senior

Secured

Note

,

144A,

4.875

%

,

5/01/28

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

United

States

3,900,000

3,895,125

Construction

Materials

0.4%

f

Cemex

SAB

de

CV

,

Senior

Secured

Bond

,

144A,

5.2

%

,

9/17/30

..

Mexico

3,875,000

4,221,832

Hotels,

Restaurants

&

Leisure

0.1%

f

International

Game

Technology

plc

,

Senior

Secured

Note

,

144A,

5.25

%

,

1/15/29

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

United

States

500,000

530,813

Independent

Power

and

Renewable

Electricity

Producers

0.1%

f

Talen

Energy

Supply

LLC

,

Senior

Secured

Note

,

144A,

6.625

%

,

1/15/28

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

United

States

1,556,000

1,568,347

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Floating

Rate

Daily

Access

Fund

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

38

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Media

0.9%

f

Diamond

Sports

Group

LLC

/

Diamond

Sports

Finance

Co.

,

Senior

Secured

Note

,

144A,

5.375

%

,

8/15/26

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

United

States

7,800,000

$

5,703,750

f

Sinclair

Television

Group,

Inc.

,

Senior

Secured

Note

,

144A,

4.125

%

,

12/01/30

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

United

States

3,100,000

3,026,406

f

Univision

Communications,

Inc.

,

Senior

Secured

Note

,

144A,

5.125

%

,

2/15/25

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

United

States

1,555,556

1,583,875

10,314,031

Oil,

Gas

&

Consumable

Fuels

0.2%

f

Cheniere

Energy,

Inc.

,

Senior

Secured

Note

,

144A,

4.625

%

,

10/15/28

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

United

States

2,400,000

2,505,360

Road

&

Rail

1.6%

b,g

Onsite

Rental

Group

Operations

Pty.

Ltd.

,

PIK,

6.1

%

,

10/26/23

...

Australia

21,096,262

19,473,939

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

1,385,312

Total

Corporate

Bonds

(Cost

$59,712,485)

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

57,038,409

a

h,i

Senior

Floating

Rate

Interests

84.4%

Aerospace

&

Defense

1.9%

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

3,631,320

3,633,590

g

Alloy

FinCo

Ltd.,

Facility

Term

Loan,

B,

14%,

PIK,

(3-month

USD

LIBOR

+

13.5%),

3/06/25

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

United

Kingdom

17,282,009

10,802,247

Dynasty

Acquisition

Co.,

Inc.,

2020

Term

Loan,

B1,

3.703%,

(3-month

USD

LIBOR

+

3.5%),

4/06/26

..........

United

States

5,356,048

5,220,406

B2,

3.703%,

(3-month

USD

LIBOR

+

3.5%),

4/06/26

..........

United

States

2,879,596

2,806,670

22,462,913

a

a

a

a

a

a

Air

Freight

&

Logistics

0.3%

Kenan

Advantage

Group,

Inc.

(The),

U.S.

Term

Loan,

B1,

4.5%,

(1-month

USD

LIBOR

+

3.75%),

3/24/26

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

United

States

3,790,500

3,781,706

Airlines

3.1%

j

AAdvantage

Loyalty

IP

Ltd.

(American

Airlines,

Inc.),

Initial

Term

Loan,

5.5%,

(6-month

USD

LIBOR

+

4.75%),

4/20/28

.........

United

States

3,548,233

3,653,722

Allegiant

Travel

Co.,

Replacement

Term

Loan,

3.198%,

(3-month

USD

LIBOR

+

3%),

2/05/24

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

United

States

10,177,839

10,109,953

American

Airlines,

Inc.,

2017

Term

Loan,

B,

2.115%,

(1-month

USD

LIBOR

+

2%),

12/15/23

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

United

States

1,979,381

1,912,686

American

Airlines,

Inc.,

2018

Replacement

Term

Loan,

1.861%,

(1-month

USD

LIBOR

+

1.75%),

6/27/25

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

United

States

2,650,000

2,451,595

Delta

Air

Lines,

Inc.

/

SkyMiles

IP

Ltd.,

Initial

Term

Loan,

4.75%,

(3-month

USD

LIBOR

+

3.75%),

10/20/27

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

United

States

4,371,107

4,597,334

JetBlue

Airways

Corp.,

Term

Loan,

6.25%,

(3-month

USD

LIBOR

+

5.25%),

6/17/24

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

United

States

1,269,493

1,305,197

Kestrel

Bidco

,

Inc.,

Term

Loan,

4%,

(3-month

USD

LIBOR

+

3%),

12/11/26

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

Canada

10,068,668

9,764,242

j

United

AirLines

,

Inc.,

Term

Loan,

B,

4.5%,

(3-month

USD

LIBOR

+

3.75%),

4/21/28

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

United

States

3,549,107

3,595,689

37,390,418

a

a

a

a

a

a

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Floating

Rate

Daily

Access

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

39

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

h,i

Senior

Floating

Rate

Interests

(continued)

Auto

Components

2.3%

Adient

US

LLC,

Term

Loan,

B1,

3.61%,

(1-month

USD

LIBOR

+

3.5%),

4/10/28

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

United

States

6,500,000

$

6,504,062

Clarios

Global

LP,

First

Lien,

Amendment

No.

1

Dollar

Term

Loan,

3.363%,

(1-month

USD

LIBOR

+

3.25%),

4/30/26

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

United

States

7,974,713

7,905,931

First

Brands

Group

LLC,

First

Lien,

2021

Term

Loan,

6%,

(1-month

USD

LIBOR

+

5%),

3/30/27

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

United

States

4,542,863

4,576,004

Highline

Aftermarket

Acquisition

LLC,

First

Lien,

Term

Loan,

5.25%,

(3-month

USD

LIBOR

+

4.5%),

11/09/27

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

United

States

2,648,474

2,660,074

TI

Group

Automotive

Systems

LLC,

Refinancing

US

Term

Loan,

3.75%,

(3-month

USD

LIBOR

+

3.25%),

12/16/26

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

United

States

2,197,913

2,197,001

j

Truck

Hero,

Inc.,

Initial

Term

Loan,

4.5%,

(1-month

USD

LIBOR

+

3.75%),

1/31/28

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

United

States

3,558,772

3,557,366

27,400,438

a

a

a

a

a

a

Automobiles

0.8%

j

American

Trailer

World

Corp.,

First

Lien,

Initial

Term

Loan,

4.5%,

(1-month

USD

LIBOR

+

3.75%),

3/03/28

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

United

States

5,352,411

5,315,613

Thor

Industries,

Inc.,

Term

Loan,

B1,

3.12%,

(1-month

USD

LIBOR

+

3%),

2/01/26

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

United

States

4,600,000

4,617,250

9,932,863

a

a

a

a

a

a

Banks

1.0%

j

Finastra

Ltd.,

First

Lien,

Dollar

Term

Loan,

4.5%,

(6-month

USD

LIBOR

+

3.5%),

6/13/24

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

United

Kingdom

11,722,800

11,542,269

Beverages

0.6%

City

Brewing

Company

LLC,

First

Lien,

Closing

Date

Term

Loan,

4.25%,

(3-month

USD

LIBOR

+

3.5%),

4/05/28

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

United

States

2,210,884

2,219,175

j

Triton

Water

Holdings,

Inc.,

First

Lien,

Initial

Term

Loan,

4%,

(3-month

USD

LIBOR

+

3.5%),

3/31/28

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

United

States

4,821,466

4,810,908

7,030,083

a

a

a

a

a

a

Biotechnology

0.3%

Grifols

Worldwide

Operations

Ltd.,

Dollar

Term

Loan,

B,

2.087%,

(1-

week

USD

LIBOR

+

2%),

11/15/27

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

Ireland

2,280,989

2,255,966

Horizon

Therapeutics

USA,

Inc.,

Seventh

Amendment

Refinancing

Term

Loan,

2.125%,

(1-month

USD

LIBOR

+

2%),

5/22/26

.....

United

States

1,618,143

1,613,895

3,869,861

a

a

a

a

a

a

Building

Products

0.2%

j

Cornerstone

Building

Brands,

Inc.,

Term

Loan,

B,

3.75%,

(1-month

USD

LIBOR

+

3.25%),

4/12/28

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

United

States

2,969,770

2,947,497

Capital

Markets

2.6%

Citadel

Securities

LP,

Term

Loan,

B,

2.613%,

(1-month

USD

LIBOR

+

2.5%),

2/02/28

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

United

States

4,300,000

4,266,417

Deerfield

Dakota

Holding

LLC,

First

Lien,

Initial

Dollar

Term

Loan,

4.75%,

(1-month

USD

LIBOR

+

3.75%),

4/09/27

.............

United

States

5,937,232

5,958,577

j

Edelman

Financial

Engines

Center

LLC

(The),

First

Lien,

2021

Initial

Term

Loan,

B,

4.25%,

(1-month

USD

LIBOR

+

3.5%),

4/07/28

..

United

States

3,500,000

3,489,955

Jane

Street

Group

LLC,

Term

Loan,

2.863%,

(1-month

USD

LIBOR

+

2.75%),

1/26/28

.....................................

United

States

3,124,993

3,101,946

j

Russell

Investments

US

Institutional

Holdco,

Inc.,

2025

Term

Loan,

4.5%,

(3-month

USD

LIBOR

+

3.5%),

5/30/25

..............

United

States

9,912,434

9,825,700

Vertical

Midco

GmbH,

USD

Term

Loan,

4.478%,

(6-month

USD

LIBOR

+

4.25%),

6/30/27

..............................

Germany

4,101,147

4,113,717

30,756,312

a

a

a

a

a

a

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Floating

Rate

Daily

Access

Fund

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

40

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

h,i

Senior

Floating

Rate

Interests

(continued)

Chemicals

2.3%

Cyanco

Intermediate

2

Corp.,

First

Lien,

Initial

Term

Loan,

3.613%,

(1-month

USD

LIBOR

+

3.5%),

3/16/25

...................

United

States

5,453,744

$

5,423,067

INEOS

226

Ltd.,

USD

Term

Loan,

B,

3.25%,

(3-month

USD

LIBOR

+

2.75%),

1/29/26

.....................................

United

Kingdom

1,873,332

1,868,358

Lummus

Technology

Holdings

V

LLC,

2021

Refinancing

Term

Loan,

B,

3.613%,

(1-month

USD

LIBOR

+

3.5%),

6/30/27

..........

United

States

3,347,943

3,329,813

j,k

NIC

Acquisition

Corp.

/

CPC

Acquisition

Corp.

/

Gardner-Gibson

Acquisition

Corp.,

Term

Loan,

B,

TBD,

12/01/25

.............

United

States

1,316,536

1,296,788

j

NIC

Acquisition

Corp.,

Term

Loan,

4.5%,

(3-month

USD

LIBOR

+

3.75%),

12/29/27

....................................

United

States

3,304,428

3,310,640

Nouryon

Finance

BV,

Initial

Dollar

Term

Loan,

2.865%,

(1-month

USD

LIBOR

+

2.75%),

10/01/25

.........................

Netherlands

1,979,267

1,957,822

SCIH

Salt

Holdings,

Inc.,

Incremental

Term

Loan,

B1,

4.75%,

(1-month

USD

LIBOR

+

4%),

3/16/27

.....................

United

States

7,202,942

7,192,137

k

Sparta

U.S.

HoldCo

LLC,

Term

Loan,

TBD,

4/28/28

............

United

States

2,515,625

2,503,047

26,881,672

a

a

a

a

a

a

Commercial

Services

&

Supplies

2.5%

Allied

Universal

Holdco

LLC,

Initial

Term

Loan,

4.363%,

(1-month

USD

LIBOR

+

4.25%),

7/10/26

..........................

United

States

5,872,028

5,868,358

CCI

Buyer,

Inc.,

Term

Loan,

4.75%,

(3-month

USD

LIBOR

+

4%),

12/17/27

..........................................

United

States

945,672

948,628

Legalzoom.com,

Inc.,

First

Lien,

2018

Term

Loan,

4.613%,

(1-month

USD

LIBOR

+

4.5%),

11/21/24

..........................

United

States

10,240,357

10,248,396

Prime

Security

Services

Borrower

LLC,

First

Lien,

2021

Refinancing

Term

Loan,

B1,

3.5%,

(1-month

USD

LIBOR

+

2.75%;

3-month

USD

LIBOR

+

2.75%),

9/23/26

..........................

United

States

2,250,723

2,249,946

Staples,

Inc.,

2019

Refinancing

New

Term

Loan,

B1,

5.205%,

(3-month

USD

LIBOR

+

5%),

4/16/26

.....................

United

States

5,300,653

5,192,652

Staples,

Inc.,

2019

Refinancing

Term

Loan,

B2,

4.705%,

(3-month

USD

LIBOR

+

4.5%),

9/12/24

...........................

United

States

5,500,000

5,436,970

29,944,950

a

a

a

a

a

a

Communications

Equipment

0.9%

CommScope

,

Inc.,

Initial

Term

Loan,

3.363%,

(1-month

USD

LIBOR

+

3.25%),

4/06/26

...................................

United

States

10,517,491

10,466,587

Construction

Materials

0.6%

Park

River

Holdings,

Inc.,

First

Lien,

Initial

Term

Loan,

4%,

(3-month

USD

LIBOR

+

3.25%),

12/28/27

.........................

United

States

3,587,094

3,571,956

White

Cap

Buyer

LLC,

Initial

Closing

Date

Term

Loan,

4.5%,

(3-month

USD

LIBOR

+

4%),

10/19/27

....................

United

States

2,985,000

2,989,194

6,561,150

a

a

a

a

a

a

Containers

&

Packaging

1.2%

BWay

Holding

Co.,

Initial

Term

Loan,

3.443%,

(3-month

USD

LIBOR

+

3.25%),

4/03/24

...................................

United

States

10,464,596

10,126,118

j

Kleopatra

Finco

SARL,

USD

Term

Loan,

B,

5.25%,

(6-month

USD

LIBOR

+

4.75%),

2/12/26

..............................

Luxembourg

4,737,913

4,733,460

14,859,578

a

a

a

a

a

a

Diversified

Consumer

Services

1.0%

KUEHG

Corp.,

Term

Loan,

B3,

4.75%,

(3-month

USD

LIBOR

+

3.75%),

2/21/25

.....................................

United

States

5,081,821

5,026,912

Sedgwick

Claims

Management

Services,

Inc.

(Lightning

Cayman

Merger

Sub

Ltd.),

Initial

Term

Loan,

3.363%,

(1-month

USD

LIBOR

+

3.25%),

12/31/25

..................................

United

States

1,687,056

1,665,656

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Floating

Rate

Daily

Access

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

41

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

h,i

Senior

Floating

Rate

Interests

(continued)

Diversified

Consumer

Services

(continued)

WeddingWire

,

Inc.,

First

Lien,

Initial

Term

Loan,

4.685%,

(2-month

USD

LIBOR

+

4.5%;

3-month

USD

LIBOR

+

4.5%),

12/19/25

...

United

States

2,393,878

$

2,393,889

j

WW

International,

Inc.,

Initial

Term

Loan,

4%,

(1-month

USD

LIBOR

+

3.5%),

4/13/28

....................................

United

States

2,358,974

2,361,628

11,448,085

a

a

a

a

a

a

Diversified

Financial

Services

1.1%

Jefferies

Finance

LLC,

Closing

Date

Term

Loan,

3.125%,

(1-month

USD

LIBOR

+

3%),

6/03/26

............................

United

States

2,985,000

2,959,359

Sabre

GLBL,

Inc.,

2020

Other

Term

Loan,

B,

4.75%,

(1-month

USD

LIBOR

+

4%),

12/17/27

...............................

United

States

325,044

328,549

Verscend

Holding

Corp.,

Term

Loan,

B1,

4.113%,

(1-month

USD

LIBOR

+

4%),

8/27/25

................................

United

States

9,308,760

9,320,396

12,608,304

a

a

a

a

a

a

Diversified

Telecommunication

Services

2.4%

Global

Tel

Link,

First

Lien,

Term

Loan,

4.363%,

(1-month

USD

LIBOR

+

4.25%),

11/29/25

.............................

United

States

14,395,354

13,451,810

Global

Tel

Link,

Second

Lien,

Term

Loan,

8.363%,

(1-month

USD

LIBOR

+

8.25%),

11/29/26

.............................

United

States

7,895,149

6,271,709

West

Corp.,

Initial

Term

Loan,

LOAN

Note,

B,

5%,

(3-month

USD

LIBOR

+

4%),

10/10/24

...............................

United

States

4,031,416

3,941,757

Zayo

Group

Holdings,

Inc.,

Initial

Dollar

Term

Loan,

3.113%,

(1-month

USD

LIBOR

+

3%),

3/09/27

.....................

United

States

5,255,569

5,209,583

28,874,859

a

a

a

a

a

a

Electric

Utilities

0.1%

Astoria

Energy

LLC,

Advance

(2020)

Term

Loan,

B,

4.5%,

(3-month

USD

LIBOR

+

3.5%),

12/10/27

..........................

United

States

1,423,243

1,426,801

Electronic

Equipment,

Instruments

&

Components

0.1%

Verifone

Systems,

Inc.,

First

Lien,

Initial

Term

Loan,

4.182%,

(3-month

USD

LIBOR

+

4%),

8/20/25

.....................

United

States

1,790,816

1,762,513

Entertainment

3.0%

Banijay

Entertainment

SAS,

Facility

USD

Term

Loan,

B,

3.86%,

(1-month

USD

LIBOR

+

3.75%),

3/01/25

..................

France

5,235,199

5,209,023

j

Crown

Finance

US,

Inc.,

Initial

Dollar

Term

Loan,

3.5%,

(3-month

USD

LIBOR

+

2.5%),

2/28/25

...........................

United

States

2,990,730

2,575,362

Diamond

Sports

Group

LLC,

Term

Loan,

3.37%,

(1-month

USD

LIBOR

+

3.25%),

8/24/26

..............................

United

States

12,890,282

9,261,410

Lions

Gate

Capital

Holdings

LLC,

2026

Term

Loan,

A,

1.863%,

(1-month

USD

LIBOR

+

1.75%),

4/06/26

..................

United

States

14,536,006

14,417,901

William

Morris

Endeavor

Entertainment

LLC

(IMG

Worldwide

Holdings

LLC),

First

Lien,

Term

Loan,

B1,

2.903%,

(1-month

USD

LIBOR

+

2.75%;

3-month

USD

LIBOR

+

2.75%),

5/18/25

......

United

States

4,381,712

4,288,623

35,752,319

a

a

a

a

a

a

Food

&

Staples

Retailing

1.5%

GNC

Holdings,

Inc.,

Second

Lien,

Term

Loan,

6.2%,

(3-month

USD

LIBOR

+

6%),

10/07/26

...............................

United

States

19,463,406

16,324,932

j

Shearer's

Foods

LLC,

First

Lien,

Refinancing

Term

Loan,

4.25%,

(3-month

USD

LIBOR

+

3.5%),

9/23/27

...................

United

States

1,777,236

1,778,018

18,102,950

a

a

a

a

a

a

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Floating

Rate

Daily

Access

Fund

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

42

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

h,i

Senior

Floating

Rate

Interests

(continued)

Food

Products

0.7%

g

CSM

Bakery

Solutions

Ltd.,

Second

Lien,

Term

Loan,

11%,

PIK,

(3-month

USD

LIBOR

+

10%),

7/05/21

....................

United

States

8,039,532

$

7,845,592

Health

Care

Equipment

&

Supplies

0.5%

j,k

Jazz

Pharmaceuticals,

Inc.,

Term

Loan,

TBD,

4/21/28

..........

United

States

2,428,571

2,436,658

j,k

Organon

&

Co.,

Term

Loan,

TBD,

4/08/28

...................

United

States

3,348,649

3,343,760

5,780,418

a

a

a

a

a

a

Health

Care

Providers

&

Services

6.4%

j

ADMI

Corp.,

Amendment

No.

4

Refinancing

Term

Loan,

3.25%,

(1-month

USD

LIBOR

+

2.75%),

12/23/27

.................

United

States

7,913,882

7,861,136

j

CNT

Holdings

I

Corp.,

First

Lien,

Facility

Term

Loan,

4.5%,

(3-month

USD

LIBOR

+

3.75%),

11/08/27

.........................

United

States

2,368,610

2,367,687

j

eResearchTechnology

,

Inc.,

First

Lien,

Initial

Term

Loan,

5.5%,

(1-month

USD

LIBOR

+

4.5%),

2/04/27

...................

United

States

6,659,179

6,683,252

Gentiva

Health

Services,

Inc.,

First

Lien,

Term

Loan,

B,

2.875%,

(1-month

USD

LIBOR

+

2.75%),

7/02/25

..................

United

States

5,636,113

5,632,590

Global

Medical

Response,

Inc.,

2018

New

Term

Loan,

5.25%,

(3-month

USD

LIBOR

+

4.25%),

3/14/25

..................

United

States

2,864,984

2,868,823

National

Mentor

Holdings,

Inc.,

First

Lien,

Initial

Term

Loan,

4.5%,

(1-month

USD

LIBOR

+

3.75%;

3-month

USD

LIBOR

+

3.75%),

3/02/28

.....................................

United

States

9,219,458

9,222,316

C,

4.5%,

(3-month

USD

LIBOR

+

3.75%),

3/02/28

...........

United

States

307,315

307,410

Navicure

,

Inc.,

First

Lien,

Initial

Term

Loan,

4.113%,

(1-month

USD

LIBOR

+

4%),

10/22/26

...............................

United

States

12,236,863

12,206,271

Pathway

Vet

Alliance

LLC,

First

Lien,

2021

Replacement

Term

Loan,

3.863%,

(1-month

USD

LIBOR

+

3.75%),

3/31/27

............

United

States

8,970,188

8,936,550

Phoenix

Guarantor,

Inc.,

First

Lien,

Term

Loan,

3.611%,

(1-month

USD

LIBOR

+

3.5%),

3/05/26

.............

United

States

6,321,127

6,273,718

B1,

3.358%,

(1-month

USD

LIBOR

+

3.25%),

3/05/26

.........

United

States

6,885,896

6,814,593

Pluto

Acquisition

I,

Inc.,

First

Lien,

Term

Loan,

B,

4.613%,

(1-month

USD

LIBOR

+

4.5%),

6/22/26

...........................

United

States

773,195

776,094

Pluto

Acquisition

I,

Inc.,

Incremental

Term

Loan,

5.5%,

(1-month

USD

LIBOR

+

5%),

6/22/26

................................

United

States

1,498,812

1,509,116

Radiology

Partners,

Inc.,

First

Lien,

Term

Loan,

B,

4.361%,

(1-month

USD

LIBOR

+

4.25%),

7/09/25

..........................

United

States

3,000,000

2,993,670

j

U.S.

Anesthesia

Partners,

Inc.,

First

Lien,

Initial

Term

Loan,

4%,

(3-month

USD

LIBOR

+

3%),

6/23/24

.....................

United

States

1,799,743

1,776,248

76,229,474

a

a

a

a

a

a

Health

Care

Technology

0.1%

Inovalon

Holdings,

Inc.,

Refinancing

Date

Term

Loan,

2.875%,

(1-month

USD

LIBOR

+

2.75%),

4/02/25

..................

United

States

1,339,313

1,330,105

Hotels,

Restaurants

&

Leisure

3.8%

g

24

Hour

Fitness

Worldwide,

Inc.,

Exit

Term

Loan,

5.193%,

PIK,

(3-month

USD

LIBOR

+

5%),

12/29/25

....................

United

States

13,047,124

11,495,060

Boyd

Gaming

Corp.,

Refinancing

Term

Loan,

B,

2.337%,

(1-week

USD

LIBOR

+

2.25%),

9/15/23

..........................

United

States

3,981,376

3,981,376

Boyd

Gaming

Corp.,

Term

Loan,

A,

3.25%,

(1-week

USD

LIBOR

+

2.75%),

9/15/23

.....................................

United

States

3,855,778

3,865,417

Caesars

Resort

Collection

LLC,

Term

Loan,

B,

2.863%,

(1-month

USD

LIBOR

+

2.75%),

12/23/24

.........

United

States

8,904,980

8,818,112

B1,

4.613%,

(1-month

USD

LIBOR

+

4.5%),

7/21/25

..........

United

States

1,718,565

1,725,989

Golden

Nugget,

Inc.,

Initial

Term

Loan,

B,

3.25%,

(2-month

USD

LIBOR

+

2.5%),

10/04/23

..............................

United

States

3,511,686

3,476,411

j

IRB

Holding

Corp.,

Fourth

Amendment

Incremental

Term

Loan,

4.25%,

(3-month

USD

LIBOR

+

3.25%),

12/15/27

............

United

States

4,730,701

4,726,278

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Floating

Rate

Daily

Access

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

43

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

h,i

Senior

Floating

Rate

Interests

(continued)

Hotels,

Restaurants

&

Leisure

(continued)

Station

Casinos

LLC,

Facility

Term

Loan,

B1,

2.5%,

(1-month

USD

LIBOR

+

2.25%),

2/08/27

..............................

United

States

7,708,750

$

7,613,238

45,701,881

a

a

a

a

a

a

Household

Durables

0.2%

Playtika

Holding

Corp.,

Term

Loan,

B1,

2.863%,

(1-month

USD

LIBOR

+

2.75%),

3/13/28

..............................

United

States

2,565,360

2,554,945

Household

Products

1.3%

b,g,l

FGI

Operating

Co.

LLC,

Term

Loan,

12.1%,

PIK,

(3-month

USD

LIBOR

+

11%),

5/16/22

...............................

United

States

45,096,629

15,757,453

Insurance

3.0%

j

Acrisure

LLC,

First

Lien,

2020

Term

Loan,

3.703%,

(3-month

USD

LIBOR

+

3.5%),

2/15/27

...............................

United

States

4,200,000

4,143,552

Alliant

Holdings

Intermediate

LLC,

2018

Initial

Term

Loan,

3.363%,

(1-month

USD

LIBOR

+

3.25%),

5/09/25

..................

United

States

8,257,677

8,165,728

j

Alliant

Holdings

Intermediate

LLC,

Term

Loan,

B3,

4.25%,

(1-month

USD

LIBOR

+

3.75%),

11/05/27

.........................

United

States

1,071,273

1,072,687

AssuredPartners

,

Inc.,

2020

February

Refinancing

Term

Loan,

3.613%,

(1-month

USD

LIBOR

+

3.5%),

2/12/27

.............

United

States

9,017,842

8,944,572

AssuredPartners

,

Inc.,

2020

June

Incremental

Term

Loan,

5.5%,

(1-month

USD

LIBOR

+

4.5%),

2/12/27

...................

United

States

493,446

495,111

Asurion

LLC,

New

Term

Loan,

B8,

3.363%,

(1-month

USD

LIBOR

+

3.25%),

12/23/26

........

United

States

8,982,287

8,931,762

B9,

3.363%,

(1-month

USD

LIBOR

+

3.25%),

7/31/27

.........

United

States

3,575,507

3,553,535

Asurion

LLC,

Second

Lien,

New

Term

Loan,

B3,

5.363%,

(1-month

USD

LIBOR

+

5.25%),

1/31/28

..........................

United

States

195,987

199,123

35,506,070

a

a

a

a

a

a

Internet

&

Direct

Marketing

Retail

0.6%

j

MH

Sub

I

LLC

(Micro

Holding

Corp.),

First

Lien,

2020

June

New

Term

Loan,

4.75%,

(1-month

USD

LIBOR

+

3.75%),

9/13/24

....

United

States

2,948,976

2,952,293

MH

Sub

I

LLC

(Micro

Holding

Corp.),

First

Lien,

Amendment

No.

2

Initial

Term

Loan,

3.613%,

(1-month

USD

LIBOR

+

3.5%),

9/13/24

United

States

4,340,072

4,308,737

7,261,030

a

a

a

a

a

a

IT

Services

5.1%

j

Arches

Buyer,

Inc.,

Refinancing

Term

Loan,

3.75%,

(1-month

USD

LIBOR

+

3.25%),

12/06/27

.............................

United

States

1,780,000

1,773,512

Aventiv

Technologies

LLC,

First

Lien,

Initial

Term

Loan,

5.5%,

(3-month

USD

LIBOR

+

4.5%),

11/01/24

..................

United

States

8,795,455

8,177,046

Barracuda

Networks,

Inc.,

First

Lien,

2020

Term

Loan,

4.5%,

(3-month

USD

LIBOR

+

3.75%),

2/12/25

..................

United

States

2,944,109

2,945,213

Conduent

,

Inc.,

Term

Loan,

B,

2.613%,

(1-month

USD

LIBOR

+

2.5%),

12/07/23

.....................................

United

States

1,746,466

1,727,691

Gainwell

Acquisition

Corp.,

Term

Loan,

B,

4.75%,

(3-month

USD

LIBOR

+

4%),

10/01/27

...............................

United

States

7,767,433

7,784,444

Informatica

LLC,

Dollar

2020

Term

Loan,

3.363%,

(1-month

USD

LIBOR

+

3.25%),

2/25/27

..............................

United

States

5,316,300

5,277,624

Neustar

,

Inc.,

First

Lien,

Term

Loan,

B5,

5.5%,

(3-month

USD

LIBOR

+

4.5%),

8/08/24

....................................

United

States

6,035,470

5,782,131

j

Peraton

Corp.,

First

Lien,

Term

Loan,

B,

4.5%,

(1-month

USD

LIBOR

+

3.75%),

2/01/28

...................................

United

States

3,011,567

3,014,293

Pitney

Bowes,

Inc.,

Refinancing

Term

Loan,

B,

4.12%,

(1-month

USD

LIBOR

+

4%),

3/17/28

................................

United

States

11,000,000

11,009,130

Tempo

Acquisition

LLC,

Extended

Term

Loan,

3.75%,

(1-month

USD

LIBOR

+

3.25%),

11/02/26

.............................

United

States

2,387,970

2,388,710

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Floating

Rate

Daily

Access

Fund

franklintempleton.com

Semiannual

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)

IT

Services

(continued)

TIBCO

Software,

Inc.,

Term

Loan,

B3,

3.87%,

(1-month

USD

LIBOR

+

3.75%),

6/30/26

...................................

United

States

10,908,492

$

10,862,512

60,742,306

a

a

a

a

a

a

Leisure

Products

0.7%

j

Hercules

Achievement,

Inc.

(Varsity

Brands

Holding

Co.,

Inc.),

First

Lien,

Initial

Term

Loan,

4.5%,

(1-month

USD

LIBOR

+

3.5%),

12/16/24

..........................................

United

States

5,276,335

5,087,284

NASCAR

Holdings

LLC,

Initial

Term

Loan,

2.859%,

(1-month

USD

LIBOR

+

2.75%),

10/19/26

.............................

United

States

3,528,648

3,509,294

8,596,578

a

a

a

a

a

a

Machinery

1.8%

Navistar,

Inc.,

Term

Loan,

B,

3.61%,

(1-month

USD

LIBOR

+

3.5%),

11/06/24

..........................................

United

States

20,895,088

20,913,371

Media

5.7%

Cengage

Learning,

Inc.,

2016

Refinancing

Term

Loan,

5.25%,

(2-month

USD

LIBOR

+

4.25%;

3-month

USD

LIBOR

+

4.25%),

6/07/23

...........................................

United

States

10,565,741

10,534,361

Clear

Channel

Outdoor

Holdings,

Inc.,

Term

Loan,

B,

3.685%,

(2-month

USD

LIBOR

+

3.5%;

3-month

USD

LIBOR

+

3.5%),

8/21/26

...........................................

United

States

9,556,777

9,280,060

CSC

Holdings

LLC,

March

2017

Refinancing

Term

Loan,

2.365%,

(1-month

USD

LIBOR

+

2.25%),

7/17/25

..................

United

States

17,428,272

17,268,803

Gray

Television,

Inc.,

Term

Loan,

B2,

2.365%,

(1-month

USD

LIBOR

+

2.25%),

2/07/24

...................................

United

States

3,457,244

3,441,859

Nexstar

Broadcasting,

Inc.,

Term

Loan,

B3,

2.356%,

(1-month

USD

LIBOR

+

2.25%),

1/17/24

..............................

United

States

6,117,538

6,102,703

Nielsen

Finance

LLC,

Dollar

Term

Loan,

B5,

4.75%,

(1-month

USD

LIBOR

+

3.75%),

6/04/25

..............................

United

States

1,189,608

1,194,950

Radiate

HoldCo

LLC,

Term

Loan,

B,

4.25%,

(1-month

USD

LIBOR

+

3.5%),

9/25/26

......................................

United

States

1,635,067

1,638,648

Sinclair

Television

Group,

Inc.,

Term

Loan,

B,

2.36%,

(1-month

USD

LIBOR

+

2.25%),

1/03/24

..............................

United

States

7,303,522

7,257,875

Univision

Communications,

Inc.,

First

Lien,

2020

Replacement

Term

Loan,

4.75%,

(1-month

USD

LIBOR

+

3.75%),

3/15/26

........

United

States

2,313,287

2,320,782

j,k

Virgin

Media

Bristol

LLC,

Term

Loan,

Q,

TBD,

1/31/29

..........

United

States

3,155,393

3,154,873

WideOpenWest

Finance

LLC,

Eighth

Amendment

Term

Loan,

B,

4.25%,

(1-month

USD

LIBOR

+

3.25%),

8/18/23

.............

United

States

5,367,694

5,370,351

67,565,265

a

a

a

a

a

a

Metals

&

Mining

0.6%

j

U.S.

Silica

Co.,

Term

Loan,

5%,

(1-month

USD

LIBOR

+

4%),

5/01/25

...........................................

United

States

7,330,702

7,054,445

Multiline

Retail

0.2%

Franchise

Group,

Inc.,

First

Lien,

Initial

Term

Loan,

5.5%,

(3-month

USD

LIBOR

+

4.75%),

3/10/26

..........................

United

States

1,588,583

1,595,542

Harbor

Freight

Tools

USA,

Inc.,

Initial

Term

Loan

(2020),

3.75%,

(1-month

USD

LIBOR

+

3%),

10/19/27

....................

United

States

1,211,134

1,211,697

2,807,239

a

a

a

a

a

a

Oil,

Gas

&

Consumable

Fuels

3.5%

Centurion

Pipeline

Co.

LLC,

Initial

Term

Loan,

3.363%,

(1-month

USD

LIBOR

+

3.25%),

9/29/25

..........................

United

States

1,939,413

1,930,201

j,m

Fieldwood

Energy

LLC,

Debtor-in-possession

Facility

Term

Loan,

9.75%,

(1-month

USD

LIBOR

+

8.75%),

8/04/21

.............

United

States

724,518

753,499

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Floating

Rate

Daily

Access

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

45

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

h,i

Senior

Floating

Rate

Interests

(continued)

Oil,

Gas

&

Consumable

Fuels

(continued)

l

Fieldwood

Energy

LLC,

First

Lien,

Closing

Date

Term

Loan,

7.251%,

(3-month

USD

LIBOR

+

4.25%),

4/11/22

..................

United

States

74,275,433

$

28,763,161

b,j,k

Fieldwood

Energy

LLC,

Second

Lien,

Exit

Facility

Term

Loan,

TBD,

3/31/26

...........................................

United

States

6,478,518

6,348,948

UTEX

Industries,

Inc.,

First

Out

Term

Loan,

8.5%,

(1-month

USD

LIBOR

+

7%),

12/03/24

...............................

United

States

2,716,008

2,737,736

g

UTEX

Industries,

Inc.,

Second

Out

Term

Loan,

5.25%,

PIK,

(1-month

USD

LIBOR

+

3.75%),

12/03/25

.........................

United

States

1,691,609

1,649,049

42,182,594

a

a

a

a

a

a

Paper

&

Forest

Products

0.8%

d

Appvion

Operations,

Inc.,

Term

Loan,

7%,

(3-month

USD

LIBOR

+

6%),

6/12/26

.......................................

United

States

10,110,289

10,085,013

Personal

Products

0.9%

Coty,

Inc.,

USD

Term

Loan,

B,

2.36%,

(1-month

USD

LIBOR

+

2.25%),

4/07/25

.....................................

United

States

1,237,906

1,190,519

Sunshine

Luxembourg

VII

SARL,

Term

Loan,

B3,

4.5%,

(3-month

USD

LIBOR

+

3%),

10/01/26

...........................

Luxembourg

9,321,600

9,336,142

10,526,661

a

a

a

a

a

a

Pharmaceuticals

0.4%

Bausch

Health

Cos.,

Inc.,

Initial

Term

Loan,

3.109%,

(1-month

USD

LIBOR

+

3%),

6/02/25

................................

United

States

5,355,740

5,352,768

Professional

Services

0.6%

CCRR

Parent,

Inc.,

First

Lien,

Initial

Term

Loan,

5%,

(3-month

USD

LIBOR

+

4.25%),

3/06/28

..............................

United

States

1,633,226

1,639,351

Dun

&

Bradstreet

Corp.

(The),

Initial

Term

Loan

Borrowing,

B,

3.361%,

(1-month

USD

LIBOR

+

3.25%),

2/06/26

............

United

States

3,015,216

3,002,024

UKG,

Inc.,

First

Lien,

2021

Incremental

Term

Loan,

4%,

(3-month

USD

LIBOR

+

3.25%),

5/04/26

..........................

United

States

2,236,836

2,242,081

6,883,456

a

a

a

a

a

a

Real

Estate

Management

&

Development

0.3%

Cushman

&

Wakefield

U.S.

Borrower

LLC,

Replacement

Term

Loan,

2.863%,

(1-month

USD

LIBOR

+

2.75%),

8/21/25

............

United

States

3,680,000

3,602,959

Road

&

Rail

3.6%

Avis

Budget

Car

Rental

LLC,

New

Term

Loan,

B,

2.37%,

(1-month

USD

LIBOR

+

2.25%),

8/06/27

..........................

United

States

8,222,929

8,061,924

b

Onsite

Rental

Group

Operations

Pty.

Ltd.,

Term

Loan,

B,

5.5%,

(1-month

USD

LIBOR

+

4.5%),

10/26/22

..................

Australia

15,430,072

14,534,123

Ventia

Midco

Pty.

Ltd.,

2017

Refinancing

USD

Term

Loan,

B,

5%,

(3-month

USD

LIBOR

+

4%),

5/21/26

.....................

Australia

19,825,761

19,887,816

42,483,863

a

a

a

a

a

a

Software

11.3%

athenahealth

,

Inc.,

First

Lien,

Term

Loan,

B1,

4.453%,

(3-month

USD

LIBOR

+

4.25%),

2/11/26

..............................

United

States

11,779,187

11,835,138

Blackboard,

Inc.,

First

Lien,

Term

Loan,

B5,

7%,

(3-month

USD

LIBOR

+

6%),

6/30/24

................................

United

States

11,301,148

11,308,267

Ceridian

HCM

Holding,

Inc.,

Initial

Term

Loan,

2.587%,

(1-week

USD

LIBOR

+

2.5%),

4/30/25

...............................

United

States

3,855,645

3,800,220

j

DCert

Buyer,

Inc.,

First

Lien,

Initial

Term

Loan,

4.113%,

(1-month

USD

LIBOR

+

4%),

10/16/26

...........................

United

States

10,655,078

10,669,142

DCert

Buyer,

Inc.,

Second

Lien,

First

Amendment

Refinancing

Term

Loan,

7.113%,

(1-month

USD

LIBOR

+

7%),

2/19/29

.........

United

States

2,168,879

2,188,312

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Floating

Rate

Daily

Access

Fund

franklintempleton.com

Semiannual

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)

Software

(continued)

j

ECI

Macola

/MAX

Holding

LLC,

First

Lien,

Initial

Term

Loan,

4.5%,

(3-month

USD

LIBOR

+

3.75%),

11/09/27

..................

United

States

2,992,500

$

2,999,981

j

Epicor

Software

Corp.,

Term

Loan,

C,

4%,

(1-month

USD

LIBOR

+

3.25%),

7/30/27

.....................................

United

States

3,552,037

3,551,575

Greeneden

U.S.

Holdings

I

LLC,

Term

Loan,

B,

4.75%,

(1-month

USD

LIBOR

+

4%),

12/01/27

...........................

United

States

5,542,786

5,561,492

j

Hyland

Software,

Inc.,

First

Lien,

2018

Refinancing

Term

Loan,

4.25%,

(1-month

USD

LIBOR

+

3.5%),

7/01/24

..............

United

States

7,090,617

7,105,365

Hyland

Software,

Inc.,

Second

Lien,

2021

Refinancing

Term

Loan,

7%,

(1-month

USD

LIBOR

+

6.25%),

7/07/25

...............

United

States

106,061

107,209

j

Idera

,

Inc.,

First

Lien,

Term

Loan,

B1,

4.5%,

(3-month

USD

LIBOR

+

3.75%),

3/02/28

.....................................

United

States

6,683,379

6,643,011

j,k

IGT

Holding

IV

AB,

Facility

Term

Loan,

TBD,

3/31/28

...........

Sweden

4,153,333

4,148,142

Ivanti

Software,

Inc.,

First

Lien,

First

Amendment

Term

Loan,

B,

4.75%,

(3-month

USD

LIBOR

+

4%),

12/01/27

..............

United

States

306,406

302,653

Ivanti

Software,

Inc.,

First

Lien,

Initial

Term

Loan,

5.75%,

(3-month

USD

LIBOR

+

4.75%),

12/01/27

.........................

United

States

3,500,000

3,495,625

LogMeIn,

Inc.,

First

Lien,

Initial

Term

Loan,

4.86%,

(1-month

USD

LIBOR

+

4.75%),

8/31/27

..............................

United

States

5,919,575

5,917,711

Mitchell

International,

Inc.,

First

Lien,

Amendment

No.

2

New

Facility

Term

Loan,

4.75%,

(1-month

USD

LIBOR

+

4.25%),

11/29/24

...

United

States

4,676,500

4,692,096

j,k

Mitchell

International,

Inc.,

First

Lien,

Initial

Term

Loan,

TBD,

11/29/24

..........................................

United

States

2,396,915

2,364,557

Perforce

Software,

Inc.,

First

Lien,

New

Term

Loan,

3.863%,

(1-month

USD

LIBOR

+

3.75%),

7/01/26

..................

United

States

5,628,256

5,567,865

Project

Alpha

Intermediate

Holding,

Inc.,

2021

Refinancing

Term

Loan,

4.12%,

(1-month

USD

LIBOR

+

4%),

4/26/24

..........

United

States

4,868,325

4,860,414

j

Project

Ruby

Ultimate

Parent

Corp.,

First

Lien,

Closing

Date

Term

Loan,

4%,

(1-month

USD

LIBOR

+

3.25%),

3/10/28

..........

United

States

4,339,105

4,314,698

Quest

Software

US

Holdings,

Inc.,

First

Lien,

Initial

Term

Loan,

4.436%,

(3-month

USD

LIBOR

+

4.25%),

5/16/25

............

United

States

4,114,836

4,117,099

j

RealPage

,

Inc.,

First

Lien,

Initial

Term

Loan,

3.75%,

(1-month

USD

LIBOR

+

3.25%),

4/24/28

..............................

United

States

7,096,774

7,072,397

Solera

LLC

(Solera

Finance,

Inc.),

Dollar

Term

Loan,

2.863%,

(1-month

USD

LIBOR

+

2.75%),

3/03/23

..................

United

States

1,472,687

1,466,966

Sophia

LP,

Term

Loan,

B,

4.5%,

(3-month

USD

LIBOR

+

3.75%),

10/07/27

..........................................

United

States

3,876,144

3,880,989

Surf

Holdings

SARL,

First

Lien,

Dollar

Term

Loan,

3.676%,

(3-month

USD

LIBOR

+

3.5%),

3/05/27

...........................

Luxembourg

8,079,100

8,013,902

j,k

Syncsort

,

Inc.,

Term

Loan,

B,

TBD,

3/19/28

..................

United

States

4,743,592

4,734,697

Ultimate

Software

Group,

Inc.

(The),

First

Lien,

Initial

Term

Loan,

3.863%,

(1-month

USD

LIBOR

+

3.75%),

5/04/26

............

United

States

4,306,281

4,313,322

135,032,845

a

a

a

a

a

a

Specialty

Retail

1.2%

j

Michaels

Companies,

Inc.

(The),

Term

Loan,

B,

5%,

(3-month

USD

LIBOR

+

4.25%),

4/15/28

..............................

United

States

4,760,000

4,745,125

PetSmart

LLC,

Initial

Term

Loan,

4.5%,

(3-month

USD

LIBOR

+

3.75%),

2/11/28

.....................................

United

States

1,727,090

1,734,214

Rent-A-Center,

Inc.,

Initial

Term

Loan,

4.75%,

(1-month

USD

LIBOR

+

4%),

2/17/28

......................................

United

States

1,629,904

1,643,482

j,k

Savers,

Inc.,

Term

Loan,

TBD,

4/21/28

.....................

United

States

3,592,105

3,632,516

j

Woof

Holdings,

Inc.,

First

Lien,

Initial

Term

Loan,

4.5%,

(3-month

USD

LIBOR

+

3.75%),

12/21/27

.........................

United

States

2,367,896

2,364,936

14,120,273

a

a

a

a

a

a

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Floating

Rate

Daily

Access

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

47

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

h,i

Senior

Floating

Rate

Interests

(continued)

Technology

Hardware,

Storage

&

Peripherals

0.5%

Amentum

Government

Services

Holdings

LLC,

First

Lien,

Initial

Term

Loan,

3.613%,

(1-month

USD

LIBOR

+

3.5%),

1/29/27

........

United

States

2,679,750

$

2,669,031

Amentum

Government

Services

Holdings

LLC,

Incremental

Term

Loan,

5.5%,

(3-month

USD

LIBOR

+

4.75%),

1/29/27

.........

United

States

3,100,650

3,118,742

5,787,773

a

a

a

a

a

a

Textiles,

Apparel

&

Luxury

Goods

0.4%

Champ

Acquisition

Corp.,

First

Lien,

Initial

Term

Loan,

5.73%,

(3-month

USD

LIBOR

+

5.5%;

6-month

USD

LIBOR

+

5.5%),

12/19/25

..........................................

United

States

2,942,239

2,942,504

Tory

Burch

LLC,

Initial

Term

Loan,

B,

4.5%,

(1-month

USD

LIBOR

+

3.5%),

4/16/28

......................................

United

States

2,080,645

2,067,652

5,010,156

a

a

a

a

a

a

Wireless

Telecommunication

Services

0.4%

Altice

France

SA,

USD

Incremental

Term

Loan,

B13,

4.198%,

(3-month

USD

LIBOR

+

4%),

8/14/26

.....................

France

4,414,608

4,411,451

Total

Senior

Floating

Rate

Interests

(Cost

$1,083,177,694)

........................

1,006,930,112

Asset-Backed

Securities

0.8%

Diversified

Financial

Services

0.8%

f,n

Alinea

CLO

Ltd.

,

2018-1A

,

C

,

144A,

FRN

,

2.088

%

,

(

3-month

USD

LIBOR

+

1.9

%

),

7/20/31

...............................

United

States

7,000,000

6,946,375

f,n

Dryden

40

Senior

Loan

Fund

,

2015-40A

,

CR

,

144A,

FRN

,

2.294

%

,

(

3-month

USD

LIBOR

+

2.1

%

),

8/15/31

...................

United

States

2,000,000

2,001,709

f,n

Galaxy

XXV

CLO

Ltd.

,

2018-25A

,

C

,

144A,

FRN

,

2.176

%

,

(

3-month

USD

LIBOR

+

2

%

),

10/25/31

...........................

United

States

500,000

500,489

9,448,573

a

a

a

a

a

a

Total

Asset-Backed

Securities

(Cost

$9,500,000)

................................

9,448,573

Shares/Units

Escrows

and

Litigation

Trusts

0.2%

a,f

99

Escrow

Issuer,

Inc.,

Escrow

Account,

144A

................

United

States

2,500,000

2,397,350

a,b

Millennium

Corporate

Claim

Trust,

Escrow

Account

............

United

States

13,585,837

—

a,b

Millennium

Lender

Claim

Trust,

Escrow

Account

..............

United

States

13,585,837

—

a,b

Remington

Outdoor

Co.,

Inc.,

Litigation

Units

.................

United

States

170,300

282,977

Total

Escrows

and

Litigation

Trusts

(Cost

$2,497,881)

...........................

2,680,327

Total

Long

Term

Investments

(Cost

$1,247,417,347)

.............................

1,157,989,248

a

Short

Term

Investments

9.7%

a

a

Country

Shares

a

Value

a

Money

Market

Funds

5.0%

e,o

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

59,512,964

59,512,964

Total

Money

Market

Funds

(Cost

$59,512,964)

..................................

59,512,964

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Floating

Rate

Daily

Access

Fund

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

48

See

Abbreviations

on

page

151

.

Short

Term

Investments

(continued)

a

a

Principal

Amount

*

a

Value

a

a

a

a

a

a

Repurchase

Agreements

4.7%

p

Joint

Repurchase

Agreement,

0.005%,

5/03/21

(Maturity

Value

$55,587,720)

BNP

Paribas

Securities

Corp.

(Maturity

Value

$40,166,575)

Deutsche

Bank

Securities,

Inc.

(Maturity

Value

$4,916,178)

HSBC

Securities

(USA),

Inc.

(Maturity

Value

$10,504,967)

Collateralized

by

U.S.

Government

Agency

Securities,

3%

-

4.5%,

5/20/46

-

11/20/50;

and

U.S.

Treasury

Notes,

1.38%

-

2.88%,

5/31/21

-

3/31/26

(valued

at

$56,698,108)

.................

55,587,699

$

55,587,699

Total

Repurchase

Agreements

(Cost

$55,587,699)

...............................

55,587,699

Total

Short

Term

Investments

(Cost

$115,100,663

)

...............................

115,100,663

a

Total

Investments

(Cost

$1,362,518,010)

106.8%

................................

$1,273,089,911

Other

Assets,

less

Liabilities

(6.8)%

...........................................

(80,977,780)

Net

Assets

100.0%

...........................................................

$1,192,112,131

*

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

Fair

valued

using

significant

unobservable

inputs.

See

Note

15

regarding

fair

value

measurements.

c

See

Note

9

regarding

restricted

securities.

d

See

Note

12

regarding

holdings

of

5%

voting

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

April

30,

2021,

the

aggregate

value

of

these

securities

was

$49,410,393,

representing

4.1%

of

net

assets.

g

Income

may

be

received

in

additional

securities

and/or

cash.

h

See

Note

1(i)

regarding

senior

floating

rate

interests.

i

The

coupon

rate

shown

represents

the

rate

at

period

end.

j

A

portion

or

all

of

the

security

purchased

on

a

delayed

delivery

basis.

See

Note

1(d).

k

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.

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.

p

See

Note

1(c)

regarding

joint

repurchase

agreement.

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

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accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

49

a

Six

Months

Ended

April

30,

2021

(unaudited)

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

A

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$9.54

$9.65

$9.60

$9.84

$9.89

$9.91

Income

from

investment

operations

a

:

Net

investment

income

..............

0.052

b

0.244

b

0.290

0.237

0.170

0.151

Net

realized

and

unrealized

gains

(losses)

0.191

(0.079)

0.068

(0.185)

(0.023)

0.031

Total

from

investment

operations

........

0.243

0.165

0.358

0.052

0.147

0.182

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

....................

(0.163)

(0.275)

(0.308)

(0.292)

(0.197)

(0.202)

Net

asset

value,

end

of

period

..........

$9.62

$9.54

$9.65

$9.60

$9.84

$9.89

Total

return

c

.......................

2.56%

1.77%

3.78%

0.54%

1.50%

1.88%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

..........................

0.94%

0.94%

0.94%

0.96%

0.96%

0.95%

Expenses

net

of

waiver

and

payments

by

affiliates

e

..........................

0.66%

0.67%

0.68%

0.72%

0.80%

0.80%

Net

investment

income

...............

1.09%

2.58%

2.99%

2.43%

1.73%

1.57%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$1,880,163

$1,778,666

$1,631,123

$1,499,579

$1,519,902

$1,524,437

Portfolio

turnover

rate

................

44.69%

f

93.23%

51.93%

f

56.12%

50.40%

44.76%

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

g

........................

30.06%

f

67.97%

51.93%

f

44.01%

45.29%

44.76%

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,

and

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

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.

See

Note

13

.

g

See

Note

1

(

h

)

regarding

mortgage

dollar

rolls.

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Low

Duration

Total

Return

Fund

(continued)

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accompanying

notes

are

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integral

part

of

these

financial

statements.

50

a

Six

Months

Ended

April

30,

2021

(unaudited)

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

C

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$9.50

$9.61

$9.56

$9.80

$9.86

$9.90

Income

from

investment

operations

a

:

Net

investment

income

..............

0.033

b

0.205

b

0.251

0.168

0.121

0.113

Net

realized

and

unrealized

gains

(losses)

0.181

(0.074)

0.068

(0.155)

(0.015)

0.024

Total

from

investment

operations

........

0.214

0.131

0.319

0.013

0.106

0.137

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

....................

(0.144)

(0.242)

(0.269)

(0.253)

(0.166)

(0.177)

Net

asset

value,

end

of

period

..........

$9.57

$9.50

$9.61

$9.56

$9.80

$9.86

Total

return

c

.......................

2.26%

1.42%

3.38%

0.14%

1.08%

1.41%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

..........................

1.34%

1.34%

1.34%

1.36%

1.36%

1.35%

Expenses

net

of

waiver

and

payments

by

affiliates

e

..........................

1.06

%

1.07%

1.08%

1.12%

1.20%

1.20%

Net

investment

income

...............

0.70%

2.18%

2.59%

2.03%

1.33%

1.17%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$117,248

$117,893

$135,372

$130,206

$174,754

$218,066

Portfolio

turnover

rate

................

44.69%

f

93.23%

51.93%

f

56.12%

50.40%

44.76%

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

g

........................

30.06%

f

67.97%

51.93%

f

44.01%

45.29%

44.76%

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,

and

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

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.

See

Note

13

.

g

See

Note

1

(

h

)

regarding

mortgage

dollar

rolls.

Franklin

Investors

Securities

Trust

Financial

Highlights

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Duration

Total

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(continued)

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integral

part

of

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financial

statements.

Semiannual

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a

Six

Months

Ended

April

30,

2021

(unaudited)

Year

Ended

October

31,

2020

Year

Ended

October

31,

2019

a

Class

R

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

..........................................

$9.54

$9.65

$9.65

Income

from

investment

operations

b

:

Net

investment

income

...................................................

0.037

c

0.219

c

0.012

Net

realized

and

unrealized

gains

(losses)

....................................

0.184

(0.073)

0.001

Total

from

investment

operations

.............................................

0.221

0.146

0.013

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

...........................

(0.151)

(0.256)

(0.013)

Net

asset

value,

end

of

period

...............................................

$9.61

$9.54

$9.65

Total

return

d

............................................................

2.33%

1.57%

0.14%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

...............................

1.16%

1.17%

1.19%

Expenses

net

of

waiver

and

payments

by

affiliates

f

...............................

0.91%

0.90%

0.93%

Net

investment

income

....................................................

0.78%

2.33%

2.73%

Supplemental

data

Net

assets,

end

of

period

(000’s)

.............................................

$181

$95

$18

Portfolio

turnover

rate

.....................................................

44.69%

g

93.23%

51.93%

g

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

h

.............................

30.06%

g

67.97%

51.93%

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

Ratios

are

annualized

for

periods

less

than

one

year.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

g

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

See

Note

13

.

h

See

Note

1

(

h

)

regarding

mortgage

dollar

rolls.

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Low

Duration

Total

Return

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

52

a

Six

Months

Ended

April

30,

2021

(unaudited)

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

R6

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$9.61

$9.71

$9.66

$9.90

$9.94

$9.95

Income

from

investment

operations

a

:

Net

investment

income

..............

0.071

b

0.277

b

0.326

0.271

0.214

0.195

Net

realized

and

unrealized

gains

(losses)

0.180

(0.071)

0.071

(0.178)

(0.025)

0.021

Total

from

investment

operations

........

0.251

0.206

0.397

0.093

0.189

0.216

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

....................

(0.181)

(0.306)

(0.347)

(0.333)

(0.229)

(0.226)

Net

asset

value,

end

of

period

..........

$9.68

$9.61

$9.71

$9.66

$9.90

$9.94

Total

return

c

.......................

2.62%

2.20%

4.17%

0.96%

1.92%

2.22%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

..........................

0.59%

0.58%

0.56%

0.55%

0.53%

0.53%

Expenses

net

of

waiver

and

payments

by

affiliates

e

..........................

0.30%

0.30%

0.30%

0.31%

0.39%

0.42%

Net

investment

income

...............

1.48%

2.92%

3.37%

2.84%

2.14%

1.95%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$440,687

$553,603

$1,003,208

$1,017,856

$591,622

$553,233

Portfolio

turnover

rate

................

44.69%

f

93.23%

51.93%

f

56.12%

50.40%

44.76%

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

g

........................

30.06%

f

67.97%

51.93%

f

44.01%

45.29%

44.76%

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

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

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.

See

Note

13

.

g

See

Note

1

(

h

)

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.

Semiannual

Report

53

a

Six

Months

Ended

April

30,

2021

(unaudited)

Year

Ended

October

31,

2020

2019

2018

2017

2016

Advisor

Class

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$9.60

$9.70

$9.65

$9.89

$9.94

$9.95

Income

from

investment

operations

a

:

Net

investment

income

..............

0.064

b

0.269

b

0.315

0.264

0.209

0.184

Net

realized

and

unrealized

gains

(losses)

0.181

(0.073)

0.069

(0.187)

(0.042)

0.025

Total

from

investment

operations

........

0.245

0.196

0.384

0.077

0.167

0.209

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

....................

(0.175)

(0.297)

(0.334)

(0.317)

(0.217)

(0.219)

Net

asset

value,

end

of

period

..........

$9.67

$9.60

$9.70

$9.65

$9.89

$9.94

Total

return

c

.......................

2.56%

2.10%

4.04%

0.80%

1.70%

2.14%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

..........................

0.69%

0.69%

0.69%

0.71%

0.71%

0.70%

Expenses

net

of

waiver

and

payments

by

affiliates

e

..........................

0.41%

0.42%

0.43%

0.47%

0.55%

0.55%

Net

investment

income

...............

1.33%

2.83%

3.24%

2.68%

1.98%

1.82%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$251,917

$229,233

$254,314

$214,339

$428,838

$224,887

Portfolio

turnover

rate

................

44.69%

f

93.23%

51.93%

f

56.12%

50.40%

44.76%

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

g

........................

30.06%

f

67.97%

51.93%

f

44.01%

45.29%

44.76%

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

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

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.

See

Note

13

.

g

See

Note

1

(

h

)

regarding

mortgage

dollar

rolls.

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited),

April

30,

2021

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

54

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

0.0%

†

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%

†

a,b

Riviera

Resources,

Inc.

.................................

United

States

2,835

732

Paper

&

Forest

Products

0.0%

†

Verso

Corp.,

A

........................................

United

States

1,387

21,415

Specialty

Retail

0.0%

†

b

Party

City

Holdco,

Inc.

..................................

United

States

57,585

403,096

Total

Common

Stocks

(Cost

$250,685)

.........................................

425,243

Management

Investment

Companies

4.1%

Capital

Markets

4.1%

d

Franklin

Floating

Rate

Income

Fund

.......................

United

States

12,169,074

94,432,018

d,e

Franklin

Liberty

High

Yield

Corporate

ETF

...................

United

States

259,500

6,848,594

Invesco

Senior

Loan

ETF

...............................

United

States

445,000

9,856,750

111,137,362

Total

Management

Investment

Companies

(Cost

$122,682,548)

...................

111,137,362

Warrants

Warrants

0.0%

†

Oil,

Gas

&

Consumable

Fuels

0.0%

†

a,b

Battalion

Oil

Corp.,

A,

10/08/22

...........................

United

States

1,093

104

a,b

Battalion

Oil

Corp.,

B,

10/08/22

...........................

United

States

1,366

62

a,b

Battalion

Oil

Corp.,

C,

10/08/22

...........................

United

States

1,757

29

195

Paper

&

Forest

Products

0.0%

†

b

Verso

Corp.,

7/25/23

...................................

United

States

146

343

Total

Warrants

(Cost

$—)

.....................................................

538

Principal

Amount

*

Corporate

Bonds

19.9%

Aerospace

&

Defense

0.3%

Boeing

Co.

(The)

,

Senior

Note

,

2.196

%

,

2/04/26

..............

United

States

6,400,000

6,412,756

f

TransDigm

,

Inc.

,

Senior

Secured

Note

,

144A,

6.25

%

,

3/15/26

....

United

States

1,500,000

1,590,000

8,002,756

Air

Freight

&

Logistics

0.5%

FedEx

Corp.

,

Senior

Bond

,

3.2

%

,

2/01/25

...................

United

States

850,000

923,640

United

Parcel

Service,

Inc.

,

Senior

Note

,

3.9

%

,

4/01/25

.........

United

States

12,000,000

13,349,670

14,273,310

Airlines

0.4%

f

American

Airlines

Inc

/

AAdvantage

Loyalty

IP

Ltd.

,

Senior

Secured

Note

,

144A,

5.5

%

,

4/20/26

.............................

United

States

1,300,000

1,366,625

Delta

Air

Lines,

Inc.

,

Senior

Note

,

2.9

%

,

10/28/24

.............

United

States

1,600,000

1,614,923

f

Delta

Air

Lines,

Inc.

/

SkyMiles

IP

Ltd.

,

Senior

Secured

Note

,

144A,

4.5

%

,

10/20/25

.....................................

United

States

4,600,000

4,936,262

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

55

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Airlines

(continued)

f

Hawaiian

Brand

Intellectual

Property

Ltd.

/

HawaiianMiles

Loyalty

Ltd.

,

Senior

Secured

Note

,

144A,

5.75

%

,

1/20/26

............

United

States

1,900,000

$

2,009,250

United

Airlines

Holdings,

Inc.

,

Senior

Note

,

5

%

,

2/01/24

.........

United

States

800,000

824,000

f

United

Airlines,

Inc.

,

Senior

Secured

Note

,

144A,

4.375

%

,

4/15/26

.

United

States

300,000

311,691

11,062,751

Auto

Components

0.2%

Aptiv

Corp.

,

Senior

Bond

,

4.15

%

,

3/15/24

...................

United

States

900,000

981,614

Goodyear

Tire

&

Rubber

Co.

(The)

,

Senior

Note

,

5.125

%

,

11/15/23

United

States

3,500,000

3,504,725

4,486,339

Banks

3.8%

f

Akbank

TAS

,

Senior

Bond

,

144A,

5.125

%

,

3/31/25

............

Turkey

2,000,000

1,995,986

Bank

of

America

Corp.

,

Senior

Note

,

3.55%

to

3/05/23,

FRN

thereafter

,

3/05/24

...................................

United

States

10,350,000

10,904,968

Barclays

plc

,

Senior

Note

,

4.61%

to

2/15/22,

FRN

thereafter

,

2/15/23

United

Kingdom

6,300,000

6,497,181

Citigroup,

Inc.

,

Senior

Note,

2.35%,

8/02/21

...........................

United

States

5,400,000

5,428,226

Senior

Note

,

3.106%

to

4/08/25,

FRN

thereafter,

4/08/26

......

United

States

6,500,000

6,975,981

Sub.

Bond,

4.6%,

3/09/26

.............................

United

States

2,600,000

2,973,613

HSBC

Holdings

plc

,

Senior

Bond,

4.3%,

3/08/26

............................

United

Kingdom

800,000

901,785

Senior

Note,

3.262%

to

3/13/22,

FRN

thereafter,

3/13/23

......

United

Kingdom

1,400,000

1,433,536

Senior

Note,

2.013%

to

9/22/27,

FRN

thereafter,

9/22/28

......

United

Kingdom

7,600,000

7,547,640

JPMorgan

Chase

&

Co.

,

Senior

Note,

2.083%

to

4/22/25,

FRN

thereafter,

4/22/26

......

United

States

18,200,000

18,827,121

Sub.

Bond,

3.875%,

9/10/24

...........................

United

States

8,400,000

9,193,686

Lloyds

Banking

Group

plc

,

Senior

Note

,

3.87%

to

7/09/24,

FRN

thereafter

,

7/09/25

...................................

United

Kingdom

2,300,000

2,502,760

f

Shinhan

Bank

Co.

Ltd.

,

Senior

Note

,

144A,

1.375

%

,

10/21/26

....

South

Korea

6,500,000

6,491,895

f

Standard

Chartered

plc

,

Senior

Note

,

144A,

3.885%

to

3/15/23,

FRN

thereafter

,

3/15/24

...................................

United

Kingdom

10,000,000

10,557,899

Wells

Fargo

&

Co.

,

Senior

Note

,

2.188%

to

4/30/25,

FRN

thereafter

,

4/30/26

...........................................

United

States

8,400,000

8,708,327

100,940,604

Beverages

0.2%

f,g

Coca-Cola

European

Partners

plc

,

Senior

Note

,

144A,

1.5

%

,

1/15/27

United

Kingdom

4,400,000

4,393,920

Biotechnology

0.3%

AbbVie,

Inc.

,

Senior

Note,

2.3%,

11/21/22

...........................

United

States

7,500,000

7,720,767

Senior

Note,

3.8%,

3/15/25

............................

United

States

600,000

657,588

Senior

Note,

2.95%,

11/21/26

..........................

United

States

500,000

535,887

8,914,242

Capital

Markets

0.9%

Goldman

Sachs

Group,

Inc.

(The)

,

Senior

Bond,

3.75%,

5/22/25

...........................

United

States

1,000,000

1,097,236

Senior

Bond,

3.75%,

2/25/26

...........................

United

States

6,500,000

7,225,758

Senior

Note,

3.272%

to

9/29/24,

FRN

thereafter,

9/29/25

......

United

States

5,000,000

5,373,145

Morgan

Stanley

,

Senior

Bond,

3.7%,

10/23/24

...........................

United

States

1,400,000

1,532,190

Senior

Note,

2.188%

to

4/28/25,

FRN

thereafter,

4/28/26

......

United

States

1,300,000

1,352,472

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

Semiannual

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

Corporate

Bonds

(continued)

Capital

Markets

(continued)

Morgan

Stanley,

(continued)

Sub.

Bond,

4.35%,

9/08/26

............................

United

States

7,800,000

$

8,832,703

25,413,504

Chemicals

0.5%

f,h

Anagram

International,

Inc.

/

Anagram

Holdings

LLC

,

Secured

Note

,

144A,

PIK,

10

%

,

8/15/26

..............................

United

States

314,174

307,629

f

Braskem

Netherlands

Finance

BV

,

Senior

Bond

,

144A,

4.5

%

,

1/31/30

...........................................

Brazil

7,100,000

7,223,895

EI

du

Pont

de

Nemours

and

Co.

,

Senior

Note

,

1.7

%

,

7/15/25

.....

United

States

4,100,000

4,217,180

Methanex

Corp.

,

Senior

Bond

,

4.25

%

,

12/01/24

...............

Canada

1,500,000

1,584,375

f

SABIC

Capital

II

BV

,

Senior

Bond

,

144A,

4.5

%

,

10/10/28

........

Saudi

Arabia

400,000

458,316

f

Yara

International

ASA

,

Senior

Bond

,

144A,

3.148

%

,

6/04/30

.....

Brazil

700,000

732,751

14,524,146

Communications

Equipment

0.1%

f

CommScope

Technologies

LLC

,

Senior

Bond

,

144A,

6

%

,

6/15/25

.

United

States

1,500,000

1,528,125

Consumer

Finance

0.8%

Capital

One

Financial

Corp.

,

Senior

Note

,

3.05

%

,

3/09/22

.......

United

States

13,800,000

14,091,490

Caterpillar

Financial

Services

Corp.

,

Senior

Note

,

1.45

%

,

5/15/25

.

United

States

1,900,000

1,947,618

OneMain

Finance

Corp.

,

Senior

Note

,

6.125

%

,

3/15/24

.........

United

States

4,200,000

4,541,250

20,580,358

Containers

&

Packaging

0.1%

f

Owens-Brockway

Glass

Container,

Inc.

,

Senior

Note

,

144A,

5.875

%

,

8/15/23

...........................................

United

States

1,000,000

1,083,750

f

Sealed

Air

Corp.

,

Senior

Bond

,

144A,

5.25

%

,

4/01/23

..........

United

States

950,000

1,009,275

2,093,025

Diversified

Financial

Services

0.3%

i

Cia

Securitizadora

de

Creditos

Financeiros

Vert

-Fintech

,

12

,

Senior

Secured

Note

,

FRN

,

0

%

,

(

BZDIOVRA

+

5.75

%

),

2/14/24

......

Brazil

7,676,000

BRL

1,653,876

f

EDP

Finance

BV

,

Senior

Note

,

144A,

1.71

%

,

1/24/28

..........

Portugal

6,500,000

6,338,725

7,992,601

Diversified

Telecommunication

Services

0.7%

AT&T,

Inc.

,

Senior

Bond

,

4.125

%

,

2/17/26

...................

United

States

7,000,000

7,886,013

f

CCO

Holdings

LLC

/

CCO

Holdings

Capital

Corp.

,

Senior

Note

,

144A,

4

%

,

3/01/23

...................................

United

States

1,700,000

1,721,259

Verizon

Communications,

Inc.

,

Senior

Note

,

1.45

%

,

3/20/26

.....

United

States

8,400,000

8,457,438

18,064,710

Electric

Utilities

0.9%

Duke

Energy

Corp.

,

Senior

Bond

,

3.75

%

,

4/15/24

.............

United

States

5,000,000

5,412,171

f

Korea

East-West

Power

Co.

Ltd.

,

Senior

Note,

144A,

3.875%,

7/19/23

.....................

South

Korea

4,800,000

5,153,977

Senior

Note,

144A,

1.75%,

5/06/25

......................

South

Korea

8,500,000

8,664,160

Southern

Co.

(The)

,

Senior

Bond,

3.25%,

7/01/26

...........................

United

States

850,000

918,335

A,

Senior

Bond,

3.7%,

4/30/30

.........................

United

States

4,100,000

4,480,203

24,628,846

Electronic

Equipment,

Instruments

&

Components

0.0%

†

FLIR

Systems,

Inc.

,

Senior

Note

,

2.5

%

,

8/01/30

...............

United

States

600,000

597,742

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

57

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Energy

Equipment

&

Services

0.4%

Baker

Hughes

a

GE

Co.

LLC

/

Baker

Hughes

Co-Obligor,

Inc.

,

Senior

Bond,

4.486%,

5/01/30

..........................

United

States

500,000

$

577,082

Senior

Note,

2.773%,

12/15/22

.........................

United

States

8,800,000

9,119,577

9,696,659

Entertainment

0.8%

f

Banijay

Entertainment

SASU

,

Senior

Secured

Note

,

144A,

5.375

%

,

3/01/25

...........................................

France

3,500,000

3,624,688

f

Live

Nation

Entertainment,

Inc.

,

Senior

Secured

Note

,

144A,

3.75

%

,

1/15/28

...........................................

United

States

2,700,000

2,693,547

Netflix,

Inc.

,

Senior

Bond,

5.75%,

3/01/24

...........................

United

States

1,800,000

2,031,750

Senior

Bond,

4.375%,

11/15/26

.........................

United

States

3,100,000

3,501,295

f

Senior

Note,

144A,

3.625%,

6/15/25

.....................

United

States

3,100,000

3,338,700

Walt

Disney

Co.

(The)

,

Senior

Note

,

1.75

%

,

1/13/26

...........

United

States

6,600,000

6,789,421

21,979,401

Equity

Real

Estate

Investment

Trusts

(REITs)

0.3%

Simon

Property

Group

LP

,

Senior

Bond

,

3.375

%

,

10/01/24

......

United

States

5,600,000

6,034,412

f

VICI

Properties

LP

/

VICI

Note

Co.,

Inc.

,

Senior

Note

,

144A,

3.5

%

,

2/15/25

...........................................

United

States

3,000,000

3,067,500

9,101,912

Food

&

Staples

Retailing

0.1%

f

Cencosud

SA

,

Senior

Bond

,

144A,

4.375

%

,

7/17/27

...........

Chile

2,900,000

3,225,264

Health

Care

Equipment

&

Supplies

0.0%

†

Edwards

Lifesciences

Corp.

,

Senior

Bond

,

4.3

%

,

6/15/28

.......

United

States

300,000

341,901

Health

Care

Providers

&

Services

0.2%

Anthem,

Inc.

,

Senior

Note

,

2.375

%

,

1/15/25

.................

United

States

2,400,000

2,519,278

Centene

Corp.

,

Senior

Note

,

3.375

%

,

2/15/30

................

United

States

2,700,000

2,713,513

Orlando

Health

Obligated

Group

,

3.777

%

,

10/01/28

............

United

States

105,000

116,070

Providence

St

Joseph

Health

Obligated

Group

,

H

,

2.746

%

,

10/01/26

United

States

15,000

15,990

5,364,851

Hotels,

Restaurants

&

Leisure

0.6%

f

Caesars

Resort

Collection

LLC

/

CRC

Finco

,

Inc.

,

Senior

Note

,

144A,

5.25

%

,

10/15/25

.....................................

United

States

500,000

504,694

f

Genting

New

York

LLC

/

GENNY

Capital,

Inc.

,

Senior

Note

,

144A,

3.3

%

,

2/15/26

......................................

United

States

400,000

399,676

f

International

Game

Technology

plc

,

Senior

Secured

Note

,

144A,

4.125

%

,

4/15/26

.....................................

United

States

1,800,000

1,856,988

Marriott

International,

Inc.

,

EE

,

Senior

Note

,

5.75

%

,

5/01/25

.....

United

States

5,500,000

6,334,167

f

NCL

Corp.

Ltd.

,

Senior

Note

,

144A,

5.875

%

,

3/15/26

...........

United

States

4,050,000

4,238,284

f

Studio

City

Finance

Ltd.

,

Senior

Note

,

144A,

6

%

,

7/15/25

.......

Macau

2,600,000

2,749,500

f

Wynn

Macau

Ltd.

,

Senior

Note

,

144A,

5.625

%

,

8/26/28

.........

Macau

400,000

421,506

16,504,815

Independent

Power

and

Renewable

Electricity

Producers

0.1%

f

InterGen

NV

,

Senior

Secured

Bond

,

144A,

7

%

,

6/30/23

.........

Netherlands

1,400,000

1,356,250

f

Talen

Energy

Supply

LLC

,

Senior

Note

,

144A,

10.5

%

,

1/15/26

....

United

States

1,500,000

1,381,463

2,737,713

Industrial

Conglomerates

0.2%

Honeywell

International,

Inc.

,

Senior

Note

,

1.35

%

,

6/01/25

.......

United

States

5,600,000

5,722,632

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

Semiannual

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

Corporate

Bonds

(continued)

Interactive

Media

&

Services

0.7%

Baidu,

Inc.

,

Senior

Note

,

4.375

%

,

5/14/24

...................

China

6,500,000

$

7,111,923

f

Tencent

Holdings

Ltd.

,

Senior

Note,

144A,

2.985%,

1/19/23

.....................

China

9,200,000

9,514,673

Senior

Note,

144A,

1.81%,

1/26/26

......................

China

3,000,000

3,051,073

19,677,669

Internet

&

Direct

Marketing

Retail

0.6%

Alibaba

Group

Holding

Ltd.

,

Senior

Note,

2.8%,

6/06/23

............................

China

1,100,000

1,149,237

Senior

Note,

3.6%,

11/28/24

...........................

China

11,000,000

11,941,185

Amazon.com,

Inc.

,

Senior

Note

,

2.4

%

,

2/22/23

...............

United

States

2,550,000

2,645,254

15,735,676

IT

Services

0.2%

Fiserv,

Inc.

,

Senior

Note

,

2.25

%

,

6/01/27

....................

United

States

5,200,000

5,375,599

Machinery

0.0%

†

f

Manitowoc

Co.,

Inc.

(The)

,

Secured

Note

,

144A,

9

%

,

4/01/26

....

United

States

1,200,000

1,301,250

Media

0.4%

f

Clear

Channel

International

BV

,

Senior

Secured

Note

,

144A,

6.625

%

,

8/01/25

.....................................

United

States

3,000,000

3,146,250

CSC

Holdings

LLC

,

Senior

Bond

,

5.25

%

,

6/01/24

.............

United

States

2,000,000

2,169,110

Fox

Corp.

,

Senior

Note

,

3.05

%

,

4/07/25

.....................

United

States

2,000,000

2,139,184

f

Univision

Communications,

Inc.

,

Senior

Secured

Note

,

144A,

5.125

%

,

2/15/25

.....................................

United

States

3,700,000

3,767,359

11,221,903

Metals

&

Mining

0.1%

f

Glencore

Funding

LLC

,

Senior

Note

,

144A,

3

%

,

10/27/22

.......

Australia

2,200,000

2,268,495

Multiline

Retail

0.0%

a,f,h

K2016470219

South

Africa

Ltd.

,

Senior

Secured

Note

,

144A,

PIK,

3

%

,

12/31/22

.......................................

South

Africa

1,021,612

—

a,f,h

K2016470260

South

Africa

Ltd.

,

Senior

Secured

Note

,

144A,

PIK,

25

%

,

12/31/22

......................................

South

Africa

330,503

—

—

Multi-Utilities

0.1%

Dominion

Energy,

Inc.

,

D

,

Senior

Bond

,

2.85

%

,

8/15/26

.........

United

States

1,300,000

1,386,294

Oil,

Gas

&

Consumable

Fuels

2.7%

f

Aker

BP

ASA

,

Senior

Note

,

144A,

4.75

%

,

6/15/24

.............

Norway

1,800,000

1,846,972

Apache

Corp.

,

Senior

Note

,

4.625

%

,

11/15/25

................

United

States

1,500,000

1,586,250

Cenovus

Energy,

Inc.

,

Senior

Note

,

5.375

%

,

7/15/25

...........

Canada

4,000,000

4,551,260

Cheniere

Corpus

Christi

Holdings

LLC

,

Senior

Secured

Note

,

5.875

%

,

3/31/25

.....................................

United

States

5,800,000

6,643,625

Chevron

Corp.

,

Senior

Note

,

1.554

%

,

5/11/25

................

United

States

4,500,000

4,611,002

Energy

Transfer

LP

,

Senior

Bond

,

4.75

%

,

1/15/26

.............

United

States

5,200,000

5,816,853

EnLink

Midstream

Partners

LP

,

Senior

Bond

,

4.4

%

,

4/01/24

......

United

States

3,800,000

3,905,146

Exxon

Mobil

Corp.

,

Senior

Note

,

1.571

%

,

4/15/23

.............

United

States

19,000,000

19,482,198

f

Harvest

Operations

Corp.

,

Senior

Note

,

144A,

4.2

%

,

6/01/23

.....

South

Korea

2,900,000

3,108,663

MPLX

LP

,

Senior

Note

,

4.875

%

,

12/01/24

...................

United

States

6,800,000

7,625,851

Occidental

Petroleum

Corp.

,

Senior

Note,

3.45%,

7/15/24

...........................

United

States

3,000,000

3,007,500

Senior

Note,

5.5%,

12/01/25

...........................

United

States

500,000

538,125

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

59

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Oil,

Gas

&

Consumable

Fuels

(continued)

Sabine

Pass

Liquefaction

LLC

,

Senior

Secured

Note,

5.75%,

5/15/24

....................

United

States

2,000,000

$

2,258,987

Senior

Secured

Note,

5.625%,

3/01/25

...................

United

States

2,000,000

2,296,061

Williams

Cos.,

Inc.

(The)

,

Senior

Bond,

4.55%,

6/24/24

...........................

United

States

2,900,000

3,202,830

Senior

Bond,

4%,

9/15/25

.............................

United

States

2,300,000

2,546,197

73,027,520

Personal

Products

0.3%

Avon

Products,

Inc.

,

Senior

Bond

,

6.75

%

,

3/15/23

.............

United

Kingdom

5,835,000

6,268,978

f,g

Oriflame

Investment

Holding

plc

,

Senior

Secured

Note

,

144A,

5.125

%

,

5/04/26

.....................................

Switzerland

600,000

602,610

6,871,588

Pharmaceuticals

0.5%

f

Bayer

US

Finance

II

LLC

,

Senior

Note,

144A,

3.875%,

12/15/23

....................

Germany

5,800,000

6,241,355

Senior

Note,

144A,

4.25%,

12/15/25

.....................

Germany

4,600,000

5,138,376

Bristol-Myers

Squibb

Co.

,

Senior

Note

,

2.9

%

,

7/26/24

..........

United

States

2,551,000

2,734,871

f

Royalty

Pharma

plc

,

Senior

Note

,

144A,

1.75

%

,

9/02/27

........

United

States

700,000

690,062

14,804,664

Semiconductors

&

Semiconductor

Equipment

0.6%

Maxim

Integrated

Products,

Inc.

,

Senior

Bond

,

3.45

%

,

6/15/27

...

United

States

800,000

877,547

Micron

Technology,

Inc.

,

Senior

Note

,

2.497

%

,

4/24/23

.........

United

States

4,500,000

4,666,319

f

SK

Hynix,

Inc.

,

Senior

Note

,

144A,

1.5

%

,

1/19/26

.............

South

Korea

9,900,000

9,813,252

15,357,118

Specialty

Retail

0.0%

†

f,i

Party

City

Holdings,

Inc.

,

Senior

Secured

Note

,

144A,

FRN

,

5.75

%

,

(

6-month

USD

LIBOR

+

5

%

),

7/15/25

.....................

United

States

565,890

517,789

Thrifts

&

Mortgage

Finance

0.4%

f

BPCE

SA

,

Senior

Note

,

144A,

2.375

%

,

1/14/25

...............

France

7,000,000

7,274,340

Radian

Group,

Inc.

,

Senior

Note

,

6.625

%

,

3/15/25

.............

United

States

3,000,000

3,399,375

10,673,715

Tobacco

0.3%

Altria

Group,

Inc.

,

Senior

Note

,

2.35

%

,

5/06/25

...............

United

States

4,200,000

4,398,033

f

Imperial

Brands

Finance

plc

,

Senior

Bond,

144A,

4.25%,

7/21/25

......................

United

Kingdom

3,695,000

4,062,705

Senior

Note,

144A,

3.125%,

7/26/24

.....................

United

Kingdom

700,000

739,067

Reynolds

American,

Inc.

,

Senior

Bond

,

4.45

%

,

6/12/25

.........

United

Kingdom

100,000

111,379

9,311,184

Trading

Companies

&

Distributors

0.1%

f

Beacon

Roofing

Supply,

Inc.

,

Senior

Note

,

144A,

4.875

%

,

11/01/25

United

States

1,000,000

1,024,365

f

WESCO

Distribution,

Inc.

,

Senior

Note

,

144A,

7.125

%

,

6/15/25

...

United

States

1,400,000

1,513,750

2,538,115

Wireless

Telecommunication

Services

0.2%

f

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

312,500

314,942

Senior

Secured

Note,

144A,

4.738%,

3/20/25

..............

United

States

800,000

859,000

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

Semiannual

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

Corporate

Bonds

(continued)

Wireless

Telecommunication

Services

(continued)

f

Sprint

Spectrum

Co.

LLC

/

Sprint

Spectrum

Co.

II

LLC

/

Sprint

Spectrum

Co.

III

LLC,

(continued)

T-Mobile

USA,

Inc.

,

Senior

Note

,

2.25

%

,

2/15/26

..............

United

States

3,000,000

$

3,022,740

4,196,682

Total

Corporate

Bonds

(Cost

$524,423,637)

.....................................

536,437,388

a

i,j

Senior

Floating

Rate

Interests

0.5%

Aerospace

&

Defense

0.1%

Dynasty

Acquisition

Co.,

Inc.,

2020

Term

Loan

,

B1,

3.703%,

(3-month

USD

LIBOR

+

3.5%),

4/06/26

..........

United

States

1,793,825

1,748,397

B2,

3.703%,

(3-month

USD

LIBOR

+

3.5%),

4/06/26

..........

United

States

964,422

939,999

2,688,396

a

a

a

a

a

a

Diversified

Consumer

Services

0.0%

†

KUEHG

Corp.,

Term

Loan

,

B3

,

4.75

%

,

(

3-month

USD

LIBOR

+

3.75

%

),

2/21/25

.....................................

United

States

1,630,254

1,612,639

Entertainment

0.1%

Diamond

Sports

Group

LLC,

Term

Loan

,

3.37

%

,

(

1-month

USD

LIBOR

+

3.25

%

),

8/24/26

..............................

United

States

1,728,070

1,241,584

William

Morris

Endeavor

Entertainment

LLC

(IMG

Worldwide

Holdings

LLC),

First

Lien,

Term

Loan

,

B1

,

2.903

%

,

(

1-month

USD

LIBOR

+

2.75%;

3-month

USD

LIBOR

+

2.75%

),

5/18/25

......

United

States

1,404,871

1,375,025

2,616,609

a

a

a

a

a

a

Leisure

Products

0.1%

g

Hercules

Achievement,

Inc.

(Varsity

Brands

Holding

Co.,

Inc.),

First

Lien,

Initial

Term

Loan

,

4.5

%

,

(

1-month

USD

LIBOR

+

3.5

%

),

12/16/24

..........................................

United

States

2,396,360

2,310,498

Media

0.1%

Cengage

Learning,

Inc.,

2016

Refinancing

Term

Loan

,

5.25

%

,

(

2-month

USD

LIBOR

+

4.25%;

3-month

USD

LIBOR

+

4.25%

),

6/07/23

...........................................

United

States

2,610,029

2,602,277

Personal

Products

0.1%

Coty,

Inc.,

USD

Term

Loan

,

B

,

2.36

%

,

(

1-month

USD

LIBOR

+

2.25

%

),

4/07/25

.....................................

United

States

2,766,835

2,660,920

Total

Senior

Floating

Rate

Interests

(Cost

$14,741,031)

..........................

14,491,339

k

Marketplace

Loans

1.1%

Diversified

Financial

Services

1.1%

a

Lending

Club

-

LCX,

6.46%

-

28.8%,

4/24/22

-

4/14/25

.........

United

States

3,791,715

3,342,362

a

Lending

Club,

5%

-

28.8%,

9/20/21

-

3/16/25

.................

United

States

12,514,990

11,500,164

a

Square

Capital,

Zero

Cpn

.,

3/18/22

-

10/27/22

................

United

States

13,066,153

12,325,217

a

Upgrade,

13.64%

-

30.51%,

9/03/22

-

1/25/25

................

United

States

1,662,852

1,559,231

28,726,974

a

a

a

a

a

a

Total

Marketplace

Loans

(Cost

$30,035,249)

....................................

28,726,974

Foreign

Government

and

Agency

Securities

5.7%

f

Banque

Centrale

de

Tunisie

,

Senior

Bond,

144A,

5.75%,

1/30/25

..

Tunisia

4,700,000

4,421,938

f

Banque

Ouest

Africaine

de

Developpement

,

Senior

Bond,

144A,

5%,

7/27/27

...........................................

Supranational

l

3,900,000

4,319,484

f

Belarus

Government

Bond,

Senior

Bond,

144A,

7.625%,

6/29/27

..

Belarus

3,900,000

4,056,761

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

61

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Foreign

Government

and

Agency

Securities

(continued)

Brazil

Government

Bond,

Senior

Bond,

8.75%,

2/04/25

.........

Brazil

2,720,000

$

3,386,400

Colombia

Government

Bond,

Senior

Bond,

8.125%,

5/21/24

.....

Colombia

5,300,000

6,327,220

f

Dexia

Credit

Local

SA,

Senior

Note,

144A,

2.375%,

9/20/22

.....

France

4,800,000

4,938,464

f

Dominican

Republic

Government

Bond,

Senior

Note,

144A,

8.9%,

2/15/23

...........................................

Dominican

Republic

218,500,000

DOP

4,016,092

f

Egypt

Government

Bond,

Senior

Note,

144A,

5.75%,

5/29/24

....

Egypt

3,800,000

4,025,120

f,m

Electricite

de

France

SA,

Junior

Sub.

Bond,

144A,

5.625%

to

1/22/24,

FRN

thereafter,

Perpetual

.......................

France

2,200,000

2,370,500

Equinor

ASA,

Senior

Note,

2.875%,

4/06/25

...........................

Norway

15,300,000

16,419,479

Senior

Note,

1.75%,

1/22/26

...........................

Norway

5,400,000

5,563,855

f

Export-Import

Bank

of

India,

Senior

Bond,

144A,

3.875%,

2/01/28

.

India

3,400,000

3,630,979

Export-Import

Bank

of

Korea,

Senior

Bond,

2.875%,

1/21/25

.....

South

Korea

2,000,000

2,138,288

f

Gabon

Government

Bond,

Senior

Bond,

144A,

6.95%,

6/16/25

...

Gabon

1,250,000

1,334,164

Hungary

Government

Bond,

Senior

Bond,

5.375%,

2/21/23

......

Hungary

3,400,000

3,705,334

f

Indonesia

Government

Bond,

Senior

Note,

144A,

3.7%,

1/08/22

..

Indonesia

6,330,000

6,473,026

f

Iraq

Government

Bond,

Senior

Bond,

144A,

5.8%,

1/15/28

......

Iraq

6,562,500

6,349,547

f

Israel

Electric

Corp.

Ltd.,

Senior

Secured

Bond,

144A,

Reg

S,

4.25%,

8/14/28

...........................................

Israel

1,400,000

1,558,410

f

Kazakhstan

Government

Bond,

Senior

Bond,

144A,

3.875%,

10/14/24

..........................................

Kazakhstan

5,830,000

6,405,129

Korea

Development

Bank

(The),

Senior

Note,

3.375%,

3/12/23

...

South

Korea

7,100,000

7,482,322

Mexico

Government

Bond,

Senior

Bond,

4.15%,

3/28/27

........

Mexico

6,100,000

6,843,437

f

Mongolia

Government

Bond,

Senior

Note,

144A,

8.75%,

3/09/24

..

Mongolia

1,360,000

1,573,519

f

Pakistan

Government

Bond,

Senior

Bond,

144A,

8.25%,

9/30/25

..

Pakistan

1,440,000

1,608,365

Peru

Government

Bond,

Senior

Bond,

7.35%,

7/21/25

...........................

Peru

3,300,000

4,058,653

Senior

Bond,

2.783%,

1/23/31

..........................

Peru

800,000

802,600

f

Petroleos

Mexicanos

,

Senior

Note,

144A,

6.875%,

10/16/25

.....

Mexico

990,000

1,082,030

Philippines

Government

Bond,

Senior

Bond,

4.2%,

1/21/24

......

Philippines

1,600,000

1,759,392

Poland

Government

Bond,

Senior

Bond,

5%,

3/23/22

..........

Poland

4,310,000

4,491,882

f

Russia

Government

Bond,

Senior

Bond,

144A,

4.875%,

9/16/23

..

Russia

4,400,000

4,800,048

South

Africa

Government

Bond,

Senior

Bond,

5.875%,

9/16/25

...

South

Africa

5,640,000

6,296,101

Turkey

Government

Bond,

Senior

Note,

6.375%,

10/14/25

.......

Turkey

5,980,000

6,148,325

f

Turkiye

Vakiflar

Bankasi

TAO,

Covered

Note,

Reg

S,

2.375%,

5/04/21

...........................................

Turkey

5,600,000

EUR

6,732,880

f

Ukraine

Government

Bond,

Senior

Bond,

144A,

7.375%,

9/25/32

.

Ukraine

4,500,000

4,558,612

n

Uruguay

Government

Bond,

Index

Linked,

Senior

Bond,

3.7%,

6/26/37

...........................................

Uruguay

167,727,315

UYU

4,301,530

Total

Foreign

Government

and

Agency

Securities

(Cost

$151,720,337)

............

153,979,886

U.S.

Government

and

Agency

Securities

24.5%

U.S.

Treasury

Notes,

2.125%,

9/30/21

.....................................

United

States

10,000,000

10,086,352

1.75%,

5/15/22

.....................................

United

States

117,000,000

119,041,459

1.875%,

8/31/22

.....................................

United

States

75,000,000

76,769,531

2.625%,

2/28/23

.....................................

United

States

52,000,000

54,344,062

1.625%,

4/30/23

.....................................

United

States

90,000,000

92,613,867

1.625%,

5/31/23

.....................................

United

States

50,000,000

51,499,024

2.75%,

5/31/23

.....................................

United

States

98,000,000

103,221,563

2.875%,

10/31/23

....................................

United

States

52,000,000

55,404,375

2.875%,

11/30/23

....................................

United

States

70,000,000

74,718,164

n

0.25%,

1/15/25

.....................................

United

States

1,340,000

1,627,606

n

0.375%,

7/15/25

.....................................

United

States

1,200,000

1,477,047

2.875%,

7/31/25

.....................................

United

States

12,000,000

13,113,516

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

Semiannual

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

U.S.

Government

and

Agency

Securities

(continued)

n

0.375%,

7/15/27

.....................................

United

States

3,840,000

$

4,640,155

Total

U.S.

Government

and

Agency

Securities

(Cost

$658,134,012)

................

658,556,721

Asset-Backed

Securities

17.8%

Airlines

0.0%

†

American

Airlines

Pass-Through

Trust

,

2016-2

,

AA

,

3.2

%

,

6/15/28

.

United

States

40,475

40,811

United

Airlines

Pass-Through

Trust

,

2020-1

,

B

,

4.875

%

,

7/15/27

..

United

States

436,725

456,892

497,703

a

a

a

a

a

a

Commercial

Services

&

Supplies

0.9%

f,o

Armada

Euro

CLO

IV

DAC

,

4A

,

B

,

144A,

FRN

,

1.7

%

,

(

3-month

EURIBOR

+

1.7

%

),

7/15/33

............................

Ireland

12,400,000

EUR

14,934,609

f,o

LCM

XXII

Ltd.

,

22A

,

A2R

,

144A,

FRN

,

1.638

%

,

(

3-month

USD

LIBOR

+

1.45

%

),

10/20/28

.............................

United

States

8,500,000

8,481,005

23,415,614

a

a

a

a

a

a

Consumer

Finance

0.9%

Discover

Card

Execution

Note

Trust

,

o

2019-A2,

A,

FRN,

0.385%,

(1-month

USD

LIBOR

+

0.27%),

12/15/23

..........................................

United

States

9,250,000

9,265,036

2019-A3,

A,

1.89%,

10/15/24

...........................

United

States

13,340,000

13,657,953

22,922,989

a

a

a

a

a

a

Diversified

Financial

Services

16.0%

f,o

Adagio

CLO

VIII

DAC

,

VIII-A

,

B1

,

144A,

FRN

,

1.65

%

,

(

3-month

EURIBOR

+

1.65

%

),

4/15/32

...........................

Ireland

500,000

EUR

598,046

f

American

Homes

4

Rent

Trust

,

2014-SFR3,

A,

144A,

3.678%,

12/17/36

...................

United

States

716,431

768,989

2015-SFR1,

A,

144A,

3.467%,

4/17/52

....................

United

States

5,461,701

5,843,808

f,o

AMMC

CLO

15

Ltd.

,

2014-15A

,

BRR

,

144A,

FRN

,

1.984

%

,

(

3-month

USD

LIBOR

+

1.8

%

),

1/15/32

...........................

United

States

1,494,355

1,489,481

f,o

AMMC

CLO

21

Ltd.

,

2017-21A

,

C

,

144A,

FRN

,

2.302

%

,

(

3-month

USD

LIBOR

+

2.1

%

),

11/02/30

..........................

United

States

400,000

395,283

f,o

AMMC

CLO

XI

Ltd.

,

2012-11A

,

CR2

,

144A,

FRN

,

2.086

%

,

(

3-month

USD

LIBOR

+

1.9

%

),

4/30/31

...........................

United

States

1,850,000

1,806,217

f,o

Antares

CLO

Ltd.

,

2018-1A

,

B

,

144A,

FRN

,

1.838

%

,

(

3-month

USD

LIBOR

+

1.65

%

),

4/20/31

..............................

United

States

6,000,000

5,924,879

f,o

Apidos

CLO

XXXV

,

2021-35A

,

A

,

144A,

FRN

,

1.245

%

,

(

3-month

USD

LIBOR

+

1.05

%

),

4/20/34

..........................

United

States

19,306,000

19,306,052

f,o

Ares

European

CLO

VIII

BV

,

8A

,

BR

,

144A,

FRN

,

1.6

%

,

(

3-month

EURIBOR

+

1.6

%

),

4/17/32

............................

Ireland

700,000

EUR

837,012

f,o

Bain

Capital

Credit

CLO

Ltd.

,

2018-1A

,

A1

,

144A,

FRN

,

1.133

%

,

(

3-month

USD

LIBOR

+

0.96

%

),

4/23/31

..................

United

States

2,000,000

1,998,509

f,o

BCC

Middle

Market

CLO

LLC

,

2018-1A

,

A2

,

144A,

FRN

,

2.338

%

,

(

3-month

USD

LIBOR

+

2.15

%

),

10/20/30

.................

United

States

2,100,000

2,055,658

f,o

Blackrock

European

CLO

IX

DAC

,

9A,

A,

144A,

FRN,

0.9%,

(3-month

EURIBOR

+

0.9%),

12/15/32

Ireland

3,300,000

EUR

3,973,267

9A,

B,

144A,

FRN,

1.55%,

(3-month

EURIBOR

+

1.55%),

12/15/32

Ireland

1,100,000

EUR

1,325,322

f,o

BlueMountain

CLO

Ltd.

,

2012-2A,

BR2,

144A,

FRN,

1.632%,

(3-month

USD

LIBOR

+

1.45%),

11/20/28

....................................

United

States

2,970,000

2,973,480

2012-2A,

DR2,

144A,

FRN,

3.082%,

(3-month

USD

LIBOR

+

2.9%),

11/20/28

.....................................

United

States

2,295,000

2,265,889

2014-2A,

CR2,

144A,

FRN,

2.388%,

(3-month

USD

LIBOR

+

2.2%),

10/20/30

.....................................

United

States

1,300,000

1,303,521

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

63

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Asset-Backed

Securities

(continued)

Diversified

Financial

Services

(continued)

f,o

BlueMountain

CLO

XXIV

Ltd.

,

2019-24A

,

D

,

144A,

FRN

,

4.088

%

,

(

3-month

USD

LIBOR

+

3.9

%

),

4/20/31

...................

United

States

1,000,000

$

1,002,045

f,o

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

5,494,501

f,o

BlueMountain

Fuji

US

CLO

III

Ltd.

,

2017-3A,

A2,

144A,

FRN,

1.334%,

(3-month

USD

LIBOR

+

1.15%),

1/15/30

.....................................

United

States

1,000,000

995,680

2017-3A,

C,

144A,

FRN,

1.884%,

(3-month

USD

LIBOR

+

1.7%),

1/15/30

...........................................

United

States

500,000

490,785

f,o

Carlyle

Global

Market

Strategies

CLO

Ltd.

,

2014-1A,

A2R2,

144A,

FRN,

1.32%,

(3-month

USD

LIBOR

+

1.13%),

4/17/31

.....................................

United

States

1,200,000

1,186,074

2014-1A,

DR,

144A,

FRN,

2.79%,

(3-month

USD

LIBOR

+

2.6%),

4/17/31

...........................................

United

States

533,000

506,958

f,o

Carlyle

GMS

Finance

MM

CLO

LLC

,

2015-1A

,

A2R

,

144A,

FRN

,

2.384

%

,

(

3-month

USD

LIBOR

+

2.2

%

),

10/15/31

............

United

States

7,300,000

7,170,554

f,o

Carlyle

US

CLO

Ltd.

,

2017-4A,

B,

144A,

FRN,

2.034%,

(3-month

USD

LIBOR

+

1.85%),

1/15/30

...........................................

United

States

1,107,000

1,095,329

2017-4A,

C,

144A,

FRN,

2.984%,

(3-month

USD

LIBOR

+

2.8%),

1/15/30

...........................................

United

States

400,000

385,576

2017-5A,

B,

144A,

FRN,

1.988%,

(3-month

USD

LIBOR

+

1.8%),

1/20/30

...........................................

United

States

2,200,000

2,170,026

2021-1A,

A1,

144A,

FRN,

1.331%,

(3-month

USD

LIBOR

+

1.14%),

4/15/34

.....................................

United

States

17,876,000

17,878,281

f,o

Cent

CLO

21

Ltd.

,

2014-21A

,

CR2

,

144A,

FRN

,

3.381

%

,

(

3-month

USD

LIBOR

+

3.2

%

),

7/27/30

...........................

United

States

502,000

497,039

f

CF

Hippolyta

LLC

,

2020-1

,

A1

,

144A,

1.69

%

,

7/15/60

..........

United

States

3,493,027

3,545,495

f,p

Consumer

Loan

Underlying

Bond

Certificate

Issuer

Trust

I

,

2018-14,

PT,

144A,

FRN,

9.597%,

9/16/41

.................

United

States

285,535

279,137

a

2018-29,

PT,

144A,

FRN,

31.791%,

12/15/43

...............

United

States

281,742

279,148

2018-8,

PT,

144A,

FRN,

4.644%,

6/17/41

..................

United

States

64,056

60,015

2019-26,

PT,

144A,

FRN,

23.345%,

8/15/44

................

United

States

1,156,028

1,144,014

2019-31,

PT,

144A,

FRN,

23.325%,

9/15/44

................

United

States

1,060,438

1,039,500

2019-37,

PT,

144A,

FRN,

26.381%,

10/17/44

...............

United

States

1,013,669

987,426

2019-42,

PT,

144A,

FRN,

22.361%,

11/15/44

...............

United

States

1,023,442

1,011,244

2019-51,

PT,

144A,

FRN,

18.534%,

1/15/45

................

United

States

2,763,268

2,731,849

2019-52,

PT,

144A,

FRN,

17.047%,

1/15/45

................

United

States

3,390,049

3,374,787

2019-S1,

PT,

144A,

FRN,

19.425%,

4/15/44

................

United

States

634,132

616,814

2019-S2,

PT,

144A,

FRN,

16.111%,

5/16/44

................

United

States

525,935

520,457

2019-S3,

PT,

144A,

FRN,

16.022%,

6/15/44

................

United

States

373,220

367,934

2019-S4,

PT,

144A,

FRN,

14.705%,

8/15/44

................

United

States

820,930

810,428

2019-S5,

PT,

144A,

FRN,

15.275%,

9/15/44

................

United

States

833,565

822,889

2019-S6,

PT,

144A,

FRN,

13.945%,

10/17/44

...............

United

States

825,893

801,552

2019-S7,

PT,

144A,

FRN,

12.842%,

12/15/44

...............

United

States

1,558,502

1,519,399

2019-S8,

PT,

144A,

FRN,

12.006%,

1/15/45

................

United

States

1,981,224

1,923,071

2020-2,

PT,

144A,

FRN,

17.867%,

3/15/45

.................

United

States

3,271,222

3,245,001

2020-7,

PT,

144A,

FRN,

18.379%,

4/17/45

.................

United

States

1,923,823

1,883,995

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

Semiannual

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

Asset-Backed

Securities

(continued)

Diversified

Financial

Services

(continued)

f,o

Cook

Park

CLO

Ltd.

,

2018-1A

,

A2

,

144A,

FRN

,

1.31

%

,

(

3-month

USD

LIBOR

+

1.12

%

),

4/17/30

..........................

United

States

1,000,000

$

994,834

o

CWABS,

Inc.

,

2004-1

,

M1

,

FRN

,

0.856

%

,

(

1-month

USD

LIBOR

+

0.75

%

),

3/25/34

.....................................

United

States

56,378

56,294

f,o

Dryden

44

Euro

CLO

2015

BV

,

2015-44A

,

A1RR

,

144A,

FRN

,

0.88

%

,

(

3-month

EURIBOR

+

0.88

%

),

4/15/34

....................

Netherlands

20,020,000

EUR

24,013,608

f,o

Dryden

55

CLO

Ltd.

,

2018-55A,

C,

144A,

FRN,

2.084%,

(3-month

USD

LIBOR

+

1.9%),

4/15/31

...........................................

United

States

600,000

593,755

2018-55A,

D,

144A,

FRN,

3.034%,

(3-month

USD

LIBOR

+

2.85%),

4/15/31

.....................................

United

States

300,000

293,044

f,o

Dryden

58

CLO

Ltd.

,

2018-58A

,

A2

,

144A,

FRN

,

1.44

%

,

(

3-month

USD

LIBOR

+

1.25

%

),

7/17/31

..........................

United

States

1,600,000

1,596,999

f,o

Dryden

64

CLO

Ltd.

,

2018-64A

,

C

,

144A,

FRN

,

1.94

%

,

(

3-month

USD

LIBOR

+

1.75

%

),

4/18/31

..........................

United

States

750,000

748,402

f,o

Ellington

CLO

III

Ltd.

,

2018-3A

,

A1

,

144A,

FRN

,

1.838

%

,

(

3-month

USD

LIBOR

+

1.65

%

),

7/20/30

..........................

United

States

3,700,639

3,697,800

f

FirstKey

Homes

Trust

,

2020-SFR2

,

A

,

144A,

1.266

%

,

10/19/37

...

United

States

4,220,664

4,209,838

f,o

Galaxy

XXVII

CLO

Ltd.

,

2018-27A

,

A

,

144A,

FRN

,

1.214

%

,

(

3-month

USD

LIBOR

+

1.02

%

),

5/16/31

..........................

United

States

1,500,000

1,500,676

f,o

Golden

Tree

Loan

Management

US

CLO

1

Ltd.

,

2021-9A

,

A

,

144A,

FRN

,

1.195

%

,

(

3-month

USD

LIBOR

+

1.07

%

),

1/20/33

.......

United

States

15,731,000

15,768,623

f,o

Halcyon

Loan

Advisors

Funding

Ltd.

,

2018-1A

,

A2

,

144A,

FRN

,

1.988

%

,

(

3-month

USD

LIBOR

+

1.8

%

),

7/21/31

.............

United

States

5,000,000

4,975,241

f,o

Harbor

Park

CLO

18-1

Ltd.

,

2018-1A

,

A2

,

144A,

FRN

,

1.588

%

,

(

3-month

USD

LIBOR

+

1.4

%

),

1/20/31

...................

United

States

1,710,526

1,717,551

f,o

Holland

Park

CLO

DAC

,

1A

,

A1RR

,

144A,

FRN

,

0.92

%

,

(

3-month

EURIBOR

+

0.92

%

),

11/14/32

..........................

Ireland

15,000,000

EUR

18,061,505

f,o

HPS

Loan

Management

Ltd.

,

13A-18

,

A2

,

144A,

FRN

,

1.634

%

,

(

3-month

USD

LIBOR

+

1.45

%

),

10/15/30

.................

United

States

1,400,000

1,401,325

f,o

LCM

26

Ltd.

,

26A

,

C

,

144A,

FRN

,

1.988

%

,

(

3-month

USD

LIBOR

+

1.8

%

),

1/20/31

......................................

United

States

2,000,000

1,976,136

o

Lehman

XS

Trust

,

2005-4

,

1A4

,

FRN

,

0.666

%

,

(

1-month

USD

LIBOR

+

0.56

%

),

10/25/35

..................................

United

States

157,746

157,868

f,o

Long

Point

Park

CLO

Ltd.

,

2017-1A

,

B

,

144A,

FRN

,

1.89

%

,

(

3-month

USD

LIBOR

+

1.7

%

),

1/17/30

...........................

United

States

2,000,000

1,987,590

f,o

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

29,750,671

8A,

BRN,

144A,

FRN,

1.7%,

(3-month

EURIBOR

+

1.7%),

4/15/32

Ireland

2,800,000

EUR

3,379,558

f,o

Madison

Park

Funding

XIII

Ltd.

,

2014-13A

,

DR2

,

144A,

FRN

,

3.04

%

,

(

3-month

USD

LIBOR

+

2.85

%

),

4/19/30

..................

United

States

332,000

329,084

f,o

Madison

Park

Funding

XLII

Ltd.

,

13A,

B,

144A,

FRN,

1.673%,

(3-month

USD

LIBOR

+

1.5%),

11/21/30

..........................................

United

States

3,000,000

3,007,162

13A,

C,

144A,

FRN,

1.973%,

(3-month

USD

LIBOR

+

1.8%),

11/21/30

..........................................

United

States

1,600,000

1,584,981

f,o

Madison

Park

Funding

XXII

Ltd.

,

2016-22A

,

CR

,

144A,

FRN

,

2.184

%

,

(

3-month

USD

LIBOR

+

2

%

),

1/15/33

..............

United

States

2,800,000

2,783,289

f,o

Madison

Park

Funding

XXVIII

Ltd.

,

2018-28A

,

C

,

144A,

FRN

,

2.034

%

,

(

3-month

USD

LIBOR

+

1.85

%

),

7/15/30

............

United

States

4,200,000

4,210,649

f,o

Madison

Park

Funding

XXXI

Ltd.

,

2018-31A

,

A2A

,

144A,

FRN

,

1.673

%

,

(

3-month

USD

LIBOR

+

1.5

%

),

1/23/31

.............

United

States

3,000,000

3,001,346

f,o

Magnetite

XXIX

Ltd.

,

2021-29A

,

A

,

144A,

FRN

,

1.094

%

,

(

3-month

USD

LIBOR

+

0.99

%

),

1/15/34

..........................

United

States

21,809,000

21,809,296

f,p

Mill

City

Mortgage

Loan

Trust

,

2017-1,

A1,

144A,

FRN,

2.75%,

11/25/58

..................

United

States

459,166

464,593

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

65

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Asset-Backed

Securities

(continued)

Diversified

Financial

Services

(continued)

f,p

Mill

City

Mortgage

Loan

Trust,

(continued)

2018-1,

A1,

144A,

FRN,

3.25%,

5/25/62

...................

United

States

9,555,768

$

9,853,414

2018-4,

A1B,

144A,

FRN,

3.5%,

4/25/66

...................

United

States

8,988,277

9,413,214

f,o

Neuberger

Berman

CLO

XVIII

Ltd.

,

2014-18A

,

A1BR

,

144A,

FRN

,

1.586

%

,

(

3-month

USD

LIBOR

+

1.4

%

),

10/21/30

............

United

States

2,295,000

2,302,384

f,o

NZCG

Funding

Ltd.

,

2015-1A

,

A2R

,

144A,

FRN

,

1.74

%

,

(

3-month

USD

LIBOR

+

1.55

%

),

2/26/31

..........................

United

States

7,920,000

7,919,353

f,o

Octagon

Investment

Partners

18-R

Ltd.

,

2018-18A,

A1A,

144A,

FRN,

1.144%,

(3-month

USD

LIBOR

+

0.96%),

4/16/31

.....................................

United

States

1,000,000

1,000,980

2018-18A,

C,

144A,

FRN,

2.884%,

(3-month

USD

LIBOR

+

2.7%),

4/16/31

...........................................

United

States

1,000,000

983,864

f,o

Octagon

Investment

Partners

26

Ltd.

,

2016-1A

,

A2R

,

144A,

FRN

,

1.534

%

,

(

3-month

USD

LIBOR

+

1.35

%

),

7/15/30

............

United

States

1,600,000

1,598,927

f,o

Octagon

Investment

Partners

28

Ltd.

,

2016-1A

,

A2R

,

144A,

FRN

,

1.626

%

,

(

3-month

USD

LIBOR

+

1.45

%

),

10/24/30

...........

United

States

4,000,000

4,003,914

f,o

Octagon

Investment

Partners

33

Ltd.

,

2017-1A

,

C

,

144A,

FRN

,

2.938

%

,

(

3-month

USD

LIBOR

+

2.75

%

),

1/20/31

............

United

States

250,000

248,273

f,o

Octagon

Investment

Partners

35

Ltd.

,

2018-1A

,

A1B

,

144A,

FRN

,

1.288

%

,

(

3-month

USD

LIBOR

+

1.1

%

),

1/20/31

.............

United

States

2,000,000

1,988,259

f,o

Octagon

Investment

Partners

XVI

Ltd.

,

2013-1A

,

CR

,

144A,

FRN

,

2.04

%

,

(

3-month

USD

LIBOR

+

1.85

%

),

7/17/30

.............

United

States

3,000,000

3,003,751

f,o

Octagon

Investment

Partners

XXIII

Ltd.

,

2015-1A,

BR,

144A,

FRN,

1.384%,

(3-month

USD

LIBOR

+

1.2%),

7/15/27

...........................................

United

States

1,200,000

1,200,872

2015-1A,

DR,

144A,

FRN,

2.734%,

(3-month

USD

LIBOR

+

2.55%),

7/15/27

.....................................

United

States

600,000

598,575

f,o

OHA

Credit

Partners

VII

Ltd.

,

2012-7A

,

AR3

,

144A,

FRN

,

1.238

%

,

(

3-month

USD

LIBOR

+

1.07

%

),

2/20/34

..................

United

States

17,876,000

17,877,641

f,p

Prosper

Pass-Thru

Trust

III

,

2020-PT1,

A,

144A,

FRN,

8.796%,

3/15/26

.................

United

States

2,073,421

2,052,276

2020-PT2,

A,

144A,

FRN,

9.444%,

4/15/26

.................

United

States

2,260,742

2,221,984

2020-PT3,

A,

144A,

FRN,

7.183%,

5/15/26

.................

United

States

708,747

715,140

o

RAAC

Trust

,

2004-SP1

,

AII

,

FRN

,

0.806

%

,

(

1-month

USD

LIBOR

+

0.7

%

),

3/25/34

....................................

United

States

165,386

167,239

f,o

RR

14

Ltd.

,

2021-14A

,

A1

,

144A,

FRN

,

1.215

%

,

(

3-month

USD

LIBOR

+

1.12

%

),

4/15/36

..............................

United

States

23,418,000

23,406,762

f,o

Sculptor

CLO

XXV

Ltd.

,

25A

,

A1

,

144A,

FRN

,

1.457

%

,

(

3-month

USD

LIBOR

+

1.27

%

),

1/15/31

..........................

United

States

10,726,000

10,726,463

f,p

Towd

Point

Mortgage

Trust

,

2015-2,

1A12,

144A,

FRN,

2.75%,

11/25/60

................

United

States

55,521

55,577

2017-1,

A1,

144A,

FRN,

2.75%,

10/25/56

..................

United

States

6,717,545

6,834,887

2018-4,

A1,

144A,

FRN,

3%,

6/25/58

.....................

United

States

13,995,549

14,544,128

2019-1,

A1,

144A,

FRN,

3.75%,

3/25/58

...................

United

States

11,390,409

12,194,574

f,p

Upgrade

Master

Pass-Thru

Trust

,

2019-PT1,

A,

144A,

FRN,

11.995%,

6/15/25

................

United

States

414,104

372,535

2019-PT2,

A,

144A,

FRN,

15.25%,

2/15/26

.................

United

States

1,882,411

1,883,260

f,o

Voya

CLO

Ltd.

,

2013-2A,

A1R,

144A,

FRN,

1.146%,

(3-month

USD

LIBOR

+

0.97%),

4/25/31

.....................................

United

States

11,800,000

11,788,309

2013-2A,

CR,

144A,

FRN,

2.926%,

(3-month

USD

LIBOR

+

2.75%),

4/25/31

.....................................

United

States

375,000

364,607

2014-1A,

BR2,

144A,

FRN,

2.09%,

(3-month

USD

LIBOR

+

1.9%),

4/18/31

...........................................

United

States

2,750,000

2,721,399

2014-1A,

CR2,

144A,

FRN,

2.99%,

(3-month

USD

LIBOR

+

2.8%),

4/18/31

...........................................

United

States

600,000

579,995

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

Semiannual

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

Asset-Backed

Securities

(continued)

Diversified

Financial

Services

(continued)

f,o

Voya

CLO

Ltd.,

(continued)

2016-3A,

A2R,

144A,

FRN,

1.59%,

(3-month

USD

LIBOR

+

1.4%),

10/18/31

..........................................

United

States

818,182

$

820,813

2016-3A,

CR,

144A,

FRN,

3.44%,

(3-month

USD

LIBOR

+

3.25%),

10/18/31

..........................................

United

States

1,698,113

1,623,879

2018-2A,

A2,

144A,

FRN,

1.434%,

(3-month

USD

LIBOR

+

1.25%),

7/15/31

.....................................

United

States

2,500,000

2,495,097

430,336,479

a

a

a

a

a

a

Thrifts

&

Mortgage

Finance

0.0%

†

p

Conseco

Finance

Corp.

,

1998-6

,

A8

,

FRN

,

6.66

%

,

6/01/30

......

United

States

332,020

333,602

p

Conseco

Finance

Securitizations

Corp.

,

2002-2

,

M1

,

FRN

,

7.424

%

,

3/01/33

...........................................

United

States

423,929

446,530

o

Countrywide

Asset-Backed

Certificates

Trust

,

2002-3

,

1A1

,

FRN

,

0.846

%

,

(

1-month

USD

LIBOR

+

0.74

%

),

5/25/32

............

United

States

1,075

1,058

781,190

a

a

a

a

a

a

Total

Asset-Backed

Securities

(Cost

$467,679,957)

..............................

477,953,975

Commercial

Mortgage-Backed

Securities

2.3%

Diversified

Financial

Services

1.8%

f

BAMLL

Commercial

Mortgage

Securities

Trust

,

2012-PARK,

A,

144A,

2.959%,

12/10/30

...................

United

States

3,300,000

3,419,020

2015-200P,

A,

144A,

3.218%,

4/14/33

....................

United

States

600,000

642,405

f,o

BX

Commercial

Mortgage

Trust

,

2018-IND,

A,

144A,

FRN,

0.865%,

(1-month

USD

LIBOR

+

0.75%),

11/15/35

..........................................

United

States

2,534,790

2,537,824

2019-XL,

A,

144A,

FRN,

1.035%,

(1-month

USD

LIBOR

+

0.92%),

10/15/36

..........................................

United

States

3,620,968

3,628,698

2020-BXLP,

A,

144A,

FRN,

0.915%,

(1-month

USD

LIBOR

+

0.8%),

12/15/36

.....................................

United

States

11,526,635

11,544,565

2020-FOX,

A,

144A,

FRN,

1.115%,

(1-month

USD

LIBOR

+

1%),

11/15/32

..........................................

United

States

13,233,080

13,278,800

f

BXP

Trust

,

2017-GM

,

A

,

144A,

3.379

%

,

6/13/39

..............

United

States

2,000,000

2,173,474

Commercial

Mortgage

Trust

,

p

2006-GG7,

AJ,

FRN,

6.214%,

7/10/38

....................

United

States

836,002

752,611

f,p

2014-277P,

A,

144A,

FRN,

3.732%,

8/10/49

................

United

States

3,880,000

4,167,786

f

2015-3BP,

A,

144A,

3.178%,

2/10/35

.....................

United

States

600,000

638,656

f,o

DBCG

Mortgage

Trust

,

2017-BBG

,

A

,

144A,

FRN

,

0.815

%

,

(

1-month

USD

LIBOR

+

0.7

%

),

6/15/34

...........................

United

States

1,500,000

1,502,435

f,p

Eleven

Madison

Mortgage

Trust

,

2015-11MD

,

A

,

144A,

FRN

,

3.673

%

,

9/10/35

.....................................

United

States

2,005,000

2,184,270

f,p

J.P.

Morgan

Chase

Commercial

Mortgage

Securities

Trust

,

2016-

NINE

,

A

,

144A,

FRN

,

2.949

%

,

9/06/38

....................

United

States

600,000

637,331

f

Morgan

Stanley

Capital

I

Trust

,

2014-150E

,

A

,

144A,

3.912

%

,

9/09/32

...........................................

United

States

450,000

485,854

47,593,729

a

a

a

a

a

a

Thrifts

&

Mortgage

Finance

0.5%

Banc

of

America

Commercial

Mortgage

Trust

,

2015-UBS7

,

A4

,

3.705

%

,

9/15/48

.....................................

United

States

100,000

109,437

FHLMC

,

4402

,

PE

,

3.5

%

,

3/15/43

.........................

United

States

550,298

562,257

GS

Mortgage

Securities

Trust

,

2016-GS3,

A4,

2.85%,

10/10/49

.........................

United

States

600,000

639,907

2017-GS6,

A3,

3.433%,

5/10/50

.........................

United

States

2,000,000

2,193,309

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

67

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Commercial

Mortgage-Backed

Securities

(continued)

Thrifts

&

Mortgage

Finance

(continued)

JPMBB

Commercial

Mortgage

Securities

Trust

,

2015-C30,

A5,

3.822%,

7/15/48

.........................

United

States

1,500,000

$

1,655,471

2016-C1,

A5,

3.576%,

3/15/49

..........................

United

States

1,500,000

1,648,494

Wells

Fargo

Commercial

Mortgage

Trust

,

2016-NXS6

,

A2

,

2.399

%

,

11/15/49

..........................................

United

States

6,534,000

6,555,165

13,364,040

a

a

a

a

a

a

Total

Commercial

Mortgage-Backed

Securities

(Cost

$59,271,782)

................

60,957,769

Mortgage-Backed

Securities

2.7%

q

Federal

Home

Loan

Mortgage

Corp.

(FHLMC)

Adjustable

Rate

0.0%

†

FHLMC,

2.234%

-

2.708%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

10/01/36

-

6/01/37

...................................

United

States

986,624

1,036,330

1,036,330

Federal

Home

Loan

Mortgage

Corp.

(FHLMC)

Fixed

Rate

0.0%

†

FHLMC

Gold

Pools,

15

Year,

5%,

10/01/23

..................

United

States

32,462

34,119

FHLMC

Gold

Pools,

15

Year,

6%,

6/01/23

...................

United

States

4,530

4,690

FHLMC

Gold

Pools,

30

Year,

5%,

1/01/39

...................

United

States

73,108

84,588

123,397

q

Federal

National

Mortgage

Association

(FNMA)

Adjustable

Rate

0.3%

FNMA,

1.155%

-

5.623%,

(6-month

USD

LIBOR

+/-

MBS

Margin),

9/01/22

-

10/01/44

...................................

United

States

8,473,120

8,753,877

FNMA,

2.625%,

(6-month

H15BDI

+/-

MBS

Margin),

8/01/32

.....

United

States

58,773

58,819

8,812,696

Federal

National

Mortgage

Association

(FNMA)

Fixed

Rate

2.4%

FNMA,

15

Year,

3.5%,

10/01/25

...........................

United

States

343,395

367,359

FNMA,

15

Year,

4%,

12/01/25

............................

United

States

549,997

587,077

FNMA,

15

Year,

4.5%,

5/01/23

-

6/01/25

....................

United

States

335,484

354,744

FNMA,

30

Year,

5%,

3/01/38

.............................

United

States

9,703

11,074

r

FNMA,

Single-family,

15

Year,

2%,

5/25/36

..................

United

States

59,821,000

61,795,561

63,115,815

q

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

10,010

10,193

10,193

Total

Mortgage-Backed

Securities

(Cost

$72,911,781)

............................

73,098,431

Municipal

Bonds

3.2%

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

1,603,835

Tax

Allocation,

Senior

Lien,

2017A-T,

Refunding,

2.63%,

8/01/22

United

States

5,320,000

5,473,346

Tax

Allocation,

Senior

Lien,

2017A-T,

Refunding,

3.226%,

8/01/27

United

States

190,000

209,569

State

of

California,

GO,

2.375%,

10/01/26

...................

United

States

18,195,000

19,386,820

26,673,570

Colorado

0.0%

†

Board

of

Governors

of

Colorado

State

University

System,

Revenue,

2015E-2,

5%,

3/01/25

................................

United

States

100,000

117,107

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

Semiannual

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

Municipal

Bonds

(continued)

Florida

0.0%

†

Citizens

Property

Insurance,

Inc.,

Revenue,

2015A-1,

5%,

6/01/22

United

States

125,000

$

128,520

Hawaii

0.1%

City

&

County

Honolulu,

Wastewater

System,

Revenue,

2019

B,

Refunding,

2.233%,

7/01/24

............................

United

States

2,470,000

2,589,028

Illinois

0.1%

State

of

Illinois,

GO,

2003,

5.1%,

6/01/33

...................

United

States

2,415,000

2,756,595

Massachusetts

0.1%

Massachusetts

State

College

Building

Authority,

Revenue,

2019

C,

Refunding,

2.256%,

5/01/26

............................

United

States

2,635,000

2,774,142

New

Jersey

0.1%

State

of

New

Jersey,

GO,

2020

A,

3%,

6/01/32

...............

United

States

1,430,000

1,623,281

New

York

1.5%

Metropolitan

Transportation

Authority

,

Revenue,

2019

D-1,

5%,

9/01/22

........................

United

States

9,690,000

10,294,406

Revenue,

2020

E,

Refunding,

4%,

11/15/45

................

United

States

1,865,000

2,131,087

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

9,136,167

State

of

New

York,

GO,

2019B,

Refunding,

2.12%,

2/15/25

......

United

States

18,195,000

19,212,603

40,774,263

Ohio

0.0%

†

City

of

Cincinnati,

GO,

2015A,

Refunding,

5%,

12/01/25

........

United

States

100,000

118,438

Teays

Valley

Local

School

District,

GO,

2015,

Refunding,

4%,

12/01/26

..........................................

United

States

100,000

108,258

226,696

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

3,852,846

Texas

0.2%

Texas

State

University

System,

Revenue,

2019

B,

Refunding,

2.351%,

3/15/26

.....................................

United

States

4,825,000

5,105,304

Total

Municipal

Bonds

(Cost

$81,867,163)

......................................

86,621,352

Residential

Mortgage-Backed

Securities

7.7%

Capital

Markets

0.0%

†

o

Merrill

Lynch

Mortgage

Investors

Trust

,

2003-A,

1A,

FRN,

0.846%,

(1-month

USD

LIBOR

+

0.74%),

3/25/28

...........................................

United

States

127,572

126,128

2003-E,

A1,

FRN,

0.726%,

(1-month

USD

LIBOR

+

0.62%),

10/25/28

..........................................

United

States

300,331

304,285

430,413

a

a

a

a

a

a

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

69

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Residential

Mortgage-Backed

Securities

(continued)

Diversified

Financial

Services

0.5%

o

American

Home

Mortgage

Investment

Trust

,

2005-1

,

6A

,

FRN

,

2.205

%

,

(

6-month

USD

LIBOR

+

2

%

),

6/25/45

..............

United

States

448,997

$

462,084

f,p

BRAVO

Residential

Funding

Trust

,

2019-2

,

A3

,

144A,

FRN

,

3.5

%

,

10/25/44

..........................................

United

States

6,387,103

6,684,060

p

CHL

Mortgage

Pass-Through

Trust

,

2004-11

,

2A1

,

FRN

,

2.629

%

,

7/25/34

...........................................

United

States

969,875

980,459

f,p

CIM

Trust

,

2019-INV1

,

A1

,

144A,

FRN

,

4

%

,

2/25/49

...........

United

States

436,935

444,494

Credit

Suisse

First

Boston

Mortgage

Securities

Corp.

,

2004-6

,

3A1

,

5

%

,

9/25/19

........................................

United

States

156,249

131,849

f,p

CSMC

Trust

,

2014-IVR3

,

A1

,

144A,

FRN

,

3.5

%

,

7/25/44

........

United

States

645,780

661,083

f,p

Flagstar

Mortgage

Trust

,

2018-6RR

,

1A3

,

144A,

FRN

,

4

%

,

10/25/48

United

States

142,977

143,036

p

GSR

Mortgage

Loan

Trust

,

2005-AR1

,

1A1

,

FRN

,

2.678

%

,

1/25/35

United

States

116,369

115,289

p

J.P.

Morgan

Mortgage

Trust

,

2004-A1

,

5A1

,

FRN

,

2.414

%

,

2/25/34

United

States

24,050

25,694

MASTR

Alternative

Loan

Trust

,

2003-1

,

3A1

,

5

%

,

6/25/23

.......

United

States

12,855

13,069

f,o

OBX

Trust

,

2018-1

,

A2

,

144A,

FRN

,

0.756

%

,

(

1-month

USD

LIBOR

+

0.65

%

),

6/25/57

.....................................

United

States

1,550,992

1,556,040

o

Thornburg

Mortgage

Securities

Trust

,

2004-3

,

A

,

FRN

,

0.846

%

,

(

1-month

USD

LIBOR

+

0.74

%

),

9/25/34

..................

United

States

423,083

428,959

f,p

Wells

Fargo

Mortgage

Backed

Securities

Trust

,

2018-1

,

A3

,

144A,

FRN

,

3.5

%

,

7/25/47

..................................

United

States

674,129

676,402

12,322,518

a

a

a

a

a

a

Thrifts

&

Mortgage

Finance

7.2%

o

FHLMC

Structured

Agency

Credit

Risk

Debt

Notes

,

2013-DN2,

M2,

FRN,

4.356%,

(1-month

USD

LIBOR

+

4.25%),

11/25/23

..........................................

United

States

5,733,510

5,846,711

2014-DN2,

M3,

FRN,

3.706%,

(1-month

USD

LIBOR

+

3.6%),

4/25/24

...........................................

United

States

7,530,917

7,522,051

2014-DN3,

M3,

FRN,

4.106%,

(1-month

USD

LIBOR

+

4%),

8/25/24

...........................................

United

States

1,753,673

1,792,193

2014-DN4,

M3,

FRN,

4.656%,

(1-month

USD

LIBOR

+

4.55%),

10/25/24

..........................................

United

States

3,568,342

3,660,150

2014-HQ2,

M3,

FRN,

3.856%,

(1-month

USD

LIBOR

+

3.75%),

9/25/24

...........................................

United

States

11,425,350

11,757,974

2014-HQ3,

M3,

FRN,

4.856%,

(1-month

USD

LIBOR

+

4.75%),

10/25/24

..........................................

United

States

815,590

824,451

2015-DN1,

M3,

FRN,

4.256%,

(1-month

USD

LIBOR

+

4.15%),

1/25/25

...........................................

United

States

271,850

271,870

2015-HQA1,

M3,

FRN,

4.806%,

(1-month

USD

LIBOR

+

4.7%),

3/25/28

...........................................

United

States

13,328,258

13,808,064

2015-HQA2,

M3,

FRN,

4.906%,

(1-month

USD

LIBOR

+

4.8%),

5/25/28

...........................................

United

States

1,549,153

1,609,416

2016-DNA1,

M3,

FRN,

5.656%,

(1-month

USD

LIBOR

+

5.55%),

7/25/28

...........................................

United

States

11,101,016

11,692,234

2016-DNA2,

M3,

FRN,

4.756%,

(1-month

USD

LIBOR

+

4.65%),

10/25/28

..........................................

United

States

12,409,846

12,991,122

2016-HQA2,

M3,

FRN,

5.256%,

(1-month

USD

LIBOR

+

5.15%),

11/25/28

..........................................

United

States

9,877,576

10,342,762

2016-HQA3,

M2,

FRN,

1.456%,

(1-month

USD

LIBOR

+

1.35%),

3/25/29

...........................................

United

States

133,140

133,327

2017-HQA3,

M2,

FRN,

2.456%,

(1-month

USD

LIBOR

+

2.35%),

4/25/30

...........................................

United

States

180,344

183,335

o

FNMA

Connecticut

Avenue

Securities

,

2013-C01,

M2,

FRN,

5.356%,

(1-month

USD

LIBOR

+

5.25%),

10/25/23

..........................................

United

States

7,426,471

7,746,284

2014-C01,

M2,

FRN,

4.506%,

(1-month

USD

LIBOR

+

4.4%),

1/25/24

...........................................

United

States

1,858,506

1,897,876

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

Semiannual

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

Residential

Mortgage-Backed

Securities

(continued)

Thrifts

&

Mortgage

Finance

(continued)

o

FNMA

Connecticut

Avenue

Securities,

(continued)

2014-C02,

1M2,

FRN,

2.706%,

(1-month

USD

LIBOR

+

2.6%),

5/25/24

...........................................

United

States

7,636,634

$

7,643,727

2014-C02,

2M2,

FRN,

2.706%,

(1-month

USD

LIBOR

+

2.6%),

5/25/24

...........................................

United

States

1,936,950

1,958,250

2014-C03,

1M2,

FRN,

3.106%,

(1-month

USD

LIBOR

+

3%),

7/25/24

...........................................

United

States

8,201,580

8,266,164

2014-C03,

2M2,

FRN,

3.006%,

(1-month

USD

LIBOR

+

2.9%),

7/25/24

...........................................

United

States

10,304,293

10,404,742

2014-C04,

1M2,

FRN,

5.006%,

(1-month

USD

LIBOR

+

4.9%),

11/25/24

..........................................

United

States

8,130,607

8,417,928

2014-C04,

2M2,

FRN,

5.106%,

(1-month

USD

LIBOR

+

5%),

11/25/24

..........................................

United

States

2,341,297

2,404,628

2015-C01,

1M2,

FRN,

4.406%,

(1-month

USD

LIBOR

+

4.3%),

2/25/25

...........................................

United

States

5,582,693

5,722,434

2015-C01,

2M2,

FRN,

4.656%,

(1-month

USD

LIBOR

+

4.55%),

2/25/25

...........................................

United

States

908,172

915,938

2015-C02,

1M2,

FRN,

4.106%,

(1-month

USD

LIBOR

+

4%),

5/25/25

...........................................

United

States

6,364,262

6,460,629

2015-C02,

2M2,

FRN,

4.106%,

(1-month

USD

LIBOR

+

4%),

5/25/25

...........................................

United

States

2,003,146

2,032,249

2015-C03,

1M2,

FRN,

5.106%,

(1-month

USD

LIBOR

+

5%),

7/25/25

...........................................

United

States

6,697,860

6,865,786

2016-C01,

1M2,

FRN,

6.856%,

(1-month

USD

LIBOR

+

6.75%),

8/25/28

...........................................

United

States

1,313,259

1,399,284

2016-C01,

2M2,

FRN,

7.056%,

(1-month

USD

LIBOR

+

6.95%),

8/25/28

...........................................

United

States

4,061,922

4,331,717

2016-C02,

1M2,

FRN,

6.106%,

(1-month

USD

LIBOR

+

6%),

9/25/28

...........................................

United

States

114,431

120,891

2016-C04,

1M2,

FRN,

4.356%,

(1-month

USD

LIBOR

+

4.25%),

1/25/29

...........................................

United

States

11,215,197

11,768,091

2016-C05,

2M2,

FRN,

4.556%,

(1-month

USD

LIBOR

+

4.45%),

1/25/29

...........................................

United

States

8,651,778

9,029,496

2016-C06,

1M2,

FRN,

4.356%,

(1-month

USD

LIBOR

+

4.25%),

4/25/29

...........................................

United

States

3,465,513

3,617,423

2016-C07,

2M2,

FRN,

4.456%,

(1-month

USD

LIBOR

+

4.35%),

5/25/29

...........................................

United

States

7,436,743

7,759,114

2017-C03,

1M2,

FRN,

3.106%,

(1-month

USD

LIBOR

+

3%),

10/25/29

..........................................

United

States

2,495,252

2,566,843

o

New

York

Mortgage

Trust

,

2005-3

,

M1

,

FRN

,

0.781

%

,

(

1-month

USD

LIBOR

+

0.675

%

),

2/25/36

.............................

United

States

130,642

125,910

193,891,064

a

a

a

a

a

a

Total

Residential

Mortgage-Backed

Securities

(Cost

$221,508,509)

................

206,643,995

Shares

Escrows

and

Litigation

Trusts

0.0%

†

a,b

Millennium

Corporate

Claim

Trust,

Escrow

Account

............

United

States

477,205

—

a,b

Millennium

Lender

Claim

Trust,

Escrow

Account

..............

United

States

477,205

—

b

Sanchez

Energy

Corp.,

Escrow

Account

....................

United

States

1,900,000

11,875

Total

Escrows

and

Litigation

Trusts

(Cost

$1,838,967)

...........................

11,875

Total

Long

Term

Investments

(Cost

$2,407,065,658)

.............................

2,409,042,848

a

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

71

Short

Term

Investments

11.9%

a

a

Country

Shares

a

Value

a

Money

Market

Funds

4.0%

d,s

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

106,930,648

$

106,930,648

Total

Money

Market

Funds

(Cost

$106,930,648)

.................................

106,930,648

Principal

Amount

*

a

a

a

a

a

Repurchase

Agreements

7.9%

t

Joint

Repurchase

Agreement,

0.005%,

5/03/21

(Maturity

Value

$214,221,250)

BNP

Paribas

Securities

Corp.

(Maturity

Value

$154,791,991)

Deutsche

Bank

Securities,

Inc.

(Maturity

Value

$18,945,727)

HSBC

Securities

(USA),

Inc.

(Maturity

Value

$40,483,532)

Collateralized

by

U.S.

Government

Agency

Securities,

3%

-

4.5%,

5/20/46

-

11/20/50;

and

U.S.

Treasury

Notes,

1.38%

-

2.88%,

5/31/21

-

3/31/26

(valued

at

$218,500,410)

.................

214,221,168

214,221,168

Total

Repurchase

Agreements

(Cost

$214,221,168)

..............................

214,221,168

u

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

0.0%

†

Country

Shares

Money

Market

Funds

0.0%

†

d,s

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

93,000

93,000

Principal

Amount

*

Repurchase

Agreements

0.0%

†

t

Joint

Repurchase

Agreement,

BofA

Securities,

Inc.,

0%,

5/03/21

(Maturity

Value

$23,435)

Collateralized

by

U.S.

Treasury

Note,

1.5%,

11/30/24

(valued

at

$23,904)

..........................................

23,435

23,435

Total

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

(Cost

$116,435)

..............................................................

116,435

Total

Short

Term

Investments

(Cost

$321,268,251

)

...............................

321,268,251

a

Total

Investments

(Cost

$2,728,333,909)

101.4%

................................

$2,730,311,099

Other

Assets,

less

Liabilities

(1.4)%

...........................................

(40,114,694)

Net

Assets

100.0%

...........................................................

$2,690,196,405

*

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

A

portion

or

all

of

the

security

is

on

loan

at

April

30,

2021.

See

Note

1(f).

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

April

30,

2021,

the

aggregate

value

of

these

securities

was

$748,161,791,

representing

27.8%

of

net

assets.

g

A

portion

or

all

of

the

security

purchased

on

a

delayed

delivery

basis.

See

Note

1(d).

h

Income

may

be

received

in

additional

securities

and/or

cash.

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

72

i

The

coupon

rate

shown

represents

the

rate

at

period

end.

j

See

Note

1(i)

regarding

senior

floating

rate

interests.

k

See

Note

1(j)

regarding

Marketplace

Lending.

l

A

supranational

organization

is

an

entity

formed

by

two

or

more

central

governments

through

international

treaties.

m

Perpetual

security

with

no

stated

maturity

date.

n

Principal

amount

of

security

is

adjusted

for

inflation.

See

Note

1(l).

o

The

coupon

rate

shown

represents

the

rate

inclusive

of

any

caps

or

floors,

if

applicable,

in

effect

at

period

end.

p

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.

q

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).

r

Security

purchased

on

a

to-be-announced

(TBA)

basis.

See

Note

1(d).

s

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

t

See

Note

1(c)

regarding

joint

repurchase

agreement.

u

See

Note

1(f)

regarding

securities

on

loan.

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

73

At

April

30,

2021,

the

Fund

had

the

following futures

contracts

outstanding.

See

Note

1

(

e

). 

At

April

30,

2021,

the

Fund

had

the

following

forward

exchange

contracts

outstanding.

See

Note

1

(

e

). 

Futures

Contracts

Description

Type

Number

of

Contracts

Notional

Amount

*

Expiration

Date

Value/

Unrealized

Appreciation

(Depreciation)

Interest

rate

contracts

U.S.

Treasury

10

Year

Notes

....................

Short

1,391

$

183,655,469

6/21/21

$

2,910,500

U.S.

Treasury

2

Year

Notes

.....................

Long

3,619

798,922,522

6/30/21

(577,773)

U.S.

Treasury

5

Year

Notes

.....................

Short

135

16,731,562

6/30/21

121,118

Total

Futures

Contracts

......................................................................

$2,453,845

*

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

Sell

2,520,623

460,413

5/10/21

$

—

$

(3,366)

Brazilian

Real

......

JPHQ

Sell

4,945,000

898,062

6/01/21

—

(10,059)

Indonesian

Rupiah

..

JPHQ

Buy

47,801,500,000

3,321,394

6/02/21

—

(28,683)

Australian

Dollar

....

JPHQ

Buy

14,620,000

11,366,173

6/17/21

—

(100,605)

Australian

Dollar

....

JPHQ

Sell

14,620,000

11,035,103

6/17/21

—

(230,465)

Euro

.............

JPHQ

Buy

13,415,000

16,496,009

6/22/21

—

(350,335)

Euro

.............

JPHQ

Sell

10,540,000

12,557,951

6/22/21

—

(127,506)

Canadian

Dollar

....

JPHQ

Sell

2,640,000

2,093,767

6/24/21

—

(54,138)

Japanese

Yen

......

JPHQ

Buy

1,400,000,000

13,513,970

7/07/21

—

(696,215)

Japanese

Yen

......

JPHQ

Sell

384,000,000

3,552,513

7/07/21

36,786

—

Canadian

Dollar

....

JPHQ

Buy

11,330,000

8,878,893

7/08/21

339,490

—

Canadian

Dollar

....

JPHQ

Sell

11,330,000

8,870,204

7/08/21

—

(348,180)

Australian

Dollar

....

JPHQ

Buy

3,490,000

2,687,911

7/28/21

1,786

—

Singapore

Dollar

....

JPHQ

Buy

3,600,000

2,710,843

7/28/21

—

(6,378)

South

Korean

Won

..

JPHQ

Buy

3,000,000,000

2,713,213

7/28/21

—

(29,458)

Chinese

Yuan

......

JPHQ

Buy

14,000,000

2,125,173

9/17/21

16,121

—

Turkish

Lira

........

JPHQ

Buy

12,510,000

1,318,230

9/28/21

77,912

—

Total

Forward

Exchange

Contracts

...................................................

$472,095

$(1,985,388)

Net

unrealized

appreciation

(depreciation)

............................................

$(1,513,293)

*

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

(unaudited)

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

74

At

April

30,

2021,

the

Fund

had

the

following credit

default

swap

contracts outstanding.

See

Note

1

(

e

). 

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

ITRAXX.

EUROPE.

MAIN.35

....

1.00%

Quarterly

6/20/26

11,100,000

EUR

$

358,823

$

306,576

$

52,247

Investment

Grade

Total

Centrally

Cleared

Swap

Contracts

.....................................

$358,823

$306,576

$52,247

OTC

Swap

Contracts

Contracts

to

Buy

Protection

(c)

Single

Name

Avon

Products,

Inc.

.......

(5.00)%

Quarterly

CITI

3/20/23

5,835,000

(398,837)

(320,213)

(78,624)

HCA,

Inc.

.....

(5.00)%

Quarterly

FBCO

3/20/22

2,050,000

(98,037)

(66,425)

(31,612)

Lumen

Technologies,

Inc.

.......

(5.00)%

Quarterly

BZWS

6/20/21

4,700,000

(55,565)

(15,277)

(40,288)

Nabors

Industries,

Inc.

.......

(1.00)%

Quarterly

CITI

12/20/21

6,200,000

139,867

57,645

82,222

Contracts

to

Sell

Protection

(c)(d)

Single

Name

Air

France-KLM

.

5.00%

Quarterly

BOFA

6/20/26

600,000

EUR

7,816

12,395

(4,579)

NR

Air

France-KLM

.

5.00%

Quarterly

JPHQ

6/20/26

1,420,000

EUR

18,498

25,628

(7,130)

NR

Air

France-KLM

.

5.00%

Quarterly

MSCO

12/20/25

1,320,000

EUR

19,581

1,468

18,113

NR

American

Airlines

Group,

Inc.

..

5.00%

Quarterly

CITI

12/20/21

1,600,000

34,981

(68,493)

103,474

CCC

American

Airlines

Group,

Inc.

..

5.00%

Quarterly

GSCO

6/20/22

1,000,000

(1,073)

(10,684)

9,611

CCC

Carnival

Corp.

..

1.00%

Quarterly

CITI

12/20/25

1,600,000

(146,130)

(232,131)

86,001

B-

Macy's

Retail

Holdings

LLC

.

1.00%

Quarterly

JPHQ

12/20/25

1,600,000

(185,407)

(276,496)

91,089

B

Nabors

Industries,

Inc.

.......

1.00%

Quarterly

CITI

12/20/23

6,200,000

(1,015,582)

(489,658)

(525,924)

CCC-

Royal

Caribbean

Cruises

Ltd.

..

5.00%

Quarterly

BZWS

12/20/25

1,600,000

107,951

(44,216)

152,167

B

United

Airlines

Holdings,

Inc.

.

5.00%

Quarterly

FBCO

12/20/25

776,000

44,938

(1,624)

46,562

B

Traded

Index

(e)

Citibank

Bespoke

Franklin,

Equity

Tranche

0-5%

—%

Quarterly

CITI

12/20/22

2,500,000

(620,648)

(566,139)

(54,509)

Non-

Investment

Grade

(e)

Citibank

Bespoke

Palma

Index,

Mezzanine

Tranche

5-7%

2.30%

Quarterly

CITI

6/20/21

4,910,000

23,773

—

23,773

Non-

Investment

Grade

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

75

At

April

30,

2021,

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)

Citibank

Bespoke

Phoenix

Index,

Mezzanine

Tranche

5-7%

2.90%

Quarterly

CITI

12/20/21

3,500,000

$

52,964

$

—

$

52,964

Non-

Investment

Grade

MCDX.

NA.MAIN.31

.

1.00%

Quarterly

CITI

12/20/23

12,200,000

139,585

66,354

73,231

Investment

Grade

(e)

Morgan

Stanley

Bespoke

Pecan

Index,

Mezzanine

Tranche

5-10%

4.10%

Quarterly

MSCO

12/20/21

3,700,000

(8,929)

—

(8,929)

Non-

Investment

Grade

(e)

Morgan

Stanley

Bespoke

Pecan

Index,

Mezzanine

Tranche

5-10%

3.98%

Quarterly

MSCO

12/20/21

3,700,000

(12,262)

—

(12,262)

Non-

Investment

Grade

Total

OTC

Swap

Contracts

..............................................

$(1,952,516)

$(1,927,866)

$(24,650)

Total

Credit

Default

Swap

Contracts

....................................

$(1,593,693)

$

(1,621,290)

$27,597

(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

$

10,428

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

31,929

Receive

Floating

3-month

USD

LIBOR

+

1.303%

.....

Quarterly

496,000

USD

Pay

Fixed

1%

..............................

Annual

JPHQ

5/04/21

400,000

EUR

12,087

Receive

Floating

3-month

USD

LIBOR

+

1.175%

.....

Quarterly

25,083,500

USD

Pay

Floating

3-month

EURIBOR

+

1.05%

.........

Quarterly

CITI

11/22/21

22,700,000

EUR

(2,171,659)

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

76

Cross-Currency

Swap

Contracts

(continued)

Description

Payment

Frequency

Counter-

party

Maturity

Date

Notional

Amount

Value/

Unrealized

Appreciation

(Depreciation)

aA

aaa

aaa

aaa

OTC

Swap

Contracts

(continued)

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

$

(420,938)

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

(2,505,228)

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

(1,146,352)

Receive

Floating

3-month

USD

LIBOR

+

0.938%

.....

Quarterly

23,823,800

USD

Pay

Floating

3-month

EURIBOR

+

0.88%

.........

Quarterly

CITI

6/29/22

20,020,000

EUR

(231,537)

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

72,540

Total

Cross

Currency

Swap

Contracts

...........................................................

$(6,348,730)

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

2.079%

.....

At

Maturity

9/18/24

$

1,770,000

$

39,257

$

—

$

39,257

Receive

variable

change

  in

USA

CPI-U

........

At

Maturity

Pay

Fixed

1.893%

.....

At

Maturity

1/15/27

50,500,000

2,287,814

—

2,287,814

Receive

variable

change

  in

USA

CPI-U

........

At

Maturity

Pay

Fixed

2.313%

.....

At

Maturity

6/01/28

1,400,000

10,937

—

10,937

Total

Inflation

Index

Swap

Contracts

..................................

$2,338,008

$—

$2,338,008

At

April

30,

2021,

the

Fund

had

the

following inflation index

swap

contracts outstanding.

See

Note

1

(

e

). 

See

Note

11

regarding

other

derivative

information.

See

Abbreviations

on

page

151

.

Franklin

Investors

Securities

Trust

Consolidated

Financial

Highlights

Franklin

Total

Return

Fund

franklintempleton.com

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accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

77

a

Six

Months

Ended

April

30,

2021*

(unaudited)

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

A

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$10.04

$9.92

$9.31

$9.84

$9.93

$9.87

Income

from

investment

operations

a

:

Net

investment

income

..............

0.082

b

0.257

b

0.302

b

0.269

0.251

b

0.231

Net

realized

and

unrealized

gains

(losses)

(0.025)

0.170

0.618

(0.518)

(0.110)

0.107

Total

from

investment

operations

........

0.057

0.427

0.920

(0.249)

0.141

0.338

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

....................

(0.167)

(0.306)

(0.310)

(0.275)

(0.231)

(0.278)

Tax

return

of

capital

................

—

—

—

(0.006)

—

—

Total

distributions

...................

(0.167)

(0.306)

(0.310)

(0.281)

(0.231)

(0.278)

Net

asset

value,

end

of

period

..........

$9.93

$10.04

$9.92

$9.31

$9.84

$9.93

Total

return

c

.......................

0.55%

4.38%

10.01%

(2.57)%

1.47%

3.53%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

..........................

0.88%

0.90%

0.90%

0.91%

0.91%

0.90%

Expenses

net

of

waiver

and

payments

by

affiliates

..........................

0.84%

0.85%

e

0.86%

e

0.88%

e

0.87%

e

0.85%

e

Net

investment

income

...............

1.65%

2.59%

3.12%

2.91%

2.58%

2.32%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$4,157,278

$4,031,242

$3,422,747

$2,763,774

$3,153,751

$3,623,035

Portfolio

turnover

rate

................

99.41%

f

228.24%

169.95%

f

151.77%

101.07%

287.38%

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

g

........................

29.54%

f

137.82%

98.83%

f

84.86%

78.46%

146.15%

*Includes

the

consolidated

operations

of

FT

Holdings

Corporation

I

from

November

1,

2020

through

April

27,

2021.

See

Note

1(g).

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,

and

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

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.

See

Note

13

.

g

See

Note

1

(

h

)

regarding

mortgage

dollar

rolls.

Franklin

Investors

Securities

Trust

Consolidated

Financial

Highlights

Franklin

Total

Return

Fund

(continued)

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accompanying

notes

are

an

integral

part

of

these

financial

statements.

78

a

Six

Months

Ended

April

30,

2021*

(unaudited)

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

C

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$9.97

$9.85

$9.25

$9.77

$9.87

$9.84

Income

from

investment

operations

a

:

Net

investment

income

..............

0.062

b

0.216

b

0.262

b

0.183

0.212

b

0.189

Net

realized

and

unrealized

gains

(losses)

(0.034)

0.171

0.609

(0.457)

(0.109)

0.100

Total

from

investment

operations

........

0.028

0.387

0.871

(0.274)

0.103

0.289

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

....................

(0.148)

(0.267)

(0.271)

(0.241)

(0.203)

(0.259)

Tax

return

of

capital

................

—

—

—

(0.005)

—

—

Total

distributions

...................

(0.148)

(0.267)

(0.271)

(0.246)

(0.203)

(0.259)

Net

asset

value,

end

of

period

..........

$9.85

$9.97

$9.85

$9.25

$9.77

$9.87

Total

return

c

.......................

0.26%

4.01%

9.52%

(2.84)%

0.98%

3.13%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

..........................

1.29%

1.30%

1.30%

1.31%

1.31%

1.30%

Expenses

net

of

waiver

and

payments

by

affiliates

..........................

1.24%

1.25%

e

1.26%

e

1.28%

e

12.70%

e

1.25%

e

Net

investment

income

...............

1.26%

2.20%

2.72%

2.51%

2.18%

1.92%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$187,032

$208,947

$236,838

$243,068

$354,269

$449,274

Portfolio

turnover

rate

................

99.41%

f

228.24%

169.95%

f

151.77%

101.07%

287.38%

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

g

........................

29.54%

f

137.82%

98.83%

f

84.86%

78.46%

146.15%

*Includes

the

consolidated

operations

of

FT

Holdings

Corporation

I

from

November

1,

2020

through

April

27,

2021.

See

Note

1(g).

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,

and

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

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.

See

Note

13

.

g

See

Note

1

(

h

)

regarding

mortgage

dollar

rolls.

Franklin

Investors

Securities

Trust

Consolidated

Financial

Highlights

Franklin

Total

Return

Fund

(continued)

franklintempleton.com

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accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

79

a

Six

Months

Ended

April

30,

2021*

(unaudited)

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

R

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$10.00

$9.88

$9.27

$9.80

$9.90

$9.85

Income

from

investment

operations

a

:

Net

investment

income

..............

0.070

b

0.232

b

0.277

b

0.182

0.228

b

0.199

Net

realized

and

unrealized

gains

(losses)

(0.025)

0.171

0.619

(0.453)

(0.115)

0.117

Total

from

investment

operations

........

0.045

0.403

0.896

(0.271)

0.113

0.316

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

....................

(0.155)

(0.282)

(0.286)

(0.253)

(0.213)

(0.266)

Tax

return

of

capital

................

—

—

—

(0.006)

—

—

Total

distributions

...................

(0.155)

(0.282)

(0.286)

(0.259)

(0.213)

(0.266)

Net

asset

value,

end

of

period

..........

$9.89

$10.00

$9.88

$9.27

$9.80

$9.90

Total

return

c

.......................

0.43%

4.14%

9.66%

(2.70)%

1.19%

3.31%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

..........................

1.14%

1.15%

1.15%

1.16%

1.16%

1.15%

Expenses

net

of

waiver

and

payments

by

affiliates

..........................

1.09%

1.10%

e

1.11%

e

1.13%

e

1.12%

e

1.10%

e

Net

investment

income

...............

1.41%

2.36%

2.87%

2.66%

2.33%

2.07%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$14,739

$17,274

$21,223

$23,620

$36,337

$58,715

Portfolio

turnover

rate

................

99.41%

f

228.24%

169.95%

f

151.77%

101.07%

287.38%

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

g

........................

29.54%

f

137.82%

98.83%

f

84.86%

78.46%

146.15%

*Includes

the

consolidated

operations

of

FT

Holdings

Corporation

I

from

November

1,

2020

through

April

27,

2021.

See

Note

1(g).

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

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

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.

See

Note

13

.

g

See

Note

1

(

h

)

regarding

mortgage

dollar

rolls.

Franklin

Investors

Securities

Trust

Consolidated

Financial

Highlights

Franklin

Total

Return

Fund

(continued)

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accompanying

notes

are

an

integral

part

of

these

financial

statements.

80

a

Six

Months

Ended

April

30,

2021*

(unaudited)

Year

Ended

October

31,

2020

2019

2018

2017

2016

Class

R6

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$10.11

$9.99

$9.38

$9.90

$9.98

$9.91

Income

from

investment

operations

a

:

Net

investment

income

..............

0.100

b

0.294

b

0.340

b

0.308

0.296

b

0.195

Net

realized

and

unrealized

gains

(losses)

(0.025)

0.168

0.617

(0.512)

(0.117)

0.173

Total

from

investment

operations

........

0.075

0.462

0.957

(0.204)

0.179

0.368

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

....................

(0.185)

(0.341)

(0.347)

(0.309)

(0.259)

(0.298)

Tax

return

of

capital

................

—

—

—

(0.007)

—

—

Total

distributions

...................

(0.185)

(0.341)

(0.347)

(0.316)

(0.259)

(0.298)

Net

asset

value,

end

of

period

..........

$10.00

$10.11

$9.99

$9.38

$9.90

$9.98

Total

return

c

.......................

0.73%

4.72%

10.35%

(2.10)%

1.75%

3.94%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

..........................

0.52%

0.54%

0.53%

0.54%

0.50%

0.51%

Expenses

net

of

waiver

and

payments

by

affiliates

..........................

0.47%

0.48%

e

0.49%

e

0.49%

e

0.48%

e

0.46%

e

Net

investment

income

...............

1.99%

2.95%

3.49%

3.30%

2.97%

2.71%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$581,634

$547,075

$481,399

$430,637

$398,732

$93,892

Portfolio

turnover

rate

................

99.41%

f

228.24%

169.95%

f

151.77%

101.07%

287.38%

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

g

........................

29.54%

f

137.82%

98.83%

f

84.86%

78.46%

146.15%

*Includes

the

consolidated

operations

of

FT

Holdings

Corporation

I

from

November

1,

2020

through

April

27,

2021.

See

Note

1(g).

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

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

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.

See

Note

13

.

g

See

Note

1

(

h

)

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.

Semiannual

Report

81

a

Six

Months

Ended

April

30,

2021*

(unaudited)

Year

Ended

October

31,

2020

2019

2018

2017

2016

Advisor

Class

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$10.10

$9.98

$9.37

$9.89

$9.98

$9.91

Income

from

investment

operations

a

:

Net

investment

income

..............

0.095

b

0.281

b

0.328

b

0.291

0.275

b

0.218

Net

realized

and

unrealized

gains

(losses)

(0.025)

0.169

0.618

(0.507)

(0.116)

0.142

Total

from

investment

operations

........

0.070

0.450

0.946

(0.216)

0.159

0.360

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

....................

(0.180)

(0.329)

(0.336)

(0.297)

(0.249)

(0.290)

Tax

return

of

capital

................

—

—

—

(0.007)

—

—

Total

distributions

...................

(0.180)

(0.329)

(0.336)

(0.304)

(0.249)

(0.290)

Net

asset

value,

end

of

period

..........

$9.99

$10.10

$9.98

$9.37

$9.89

$9.98

Total

return

c

.......................

0.67%

4.60%

10.23%

(2.22)%

1.65%

3.75%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

..........................

0.63%

0.64%

0.65%

0.66%

0.66%

0.65%

Expenses

net

of

waiver

and

payments

by

affiliates

..........................

0.58%

0.60%

e

0.61%

e

0.63%

e

0.62%

e

0.60%

e

Net

investment

income

...............

1.89%

2.84%

3.37%

3.16%

2.83%

2.57%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$247,933

$293,080

$863,516

$620,803

$595,239

$740,046

Portfolio

turnover

rate

................

99.41%

f

228.24%

169.95%

f

151.77%

101.07%

287.38%

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

g

........................

29.54

%

f

137.82%

98.83%

f

8.49%

78.46%

146.15%

*Includes

the

consolidated

operations

of

FT

Holdings

Corporation

I

from

November

1,

2020

through

April

27,

2021.

See

Note

1(g).

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

is

not

annualized

for

periods

less

than

one

year.

d

Ratios

are

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.

See

Note

13

.

g

See

Note

1

(

h

)

regarding

mortgage

dollar

rolls.

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited),

April

30,

2021

Franklin

Total

Return

Fund

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

82

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

0.0%

†

Energy

Equipment

&

Services

0.0%

†

a

Weatherford

International

plc

.............................

United

States

34,108

$

361,545

Multiline

Retail

0.0%

a,b,c

K2016470219

South

Africa

Ltd.,

A

.........................

South

Africa

28,762,824

—

a,b,c

K2016470219

South

Africa

Ltd.,

B

.........................

South

Africa

2,862,311

—

—

Oil,

Gas

&

Consumable

Fuels

0.0%

†

a,b

Riviera

Resources,

Inc.

.................................

United

States

12,605

3,256

Paper

&

Forest

Products

0.0%

†

Verso

Corp.,

A

........................................

United

States

6,954

107,370

Specialty

Retail

0.0%

†

a

Party

City

Holdco,

Inc.

..................................

United

States

112,955

790,687

Total

Common

Stocks

(Cost

$1,434,827)

.......................................

1,262,858

Management

Investment

Companies

18.0%

Capital

Markets

18.0%

d

Franklin

Floating

Rate

Income

Fund

.......................

United

States

24,116,234

187,141,974

d

Franklin

Liberty

High

Yield

Corporate

ETF

...................

United

States

5,830,000

153,862,445

d

Franklin

Liberty

Investment

Grade

Corporate

ETF

.............

United

States

18,335,000

471,576,200

d,e

Franklin

Liberty

Senior

Loan

ETF

.........................

United

States

1,737,400

43,400,252

Invesco

Senior

Loan

ETF

...............................

United

States

3,570,000

79,075,500

935,056,371

Total

Management

Investment

Companies

(Cost

$926,022,133)

...................

935,056,371

Preferred

Stocks

0.1%

Banks

0.1%

Citigroup

Capital

XIII,

6.546%

............................

United

States

93,000

2,524,020

Total

Preferred

Stocks

(Cost

$2,325,000)

.......................................

2,524,020

Warrants

Warrants

0.0%

†

Oil,

Gas

&

Consumable

Fuels

0.0%

†

a,b

Battalion

Oil

Corp.,

A,

10/08/22

...........................

United

States

2,551

244

a,b

Battalion

Oil

Corp.,

B,

10/08/22

...........................

United

States

3,189

144

a,b

Battalion

Oil

Corp.,

C,

10/08/22

...........................

United

States

4,100

68

456

Paper

&

Forest

Products

0.0%

†

a

Verso

Corp.,

7/25/23

...................................

United

States

732

1,720

Total

Warrants

(Cost

$—)

.....................................................

2,176

Principal

Amount

*

Corporate

Bonds

21.2%

Aerospace

&

Defense

0.3%

Boeing

Co.

(The)

,

Senior

Note

,

2.196

%

,

2/04/26

..............

United

States

9,500,000

9,518,935

Northrop

Grumman

Corp.

,

Senior

Bond

,

5.25

%

,

5/01/50

........

United

States

3,500,000

4,688,359

14,207,294

Air

Freight

&

Logistics

0.3%

FedEx

Corp.

,

Senior

Bond

,

4.05

%

,

2/15/48

..................

United

States

2,000,000

2,179,405

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

Semiannual

Report

83

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Air

Freight

&

Logistics

(continued)

United

Parcel

Service,

Inc.

,

Senior

Bond

,

5.3

%

,

4/01/50

........

United

States

10,000,000

$

13,921,552

16,100,957

Airlines

0.8%

f

American

Airlines

Inc

/

AAdvantage

Loyalty

IP

Ltd.

,

Senior

Secured

Note

,

144A,

5.75

%

,

4/20/29

............................

United

States

2,600,000

2,789,150

Delta

Air

Lines,

Inc.

,

Senior

Note

,

2.9

%

,

10/28/24

.............

United

States

7,800,000

7,872,752

f

Delta

Air

Lines,

Inc.

/

SkyMiles

IP

Ltd.

,

Senior

Secured

Note

,

144A,

4.5

%

,

10/20/25

.....................................

United

States

10,500,000

11,267,554

f

Hawaiian

Brand

Intellectual

Property

Ltd.

/

HawaiianMiles

Loyalty

Ltd.

,

Senior

Secured

Note

,

144A,

5.75

%

,

1/20/26

............

United

States

11,100,000

11,738,250

United

Airlines

Holdings,

Inc.

,

Senior

Note

,

5

%

,

2/01/24

.........

United

States

4,000,000

4,120,000

f

United

Airlines,

Inc.

,

Senior

Secured

Note

,

144A,

4.375

%

,

4/15/26

.

United

States

2,200,000

2,285,734

40,073,440

Auto

Components

0.1%

f

Adient

US

LLC

,

Senior

Secured

Note

,

144A,

7

%

,

5/15/26

.......

United

States

1,538,000

1,652,020

f

Allison

Transmission,

Inc.

,

Senior

Bond

,

144A,

5.875

%

,

6/01/29

..

United

States

2,500,000

2,706,250

4,358,270

Banks

2.2%

f

Akbank

TAS

,

Senior

Bond

,

144A,

5.125

%

,

3/31/25

............

Turkey

5,600,000

5,588,761

Banco

Santander

SA

,

Sub.

Bond

,

2.749

%

,

12/03/30

...........

Spain

3,600,000

3,500,351

Bank

of

America

Corp.

,

Senior

Bond,

2.592%

to

4/29/30,

FRN

thereafter,

4/29/31

.....

United

States

6,700,000

6,747,089

Sub.

Bond,

6.11%,

1/29/37

............................

United

States

2,800,000

3,767,819

f

BNP

Paribas

SA

,

Senior

Note

,

144A,

2.219%

to

6/09/25,

FRN

thereafter

,

6/09/26

...................................

France

5,900,000

6,084,105

Citigroup,

Inc.

,

Senior

Bond,

2.572%

to

6/03/30,

FRN

thereafter,

6/03/31

.....

United

States

10,500,000

10,546,032

Senior

Bond,

4.65%,

7/23/48

...........................

United

States

3,700,000

4,597,945

g

Comerica,

Inc.

,

Junior

Sub.

Bond

,

5.625%

to

10/01/25,

FRN

thereafter

,

Perpetual

.................................

United

States

3,800,000

4,232,250

HSBC

Holdings

plc

,

Senior

Bond,

2.848%

to

6/04/30,

FRN

thereafter,

6/04/31

.....

United

Kingdom

10,600,000

10,718,068

Senior

Bond,

2.357%

to

8/18/30,

FRN

thereafter,

8/18/31

.....

United

Kingdom

3,800,000

3,706,751

Senior

Note,

2.013%

to

9/22/27,

FRN

thereafter,

9/22/28

......

United

Kingdom

12,400,000

12,314,571

JPMorgan

Chase

&

Co.

,

Senior

Bond,

4.493%

to

3/24/30,

FRN

thereafter,

3/24/31

.....

United

States

32,100,000

37,232,189

Sub.

Bond,

4.95%,

6/01/45

............................

United

States

1,600,000

2,019,115

Lloyds

Banking

Group

plc

,

Senior

Note

,

3.87%

to

7/09/24,

FRN

thereafter

,

7/09/25

...................................

United

Kingdom

2,500,000

2,720,391

113,775,437

Beverages

0.5%

Anheuser-Busch

Cos.

LLC

/

Anheuser-Busch

InBev

Worldwide,

Inc.

,

Senior

Bond,

4.7%,

2/01/36

............................

Belgium

1,800,000

2,133,059

Senior

Bond,

4.9%,

2/01/46

............................

Belgium

3,400,000

4,068,361

Anheuser-Busch

InBev

Worldwide,

Inc.

,

Senior

Bond

,

3.5

%

,

6/01/30

Belgium

18,400,000

20,104,587

26,306,007

Biotechnology

0.7%

AbbVie,

Inc.

,

Senior

Bond,

4.7%,

5/14/45

............................

United

States

3,200,000

3,816,392

Senior

Note,

3.2%,

11/21/29

...........................

United

States

18,000,000

19,257,318

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Total

Return

Fund

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

84

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Biotechnology

(continued)

AbbVie,

Inc.,

(continued)

Amgen,

Inc.

,

Senior

Bond

,

2.45

%

,

2/21/30

...................

United

States

10,000,000

$

10,142,080

Regeneron

Pharmaceuticals,

Inc.

,

Senior

Bond

,

1.75

%

,

9/15/30

..

United

States

1,400,000

1,305,466

34,521,256

Capital

Markets

0.1%

Goldman

Sachs

Group,

Inc.

(The)

,

Senior

Bond

,

6.25

%

,

2/01/41

..

United

States

2,800,000

4,005,950

Chemicals

0.4%

f

Alpek

SAB

de

CV

,

Senior

Bond

,

144A,

3.25

%

,

2/25/31

.........

Mexico

5,800,000

5,721,120

f

Braskem

Netherlands

Finance

BV

,

Senior

Bond

,

144A,

4.5

%

,

1/31/30

...........................................

Brazil

11,800,000

12,005,910

Westlake

Chemical

Corp.

,

Senior

Bond

,

3.375

%

,

6/15/30

.......

United

States

3,500,000

3,676,543

f

Yara

International

ASA

,

Senior

Bond

,

144A,

3.148

%

,

6/04/30

.....

Brazil

1,700,000

1,779,538

23,183,111

Commercial

Services

&

Supplies

0.0%

†

f

Harsco

Corp.

,

Senior

Note

,

144A,

5.75

%

,

7/31/27

.............

United

States

2,500,000

2,642,262

Communications

Equipment

0.1%

f

CommScope

Technologies

LLC

,

Senior

Bond

,

144A,

5

%

,

3/15/27

.

United

States

3,000,000

2,975,812

Consumer

Finance

0.1%

Capital

One

Financial

Corp.

,

Senior

Bond

,

3.8

%

,

1/31/28

........

United

States

3,700,000

4,120,043

OneMain

Finance

Corp.

,

Senior

Bond

,

5.375

%

,

11/15/29

........

United

States

3,000,000

3,241,515

7,361,558

Containers

&

Packaging

0.3%

Amcor

Flexibles

North

America,

Inc.

,

Senior

Bond

,

2.63

%

,

6/19/30

United

States

2,800,000

2,831,248

f

Mauser

Packaging

Solutions

Holding

Co.

,

Senior

Note

,

144A,

7.25

%

,

4/15/25

...........................................

United

States

3,000,000

2,921,250

f

Plastipak

Holdings,

Inc.

,

Senior

Note

,

144A,

6.25

%

,

10/15/25

....

United

States

3,000,000

3,088,125

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

2,277,069

WRKCo

,

Inc.

,

Senior

Bond

,

3

%

,

6/15/33

....................

United

States

4,700,000

4,859,693

15,977,385

Diversified

Financial

Services

0.2%

f

EDP

Finance

BV

,

Senior

Note

,

144A,

1.71

%

,

1/24/28

..........

Portugal

10,500,000

10,239,479

Shell

International

Finance

BV

,

Senior

Bond

,

4.55

%

,

8/12/43

.....

Netherlands

1,700,000

2,057,639

12,297,118

Diversified

Telecommunication

Services

0.2%

f

Altice

France

SA

,

Senior

Secured

Note

,

144A,

5.5

%

,

1/15/28

....

France

3,000,000

3,094,470

Bell

Canada,

Inc.

,

Senior

Bond

,

4.464

%

,

4/01/48

..............

Canada

3,600,000

4,245,066

f

CCO

Holdings

LLC

/

CCO

Holdings

Capital

Corp.

,

Senior

Bond

,

144A,

5

%

,

2/01/28

...................................

United

States

1,500,000

1,569,375

Orange

SA

,

Senior

Bond

,

8.75

%

,

3/01/31

...................

France

1,300,000

2,031,508

10,940,419

Electric

Utilities

1.5%

Commonwealth

Edison

Co.

,

Senior

Bond

,

6.45

%

,

1/15/38

.......

United

States

700,000

1,006,133

Duke

Energy

Corp.

,

Senior

Bond

,

3.75

%

,

9/01/46

.............

United

States

2,000,000

2,069,849

Duke

Energy

Florida

LLC

,

Senior

Bond

,

6.4

%

,

6/15/38

.........

United

States

1,300,000

1,881,594

f

Enel

Finance

International

NV

,

Senior

Bond

,

144A,

6.8

%

,

9/15/37

.

Italy

3,000,000

4,290,035

Exelon

Corp.

,

Senior

Bond

,

4.05

%

,

4/15/30

..................

United

States

16,900,000

19,018,438

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

Semiannual

Report

85

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Electric

Utilities

(continued)

Georgia

Power

Co.

,

Senior

Bond

,

4.3

%

,

3/15/42

..............

United

States

9,000,000

$

10,374,685

Southern

Co.

(The)

,

Senior

Bond,

3.25%,

7/01/26

...........................

United

States

9,850,000

10,641,890

Senior

Bond,

4.4%,

7/01/46

............................

United

States

2,000,000

2,278,132

A,

Senior

Bond,

3.7%,

4/30/30

.........................

United

States

13,900,000

15,188,980

f

State

Grid

Overseas

Investment

2016

Ltd.

,

Senior

Bond

,

144A,

3.5

%

,

5/04/27

......................................

China

10,700,000

11,796,378

Virginia

Electric

and

Power

Co.

,

Senior

Bond

,

6.35

%

,

11/30/37

...

United

States

520,000

741,685

79,287,799

Electronic

Equipment,

Instruments

&

Components

0.5%

CDW

LLC

/

CDW

Finance

Corp.

,

Senior

Note

,

3.25

%

,

2/15/29

....

United

States

3,000,000

2,977,500

Flex

Ltd.

,

Senior

Bond

,

4.875

%

,

5/12/30

....................

United

States

16,700,000

19,259,902

FLIR

Systems,

Inc.

,

Senior

Note

,

2.5

%

,

8/01/30

...............

United

States

3,000,000

2,988,712

25,226,114

Energy

Equipment

&

Services

0.1%

Baker

Hughes

a

GE

Co.

LLC

/

Baker

Hughes

Co-Obligor,

Inc.

,

Senior

Bond,

4.486%,

5/01/30

..........................

United

States

800,000

923,332

Senior

Bond,

4.08%,

12/15/47

..........................

United

States

1,200,000

1,293,208

h

Valaris

plc

,

Senior

Bond

,

5.75

%

,

10/01/44

...................

Saudi

Arabia

700,000

71,750

f

Weatherford

International

Ltd.

,

Senior

Note

,

144A,

11

%

,

12/01/24

.

United

States

1,032,000

1,021,520

3,309,810

Entertainment

0.5%

f

Live

Nation

Entertainment,

Inc.

,

Senior

Secured

Note

,

144A,

3.75

%

,

1/15/28

...........................................

United

States

5,200,000

5,187,572

f

Netflix,

Inc.

,

Senior

Bond,

144A,

5.375%,

11/15/29

....................

United

States

3,000,000

3,566,250

Senior

Bond,

144A,

4.875%,

6/15/30

.....................

United

States

12,800,000

14,865,984

23,619,806

Equity

Real

Estate

Investment

Trusts

(REITs)

0.3%

Equinix

,

Inc.

,

Senior

Bond

,

3.2

%

,

11/18/29

..................

United

States

3,500,000

3,696,636

National

Retail

Properties,

Inc.

,

Senior

Bond

,

4.3

%

,

10/15/28

.....

United

States

9,700,000

10,915,742

14,612,378

Food

&

Staples

Retailing

0.2%

f

Cencosud

SA

,

Senior

Bond

,

144A,

4.375

%

,

7/17/27

...........

Chile

9,700,000

10,787,953

Food

Products

0.2%

B&G

Foods,

Inc.

,

Senior

Note

,

5.25

%

,

9/15/27

...............

United

States

3,000,000

3,108,390

Kraft

Heinz

Foods

Co.

,

Senior

Note

,

3

%

,

6/01/26

..............

United

States

3,100,000

3,280,059

f

Post

Holdings,

Inc.

,

Senior

Bond,

144A,

4.625%,

4/15/30

.....................

United

States

3,000,000

3,033,750

Senior

Bond,

144A,

4.5%,

9/15/31

.......................

United

States

3,000,000

2,982,150

12,404,349

Health

Care

Equipment

&

Supplies

0.1%

Edwards

Lifesciences

Corp.

,

Senior

Bond

,

4.3

%

,

6/15/28

.......

United

States

1,700,000

1,937,438

STERIS

Irish

FinCo

.

UnLtd

.

Co.

,

Senior

Note

,

2.7

%

,

3/15/31

.....

United

States

5,900,000

5,891,829

7,829,267

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Total

Return

Fund

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

86

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Health

Care

Providers

&

Services

0.8%

Anthem,

Inc.

,

Senior

Bond,

4.101%,

3/01/28

..........................

United

States

1,800,000

$

2,034,228

Senior

Bond,

4.65%,

1/15/43

...........................

United

States

3,100,000

3,720,594

Centene

Corp.

,

Senior

Note

,

4.25

%

,

12/15/27

................

United

States

2,000,000

2,098,750

f

CHS/Community

Health

Systems,

Inc.

,

Senior

Secured

Note,

144A,

5.625%,

3/15/27

..............

United

States

800,000

849,428

Senior

Secured

Note,

144A,

6%,

1/15/29

..................

United

States

600,000

632,400

CVS

Health

Corp.

,

Senior

Bond

,

4.78

%

,

3/25/38

..............

United

States

3,200,000

3,831,129

f

DaVita,

Inc.

,

Senior

Note

,

144A,

4.625

%

,

6/01/30

.............

United

States

1,900,000

1,926,125

Kaiser

Foundation

Hospitals

,

2019

,

Senior

Bond

,

3.266

%

,

11/01/49

United

States

11,270,000

11,835,825

Orlando

Health

Obligated

Group

,

Bond

,

3.777

%

,

10/01/28

.......

United

States

2,810,000

3,106,243

Providence

St

Joseph

Health

Obligated

Group

,

H

,

Bond

,

2.746

%

,

10/01/26

..........................................

United

States

8,875,000

9,460,688

39,495,410

Hotels,

Restaurants

&

Leisure

0.9%

f

Caesars

Resort

Collection

LLC

/

CRC

Finco

,

Inc.

,

Senior

Note

,

144A,

5.25

%

,

10/15/25

.....................................

United

States

3,500,000

3,532,856

f

Genting

New

York

LLC

/

GENNY

Capital,

Inc.

,

Senior

Note

,

144A,

3.3

%

,

2/15/26

......................................

United

States

2,100,000

2,098,297

Las

Vegas

Sands

Corp.

,

Senior

Bond

,

3.9

%

,

8/08/29

...........

United

States

8,500,000

8,874,544

f

NCL

Corp.

Ltd.

,

Senior

Note

,

144A,

5.875

%

,

3/15/26

...........

United

States

15,300,000

16,011,297

f

Studio

City

Finance

Ltd.

,

Senior

Note

,

144A,

5

%

,

1/15/29

.......

Macau

13,000,000

13,308,750

f

Wynn

Macau

Ltd.

,

Senior

Note

,

144A,

5.625

%

,

8/26/28

.........

Macau

1,500,000

1,580,648

45,406,392

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

3,134,685

Mohawk

Industries,

Inc.

,

Senior

Bond

,

3.625

%

,

5/15/30

.........

United

States

19,400,000

21,073,597

24,208,282

Independent

Power

and

Renewable

Electricity

Producers

0.3%

f

Calpine

Corp.

,

Senior

Note

,

144A,

5.125

%

,

3/15/28

............

United

States

2,500,000

2,544,012

f

Colbun

SA

,

Senior

Bond

,

144A,

3.15

%

,

3/06/30

...............

Chile

4,400,000

4,507,862

f

InterGen

NV

,

Senior

Secured

Bond

,

144A,

7

%

,

6/30/23

.........

Netherlands

3,300,000

3,196,875

f

Talen

Energy

Supply

LLC

,

Senior

Secured

Note

,

144A,

7.25

%

,

5/15/27

...........................................

United

States

3,000,000

3,090,030

13,338,779

Insurance

1.0%

Aflac,

Inc.

,

Senior

Bond

,

3.6

%

,

4/01/30

.....................

United

States

6,000,000

6,642,058

f

Liberty

Mutual

Group,

Inc.

,

Senior

Bond

,

144A,

4.569

%

,

2/01/29

..

United

States

12,000,000

13,938,070

f

Metropolitan

Life

Global

Funding

I

,

Senior

Secured

Bond

,

144A,

2.95

%

,

4/09/30

.....................................

United

States

9,200,000

9,678,552

Prudential

plc

,

Senior

Bond

,

3.125

%

,

4/14/30

................

United

Kingdom

18,000,000

19,175,303

Willis

North

America,

Inc.

,

Senior

Bond

,

2.95

%

,

9/15/29

.........

United

States

4,600,000

4,823,302

54,257,285

Interactive

Media

&

Services

0.3%

f

Tencent

Holdings

Ltd.

,

Senior

Bond

,

144A,

2.39

%

,

6/03/30

......

China

15,000,000

14,711,757

Internet

&

Direct

Marketing

Retail

0.4%

Alibaba

Group

Holding

Ltd.

,

Senior

Bond,

3.4%,

12/06/27

...........................

China

14,700,000

15,998,457

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

Semiannual

Report

87

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Internet

&

Direct

Marketing

Retail

(continued)

Alibaba

Group

Holding

Ltd.,

(continued)

Senior

Bond,

2.125%,

2/09/31

..........................

China

7,400,000

$

7,140,899

23,139,356

IT

Services

0.3%

Fiserv,

Inc.

,

Senior

Bond,

3.5%,

7/01/29

............................

United

States

1,800,000

1,952,483

Senior

Bond,

2.65%,

6/01/30

...........................

United

States

8,600,000

8,765,141

f

Presidio

Holdings,

Inc.

,

Senior

Note

,

144A,

8.25

%

,

2/01/28

......

United

States

3,000,000

3,279,375

13,996,999

Machinery

0.2%

Caterpillar,

Inc.

,

Senior

Bond,

2.6%,

4/09/30

............................

United

States

3,800,000

3,969,151

Senior

Bond,

3.25%,

4/09/50

...........................

United

States

2,000,000

2,089,609

Westinghouse

Air

Brake

Technologies

Corp.

,

Senior

Note

,

3.2

%

,

6/15/25

...........................................

United

States

2,300,000

2,455,738

8,514,498

Media

0.9%

Charter

Communications

Operating

LLC

/

Charter

Communications

Operating

Capital

,

Senior

Secured

Bond

,

2.8

%

,

4/01/31

.......

United

States

18,200,000

18,053,375

Comcast

Corp.

,

Senior

Bond,

4.25%,

1/15/33

...........................

United

States

10,000,000

11,746,694

Senior

Bond,

4.2%,

8/15/34

............................

United

States

1,700,000

1,979,198

Senior

Bond,

4.049%,

11/01/52

.........................

United

States

2,000,000

2,295,633

f

Diamond

Sports

Group

LLC

/

Diamond

Sports

Finance

Co.

,

Senior

Secured

Note

,

144A,

5.375

%

,

8/15/26

....................

United

States

3,200,000

2,340,000

Fox

Corp.

,

Senior

Bond

,

5.476

%

,

1/25/39

...................

United

States

3,000,000

3,766,234

f

Nexstar

Broadcasting,

Inc.

,

Senior

Note

,

144A,

5.625

%

,

7/15/27

..

United

States

2,000,000

2,115,650

f

Univision

Communications,

Inc.

,

Senior

Secured

Note

,

144A,

5.125

%

,

2/15/25

.....................................

United

States

3,000,000

3,054,615

45,351,399

Metals

&

Mining

0.0%

†

f

Novelis

Corp.

,

Senior

Bond

,

144A,

4.75

%

,

1/30/30

............

United

States

2,500,000

2,603,125

Multiline

Retail

0.3%

Dollar

Tree,

Inc.

,

Senior

Bond

,

4.2

%

,

5/15/28

.................

United

States

11,700,000

13,293,496

b,f,i

K2016470219

South

Africa

Ltd.

,

Senior

Secured

Note

,

144A,

PIK,

3

%

,

12/31/22

.......................................

South

Africa

2,383,764

—

b,f,i

K2016470260

South

Africa

Ltd.

,

Senior

Secured

Note

,

144A,

PIK,

25

%

,

12/31/22

......................................

South

Africa

771,178

—

13,293,496

Multi-Utilities

0.4%

Berkshire

Hathaway

Energy

Co.

,

Senior

Bond

,

6.125

%

,

4/01/36

..

United

States

2,700,000

3,705,065

Dominion

Energy,

Inc.

,

Senior

Note,

4.25%,

6/01/28

...........................

United

States

10,000,000

11,377,489

C,

Senior

Note,

3.375%,

4/01/30

........................

United

States

4,351,000

4,692,113

19,774,667

Oil,

Gas

&

Consumable

Fuels

2.2%

f

Aker

BP

ASA

,

Senior

Bond,

144A,

4%,

1/15/31

........................

Norway

10,400,000

11,030,827

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Total

Return

Fund

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

88

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Oil,

Gas

&

Consumable

Fuels

(continued)

f

Aker

BP

ASA,

(continued)

Senior

Note,

144A,

4.75%,

6/15/24

......................

Norway

3,400,000

$

3,488,725

BP

Capital

Markets

America,

Inc.

,

Senior

Bond

,

3.937

%

,

9/21/28

..

United

States

3,400,000

3,823,416

Canadian

Natural

Resources

Ltd.

,

Senior

Bond

,

3.85

%

,

6/01/27

..

Canada

10,000,000

10,945,310

Cenovus

Energy,

Inc.

,

Senior

Bond

,

6.75

%

,

11/15/39

...........

Canada

1,500,000

1,902,885

Cheniere

Corpus

Christi

Holdings

LLC

,

Senior

Secured

Note,

7%,

6/30/24

.......................

United

States

4,500,000

5,185,016

Senior

Secured

Note,

5.875%,

3/31/25

...................

United

States

1,600,000

1,832,724

f

Cheniere

Energy,

Inc.

,

Senior

Secured

Note

,

144A,

4.625

%

,

10/15/28

..........................................

United

States

1,700,000

1,774,630

f

Crestwood

Midstream

Partners

LP

/

Crestwood

Midstream

Finance

Corp.

,

Senior

Note

,

144A,

6

%

,

2/01/29

....................

United

States

4,000,000

4,140,480

Diamondback

Energy,

Inc.

,

Senior

Note

,

5.375

%

,

5/31/25

.......

United

States

5,500,000

5,651,850

Enable

Midstream

Partners

LP

,

Senior

Bond,

5.25%,

5/15/44

...........................

United

States

1,200,000

1,203,501

Senior

Note,

4.15%,

5/15/24

...........................

United

States

3,600,000

3,839,599

Energy

Transfer

LP

,

Senior

Bond,

4.25%,

4/01/24

...........................

United

States

3,000,000

3,249,508

Senior

Bond,

4.75%,

1/15/26

...........................

United

States

4,500,000

5,033,815

Senior

Bond,

5.15%,

2/01/43

...........................

United

States

6,000,000

6,229,121

EnLink

Midstream

LLC

,

Senior

Bond

,

5.375

%

,

6/01/29

.........

United

States

400,000

400,500

Enterprise

Products

Operating

LLC

,

Senior

Bond

,

3.125

%

,

7/31/29

United

States

2,000,000

2,119,356

Exxon

Mobil

Corp.

,

Senior

Bond,

2.61%,

10/15/30

..........................

United

States

6,100,000

6,257,194

Senior

Bond,

3.452%,

4/15/51

..........................

United

States

2,000,000

2,045,031

f

Harvest

Operations

Corp.

,

Senior

Note

,

144A,

4.2

%

,

6/01/23

.....

South

Korea

3,800,000

4,073,421

f

Martin

Midstream

Partners

LP

/

Martin

Midstream

Finance

Corp.

,

Secured

Note,

144A,

10%,

2/29/24

......................

United

States

151,936

158,963

Secured

Note,

144A,

11.5%,

2/28/25

.....................

United

States

689,984

714,133

MPLX

LP

,

Senior

Bond,

4%,

2/15/25

.............................

United

States

4,600,000

5,032,037

Senior

Bond,

4.7%,

4/15/48

............................

United

States

2,000,000

2,191,525

Senior

Note,

4.875%,

6/01/25

..........................

United

States

4,500,000

5,078,320

Occidental

Petroleum

Corp.

,

Senior

Bond

,

6.125

%

,

1/01/31

......

United

States

1,800,000

2,004,750

f

Rattler

Midstream

LP

,

Senior

Note

,

144A,

5.625

%

,

7/15/25

......

United

States

900,000

950,242

f

Sunoco

LP

/

Sunoco

Finance

Corp.

,

Senior

Note

,

144A,

4.5

%

,

5/15/29

...........................................

United

States

1,400,000

1,415,750

Total

Capital

International

SA

,

Senior

Bond

,

3.455

%

,

2/19/29

.....

France

1,800,000

1,970,922

TransCanada

PipeLines

Ltd.

,

Senior

Bond

,

4.25

%

,

5/15/28

......

Canada

3,400,000

3,844,526

f

Tullow

Oil

plc

,

Senior

Note

,

144A,

7

%

,

3/01/25

...............

Ghana

600,000

524,250

Williams

Cos.,

Inc.

(The)

,

Senior

Bond,

3.75%,

6/15/27

...........................

United

States

3,600,000

3,961,930

Senior

Bond,

3.5%,

11/15/30

...........................

United

States

3,200,000

3,420,578

115,494,835

Paper

&

Forest

Products

0.1%

Suzano

Austria

GmbH

,

Senior

Bond

,

3.75

%

,

1/15/31

...........

Brazil

5,000,000

5,125,550

Personal

Products

0.2%

Avon

Products,

Inc.

,

Senior

Bond

,

6.75

%

,

3/15/23

.............

United

Kingdom

8,800,000

9,454,500

f,j

Oriflame

Investment

Holding

plc

,

Senior

Secured

Note

,

144A,

5.125

%

,

5/04/26

.....................................

Switzerland

2,600,000

2,611,310

f

Prestige

Brands,

Inc.

,

Senior

Bond

,

144A,

3.75

%

,

4/01/31

.......

United

States

800,000

768,972

12,834,782

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

Semiannual

Report

89

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Pharmaceuticals

0.3%

f

Endo

Luxembourg

Finance

Co.

I

SARL

/

Endo

US,

Inc.

,

Senior

Secured

Note

,

144A,

6.125

%

,

4/01/29

....................

United

States

4,000,000

$

3,965,000

f

Organon

Finance

1

LLC

,

Senior

Bond,

144A,

5.125%,

4/30/31

.....................

United

States

1,500,000

1,558,275

Senior

Secured

Note,

144A,

4.125%,

4/30/28

..............

United

States

2,500,000

2,564,350

Takeda

Pharmaceutical

Co.

Ltd.

,

Senior

Note

,

2.05

%

,

3/31/30

....

Japan

6,400,000

6,198,557

14,286,182

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

635,625

Road

&

Rail

0.4%

Burlington

Northern

Santa

Fe

LLC

,

Senior

Bond,

4.9%,

4/01/44

............................

United

States

1,600,000

2,035,389

Senior

Bond,

4.15%,

4/01/45

...........................

United

States

5,100,000

5,899,595

Senior

Bond,

3.9%,

8/01/46

............................

United

States

5,000,000

5,583,404

f

Kazakhstan

Temir

Zholy

Finance

BV

,

Senior

Bond

,

144A,

6.95

%

,

7/10/42

...........................................

Kazakhstan

7,500,000

10,087,500

23,605,888

Semiconductors

&

Semiconductor

Equipment

0.3%

f

SK

Hynix,

Inc.

,

Senior

Bond

,

144A,

2.375

%

,

1/19/31

...........

South

Korea

14,800,000

14,234,023

Software

0.0%

†

Anagram,

Inc.

,

10

%

,

8/15/26

.............................

United

States

616,265

603,426

Specialty

Retail

0.1%

AutoNation,

Inc.

,

Senior

Bond

,

4.75

%

,

6/01/30

...............

United

States

2,400,000

2,801,347

Murphy

Oil

USA,

Inc.

,

Senior

Bond

,

4.75

%

,

9/15/29

............

United

States

2,700,000

2,838,375

f

Party

City

Holdings,

Inc.

,

Senior

Secured

Note

,

144A,

5.75

%

,

7/15/25

...........................................

United

States

1,110,015

1,015,664

6,655,386

Tobacco

0.5%

Altria

Group,

Inc.

,

Senior

Bond

,

3.4

%

,

5/06/30

................

United

States

15,100,000

15,748,344

Reynolds

American,

Inc.

,

Senior

Bond,

5.7%,

8/15/35

............................

United

Kingdom

9,300,000

10,899,256

Senior

Bond,

5.85%,

8/15/45

...........................

United

Kingdom

300,000

346,265

26,993,865

Trading

Companies

&

Distributors

0.1%

f

Ahern

Rentals,

Inc.

,

Secured

Note

,

144A,

7.375

%

,

5/15/23

......

United

States

400,000

360,250

f

Beacon

Roofing

Supply,

Inc.

,

Senior

Note

,

144A,

4.875

%

,

11/01/25

United

States

3,100,000

3,175,531

f

WESCO

Distribution,

Inc.

,

Senior

Note,

144A,

7.125%,

6/15/25

.....................

United

States

1,100,000

1,189,375

Senior

Note,

144A,

7.25%,

6/15/28

......................

United

States

1,900,000

2,111,375

6,836,531

Wireless

Telecommunication

Services

1.0%

f

T-Mobile

USA,

Inc.

,

Senior

Secured

Bond,

144A,

3.875%,

4/15/30

..............

United

States

18,000,000

19,629,900

Senior

Secured

Bond,

144A,

4.375%,

4/15/40

..............

United

States

3,400,000

3,778,250

Senior

Secured

Bond,

144A,

3.3%,

2/15/51

................

United

States

5,700,000

5,323,601

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Total

Return

Fund

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

90

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Wireless

Telecommunication

Services

(continued)

f

T-Mobile

USA,

Inc.,

(continued)

Vodafone

Group

plc

,

Senior

Bond

,

6.15

%

,

2/27/37

.............

United

Kingdom

16,000,000

$

21,595,664

50,327,415

Total

Corporate

Bonds

(Cost

$1,072,482,605)

...................................

1,101,528,705

a

k,l

Senior

Floating

Rate

Interests

0.9%

Aerospace

&

Defense

0.2%

Dynasty

Acquisition

Co.,

Inc.,

2020

Term

Loan

,

B1,

3.703%,

(3-month

USD

LIBOR

+

3.5%),

4/06/26

..........

United

States

5,164,876

5,034,076

B2,

3.703%,

(3-month

USD

LIBOR

+

3.5%),

4/06/26

..........

United

States

2,776,815

2,706,492

7,740,568

a

a

a

a

a

a

Diversified

Consumer

Services

0.1%

KUEHG

Corp.,

Term

Loan

,

B3

,

4.75

%

,

(

3-month

USD

LIBOR

+

3.75

%

),

2/21/25

.....................................

United

States

6,609,675

6,538,258

Entertainment

0.2%

Diamond

Sports

Group

LLC,

Term

Loan

,

3.37

%

,

(

1-month

USD

LIBOR

+

3.25

%

),

8/24/26

..............................

United

States

4,814,467

3,459,098

William

Morris

Endeavor

Entertainment

LLC

(IMG

Worldwide

Holdings

LLC),

First

Lien,

Term

Loan

,

B1

,

2.903

%

,

(

1-month

USD

LIBOR

+

2.75%;

3-month

USD

LIBOR

+

2.75%

),

5/18/25

......

United

States

6,485,749

6,347,959

9,807,057

a

a

a

a

a

a

Leisure

Products

0.2%

j

Hercules

Achievement,

Inc.

(Varsity

Brands

Holding

Co.,

Inc.),

First

Lien,

Initial

Term

Loan

,

4.5

%

,

(

1-month

USD

LIBOR

+

3.5

%

),

12/16/24

..........................................

United

States

7,590,525

7,318,557

Media

0.1%

Cengage

Learning,

Inc.,

2016

Refinancing

Term

Loan

,

5.25

%

,

(

2-month

USD

LIBOR

+

4.25%;

3-month

USD

LIBOR

+

4.25%

),

6/07/23

...........................................

United

States

6,074,401

6,056,360

Personal

Products

0.1%

Coty,

Inc.,

USD

Term

Loan

,

B

,

2.36

%

,

(

1-month

USD

LIBOR

+

2.25

%

),

4/07/25

.....................................

United

States

7,456,059

7,170,641

Total

Senior

Floating

Rate

Interests

(Cost

$45,288,000)

..........................

44,631,441

m

Marketplace

Loans

0.3%

Diversified

Financial

Services

0.3%

b

Freedom

Financial

Asset

Management

LLC,

5.99%

-

26.99%,

3/20/23

-

7/13/26

....................................

United

States

5,362,991

6,624,040

b

Lending

Club

-

LCX

PM,

6.49%

-

21.49%,

10/07/23

-

2/08/26

.....

United

States

3,850,532

3,682,839

b

Lending

Club

-

LCX,

6.46%

-

25.65%,

7/15/22

-

4/14/25

.........

United

States

3,809,833

3,460,069

b

Upgrade,

13.64%

-

30.99%,

10/11/22

-

1/15/25

...............

United

States

2,158,449

2,006,823

15,773,771

a

a

a

a

a

a

Total

Marketplace

Loans

(Cost

$16,322,908)

....................................

15,773,771

Foreign

Government

and

Agency

Securities

4.3%

f

Banque

Centrale

de

Tunisie

,

Senior

Bond,

144A,

5.75%,

1/30/25

..

Tunisia

8,000,000

7,526,704

f

Banque

Ouest

Africaine

de

Developpement

,

Senior

Bond,

144A,

5%,

7/27/27

...........................................

Supranational

n

10,700,000

11,850,892

f

Belarus

Government

Bond,

Senior

Bond,

144A,

7.625%,

6/29/27

..

Belarus

13,300,000

13,834,593

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

Semiannual

Report

91

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Foreign

Government

and

Agency

Securities

(continued)

Brazil

Government

Bond,

Senior

Bond,

5.625%,

2/21/47

........

Brazil

6,500,000

$

6,881,322

Colombia

Government

Bond,

Senior

Bond,

5%,

6/15/45

........

Colombia

8,800,000

9,397,784

f

Dominican

Republic

Government

Bond,

Senior

Note,

144A,

8.9%,

2/15/23

...........................................

Dominican

Republic

610,400,000

DOP

11,219,324

f

Egypt

Government

Bond,

Senior

Bond,

144A,

8.875%,

5/29/50

...

Egypt

4,500,000

4,747,757

f,g

Electricite

de

France

SA,

Junior

Sub.

Bond,

144A,

5.25%

to

1/29/23,

FRN

thereafter,

Perpetual

.............................

France

24,000,000

25,148,880

f

Gabon

Government

Bond,

Senior

Bond,

144A,

6.625%,

2/06/31

..

Gabon

5,000,000

5,044,070

f

Indonesia

Government

Bond,

Senior

Bond,

144A,

4.35%,

1/08/27

.

Indonesia

9,100,000

10,281,908

f

Iraq

Government

Bond,

Senior

Bond,

144A,

5.8%,

1/15/28

......

Iraq

14,262,500

13,799,682

f

Israel

Electric

Corp.

Ltd.,

Senior

Secured

Bond,

144A,

Reg

S,

4.25%,

8/14/28

...........................................

Israel

6,700,000

7,458,105

Mexico

Government

Bond,

Senior

Bond,

4.5%,

4/22/29

.........

Mexico

9,500,000

10,684,603

f

Nigeria

Government

Bond,

Senior

Bond,

144A,

9.248%,

1/21/49

..

Nigeria

3,600,000

4,147,236

f

Panama

Government

Bond,

Senior

Note,

144A,

3.75%,

4/17/26

..

Panama

5,700,000

6,147,251

Peru

Government

Bond

,

Senior

Bond,

2.783%,

1/23/31

..........................

Peru

8,000,000

8,026,000

Senior

Bond,

6.55%,

3/14/37

...........................

Peru

2,900,000

3,901,384

Petroleos

Mexicanos

,

Senior

Bond,

6.625%,

6/15/35

...........

Mexico

6,000,000

5,807,250

f

Russia

Government

Bond,

Senior

Bond,

144A,

4.875%,

9/16/23

..

Russia

11,600,000

12,654,672

e

South

Africa

Government

Bond,

Senior

Bond,

5.875%,

6/22/30

...

South

Africa

9,500,000

10,503,675

Turkey

Government

Bond,

Senior

Bond,

5.25%,

3/13/30

........

Turkey

10,000,000

9,187,500

f

Ukraine

Government

Bond

,

Senior

Note,

144A,

7.75%,

9/01/21

.......................

Ukraine

229,000

231,743

Senior

Note,

144A,

7.75%,

9/01/22

.......................

Ukraine

229,000

239,868

Senior

Note,

144A,

7.75%,

9/01/23

.......................

Ukraine

229,000

244,136

Senior

Note,

144A,

7.75%,

9/01/24

.......................

Ukraine

229,000

246,322

Senior

Note,

144A,

7.75%,

9/01/25

.......................

Ukraine

229,000

247,371

Senior

Bond,

144A,

7.75%,

9/01/26

......................

Ukraine

229,000

247,359

Senior

Bond,

144A,

7.75%,

9/01/27

......................

Ukraine

229,000

246,189

Senior

Bond,

144A,

7.375%,

9/25/32

.....................

Ukraine

12,400,000

12,561,510

o

VRI,

GDP

Linked

Security,

Senior

Bond,

144A,

5/31/40

.......

Ukraine

474,000

501,684

p

Uruguay

Government

Bond,

Index

Linked,

Senior

Bond,

3.7%,

6/26/37

...........................................

Uruguay

442,694,918

UYU

11,353,342

Total

Foreign

Government

and

Agency

Securities

(Cost

$225,866,029)

............

224,370,116

U.S.

Government

and

Agency

Securities

23.3%

U.S.

Treasury

Bonds

,

p

3.625%,

4/15/28

.....................................

United

States

6,000,000

13,258,970

1.125%,

5/15/40

.....................................

United

States

25,000,000

20,919,922

1.125%,

8/15/40

.....................................

United

States

29,700,000

24,764,695

3.125%,

11/15/41

....................................

United

States

14,500,000

16,838,125

2.5%,

5/15/46

......................................

United

States

9,000,000

9,382,852

2.25%,

8/15/46

.....................................

United

States

34,800,000

34,571,625

2.75%,

11/15/47

.....................................

United

States

25,500,000

27,885,147

3.125%,

5/15/48

.....................................

United

States

16,500,000

19,340,127

3%,

8/15/48

........................................

United

States

17,000,000

19,499,863

2.875%,

5/15/49

.....................................

United

States

14,000,000

15,728,945

2.25%,

8/15/49

.....................................

United

States

39,000,000

38,664,082

1.25%,

5/15/50

.....................................

United

States

28,300,000

21,964,559

U.S.

Treasury

Notes

,

0.125%,

8/31/22

.....................................

United

States

25,000,000

25,011,719

0.125%,

11/30/22

....................................

United

States

50,000,000

50,005,859

0.125%,

1/31/23

.....................................

United

States

75,000,000

74,982,422

1.125%,

2/28/25

.....................................

United

States

50,000,000

51,084,961

0.25%,

6/30/25

.....................................

United

States

145,000,000

142,652,246

0.25%,

7/31/25

.....................................

United

States

90,000,000

88,419,727

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Total

Return

Fund

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

92

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)

0.25%,

8/31/25

.....................................

United

States

114,000,000

$

111,838,008

0.25%,

9/30/25

.....................................

United

States

150,000,000

147,008,788

0.375%,

11/30/25

....................................

United

States

128,000,000

125,812,500

0.375%,

12/31/25

....................................

United

States

110,000,000

107,976,172

0.375%,

7/31/27

.....................................

United

States

22,200,000

21,144,199

Total

U.S.

Government

and

Agency

Securities

(Cost

$1,230,574,315)

..............

1,208,755,513

Asset-Backed

Securities

12.2%

Airlines

0.0%

†

United

Airlines

Pass-Through

Trust

,

2020-1

,

B

,

4.875

%

,

7/15/27

..

United

States

1,455,750

1,522,972

Commercial

Services

&

Supplies

0.2%

f,q

Armada

Euro

CLO

IV

DAC

,

4A

,

B

,

144A,

FRN

,

1.7

%

,

(

3-month

EURIBOR

+

1.7

%

),

7/15/33

............................

Ireland

5,100,000

EUR

6,142,460

f,q

LCM

XXII

Ltd.

,

22A,

A2R,

144A,

FRN,

1.638%,

(3-month

USD

LIBOR

+

1.45%),

10/20/28

..........................................

United

States

1,000,000

997,765

22A,

CR,

144A,

FRN,

2.988%,

(3-month

USD

LIBOR

+

2.8%),

10/20/28

..........................................

United

States

1,000,000

966,178

8,106,403

a

a

a

a

a

a

Diversified

Financial

Services

12.0%

f,q

Adagio

CLO

VIII

DAC

,

VIII-A

,

B1

,

144A,

FRN

,

1.65

%

,

(

3-month

EURIBOR

+

1.65

%

),

4/15/32

...........................

Ireland

2,050,000

EUR

2,451,989

f,q

AMMC

CLO

15

Ltd.

,

2014-15A

,

BRR

,

144A,

FRN

,

1.984

%

,

(

3-month

USD

LIBOR

+

1.8

%

),

1/15/32

...........................

United

States

922,984

919,974

f,q

AMMC

CLO

21

Ltd.

,

2017-21A

,

C

,

144A,

FRN

,

2.302

%

,

(

3-month

USD

LIBOR

+

2.1

%

),

11/02/30

..........................

United

States

1,000,000

988,209

f,q

AMMC

CLO

XI

Ltd.

,

2012-11A,

BR2,

144A,

FRN,

1.785%,

(3-month

USD

LIBOR

+

1.6%),

4/30/31

......................................

United

States

5,050,000

5,053,152

2012-11A,

CR2,

144A,

FRN,

2.086%,

(3-month

USD

LIBOR

+

1.9%),

4/30/31

......................................

United

States

2,750,000

2,684,917

f,q

Antares

CLO

Ltd.

,

2018-1A

,

B

,

144A,

FRN

,

1.838

%

,

(

3-month

USD

LIBOR

+

1.65

%

),

4/20/31

..............................

United

States

12,900,000

12,738,490

f,q

Ares

European

CLO

VIII

BV

,

8A

,

BR

,

144A,

FRN

,

1.6

%

,

(

3-month

EURIBOR

+

1.6

%

),

4/17/32

............................

Ireland

2,900,000

EUR

3,467,623

f,q

Ares

LII

CLO

Ltd.

,

2019-52A

,

A2

,

144A,

FRN

,

1.834

%

,

(

3-month

USD

LIBOR

+

1.65

%

),

4/22/31

..........................

United

States

1,382,114

1,383,515

f,q

Ares

XLVIII

CLO

Ltd.

,

2018-48A

,

D

,

144A,

FRN

,

2.888

%

,

(

3-month

USD

LIBOR

+

2.7

%

),

7/20/30

...........................

United

States

2,000,000

1,946,375

f,q

Atrium

XIV

LLC

,

14A

,

A2A

,

144A,

FRN

,

1.634

%

,

(

3-month

USD

LIBOR

+

1.45

%

),

8/23/30

..............................

United

States

7,400,000

7,406,102

f,q

Bain

Capital

Credit

CLO

Ltd.

,

2018-1A,

A1,

144A,

FRN,

1.133%,

(3-month

USD

LIBOR

+

0.96%),

4/23/31

.....................................

United

States

12,000,000

11,991,056

2018-1A,

A2,

144A,

FRN,

1.323%,

(3-month

USD

LIBOR

+

1.15%),

4/23/31

.....................................

United

States

5,100,000

5,105,176

2020-4A,

B,

144A,

FRN,

2.138%,

(3-month

USD

LIBOR

+

1.95%),

10/20/33

..........................................

United

States

8,350,000

8,364,224

f,q

BCC

Middle

Market

CLO

LLC

,

2018-1A

,

A2

,

144A,

FRN

,

2.338

%

,

(

3-month

USD

LIBOR

+

2.15

%

),

10/20/30

.................

United

States

5,100,000

4,992,312

f,q

Blackrock

European

CLO

IX

DAC

,

9A,

A,

144A,

FRN,

0.9%,

(3-month

EURIBOR

+

0.9%),

12/15/32

Ireland

17,350,000

EUR

20,889,754

9A,

B,

144A,

FRN,

1.55%,

(3-month

EURIBOR

+

1.55%),

12/15/32

Ireland

5,250,000

EUR

6,325,398

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

Semiannual

Report

93

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Asset-Backed

Securities

(continued)

Diversified

Financial

Services

(continued)

f,q

BlueMountain

CLO

Ltd.

,

2012-2A,

DR2,

144A,

FRN,

3.082%,

(3-month

USD

LIBOR

+

2.9%),

11/20/28

.....................................

United

States

1,753,000

$

1,730,764

2014-2A,

CR2,

144A,

FRN,

2.388%,

(3-month

USD

LIBOR

+

2.2%),

10/20/30

.....................................

United

States

4,700,000

4,712,729

2016-3A,

CR,

144A,

FRN,

2.394%,

(3-month

USD

LIBOR

+

2.2%),

11/15/30

..........................................

United

States

500,000

501,266

2018-1A,

B,

144A,

FRN,

1.886%,

(3-month

USD

LIBOR

+

1.7%),

7/30/30

...........................................

United

States

272,725

273,452

2018-3A,

C,

144A,

FRN,

2.376%,

(3-month

USD

LIBOR

+

2.2%),

10/25/30

..........................................

United

States

1,071,430

1,071,698

f,q

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

7,547,391

f,q

BlueMountain

Fuji

US

CLO

III

Ltd.

,

2017-3A,

C,

144A,

FRN,

1.884%,

(3-month

USD

LIBOR

+

1.7%),

1/15/30

...........................................

United

States

2,300,000

2,257,612

2017-3A,

D,

144A,

FRN,

2.584%,

(3-month

USD

LIBOR

+

2.4%),

1/15/30

...........................................

United

States

1,600,000

1,501,627

f,q

Burnham

Park

CLO

Ltd.

,

2016-1A

,

BR

,

144A,

FRN

,

1.688

%

,

(

3-month

USD

LIBOR

+

1.5

%

),

10/20/29

..................

United

States

1,488,189

1,484,492

f,q

Buttermilk

Park

CLO

Ltd.

,

2018-1A

,

C

,

144A,

FRN

,

2.284

%

,

(

3-month

USD

LIBOR

+

2.1

%

),

10/15/31

..................

United

States

1,452,380

1,454,477

f,q

Carlyle

Global

Market

Strategies

CLO

Ltd.

,

2014-1A,

A1R2,

144A,

FRN,

1.16%,

(3-month

USD

LIBOR

+

0.97%),

4/17/31

.....................................

United

States

722,802

723,514

2014-1A,

A2R2,

144A,

FRN,

1.32%,

(3-month

USD

LIBOR

+

1.13%),

4/17/31

.....................................

United

States

6,300,000

6,226,890

2014-1A,

DR,

144A,

FRN,

2.79%,

(3-month

USD

LIBOR

+

2.6%),

4/17/31

...........................................

United

States

3,175,000

3,019,867

f,q

Carlyle

GMS

Finance

MM

CLO

LLC

,

2015-1A

,

A2R

,

144A,

FRN

,

2.384

%

,

(

3-month

USD

LIBOR

+

2.2

%

),

10/15/31

............

United

States

10,000,000

9,822,677

f,q

Carlyle

US

CLO

Ltd.

,

2017-4A,

C,

144A,

FRN,

2.984%,

(3-month

USD

LIBOR

+

2.8%),

1/15/30

...........................................

United

States

545,000

525,347

2017-5A,

A2,

144A,

FRN,

1.588%,

(3-month

USD

LIBOR

+

1.4%),

1/20/30

...........................................

United

States

2,740,000

2,726,708

2017-5A,

B,

144A,

FRN,

1.988%,

(3-month

USD

LIBOR

+

1.8%),

1/20/30

...........................................

United

States

7,000,000

6,904,628

f,q

Cent

CLO

21

Ltd.

,

2014-21A

,

CR2

,

144A,

FRN

,

3.381

%

,

(

3-month

USD

LIBOR

+

3.2

%

),

7/27/30

...........................

United

States

3,123,000

3,092,135

f

CF

Hippolyta

LLC

,

2020-1,

A1,

144A,

1.69%,

7/15/60

.......................

United

States

6,317,988

6,412,891

2021-1A,

A1,

144A,

1.53%,

3/15/61

......................

United

States

4,209,000

4,216,070

f,r

Consumer

Loan

Underlying

Bond

Certificate

Issuer

Trust

I

,

2018-14,

PT,

144A,

FRN,

9.597%,

9/16/41

.................

United

States

438,660

428,830

b

2018-29,

PT,

144A,

FRN,

31.791%,

12/15/43

...............

United

States

693,518

687,134

2019-26,

PT,

144A,

FRN,

23.345%,

8/15/44

................

United

States

3,371,749

3,336,707

2019-31,

PT,

144A,

FRN,

23.325%,

9/15/44

................

United

States

3,092,944

3,031,874

2019-37,

PT,

144A,

FRN,

26.381%,

10/17/44

...............

United

States

3,409,616

3,321,342

2019-42,

PT,

144A,

FRN,

22.361%,

11/15/44

...............

United

States

3,991,425

3,943,854

2019-51,

PT,

144A,

FRN,

18.534%,

1/15/45

................

United

States

5,090,230

5,032,353

2019-52,

PT,

144A,

FRN,

17.047%,

1/15/45

................

United

States

5,040,073

5,017,383

2019-S1,

PT,

144A,

FRN,

19.425%,

4/15/44

................

United

States

1,796,707

1,747,639

2019-S2,

PT,

144A,

FRN,

16.111%,

5/16/44

................

United

States

1,577,805

1,561,373

2019-S3,

PT,

144A,

FRN,

16.022%,

6/15/44

................

United

States

2,239,319

2,207,603

2019-S4,

PT,

144A,

FRN,

14.705%,

8/15/44

................

United

States

2,612,050

2,578,634

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Total

Return

Fund

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

94

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Asset-Backed

Securities

(continued)

Diversified

Financial

Services

(continued)

f,r

Consumer

Loan

Underlying

Bond

Certificate

Issuer

Trust

I,

(continued)

2019-S5,

PT,

144A,

FRN,

15.275%,

9/15/44

................

United

States

2,728,033

$

2,693,094

2019-S6,

PT,

144A,

FRN,

13.945%,

10/17/44

...............

United

States

2,702,921

2,623,259

2019-S7,

PT,

144A,

FRN,

12.842%,

12/15/44

...............

United

States

2,805,304

2,734,917

2019-S8,

PT,

144A,

FRN,

12.006%,

1/15/45

................

United

States

3,649,622

3,542,500

2020-2,

PT,

144A,

FRN,

17.867%,

3/15/45

.................

United

States

4,998,788

4,958,720

2020-7,

PT,

144A,

FRN,

18.379%,

4/17/45

.................

United

States

3,307,144

3,238,677

f,q

Cook

Park

CLO

Ltd.

,

2018-1A

,

A2

,

144A,

FRN

,

1.31

%

,

(

3-month

USD

LIBOR

+

1.12

%

),

4/17/30

..........................

United

States

6,000,000

5,969,005

q

CWABS,

Inc.

,

2004-1

,

M1

,

FRN

,

0.856

%

,

(

1-month

USD

LIBOR

+

0.75

%

),

3/25/34

.....................................

United

States

304,300

303,844

f,q

Dryden

42

Senior

Loan

Fund

,

2016-42A

,

DR

,

144A,

FRN

,

3.114

%

,

(

3-month

USD

LIBOR

+

2.93

%

),

7/15/30

..................

United

States

800,000

798,097

f,q

Dryden

45

Senior

Loan

Fund

,

2016-45A

,

CR

,

144A,

FRN

,

2.384

%

,

(

3-month

USD

LIBOR

+

2.2

%

),

10/15/30

..................

United

States

1,250,000

1,251,927

f,q

Dryden

55

CLO

Ltd.

,

2018-55A

,

D

,

144A,

FRN

,

3.034

%

,

(

3-month

USD

LIBOR

+

2.85

%

),

4/15/31

..........................

United

States

2,000,000

1,953,628

f,q

Ellington

CLO

III

Ltd.

,

2018-3A,

A1,

144A,

FRN,

1.838%,

(3-month

USD

LIBOR

+

1.65%),

7/20/30

.....................................

United

States

5,123,962

5,120,030

2018-3A,

A2R,

144A,

FRN,

1.938%,

(3-month

USD

LIBOR

+

1.75%),

7/20/30

.....................................

United

States

9,488,818

9,484,761

f

FirstKey

Homes

Trust

,

2020-SFR2

,

A

,

144A,

1.266

%

,

10/19/37

...

United

States

11,584,375

11,554,660

f,q

Galaxy

XXVII

CLO

Ltd.

,

2018-27A,

A,

144A,

FRN,

1.214%,

(3-month

USD

LIBOR

+

1.02%),

5/16/31

.....................................

United

States

1,000,000

1,000,451

2018-27A,

C,

144A,

FRN,

1.994%,

(3-month

USD

LIBOR

+

1.8%),

5/16/31

...........................................

United

States

4,000,000

3,999,905

f,q

Gilbert

Park

CLO

Ltd.

,

2017-1A

,

B

,

144A,

FRN

,

1.784

%

,

(

3-month

USD

LIBOR

+

1.6

%

),

10/15/30

..........................

United

States

1,000,000

1,002,756

f,q

Halcyon

Loan

Advisors

Funding

Ltd.

,

2018-1A

,

A2

,

144A,

FRN

,

1.988

%

,

(

3-month

USD

LIBOR

+

1.8

%

),

7/21/31

.............

United

States

4,500,000

4,477,717

f,q

Harbor

Park

CLO

18-1

Ltd.

,

2018-1A

,

A2

,

144A,

FRN

,

1.588

%

,

(

3-month

USD

LIBOR

+

1.4

%

),

1/20/31

...................

United

States

657,895

660,597

f,q

Hayfin

US

XII

Ltd.

,

2018-9A

,

BR

,

144A,

FRN

,

1.984

%

,

(

3-month

USD

LIBOR

+

1.8

%

),

4/28/31

...........................

United

States

14,500,000

14,523,344

f,q

Highbridge

Loan

Management

Ltd.

,

2013-2A

,

BR

,

144A,

FRN

,

2.088

%

,

(

3-month

USD

LIBOR

+

1.9

%

),

10/20/29

............

United

States

700,000

700,000

f,q

Holland

Park

CLO

DAC

,

1A

,

A1RR

,

144A,

FRN

,

0.92

%

,

(

3-month

EURIBOR

+

0.92

%

),

11/14/32

..........................

Ireland

50,450,000

EUR

60,746,861

f,q

HPS

Loan

Management

Ltd.

,

13A-18,

A2,

144A,

FRN,

1.634%,

(3-month

USD

LIBOR

+

1.45%),

10/15/30

..........................................

United

States

8,600,000

8,608,142

13A-18,

C,

144A,

FRN,

2.334%,

(3-month

USD

LIBOR

+

2.15%),

10/15/30

..........................................

United

States

3,000,000

3,002,532

f,q

LCM

26

Ltd.

,

26A,

B,

144A,

FRN,

1.588%,

(3-month

USD

LIBOR

+

1.4%),

1/20/31

...........................................

United

States

2,000,000

1,991,086

26A,

C,

144A,

FRN,

1.988%,

(3-month

USD

LIBOR

+

1.8%),

1/20/31

...........................................

United

States

9,600,000

9,485,451

26A,

D,

144A,

FRN,

2.688%,

(3-month

USD

LIBOR

+

2.5%),

1/20/31

...........................................

United

States

600,000

561,260

f,q

LCM

XVIII

LP

,

18A,

BR,

144A,

FRN,

1.788%,

(3-month

USD

LIBOR

+

1.6%),

4/20/31

...........................................

United

States

1,090,000

1,084,203

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

Semiannual

Report

95

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Asset-Backed

Securities

(continued)

Diversified

Financial

Services

(continued)

f,q

LCM

XVIII

LP,

(continued)

18A,

CR,

144A,

FRN,

2.038%,

(3-month

USD

LIBOR

+

1.85%),

4/20/31

...........................................

United

States

2,000,000

$

1,980,859

f,q

Long

Point

Park

CLO

Ltd.

,

2017-1A,

A2,

144A,

FRN,

1.565%,

(3-month

USD

LIBOR

+

1.375%),

1/17/30

....................................

United

States

5,800,000

5,794,200

2017-1A,

B,

144A,

FRN,

1.89%,

(3-month

USD

LIBOR

+

1.7%),

1/17/30

...........................................

United

States

2,700,000

2,683,246

2017-1A,

C,

144A,

FRN,

2.59%,

(3-month

USD

LIBOR

+

2.4%),

1/17/30

...........................................

United

States

3,100,000

3,010,777

f,q

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

49,925,720

8A,

BRN,

144A,

FRN,

1.7%,

(3-month

EURIBOR

+

1.7%),

4/15/32

Ireland

4,600,000

EUR

5,552,132

f,q

Madison

Park

Funding

XIII

Ltd.

,

2014-13A

,

DR2

,

144A,

FRN

,

3.04

%

,

(

3-month

USD

LIBOR

+

2.85

%

),

4/19/30

..................

United

States

1,973,000

1,955,670

f,q

Madison

Park

Funding

XLII

Ltd.

,

13A,

B,

144A,

FRN,

1.673%,

(3-month

USD

LIBOR

+

1.5%),

11/21/30

..........................................

United

States

2,700,000

2,706,446

13A,

C,

144A,

FRN,

1.973%,

(3-month

USD

LIBOR

+

1.8%),

11/21/30

..........................................

United

States

3,753,500

3,718,266

13A,

D,

144A,

FRN,

2.873%,

(3-month

USD

LIBOR

+

2.7%),

11/21/30

..........................................

United

States

5,500,000

5,450,330

f,q

Madison

Park

Funding

XXII

Ltd.

,

2016-22A

,

CR

,

144A,

FRN

,

2.184

%

,

(

3-month

USD

LIBOR

+

2

%

),

1/15/33

..............

United

States

7,790,000

7,743,508

f,q

Madison

Park

Funding

XXIX

Ltd.

,

2018-29A

,

C

,

144A,

FRN

,

2.39

%

,

(

3-month

USD

LIBOR

+

2.2

%

),

10/18/30

..................

United

States

1,072,581

1,073,920

f,q

Madison

Park

Funding

XXVII

Ltd.

,

2018-27A

,

C

,

144A,

FRN

,

2.788

%

,

(

3-month

USD

LIBOR

+

2.6

%

),

4/20/30

.............

United

States

2,125,000

2,079,797

f,q

Madison

Park

Funding

XXXI

Ltd.

,

2018-31A,

B,

144A,

FRN,

1.873%,

(3-month

USD

LIBOR

+

1.7%),

1/23/31

...........................................

United

States

1,500,000

1,502,851

2018-31A,

C,

144A,

FRN,

2.323%,

(3-month

USD

LIBOR

+

2.15%),

1/23/31

.....................................

United

States

650,000

650,520

f,q

Magnetite

VII

Ltd.

,

2012-7A

,

CR2

,

144A,

FRN

,

2.234

%

,

(

3-month

USD

LIBOR

+

2.05

%

),

1/15/28

..........................

United

States

2,000,000

1,965,490

f,r

Mill

City

Mortgage

Loan

Trust

,

2018-4

,

A1B

,

144A,

FRN

,

3.5

%

,

4/25/66

...........................................

United

States

11,313,815

11,848,696

f,q

Neuberger

Berman

CLO

XVIII

Ltd.

,

2014-18A

,

A1BR

,

144A,

FRN

,

1.586

%

,

(

3-month

USD

LIBOR

+

1.4

%

),

10/21/30

............

United

States

1,700,000

1,705,470

f,q

Neuberger

Berman

CLO

XVI-S

Ltd.

,

2017-16SA,

CR,

144A,

FRN,

2.1%,

(3-month

USD

LIBOR

+

1.9%),

4/15/34

...........................................

United

States

2,350,000

2,350,007

2017-16SA,

DR,

144A,

FRN,

3.1%,

(3-month

USD

LIBOR

+

2.9%),

4/15/34

...........................................

United

States

650,000

649,995

f,q

Neuberger

Berman

Loan

Advisers

CLO

27

Ltd.

,

2018-27A

,

C

,

144A,

FRN

,

1.884

%

,

(

3-month

USD

LIBOR

+

1.7

%

),

1/15/30

........

United

States

4,900,000

4,884,332

f,q

NZCG

Funding

Ltd.

,

2015-1A

,

A2R

,

144A,

FRN

,

1.74

%

,

(

3-month

USD

LIBOR

+

1.55

%

),

2/26/31

..........................

United

States

12,390,000

12,388,989

f,q

Octagon

Investment

Partners

18-R

Ltd.

,

2018-18A

,

C

,

144A,

FRN

,

2.884

%

,

(

3-month

USD

LIBOR

+

2.7

%

),

4/16/31

.............

United

States

9,050,000

8,903,973

f,q

Octagon

Investment

Partners

28

Ltd.

,

2016-1A

,

A2R

,

144A,

FRN

,

1.626

%

,

(

3-month

USD

LIBOR

+

1.45

%

),

10/24/30

...........

United

States

1,000,000

1,000,978

f,q

Octagon

Investment

Partners

33

Ltd.

,

2017-1A,

A2,

144A,

FRN,

1.688%,

(3-month

USD

LIBOR

+

1.5%),

1/20/31

...........................................

United

States

400,000

400,840

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Total

Return

Fund

franklintempleton.com

Semiannual

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

Asset-Backed

Securities

(continued)

Diversified

Financial

Services

(continued)

f,q

Octagon

Investment

Partners

33

Ltd.,

(continued)

2017-1A,

C,

144A,

FRN,

2.938%,

(3-month

USD

LIBOR

+

2.75%),

1/20/31

...........................................

United

States

2,800,000

$

2,780,654

f,q

Octagon

Investment

Partners

35

Ltd.

,

2018-1A,

A1B,

144A,

FRN,

1.288%,

(3-month

USD

LIBOR

+

1.1%),

1/20/31

......................................

United

States

3,325,000

3,305,481

2018-1A,

B,

144A,

FRN,

1.888%,

(3-month

USD

LIBOR

+

1.7%),

1/20/31

...........................................

United

States

450,000

445,274

f,q

Octagon

Investment

Partners

36

Ltd.

,

2018-1A,

A1,

144A,

FRN,

1.154%,

(3-month

USD

LIBOR

+

0.97%),

4/15/31

.....................................

United

States

18,000,000

17,975,245

2018-1A,

A2,

144A,

FRN,

1.384%,

(3-month

USD

LIBOR

+

1.2%),

4/15/31

...........................................

United

States

8,500,000

8,411,099

f,q

Octagon

Investment

Partners

37

Ltd.

,

2018-2A

,

C

,

144A,

FRN

,

3.026

%

,

(

3-month

USD

LIBOR

+

2.85

%

),

7/25/30

............

United

States

2,000,000

1,981,311

f,q

Octagon

Investment

Partners

38

Ltd.

,

2018-1A

,

C

,

144A,

FRN

,

3.138

%

,

(

3-month

USD

LIBOR

+

2.95

%

),

7/20/30

............

United

States

4,000,000

3,898,590

f,q

Octagon

Investment

Partners

XVII

Ltd.

,

2013-1A,

BR2,

144A,

FRN,

1.576%,

(3-month

USD

LIBOR

+

1.4%),

1/25/31

......................................

United

States

4,020,000

4,006,070

2013-1A,

CR2,

144A,

FRN,

1.876%,

(3-month

USD

LIBOR

+

1.7%),

1/25/31

......................................

United

States

5,250,000

5,135,557

f,q

Octagon

Investment

Partners

XXIII

Ltd.

,

2015-1A

,

BR

,

144A,

FRN

,

1.384

%

,

(

3-month

USD

LIBOR

+

1.2

%

),

7/15/27

.............

United

States

1,170,000

1,170,850

f,q

Octagon

Loan

Funding

Ltd.

,

2014-1A

,

CRR

,

144A,

FRN

,

2.389

%

,

(

3-month

USD

LIBOR

+

2.2

%

),

11/18/31

..................

United

States

750,000

748,125

f,r

Prosper

Pass-Thru

Trust

III

,

2020-PT1,

A,

144A,

FRN,

8.796%,

3/15/26

.................

United

States

3,126,742

3,094,855

2020-PT2,

A,

144A,

FRN,

9.444%,

4/15/26

.................

United

States

3,760,860

3,696,384

2020-PT3,

A,

144A,

FRN,

7.183%,

5/15/26

.................

United

States

1,238,594

1,249,765

f,q

Race

Point

X

CLO

Ltd.

,

2016-10A

,

B1R

,

144A,

FRN

,

1.826

%

,

(

3-month

USD

LIBOR

+

1.65

%

),

7/25/31

..................

United

States

3,600,000

3,595,540

f,q

Sound

Point

CLO

V-R

Ltd.

,

2014-1RA

,

D

,

144A,

FRN

,

3.29

%

,

(

3-month

USD

LIBOR

+

3.1

%

),

7/18/31

...................

United

States

5,780,000

5,562,371

f,q

Strata

CLO

I

Ltd.

,

2018-1A

,

B

,

144A,

FRN

,

2.384

%

,

(

3-month

USD

LIBOR

+

2.2

%

),

1/15/31

...............................

United

States

11,000,000

10,892,636

f,q

TCI-Flatiron

CLO

Ltd.

,

2017-1A,

B,

144A,

FRN,

1.752%,

(3-month

USD

LIBOR

+

1.56%),

11/18/30

..........................................

United

States

3,500,000

3,503,217

2017-1A,

C,

144A,

FRN,

2.041%,

(3-month

USD

LIBOR

+

1.85%),

11/18/30

..........................................

United

States

2,800,000

2,782,143

f,r

Towd

Point

Mortgage

Trust

,

2017-1,

A1,

144A,

FRN,

2.75%,

10/25/56

..................

United

States

4,219,923

4,293,637

2017-1,

A2,

144A,

FRN,

3.5%,

10/25/56

...................

United

States

8,862,000

9,304,886

2017-2,

A1,

144A,

FRN,

2.75%,

4/25/57

...................

United

States

1,975,124

2,006,253

f,r

Upgrade

Master

Pass-Thru

Trust

,

2019-PT1,

A,

144A,

FRN,

11.995%,

6/15/25

................

United

States

1,242,312

1,117,604

2019-PT2,

A,

144A,

FRN,

15.25%,

2/15/26

.................

United

States

2,700,851

2,702,068

f,q

Voya

CLO

Ltd.

,

2013-2A,

CR,

144A,

FRN,

2.926%,

(3-month

USD

LIBOR

+

2.75%),

4/25/31

.....................................

United

States

1,650,000

1,604,271

2014-1A,

BR2,

144A,

FRN,

2.09%,

(3-month

USD

LIBOR

+

1.9%),

4/18/31

...........................................

United

States

1,000,000

989,600

2014-1A,

CR2,

144A,

FRN,

2.99%,

(3-month

USD

LIBOR

+

2.8%),

4/18/31

...........................................

United

States

3,750,000

3,624,970

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

Semiannual

Report

97

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Asset-Backed

Securities

(continued)

Diversified

Financial

Services

(continued)

f,q

Voya

CLO

Ltd.,

(continued)

2016-3A,

CR,

144A,

FRN,

3.44%,

(3-month

USD

LIBOR

+

3.25%),

10/18/31

..........................................

United

States

2,547,170

$

2,435,818

2018-2A,

A2,

144A,

FRN,

1.434%,

(3-month

USD

LIBOR

+

1.25%),

7/15/31

.....................................

United

States

1,500,000

1,497,058

2018-2A,

C1,

144A,

FRN,

2.034%,

(3-month

USD

LIBOR

+

1.85%),

7/15/31

.....................................

United

States

700,000

693,888

f,q

Webster

Park

CLO

Ltd.

,

2015-1A

,

BR

,

144A,

FRN

,

1.988

%

,

(

3-month

USD

LIBOR

+

1.8

%

),

7/20/30

...........................

United

States

2,000,000

2,000,000

622,312,883

a

a

a

a

a

a

Road

&

Rail

0.0%

†

Union

Pacific

Railroad

Co.

Pass-Through

Trust

,

2005-1

,

5.082

%

,

1/02/29

...........................................

United

States

69,403

78,466

Total

Asset-Backed

Securities

(Cost

$616,930,184)

..............................

632,020,724

Commercial

Mortgage-Backed

Securities

0.3%

Diversified

Financial

Services

0.3%

r

Commercial

Mortgage

Trust

,

2006-GG7

,

AJ

,

FRN

,

6.214

%

,

7/10/38

United

States

1,576,925

1,419,627

f,q

DBCG

Mortgage

Trust

,

2017-BBG

,

A

,

144A,

FRN

,

0.815

%

,

(

1-month

USD

LIBOR

+

0.7

%

),

6/15/34

...........................

United

States

9,840,000

9,855,976

f,r

Eleven

Madison

Mortgage

Trust

,

2015-11MD

,

A

,

144A,

FRN

,

3.673

%

,

9/10/35

.....................................

United

States

3,255,000

3,546,034

14,821,637

a

a

a

a

a

a

Thrifts

&

Mortgage

Finance

0.0%

†

q

FNMA

,

2005-122

,

FN

,

FRN

,

0.456

%

,

(

1-month

USD

LIBOR

+

0.35

%

),

1/25/36

.....................................

United

States

380,188

367,331

b

Weyerhaeuser

Mortgage

Co.

of

Texas

,

1984-A

,

7.43

%

,

1/01/24

...

United

States

6,602

6,602

373,933

a

a

a

a

a

a

Total

Commercial

Mortgage-Backed

Securities

(Cost

$15,036,519)

................

15,195,570

Mortgage-Backed

Securities

15.2%

s

Federal

Home

Loan

Mortgage

Corp.

(FHLMC)

Adjustable

Rate

0.0%

†

FHLMC,

1.707%,

(COFI

11th

District

+/-

MBS

Margin),

11/01/27

..

United

States

902,292

905,622

Federal

Home

Loan

Mortgage

Corp.

(FHLMC)

Fixed

Rate

0.4%

FHLMC

Gold

Pools,

15

Year,

5.5%,

11/01/22

.................

United

States

23,879

24,064

FHLMC

Gold

Pools,

15

Year,

6%,

10/01/21

-

9/01/22

...........

United

States

31,671

32,208

FHLMC

Gold

Pools,

30

Year,

4.5%,

3/01/39

..................

United

States

833,570

937,230

FHLMC

Gold

Pools,

30

Year,

5%,

8/01/33

-

2/01/39

............

United

States

5,615,304

6,479,442

FHLMC

Gold

Pools,

30

Year,

5.5%,

1/01/35

-

12/01/37

.........

United

States

427,659

496,259

FHLMC

Gold

Pools,

30

Year,

6%,

5/01/33

-

4/01/38

............

United

States

652,067

770,493

FHLMC

Gold

Pools,

30

Year,

6.5%,

8/01/25

-

3/01/39

..........

United

States

546,028

628,055

FHLMC

Gold

Pools,

30

Year,

7%,

1/01/28

-

7/01/32

............

United

States

40,615

45,901

FHLMC

Gold

Pools,

30

Year,

7.5%,

3/01/32

..................

United

States

8,849

10,559

FHLMC

Gold

Pools,

30

Year,

8%,

2/01/30

...................

United

States

11,560

13,317

FHLMC

Gold

Pools,

30

Year,

8.5%,

10/01/24

-

8/01/30

.........

United

States

2,983

3,308

FHLMC

Pool,

15

Year,

2%,

10/01/35

-

12/01/35

...............

United

States

7,935,614

8,207,577

17,648,413

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Total

Return

Fund

franklintempleton.com

Semiannual

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

Mortgage-Backed

Securities

(continued)

s

Federal

National

Mortgage

Association

(FNMA)

Adjustable

Rate

0.1%

FNMA,

1.607%

-

4.104%,

(6-month

USD

LIBOR

+/-

MBS

Margin),

12/01/24

-

3/01/37

...................................

United

States

2,344,420

$

2,456,664

2,456,664

Federal

National

Mortgage

Association

(FNMA)

Fixed

Rate

12.5%

FNMA,

15

Year,

2%,

9/01/35

-

4/01/36

......................

United

States

11,557,110

11,980,203

FNMA,

15

Year,

2.5%,

3/01/36

...........................

United

States

1,156,264

1,213,668

FNMA,

15

Year,

3%,

1/01/31

-

11/01/34

.....................

United

States

3,318,540

3,514,183

FNMA,

15

Year,

5.5%,

12/01/22

-

12/01/23

..................

United

States

28,854

29,558

FNMA,

15

Year,

6%,

9/01/22

.............................

United

States

16,426

16,594

FNMA,

30

Year,

2.5%,

7/01/50

...........................

United

States

2,465,245

2,562,375

FNMA,

30

Year,

3%,

9/01/48

.............................

United

States

20,156,837

21,335,152

FNMA,

30

Year,

3%,

11/01/48

............................

United

States

49,152,945

52,058,368

FNMA,

30

Year,

3%,

4/01/51

.............................

United

States

27,174,585

28,650,723

FNMA,

30

Year,

5%,

6/01/36

-

5/01/39

......................

United

States

1,125,726

1,298,248

FNMA,

30

Year,

5.5%,

6/01/33

-

8/01/37

....................

United

States

3,566,501

4,092,396

FNMA,

30

Year,

6%,

9/01/32

-

9/01/38

......................

United

States

3,881,939

4,605,803

FNMA,

30

Year,

6.5%,

8/01/28

-

5/01/37

....................

United

States

133,878

152,701

FNMA,

30

Year,

7%,

11/01/25

............................

United

States

2,169

2,177

FNMA,

30

Year,

7.5%,

1/01/30

...........................

United

States

7,255

8,583

FNMA,

30

Year,

8.5%,

4/01/30

-

5/01/32

....................

United

States

37,269

44,328

FNMA,

30

Year,

9%,

5/01/27

.............................

United

States

16,017

16,374

t

FNMA,

Single-family,

15

Year,

2%,

5/25/36

..................

United

States

145,190,000

149,982,405

t

FNMA,

Single-family,

30

Year,

2.5%,

5/25/51

.................

United

States

357,349,000

370,749,584

652,313,423

s

Government

National

Mortgage

Association

(GNMA)

Adjustable

Rate

0.0%

†

GNMA

II,

2%

-

2.125%,

(1-year

CMT

T-Note

+/-

MBS

Margin),

1/20/23

-

10/20/26

...................................

United

States

15,366

15,794

15,794

Government

National

Mortgage

Association

(GNMA)

Fixed

Rate

2.2%

GNMA

I,

30

Year,

7%,

10/15/27

-

6/15/31

....................

United

States

13,168

15,646

GNMA

I,

Single-family,

30

Year,

6%,

1/15/39

.................

United

States

81,977

96,143

GNMA

I,

Single-family,

30

Year,

6.5%,

10/15/31

-

7/15/38

........

United

States

14,732

16,628

GNMA

I,

Single-family,

30

Year,

7%,

3/15/28

-

4/15/28

..........

United

States

6,215

6,397

GNMA

I,

Single-family,

30

Year,

7.5%,

2/15/22

-

5/15/26

........

United

States

13,811

14,261

GNMA

I,

Single-family,

30

Year,

9%,

9/15/25

.................

United

States

29

29

GNMA

II,

Single-family,

30

Year,

2%,

10/20/50

................

United

States

45,082,768

46,024,706

GNMA

II,

Single-family,

30

Year,

2%,

12/20/50

................

United

States

2,563,357

2,617,361

GNMA

II,

Single-family,

30

Year,

2.5%,

10/20/50

..............

United

States

44,588,777

46,388,085

GNMA

II,

Single-family,

30

Year,

2.5%,

1/20/51

-

3/20/51

........

United

States

5,895,047

6,129,661

GNMA

II,

Single-family,

30

Year,

3%,

9/20/50

-

3/20/51

.........

United

States

5,558,095

5,846,828

GNMA

II,

Single-family,

30

Year,

3.5%,

12/20/50

-

3/20/51

.......

United

States

4,569,713

4,880,679

GNMA

II,

Single-family,

30

Year,

4%,

12/20/50

................

United

States

2,338,127

2,527,357

GNMA

II,

Single-family,

30

Year,

4.5%,

11/20/50

..............

United

States

1,107,420

1,204,608

GNMA

II,

Single-family,

30

Year,

6%,

5/20/31

.................

United

States

2,074

2,355

GNMA

II,

Single-family,

30

Year,

6.5%,

3/20/28

-

7/20/38

........

United

States

225,465

271,710

GNMA

II,

Single-family,

30

Year,

7.5%,

8/20/30

-

1/20/33

........

United

States

27,028

30,956

116,073,410

Total

Mortgage-Backed

Securities

(Cost

$778,840,810)

...........................

789,413,326

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

Semiannual

Report

99

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Municipal

Bonds

4.6%

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

$

7,052,945

State

of

California

Personal

Income

Tax,

Revenue,

Senior

Lien,

2019,

2.984%,

6/01/33

..............................

United

States

5,870,000

6,061,176

State

of

California

Personal

Income

Tax,

Revenue,

Senior

Lien,

2019,

3.034%,

6/01/34

..............................

United

States

4,445,000

4,584,122

California

Municipal

Finance

Authority,

United

States

General

Services

Administration,

Revenue,

2020,

2.519%,

10/01/35

....

United

States

9,970,000

9,471,111

City

of

San

Francisco,

Public

Utilities

Commission

Water,

Revenue,

2019

A,

Refunding,

3.473%,

11/01/43

.....................

United

States

2,640,000

2,797,427

Foothill-Eastern

Transportation

Corridor

Agency,

Revenue,

2019A,

Refunding,

4.094%,

1/15/49

............................

United

States

3,470,000

3,630,005

Gilroy

Unified

School

District,

GO,

2019,

Refunding,

3.364%,

8/01/47

United

States

7,220,000

7,325,561

Los

Angeles

Community

College

District,

GO,

2020,

Refunding,

2.106%,

8/01/32

.....................................

United

States

3,050,000

3,070,299

San

Jose

Redevelopment

Agency

Successor

Agency,

Tax

Allocation,

Senior

Lien,

2017A-T,

Refunding,

3.226%,

8/01/27

...........

United

States

6,150,000

6,783,429

University

of

California,

Revenue,

2015

J,

Refunding,

4.131%,

5/15/45

...........................................

United

States

10,750,000

12,327,286

63,103,361

Colorado

0.1%

Metro

Wastewater

Reclamation

District,

Revenue,

2019

B,

Refunding,

3.158%,

4/01/41

............................

United

States

5,600,000

5,861,527

Florida

0.1%

County

of

Broward,

Airport

System,

Revenue,

2019C,

Refunding,

3.477%,

10/01/43

....................................

United

States

7,145,000

7,390,289

Hawaii

0.0%

†

City

&

County

Honolulu,

Wastewater

System,

Revenue,

2019

B,

Refunding,

2.585%,

7/01/28

............................

United

States

1,350,000

1,413,595

Illinois

0.2%

Chicago

Transit

Authority

Sales

&

Transfer

Tax

Receipts,

Revenue,

2008A,

6.899%,

12/01/40

..............................

United

States

800,000

1,108,095

State

of

Illinois,

GO,

2003,

5.1%,

6/01/33

...................

United

States

8,900,000

10,158,881

11,266,976

Louisiana

0.1%

City

of

New

Orleans

,

Sewerage

Service,

Revenue,

2021,

Refunding,

AGMC

Insured,

1.791%,

6/01/30

...................................

United

States

1,300,000

1,251,529

Water

System,

Revenue,

2021,

Refunding,

AGMC

Insured,

1.841%,

12/01/30

..................................

United

States

1,400,000

1,350,999

2,602,528

Massachusetts

0.3%

Massachusetts

School

Building

Authority,

Revenue,

2019

B,

Refunding,

3.395%,

10/15/40

...........................

United

States

6,760,000

7,118,320

Massachusetts

State

College

Building

Authority,

Revenue,

2019

C,

Refunding,

3.373%,

5/01/43

............................

United

States

5,900,000

6,015,873

13,134,193

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Total

Return

Fund

franklintempleton.com

Semiannual

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

Municipal

Bonds

(continued)

Minnesota

0.1%

State

of

Minnesota,

GO,

2013F,

Refunding,

4%,

10/01/24

.......

United

States

5,760,000

$

6,282,735

Missouri

0.2%

Metropolitan

St.

Louis

Sewer

District,

Revenue,

2019

C,

Refunding,

3.259%,

5/01/45

.....................................

United

States

7,640,000

7,925,511

New

Jersey

0.3%

New

Jersey

Transportation

Trust

Fund

Authority,

Revenue,

2019

B,

Refunding,

4.131%,

6/15/42

............................

United

States

4,060,000

4,323,611

State

of

New

Jersey,

GO,

2020

A,

3%,

6/01/32

...............

United

States

8,745,000

9,926,985

14,250,596

New

York

0.4%

Metropolitan

Transportation

Authority,

Revenue,

2020

E,

Refunding,

4%,

11/15/45

.......................................

United

States

6,715,000

7,673,056

New

York

State

Dormitory

Authority,

State

University

of

New

York,

Revenue,

2019B,

Refunding,

3.142%,

7/01/43

..............

United

States

3,605,000

3,648,543

Port

Authority

of

New

York

&

New

Jersey

,

Revenue,

191,

4.823%,

6/01/45

.........................

United

States

4,570,000

5,159,137

Revenue,

192,

4.81%,

10/15/65

.........................

United

States

5,000,000

6,652,423

23,133,159

Ohio

0.4%

Greenville

City

School

District,

GO,

2019,

Refunding,

3.541%,

1/01/51

...........................................

United

States

16,585,000

16,731,086

State

of

Ohio,

Cleveland

Clinic

Health

System

Obligated

Group,

Revenue,

2019G,

Refunding,

3.276%,

1/01/42

..............

United

States

2,265,000

2,404,871

19,135,957

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

4,794,193

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

6,463,271

Texas

0.8%

City

of

Austin,

Electric

Utility,

Revenue,

2008,

Refunding,

AGMC

Insured,

6.262%,

11/15/32

.............................

United

States

12,790,000

15,933,368

Grand

Parkway

Transportation

Corp.,

Revenue,

2020B,

Refunding,

3.236%,

10/01/52

....................................

United

States

5,800,000

5,868,942

Permanent

University

Fund

-

Texas

A&M

University

System,

Revenue,

2019,

3.1%,

7/01/49

..........................

United

States

9,020,000

9,244,694

State

of

Texas,

GO,

2019,

Refunding,

3.211%,

4/01/44

.........

United

States

6,760,000

7,122,737

Texas

State

University

System

,

Revenue,

2019

B,

Refunding,

2.938%,

3/15/33

..............

United

States

2,655,000

2,774,093

Revenue,

2019

B,

Refunding,

3.289%,

3/15/40

..............

United

States

2,255,000

2,314,693

43,258,527

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

Semiannual

Report

101

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Municipal

Bonds

(continued)

Utah

0.2%

Salt

Lake

City

Corp.,

Revenue,

2019B,

Refunding,

3.102%,

4/01/38

United

States

3,155,000

$

3,317,482

Utah

Transit

Authority,

Revenue,

Senior

Lien,

2019

B,

Refunding,

3.443%,

12/15/42

....................................

United

States

4,510,000

4,742,459

8,059,941

Total

Municipal

Bonds

(Cost

$227,529,029)

.....................................

238,076,359

Residential

Mortgage-Backed

Securities

8.0%

Capital

Markets

0.0%

†

q

Merrill

Lynch

Mortgage

Investors

Trust

,

2003-A

,

1A

,

FRN

,

0.846

%

,

(

1-month

USD

LIBOR

+

0.74

%

),

3/25/28

..................

United

States

371,187

366,986

Diversified

Financial

Services

0.9%

f

BRAVO

Residential

Funding

Trust

,

2019-1,

A1C,

144A,

3.5%,

3/25/58

.......................

United

States

8,636,251

8,889,613

r

2019-2,

A3,

144A,

FRN,

3.5%,

10/25/44

...................

United

States

8,187,658

8,568,328

f,r

CIM

Trust

,

2018-INV1,

A4,

144A,

FRN,

4%,

8/25/48

..................

United

States

3,738,863

3,834,412

2019-INV1,

A1,

144A,

FRN,

4%,

2/25/49

..................

United

States

3,594,581

3,656,765

2019-INV2,

A3,

144A,

FRN,

4%,

5/25/49

..................

United

States

6,549,300

6,707,400

f,r

Citigroup

Mortgage

Loan

Trust

,

2013-A

,

A

,

144A,

FRN

,

3

%

,

5/25/42

United

States

288,437

290,164

Credit

Suisse

First

Boston

Mortgage

Securities

Corp.

,

2004-6

,

3A1

,

5

%

,

9/25/19

........................................

United

States

113,515

95,789

f,q

FHLMC

Stacr

Remic

Trust

,

2020-DNA1

,

M2

,

144A,

FRN

,

1.806

%

,

(

1-month

USD

LIBOR

+

1.7

%

),

1/25/50

...................

United

States

8,847,803

8,892,120

f,r

Provident

Funding

Mortgage

Trust

,

2019-1,

A2,

144A,

FRN,

3%,

12/25/49

....................

United

States

3,465,561

3,512,769

2020-1,

A3,

144A,

FRN,

3%,

2/25/50

.....................

United

States

2,675,110

2,685,145

47,132,505

a

a

a

a

a

a

Thrifts

&

Mortgage

Finance

7.1%

q

FHLMC

Structured

Agency

Credit

Risk

Debt

Notes

,

2014-DN3,

M3,

FRN,

4.106%,

(1-month

USD

LIBOR

+

4%),

8/25/24

...........................................

United

States

6,639,178

6,785,008

2014-DN4,

M3,

FRN,

4.656%,

(1-month

USD

LIBOR

+

4.55%),

10/25/24

..........................................

United

States

3,355,422

3,441,751

2014-HQ1,

M3,

FRN,

4.206%,

(1-month

USD

LIBOR

+

4.1%),

8/25/24

...........................................

United

States

717,263

725,082

2015-DN1,

M3,

FRN,

4.256%,

(1-month

USD

LIBOR

+

4.15%),

1/25/25

...........................................

United

States

200,123

200,138

2015-DNA2,

M3,

FRN,

4.006%,

(1-month

USD

LIBOR

+

3.9%),

12/25/27

..........................................

United

States

14,176,755

14,398,717

2015-DNA3,

M3,

FRN,

4.806%,

(1-month

USD

LIBOR

+

4.7%),

4/25/28

...........................................

United

States

3,061,869

3,175,807

2015-HQ2,

M3,

FRN,

3.356%,

(1-month

USD

LIBOR

+

3.25%),

5/25/25

...........................................

United

States

3,158,194

3,207,485

2016-DNA1,

M3,

FRN,

5.656%,

(1-month

USD

LIBOR

+

5.55%),

7/25/28

...........................................

United

States

17,717,723

18,661,334

2016-DNA2,

M3,

FRN,

4.756%,

(1-month

USD

LIBOR

+

4.65%),

10/25/28

..........................................

United

States

13,742,493

14,386,190

2016-DNA4,

M3,

FRN,

3.906%,

(1-month

USD

LIBOR

+

3.8%),

3/25/29

...........................................

United

States

8,953,655

9,342,022

2016-HQA2,

M3,

FRN,

5.256%,

(1-month

USD

LIBOR

+

5.15%),

11/25/28

..........................................

United

States

22,839,773

23,915,417

2016-HQA3,

M2,

FRN,

1.456%,

(1-month

USD

LIBOR

+

1.35%),

3/25/29

...........................................

United

States

115,217

115,379

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Total

Return

Fund

franklintempleton.com

Semiannual

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

Residential

Mortgage-Backed

Securities

(continued)

Thrifts

&

Mortgage

Finance

(continued)

q

FHLMC

Structured

Agency

Credit

Risk

Debt

Notes,

(continued)

2017-DNA1,

M2,

FRN,

3.356%,

(1-month

USD

LIBOR

+

3.25%),

7/25/29

...........................................

United

States

14,014,836

$

14,564,918

2017-DNA2,

M2,

FRN,

3.556%,

(1-month

USD

LIBOR

+

3.45%),

10/25/29

..........................................

United

States

26,327,007

27,370,931

2017-DNA3,

M2,

FRN,

2.606%,

(1-month

USD

LIBOR

+

2.5%),

3/25/30

...........................................

United

States

13,500,000

13,821,762

2017-HQA1,

M2,

FRN,

3.656%,

(1-month

USD

LIBOR

+

3.55%),

8/25/29

...........................................

United

States

18,603,769

19,243,988

2017-HQA2,

M2,

FRN,

2.756%,

(1-month

USD

LIBOR

+

2.65%),

12/25/29

..........................................

United

States

7,113,388

7,282,062

2017-HQA3,

M2,

FRN,

2.456%,

(1-month

USD

LIBOR

+

2.35%),

4/25/30

...........................................

United

States

7,148,121

7,266,667

q

FNMA

Connecticut

Avenue

Securities

,

2013-C01,

M2,

FRN,

5.356%,

(1-month

USD

LIBOR

+

5.25%),

10/25/23

..........................................

United

States

5,453,683

5,688,540

2014-C02,

1M2,

FRN,

2.706%,

(1-month

USD

LIBOR

+

2.6%),

5/25/24

...........................................

United

States

13,225,867

13,238,151

2014-C02,

2M2,

FRN,

2.706%,

(1-month

USD

LIBOR

+

2.6%),

5/25/24

...........................................

United

States

4,284,798

4,331,919

2014-C03,

1M2,

FRN,

3.106%,

(1-month

USD

LIBOR

+

3%),

7/25/24

...........................................

United

States

16,249,316

16,377,275

2014-C03,

2M2,

FRN,

3.006%,

(1-month

USD

LIBOR

+

2.9%),

7/25/24

...........................................

United

States

1,426,272

1,440,175

2014-C04,

1M2,

FRN,

5.006%,

(1-month

USD

LIBOR

+

4.9%),

11/25/24

..........................................

United

States

12,051,133

12,476,998

2014-C04,

2M2,

FRN,

5.106%,

(1-month

USD

LIBOR

+

5%),

11/25/24

..........................................

United

States

1,546,731

1,588,570

2015-C01,

1M2,

FRN,

4.406%,

(1-month

USD

LIBOR

+

4.3%),

2/25/25

...........................................

United

States

1,495,124

1,532,549

2015-C01,

2M2,

FRN,

4.656%,

(1-month

USD

LIBOR

+

4.55%),

2/25/25

...........................................

United

States

1,888,406

1,904,556

2015-C02,

1M2,

FRN,

4.106%,

(1-month

USD

LIBOR

+

4%),

5/25/25

...........................................

United

States

7,447,446

7,560,215

2015-C02,

2M2,

FRN,

4.106%,

(1-month

USD

LIBOR

+

4%),

5/25/25

...........................................

United

States

1,121,469

1,137,762

2015-C03,

1M2,

FRN,

5.106%,

(1-month

USD

LIBOR

+

5%),

7/25/25

...........................................

United

States

5,161,169

5,290,568

2015-C03,

2M2,

FRN,

5.106%,

(1-month

USD

LIBOR

+

5%),

7/25/25

...........................................

United

States

1,174,208

1,195,505

2016-C04,

1M2,

FRN,

4.356%,

(1-month

USD

LIBOR

+

4.25%),

1/25/29

...........................................

United

States

16,032,823

16,823,219

2016-C05,

2M2,

FRN,

4.556%,

(1-month

USD

LIBOR

+

4.45%),

1/25/29

...........................................

United

States

10,815,939

11,288,139

2016-C07,

2M2,

FRN,

4.456%,

(1-month

USD

LIBOR

+

4.35%),

5/25/29

...........................................

United

States

7,766,532

8,103,198

2017-C01,

1M2,

FRN,

3.656%,

(1-month

USD

LIBOR

+

3.55%),

7/25/29

...........................................

United

States

11,389,846

11,788,278

2017-C02,

2M2,

FRN,

3.756%,

(1-month

USD

LIBOR

+

3.65%),

9/25/29

...........................................

United

States

7,928,248

8,213,931

2017-C03,

1M2,

FRN,

3.106%,

(1-month

USD

LIBOR

+

3%),

10/25/29

..........................................

United

States

24,835,831

25,548,401

2017-C04,

2M2,

FRN,

2.956%,

(1-month

USD

LIBOR

+

2.85%),

11/25/29

..........................................

United

States

5,227,454

5,355,999

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

Semiannual

Report

103

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Residential

Mortgage-Backed

Securities

(continued)

Thrifts

&

Mortgage

Finance

(continued)

q

FNMA

Connecticut

Avenue

Securities,

(continued)

2017-C05,

1M2,

FRN,

2.306%,

(1-month

USD

LIBOR

+

2.2%),

1/25/30

...........................................

United

States

20,431,202

$

20,716,626

369,505,232

a

a

a

a

a

a

Total

Residential

Mortgage-Backed

Securities

(Cost

$431,059,917)

................

417,004,723

Shares

Escrows

and

Litigation

Trusts

0.0%

†

a,b

Millennium

Corporate

Claim

Trust,

Escrow

Account

............

United

States

73,753

—

a,b

Millennium

Lender

Claim

Trust,

Escrow

Account

..............

United

States

73,753

—

a

Sanchez

Energy

Corp.,

Escrow

Account

....................

United

States

3,000,000

18,750

Total

Escrows

and

Litigation

Trusts

(Cost

$2,814,454)

...........................

18,750

Total

Long

Term

Investments

(Cost

$5,592,526,730)

.............................

5,625,634,423

a

Number

of

Contracts

Notional

Amount

#

a

a

aa

Options

Purchased

0.1%

Calls

-

Over-the-Counter

Interest

Rate

Swaptions

0.1%

Receive

Fixed

0.9%,

Pay

Floating

3

month

USD

LIBOR,

Counterparty

CITI,

Expires

9/16/21

.......................

1

385,900,000

1,309,081

Puts

-

Over-the-Counter

Interest

Rate

Swaptions

0.0%

†

Receive

Floating

3-month

USD

LIBOR,

Pay

Fixed

1.94%,

Counterparty

CITI,

Expires

9/03/21

.......................

1

129,100,000

1,146,012

Receive

Floating

3-month

USD

LIBOR,

Pay

Fixed

2.09%,

Counterparty

DBAB,

Expires

9/27/21

.....................

1

129,100,000

951,376

Total

Options

Purchased

(Cost

$4,953,283)

.....................................

3,406,469

Short

Term

Investments

1.0%

a

a

Country

Shares

a

Value

a

Money

Market

Funds

0.9%

d,u

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

48,239,268

48,239,268

Total

Money

Market

Funds

(Cost

$48,239,268)

..................................

48,239,268

v

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

0.1%

a

a

a

a

a

Money

Market

Funds

0.1%

d,u

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

5,757,000

5,757,000

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Total

Return

Fund

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

104

Short

Term

Investments

(continued)

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Repurchase

Agreements

0.0%

†

w

Joint

Repurchase

Agreement,

BofA

Securities,

Inc.,

0%,

5/03/21

(Maturity

Value

$1,439,868)

Collateralized

by

U.S.

Treasury

Note,

1.5%,

11/30/24

(valued

at

$1,468,667)

........................................

1,439,868

$

1,439,868

Total

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

(Cost

$7,196,868)

............................................................

7,196,868

Total

Short

Term

Investments

(Cost

$55,436,136

)

................................

55,436,136

a

Total

Investments

(Cost

$5,652,916,149)

109.5%

................................

$5,684,477,028

Options

Written

(0.0)%

†

......................................................

(1,322,944)

Other

Assets,

less

Liabilities

(9.5)%

...........................................

(494,538,414)

Net

Assets

100.0%

...........................................................

$5,188,615,670

Number

of

Contracts

Notional

Amount

#

Options

Written

(0.0)%

†

Puts

-

Over-the-Counter

Interest

Rate

Swaptions

(0.0)%

†

Receive

Floating

3-month

USD

LIBOR,

Pay

Fixed

1.39%,

Counterparty

CITI,

Expires

9/16/21

.......................

1

(385,900,000)

(1,322,944)

(1,322,944)

Total

Options

Written

(Premiums

received

$1,997,033)

...........................

$

(1,322,944)

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

Semiannual

Report

105

#

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

Non-income

producing.

b

Fair

valued

using

significant

unobservable

inputs.

See

Note

15

regarding

fair

value

measurements.

c

See

Note

9

regarding

restricted

securities.

d

See

Note

3(f)

regarding

investments

in

affiliated

management

investment

companies.

e

A

portion

or

all

of

the

security

is

on

loan

at

April

30,

2021.

See

Note

1(f).

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

April

30,

2021,

the

aggregate

value

of

these

securities

was

$1,198,554,081,

representing

23.1%

of

net

assets.

g

Perpetual

security

with

no

stated

maturity

date.

h

See

Note

7

regarding

defaulted

securities.

i

Income

may

be

received

in

additional

securities

and/or

cash.

j

A

portion

or

all

of

the

security

purchased

on

a

delayed

delivery

basis.

See

Note

1(d).

k

See

Note

1(i)

regarding

senior

floating

rate

interests.

l

The

coupon

rate

shown

represents

the

rate

at

period

end.

m

See

Note

1(j)

regarding

Marketplace

Lending.

n

A

supranational

organization

is

an

entity

formed

by

two

or

more

central

governments

through

international

treaties.

o

The

principal

represents

the

notional

amount.

See

Note

1(e)

regarding

value

recovery

instruments.

p

Principal

amount

of

security

is

adjusted

for

inflation.

See

Note

1(l).

q

The

coupon

rate

shown

represents

the

rate

inclusive

of

any

caps

or

floors,

if

applicable,

in

effect

at

period

end.

r

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.

s

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).

t

Security

purchased

on

a

to-be-announced

(TBA)

basis.

See

Note

1(d).

u

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

v

See

Note

1(f)

regarding

securities

on

loan.

w

See

Note

1(c)

regarding

joint

repurchase

agreement.

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Total

Return

Fund

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

106

At

April

30,

2021,

the

Fund

had

the

following futures

contracts

outstanding.

See

Note

1

(

e

). 

At

April

30,

2021,

the

Fund

had

the

following

forward

exchange

contracts

outstanding.

See

Note

1

(

e

). 

Futures

Contracts

Description

Type

Number

of

Contracts

Notional

Amount

*

Expiration

Date

Value/

Unrealized

Appreciation

(Depreciation)

Interest

rate

contracts

U.S.

Treasury

10

Year

Notes

....................

Long

380

$

50,171,875

6/21/21

$

(816,927)

U.S.

Treasury

10

Year

Ultra

Notes

................

Short

1,068

155,444,062

6/21/21

3,257,256

U.S.

Treasury

2

Year

Notes

.....................

Long

1,492

329,370,656

6/30/21

(164,095)

U.S.

Treasury

5

Year

Notes

.....................

Long

5,400

669,262,500

6/30/21

(2,521,984)

U.S.

Treasury

Long

Bonds

.....................

Long

194

30,506,500

6/21/21

(539,838)

U.S.

Treasury

Ultra

Bonds

......................

Long

642

119,351,812

6/21/21

(1,212,037)

Total

Futures

Contracts

......................................................................

$(1,997,625)

*

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

Singapore

Dollar

....

JPHQ

Buy

68,000,000

51,330,440

5/20/21

$

—

$

(234,302)

Singapore

Dollar

....

JPHQ

Sell

68,000,000

50,722,422

5/20/21

—

(373,716)

Indonesian

Rupiah

..

DBAB

Buy

139,844,100,000

9,718,280

6/02/21

—

(85,398)

Indonesian

Rupiah

..

DBAB

Sell

42,700,000,000

2,976,751

6/02/21

35,447

—

Indonesian

Rupiah

..

JPHQ

Buy

92,000,000,000

6,392,440

6/02/21

—

(55,204)

Australian

Dollar

....

JPHQ

Buy

34,750,000

27,016,040

6/17/21

—

(239,127)

Australian

Dollar

....

JPHQ

Sell

34,750,000

26,229,126

6/17/21

—

(547,787)

Euro

.............

JPHQ

Buy

52,300,000

64,311,689

6/22/21

—

(1,365,825)

Euro

.............

JPHQ

Sell

50,058,000

59,650,260

6/22/21

—

(597,235)

Canadian

Dollar

....

JPHQ

Sell

16,300,000

12,927,428

6/24/21

—

(334,260)

Japanese

Yen

......

JPHQ

Buy

5,431,000,000

52,557,774

7/07/21

—

(2,834,042)

Japanese

Yen

......

JPHQ

Sell

1,470,000,000

13,599,463

7/07/21

140,821

—

Canadian

Dollar

....

JPHQ

Buy

15,200,000

11,911,666

7/08/21

455,451

—

Canadian

Dollar

....

JPHQ

Sell

15,200,000

11,900,009

7/08/21

—

(467,108)

Euro

.............

JPHQ

Buy

930,686

1,098,912

7/08/21

21,614

—

Euro

.............

JPHQ

Sell

930,686

1,135,939

7/08/21

15,413

—

Australian

Dollar

....

JPHQ

Buy

17,000,000

13,092,975

7/28/21

8,698

—

Singapore

Dollar

....

JPHQ

Buy

17,500,000

13,177,711

7/28/21

—

(31,002)

South

Korean

Won

..

JPHQ

Buy

14,600,000,000

13,204,305

7/28/21

—

(143,364)

Chinese

Yuan

......

JPHQ

Buy

84,000,000

12,750,842

9/17/21

96,917

—

Turkish

Lira

........

JPHQ

Buy

76,280,000

8,037,934

9/28/21

475,070

—

Total

Forward

Exchange

Contracts

...................................................

$1,249,431

$(7,308,370)

Net

unrealized

appreciation

(depreciation)

............................................

$(6,058,939)

*

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

(unaudited)

Franklin

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

Semiannual

Report

107

At

April

30,

2021,

the

Fund

had

the

following credit

default

swap

contracts outstanding.

See

Note

1

(

e

). 

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

Avon

Products,

Inc.

.......

(5.00)%

Quarterly

CITI

3/20/23

8,800,000

$

(601,500)

$

(482,925)

$

(118,575)

Nabors

Industries,

Inc.

.......

(1.00)%

Quarterly

CITI

12/20/21

10,225,000

230,667

95,068

135,599

Contracts

to

Sell

Protection

(c)(d)

Single

Name

Air

France-KLM

.

5.00%

Quarterly

BOFA

6/20/26

1,170,000

EUR

15,241

24,170

(8,929)

NR

Air

France-KLM

.

5.00%

Quarterly

JPHQ

6/20/26

2,780,000

EUR

36,214

50,172

(13,958)

NR

Air

France-KLM

.

5.00%

Quarterly

MSCO

12/20/25

6,430,000

EUR

95,386

7,143

88,243

NR

American

Airlines

Group,

Inc.

..

5.00%

Quarterly

CITI

12/20/21

7,800,000

170,531

(333,905)

504,436

CCC

American

Airlines

Group,

Inc.

..

5.00%

Quarterly

GSCO

6/20/22

5,200,000

(5,580)

(55,555)

49,975

CCC

Carnival

Corp.

..

1.00%

Quarterly

CITI

12/20/25

7,800,000

(712,385)

(1,131,636)

419,251

B-

Macy's

Retail

Holdings

LLC

.

1.00%

Quarterly

JPHQ

12/20/25

7,800,000

(903,858)

(1,347,919)

444,061

B

Nabors

Industries,

Inc.

.......

1.00%

Quarterly

CITI

12/20/23

10,225,000

(1,674,890)

(807,555)

(867,335)

CCC-

Royal

Caribbean

Cruises

Ltd.

..

5.00%

Quarterly

BZWS

12/20/25

7,800,000

526,261

(215,550)

741,811

B

United

Airlines

Holdings,

Inc.

.

5.00%

Quarterly

FBCO

12/20/25

3,775,000

218,609

(7,840)

226,449

B

Traded

Index

(e)

Citibank

Bespoke

Franklin,

Equity

Tranche

0-5%

—%

Quarterly

CITI

12/20/22

12,600,000

(3,128,065)

(2,853,343)

(274,722)

Non-

Investment

Grade

(e)

Citibank

Bespoke

Palma

Index,

Mezzanine

Tranche

5-7%

2.30%

Quarterly

CITI

6/20/21

5,900,000

28,566

—

28,566

Non-

Investment

Grade

(e)

Citibank

Bespoke

Phoenix

Index,

Mezzanine

Tranche

3.97-

5.99%

.....

3.35%

Quarterly

CITI

12/20/21

1,100,000

20,396

—

20,396

Non-

Investment

Grade

(e)

Citibank

Bespoke

Phoenix

Index,

Mezzanine

Tranche

5-7%

2.90%

Quarterly

CITI

12/20/21

7,800,000

118,033

—

118,033

Non-

Investment

Grade

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Total

Return

Fund

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

108

At

April

30,

2021,

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)

Citibank

Bespoke

Portsmouth,

Mezzanine

Tranche

5-10%

2.15%

Quarterly

CITI

6/20/22

30,000,000

$

448,110

$

—

$

448,110

Non-

Investment

Grade

MCDX.

NA.MAIN.31

.

1.00%

Quarterly

CITI

12/20/23

2,325,000

26,601

12,419

14,182

Investment

Grade

(e)

Morgan

Stanley

Bespoke

Pecan

Index,

Mezzanine

Tranche

5-10%

4.10%

Quarterly

MSCO

12/20/21

8,300,000

(20,030)

—

(20,030)

Non-

Investment

Grade

(e)

Morgan

Stanley

Bespoke

Pecan

Index,

Mezzanine

Tranche

5-10%

3.98%

Quarterly

MSCO

12/20/21

8,300,000

(27,507)

—

(27,507)

Non-

Investment

Grade

Total

OTC

Swap

Contracts

..............................................

$(5,139,200)

$(7,047,256)

$1,908,056

Total

Credit

Default

Swap

Contracts

....................................

$(5,139,200)

$

(7,047,256)

$1,908,056

(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

+

1.334%

.....

Quarterly

8,176,000

USD

Pay

Floating

3-month

EURIBOR

+

1.12%

.........

Quarterly

CITI

7/10/21

7,300,000

EUR

$

(594,843)

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

(231,962)

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

(571,458)

Receive

Floating

3-month

USD

LIBOR

+

1.175%

.....

Quarterly

55,747,250

USD

Pay

Floating

3-month

EURIBOR

+

1.05%

.........

Quarterly

CITI

11/22/21

50,450,000

EUR

(4,826,439)

Receive

Floating

3-month

USD

LIBOR

+

1.174%

.....

Quarterly

51,115,500

USD

Franklin

Investors

Securities

Trust

Statement

of

Investments

(unaudited)

Franklin

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

Semiannual

Report

109

At

April

30,

2021,

the

Fund

had

the

following inflation index

swap

contracts outstanding.

See

Note

1

(

e

). 

Cross-Currency

Swap

Contracts

(continued)

Description

Payment

Frequency

Counter-

party

Maturity

Date

Notional

Amount

Value/

Unrealized

Appreciation

(Depreciation)

aA

aaa

aaa

aaa

OTC

Swap

Contracts

(continued)

Pay

Floating

3-month

EURIBOR

+

1.05%

.........

Quarterly

CITI

12/10/21

46,050,000

EUR

$

(4,195,117)

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

(2,210,497)

Total

Cross

Currency

Swap

Contracts

...........................................................

$(12,630,316)

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

$

2,096,062

$

—

$

2,096,062

Receive

variable

change

  in

USA

CPI-U

........

At

Maturity

Pay

Fixed

1.943%

.....

At

Maturity

1/15/29

45,100,000

2,366,926

—

2,366,926

Total

Inflation

Index

Swap

Contracts

..................................

$4,462,988

$—

$4,462,988

See

Note

11

regarding

other

derivative

information.

See

Abbreviations

on

page

151

Franklin

Investors

Securities

Trust

Financial

Statements

Statements

of

Assets

and

Liabilities

April

30,

2021

(unaudited)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

110

Franklin

Adjustable

U.S.

Government

Securities

Fund

Franklin

Floating

Rate

Daily

Access

Fund

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

................

$640,020,75

7

$1,179,221,917

$2,294,350,964

$4,751,430,344

Cost

-

Controlled

affiliates

(Note

3

f

and

12

)

...

—

—

—

802,386,440

Cost

-

Non-controlled

affiliates

(Note

3

f

and

12

)

34,975,191

127,708,394

219,738,342

97,659,497

Cost

-

Unaffiliated

repurchase

agreements

...

19,737,227

55,587,699

214,244,603

1,439,868

Value

-

Unaffiliated

issuers

(Includes

securities

loaned

of

$—,

$—,

$113,483

and

$6,922,564

respectively)

..........................

$641,730,595

$1,085,307,272

$2,307,762,236

$4,773,060,021

Value

-

Controlled

affiliates

(Note

3

f

and

12

)

..

—

—

—

812,580,619

Value

-

Non-controlled

affiliates

(Note

3

f

and

12

)

34,975,191

132,194,940

208,304,260

97,396,520

Value

-

Unaffiliated

repurchase

agreements

...

19,737,227

55,587,699

214,244,603

1,439,868

Cash

.................................

—

920,573

4,198,439

2,116,559

Foreign

currency,

at

value

(cost

$–,

$–,

$443,166

and

$1,287,859

respectively)

...............

—

—

458,846

1,243,441

Receivables:

Investment

securities

sold

................

3,026,311

17,339,137

14,192

1,350,207

Capital

shares

sold

.....................

729,222

2,323,094

16,365,765

7,059,323

Dividends

and

interest

..................

1,333,897

3,747,201

11,895,777

23,313,087

Deposits

with

brokers

for:

OTC

derivative

contracts

...............

—

—

8,388,727

25,067,514

Futures

contracts

.....................

—

—

1,862,937

8,982,612

Centrally

cleared

swap

contracts

.........

—

—

5,156,005

6,466,155

Variation

margin

on

futures

contracts

........

—

—

—

307,985

OTC

swap

contracts

(upfront

payments

$–,

$–,

$6,378,454

and

$14,241,072,

respectively)

.....

—

—

163,490

188,972

Unrealized

appreciation

on

OTC

forward

exchange

contracts

..............................

—

—

472,095

1,249,431

Unrealized

appreciation

on

OTC

swap

contracts

.

—

—

866,191

3,239,112

Unrealized

appreciation

on

unfunded

loan

commitments

(Note

10

)

...................

—

486,354

—

—

FT

Subsidiary

deferred

tax

benefit

(Note

1

g

)

....

—

—

—

245,257

Total

assets

.......................

701,532,443

1,297,906,270

2,780,153,563

5,765,306,683

Liabilities:

Payables:

Investment

securities

purchased

...........

—

101,430,817

68,783,759

521,590,511

Capital

shares

redeemed

................

1,244,296

2,460,544

5,073,682

6,957,950

Management

fees

......................

256,044

550,338

335,382

1,678,316

Distribution

fees

.......................

126,631

219,383

445,473

960,794

Transfer

agent

fees

.....................

134,014

259,139

292,426

901,049

Trustees'

fees

and

expenses

..............

—

1,144

—

—

Distributions

to

shareholders

..............

30,533

683,167

325,742

923,418

Variation

margin

on

futures

contracts

........

—

—

70,469

—

Variation

margin

on

centrally

cleared

swap

contracts

............................

—

—

2,659,545

4,450,282

Due

to

brokers

..........................

—

—

—

1,484,650

OTC

swap

contracts

(upfront

receipts

$–,

$–,

$2,093,636

and

$7,247,017)

...............

—

—

2,091,356

7,236,228

Unrealized

depreciation

on

OTC

swap

contracts

.

—

—

7,239,571

13,961,372

Options

written,

at

value

(premiums

received

$–,

$–,

$–

and

$1,997,033

respectively)

..........

—

—

—

1,322,944

Unrealized

depreciation

on

OTC

forward

exchange

contracts

..............................

—

—

1,985,388

7,308,370

Payable

upon

return

of

securities

loaned

(Note

1

f

)

—

—

116,435

7,196,868

Deferred

tax

............................

—

—

9,414

21,902

Franklin

Investors

Securities

Trust

Financial

Statements

Statements

of

Assets

and

Liabilities

(continued)

April

30,

2021

(unaudited)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

111

Franklin

Adjustable

U.S.

Government

Securities

Fund

Franklin

Floating

Rate

Daily

Access

Fund

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

Accrued

expenses

and

other

liabilities

........

326,186

189,607

528,516

696,359

Total

liabilities

......................

2,117,704

105,794,139

89,957,158

576,691,013

Net

assets,

at

value

..............

$699,414,739

$1,192,112,131

$2,690,196,405

$5,188,615,670

Net

assets

consist

of:

Paid-in

capital

..........................

$835,010,520

$1,759,651,664

$2,868,217,874

$5,282,517,270

Total

distributable

earnings

(losses)

..........

(135,595,781)

(567,539,533)

(178,021,469)

(93,901,600)

Net

assets,

at

value

..............

$699,414,739

$1,192,112,131

$2,690,196,405

$5,188,615,670

Franklin

Investors

Securities

Trust

Financial

Statements

Statements

of

Assets

and

Liabilities

(continued)

April

30,

2021

(unaudited)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

112

Franklin

Adjustable

U.S.

Government

Securities

Fund

Franklin

Floating

Rate

Daily

Access

Fund

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

Class

A:

Net

assets,

at

value

....................

$440,099,418

$709,675,264

$1,880,163,313

$4,157,278,135

Shares

outstanding

.....................

55,404,471

92,710,607

195,494,199

418,714,960

Net

asset

value

per

share

a

...............

$7.94

$7.65

$9.62

$9.93

Maximum

offering

price

per

share

(net

asset

value

per

share

÷

97.75%,

97.75%,

97.75%

and

96.25%,

respectively)

...................

$8.12

$7.83

$9.84

$10.32

Class

A1:

Net

assets,

at

value

....................

$72,960,060

$—

$—

$—

Shares

outstanding

.....................

9,187,409

—

—

—

Net

asset

value

per

share

a

...............

$7.94

$—

$—

$—

Maximum

offering

price

per

share

(net

asset

value

per

share

÷

97.75%,

—%,

—%

and

—%)

$8.12

$—

$—

$—

Class

C:

Net

assets,

at

value

....................

$54,423,383

$139,095,742

$117,247,981

$187,032,112

Shares

outstanding

.....................

6,856,199

18,163,413

12,247,709

18,981,999

Net

asset

value

and

maximum

offering

price

per

share

a

...............................

$7.94

$7.66

$9.57

$9.85

Class

R:

Net

assets,

at

value

....................

$—

$—

$181,329

$14,738,695

Shares

outstanding

.....................

—

—

18,860

1,490,890

Net

asset

value

and

maximum

offering

price

per

share

...............................

$—

$—

$9.61

$9.89

Class

R6:

Net

assets,

at

value

....................

$38,925,421

$16,211,486

$440,686,900

$581,633,917

Shares

outstanding

.....................

4,891,492

2,113,837

45,525,040

58,161,306

Net

asset

value

and

maximum

offering

price

per

share

...............................

$7.96

$7.67

$9.68

$10.00

Advisor

Class:

Net

assets,

at

value

....................

$93,006,457

$327,129,639

$251,916,882

$247,932,811

Shares

outstanding

.....................

11,697,617

42,719,182

26,048,759

24,821,358

Net

asset

value

and

maximum

offering

price

per

share

...............................

$7.95

$7.66

$9.67

$9.99

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

six

months

ended

April

30,

2021

(unaudited)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

113

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

.....................

$—

$491,847

$77,256

$764,905

Controlled

affiliates

(Note

3

f

and

12

)

........

—

—

—

7,345,509

Non-controlled

affiliates

(Note

3

f

and

12

)

.....

591

905,261

860,106

420,479

Interest:

(net

of

foreign

taxes

of

$—,

$—,

$1,253

and

$—

respectively)

Unaffiliated

issuers:

Paydown

gain

(loss)

..................

(3,624,318)

3,174,357

(6,423,455)

(7,443,701)

Paid

in

cash

b

........................

7,263,462

24,755,346

28,712,461

63,212,646

Non-controlled

affiliates

(Note

3

f

and

12

)

.....

—

793,923

—

—

Income

from

securities

loaned:

Unaffiliated

entities

(net

of

fees

and

rebates)

..

—

—

5,900

9,297

Non-controlled

affiliates

(Note

3

f

)

..........

—

—

6

27

Total

investment

income

................

3,639,735

30,120,734

23,232,274

64,309,162

Expenses:

Management

fees

(Note

3

a

)

................

1,775,532

3,482,316

6,545,818

12,082,347

Distribution

fees:

(Note

3c

)

    Class

A

.............................

557,476

875,850

2,254,872

5,173,083

    Class

A1

............................

37,480

—

—

—

    Class

C

.............................

200,357

476,346

378,518

652,940

    Class

R

.............................

—

—

344

41,987

Transfer

agent

fees:

(Note

3e

)

    Class

A

.............................

308,251

476,303

1,118,965

2,815,778

    Class

A1

............................

51,809

—

—

—

    Class

C

.............................

42,556

99,844

72,154

136,679

    Class

R

.............................

—

—

86

11,456

    Class

R6

............................

9,630

9,577

68,913

79,262

    Advisor

Class

.........................

64,195

228,370

143,557

178,556

Custodian

fees

(Note

4

)

...................

2,308

3,916

16,998

30,081

Reports

to

shareholders

...................

51,503

91,708

158,946

307,667

Registration

and

filing

fees

.................

61,319

47,055

104,140

116,037

Professional

fees

........................

36,276

54,080

85,197

86,306

Trustees'

fees

and

expenses

...............

4,239

10,562

16,885

25,367

Marketplace

lending

fees

(Note

1

j

)

...........

—

—

430,804

129,601

Other

.................................

125,032

20,126

85,415

103,413

Total

expenses

......................

3,327,963

5,876,053

11,481,612

21,970,560

Expense

reductions

(Note

4

)

............

—

(3,585)

(12,432)

—

Expenses

waived/paid

by

affiliates

(Note

3

f

and

3

g

)

...........................

(105,181)

(128,590)

(3,658,738)

(1,231,217)

Net

expenses

......................

3,222,782

5,743,878

7,810,442

20,739,343

Net

investment

income

.............

416,953

24,376,856

15,421,832

43,569,819

Franklin

Investors

Securities

Trust

Financial

Statements

Statements

of

Operations

(continued)

for

the

six

months

ended

April

30,

2021

(unaudited)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

114

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:

(net

of

foreign

taxes

of

$–,

$–,

$6,125

and

$17,988

respectively)

Unaffiliated

issuers

...................

(102,676)

(15,821,696)

13,168,461

40,314,922

Non-controlled

affiliates

(Note

3

f

and

12

)

...

—

(74,217,683)

—

—

Foreign

currency

transactions

.............

—

—

2,150,561

4,328,461

Forward

exchange

contracts

..............

—

—

(1,533,545)

(4,555,528)

Futures

contracts

......................

—

—

8,254,286

(24,589,889)

TBA

sale

commitments

..................

—

—

10,076

151,165

Swap

contracts

........................

—

—

(524,172)

1,748,208

Capital

gain

distributions

from

management

investment

companies:

Controlled

affiliates

(Note

3

f

)

............

—

—

—

4,235,752

Net

realized

gain

(loss)

...............

(102,676)

(90,039,379)

21,525,667

21,633,091

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

...................

2,774,152

58,082,747

31,266,865

(41,513,418)

Controlled

affiliates

(Note

3

f

)

............

—

—

—

(10,925,813)

Non-controlled

affiliates

(Note

3

f

and

12

)

...

—

85,747,743

(5,494,052)

888,979

Translation

of

other

assets

and

liabilities

denominated

in

foreign

currencies

........

—

—

(1,717,309)

956,065

Written

options

........................

—

—

—

674,089

Forward

exchange

contracts

..............

—

—

(1,258,180)

(5,838,867)

Futures

contracts

......................

—

—

581,264

3,730,751

Swap

contracts

........................

—

—

6,783,036

12,003,396

Change

in

deferred

taxes

on

unrealized

appreciation

..........................

—

—

1,279

3,651

Net

change

in

unrealized

appreciation

(depreciation)

......................

2,774,152

143,830,490

30,162,903

(40,021,167)

Net

realized

and

unrealized

gain

(loss)

.........

2,671,476

53,791,111

51,688,570

(18,388,076)

Net

increase

(decrease)

in

net

assets

resulting

from

operations

...............................

$3,088,429

$78,167,967

$67,110,402

$25,181,743

a

Includes

the

consolidated

operations

of

FT

Holdings

Corporation

I

from

November

1,

2020

through

April

27,

2021.

See

Note

1(g

).

b

Includes

amortization

of

premium

and

accretion

of

discount.

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.

Semiannual

Report

115

Franklin

Adjustable

U.S.

Government

Securities

Fund

Franklin

Floating

Rate

Daily

Access

Fund

Six

Months

Ended

April

30,

2021

(unaudited)

Year

Ended

October

31,

2020

Six

Months

Ended

April

30,

2021

(unaudited)

Year

Ended

October

31,

2020

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

............

$416,953

$11,582,257

$24,376,856

$71,688,245

Net

realized

gain

(loss)

............

(102,676)

(1,630,151)

(90,039,379)

(117,211,319)

Net

change

in

unrealized

appreciation

(depreciation)

.................

2,774,152

(754,301)

143,830,490

(68,532,307)

Net

increase

(decrease)

in

net

assets

resulting

from

operations

.

3,088,429

9,197,805

78,167,967

(114,055,381)

Distributions

to

shareholders:

Class

A

........................

(2,500,199)

(8,897,340)

(16,410,113)

(39,489,904)

Class

A1

.......................

(477,112)

(1,864,934)

—

—

Class

C

........................

(224,952)

(1,350,734)

(3,162,917)

(9,486,664)

Class

R6

.......................

(255,223)

(788,720)

(268,960)

(677,256)

Advisor

Class

...................

(636,045)

(2,630,546)

(8,407,414)

(27,632,187)

Total

distributions

to

shareholders

.....

(4,093,531)

(15,532,274)

(28,249,404)

(77,286,011)

Capital

share

transactions:

(Note

2

)

Class

A

........................

(19,885,816)

70,494,497

(36,224,673)

(233,315,055)

Class

A1

.......................

(4,849,919)

(7,859,324)

—

—

Class

C

........................

(16,696,790)

(12,754,011)

(27,263,944)

(109,798,686)

Class

R6

.......................

5,436,173

1,855,199

6,232,401

(7,604,281)

Advisor

Class

...................

(5,707,650)

(3,762,005)

(64,330,322)

(416,487,193)

Total

capital

share

transactions

.......

(41,704,002)

47,974,356

(121,586,538)

(767,205,215)

Net

increase

(decrease)

in

net

assets

.....................

(42,709,104)

41,639,887

(71,667,975)

(958,546,607)

Net

assets:

Beginning

of

period

................

742,123,843

700,483,956

1,263,780,106

2,222,326,713

End

of

period

.....................

$699,414,739

$742,123,843

$1,192,112,131

$1,263,780,106

Franklin

Investors

Securities

Trust

Financial

Statements

Statements

of

Changes

in

Net

Assets

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

116

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

a

Six

Months

Ended

April

30,

2021

(unaudited)

Year

Ended

October

31,

2020

Six

Months

Ended

April

30,

2021

(unaudited)

Year

Ended

October

31,

2020

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

............

$15,421,832

$81,129,500

$43,569,819

$133,781,601

Net

realized

gain

(loss)

............

21,525,667

(38,737,091)

21,633,091

49,502,352

Net

change

in

unrealized

appreciation

(depreciation)

.................

30,162,903

(8,389,225)

(40,021,167)

22,324,451

Net

increase

(decrease)

in

net

assets

resulting

from

operations

.

67,110,402

34,003,184

25,181,743

205,608,404

Distributions

to

shareholders:

Class

A

........................

(30,673,607)

(48,969,878)

(69,017,862)

(112,806,584)

Class

C

........................

(1,765,296)

(3,380,036)

(2,987,777)

(6,432,576)

Class

R

........................

(2,009)

(2,772)

(266,098)

(545,953)

Class

R6

.......................

(9,340,463)

(32,873,199)

(10,348,529)

(17,343,719)

Advisor

Class

...................

(4,209,124)

(7,090,816)

(4,743,900)

(22,371,427)

Total

distributions

to

shareholders

.....

(45,990,499)

(92,316,701)

(87,364,166)

(159,500,259)

Capital

share

transactions:

(Note

2

)

Class

A

........................

87,823,807

168,718,534

176,108,282

569,003,350

Class

C

........................

(1,555,397)

(15,065,931)

(19,692,745)

(30,617,403)

Class

R

........................

85,892

74,287

(2,330,034)

(4,067,761)

Class

R6

.......................

(117,650,131)

(418,721,668)

41,493,032

59,823,951

Advisor

Class

...................

20,882,108

(21,237,380)

(42,398,946)

(568,354,934)

Total

capital

share

transactions

.......

(10,413,721)

(286,232,158)

153,179,589

25,787,203

Net

increase

(decrease)

in

net

assets

.....................

10,706,182

(344,545,675)

90,997,166

71,895,348

Net

assets:

Beginning

of

period

................

2,679,490,223

3,024,035,898

5,097,618,504

5,025,723,156

End

of

period

.....................

$2,690,196,405

$2,679,490,223

$5,188,615,670

$5,097,618,504

a

Includes

the

consolidated

operations

of

FT

Holdings

Corporation

I

from

November

1,

2020

through

April

27,

2021.

See

Note

1(g

).

Franklin

Investors

Securities

Trust

117

franklintempleton.com

Semiannual

Report

Notes

to

Financial

Statements

(unaudited)

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

(unaudited)

118

franklintempleton.com

Semiannual

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.

Events

can occur

between

the

time

at

which

trading

in

a

foreign

security

is

completed

and

4

p.m.

Eastern

time

that

might

call

into

question

the

reliability

of

the

value

of

a

portfolio

security

held

by

the

Fund.

As

a

result,

differences

may

arise

between

the

value

of

the

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

April

30,

2021,

certain

securities

may

have

been

fair

valued

using

these

procedures,

in

which

case

the

securities

were

categorized

as

Level

2

inputs

within

the

fair

value

hierarchy

(referred

to

as

“market

level

fair

value”).

See

the

Fair

Value

Measurements

note

for

more

information.

When

the

last

day

of

the

reporting

period

is

a

non-business

day,

certain

foreign

markets

may

be

open

on

those

days

that

the

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

(unaudited)

119

franklintempleton.com

Semiannual

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

period

end,

as

indicated

in

the

Statements

of

Investments,

had

been

entered

into

on

April

30,

2021.

d.

Securities

Purchased

on

a

Delayed

Delivery

and

TBA

Basis

Certain

or

all

Funds

purchase

securities

on

a

delayed

delivery

and

to-be-announced

(TBA)

basis,

with

payment

and

delivery

scheduled

for

a

future

date.

These

transactions

are

subject

to

market

fluctuations

and

are

subject

to

the

risk

that

the

value

at

delivery

may

be

more

or

less

than

the

trade

date

purchase

price.

Although

the

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

(unaudited)

120

franklintempleton.com

Semiannual

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

interest

rate

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

(unaudited)

121

franklintempleton.com

Semiannual

Report

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

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

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.

Securities

Lending

Certain

or

all

Funds

participate

in

a

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.

These

securities

received

as

collateral

are

held

in

segregated

accounts

with

the

Funds’

custodian.

The

Fund

cannot

repledge

or

resell

these

securities

received

as

collateral.

As

such,

the

non-

cash

collateral

is

excluded

from

the

Statements

of

Assets

and

Liabilities.

The

Fund

may

receive

income

from

the

investment

of

cash

collateral,

in

addition

to

lending

fees

and

rebates

paid

by

the

borrower.

Income

from

securities

loaned,

net

of

fees

paid

to

the

securities

lending

agent

and/or

third-

party

vendor,

is

reported

separately

in

the

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)

e.

Derivative

Financial

Instruments

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

122

franklintempleton.com

Semiannual

Report

g.

Investments

in

FT

Holdings

Corporation

I

(FT

Subsidiary)

Prior

to

April

27,

2021,

the

Franklin

Total

Return

Fund

invested

in

FT

Subsidiary.

FT

Subsidiary

is

a

Delaware

Corporation,

was

a

wholly-owned

subsidiary

of

the

Fund,

and

was

able

to

invest

in

certain

financial

instruments

consistent

with

the

investment

objective

of

the

Fund.

In

December

2020,

FT

Subsidiary’s

sole

investment,

Turtle

Bay

Resort,

liquidated

and

paid

a

final

distribution.

FT

Subsidiary,

which

is

a

tax

paying

entity,

recognized

a

realized

loss

on

its

Turtle

Bay

investment.

An

estimated

deferred

tax

asset

based

on

such

realized

loss

was

recorded.

The

estimated

benefit

was

calculated

using

the

federal

rates

applicable

at

the

time

the

tax

was

paid.

The

losses

will

be

carried-back

to

offset

prior

year

gains,

resulting

in

a

tax

refund

which

will

relieve

the

estimated

deferred

tax

asset

once

the

final

tax

filings

are

completed.

On

April

27,

2021,

the

Fund

redeemed

out

of

FT

Subsidiary.

FT

Subsidiary

ceased

operations

and

simultaneously

transferred

its

assets,

including

the

deferred

tax

asset,

and

liabilities

to

the

Fund.

The

results

of

operations

of

the

FT

Subsidiary

through

April

27,

2021

have

been

consolidated

into

the

Consolidated

Statement

of

Operations,

Consolidated

Statements

of

Changes

in

Net

Assets

and

Consolidated

Financial

Highlights.

h.

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.

i.

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.

j.

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

1.

Organization

and

Significant

Accounting

Policies

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

123

franklintempleton.com

Semiannual

Report

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.

k.

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

April

30,

2021, 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. 

l.

Security

Transactions,

Investment

Income,

Expenses

and

Distributions

Security

transactions

are

accounted

for

on

trade

date.

Realized

gains

and

losses

on

security

transactions

are

determined

on

a

specific

identification

basis.

Interest

income

and

estimated

expenses

are

accrued

daily.

Amortization

of

premium

and

accretion

of

discount

on

debt

securities

are

included

in

interest

income.

Paydown

gains

and

losses

are

recorded

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.

m.

Accounting

Estimates

The

preparation

of

financial

statements

in

accordance

with

U.S.

GAAP

requires

management

to

make

estimates

and

assumptions

that

affect

the

reported

amounts

of

assets

1.

Organization

and

Significant

Accounting

Policies

(continued)

j.

Marketplace

Lending

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

124

franklintempleton.com

Semiannual

Report

and

liabilities

at

the

date

of

the

financial

statements

and

the

amounts

of

income

and

expenses

during

the

reporting

period.

Actual

results

could

differ

from

those

estimates.

n.

Guarantees

and

Indemnifications

Under

the

Trust's

organizational

documents,

its

officers

and

trustees

are

indemnified

by

the

Trust

against

certain

liabilities

arising

out

of

the

performance

of

their

duties

to

the

Trust.

Additionally,

in

the

normal

course

of

business,

the

Trust,

on

behalf

of

the

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

April

30,

2021,

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:

Six

Months

ended

April

30,

2021

Shares

sold

a

...................................

9,378,885

$74,538,575

9,287,758

$70,451,349

Shares

issued

in

reinvestment

of

distributions

..........

297,211

2,361,865

2,000,861

15,123,399

Shares

redeemed

...............................

(12,183,890)

(96,786,256)

(16,110,935)

(121,799,421)

Net

increase

(decrease)

..........................

(2,507,794)

$(19,885,816)

(4,822,316)

$(36,224,673)

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)

Class

A1

Class

A1

Shares:

Six

Months

ended

April

30,

2021

Shares

sold

...................................

322,254

$2,560,122

—

$—

Shares

issued

in

reinvestment

of

distributions

..........

56,573

449,372

—

—

Shares

redeemed

...............................

(989,222)

(7,859,413)

—

—

Net

increase

(decrease)

..........................

(610,395)

$(4,849,919)

—

$—

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)

—

$—

Class

C

1.

Organization

and

Significant

Accounting

Policies

(continued)

m.

Accounting

Estimates

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

125

franklintempleton.com

Semiannual

Report

Franklin

Adjustable

U.S.

Government

Securities

Fund

Franklin

Floating

Rate

Daily

Access

Fund

Shares

Amount

Shares

Amount

Class

C

Shares:

Six

Months

ended

April

30,

2021

Shares

sold

...................................

846,805

$6,724,279

1,009,175

$7,674,208

Shares

issued

in

reinvestment

of

distributions

..........

28,040

222,643

403,400

3,050,307

Shares

redeemed

a

..............................

(2,977,595)

(23,643,712)

(5,024,863)

(37,988,459)

Net

increase

(decrease)

..........................

(2,102,750)

$(16,696,790)

(3,612,288)

$(27,263,944)

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)

Class

R6

Class

R6

Shares:

Six

Months

ended

April

30,

2021

Shares

sold

...................................

1,500,007

$11,935,537

1,234,502

$9,416,700

Shares

issued

in

reinvestment

of

distributions

..........

32,094

255,464

33,765

256,090

Shares

redeemed

...............................

(848,459)

(6,754,828)

(452,814)

(3,440,389)

Net

increase

(decrease)

..........................

683,642

$5,436,173

815,453

$6,232,401

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)

Advisor

Class

Advisor

Class

Shares:

Six

Months

ended

April

30,

2021

Shares

sold

...................................

2,536,557

$20,183,764

11,287,498

$85,638,795

Shares

issued

in

reinvestment

of

distributions

..........

73,524

584,741

694,699

5,249,907

Shares

redeemed

...............................

(3,328,431)

(26,476,155)

(20,494,537)

(155,219,024)

Net

increase

(decrease)

..........................

(718,350)

$(5,707,650)

(8,512,340)

$(64,330,322)

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)

2.

Shares

of

Beneficial

Interest

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

126

franklintempleton.com

Semiannual

Report

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

Shares

Amount

Shares

Amount

Class

A

Class

A

Shares:

Six

Months

ended

April

30,

2021

Shares

sold

a

...................................

37,532,347

$361,134,964

50,993,538

$515,069,620

Shares

issued

in

reinvestment

of

distributions

..........

2,949,889

28,394,889

6,216,585

62,842,740

Shares

redeemed

...............................

(31,353,631)

(301,706,046)

(39,919,728)

(401,804,078)

Net

increase

(decrease)

..........................

9,128,605

$87,823,807

17,290,395

$176,108,282

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

Class

C

Class

C

Shares:

Six

Months

ended

April

30,

2021

Shares

sold

...................................

2,322,852

$22,249,290

2,871,988

$28,864,407

Shares

issued

in

reinvestment

of

distributions

..........

178,825

1,713,416

294,521

2,957,201

Shares

redeemed

a

..............................

(2,663,450)

(25,518,103)

(5,149,900)

(51,514,353)

Net

increase

(decrease)

..........................

(161,773)

$(1,555,397)

(1,983,391)

$(19,692,745)

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)

Class

R

Class

R

Shares:

Six

Months

ended

April

30,

2021

Shares

sold

...................................

8,876

$85,519

216,750

$2,182,867

Shares

issued

in

reinvestment

of

distributions

..........

209

2,009

26,277

264,799

Shares

redeemed

...............................

(170)

(1,636)

(479,852)

(4,777,700)

Net

increase

(decrease)

..........................

8,915

$85,892

(236,825)

$(2,330,034)

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)

Class

R6

2.

Shares

of

Beneficial

Interest

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

127

franklintempleton.com

Semiannual

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:

Six

Months

ended

April

30,

2021

Shares

sold

...................................

8,797,080

$85,194,082

9,113,782

$92,413,563

Shares

issued

in

reinvestment

of

distributions

..........

965,117

9,354,040

938,205

9,547,902

Shares

redeemed

...............................

(21,872,539)

(212,198,253)

(5,978,513)

(60,468,433)

Net

increase

(decrease)

..........................

(12,110,342)

$(117,650,131)

4,073,474

$41,493,032

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

Advisor

Class

Advisor

Class

Shares:

Six

Months

ended

April

30,

2021

Shares

sold

...................................

7,872,510

$76,173,440

4,524,834

$46,068,134

Shares

issued

in

reinvestment

of

distributions

..........

401,714

3,888,906

424,742

4,320,191

Shares

redeemed

...............................

(6,113,209)

(59,180,238)

(9,137,684)

(92,787,271)

Net

increase

(decrease)

..........................

2,161,015

$20,882,108

(4,188,108)

$(42,398,946)

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)

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

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

(unaudited)

128

franklintempleton.com

Semiannual

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

period

ended

April

30,

2021,

each

Fund's

annualized

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

3.

Transactions

with

Affiliates

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

129

franklintempleton.com

Semiannual

Report

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

Fund’s

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:

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

period:

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%

0.583%

0.496%

Franklin

Total

Return

Fund

Gross

effective

investment

management

fee

rate

........

0.466%

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

(unaudited)

130

franklintempleton.com

Semiannual

Report

e.

Transfer

Agent

Fees

Each

class

of

shares

pays

transfer

agent

fees

to

Investor

Services

for

its

performance

of

shareholder

servicing

obligations.

The

fees

are

based

on

an

annualized

asset

based

fee

of

0.02%

plus

a

transaction

based

fee.

In

addition,

each

class

reimburses

Investor

Services

for

out

of

pocket

expenses

incurred

and,

except

for

Class

R6,

reimburses

shareholder

servicing

fees

paid

to

third

parties.

These

fees

are

allocated

daily

based

upon

their

relative

proportion

of

such

classes'

aggregate

net

assets.

Class

R6

pays

Investor

Services

transfer

agent

fees

specific

to

that

class.

For

the

period

ended

April

30,

2021,

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.

As

defined

in

the

1940

Act,

an

investment

is

deemed

to

be

a

“Controlled

Affiliate”

of

a

fund

when

a

fund

owns,

either

directly

or

indirectly,

25%

or

more

of

the

affiliated

fund’s

outstanding

shares

or

has

the

power

to

exercise

control

over

management

or

policies

of

such

fund.

The

Funds

do

not

invest

for

purposes

of

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

period

ended

April

30,

2021,

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

..................

$4,517

$7,931

$27,699

$140,189

CDSC

retained

...........................

$20,893

$13,173

$45,697

$50,485

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

........................

$245,584

$368,779

$514,784

$1,027,358

    aa

Value

at

Beginning

of

Period

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Period

Number

of

Shares

Held

at

End

of

Period

Investment

Income

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,

0.01%

.......

$37,053,731

$1,642,463

$(3,721,003)

$—

$—

$34,975,191

34,975,191

$591

Total

Affiliated

Securities

....

$37,053,731

$1,642,463

$(3,721,003)

$—

$—

$34,975,191

$591

3.

Transactions

with

Affiliates

(continued)

d.

Sales

Charges/Underwriting

Agreements

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

131

franklintempleton.com

Semiannual

Report

    aa

Value

at

Beginning

of

Period

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Period

Number

of

Shares

Held

at

End

of

Period

Investment

Income

Franklin

Floating

Rate

Daily

Access

Fund

Non-Controlled

Affiliates

Dividends

Franklin

Floating

Rate

Income

Fund

$37,437,554

$—

$(4,000,005)

$(1,176,106)

$3,668,240

$35,929,683

4,630,114

$904,285

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.......

69,832,875

93,178,663

(103,498,574)

—

—

59,512,964

59,512,964

976

Total

Affiliated

Securities

....

$107,270,429

$93,178,663

$(107,498,579)

$(1,176,106)

$3,668,240

$95,442,647

$905,261

Franklin

Low

Duration

Total

Return

Fund

Non-Controlled

Affiliates

Dividends

Franklin

Floating

Rate

Income

Fund

$17,370,266

$82,491,968

$—

$—

$(5,430,216)

$94,432,018

12,169,074

$733,032

Franklin

Liberty

High

Yield

Corporate

ETF

............

—

6,912,430

—

—

(63,836)

6,848,594

259,500

125,329

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.......

197,465,127

239,450,780

(329,985,259)

—

—

106,930,648

106,930,648

1,745

Total

Non-Controlled

Affiliates

$214,835,393

$328,855,178

$(329,985,259)

$

—

$

(5,494,052)

$208,211,260

$

860,106

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.......

$—

$5,226,000

$(5,133,000)

$

—

$

—

$93,000

93,000

$6

Total

Affiliated

Securities

....

$214,835,393

$334,081,178

$(335,118,259)

$—

$(5,494,052)

$208,304,260

$860,112

Franklin

Total

Return

Fund

Controlled

Affiliates

Dividends

Franklin

Floating

Rate

Income

Fund

$11,263,485

$177,153,326

$—

$

—

$

(1,274,837)

$

187,141,974

24,116,234

$

979,825

Franklin

Liberty

High

Yield

Corporate

ETF

............

147,928,671

—

—

—

5,933,774

153,862,445

5,830,000

3,728,781

Franklin

Liberty

Investment

Grade

Corporate

ETF

............

487,160,950

—

—

—

(15,584,750)

471,576,200

18,335,000

6,872,655

a

Total

Controlled

Affiliates

....

$646,353,106

$177,153,326

$—

$

—

$

(10,925,813)

$812,580,619

$

11,581,261

Non-Controlled

Affiliates

Dividends

Franklin

Liberty

Senior

Loan

ETF

$21,950,830

$20,560,443

$—

$—

$888,979

$43,400,252

1,737,400

$419,265

3.

Transactions

with

Affiliates

(continued)

f.

Investments

in

Affiliated

Management

Investment

Companies

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

132

franklintempleton.com

Semiannual

Report

g.

Waiver

and

Expense

Reimbursements

Effective

March

1,

2021,

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

Adjustable

U.S.

Government

Securities

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)

for

Class

A,

Class

A1,

Class

C,

and

Advisor

Class

of

the

Fund

do

not

exceed

0.65%

and

for

Class

R6

do

not

exceed

0.53%

based

on

the

average

net

assets

of

each

class

until

February

28,

2022.

Total

expenses

waived

or

paid

are

not

subject

to

recapture

subsequent

to

the

Fund’s

fiscal

year

end.

Prior

to

March

1,

2021,

for

Franklin

Adjustable

U.S.

Government

Securities,

Investor

Services

had

contractually

agreed

in

advance

to

waive

or

limit

its

fees

so

that

the

Class

R6

transfer

agent

fees

did

not

exceed

0.03%

based

on

the

average

net

assets

of

the

class.

For

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,

2022.

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

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)

for

Class

A,

Class

C,

Class

R,

and

Advisor

Class

of

the

Fund

does

not

exceed

0.44%

and

for

Class

R6

do

not

exceed

0.30%

based

on

the

average

net

assets

of

each

class

until

February

28,

2022.

Total

expenses

waived

or

paid

are

not

subject

to

recapture

subsequent

to

the

Fund’s

fiscal

year

end.

Effective

March

1,

2021,

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

Total

Return

Fund

so

that

the

operating

expenses

(excluding

distribution

fees

and

acquired

fund

fees

and

expenses

and

certain

non-routine

expenses

or

    aa

Value

at

Beginning

of

Period

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Period

Number

of

Shares

Held

at

End

of

Period

Investment

Income

Franklin

Total

Return

Fund

(continued)

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.......

226,741,557

580,517,680

(759,019,969)

—

—

48,239,268

48,239,268

1,214

Total

Non-Controlled

Affiliates

$248,692,387

$601,078,123

$(759,019,969)

$

—

$

888,979

$91,639,520

$

420,479

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.......

$—

$22,567,000

$(16,810,000)

$

—

$

—

$5,757,000

5,757,000

$27

Total

Affiliated

Securities

....

$895,045,493

$800,798,449

$(775,829,969)

$—

$(10,036,834)

$909,977,139

$12,001,767

a

Dividend

income

includes

capital

gain

distributions

received,

if

any,

from

underlying

funds,

and

are

presented

in

corresponding

line

item

in

the

Statement

of

Operations.

3.

Transactions

with

Affiliates

(continued)

f.

Investments

in

Affiliated

Management

Investment

Companies

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

133

franklintempleton.com

Semiannual

Report

costs,

including

those

relating

to

litigation,

indemnification,

reorganizations,

and

liquidations)

for

Class

A,

Class

C,

Class

R,

and

Advisor

Class

of

the

Fund

do

not

exceed

0.58%

and

for

Class

R6

do

not

exceed

0.47%

based

on

the

average

net

assets

of

each

class

until

February

28,

2022.

Total

expenses

waived

or

paid

are

not

subject

to

recapture

subsequent

to

the

Fund’s

fiscal

year

end.

Prior

to

March

1,

2021,

expenses

(excluding

certain

fees

and

expenses

as

previously

disclosed)

for

Franklin

Total

Return

Fund

for

Class

A,

Class

C,

Class

R,

and

Advisor

were

limited

to

0.60%

and

expenses

for

Class

R6

were

limited

to

0.48%

based

on

the

average

net

assets

of

each

class.

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 period

ended

April

30,

2021 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:

At

April

30,

2021,

the

cost

of

investments

and

net

unrealized

appreciation

(depreciation)

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.

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

a

a

a

a

a

Cost

of

investments

.......................

$694,733,175

$1,373,448,632

$2,742,543,503

$5,649,323,809

Unrealized

appreciation

.....................

$5,258,924

$26,838,497

$52,993,939

$144,197,091

Unrealized

depreciation

.....................

(3,549,086)

(127,197,218)

(64,970,410)

(131,729,908)

Net

unrealized

appreciation

(depreciation)

.......

$1,709,838

$(100,358,721)

$(11,976,471)

$12,467,183

3.

Transactions

with

Affiliates

(continued)

g.

Waiver

and

Expense

Reimbursements

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

134

franklintempleton.com

Semiannual

Report

6.

Investment

Transactions

Purchases

and

sales

of

investments

(excluding

short

term

securities

and

in-kind

transactions)

for

the

period

ended

April

30,

2021,

were

as

follows:

At

April

30,

2021,

in

connection

with

securities

lending

transactions,

certain

or

all

Funds

loaned

investments

and

received

cash

collateral

as

follows:

7.

Credit Risk

and

Defaulted

Securities

At

April

30,

2021,

Franklin

Floating

Rate

Daily

Access

Fund,

Franklin

Low

Duration

Total

Return

Fund

and

Franklin

Total

Return

Fund

had

82.0%,

10.4%

and

9.0%,

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

April

30,

2021,

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.

Franklin

Adjustable

U.S.

Government

Securities

Fund

Franklin

Floating

Rate

Daily

Access

Fund

Franklin

Low

Duration

Total

Return

Fund

a

Franklin

Total

Return

Fund

b

Purchases

..............................

$216,813,536

$428,677,865

$1,118,399,457

$5,693,286,341

Sales

..................................

$242,025,905

$501,980,304

$1,228,357,237

$5,653,668,289

a

Purchases

and

sales

of

investments

excludes

in-kind

transactions

of

$75,206,407.

See

Note

13.

b

Purchases

and

sales

of

investments

excludes

in-kind

transactions

of

$115,539,642.

See

Note

13.

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

Securities

lending

transactions:

Equity

investments

........................

$116,435

$7,196,868

Value

Percentage

of

Net

Assets

Franklin

Floating

Rate

Daily

Access

Fund

.........................................

$

44,520,614

3.7%

Franklin

Total

Return

Fund

....................................................

71,750

—%

†

†

Rounds

to

less

than

0.1%

of

net

assets.

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

135

franklintempleton.com

Semiannual

Report

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

April

30,

2021,

investments

in

restricted

securities,

excluding

securities

exempt

from

registration

under

the

1933

Act,

were

as

follows:

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

April

30,

2021,

unfunded

commitments

were

as

follows:

Shares

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

$

26,667,280

Total

Restricted

Securities

(Value

is

2.24%

of

Net

Assets)

.............

$12,791,766

$26,667,280

Shares

Issuer

Acquisition

Date

Cost

Value

Franklin

Low

Duration

Total

Return

Fund

12,326,925

K2016470219

South

Africa

Ltd.,

A

...............

4/15/13

-

2/01/17

$

92,077

$

—

1,226,701

K2016470219

South

Africa

Ltd.,

B

...............

2/01/17

911

—

Total

Restricted

Securities

(Value

is

—%

of

Net

Assets)

..............

$92,988

$—

Shares

Issuer

Acquisition

Date

Cost

Value

Franklin

Total

Return

Fund

28,762,824

K2016470219

South

Africa

Ltd.,

A

...............

4/15/13

-

2/01/17

$

221,469

$

—

2,862,311

K2016470219

South

Africa

Ltd.,

B

...............

2/01/17

2,125

—

Total

Restricted

Securities

(Value

is

—%

of

Net

Assets)

..............

$223,594

$—

a

The

Fund

also

invests

in

unrestricted

securities

of

the

issuer,

valued

at

$10,085,013

as

of

April

30,

2021.

Borrower

Unfunded

Commitment

Franklin

Floating

Rate

Daily

Access

Fund

Fieldwood

Energy

LLC

$6,781,487

National

Mentor

Holdings

1,014,455

Peraton

Corp

5,304,874

$13,100,816

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

136

franklintempleton.com

Semiannual

Report

11.

Other

Derivative

Information

At

April

30,

2021,

investments

in

derivative

contracts

are

reflected

in

the

Statements

of

Assets

and

Liabilities

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

Low

Duration

Total

Return

Fund

Interest

rate

contracts

.......

Variation

margin

on

futures

contracts

$

3,031,618

a

Variation

margin

on

futures

contracts

$

577,773

a

Variation

margin

on

centrally

cleared

swap

contracts

2,338,00

8

b

Variation

margin

on

centrally

cleared

swap

contracts

—

Foreign

exchange

contracts

..

Unrealized

appreciation

on

OTC

forward

exchange

contracts

472,095

Unrealized

depreciation

on

OTC

forward

exchange

contracts

1,985,388

Unrealized

appreciation

on

OTC

swap

contracts

126,984

Unrealized

depreciation

on

OTC

swap

contracts

6,475,71

4

Credit

contracts

............

Variation

margin

on

centrally

cleared

swap

contracts

52,24

7

b

Variation

margin

on

centrally

cleared

swap

contracts

—

OTC

swap

contracts

(upfront

payments)

163,490

OTC

swap

contracts

(upfront

receipts)

2,091,35

6

Unrealized

appreciation

on

OTC

swap

contracts

739,207

Unrealized

depreciation

on

OTC

swap

contracts

763,85

7

Total

....................

$6,923,649

$11,894,088

Franklin

Total

Return

Fund

Interest

rate

contracts

.......

Investments

in

securities,

at

value

3,406,469

c

Options

written,

at

value

1,322,944

Variation

margin

on

futures

contracts

3,257,256

a

Variation

margin

on

futures

contracts

5,254,881

a

Variation

margin

on

centrally

cleared

swap

contracts

4,462,988

b

Variation

margin

on

centrally

cleared

swap

contracts

—

Foreign

exchange

contracts

..

Unrealized

appreciation

on

OTC

forward

exchange

contracts

1,249,431

Unrealized

depreciation

on

OTC

forward

exchange

contracts

7,308,370

Unrealized

appreciation

on

OTC

swap

contracts

—

Unrealized

depreciation

on

OTC

swap

contracts

12,630,316

Credit

contracts

............

OTC

swap

contracts

(upfront

payments)

188,972

OTC

swap

contracts

(upfront

receipts)

7,236,22

8

Unrealized

appreciation

on

OTC

swap

contracts

3,239,11

2

Unrealized

depreciation

on

OTC

swap

contracts

1,331,05

6

Value

recovery

instruments

...

Investments

in

securities,

at

value

501,684

d

Investments

in

securities,

at

value

—

Total

....................

$16,305,912

$35,083,795

a

This

amount

reflects

the

cumulative

appreciation

(depreciation)

of

futures

contracts

as

reported

in

the

Statement

of

Investments.

Only

the

variation

margin

receivable/

payable

at

period

end

is

separately

reported

within

the

Statements

of

Assets

and

Liabilities.

Prior

variation

margin

movements

were

recorded

to

cash

upon

receipt

or

payment.

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

137

franklintempleton.com

Semiannual

Report

For

the

period

ended

April

30,

2021,

the

effect

of

derivative

contracts

in

the

Statements

of

Operations

was

as

follows:

b

This

amount

reflects

the

cumulative

appreciation

(depreciation)

of

centrally

cleared

swap

contracts

as

reported

in

the

Statement

of

Investments.

Only

the

variation

margin

receivable/payable

at

period

end

is

separately

reported

within

the

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

Statements

of

Operations

Location

Net

Realized

Gain

(Loss)

for

the

Period

Statements

of

Operations

Location

Net

Change

in

Unrealized

Appreciation

(Depreciation)

for

the

Period

Net

realized

gain

(loss)

from:

Net

change

in

unrealized

  appreciation

(depreciation)

on:

Franklin

Low

Duration

Total

Return

Fund

Interest

rate

contracts

.......

Futures

contracts

$8,254,286

Futures

contracts

$581,264

Swap

contracts

(72,022)

Swap

contracts

3,450,906

Foreign

exchange

contracts

..

Swap

contracts

(1,573,545)

Swap

contracts

(2,144,663)

Forward

exchange

contracts

(1,533,545)

Forward

exchange

contracts

(1,258,180)

Credit

contracts

............

Swap

contracts

1,121,395

Swap

contracts

5,476,793

Total

....................

$6,196,569

$6,106,120

Franklin

Total

Return

Fund

Interest

rate

contracts

.......

Investments

8,276,601

a

Investments

(2,996,384)

a

Written

options

—

Written

options

674,089

Futures

contracts

(24,589,889)

Futures

contracts

3,730,751

Swap

contracts

868,550

Swap

contracts

5,988,135

Foreign

exchange

contracts

..

Swap

contracts

(490,851)

Swap

contracts

(4,536,538)

Forward

exchange

contracts

(4,555,528)

Forward

exchange

contracts

(5,838,867)

Credit

contracts

............

Swap

contracts

1,370,509

Swap

contracts

10,551,799

Value

recovery

instruments

Investments

—

Investments

$89,574

b

Total

....................

$(19,120,608)

$7,662,559

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.

.

11.

Other

Derivative

Information

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

138

franklintempleton.com

Semiannual

Report

For

the period

ended

April

30,

2021,

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

April

30,

2021,

the

Funds'

OTC

derivative

assets

and

liabilities

are

as

follows:

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

Futures

contracts

.........................

$1,197,453,869

$1,563,796,908

Swap

Contracts

..........................

298,335,702

427,192,983

Forward

exchange

contracts

.................

112,489,821

425,309,287

Options

.................................

—

368,457,143

VRI

....................................

—

489,108

Gross

Amounts

of

Assets

and

Liabilities

Presented

in

the

Statement

s

of

Assets

and

Liabilities

Assets

a

Liabilities

a

Derivatives

Franklin

Low

Duration

Total

Return

Fund

Forward

exchange

contracts

.............................

$

472,095

$

1,985,388

Swap

contracts

.......................................

1,029,681

9,330,92

7

Total

.............................................

$1,501,776

$11,316,315

Franklin

Total

Return

Fund

Forward

exchange

contracts

.............................

1,249,431

7,308,370

Options

purchased

.....................................

3,406,469

—

Options

written

........................................

—

1,322,944

Swap

contracts

.......................................

3,428,08

4

21,197,600

Total

.............................................

$8,083,984

$29,828,914

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.

11.

Other

Derivative

Information

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

139

franklintempleton.com

Semiannual

Report

At

April

30,

2021,

OTC

derivative

assets,

which

may

be

offset

against

OTC

derivative

liabilities

and

collateral

received

from

the

counterparty,

are

as

follows:

Amounts

Not

Offset

in

the

Statements

of

Assets

and

Liabilities

Gross

Amounts

of

Assets

Presented

in

the

Statements

of

Assets

and

Liabilities

Financial

Instruments

Available

for

Offset

Financial

Instruments

Collateral

Received

a,b

Cash

Collateral

Received

a

Net

Amount

(Not

less

than

zero)

Franklin

Low

Duration

Total

Return

Fund

Counterparty

BOFA

....................

$12,395

$(4,579)

$—

$—

$7,816

BZWS

...................

152,167

(99,781)

—

—

52,386

CITI

.....................

588,021

(588,021)

—

—

—

DBAB

...................

72,540

—

(72,540)

—

—

FBCO

...................

46,562

(46,562)

—

—

—

GSCO

...................

9,611

(9,611)

—

—

—

JPHQ

...................

600,899

(600,899)

—

—

—

MSCO

...................

19,581

(19,581)

—

—

—

Total

...................

$1,501,776

$(1,369,034)

$

(72,540)

$—

$60,202

Franklin

Total

Return

Fund

Counterparty

BOFA

....................

24,170

(8,929)

—

—

15,241

BZWS

...................

741,811

(215,550)

(526,261)

—

—

CITI

.....................

4,251,153

(4,251,153)

—

—

—

DBAB

...................

986,823

(85,398)

(901,425)

—

—

FBCO

...................

226,449

(7,840)

—

(140,000)

78,609

GSCO

...................

49,975

(49,975)

—

—

—

JPHQ

...................

1,708,217

(1,708,217)

—

—

—

MSCO

...................

95,386

(47,537)

—

—

47,849

Total

...................

$8,083,984

$(6,374,599)

(1,427,68

6

)

$(140,000)

$141,699

2

11.

Other

Derivative

Information

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

140

franklintempleton.com

Semiannual

Report

At

April

30,

2021,

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

151.

Amounts

Not

Offset

in

the

Statements

of

Assets

and

Liabilities

Gross

Amounts

of

Liabilities

Presented

in

the

Statements

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

BOFA

....................

$4,579

$(4,579)

$—

$—

$—

BZWS

...................

99,781

(99,781)

—

—

—

CITI

.....................

8,811,405

(588,021)

—

(8,223,384)

—

DBAB

...................

—

—

—

—

—

FBCO

...................

99,661

(46,562)

—

(53,099)

—

GSCO

...................

10,684

(9,611)

—

—

1,073

JPHQ

...................

2,269,014

(600,899)

—

(1,550,000)

118,115

MSCO

...................

21,191

(19,581)

—

(1,610)

—

Total

...................

$11,316,315

$(1,369,034)

$—

$(9,828,093)

$119,188

Franklin

Total

Return

Fund

Counterparty

BOFA

....................

8,929

(8,929)

—

—

—

BZWS

...................

215,550

(215,550)

—

—

—

CITI

.....................

20,823,256

(4,251,153)

—

(16,572,103)

—

DBAB

...................

85,398

(85,398)

—

—

—

FBCO

...................

7,840

(7,840)

—

—

—

GSCO

...................

55,555

(49,975)

—

—

5,580

JPHQ

...................

8,584,849

(1,708,217)

—

(6,130,000)

746,632

MSCO

...................

47,537

(47,537)

—

—

—

Total

...................

$29,828,914

$(6,374,599)

$—

$(22,702,103)

$752,212

a

In

some

instances,

the

collateral

amounts

disclosed

in

the

table

above

were

adjusted

due

to

the

requirement

to

limit

collateral

amounts

to

avoid

the

effect

of

over

collateralization.

Actual

collateral

received

and/or

pledged

may

be

more

than

the

amounts

disclosed

herein.

b

At

April

30,

2021,

the

Fund

received

U.S.

Treasury

Bonds

and

Notes

as

collateral

for

derivatives.

11.

Other

Derivative

Information

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

141

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Semiannual

Report

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.

Additionally,

as

defined

in

the

1940

Act,

an

investment

is

deemed

to

be

a

“Controlled

Affiliate”

of

a

fund

when

a

fund

owns,

either

directly

or

indirectly,

25%

or

more

of

the

affiliated

companies’

outstanding

shares

or

has

the

power

to

exercise

control

over

management

or

policies

of

such

company.

During

the

period

ended

April

30,

2021,

investments

in

“affiliated

companies”

were

as

follows:

13.

Transfer

In-Kind

On

March

5,

2021,

the

Franklin

Low

Duration

Total

Return

Fund

and

Franklin

Total

Return

Fund

completed

a

non-taxable

exchange

of

securities

with

a

value

of

$75,206,407

and

$115,539,642,

respectively,

(which

included

$7,285,561

and

$3,613,684,

respectively,

of

net

unrealized

depreciation)

for

9,779,767

and

15,024,661

shares,

respectively

(each

then

valued

at

$7.69

per

share)

of

Franklin

Floating

Rate

Income

Fund,

an

affiliated

entity.

This

is

considered

a

non-taxable

exchange

for

federal

income

tax

purposes,

with

no

gain

or

loss

recognized

by

the

Funds

or

their

shareholders.

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

$2.675

billion

(Global

Credit

Facility)

which

matures

on

February

4,

2022.

This

Global

Credit

Facility

provides

a

source

of

funds

to

the

Borrowers

for

temporary

and

emergency

purposes,

including

the

ability

to

meet

future

unanticipated

or

unusually

large

redemption

requests.

Under

the

terms

of

the

Global

Credit

Facility,

the

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

Value

at

Beginning

of

Period

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Period

Number

of

Shares/Principal

Amount

Held

at

End

of

Period

Investment

Income

Franklin

Floating

Rate

Daily

Access

Fund

Non-Controlled

Affiliates

Dividends

Appvion

Operations,

Inc.

$

18,106,975

$

—

$

—

$

—

$

8,560,305

$

26,667,280

1,219,956

$

—

Remington

Outdoor

Co.,

Inc.

............

—

—

—

(73,081,001)

73,081,001

—

a

—

—

Remington

Outdoor

Co.,

Inc.,

Litigation

Units

.

—

—

—

—

—

—

b

—

—

Interest

Appvion

Operations,

Inc.,

Term

Loan,

7%,

(3-month

USD

LIBOR

+

6%),

6/12/26

......

28,599,539

—

(18,992,147)

39,424

438,197

10,085,013

10,110,289

793,923

c

Total

Affiliated

Securities

(Value

is

3.1%

of

Net

Assets)

..........

$46,706,514

$—

$(18,992,147)

(73,041,577)

82,079,503

$36,752,293

$793,923

a

As

of

April

30,

2021,

no

longer

held

by

the

fund.

b

As

of

April

30,

2021,

no

longer

an

affiliate.

c

Includes

non-cash

dividend/interest

received.

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

142

franklintempleton.com

Semiannual

Report

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

period ended

April

30,

2021,

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

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

April

30,

2021,

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

......

$

—

$

60,277,587

$

—

$

60,277,587

Mortgage-Backed

Securities

................

—

581,453,008

—

581,453,008

Short

Term

Investments

...................

34,975,191

19,737,227

—

54,712,418

Total

Investments

in

Securities

...........

$34,975,191

$661,467,822

$—

$696,443,013

Franklin

Floating

Rate

Daily

Access

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Hotels,

Restaurants

&

Leisure

.............

—

767,499

—

767,499

Machinery

............................

—

10,355,597

—

10,355,597

Paper

&

Forest

Products

.................

—

—

26,667,280

26,667,280

Road

&

Rail

..........................

—

—

—

b

—

Management

Investment

Companies

.........

42,140,898

—

—

42,140,898

Preferred

Stocks

........................

—

1,959,844

—

1,959,844

Warrants

..............................

—

—

709

709

Corporate

Bonds

:

Airlines

..............................

—

13,143,650

—

13,143,650

Chemicals

...........................

—

3,895,125

—

3,895,125

Construction

Materials

..................

—

4,221,832

—

4,221,832

Hotels,

Restaurants

&

Leisure

.............

—

530,813

—

530,813

Independent

Power

and

Renewable

Electricity

Producers

..........................

—

1,568,347

—

1,568,347

Media

...............................

—

10,314,031

—

10,314,031

Oil,

Gas

&

Consumable

Fuels

.............

—

2,505,360

—

2,505,360

Road

&

Rail

..........................

—

—

19,473,939

19,473,939

14.

Credit

Facility

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

143

franklintempleton.com

Semiannual

Report

Level

1

Level

2

Level

3

Total

Franklin

Floating

Rate

Daily

Access

Fund

(continued)

Assets:

(continued)

Investments

in

Securities:

Corporate

Bonds:

Wireless

Telecommunication

Services

.......

$

—

$

1,385,312

$

—

$

1,385,312

Senior

Floating

Rate

Interests

...............

—

970,289,588

36,640,524

1,006,930,112

Asset-Backed

Securities

..................

—

9,448,573

—

9,448,573

Escrows

and

Litigation

Trusts

...............

—

2,397,350

282,977

b

2,680,327

Short

Term

Investments

...................

59,512,964

55,587,699

—

115,100,663

Total

Investments

in

Securities

...........

$101,653,862

$1,088,370,620

$83,065,429

$1,273,089,911

Other

Financial

Instruments:

Unfunded

Loan

Commitments

..............

$

—

$

486,354

$

—

$

486,354

Total

Other

Financial

Instruments

.........

$—

$486,354

$—

$486,354

Franklin

Low

Duration

Total

Return

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Multiline

Retail

........................

—

—

—

b

—

Oil,

Gas

&

Consumable

Fuels

.............

—

—

732

732

Paper

&

Forest

Products

.................

21,415

—

—

21,415

Specialty

Retail

........................

403,096

—

—

403,096

Management

Investment

Companies

.........

111,137,362

—

—

111,137,362

Warrants

:

Oil,

Gas

&

Consumable

Fuels

.............

—

—

195

195

Paper

&

Forest

Products

.................

343

—

—

343

Corporate

Bonds

:

Aerospace

&

Defense

...................

—

8,002,756

—

8,002,756

Air

Freight

&

Logistics

...................

—

14,273,310

—

14,273,310

Airlines

..............................

—

11,062,751

—

11,062,751

Auto

Components

......................

—

4,486,339

—

4,486,339

Banks

...............................

—

100,940,604

—

100,940,604

Beverages

...........................

—

4,393,920

—

4,393,920

Biotechnology

.........................

—

8,914,242

—

8,914,242

Capital

Markets

........................

—

25,413,504

—

25,413,504

Chemicals

...........................

—

14,524,146

—

14,524,146

Communications

Equipment

..............

—

1,528,125

—

1,528,125

Consumer

Finance

.....................

—

20,580,358

—

20,580,358

Containers

&

Packaging

.................

—

2,093,025

—

2,093,025

Diversified

Financial

Services

.............

—

7,992,601

—

7,992,601

Diversified

Telecommunication

Services

.....

—

18,064,710

—

18,064,710

Electric

Utilities

........................

—

24,628,846

—

24,628,846

Electronic

Equipment,

Instruments

&

Components

........................

—

597,742

—

597,742

Energy

Equipment

&

Services

.............

—

9,696,659

—

9,696,659

Entertainment

.........................

—

21,979,401

—

21,979,401

Equity

Real

Estate

Investment

Trusts

(REITs)

.

—

9,101,912

—

9,101,912

Food

&

Staples

Retailing

.................

—

3,225,264

—

3,225,264

Health

Care

Equipment

&

Supplies

.........

—

341,901

—

341,901

Health

Care

Providers

&

Services

..........

—

5,364,851

—

5,364,851

Hotels,

Restaurants

&

Leisure

.............

—

16,504,815

—

16,504,815

Independent

Power

and

Renewable

Electricity

Producers

..........................

—

2,737,713

—

2,737,713

Industrial

Conglomerates

................

—

5,722,632

—

5,722,632

Interactive

Media

&

Services

..............

—

19,677,669

—

19,677,669

Internet

&

Direct

Marketing

Retail

..........

—

15,735,676

—

15,735,676

IT

Services

...........................

—

5,375,599

—

5,375,599

15.

Fair

Value

Measurements

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

144

franklintempleton.com

Semiannual

Report

Level

1

Level

2

Level

3

Total

Franklin

Low

Duration

Total

Return

Fund

(continued)

Assets:

(continued)

Investments

in

Securities:

Corporate

Bonds:

Machinery

............................

$

—

$

1,301,250

$

—

$

1,301,250

Media

...............................

—

11,221,903

—

11,221,903

Metals

&

Mining

.......................

—

2,268,495

—

2,268,495

Multiline

Retail

........................

—

—

—

b

—

Multi-Utilities

..........................

—

1,386,294

—

1,386,294

Oil,

Gas

&

Consumable

Fuels

.............

—

73,027,520

—

73,027,520

Personal

Products

.....................

—

6,871,588

—

6,871,588

Pharmaceuticals

.......................

—

14,804,664

—

14,804,664

Semiconductors

&

Semiconductor

Equipment

.

—

15,357,118

—

15,357,118

Specialty

Retail

........................

—

517,789

—

517,789

Thrifts

&

Mortgage

Finance

...............

—

10,673,715

—

10,673,715

Tobacco

.............................

—

9,311,184

—

9,311,184

Trading

Companies

&

Distributors

..........

—

2,538,115

—

2,538,115

Wireless

Telecommunication

Services

.......

—

4,196,682

—

4,196,682

Senior

Floating

Rate

Interests

...............

—

14,491,339

—

14,491,339

Marketplace

Loans

......................

—

—

28,726,974

28,726,974

Foreign

Government

and

Agency

Securities

....

—

153,979,886

—

153,979,886

U.S.

Government

and

Agency

Securities

.......

—

658,556,721

—

658,556,721

Asset-Backed

Securities

:

Airlines

..............................

—

497,703

—

497,703

Commercial

Services

&

Supplies

...........

—

23,415,614

—

23,415,614

Consumer

Finance

.....................

—

22,922,989

—

22,922,989

Diversified

Financial

Services

.............

—

430,057,331

279,148

430,336,479

Thrifts

&

Mortgage

Finance

...............

—

781,190

—

781,190

Commercial

Mortgage-Backed

Securities

......

—

60,957,769

—

60,957,769

Mortgage-Backed

Securities

................

—

73,098,431

—

73,098,431

Municipal

Bonds

.........................

—

86,621,352

—

86,621,352

Residential

Mortgage-Backed

Securities

......

—

206,643,995

—

206,643,995

Escrows

and

Litigation

Trusts

...............

—

11,875

—

b

11,875

Short

Term

Investments

...................

107,023,648

214,244,603

—

321,268,251

Total

Investments

in

Securities

...........

$218,585,864

$2,482,718,186

$29,007,049

$2,730,311,099

Other

Financial

Instruments:

Forward

exchange

contracts

...............

—

472,095

—

472,095

Futures

contracts

........................

3,031,618

—

—

3,031,618

Swap

contracts

.........................

—

3,256,44

7

—

3,256,44

7

Total

Other

Financial

Instruments

.........

$3,031,618

$3,728,542

$—

$6,760,160

Liabilities:

Other

Financial

Instruments:

Forward

exchange

contracts

................

$

—

$

1,985,388

$

—

$

1,985,388

Futures

contracts

........................

577,773

—

—

577,773

Swap

contracts

..........................

—

7,239,572

—

7,239,572

Total

Other

Financial

Instruments

.........

$577,773

$9,224,960

$—

$9,802,733

Franklin

Total

Return

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Energy

Equipment

&

Services

.............

361,545

—

—

361,545

Multiline

Retail

........................

—

—

—

b

—

Oil,

Gas

&

Consumable

Fuels

.............

—

—

3,256

3,256

Paper

&

Forest

Products

.................

107,370

—

—

107,370

15.

Fair

Value

Measurements

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

145

franklintempleton.com

Semiannual

Report

Level

1

Level

2

Level

3

Total

Franklin

Total

Return

Fund

(continued)

Assets:

(continued)

Investments

in

Securities:

Common

Stocks:

Specialty

Retail

........................

$

790,687

$

—

$

—

$

790,687

Management

Investment

Companies

.........

935,056,371

—

—

935,056,371

Preferred

Stocks

........................

2,524,020

—

—

2,524,020

Warrants

:

Oil,

Gas

&

Consumable

Fuels

.............

—

—

456

456

Paper

&

Forest

Products

.................

1,720

—

—

1,720

Corporate

Bonds

:

Aerospace

&

Defense

...................

—

14,207,294

—

14,207,294

Air

Freight

&

Logistics

...................

—

16,100,957

—

16,100,957

Airlines

..............................

—

40,073,440

—

40,073,440

Auto

Components

......................

—

4,358,270

—

4,358,270

Banks

...............................

—

113,775,437

—

113,775,437

Beverages

...........................

—

26,306,007

—

26,306,007

Biotechnology

.........................

—

34,521,256

—

34,521,256

Capital

Markets

........................

—

4,005,950

—

4,005,950

Chemicals

...........................

—

23,183,111

—

23,183,111

Commercial

Services

&

Supplies

...........

—

2,642,262

—

2,642,262

Communications

Equipment

..............

—

2,975,812

—

2,975,812

Consumer

Finance

.....................

—

7,361,558

—

7,361,558

Containers

&

Packaging

.................

—

15,977,385

—

15,977,385

Diversified

Financial

Services

.............

—

12,297,118

—

12,297,118

Diversified

Telecommunication

Services

.....

—

10,940,419

—

10,940,419

Electric

Utilities

........................

—

79,287,799

—

79,287,799

Electronic

Equipment,

Instruments

&

Components

........................

—

25,226,114

—

25,226,114

Energy

Equipment

&

Services

.............

—

3,309,810

—

3,309,810

Entertainment

.........................

—

23,619,806

—

23,619,806

Equity

Real

Estate

Investment

Trusts

(REITs)

.

—

14,612,378

—

14,612,378

Food

&

Staples

Retailing

.................

—

10,787,953

—

10,787,953

Food

Products

........................

—

12,404,349

—

12,404,349

Health

Care

Equipment

&

Supplies

.........

—

7,829,267

—

7,829,267

Health

Care

Providers

&

Services

..........

—

39,495,410

—

39,495,410

Hotels,

Restaurants

&

Leisure

.............

—

45,406,392

—

45,406,392

Household

Durables

....................

—

24,208,282

—

24,208,282

Independent

Power

and

Renewable

Electricity

Producers

..........................

—

13,338,779

—

13,338,779

Insurance

............................

—

54,257,285

—

54,257,285

Interactive

Media

&

Services

..............

—

14,711,757

—

14,711,757

Internet

&

Direct

Marketing

Retail

..........

—

23,139,356

—

23,139,356

IT

Services

...........................

—

13,996,999

—

13,996,999

Machinery

............................

—

8,514,498

—

8,514,498

Media

...............................

—

45,351,399

—

45,351,399

Metals

&

Mining

.......................

—

2,603,125

—

2,603,125

Multiline

Retail

........................

—

13,293,496

—

b

13,293,496

Multi-Utilities

..........................

—

19,774,667

—

19,774,667

Oil,

Gas

&

Consumable

Fuels

.............

—

115,494,835

—

115,494,835

Paper

&

Forest

Products

.................

—

5,125,550

—

5,125,550

Personal

Products

.....................

—

12,834,782

—

12,834,782

Pharmaceuticals

.......................

—

14,286,182

—

14,286,182

Real

Estate

Management

&

Development

....

—

635,625

—

635,625

Road

&

Rail

..........................

—

23,605,888

—

23,605,888

Semiconductors

&

Semiconductor

Equipment

.

—

14,234,023

—

14,234,023

Software

.............................

—

603,426

—

603,426

Specialty

Retail

........................

—

6,655,386

—

6,655,386

15.

Fair

Value

Measurements

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

146

franklintempleton.com

Semiannual

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 period.

At

April

30,

2021,

the

reconciliation is

as follows:

Level

1

Level

2

Level

3

Total

Franklin

Total

Return

Fund

(continued)

Assets:

(continued)

Investments

in

Securities:

Corporate

Bonds:

Tobacco

.............................

$

—

$

26,993,865

$

—

$

26,993,865

Trading

Companies

&

Distributors

..........

—

6,836,531

—

6,836,531

Wireless

Telecommunication

Services

.......

—

50,327,415

—

50,327,415

Senior

Floating

Rate

Interests

...............

—

44,631,441

—

44,631,441

Marketplace

Loans

......................

—

—

15,773,771

15,773,771

Foreign

Government

and

Agency

Securities

....

—

224,370,116

—

224,370,116

U.S.

Government

and

Agency

Securities

.......

—

1,208,755,513

—

1,208,755,513

Asset-Backed

Securities

:

Airlines

..............................

—

1,522,972

—

1,522,972

Commercial

Services

&

Supplies

...........

—

8,106,403

—

8,106,403

Diversified

Financial

Services

.............

—

621,625,749

687,134

622,312,883

Road

&

Rail

..........................

—

78,466

—

78,466

Commercial

Mortgage-Backed

Securities

:

Diversified

Financial

Services

.............

—

14,821,637

—

14,821,637

Thrifts

&

Mortgage

Finance

...............

—

367,331

6,602

373,933

Mortgage-Backed

Securities

................

—

789,413,326

—

789,413,326

Municipal

Bonds

.........................

—

238,076,359

—

238,076,359

Residential

Mortgage-Backed

Securities

......

—

417,004,723

—

417,004,723

Escrows

and

Litigation

Trusts

...............

—

18,750

—

b

18,750

Options

purchased

.......................

—

3,406,469

—

3,406,469

Short

Term

Investments

...................

53,996,268

1,439,868

—

55,436,136

Total

Investments

in

Securities

...........

$992,837,981

$4,675,167,828

$16,471,219

$5,684,477,028

Other

Financial

Instruments:

Forward

exchange

contracts

...............

—

1,249,431

—

1,249,431

Futures

contracts

........................

3,257,256

—

—

3,257,256

Swap

contracts

.........................

—

7,702,10

1

—

7,702,10

1

Total

Other

Financial

Instruments

.........

$3,257,256

$8,951,532

$—

$12,208,788

Liabilities:

Other

Financial

Instruments:

Options

written

..........................

$

—

$

1,322,944

$

—

$

1,322,944

Forward

exchange

contracts

................

—

7,308,370

—

7,308,370

Futures

contracts

........................

5,254,881

—

—

5,254,881

Swap

contracts

..........................

—

13,961,373

—

13,961,373

Total

Other

Financial

Instruments

.........

$5,254,881

$22,592,687

$—

$27,847,568

a

For

detailed

categories,

see

the

accompanying

Statement

of

Investments.

b

Includes

securities

determined

to

have

no

value

at

April

30,

2021.

15.

Fair

Value

Measurements

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

147

franklintempleton.com

Semiannual

Report

Balance

at

Beginning

of

Period

Purchases

a

Sales

b

Transfer

Into

Level

3

c

Transfer

Out

of

Level

3

Net

accretion

(

amortiza

-

tion

)

d

Net

Realized

Gain

(Loss)

Net

Unr

ealized

Appreciatio

n

(

Depreciation

)

Balance

at

End

of

Period

Net

Change

in

Unrealized

Appreciation

(Depreciation)

on

Assets

Held

at

Period

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

.

$

—

e

$

—

$

—

$

—

$

—

$

—

$

(73,081,001)

$

73,081,001

$

—

$

—

Oil,

Gas

&

Consumable

Fuels

..........

1,460,626

—

(2,592,341)

—

—

—

731,395

400,320

—

—

Paper

&

Forest

Products

18,106,975

—

—

—

—

—

—

8,560,305

26,667,280

8,560,305

Road

&

Rail

.......

—

e

—

—

—

—

—

—

—

—

e

—

Warrants

:

Machinery

.........

—

—

e

—

—

—

—

—

709

709

709

Corporate

Bonds

:

Road

&

Rail

.......

18,585,180

—

—

—

—

946,756

—

(57,997)

19,473,939

(57,997)

Senior

Floating

Rate

Interests

:

Household

Products

..

45,517,441

127,315

(17,915,728)

—

—

8,862

87,029

(12,067,466)

15,757,453

(13,587,660)

Oil,

Gas

&

Consumable

Fuels

..........

—

6,348,948

—

—

—

—

—

—

6,348,948

—

Road

&

Rail

.......

14,180,644

—

—

—

—

(163,433)

—

516,911

14,534,123

516,911

Escrows

and

Litigation

Trusts

...........

—

e

—

—

—

—

—

—

282,977

282,977

e

282,977

Total

Investments

in

Securities

.

$97,850,866

$6,476,263

$(20,508,069)

$—

$—

$792,185

$(72,262,577)

$70,716,760

$83,065,429

$(4,284,755)

Franklin

Low

Duration

Total

Return

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Aerospace

&

Defense

.

—

e

—

(3,690,418)

f

—

—

—

—

3,690,418

—

—

Multiline

Retail

......

—

e

—

—

f

—

—

—

—

—

—

e

—

Oil,

Gas

&

Consumable

Fuels

..........

—

—

(3,827)

f

863

—

45,205

—

(41,509)

732

(41,509)

Paper

&

Forest

Products

367,190

—

(334,607)

f

—

—

—

—

(32,583)

—

—

Road

&

Rail

.......

—

e

—

—

f

—

—

—

—

—

—

—

Warrants

:

Oil,

Gas

&

Consumable

Fuels

..........

15

—

—

—

—

—

—

180

195

180

Corporate

Bonds

:

Multiline

Retail

......

1,469

184

—

—

—

(27,235)

—

25,582

—

e

25,582

Road

&

Rail

.......

306,219

—

(341,063)

f

—

—

13,291

432

21,121

—

—

Senior

Floating

Rate

Interests

:

Household

Products

..

2,874,048

2,910

(3,246,697)

f

—

—

475

7,069

362,195

—

—

Road

&

Rail

.......

233,647

—

(252,634)

f

—

—

326

(37)

18,698

—

—

Marketplace

Loans

:

Diversified

Financial

Services

........

27,612,358

11,862,055

(11,750,937)

—

—

—

(1,330,699)

2,334,197

28,726,974

1,037,662

Asset-Backed

Securities

:

Diversified

Financial

Services

........

—

—

(88,306)

329,683

—

10,462

(8,863)

36,172

279,148

36,172

Escrows

and

Litigation

Trusts

...........

—

e

—

—

f

—

—

—

—

—

—

e

—

Total

Investments

in

Securities

.

$31,394,946

$11,865,149

$(19,708,489)

$330,546

$—

$42,524

$(1,332,098)

$6,414,471

$29,007,049

$1,058,087

a

Purchases

include

all

purchases

of

securities

and

securities

received

in

corporate

actions.

15.

Fair

Value

Measurements

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

148

franklintempleton.com

Semiannual

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

April

30,

2021,

are

as

follows:

b

Sales

include

all

sales

of

securities,

maturities,

paydowns

and

securities

tendered

in

corporate

actions.

c

Transferred

into

level

3

as

a

result

of

the

unavailability

of

a

quoted

market

price

in

an

active

market

for

identical

securities

or

as

a

result

of

the

unreliability

of

the

foreign

exchange

rate

and

other

significant

observable

valuation

inputs.

May

include

amounts

related

to

a

corporate

action.

d

May

include

accretion,

amortization,

partnership

adjustments,

and/or

other

cost

basis

adjustments.

e

Includes

securities

determined

to

have

no

value.

f

Includes

securities

delivered

as

a

result

of

an

in-kind

transfer.

15.

Fair

Value

Measurements

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

149

franklintempleton.com

Semiannual

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

....

$26,667,280

Discounted

cash

flow

Weighted

average

cost

of

capital

21.5%

Decrease

c

Free

cash

flow

$136.9

mil

Increase

c

Discount

for

lack

of

marketability

8.5%

Decrease

c

Long

term

growth

2.5%

Increase

Corporate

Bonds:

Road

&

Rail

.............

19,473,939

Discounted

cash

flow

Discount

rate

15.6%

Decrease

c

Free

cash

flow

$19.5

mil

Increase

Senior

Floating

Rate

Interests:

Household

...............

15,757,453

Recovery

value

Asset

value

estimate

$46.7

mil

Increase

c

Road

&

Rail

Discounted

cash

flow

Discount

rate

10.1%

Decrease

d

......................

14,534,123

Free

cash

flow

$16.7

mil

Increase

All

other

Investments

..........

6,632,634

e,f

Total

.......................

$83,065,429

Franklin

Low

Duration

Total

Return

Fund

Assets:

Investments

in

Securities:

Marketplace

Loans:

Lending

Club

............

$11,500,164

Discounted

cash

flow

Loss-Adjusted

Discount

rate

7.2%

Decrease

c

Projected

Loss

rate

17.5%

Decrease

c

Lending

Club

LCX

........

3,342,362

Discounted

cash

flow

Loss-Adjusted

Discount

rate

8.8%

Decrease

c

Projected

Loss

rate

18.4%

Decrease

c

Square

Capital

...........

12,325,217

Discounted

cash

flow

Loss-Adjusted

Discount

rate

6.2%

Decrease

c

Projected

Loss

rate

4.1%

Decrease

c

All

other

investments

..........

1,839,306

e,f

Total

.......................

$29,007,049

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

April

30,

2021.

15.

Fair

Value

Measurements

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

150

franklintempleton.com

Semiannual

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.

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

151

franklintempleton.com

Semiannual

Report

Abbreviations

Counterparty

BOFA

Bank

of

America,

N.A.

BZWS

Barclays

Bank

plc

CITI

Citibank

NA

DBAB

Deutsche

Bank

AG

FBCO

Credit

Suisse

Group

AG

GSCO

Goldman

Sachs

Group,

Inc.

JPHQ

JPMorgan

Chase

Bank

NA

MSCO

Morgan

Stanley

Cu

r

rency

BRL

Brazilian

Real

DOP

Dominican

Peso

EUR

Euro

USD

United

States

Dollar

UYU

Uruguayan

Peso

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

TBA

To-Be-Announced

TBD

To

Be

Determined

T-Note

Treasury

Note

VRI

Value

Recovery

Instrument

Index

MCDX.

NA.Series

number

MCDX

North

America

Index

Franklin

Investors

Securities

Trust

Shareholder

Information

152

franklintempleton.com

Semiannual

Report

Board

Approval

of

Investment

Management

Agreements

FRANKLIN

INVESTORS

SECURITIES

TRUST

Franklin

Adjustable

U.S.

Government

Securities

Fund

Franklin

Floating

Rate

Daily

Access

Fund

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

(each

a

Fund)

At

a

meeting

held

on

February

23,

2021

(Meeting),

the

Board

of

Trustees

(Board)

of

Franklin

Investors

Securities

Trust

(Trust),

including

a

majority

of

the

trustees

who

are

not

“interested

persons”

as

defined

in

the

Investment

Company

Act

of

1940

(Independent

Trustees),

reviewed

and

approved

the

continuance

of

the

investment

management

agreement

between

Franklin

Advisers,

Inc.

(Manager)

and

the

Trust,

on

behalf

of

each

Fund

(each

a

Management

Agreement)

for

an

additional

one-year

period.

The

Independent

Trustees

received

advice

from

and

met

separately

with

Independent

Trustee

counsel

in

considering

whether

to

approve

the

continuation

of

each

Management

Agreement.

Although

the

Management

Agreements

for

the

Funds

were

considered

at

the

same

Board

meeting,

the

Board

considered

the

information

provided

to

it

about

the

Funds

together

and

with

respect

to

each

Fund

separately

as

the

Board

deemed

appropriate.

In

considering

the

continuation

of

each

Management

Agreement,

the

Board

reviewed

and

considered

information

provided

by

the

Manager

at

the

Meeting

and

throughout

the

year

at

meetings

of

the

Board

and

its

committees.

The

Board

also

reviewed

and

considered

information

provided

in

response

to

a

detailed

set

of

requests

for

information

submitted

to

the

Manager

by

Independent

Trustee

counsel

on

behalf

of

the

Independent

Trustees

in

connection

with

the

annual

contract

renewal

process.

In

addition,

prior

to

the

Meeting,

the

Independent

Trustees

held

a

telephonic

contract

renewal

meeting

at

which

the

Independent

Trustees

conferred

amongst

themselves

and

Independent

Trustee

counsel

about

contract

renewal

matters

and,

in

some

cases,

requested

additional

information

from

the

Manager

relating

to

the

contract.

The

Board

reviewed

and

considered

all

of

the

factors

it

deemed

relevant

in

approving

the

continuance

of

each

Management

Agreement,

including,

but

not

limited

to:

(i)

the

nature,

extent

and

quality

of

the

services

provided

by

the

Manager;

(ii)

the

investment

performance

of

each

Fund;

(iii)

the

costs

of

the

services

provided

and

profits

realized

by

the

Manager

and

its

affiliates

from

the

relationship

with

each

Fund;

(iv)

the

extent

to

which

economies

of

scale

are

realized

as

each

Fund

grows;

and

(v)

whether

fee

levels

reflect

these

economies

of

scale

for

the

benefit

of

Fund

investors.

In

approving

the

continuance

of

each

Management

Agreement,

the

Board,

including

a

majority

of

the

Independent

Trustees,

determined

that

the

terms

of

the

Management

Agreement

are

fair

and

reasonable

and

that

the

continuance

of

such

Management

Agreement

is

in

the

best

interests

of

the

applicable

Fund

and

its

shareholders.

While

attention

was

given

to

all

information

furnished,

the

following

discusses

some

primary

factors

relevant

to

the

Board’s

determination.

Nature,

Extent

and

Quality

of

Services

The

Board

reviewed

and

considered

information

regarding

the

nature,

extent

and

quality

of

investment

management

services

provided

by

the

Manager

and

its

affiliates

to

the

Funds

and

their

shareholders.

This

information

included,

among

other

things,

the

qualifications,

background

and

experience

of

the

senior

management

and

investment

personnel

of

the

Manager;

as

well

as

information

on

succession

planning

where

appropriate;

the

structure

of

investment

personnel

compensation;

oversight

of

third-

party

service

providers;

investment

performance

reports

and

related

financial

information

for

each

Fund;

reports

on

expenses

and

shareholder

services;

legal

and

compliance

matters;

risk

controls;

pricing

and

other

services

provided

by

the

Manager

and

its

affiliates;

and

management

fees

charged

by

the

Manager

and

its

affiliates

to

U.S.

funds

and

other

accounts,

including

management’s

explanation

of

differences

among

accounts

where

relevant.

The

Board

also

reviewed

and

considered

an

annual

report

on

payments

made

by

Franklin

Templeton

(FT)

or

the

Funds

to

financial

intermediaries,

as

well

as

a

memorandum

relating

to

third-

party

servicing

arrangements,

which

included

discussion

of

the

changing

distribution

landscape

for

the

Funds.

The

Board

noted

management’s

continuing

efforts

and

expenditures

in

establishing

effective

business

continuity

plans

and

developing

strategies

to

address

areas

of

heightened

concern

in

the

mutual

fund

industry,

such

as

cybersecurity

in

the

current

work-from-home

environment

and

liquidity

risk

management.

The

Board

also

reviewed

and

considered

the

benefits

provided

to

Fund

shareholders

of

investing

in

a

fund

that

is

part

of

the

FT

family

of

funds.

The

Board

noted

the

financial

position

of

Franklin

Resources,

Inc.

(FRI),

the

Manager’s

parent,

and

its

commitment

to

the

mutual

fund

Franklin

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business

as

evidenced

by

its

reassessment

of

the

fund

offerings

in

response

to

the

market

environment

and

project

initiatives

and

capital

investments

relating

to

the

services

provided

to

the

Funds

by

the

FT

organization.

The

Board

specifically

noted

FT’s

commitment

to

enhancing

services

and

controlling

costs,

as

reflected

in

its

outsourcing

of

certain

administrative

functions,

and

growth

opportunities,

as

evidenced

by

its

recent

acquisition

of

the

Legg

Mason

companies.

The

Board

also

noted

FT’s

attention

focused

on

expanding

the

distribution

opportunities

for

all

funds

in

the

FT

family

of

funds.

Following

consideration

of

such

information,

the

Board

was

satisfied

with

the

nature,

extent

and

quality

of

services

provided

by

the

Manager

and

its

affiliates

to

the

Funds

and

their

shareholders.

Fund

Performance

The

Board

reviewed

and

considered

the

performance

results

of

each

Fund

over

various

time

periods

ended

November

30,

2020.

The

Board

considered

the

performance

returns

for

each

Fund

in

comparison

to

the

performance

returns

of

mutual

funds

deemed

comparable

to

the

Fund

included

in

a

universe

(Performance

Universe)

selected

by

Broadridge

Financial

Solutions,

Inc.

(Broadridge),

an

independent

provider

of

investment

company

data.

The

Board

received

a

description

of

the

methodology

used

by

Broadridge

to

select

the

mutual

funds

included

in

a

Performance

Universe.

The

Board

also

reviewed

and

considered

Fund

performance

reports

provided

and

discussions

that

occurred

with

portfolio

managers

at

Board

meetings

throughout

the

year.

A

summary

of

each

Fund’s

performance

results

is

below.

Franklin

Adjustable

U.S.

Government

Securities

Fund

-

The

Performance

Universe

for

the

Fund

included

the

Fund

and

all

retail

and

institutional

ultra-short

obligation

funds.

The

Board

noted

that

the

Fund’s

annualized

income

return

for

the

one-,

three-,

five-

and

10-year

periods

was

above

the

median

and

in

the

first

quintile

(best)

of

its

Performance

Universe.

The

Board

also

noted

that

the

Fund’s

annualized

total

return

for

the

one-,

three-,

five-

and

10-year

periods

was

below

the

median

and

in

the

fifth

(worst)

or

fourth

quintile

of

its

Performance

Universe.

The

Board

discussed

this

performance

with

management

and

management

explained

that

the

Fund

invests

in

plain

vanilla

adjustable-

rate

mortgage

securities

issued

or

guaranteed

by

the

U.S.

government

or

its

related

agencies

(such

as

Fannie

Mae

or

Freddie

Mac),

so

the

Fund

tends

to

underperform

its

Broadridge

peers,

many

of

which

invest

in

a

broader

range

of

asset

types,

during

periods

of

decreasing

risk

premiums.

The

Board

considered

that

the

income-oriented

investment

objective

of

the

Fund

is

the

primary

focus

for

the

Fund’s

portfolio

management

team

and

that

the

evaluation

of

the

Fund’s

performance

relative

to

the

Fund’s

peers

on

an

annualized

income

return

basis

is

consistent

with

investor

expectations

and

the

Fund’s

investment

goals.

Given

the

Fund’s

income-oriented

investment

objective

and

management’s

explanation,

the

Board

concluded

that

the

Fund’s

performance

was

satisfactory.

Franklin

Floating

Rate

Daily

Access

Fund

-

The

Performance

Universe

for

the

Fund

included

the

Fund

and

all

retail

and

institutional

loan

participation

funds.

The

Board

noted

that

the

Fund’s

annualized

income

return

for

the

one-,

three-,

five-

and

10-year

periods

was

above

the

median

of

its

Performance

Universe.

The

Board

also

noted

that

the

Fund’s

annualized

total

return

for

the

one-,

three-,

five-

and

10-

year

periods

was

below

the

median

and

in

the

fifth

quintile

(worst)

of

its

Performance

Universe.

The

Board

considered

that

the

income-oriented

investment

objective

of

the

Fund

is

the

primary

focus

for

the

Fund’s

portfolio

management

team

and

that

the

evaluation

of

the

Fund’s

performance

relative

to

the

Fund’s

peers

on

an

annualized

income

return

basis

is

consistent

with

investor

expectations

and

the

Fund’s

investment

goals.

Given

the

Fund’s

income-oriented

investment

objective,

the

Board

concluded

that

the

Fund’s

performance

was

satisfactory.

Franklin

Low

Duration

Total

Return

Fund

-

The

Performance

Universe

for

the

Fund

included

the

Fund

and

all

retail

and

institutional

short

investment-grade

debt

funds.

The

Board

noted

that

the

Fund’s

annualized

income

return

for

the

one-,

three-,

five-

and

10-year

periods

was

above

the

median

and

in

the

first

quintile

(best)

of

its

Performance

Universe.

The

Board

also

noted

that

the

Fund’s

annualized

total

return

for

the

one-,

three-,

five-

and

10-year

periods

was

below

the

median

of

its

Performance

Universe.

The

Board

considered

that

the

income-oriented

investment

objective

of

the

Fund

is

the

primary

focus

for

the

Fund’s

portfolio

management

team

and

that

the

evaluation

of

the

Fund’s

performance

relative

to

the

Fund’s

peers

on

an

annualized

income

return

basis

is

consistent

with

investor

expectations

and

the

Fund’s

investment

goals.

Given

the

Fund’s

income-oriented

investment

objective,

the

Board

concluded

that

the

Fund’s

performance

was

satisfactory.

Franklin

Total

Return

Fund

-

The

Performance

Universe

for

the

Fund

included

the

Fund

and

all

retail

and

institutional

core

plus

bond

funds.

The

Board

noted

that

the

Fund’s

annualized

income

return

for

the

one-,

three-,

five-

and

10-year

periods

was

above

the

median

of

its

Performance

Universe.

The

Board

also

noted

that

the

Fund’s

annualized

total

return

for

the

one-,

three-,

five-

and

10-year

periods

was

below

the

median

and

in

the

fifth

quintile

(worst)

of

its

Performance

Universe.

The

Board

considered

that

the

income-oriented

investment

objective

of

the

Fund

is

the

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primary

focus

for

the

Fund’s

portfolio

management

team

and

that

the

evaluation

of

the

Fund’s

performance

relative

to

the

Fund’s

peers

on

an

annualized

income

return

basis

is

consistent

with

investor

expectations

and

the

Fund’s

investment

goals.

Given

the

Fund’s

income-oriented

investment

objective,

the

Board

concluded

that

the

Fund’s

performance

was

satisfactory.

Comparative

Fees

and

Expenses

The

Board

reviewed

and

considered

information

regarding

each

Fund’s

actual

total

expense

ratio

and

its

various

components,

including,

as

applicable,

management

fees;

transfer

agent

expenses;

underlying

fund

expenses;

Rule

12b-1

and

non-Rule

12b-1

service

fees;

and

other

non-

management

fees.

The

Board

also

noted

the

quarterly

and

annual

reports

it

receives

on

all

marketing

support

payments

made

by

FT

to

financial

intermediaries.

The

Board

considered

the

actual

total

expense

ratio

and,

separately,

the

contractual

management

fee

rate,

without

the

effect

of

fee

waivers,

if

any

(Management

Rate)

of

each

Fund

in

comparison

to

the

median

expense

ratio

and

median

Management

Rate,

respectively,

of

other

mutual

funds

deemed

comparable

to

and

with

a

similar

expense

structure

to

the

Fund

selected

by

Broadridge

(Expense

Group).

Broadridge

fee

and

expense

data

is

based

upon

information

taken

from

each

fund’s

most

recent

annual

report,

which

reflects

historical

asset

levels

that

may

be

quite

different

from

those

currently

existing,

particularly

in

a

period

of

market

volatility.

While

recognizing

such

inherent

limitation

and

the

fact

that

expense

ratios

and

Management

Rates

generally

increase

as

assets

decline

and

decrease

as

assets

grow,

the

Board

believed

the

independent

analysis

conducted

by

Broadridge

to

be

an

appropriate

measure

of

comparative

fees

and

expenses.

The

Broadridge

Management

Rate

includes

administrative

charges,

and

the

actual

total

expense

ratio,

for

comparative

consistency,

was

shown

(i)

for

Class

A

shares

for

the

Franklin

Adjustable

U.S.

Government

Securities

Fund

and

for

Class

A

shares,

Class

N

shares

and

Investor

Class

shares

for

the

other

funds

in

each

Fund’s

respective

Expense

Group;

and

(ii)

for

Class

A

shares

for

each

of

the

Franklin

Floating

Rate

Daily

Access

Fund,

Franklin

Low

Duration

Total

Return

Fund

and

Franklin

Total

Return

Fund

and

for

Class

A

shares

for

the

other

funds

in

each

Fund’s

respective

Expense

Group.

The

Board

received

a

description

of

the

methodology

used

by

Broadridge

to

select

the

mutual

funds

included

in

an

Expense

Group.

Franklin

Adjustable

U.S.

Government

Securities

Fund

–

The

Expense

Group

for

the

Fund

included

the

Fund

and

thirteen

other

ultra-short

obligation

funds.

The

Board

noted

that

the

Management

Rate

and

actual

total

expense

ratio

for

the

Fund

were

above

the

medians

and

in

the

fifth

quintile

(most

expensive)

of

the

Expense

Group.

Management

explained

that

the

funds

in

the

peer

group

generally

have

an

effective

duration

that

is

40%

less

than

that

of

the

Fund

and

that

when

compared

to

funds

with

more

similar

effective

durations,

the

fees

and

expenses

of

the

Fund

are

in

line

with

such

funds.

Nonetheless,

management

agreed

to

implement

a

new

0.65%

expense

cap

on

the

Fund’s

total

annual

operating

expenses,

effective

March

1,

2021.

The

Board

concluded

that

the

Management

Rate

charged

to

the

Fund

is

reasonable.

Franklin

Total

Return

Fund

–

The

Expense

Group

for

the

Fund

included

the

Fund

and

12

other

core

plus

bond

funds.

The

Board

noted

that

the

Management

Rate

for

the

Fund

was

slightly

above

and

the

actual

total

expense

ratio

for

the

Fund

was

above

the

medians

and

in

the

fifth

quintile

(most

expensive)

of

its

Expense

Group.

The

Board

also

noted

that

the

Management

Rate

for

the

Fund

was

less

than

five

basis

points

above

the

median

of

its

Expense

Group.

The

Board

discussed

with

management

the

Fund’s

expenses

and

management

agreed

to

decrease

the

current

expense

cap

on

the

Fund’s

total

annual

operating

expenses

from

0.60%

to

0.58%,

effective

March

1,

2021.

The

Board

concluded

that

the

Management

Rate

charged

to

the

Fund

is

reasonable.

Franklin

Floating

Rate

Daily

Access

Fund

–

The

Expense

Group

for

the

Fund

included

the

Fund

and

16

other

loan

participation

funds.

The

Board

noted

that

the

Management

Rate

and

actual

total

expense

ratio

for

the

Fund

were

below

the

medians

and

in

the

first

quintile

(least

expensive)

of

the

Expense

Group.

The

Board

concluded

that

the

Management

Rate

charged

to

the

Fund

is

reasonable.

Franklin

Low

Duration

Total

Return

Fund

–

The

Expense

Group

for

the

Fund

included

the

Fund

and

13

other

short

investment-grade

debt

funds.

The

Board

noted

that

the

Management

Rate

was

above

the

median

and

in

the

fifth

quintile

(most

expensive)

of

its

Expense

Group.

The

Board

also

noted

that

the

actual

total

expense

ratio

for

the

Fund

was

below

the

median

of

its

Expense

Group

and

reflected

a

fee

waiver

from

management.

The

Board

concluded

that

the

Management

Rate

charged

to

the

Fund

is

reasonable.

Profitability

The

Board

reviewed

and

considered

information

regarding

the

profits

realized

by

the

Manager

and

its

affiliates

in

connection

with

the

operation

of

each

Fund.

In

this

respect,

the

Board

considered

the

Fund

profitability

analysis

that

addresses

the

overall

profitability

of

FT’s

U.S.

fund

business,

as

well

as

its

profits

in

providing

investment

management

and

other

services

to

each

of

the

individual

funds

during

the

12-month

period

ended

September

30,

2020,

being

the

most

recent

fiscal

year-end

for

FRI.

The

Board

noted

that

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Securities

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although

management

continually

makes

refinements

to

its

methodologies

used

in

calculating

profitability

in

response

to

organizational

and

product-related

changes,

the

overall

methodology

has

remained

consistent

with

that

used

in

the

Funds’

profitability

report

presentations

from

prior

years.

The

Board

further

noted

management’s

representation

that

the

profitability

analysis

excluded

the

impact

of

the

recent

acquisition

of

the

Legg

Mason

companies

and

that

management

expects

to

incorporate

the

legacy

Legg

Mason

companies

into

the

profitability

analysis

beginning

next

year.

The

Board

also

noted

that

PricewaterhouseCoopers

LLP,

auditor

to

FRI

and

certain

FT

funds,

has

been

engaged

by

the

Manager

to

periodically

review

and

assess

the

allocation

methodologies

to

be

used

solely

by

the

Funds’

Board

with

respect

to

the

profitability

analysis.

The

Board

noted

management’s

belief

that

costs

incurred

in

establishing

the

infrastructure

necessary

for

the

type

of

mutual

fund

operations

conducted

by

the

Manager

and

its

affiliates

may

not

be

fully

reflected

in

the

expenses

allocated

to

each

Fund

in

determining

its

profitability,

as

well

as

the

fact

that

the

level

of

profits,

to

a

certain

extent,

reflected

operational

cost

savings

and

efficiencies

initiated

by

management.

As

part

of

this

evaluation,

the

Board

considered

management’s

outsourcing

of

certain

operations,

which

effort

has

required

considerable

upfront

expenditures

by

the

Manager

but,

over

the

long

run

is

expected

to

result

in

greater

efficiencies.

The

Board

also

noted

management’s

expenditures

in

improving

shareholder

services

provided

to

the

Funds,

as

well

as

the

need

to

implement

systems

and

meet

additional

regulatory

and

compliance

requirements

resulting

from

recent

U.S.

Securities

and

Exchange

Commission

and

other

regulatory

requirements.

The

Board

also

considered

the

extent

to

which

the

Manager

and

its

affiliates

might

derive

ancillary

benefits

from

fund

operations,

including

revenues

generated

from

transfer

agent

services,

potential

benefits

resulting

from

personnel

and

systems

enhancements

necessitated

by

fund

growth,

as

well

as

increased

leverage

with

service

providers

and

counterparties.

Based

upon

its

consideration

of

all

these

factors,

the

Board

concluded

that

the

level

of

profits

realized

by

the

Manager

and

its

affiliates

from

providing

services

to

each

Fund

was

not

excessive

in

view

of

the

nature,

extent

and

quality

of

services

provided

to

each

Fund.

Economies

of

Scale

The

Board

reviewed

and

considered

the

extent

to

which

the

Manager

may

realize

economies

of

scale,

if

any,

as

each

Fund

grows

larger

and

whether

each

Fund’s

management

fee

structure

reflects

any

economies

of

scale

for

the

benefit

of

shareholders.

With

respect

to

possible

economies

of

scale,

the

Board

noted

the

existence

of

management

fee

breakpoints,

which

operate

generally

to

share

any

economies

of

scale

with

a

Fund’s

shareholders

by

reducing

the

Fund’s

effective

management

fees

as

the

Fund

grows

in

size.

The

Board

considered

management’s

view

that

any

analyses

of

potential

economies

of

scale

in

managing

a

particular

fund

are

inherently

limited

in

light

of

the

joint

and

common

costs

and

investments

the

Manager

incurs

across

the

FT

family

of

funds

as

a

whole.

The

Board

noted

that

the

Franklin

Adjustable

U.S.

Government

Securities

Fund

and

the

Franklin

Floating

Rate

Daily

Access

Fund

had

experienced

a

decrease

in

assets

and

would

not

be

expected

to

demonstrate

additional

economies

of

scale

in

the

near

term,

but

concluded

that

to

the

extent

economies

of

scale

may

be

realized

by

the

Manager

and

its

affiliates,

each

Fund’s

management

fee

structure

provided

a

sharing

of

benefits

with

the

Fund

and

its

shareholders

as

the

Fund

grows.

Conclusion

Based

on

its

review,

consideration

and

evaluation

of

all

factors

it

believed

relevant,

including

the

above-described

factors

and

conclusions,

the

Board

unanimously

approved

the

continuation

of

each

Management

Agreement

for

an

additional

one-year

period.

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.

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.

Franklin

Investors

Securities

Trust

Shareholder

Information

156

franklintempleton.com

Semiannual

Report

gov.

The

filed

form

may

also

be

viewed

and

copied

at

the

Commission’s

Public

Reference

Room

in

Washington,

DC.

Information

regarding

the

operations

of

the

Public

Reference

Room

may

be

obtained

by

calling

(800)

SEC-0330.

Householding

of

Reports

and

Prospectuses

You

will

receive,

or

receive

notice

of

availability

of,

each

Fund’s

financial

reports

every

six

months.

In

addition,

you

will

receive

an

annual

updated

summary

prospectus

(detail

prospectus

available

upon

request).

To

reduce

Fund

expenses,

we

try

to

identify

related

shareholders

in

a

household

and

send

only

one

copy

of

the

financial

reports

(to

the

extent

received

by

mail)

and

summary

prospectus.

This

process,

called

“householding,”

will

continue

indefinitely

unless

you

instruct

us

otherwise.

If

you

prefer

not

to

have

these

documents

householded,

please

call

us

at

(800)

632-2301.

At

any

time

you

may

view

current

prospectuses/

summary

prospectuses

and

financial

reports

on

our

website.

If

you

choose,

you

may

receive

these

documents

through

electronic

delivery.

FIST2

S

06/21

©

2021

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.

Semiannual

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.             N/A

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-CSRS, the Registrant had carried out an evaluation, under the supervision and with the participation of the Registrant’s management, including the Registrant’s principal executive officer and the Registrant’s principal financial officer, of the effectiveness of the design and operation of the Registrant’s disclosure controls and procedures. Based on such evaluation, the Registrant’s principal executive officer and principal financial officer concluded that the Registrant’s disclosure controls and procedures are effective.

(b) Changes in Internal Controls. There have been no changes in the Registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect the internal control over financial reporting.

Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Company.                 N/A

Item 13. Exhibits.

(a) (1) Code of Ethics

codeofethics

(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 Robert G. Kubilis, Chief Financial Officer and Chief Accounting Officer

section302

(b)   Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer - Finance and Administration, and Robert G. Kubilis, Chief Financial Officer and Chief Accounting Officer

section906

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 June 25, 2021

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 June 25, 2021

By S\Robert G. Kubilis_______________________________

     Robert G. Kubilis

     Chief Financial Officer and Chief Accounting Officer

Date June 25, 2021

EX-99.CODE ETH

Code of Ethics for Principal Executives

&

Senior Financial

Officers

Procedures            

Revised December 10, 2018

FRANKLIN

TEMPLETON

FUNDS

CODE OF ETHICS

FOR

PRINCIPAL

EXECUTIVES

AND

SENIOR FINANCIAL OFFICERS

I.

Covered

Officers and Purpose of the Code

Thiscode

of

ethics(the"Code")appliestothe

Principal

Executive

Officers,

Principal

Financial

Officer

andPrincipal

Accounting

Officer(the"CoveredOfficers,"eachof

whom

issetforth inExhibit

A)

ofeach investmentcompanyadvised byaFranklin

Resources

subsidiary

andthatisregisteredwiththeUnitedStates

Securities

&Exchange

Commission

(“SEC”)

(collectively,

"FTFunds")forthepurposeof

promoting:

·

Honest

andethical

conduct,

including

theethicalresolution

of

actualor

apparent

conflicts

ofinterestbetween

personal

andprofessionalrelationships;

·

Full,fair,

accurate,

timelyandunderstandabledisclosurein

reports

and

documents

thataregistrant

files

with,orsubmitsto,

the

SECandinother

public

communications

made

byoronbehalfoftheFTFunds;

·

Compliance

with

applicable

lawsandgovernmentalrulesandregulations;

·

Thepromptinternal

reporting

of

violations

oftheCode

to

an

appropriate

person

orpersons

identified

intheCode;and

·

Accountability

foradherencetotheCode.

Each

Covered

Officerwillbe

expected

toadheretoahighstandardofbusiness

ethics

andmustbe

sensitive

to

situations

that

may

giveriseto

actual

as

well

asapparentconflictsofinterest.

*

Rule 38a-1

under

the

Investment

Company

Act of 1940(“1940

Act”)

and

Rule

206(4)-7

under

the

Investment

Advisers

Act

of

1940 (“Advisers Act”)

(together

the “Compliance Rule”)

require registered

investment

companies

and

registered

investment

advisers

to,

among other

things, adopt and implement

written

policies

and

procedures reasonably

designed to

prevent

violations

of the

federal

securities

laws

(“Compliance

Rule

Policies

and

Procedures”).

CONFIDENTIAL

INFORMATION.

 

This

document

is

the

proprietary

product

ofFranklinTempleton

Investments.

It

may

NOT

be

distributed

outside

the

company

unless

it is

made subject toa

non-disclosure agreement

and/or

such

release

receives

authorization

by

an FTI

Chief Compliance

Officer.

 

Any

unauthorized

use,

reproduction

or

transfer

of this

document

is strictly

prohibited.

Franklin

Templeton

Investments

©

2014.

All

Rights Reserved.

II.

Other Policies and Procedures

ThisCodeshallbethesolecodeofethics

adopted

bytheFundsfor

purposes

of

Section

406oftheSarbanes-Oxley

Act

andtherulesandforms

applicable

to

registeredinvestmentcompanies

thereunder.

Franklin

Resources,

Inc.

has

separately

adoptedtheCodeofEthicsandBusinessConduct(“Business

Conduct”),

which

isapplicabletoallofficers,directorsandemployeesofFranklin

Resources,

Inc.,

includingCoveredOfficers.It

summarizes

thevalues,principlesandbusiness

practices

thatguidethe

employee’s

business

conduct

and

alsoprovides a set of basic

principles

toguideofficers,

directors

andemployees  regarding  theminimumethicalrequirementsexpectedofthem.Itsupplementsthevalues,

principles

andbusinessconductidentifiedintheCodeandotherexistingemployee

policies.

Additionally,theFranklinTempletonFunds

have

separatelyadoptedtheFTI

Personal

InvestmentsandInsiderTradingPolicygoverningpersonalsecurities

trading

andotherrelatedmatters.

The

CodeforInsider

Trading

provides

for

separate

requirements

thatapplytotheCoveredOfficersand

others,

and

therefore

is

not

partofthisCode.

Insofarasotherpoliciesor

procedures

of

Franklin

Resources,

Inc.,theFunds,theFunds’adviser,

principal

underwriter,orotherserviceprovidersgovernorpurporttogovernthebehaviororactivities

of

the

Covered Officers

who

are subjectto this Code, they are

superceded

bythisCodetotheextentthat

they

overlaporconflict

with

the

provisions

ofthis

Code.

Please

review these other documents or consult with

the

Legal

Department

if have questions regardingthe

applicability

ofthese

policies

toyou.

III.

Covered Officers Should Handle

Ethically

Actual and

Apparent

Conflicts ofInterest

Overview.A"conflictofinterest"occurs

when

aCoveredOfficer'sprivateinterestinterferes

with

theinterestsof,orhisorherserviceto,theFTFunds.Forexample,aconflictofinterest

would

ariseifaCoveredOfficer,ora

member

ofhis

family,

receivesimproper

personal

benefitsasaresultof

apposition

with

theFTFunds.

Certain

conflicts

of

interest

arise

out

ofthe

relationships

between

CoveredOfficersandtheFTFundsandalreadyaresubjecttoconflictof

interest

provisionsintheInvestmentCompanyActof1940("InvestmentCompanyAct")andtheInvestment

Advisers

Actof1940("Investment

Advisers

Act").Forexample,CoveredOfficers

may

notindividuallyengageincertain

transactions

(such

asthe

purchase

orsaleof

securities

or

other

property)withtheFTFunds

because

oftheirstatus

as

"affiliated

persons"of

the

FTFunds.TheFT

Funds’

andtheinvestmentadvisers’

compliance

programsandproceduresaredesignedtoprevent,oridentifyandcorrect,violationsoftheseprovisions.ThisCodedoes not,andis notintendedto,repeator replacetheseprogramsandprocedures,andsuchconflicts

fall

outside

of

theparametersofthisCode.

Althoughtypicallynot

presenting

anopportunityforimproperpersonal

benefit,

conflicts

arisefrom,orasaresultof,the

contractual

relationship

between

theFTFunds,theinvestmentadvisers

and

thefund

administrator

ofwhichtheCoveredOfficersarealso

officers

or

employees.Asaresult,

this

Code

recognizes

that

theCoveredOfficers

will,

inthe

normal

courseof

their

duties

(whether

formallyfortheFTFunds,fortheadviser,theadministrator,or

forall

three),

beinvolvedinestablishingpoliciesandimplementing

decisions

thatwillhavedifferent

effects

onthe

adviser,

administratorandtheFT

Funds.

Theparticipationof

the

CoveredOfficersinsuchactivitiesisinherentin

the

contractual

relationship

betweentheFTFunds,the

adviser,

andtheadministratorandisconsistent

with

theperformancebytheCoveredOfficersof

their

dutiesas

officers

oftheFTFunds.

Thus,

if

performed

inconformitywiththeprovisionsof

the

InvestmentCompany

Act

andtheInvestment

Advisers

Act,suchactivitieswillbedeemedtohavebeenhandled

ethically.

In

addition,

itis

recognized

by

theFTFunds'Boardsof

Directors

("Boards")thattheCoveredOfficersmayalsobeofficersoremployeesofoneormoreotherinvestmentcompanies

covered

bythisorother

codes.

Otherconflictsof

interest

arecoveredbytheCode,evenifsuch

conflicts

ofinterestarenotsubject

to

provisionsintheInvestmentCompanyActandtheInvestmentAdvisersAct.Thefollowinglistprovidesexamplesofconflictsof

interest

undertheCode,butCoveredOfficersshouldkeepinmindthattheseexamplesarenotexhaustive.Theoverarching

principle

isthatthepersonalinterestofaCoveredOfficershouldnotbe

placed

improperlybeforetheinterestoftheFTFunds.

EachCoveredOfficermust:

·

Not

usehisorher

personal

influence

or

personal

relationshipsimproperlytoinfluenceinvestment

decisions

orfinancial

reporting

bytheFTFundswherebytheCoveredOfficerwouldbenefitpersonallytothedetrimentoftheFTFunds;

·

Not

cause

the

FTFundstotake

action,

orfailtotakeaction,fortheindividual

personal

benefitof

the

CoveredOfficerratherthanthe

benefit

the

FT

Funds;

·

Not

retaliateagainstanyotherCoveredOfficerorany

employee

oftheFTFundsor

their

affiliated

persons

for

reports

of

potential

violations

thataremadeingoodfaith;

·

Report

atleastannuallythe

following

affiliations

orother

relationships:

1

o

all

directorships

forpublic

companies

andall

companies

thatare

required

tofilereportswiththeSEC;

o

anydirectorindirect

business

relationship

with

any

independentdirectorsoftheFTFunds;

o

anydirectorindirect

business

relationship

with

any

independentpublicaccounting

firm

(whicharenot

related

totheroutine

issues

related

tothe

firm’s

serviceas

the

CoveredPersonsaccountant);

and

o

anydirectorindirect

interest

inanytransactionwithanyFTFundthatwillbenefittheofficer

(not

including

benefitsderivedfromtheadvisory,sub-advisory,distributionorserviceagreementswith

affiliates

of

Franklin

Resources).

These

reports

willbereviewedbytheLegalDepartmentforcompliancewiththeCode.

Therearesomeconflictofinterestsituations

that

should

always

beapprovedinwritingbyFranklinResourcesGeneralCounselor

Deputy

GeneralCounsel,ifmaterial.Examplesofthese

include

2

:

·

Service

asadirectoron

the

boardofanypublic

or

privateCompany.

1

Reportingoftheseaffiliationsorotherrelationshipsshallbemadebycompletingtheannual

Directors

andOfficersQuestionnaireandreturningthequestionnaireto

Franklin

ResourcesInc,GeneralCounselorDeputyGeneralCounsel.

2

Anyactivityorrelationshipthat

would

presentaconflictforaCoveredOfficermayalsopresentaconflictfortheCoveredOfficer

ifamemberoftheCoveredOfficer'simmediatefamilyengagesinsuchanactivityorhassucharelationship.TheCoverPersonshouldalsoobtainwrittenapprovalbyFT’sGeneralCounselinsuchsituations.

·

Thereceiptofanygiftsinexcessof$100fromanyperson,fromanycorporationor

association.

·

Thereceiptofanyentertainmentfromany

Company

withwhichtheFTFundshascurrentor

prospective

business

dealingsunlesssuch

entertainment

is

business

related,

reasonableincost,

appropriate

astotimeandplace,andnotsofrequentastoraise

any

questionofimpropriety.Notwithstandingthe

foregoing,

theCoveredOfficersmustobtainpriorapprovalfromtheFranklin

Resources

GeneralCounselfor

any

entertainmentwithavalueinexcessof$1000.

·

Any

ownershipinterestin,oranyconsultingor

employment

relationshipwith,anyoftheFTFund’sserviceproviders,other

than

aninvestmentadviser,

principal

underwriter,administratororanyaffiliatedpersonthereof.

·

Adirectorindirect

financial

interest

incommissions,

transaction

chargesorspreads

paid

bytheFTFundsfor

effecting

portfolio

transactions

orfor

selling

or

redeeming

sharesotherthan

an

interestarisingfromtheCoveredOfficer'semployment,suchascompensationorequityownership.

·

Franklin

Resources

General

CounselorDeputyGeneralCounselwill

provide

areporttotheFTFundsAuditCommitteeofanyapprovalsgrantedat

the

next

regularlyscheduledmeeting.

IV.Disclosure and Compliance

·

Each

CoveredOfficershouldfamiliarizehimselfwiththedisclosure

requirements

generallyapplicableto

the

FTFunds;

·

Each

CoveredOfficershouldnot

knowingly

misrepresent,orcause

others

tomisrepresent,facts

about

theFT

Funds

toothers,whetherwithinor

outside

theFTFunds,

including

tothe

FT

Funds’

directors

and

auditors,

andtogovernmental

regulators

and

self-regulatory

organizations;

·

Each

CoveredOfficershould,totheextentappropriatewithinhisorherareaof

responsibility,

consultwithotherofficersandemployeesoftheFTFunds,theFTFund’sadviserandthe

administrator

withthegoalof

promoting

full,

fair,

accurate,

timelyand

understandable

disclosure

inthe

reports

and

documents

theFTFundsfile

with,

orsubmitto,theSECandinotherpubliccommunicationsmadebytheFTFunds;and

·

Itisthe

responsibility

ofeachCoveredOfficertopromotecompliancewiththe

standards

andrestrictions

imposed

by

applicable

laws,rulesandregulations.

V.

Reporting

and Accountability

EachCoveredOfficermust:

·

Upon

becomingacoveredofficer

affirm

inwritingtotheBoardthatheorshehasreceived,read,and

understands

theCode(seeExhibitB);

·

Annually

thereafter

affirm

totheBoardthathehas

complied

withtherequirementsoftheCode;and

·

Notify

Franklin

Resources’

GeneralCounselor

Deputy

GeneralCounsel

promptly

ifheorshe

knows

ofanyviolationofthis

Code.

Failuretodosoisitselfisaviolationofthis

Code.

Franklin

Resources’

General

CounselandDeputyGeneral

Counsel

areresponsibleforapplyingthisCodetospecificsituationsinwhichquestionsare

presented

underit

and

havetheauthoritytointerpretthis

Code

inanyparticular

situation.

3

However,theIndependentDirectorsofthe

respective

FTFundswill

consider

anyapprovalsorwaivers

4

soughtbyanyChiefExecutiveOfficersoftheFunds.

TheFTFundswill

follow

these

procedures

in

investigating

and

enforcingthisCode:

·

Franklin

Resources

General

CounselorDeputyGeneralCounselwill

take

all

appropriate

actionto

investigate

anypotentialviolations

reported

totheLegalDepartment;

·

If,aftersuch

investigation,

theGeneralCounsel

or

DeputyGeneralCounselbelievesthatnoviolationhasoccurred,TheGeneralCounselisnotrequiredto

take

anyfurtheraction;

·

Any

matter

thattheGeneralCounselorDeputyGeneralCounsel

believes

isa

violation

willbe

reported

tothe

Independent

Directorsofthe

appropriate

FTFund;

·

Ifthe

Independent

Directors

concur

that

aviolationhas

occurred,

itwill

inform

andmakearecommendationtotheBoardofthe

appropriate

FTFundorFunds,

which

will

consider

appropriateaction,whichmayincludereviewof,andappropriatemodificationsto, applicable

policies

and

procedures;

notification

toappropriatepersonnel

of

theinvestmentadviseroritsboard;orarecommendationtodismisstheCoveredOfficer;

·

TheIndependent

Directors

willbe

responsible

for

grantingwaivers,asappropriate;and

·

Any

changestoorwaiversofthis

Code

will,to

the

extentrequired,are

disclosed

asprovidedbySECrules.

5

VI.Other Policies and Procedures

ThisCodeshallbethesolecode

of

ethics

adopted

bytheFTFunds

for

purposesofSection406oftheSarbanes-Oxley

Act

andtherules

and

forms

applicable

toregisteredinvestmentcompaniesthereunder.Insofaras

other

policies

orproceduresoftheFTFunds,theFTFunds'advisers,principal

underwriter,

orotherserviceprovidersgovernorpurporttogovernthebehaviororactivitiesof

the

CoveredOfficerswhoaresubjecttothisCode,theyaresupersededbythisCodetotheextentthattheyoverlaporconflict

with

theprovisionsofthisCode.TheFTI

Personal

InvestmentsandInsiderTradingPolicy,adoptedbytheFTFunds,FTinvestmentadvisersandFTFund’s

principal

underwriterpursuantto

Rule

17j-1undertheInvestmentCompanyAct,theCodeof

Ethics

andBusinessConductandmoredetailed

policies

andproceduressetforth

in

FT’sEmployeeHandbookareseparaterequirementsapplyingtotheCoveredOfficersandothers,andarenotpartofthis

Code.

3

FranklinResourcesGeneralCounselandDeputyGeneralCounselareauthorizedtoconsult,asappropriate,

with

membersoftheAuditCommittee,counseltotheFTFundsandcounseltotheIndependentDirectors,andareencouragedtodoso.

4

Item2of

Form

N-CSRdefines

"waiver"

as

"the

approvalbytheregistrantofamaterialdeparturefromaprovision

of

thecodeof

ethics"and"implicit

waiver,"

which

mustalsobedisclosed,as

"the

registrant'sfailuretotakeaction

within

areasonableperiodoftime

regarding

amaterialdeparturefromaprovisionofthecodeofethicsthathas

been

madeknowntoanexecutiveofficer"

of

theregistrant.SeePartX.

5

SeePartX.

VII.

Amendments

AnyamendmentstothisCode,otherthanamendmentstoExhibitA,mustbe

approved

orratifiedbyamajorityvoteofthe

FT

Funds’

Board

including

amajorityof

independent

directors.

VIII.

Confidentiality

Allreportsandrecordspreparedor

maintained

pursuanttothis

Code

willbe

considered

confidential

andshallbe

maintained

and

protected

accordingly.

Except

asotherwiserequiredbylaw orthis Code,such mattersshallnotbe disclosedto anyoneother thanthe FTFunds’ Boardandtheir

counsel.

IX.Internal Use

TheCodeisintended

solely

fortheinternalusebytheFTFundsanddoesnot

constitute

anadmission,byoronbehalfofanyFTFunds,astoanyfact,

circumstance,

or

legal

conclusion.

X.

Disclosure

on

FormN-CSR

Item2ofFormN-CSRrequiresa

registered

managementinvestmentcompanyto

disclose

annually

whether,asofthe

end

ofthe

period

coveredbythereport,ithas

adopted

acodeofethicsthatappliestothe

registrant's

principal

executive

officer,principal

financial

officer,principal

accounting

officerorcontroller,or

persons

performing

similar

functions,

regardless

ofwhetherthese

officers

are

employedbytheregistrantorathirdparty.Iftheregistranthasnotadoptedsuchacodeofethics,itmustexplainwhyithasnotdoneso.

The

registrant

must

also:

(1)filewiththeSECacopyofthecodeasanexhibittoitsannual

report;

(2)post

the

textofthecodeon

its

Internetwebsiteand

disclose,

in

its

most

recent

report

onFormN-CSR,itsInternetaddressandthe

fact

thatit

has

postedthecodeonitsInternetwebsite;or(3)

undertake

initsmost

recent

reportonFormN-CSRtoprovidetoanyperson

without

charge,uponrequest,acopyofthecodeandexplainthemannerinwhichsuchrequestmaybemade.

Disclosure

isalso

required

ofamendmentsto,orwaivers(includingimplicitwaivers)from,aprovisionofthecodein

the

registrant's

annual

report

onFormN-CSR

oronits

website.

Ifthe

registrant

intends

tosatisfytherequirementtodisclose

amendments

andwaiversbyposting

such

information

onits

website,

itwillbe

required

todisclose

its

Internet

addressandthis

intention.

TheLegalDepartmentshallbe

responsible

for

ensuring

that:

·

acopyoftheCodeisfiledwiththeSECasanexhibittoeachFund’s

annual

report;

and

·

anyamendmentsto,orwaivers(includingimplicitwaivers)from,aprovisionoftheCodeisdisclosedinthe

registrant's

annualreportonFormN-CSR.

Intheeventthatthe

foregoing

disclosure

is

omitted

oris

determined

tobeincorrect,

the

LegalDepartmentshallpromptlyfilesuch

information

with

the

SECasanamendmenttoFormN-CSR.

Insuchan

event,

theFundChiefComplianceOfficershallreviewtheCodeandproposesuch

changes

totheCodeasare

necessary

or

appropriate

to

preventreoccurrences.

EXHIBIT

A

PersonsCoveredbytheFranklin

Templeton

FundsCodeofEthics

December2018

FRANKLIN GROUPOF FUNDS

Edward

Perks                            President

and

Chief Executive Officer

–

Investment

Management

Rupert H. Johnson, Jr.                             Chairman

of the Board and

Vice President– Investment

Management

Don

Taylor                                                President

and

Chief Executive Officer

–

Investment

Management

Sonal

Desai)                             President

and

Chief

Executive

Officer

–

Investment

Management

Matthew Hinkle                          Chief Executive Officer

–

Finance

and Administration

FRANKLIN MUTUAL

SERIES FUNDS

Peter Langerman                       Chief Executive Officer

–

Investment Management

Matthew Hinkle                                       Chief Executive Officer

–

Finance

and Administration

Robert G. Kubilis                                      Chief Financial Officer and Chief Accounting Officer

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

Mat S. Gulley                            Chief Executive Officer

–

Investment

Management

Matthew Hinkle                                       Chief Executive

Officer

–

Finance

and Administration

Robert G. Kubilis                                      Chief Financial Officer and Chief Accounting

Officer

TEMPLETON

GROUPOF FUNDS

Manraj S. Sekhon                      President and

Chief Executive Officer

–

Investment

Management

Michael

Hasenstab,

Ph.D.

President and Chief Executive Officer

–

Investment

Management

Norman

Boersma                                                     President

and

Chief Executive Officer

–

Investment

Management

Matthew Hinkle                                       Chief Executive Officer

–

Finance

and Administration

Robert G. Kubilis                       Chief Financial Officer, Chief Accounting Officer and Treasurer

Exhibit

B

ACKNOWLEDGMENT FORM

FranklinTempletonFundsCodeofEthics

ForPrincipalExecutivesandSeniorFinancialOfficers

Instructions:

1.

Complete

all

sections

ofthisform.

2.

Print

the

completed

form,sign,anddate.

3.

SubmitcompletedformtoFT’sGeneralCounselc/oCodeofEthicsAdministration

within

10daysofbecomingaCoveredOfficerandbyFebruary15

th

ofeach

subsequent

year.

Inter-officemail:

Code

ofEthics

Administration,

GlobalComplianceSM-920/2

Fax:                       

(650)312-5646

E-mail:                  

Code

ofEthics

Inquiries

&Requests(internal

address);

lpreclear@franklintempleton.com

(externaladdress)

CoveredOfficer’sName:

Title:

Department:

Location:

CertificationforYearEnding:

To:    FranklinResourcesGeneralCounsel,LegalDepartment

I

acknowledge

receiving,

reading

and

understanding

the

Franklin

Templeton

Fund’s

Code

ofEthicsfor

Principal

Executive

Officers

and

Senior

Financial

Officers

(the“Code”).I

will

complyfully

with

allprovisionsoftheCodetotheextenttheyapplyto

me

duringthe

period

of

my

employment.Ifurtherunderstandandacknowledgethatany

violation

oftheCodemaysubjectmetodisciplinaryaction,including

termination

ofemployment.

                                                                 

Signature                                                               Date signed

EX-99.CERT

I, Matthew T. Hinkle, certify that:

1. I have reviewed this report on Form N-CSR of Franklin Investors Securities Trust;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;   

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 

5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

6/25/2021

S\MATTHEW T. HINKLE

Matthew T. Hinkle

Chief Executive Officer - Finance and Administration

I, Robert G. Kubilis, certify that:

1. I have reviewed this report on Form N-CSR of Franklin Investors Securities Trust;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;   

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 

5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

6/25/2021

S\ROBERT G. KUBILIS

Robert G. Kubilis

Chief Financial Officer and Chief Accounting Officer

EX-99.906 CERT

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

I, Robert G. Kubilis, Chief Financial Officer of the Franklin Investors Securities Trust (the “Registrant”), certify, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1.The periodic report on Form N-CSR of the Registrant for the period ended 4/30/2021 (the “Form N-CSR”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Dated:  6/25/2021

                                                S\ROBERT G. KUBILIS

                                                Robert G. Kubilis

Chief Financial Officer and Chief Accounting Officer

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

I, Matthew T. Hinkle, Chief Executive Officer of the Franklin Investors Securities Trust (the “Registrant”), certify, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1.The periodic report on Form N-CSR of the Registrant for the period ended 4/30/2021 (the “Form N-CSR”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Dated:  6/25/2021

                                                S\MATTHEW T. HINKLE

                                                Matthew T. Hinkle

Chief Executive Officer - Finance and Administration