Franklin Strategic Series
10/27/2026 | Press release | Distributed by Public on 10/27/2026 11:54
Annual Report by Investment Company (Form N-CSR)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-06243
Franklin Strategic Series
(Exact name of registrant as specified in charter)
One Franklin Parkway, San Mateo, CA 94403-1906
(Address of principal executive offices) (Zip code)
Alison Baur
Franklin Templeton
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: August 31
Date of reporting period: August 31, 2026
| ITEM 1. | REPORT TO STOCKHOLDERS |
(a) The Report to Shareholders is filed herewith
|
Franklin Templeton SMACS: Series CH
|
||
|
Annual Shareholder Report | August 31, 2026
|
||
This annual shareholder report contains important information about Franklin Templeton SMACS: Series CH for the period September 1, 2025, to August 31, 2026.
You can find additional information about the Fund at https://www.franklintempleton.com/regulatory-fund-documents. You can also request this information by contacting us at (800) DIAL BEN/342-5236.
You can find additional information about the Fund at https://www.franklintempleton.com/regulatory-fund-documents. You can also request this information by contacting us at (800) DIAL BEN/342-5236.
This report describes changes to the Fund that occurred during the reporting period.
WHAT WERE THE FUND COSTS FOR THE LAST YEAR? (based on a hypothetical $10,000 investment)
|
Fund Name
|
Costs of a $10,000 investment
|
Costs paid as a percentage of a $10,000 investment*
|
|
Franklin Templeton SMACS: Series CH1
|
$0
|
0.00%
|
| * | Reflects fee waivers and/or expense reimbursements, without which expenses would have been higher. |
| 1 | Does not reflect the effect of fees and expenses associated with a separately managed account, or a management fee or other operating expenses of the Fund. |
HOW DID THE FUND PERFORM LAST YEAR AND WHAT AFFECTED ITS PERFORMANCE?
For the twelve months ended August 31, 2026, Franklin Templeton SMACS: Series CH Fund returned 6.92%. The Fund compares its performance to the Bloomberg Municipal Bond California Exempt Index, which returned 3.85% for the same period.
PERFORMANCE HIGHLIGHTS
|
Top contributors to performance:
|
|
|
↑
|
Security selection within bonds with no external credit rating
|
|
↑
|
Overweight exposure to bonds with 20 years to maturity
|
|
↑
|
Underweight allocation to AA rated bonds
|
|
Top detractors from performance:
|
|
|
↓
|
Overweight allocation to bonds with no external credit rating
|
|
↓
|
Overweight exposure to bonds with 10 years to maturity
|
|
↓
|
Security selection within BB rated bonds
|
| Franklin Templeton SMACS: Series CH | PAGE 1 | 3000-ATSR-1026 |
HOW DID THE FUND PERFORM OVER THE LAST 10 YEARS?
The Fund's past performance is not necessarily an indication of how the Fund will perform in the future. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares, or the effect of fees and expenses borne by investors at the separately managed account level.
VALUE OF A $10,000 INVESTMENT - Franklin Templeton SMACS: Series CH 6/3/2019 - 8/31/2026
AVERAGE ANNUAL TOTAL RETURNS (%) Period Ended August 31, 2026
|
1 Year
|
5 Year
|
Since Inception
(6/3/2019) |
|
|
Franklin Templeton SMACS: Series CH
|
6.92
|
0.57
|
2.28
|
|
Bloomberg Municipal Bond Index
|
4.12
|
0.54
|
1.65
|
|
Bloomberg Municipal Bond California Exempt Index
|
3.85
|
0.53
|
1.59
|
Performance figures do not reflect the effect of fees and expenses associated with a separately managed account or a management fee or other operating expenses of the Fund, which if reflected, would reduce performance of the Fund.
Fund performance figures may reflect fee waivers and/or expense reimbursements, without which the performance would have been lower.
For current month-end performance, please call Franklin Templeton at (800) DIAL BEN/342-5236 or visit
https://www.franklintempleton.com/investments/options/mutual-funds.
https://www.franklintempleton.com/investments/options/mutual-funds.
Important data provider notices and terms available at www.franklintempletondatasources.com.
KEY FUND STATISTICS (as of August 31, 2026)
|
Total Net Assets
|
$38,588,769
|
|
Total Number of Portfolio Holdings
|
103
|
|
Total Management Fee Paid
|
$0
|
|
Portfolio Turnover Rate
|
12.72%
|
| Franklin Templeton SMACS: Series CH | PAGE 2 | 3000-ATSR-1026 |
WHAT DID THE FUND INVEST IN? (as of August 31, 2026)
Portfolio Composition*(% of Total Investments)
| * | Does not include derivatives, except purchased options, if any. |
HOW HAS THE FUND CHANGED?
Effective June 30, 2026, Daniel Workman was added as a portfolio manager of the Fund and John Wiley stepped down as a portfolio manager of the Fund.
This is a summary of certain changes to the Fund since September 1, 2025. For more complete information, you may review the Fund's current prospectus and any applicable supplements and the Fund's next prospectus, which we expect to be available by January 1, 2027, at https://www.franklintempleton.com/regulatory-fund-documents or upon request at (800) DIAL BEN/342-5236 or [email protected].
|
WHERE CAN I FIND ADDITIONAL INFORMATION ABOUT THE FUND?
|
|
|
Additional information is available on https://www.franklintempleton.com/regulatory-fund-documents, including its:
|
|
|
• prospectus • proxy voting information • financial information • holdings • tax information
|
| Franklin Templeton SMACS: Series CH | PAGE 3 | 3000-ATSR-1026 |
|
Franklin Templeton SMACS: Series E
|
||
|
Annual Shareholder Report | August 31, 2026
|
||
This annual shareholder report contains important information about Franklin Templeton SMACS: Series E for the period September 1, 2025, to August 31, 2026.
You can find additional information about the Fund at https://www.franklintempleton.com/regulatory-fund-documents. You can also request this information by contacting us at (800) DIAL BEN/342-5236.
You can find additional information about the Fund at https://www.franklintempleton.com/regulatory-fund-documents. You can also request this information by contacting us at (800) DIAL BEN/342-5236.
WHAT WERE THE FUND COSTS FOR THE LAST YEAR? (based on a hypothetical $10,000 investment)
|
Fund Name
|
Costs of a $10,000 investment
|
Costs paid as a percentage of a $10,000 investment*
|
|
Franklin Templeton SMACS: Series E1
|
$0
|
0.00%
|
| * | Reflects fee waivers and/or expense reimbursements, without which expenses would have been higher. |
| 1 | Does not reflect the effect of fees and expenses associated with a separately managed account, or a management fee or other operating expenses of the Fund. |
HOW DID THE FUND PERFORM LAST YEAR AND WHAT AFFECTED ITS PERFORMANCE?
For the twelve months ended August 31, 2026, Franklin Templeton SMACS: Series E returned 21.07%. The Fund compares its performance to the MSCI USA High Dividend Yield Index, which returned 19.72% for the same period.
PERFORMANCE HIGHLIGHTS
|
Top contributors to performance:
|
|
|
↑
|
Information technology (IT), energy and health care sectors led absolute returns during the period.
|
|
↑
|
Marvell Technology added value within IT, while Albemarle and SLB contributed within materials and energy, respectively.
|
|
↑
|
Stock selection within materials assisted relative returns, as did selection and underweight allocations to the consumer discretionary and consumer staples sectors.
|
|
Top detractors from performance:
|
|
|
↓
|
The consumer discretionary sector detracted from absolute returns.
|
|
↓
|
In terms of individual issuers, Nike hindered performance within consumer discretionary. Accenture and Oracle also detracted within IT.
|
|
↓
|
Relative returns were weakened by selection within the industrials and IT sectors, as well as selection and underweight exposure to health care companies.
|
| Franklin Templeton SMACS: Series E | PAGE 1 | 3001-ATSR-1026 |
HOW DID THE FUND PERFORM OVER THE LAST 10 YEARS?
The Fund's past performance is not necessarily an indication of how the Fund will perform in the future. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares, or the effect of fees and expenses borne by investors at the separately managed account level.
VALUE OF A $10,000 INVESTMENT - Franklin Templeton SMACS: Series E 6/3/2019 - 8/31/2026
AVERAGE ANNUAL TOTAL RETURNS (%) Period Ended August 31, 2026
|
1 Year
|
5 Year
|
Since Inception
(6/3/2019) |
|
|
Franklin Templeton SMACS: Series E
|
21.07
|
12.25
|
13.78
|
|
Russell 3000 Index
|
20.10
|
11.80
|
16.42
|
|
MSCI USA High Dividend Yield Index
|
19.72
|
9.49
|
11.09
|
Performance figures do not reflect the effect of fees and expenses associated with a separately managed account or a management fee or other operating expenses of the Fund, which if reflected, would reduce performance of the Fund.
Fund performance figures may reflect fee waivers and/or expense reimbursements, without which the performance would have been lower.
For current month-end performance, please call Franklin Templeton at (800) DIAL BEN/342-5236 or visit
https://www.franklintempleton.com/investments/options/mutual-funds.
https://www.franklintempleton.com/investments/options/mutual-funds.
Important data provider notices and terms available at www.franklintempletondatasources.com.
KEY FUND STATISTICS (as of August 31, 2026)
|
Total Net Assets
|
$692,470,284
|
|
Total Number of Portfolio Holdings
|
104
|
|
Total Management Fee Paid
|
$0
|
|
Portfolio Turnover Rate
|
131.33%
|
| Franklin Templeton SMACS: Series E | PAGE 2 | 3001-ATSR-1026 |
WHAT DID THE FUND INVEST IN? (as of August 31, 2026)
Portfolio Composition* (% of Total Investments)
| * | Does not include derivatives, except purchased options, if any. |
|
WHERE CAN I FIND ADDITIONAL INFORMATION ABOUT THE FUND?
|
|
|
Additional information is available on https://www.franklintempleton.com/regulatory-fund-documents, including its:
|
|
|
• prospectus • proxy voting information • financial information • holdings • tax information
|
| Franklin Templeton SMACS: Series E | PAGE 3 | 3001-ATSR-1026 |
|
Franklin Templeton SMACS: Series H
|
||
|
Annual Shareholder Report | August 31, 2026
|
||
This annual shareholder report contains important information about Franklin Templeton SMACS: Series H for the period September 1, 2025, to August 31, 2026.
You can find additional information about the Fund at https://www.franklintempleton.com/regulatory-fund-documents. You can also request this information by contacting us at (800) DIAL BEN/342-5236.
You can find additional information about the Fund at https://www.franklintempleton.com/regulatory-fund-documents. You can also request this information by contacting us at (800) DIAL BEN/342-5236.
WHAT WERE THE FUND COSTS FOR THE LAST YEAR? (based on a hypothetical $10,000 investment)
|
Fund Name
|
Costs of a $10,000 investment
|
Costs paid as a percentage of a $10,000 investment*
|
|
Franklin Templeton SMACS: Series H1
|
$0
|
0.00%
|
| * | Reflects fee waivers and/or expense reimbursements, without which expenses would have been higher. |
| 1 | Does not reflect the effect of fees and expenses associated with a separately managed account, or a management fee or other operating expenses of the Fund. |
HOW DID THE FUND PERFORM LAST YEAR AND WHAT AFFECTED ITS PERFORMANCE?
For the twelve months ended August 31, 2026, Franklin Templeton SMACS: Series H returned 7.74%. The Fund compares its performance to the Bloomberg Municipal Bond Index, which returned 4.12% for the same period.
PERFORMANCE HIGHLIGHTS
|
Top contributors to performance:
|
|
|
↑
|
Security selection within bonds with no external credit rating
|
|
↑
|
Overweight exposure to bonds with 20 years to maturity
|
|
↑
|
Security selection within BBB rated bonds
|
|
Top detractors from performance:
|
|
|
↓
|
Overweight exposure to bonds with 10 years to maturity
|
|
↓
|
Security selection within AAA rated bonds
|
|
↓
|
Overweight exposure to bonds with 30 years to maturity
|
| Franklin Templeton SMACS: Series H | PAGE 1 | 3002-ATSR-1026 |
HOW DID THE FUND PERFORM OVER THE LAST 10 YEARS?
The Fund's past performance is not necessarily an indication of how the Fund will perform in the future. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares, or the effect of fees and expenses borne by investors at the separately managed account level.
VALUE OF A $10,000 INVESTMENT - Franklin Templeton SMACS: Series H 6/3/2019 - 8/31/2026
AVERAGE ANNUAL TOTAL RETURNS (%) Period Ended August 31, 2026
|
1 Year
|
5 Year
|
Since Inception
(6/3/2019) |
|
|
Franklin Templeton SMACS: Series H
|
7.74
|
1.51
|
2.76
|
|
Bloomberg Municipal Bond Index
|
4.12
|
0.54
|
1.65
|
Performance figures do not reflect the effect of fees and expenses associated with a separately managed account or a management fee or other operating expenses of the Fund, which if reflected, would reduce performance of the Fund.
Fund performance figures may reflect fee waivers and/or expense reimbursements, without which the performance would have been lower.
For current month-end performance, please call Franklin Templeton at (800) DIAL BEN/342-5236 or visit
https://www.franklintempleton.com/investments/options/mutual-funds.
https://www.franklintempleton.com/investments/options/mutual-funds.
Important data provider notices and terms available at www.franklintempletondatasources.com.
KEY FUND STATISTICS (as of August 31, 2026)
|
Total Net Assets
|
$47,536,029
|
|
Total Number of Portfolio Holdings
|
272
|
|
Total Management Fee Paid
|
$0
|
|
Portfolio Turnover Rate
|
22.45%
|
| Franklin Templeton SMACS: Series H | PAGE 2 | 3002-ATSR-1026 |
WHAT DID THE FUND INVEST IN? (as of August 31, 2026)
Portfolio Composition*(% of Total Investments)
| * | Does not include derivatives, except purchased options, if any. |
|
WHERE CAN I FIND ADDITIONAL INFORMATION ABOUT THE FUND?
|
|
|
Additional information is available on https://www.franklintempleton.com/regulatory-fund-documents, including its:
|
|
|
• prospectus • proxy voting information • financial information • holdings • tax information
|
| Franklin Templeton SMACS: Series H | PAGE 3 | 3002-ATSR-1026 |
|
Franklin Templeton SMACS: Series I
|
||
|
Annual Shareholder Report | August 31, 2026
|
||
This annual shareholder report contains important information about Franklin Templeton SMACS: Series I for the period September 1, 2025, to August 31, 2026.
You can find additional information about the Fund at https://www.franklintempleton.com/regulatory-fund-documents. You can also request this information by contacting us at (800) DIAL BEN/342-5236.
You can find additional information about the Fund at https://www.franklintempleton.com/regulatory-fund-documents. You can also request this information by contacting us at (800) DIAL BEN/342-5236.
WHAT WERE THE FUND COSTS FOR THE LAST YEAR? (based on a hypothetical $10,000 investment)
|
Fund Name
|
Costs of a $10,000 investment
|
Costs paid as a percentage of a $10,000 investment*
|
|
Franklin Templeton SMACS: Series I1
|
$0
|
0.00%
|
| * | Reflects fee waivers and/or expense reimbursements, without which expenses would have been higher. |
| 1 | Does not reflect the effect of fees and expenses associated with a separately managed account, or a management fee or other operating expenses of the Fund. |
HOW DID THE FUND PERFORM LAST YEAR AND WHAT AFFECTED ITS PERFORMANCE?
For the twelve months ended August 31, 2026, Franklin Templeton SMACS: Series I returned 7.76%. The Fund compares its performance to the Bloomberg High Yield Very Liquid Index and the 50% Bloomberg High Yield Very Liquid Index and 50% Bloomberg U.S. Corporate Index, which returned 5.11% and 3.52%, respectively, for the same period.
PERFORMANCE HIGHLIGHTS
|
Top contributors to performance:
|
|
|
↑
|
Returns were driven by the health care and energy sectors, in addition to securitized products.
|
|
↑
|
Community Health Systems and Organon & Co. led returns within health care, while Venture Global Partners II contributed within energy.
|
|
↑
|
Relative performance benefited from selection and an overweight allocation to the health care sector. Security selection among information technology and energy companies also assisted returns.
|
|
Top detractors from performance:
|
|
|
↓
|
No sectors meaningfully detracted from absolute returns.
|
|
↓
|
FMC and Ardagh hindered returns within materials. Mauser Packaging Solutions also detracted from performance within industrials.
|
|
↓
|
Overweight exposure to securitized products weakened relative results, as did selection among the utilities and consumer discretionary sectors.
|
| Franklin Templeton SMACS: Series I | PAGE 1 | 3003-ATSR-1026 |
HOW DID THE FUND PERFORM OVER THE LAST 10 YEARS?
The Fund's past performance is not necessarily an indication of how the Fund will perform in the future. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares, or the effect of fees and expenses borne by investors at the separately managed account level.
VALUE OF A $10,000 INVESTMENT - Franklin Templeton SMACS: Series I 6/3/2019 - 8/31/2026
AVERAGE ANNUAL TOTAL RETURNS (%) Period Ended August 31, 2026
|
1 Year
|
5 Year
|
Since Inception
(6/3/2019) |
|
|
Franklin Templeton SMACS: Series I
|
7.76
|
4.13
|
4.68
|
|
Bloomberg U.S. Aggregate Index
|
1.89
|
-0.29
|
1.18
|
|
Bloomberg High Yield Very Liquid Index
|
5.11
|
3.96
|
5.02
|
|
50% Bloomberg High Yield Very Liquid Index and 50% Bloomberg U.S. Corporate Index
|
3.52
|
1.93
|
3.57
|
Performance figures do not reflect the effect of fees and expenses associated with a separately managed account or a management fee or other operating expenses of the Fund, which if reflected, would reduce performance of the Fund.
Fund performance figures may reflect fee waivers and/or expense reimbursements, without which the performance would have been lower.
For current month-end performance, please call Franklin Templeton at (800) DIAL BEN/342-5236 or visit
https://www.franklintempleton.com/investments/options/mutual-funds.
https://www.franklintempleton.com/investments/options/mutual-funds.
Important data provider notices and terms available at www.franklintempletondatasources.com.
KEY FUND STATISTICS (as of August 31, 2026)
|
Total Net Assets
|
$989,611,101
|
|
Total Number of Portfolio Holdings
|
191
|
|
Total Management Fee Paid
|
$0
|
|
Portfolio Turnover Rate
|
33.18%
|
| Franklin Templeton SMACS: Series I | PAGE 2 | 3003-ATSR-1026 |
WHAT DID THE FUND INVEST IN? (as of August 31, 2026)
Portfolio Composition*(% of Total Investments)
| * | Does not include derivatives, except purchased options, if any. |
|
WHERE CAN I FIND ADDITIONAL INFORMATION ABOUT THE FUND?
|
|
|
Additional information is available on https://www.franklintempleton.com/regulatory-fund-documents, including its:
|
|
|
• prospectus • proxy voting information • financial information • holdings • tax information
|
| Franklin Templeton SMACS: Series I | PAGE 3 | 3003-ATSR-1026 |
(b) Not applicable
| 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 19(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. |
The Board of Trustees of the Registrant has determined that Mary C. Choksi, possesses the technical attributes identified in Item 3 to Form N-CSR to qualify as an "audit committee financial expert," and has designated Mary C. Choksi as the Audit Committee's financial expert. Mary C. Choksi is an "independent" Trustee pursuant to paragraph (a)(2) of Item 3 to Form N-CSR.
Under applicable securities laws, a person determined to be an audit committee financial expert will not be deemed an "expert" for any purpose, including without limitation for the purposes of Section 11 of the Securities Act of 1933, as a result of being designated or identified as an audit committee financial expert. The designation or identification of a person as an audit committee financial expert does not impose on such person any duties, obligations, or liabilities greater than the duties, obligations, and liabilities imposed on such person as a member of the audit committee and board of directors in the absence of such designation or identification. The designation or identification of a person as an audit committee financial expert does not affect the duties, obligations, or liability of any other member of the audit committee or board of directors.
| ITEM 4. | PRINCIPAL ACCOUNTANT FEES AND SERVICES. |
a) Audit Fees. The aggregate fees billed in the last two fiscal years ending August 31, 2025 and August 31, 2026 (the "Reporting Periods") for professional services rendered by the Registrant's principal accountant (the "Auditor") for the audit of the Registrant's annual financial statements, or services that are normally provided by the Auditor in connection with the statutory and regulatory filings or engagements for the Reporting Periods, were $183,612 in August 31, 2025 and $193,685 in August 31, 2026.
b) Audit-Related Fees. The aggregate fees billed in the Reporting Periods for assurance and related services by the Auditor that are reasonably related to the performance of the Registrant's financial statements were $0 in August 31, 2025 and $0 in August 31, 2026.
(c) Tax Fees. The aggregate fees billed in the Reporting Periods for professional services rendered by the Auditor for tax compliance, tax advice and tax planning ("Tax Services") were $39,000 in August 31, 2025 and $39,000 in August 31, 2026. These services consisted of (i) review or preparation of U.S. federal, state, local and excise tax returns; (ii) U.S. federal, state and local tax planning, advice and assistance regarding statutory, regulatory or administrative developments, and (iii) tax advice regarding tax qualification matters and/or treatment of various financial instruments held or proposed to be acquired or held.
There were no fees billed for tax services by the Auditors to the Registrant's investment manager and any entity controlling, controlled by, or under common control with the investment manager that provides ongoing services to the Registrant ("Service Affiliates") during the Reporting Periods that required pre-approval by the Audit Committee.
(d) All Other Fees. The aggregate fees billed in the Reporting Periods for products and services provided by the Auditor to the Registrant, other than the services reported in paragraphs (a) through (c) of this item, were $0 in August 31, 2025 and $0 in August 31, 2026.
There were no other non-audit services rendered by the Auditor to the Service Affiliates requiring pre-approval by the Audit Committee in the Reporting Periods.
(e) Audit Committee's pre-approval policies and procedures described in paragraph (c) (7) of Rule 2-01 of Regulation S-X.
(1) The Registrant's Audit Committee is directly responsible for approving the services to be provided by the Auditors, including:
(i) pre-approval of all audit and audit related services;
(ii) pre-approval of all non-audit related services to be provided to the Registrant by the Auditors;
(iii) pre-approval of all non-audit related services to be provided by the Auditors to the Registrant and the Service Affiliates where the non-audit services relate directly to the operations or financial reporting of the Registrant; and
(iv) establishment by the Audit Committee, if deemed necessary or appropriate, as an alternative to committee pre-approval of services to be provided by the Auditors, as required by paragraphs (ii) and (iii) above, of policies and procedures to permit such services to be pre-approved by other means, such as through establishment of guidelines or by action of a designated member or members of the committee; provided the policies and procedures are detailed as to the particular service and the committee is informed of each service and such policies and procedures do not include delegation of Audit Committee responsibilities, as contemplated under the Securities Exchange Act of 1934, to management; subject, in the case of (ii) through (iv), to any waivers, exceptions or exemptions that may be available under applicable law or rules.
(2) None of the services described in paragraphs (b) through (d) of this Item were performed in reliance on paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Not applicable.
(g) Non-audit fees billed by the Auditor for services rendered to the Registrant and the Service Affiliates during the reporting period were $377,023 in August 31, 2025 and $2,562,011 in August 31, 2026.
(h) Yes. The Registrant's Audit Committee has considered whether the provision of non-audit services that were rendered to Service Affiliates, which were not pre-approved (not requiring pre-approval), is compatible with maintaining the Auditor's independence. All services provided by the Auditor to the Registrant or to the Service Affiliates, which were required to be pre-approved, were pre-approved as required.
(i) Not applicable.
(j) Not applicable.
| ITEM 5. | AUDIT COMMITTEE OF LISTED REGISTRANTS. |
Not applicable.
| ITEM 6. | SCHEDULE OF INVESTMENTS. |
| (a) | Please see schedule of investments contained in the Financial Statements and Financial Highlights included under Item 7 of this Form N-CSR. |
| (b) | Not applicable. |
| ITEM 7. | FINANCIAL STATEMENTS AND FINANCIAL HIGHLIGHTS FOR OPEN-END MANAGEMENT INVESTMENT COMPANIES. |
Franklin
Strategic
Series
Financial
Statements
and
Other
Important
Information
Annual
|
August
31, 2026
Franklin
Templeton
SMACS:
Series
CH
Franklin
Templeton
SMACS:
Series
E
Franklin
Templeton
SMACS:
Series
H
Franklin
Templeton
SMACS:
Series
I
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you
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Table
of
Contents
franklintempleton.com
Financial
Statements
and
Other
Important
Information-Annual
1
Financial
Highlights
and
Schedules
of
Investments
2
Financial
Statements
35
Notes
to
Financial
Statements
39
Report
of
Independent
Registered
Public
Accounting
Firm
54
Tax
Information
55
Changes
In
and
Disagreements
with
Accountants
56
Results
of
Meeting(s)
of
Shareholders
56
Remuneration
Paid
to
Directors,
Officers
and
Others
56
Board
Approval
of
Management
and
Subadvisory
Agreements
56
Franklin
Strategic
Series
Financial
Highlights
Franklin
Templeton
SMACS:
Series
CH
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
2
a
Year
Ended
August
31,
2026
2025
2024
2023
2022
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$8.37
$8.96
$8.52
$8.85
$10.51
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
0.52
0.48
0.45
0.39
0.36
Net
realized
and
unrealized
gains
(losses)
...........
0.05
(0.60)
0.43
(0.32)
(1.66)
Total
from
investment
operations
....................
0.57
(0.12)
0.88
0.07
(1.30)
Less
distributions
from:
Net
investment
income
..........................
(0.47)
(0.47)
(0.44)
(0.40)
(0.36)
Net
asset
value,
end
of
year
.......................
$8.47
$8.37
$8.96
$8.52
$8.85
Total
return
....................................
6.92%
(1.39)%
10.75%
0.85%
(12.61)%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
0.36%
0.55%
0.50%
2.48%
2.37%
Expenses
net
of
waiver
and
payments
by
affiliates
.......
-%
-%
c
-%
c
-%
c
-%
c
Net
investment
income
...........................
6.08%
5.49%
5.27%
4.56%
3.71%
Supplemental
data
Net
assets
,
end
of
year
(000's)
.....................
$38,589
$27,407
$22,910
$3,898
$2,957
Portfolio
turnover
rate
............................
12.72%
28.21%
38.97%
45.25%
5.65%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund's
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Franklin
Strategic
Series
Schedule
of
Investments,
August
31,
2026
Franklin
Templeton
SMACS:
Series
CH
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
3
a
a
Warrants
a
Value
a
a
a
a
a
Warrants
0.0%
Financial
Services
0.0%
a,b
Brightline
Train
Holdings
West
LLC
,
11/26/35
..............................
1,710
$
-
Total
Warrants
(Cost
$
-
)
......................................................
-
Principal
Amount
Corporate
Bonds
0.6%
Diversified
Consumer
Services
0.6%
Grand
Canyon
University
,
Secured
Note
,
5.125
%
,
10/01/28
....................
$
250,000
247,358
Total
Corporate
Bonds
(Cost
$
237,991
)
........................................
247,358
Municipal
Bonds
96.5%
Arizona
1.3%
c
Maricopa
County
Industrial
Development
Authority
,
Grand
Canyon
University
Obligated
Group
,
Revenue
,
144A,
2024
,
7.375
%
,
10/01/29
..........................
505,000
523,192
California
94.9%
c
California
Community
College
Financing
Authority
,
NCCD-Napa
Valley
Properties
LLC
,
Revenue
,
144A,
2022
A
,
5.75
%
,
7/01/60
................................
500,000
335,228
c
California
Community
Housing
Agency
,
Annadel
Apartments
,
Revenue
,
144A,
2019
A
,
5
%
,
4/01/49
..................
1,200,000
923,140
Arbors
Apartments
,
Revenue
,
144A,
2020
A
,
5
%
,
8/01/50
....................
600,000
552,447
Brio
Apartments
&
Next
on
Lex
Apartments
,
Revenue,
Sub.
Lien
,
144A,
2021
A-2
,
4
%
,
8/01/47
....................................................
200,000
154,329
Mira
Vista
Hills
Apartments
,
Revenue
,
144A,
2021
A
,
4
%
,
2/01/56
.............
300,000
144,880
Serenity
at
Larkspur
Apartments
,
Revenue
,
144A,
2020
A
,
5
%
,
2/01/50
.........
219,959
4,179
d
Twin
Creek
Apartments
,
Revenue,
Senior
Lien
,
144A,
2022
A-2
,
8.06
%,
8/01/65
...
1,250,000
41,855
California
Educational
Facilities
Authority
,
St.
Mary's
College
of
California
,
Revenue
,
2023
A
,
Refunding
,
5.5
%
,
10/01/53
....................................
1,000,000
944,456
c
California
Enterprise
Development
Authority
,
Real
Journey
Academies
Obligated
Group
,
Revenue
,
144A,
2024
A
,
5
%
,
6/01/54
.............................
500,000
465,748
California
Municipal
Finance
Authority
,
a
8
%
,
12/01/56
.....................................................
600,000
594,489
c
Revenue
,
144A,
2025
B
,
7.375
%
,
8/01/37
...............................
300,000
304,788
Revenue
,
2025
B
,
7.1
%
,
12/01/37
.....................................
250,000
246,671
Special
Tax
,
2025
C
,
5
%
,
9/01/55
......................................
500,000
482,344
e
Special
Tax
,
2026
B
,
5.25
%
,
9/01/56
...................................
200,000
196,401
c,f
4252
Crenshaw
Preservation
LLC
,
Revenue
,
144A,
2025
B-2
,
Mandatory
Put
,
9
%
,
6/01/36
........................................................
300,000
298,559
c
Ascent
613
,
Revenue
,
144A,
2025
A
,
5.375
%
,
1/01/55
......................
500,000
491,729
BOLD
Program
,
Special
Tax
,
2022
B
,
Refunding
,
6
%
,
9/01/52
................
150,000
155,504
BOLD
Program
,
Special
Tax
,
2022
C
,
6.25
%
,
9/01/52
.......................
150,000
157,411
BOLD
Program
,
Special
Tax
,
2022
D
,
6.125
%
,
9/01/52
......................
150,000
156,458
BOLD
Program
,
Special
Tax
,
2023
A
,
5.5
%
,
9/01/53
........................
100,000
102,731
BOLD
Program
,
Special
Tax
,
2023
C
,
5.25
%
,
9/01/53
.......................
1,000,000
1,004,520
BOLD
Program
,
Special
Tax
,
2024
A
,
5
%
,
9/01/48
.........................
100,000
99,761
Boone
534
LLC
,
Revenue
,
2026
B
,
7.1
%
,
2/01/38
.........................
500,000
492,684
c
CHF-Aptos
LLC
,
Revenue
,
144A,
2025
A
,
5.5
%
,
7/01/57
....................
250,000
245,559
c
CHF-Aptos
LLC
,
Revenue
,
144A,
2025
B
,
7.5
%
,
7/01/57
....................
250,000
246,377
c
Claremont
Graduate
University
,
Revenue
,
144A,
2020
B
,
Refunding
,
5
%
,
10/01/49
.
125,000
119,874
Community
Facilities
District
No.
2021-6
Improvement
Area
No.
2
,
Special
Tax
,
2022
,
6
%
,
9/01/52
....................................................
150,000
155,504
Community
Facilities
District
No.
2022-6
Improvement
Area
No.
2
,
Special
Tax
,
2025
,
5.375
%
,
9/01/55
.................................................
200,000
200,097
Community
Facilities
District
No.
2023-11
Improvement
Area
No.
2
,
Special
Tax
,
2025
,
5.25
%
,
9/01/60
.............................................
500,000
496,754
Community
Facilities
District
No.
2023-5
Area
No.
1
,
Special
Tax
,
2023
,
5.8
%
,
9/01/53
........................................................
1,000,000
1,036,479
Franklin
Strategic
Series
Schedule
of
Investments
Franklin
Templeton
SMACS:
Series
CH
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
4
a
a
Principal
Amount
a
Value
a
a
a
a
a
Municipal
Bonds
(continued)
California
(continued)
California
Municipal
Finance
Authority,
(continued)
Gateways
Hospital
and
Mental
Health
Center
,
Revenue
,
2026
A
,
5.25
%
,
9/01/55
..
$
250,000
$
248,594
c,d
IH
Parkside
Fairfield
LLC
,
Revenue,
Sub.
Lien
,
144A,
2023
B
,
2.617
%,
9/01/43
...
250,000
197,727
LAX
Integrated
Express
Solutions
LLC
,
Revenue,
Senior
Lien
,
2018
A
,
5
%
,
12/31/43
215,000
216,165
LAX
Integrated
Express
Solutions
LLC
,
Revenue,
Senior
Lien
,
2018
A
,
4
%
,
12/31/47
100,000
87,406
LAX
Integrated
Express
Solutions
LLC
,
Revenue,
Senior
Lien
,
2018
B
,
5
%
,
6/01/48
210,000
205,406
c,f
Palmdale
Family
Housing
LP
,
Revenue
,
144A,
2025
A-S
,
Mandatory
Put
,
8.125
%
,
8/01/44
........................................................
200,000
198,576
Porter
1107
LLC
,
Revenue
,
2025
B
,
7.2
%
,
11/01/37
........................
300,000
299,452
SAC
Health
System
,
Revenue
,
2026
,
6
%
,
9/01/56
.........................
150,000
163,029
c
St.
Mary
and
All
Angels
Christian
Church
,
Revenue
,
144A,
2024
A
,
5.75
%
,
5/01/54
.
200,000
199,663
c
Verner
6430
LLC
,
Revenue
,
144A,
2026
B
,
7.1
%
,
6/01/38
...................
250,000
246,695
c
Westside
Neighborhood
School
,
Revenue
,
144A,
2024
,
5.9
%
,
6/15/44
..........
150,000
157,728
c
Westside
Neighborhood
School
,
Revenue
,
144A,
2024
,
6.375
%
,
6/15/64
........
250,000
259,914
c
California
Public
Finance
Authority
,
Kendal
at
Sonoma
Obligated
Group
,
Revenue
,
144A,
2021
A
,
Refunding
,
5
%
,
11/15/46
.................................
1,250,000
1,173,861
c
California
School
Finance
Authority
,
Larchmont
Schools
,
Revenue
,
144A,
2026
,
6
%
,
6/01/56
.....................
300,000
305,935
Magnolia
Public
Schools
Obligated
Group
,
Revenue
,
144A,
2026
A
,
5.375
%
,
7/01/65
250,000
236,909
Orange
County
Educational
Arts
Academy
,
Revenue
,
144A,
2023
A
,
Refunding
,
5.875
%
,
6/01/53
.................................................
100,000
100,176
Orange
Springs
Obligated
Group
,
Revenue
,
144A,
2026
A
,
6
%
,
7/01/61
.........
250,000
242,478
California
Statewide
Communities
Development
Authority
,
c
Revenue
,
144A,
2026
E-2
,
II
,
6.85
%
,
6/01/36
.............................
250,000
243,241
Special
Tax
,
2023
A
,
5.25
%
,
9/01/51
...................................
100,000
100,997
Special
Tax
,
2025
B
,
5
%
,
9/02/55
......................................
500,000
492,610
Community
Facilities
District
No.
2021-1
,
Special
Tax
,
2023
,
5
%
,
9/01/53
........
150,000
148,199
Community
Facilities
District
No.
2022-03
,
Special
Tax
,
2023
,
5
%
,
9/01/53
.......
150,000
145,415
Community
Facilities
District
No.
2022-07
Improvement
Area
No.
1
,
Special
Tax
,
2023
,
5
%
,
9/01/53
................................................
150,000
147,550
Community
Facilities
District
No.
2023-08
Improvement
Area
No.
1
,
Special
Tax
,
2025
,
5.25
%
,
9/01/55
.............................................
300,000
296,558
Community
Infrastructure
Program
Assessment
District
No.
20-02
,
Special
Assessment
,
2023
,
5.75
%
,
9/02/53
...................................
985,000
1,009,364
c
Foothill
Almaden
Terrace
LLC
,
Revenue
,
144A,
2026
C-S-A
,
7.5
%
,
1/01/37
......
300,000
290,796
f
Foothill
Oak
Park
Apartments
LLC
,
Revenue
,
2025
H-S-A
,
Mandatory
Put
,
7.5
%
,
3/01/36
........................................................
300,000
301,588
c
Loma
Linda
University
Medical
Center
Obligated
Group
,
Revenue
,
144A,
2016
A
,
5.25
%
,
12/01/56
.................................................
250,000
250,125
c
Maison
613
LLC
,
Revenue
,
144A,
2026
,
5.3
%
,
9/02/62
.....................
150,000
146,205
c
NCCD-Hooper
Street
LLC
,
Revenue
,
144A,
2019
,
5.25
%
,
7/01/49
.............
100,000
99,094
c
NCCD-Hooper
Street
LLC
,
Revenue
,
144A,
2019
,
5.25
%
,
7/01/52
.............
200,000
193,613
c
PACE
Assessments
,
Revenue
,
144A,
2026
,
5.25
%
,
9/02/61
..................
250,000
246,790
Chino
Community
Facilities
District
,
Community
Facilities
District
No.
2021-1
,
Special
Tax
,
2023
,
5.625
%
,
9/01/53
..........................................
1,000,000
1,032,827
c
City
&
County
of
San
Francisco
,
Community
Facilities
District
No.
2016-1
Improvement
Area
No.
2
,
Special
Tax
,
144A,
2023
A
,
5.25
%
,
9/01/48
............................................
965,000
971,285
District
No.
2020-1
Shoreline
Tax
Zone
1
,
Special
Tax
,
144A,
2023
C
,
5.75
%
,
9/01/53
1,500,000
1,541,501
City
of
Dublin
,
Community
Facilities
District
No.
2015-1
Improvement
Area
No.
5
,
Special
Tax
,
2023
,
5.375
%
,
9/01/51
....................................
1,250,000
1,267,648
City
of
Lake
Elsinore
,
Community
Facilities
District
No.
2006-8
,
Special
Tax
,
2023
,
5
%
,
9/01/53
........
150,000
148,635
Community
Facilities
District
No.
2015-4
,
Special
Tax
,
2026
,
5
%
,
9/01/55
........
650,000
640,394
City
of
Manteca
,
Community
Facilities
District
2025-1
,
Special
Tax
,
2026
,
5
%
,
9/01/57
250,000
237,866
Franklin
Strategic
Series
Schedule
of
Investments
Franklin
Templeton
SMACS:
Series
CH
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
5
a
a
Principal
Amount
a
Value
a
a
a
a
a
Municipal
Bonds
(continued)
California
(continued)
City
of
Rancho
Cordova
,
Arista
Del
Sol
Community
Facilities
District
No.
2022-1
Improvement
Area
No.
1
,
Special
Tax
,
2023
,
5.375
%
,
9/01/53
...................................
$
200,000
$
202,687
Preserve
(The)
Community
Facilities
District
No.
2025-1
Improvement
Area
,
Special
Tax
,
2026
,
5
%
,
9/01/55
............................................
650,000
634,623
City
of
Rialto
,
Community
Facilities
District
No.
2024-1
,
Special
Tax
,
2026
,
5
%
,
9/01/55
500,000
488,908
c
CSCDA
Community
Improvement
Authority
,
CTR
City
Anaheim
,
Revenue
,
144A,
2020
A
,
5
%
,
1/01/54
....................
400,000
343,830
Dublin
,
Revenue
,
144A,
2021
B
,
4
%
,
2/01/57
.............................
140,000
103,364
Renaissance
at
City
Center
,
Revenue
,
144A,
2020
A
,
5
%
,
7/01/51
.............
200,000
186,427
Eastern
Municipal
Water
District
,
Community
Facilities
District
No.
2018-81
Improvement
Area
B
,
Special
Tax
,
2026
B
,
5
%
,
9/01/55
....................................................
200,000
195,269
Community
Facilities
District
No.
2022-97
Improvement
Area
A
,
Special
Tax
,
2026
,
5
%
,
9/01/55
....................................................
500,000
483,791
Galt
Community
Facilities
District
,
City
of
Galt
Community
Facilities
District
No.
2020-2
Improvement
Area
No.
1
,
Special
Tax
,
2023
A
,
6
%
,
9/01/53
..................
1,500,000
1,566,782
c
Golden
State
Connect
Authority
,
Revenue
,
144A,
2025
,
6.5
%
,
12/01/60
...........
300,000
286,485
Hemet
Unified
School
District
,
Community
Facilities
District
No.
2020-2
Improvement
Area
No.
1
,
Special
Tax
,
2026
,
5
%
,
9/01/56
..............................
500,000
489,251
Lammersville
Joint
Unified
School
District
,
Community
Facilities
District
No.
2024-1
,
Special
Tax
,
2025
,
5.25
%
,
9/01/55
.....................................
250,000
252,713
Lompoc
Valley
Medical
Center
,
Revenue
,
2026
,
5
%
,
2/01/46
...................
250,000
240,194
c
Los
Angeles
Housing
Authority
,
Housing
Pathways,
Inc.
,
Revenue
,
144A,
2024
B
,
6
%
,
12/01/62
........................................................
600,000
560,570
Moreno
Valley
Unified
School
District
,
Community
Facilities
District
No.
2022-1
,
Special
Tax
,
2025
,
5.125
%
,
9/01/55
.....
250,000
243,624
Community
Facilities
District
No.
2023-1
,
Special
Tax
,
2025
,
5
%
,
9/01/55
........
250,000
242,258
Mountain
House
Community
Facilities
District
,
City
of
Mountain
House
Community
Facilities
District
No.
2024-1
Improvement
Area
No.
3
,
Special
Tax
,
2026
,
5
%
,
9/01/56
.........................................................
500,000
478,939
Orange
County
Community
Facilities
District
,
Community
Facilities
District
No.
2023-1
,
Special
Tax
,
2023
A
,
5.5
%
,
8/15/53
....................................
1,000,000
1,025,372
River
Islands
Public
Financing
Authority
,
d
Special
Tax
,
2026
A
,
AG
Insured
,
5.47
%,
9/01/65
..........................
2,000,000
250,849
Community
Facilities
District
2023-1
Area
No.
1
,
Special
Tax
,
2023
,
5.625
%
,
9/01/53
995,000
1,001,445
Community
Facilities
District
2023-1
Improvement
Area
No.
3
,
Special
Tax
,
2025
,
Refunding
,
5
%
,
9/01/55
............................................
400,000
374,572
Community
Facilities
District
No.
2023-1
Improvement
Area
No.
2
,
Special
Tax
,
2024
,
5
%
,
9/01/54
....................................................
670,000
624,574
Root
Creek
Water
District
,
Community
Facilities
District
No.
2016-1
Improvement
Area
No.
3
,
Special
Tax
,
2025
,
5.25
%
,
9/01/55
................................
225,000
225,902
c,d
Santa
Barbara
Housing
Authority
,
Revenue
,
144A,
2025
A-S
,
8.14
%,
5/01/44
......
900,000
225,979
Stockton
Community
Facilities
District
,
Community
Facilities
District
No.
2018-2
Improvement
Area
No.
4
,
Special
Tax
,
2025
,
5
%
,
9/01/55
....................
400,000
384,722
Washington
Township
Health
Care
District
,
Revenue
,
2023
A
,
5.75
%
,
7/01/48
......
150,000
155,834
36,611,935
U.S.
Territories
0.3%
Puerto
Rico
0.3%
GDB
Debt
Recovery
Authority
of
Puerto
Rico
,
7.5
%
,
8/20/40
...................
100,710
99,389
Total
Municipal
Bonds
(Cost
$
37,362,574
)
......................................
37,234,516
Total
Long
Term
Investments
(Cost
$
37,600,565
)
................................
37,481,874
a
a
a
a
a
Franklin
Strategic
Series
Schedule
of
Investments
Franklin
Templeton
SMACS:
Series
CH
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
6
See
A
bbreviations
on
page
53
.
Short
Term
Investments
2.3%
a
a
Principal
Amount
a
Value
Municipal
Bonds
2.3%
California
2.3%
g
Anaheim
Housing
&
Public
Improvements
Authority
,
City
of
Anaheim
Water
System
,
Revenue,
Second
Lien
,
2024
A
,
LOC
Bank
of
America
NA
,
Daily
VRDN
and
Put
,
2.4
%
,
10/01/54
...................................................
$
500,000
$
500,000
g
University
of
California
,
Revenue
,
2013
AL-1
,
Daily
VRDN
and
Put
,
2.4
%
,
5/15/48
...................
200,000
200,000
Revenue
,
2013
AL-3
,
Refunding
,
Daily
VRDN
and
Put
,
2.35
%
,
5/15/48
..........
100,000
100,000
Revenue
,
2013
AL-4
,
Refunding
,
Daily
VRDN
and
Put
,
2.25
%
,
5/15/48
..........
100,000
100,000
900,000
Total
Municipal
Bonds
(Cost
$
900,000
)
.........................................
900,000
Total
Short
Term
Investments
(Cost
$
900,000
)
..................................
900,000
a
Total
Investments
(Cost
$
38,500,565
)
99.4
%
....................................
$38,381,874
Other
Assets,
less
Liabilities
0.6
%
.............................................
206,895
Net
Assets
100.0%
...........................................................
$38,588,769
a
Fair
valued
using
significant
unobservable
inputs.
See
Note
10
regarding
fair
value
measurements.
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
August
31,
2026,
the
aggregate
value
of
these
securities
was
$13,860,851,
representing
35.9%
of
net
assets.
d
The
rate
shown
represents
the
yield
at
period
end.
e
Security
purchased
on
a
when-issued
basis.
See
Note
1(c).
f
The
maturity
date
shown
represents
the
mandatory
put
date.
g
Variable
rate
demand
notes
(VRDN)
are
obligations
which
contain
a
floating
or
variable
interest
rate
adjustment
formula
and
an
unconditional
right
of
demand
to
receive
pay-
ment
of
the
principal
balance
plus
accrued
interest
at
specified
dates.
Unless
otherwise
noted,
the
coupon
rate
is
determined
based
on
factors
including
supply
and
demand,
underlying
credit,
tax
treatment,
and
current
short
term
rates.
The
coupon
rate
shown
represents
the
rate
at
period
end.
Franklin
Strategic
Series
Financial
Highlights
Franklin
Templeton
SMACS:
Series
E
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
7
a
Year
Ended
August
31,
2026
2025
2024
2023
2022
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$13.48
$12.77
$11.56
$11.29
$12.77
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
0.38
0.33
0.37
0.42
0.37
Net
realized
and
unrealized
gains
(losses)
...........
2.36
1.18
1.60
0.75
(0.31)
Total
from
investment
operations
....................
2.74
1.51
1.97
1.17
0.06
Less
distributions
from:
Net
investment
income
..........................
(0.98)
(0.80)
(0.76)
(0.72)
(0.83)
Net
realized
gains
.............................
-
-
-
(0.18)
(0.71)
Tax
return
of
capital
............................
-
-
-
(-)
c
-
Total
distributions
...............................
(0.98)
(0.80)
(0.76)
(0.90)
(1.54)
Net
asset
value,
end
of
year
.......................
$15.24
$13.48
$12.77
$11.56
$11.29
Total
return
....................................
21.07%
12.34%
17.78%
10.81%
0.38%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
0.06%
0.08%
0.10%
0.27%
1.36%
Expenses
net
of
waiver
and
payments
by
affiliates
.......
-%
-%
-%
-%
d
-%
Net
investment
income
...........................
2.63%
2.62%
3.12%
3.70%
3.11%
Supplemental
data
Net
assets
,
end
of
year
(000's)
.....................
$692,470
$413,849
$217,932
$61,992
$12,863
Portfolio
turnover
rate
............................
131.33%
103.34%
93.40%
123.80%
117.70%
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
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Franklin
Strategic
Series
Schedule
of
Investments,
August
31,
2026
Franklin
Templeton
SMACS:
Series
E
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
8
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Common
Stocks
33.7%
Aerospace
&
Defense
2.0%
a
Boeing
Co.
(The)
...................................
United
States
15,000
$
3,116,700
Northrop
Grumman
Corp.
.............................
United
States
20,000
10,794,000
13,910,700
Banks
2.2%
Bank
of
America
Corp.
...............................
United
States
26,000
1,610,440
Fifth
Third
Bancorp
..................................
United
States
135,000
7,258,950
Truist
Financial
Corp.
................................
United
States
69,000
3,421,020
US
Bancorp
.......................................
United
States
50,000
3,079,000
15,369,410
Beverages
1.6%
Coca-Cola
Co.
(The)
.................................
United
States
125,000
11,083,750
Biotechnology
0.9%
AbbVie,
Inc.
.......................................
United
States
25,000
6,410,500
Broadline
Retail
1.3%
a
Amazon.com,
Inc.
...................................
United
States
35,256
9,158,451
Capital
Markets
1.3%
BlackRock,
Inc.
.....................................
United
States
8,000
9,244,880
Diversified
Telecommunication
Services
1.0%
Verizon
Communications,
Inc.
..........................
United
States
140,000
7,002,800
Electric
Utilities
0.4%
Xcel
Energy,
Inc.
....................................
United
States
40,000
3,027,600
Energy
Equipment
&
Services
1.3%
SLB
Ltd.
..........................................
United
States
150,000
9,015,000
Food
Products
0.9%
Nestle
SA
.........................................
Switzerland
60,000
5,836,467
Ground
Transportation
0.8%
Norfolk
Southern
Corp.
...............................
United
States
15,000
5,141,850
Health
Care
Equipment
&
Supplies
3.3%
Medtronic
plc
......................................
United
States
250,000
22,662,500
Health
Care
Providers
&
Services
2.4%
CVS
Health
Corp.
...................................
United
States
32,981
3,097,246
UnitedHealth
Group,
Inc.
..............................
United
States
35,000
13,629,350
16,726,596
Hotels,
Restaurants
&
Leisure
1.5%
McDonald's
Corp.
...................................
United
States
18,000
4,743,720
Starbucks
Corp.
....................................
United
States
55,476
5,894,325
10,638,045
Household
Products
0.4%
Procter
&
Gamble
Co.
(The)
...........................
United
States
20,000
2,902,400
Machinery
0.7%
Caterpillar,
Inc.
.....................................
United
States
6,000
4,784,820
Metals
&
Mining
1.1%
Freeport-McMoRan,
Inc.
..............................
United
States
100,000
7,574,000
Oil,
Gas
&
Consumable
Fuels
4.6%
Shell
plc
..........................................
United
States
450,000
20,617,301
TotalEnergies
SE
...................................
France
130,000
11,480,300
32,097,601
Franklin
Strategic
Series
Schedule
of
Investments
Franklin
Templeton
SMACS:
Series
E
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
9
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Common
Stocks
(continued)
Pharmaceuticals
1.0%
Bristol-Myers
Squibb
Co.
..............................
United
States
36,987
$
2,471,101
Pfizer,
Inc.
.........................................
United
States
150,000
4,269,000
6,740,101
Semiconductors
&
Semiconductor
Equipment
2.2%
Analog
Devices,
Inc.
.................................
United
States
21,200
7,677,368
Broadcom,
Inc.
.....................................
United
States
20,000
7,406,800
15,084,168
Specialty
Retail
1.0%
Home
Depot,
Inc.
(The)
...............................
United
States
20,000
6,556,600
Tobacco
1.8%
Philip
Morris
International,
Inc.
.........................
United
States
67,500
12,642,750
Total
Common
Stocks
(Cost
$
179,867,056
)
...................................
233,610,989
b
Equity-Linked
Securities
51.3%
Banks
1.1%
c
Morgan
Stanley
Finance
LLC
into
JPMorgan
Chase
&
Co.
,
144A,
8
%
,
3/30/27
......................................
United
States
23,000
7,384,140
Biotechnology
1.1%
c
Barclays
Bank
plc
into
AbbVie,
Inc.
,
144A,
8.5
%
,
12/11/26
.....
United
States
11,000
2,706,091
c
Morgan
Stanley
Finance
LLC
into
Amgen,
Inc.
,
144A,
8
%
,
12/16/26
........................................
United
States
12,500
4,764,591
7,470,682
Broadline
Retail
3.2%
c
Goldman
Sachs
Bank
USA
into
Amazon.com,
Inc.
,
144A,
10
%
,
4/16/27
.........................................
United
States
26,000
6,136,006
c
Mizuho
Markets
Cayman
LP
into
Amazon.com,
Inc.
,
144A,
10
%
,
7/06/27
.........................................
United
States
35,000
8,922,248
c
Toronto-Dominion
Bank
(The)
into
Amazon.com,
Inc.
,
144A,
10
%
,
10/13/26
........................................
United
States
5,500
1,329,089
c
Wells
Fargo
Bank
NA
into
Amazon.com,
Inc.
,
144A,
9
%
,
2/26/27
United
States
25,000
5,651,889
22,039,232
Capital
Markets
0.6%
c
Merrill
Lynch
BV
into
Charles
Schwab
Corp.
(The)
,
144A,
8
%
,
3/03/27
.........................................
United
States
39,000
4,125,015
Chemicals
0.1%
c
Toronto-Dominion
Bank
(The)
into
Albemarle
Corp.
,
144A,
15
%
,
12/23/26
........................................
United
States
6,884
961,178
Communications
Equipment
0.8%
c
Morgan
Stanley
Finance
LLC
into
Cisco
Systems,
Inc.
,
144A,
10
%
,
3/01/28
.....................................
United
States
53,000
5,885,209
Consumer
Finance
1.0%
c
Barclays
Bank
plc
into
Capital
One
Financial
Corp.
,
144A,
8
%
,
3/10/27
.........................................
United
States
32,000
6,907,603
Consumer
Staples
Distribution
&
Retail
0.2%
c
BNP
Paribas
Issuance
BV
into
Target
Corp.
,
144A,
11
%
,
10/07/26
United
States
16,000
1,762,324
Diversified
Telecommunication
Services
1.2%
c
BNP
Paribas
Issuance
BV
into
Comcast
Corp.
,
144A,
9.5
%
,
7/26/27
.........................................
United
States
306,000
8,054,752
Franklin
Strategic
Series
Schedule
of
Investments
Franklin
Templeton
SMACS:
Series
E
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
10
a
a
Country
Shares
a
Value
a
a
a
a
a
a
b
Equity-Linked
Securities
(continued)
Electric
Utilities
1.6%
c
BNP
Paribas
Issuance
BV
into
NextEra
Energy,
Inc.
,
144A,
8
%
,
9/13/27
.........................................
United
States
57,000
$
4,769,214
c
Citigroup
Global
Markets
Holdings,
Inc.
into
NextEra
Energy,
Inc.
,
144A,
9
%
,
10/05/26
................................
United
States
65,000
5,104,395
c
Wells
Fargo
Bank
NA
into
NextEra
Energy,
Inc.
,
144A,
9.5
%
,
10/22/26
........................................
United
States
12,000
1,008,513
10,882,122
Energy
Equipment
&
Services
1.5%
c
Citigroup
Global
Markets
Holdings,
Inc.
into
Halliburton
Co.
,
144A,
10
%
,
1/21/27
................................
United
States
50,000
1,783,608
c
UBS
AG
into
Schlumberger
NV
,
144A,
10
%
,
2/11/27
.........
United
States
55,000
3,018,979
c
Wells
Fargo
Bank
NA
into
Schlumberger
NV
,
144A,
9
%
,
10/02/26
United
States
130,000
5,603,340
10,405,927
Health
Care
Equipment
&
Supplies
1.7%
c
BNP
Paribas
Issuance
BV
into
Medtronic
plc
,
144A,
7.25
%
,
4/27/27
.........................................
United
States
52,266
4,627,364
c
Toronto-Dominion
Bank
(The)
into
Boston
Scientific
Corp.
,
144A,
10
%
,
9/14/27
.....................................
United
States
50,000
2,447,441
c
Toronto-Dominion
Bank
(The)
into
Boston
Scientific
Corp.
,
144A,
10
%
,
9/22/27
.....................................
United
States
95,000
4,634,987
11,709,792
Hotels,
Restaurants
&
Leisure
0.9%
c
Toronto-Dominion
Bank
(The)
into
Starbucks
Corp.
,
144A,
9
%
,
1/27/27
.........................................
United
States
60,000
6,152,232
Interactive
Media
&
Services
4.3%
c
BNP
Paribas
Issuance
BV
into
Meta
Platforms,
Inc.
,
144A,
10
%
,
9/15/27
.........................................
United
States
11,440
6,552,198
c
Citigroup
Global
Markets
Holdings,
Inc.
into
Alphabet,
Inc.
,
144A,
9
%
,
12/23/26
.....................................
United
States
16,800
5,730,602
c
Merrill
Lynch
BV
into
Alphabet,
Inc.
,
144A,
9
%
,
12/23/26
......
United
States
17,200
5,880,526
c
Mizuho
Markets
Cayman
LP
into
Meta
Platforms,
Inc.
,
144A,
10
%
,
12/07/26
....................................
United
States
1,500
881,512
c
National
Bank
of
Canada
into
Meta
Platforms,
Inc.
,
144A,
10
%
,
9/15/27
.........................................
United
States
11,900
6,776,476
c
Wells
Fargo
Bank
NA
into
Alphabet,
Inc.
,
144A,
10
%
,
3/02/28
..
United
States
11,500
3,962,816
29,784,130
IT
Services
7.5%
c
Barclays
Bank
plc
into
Accenture
plc
,
144A,
12
%
,
7/30/27
.....
United
States
52,000
9,073,044
c
Barclays
Bank
plc
into
Snowflake,
Inc.
,
144A,
12.5
%
,
4/27/27
..
United
States
34,000
6,377,779
c
Citigroup
Global
Markets
Holdings,
Inc.
into
International
Business
Machines
Corp.
,
144A,
10
%
,
2/29/28
............
United
States
51,250
12,137,125
c
J.P.
Morgan
Structured
Products
BV
into
Accenture
plc
,
144A,
12
%
,
7/28/27
.....................................
United
States
59,500
10,340,188
c
Morgan
Stanley
Finance
LLC
into
International
Business
Machines
Corp.
,
144A,
10
%
,
9/03/27
...................
United
States
34,000
8,232,973
c
Wells
Fargo
Bank
NA
into
International
Business
Machines
Corp.
,
144A,
11
%
,
5/06/27
................................
United
States
25,000
5,793,830
51,954,939
Metals
&
Mining
1.1%
c
Barclays
Bank
plc
into
Freeport-McMoRan,
Inc.
,
144A,
10
%
,
1/27/27
.........................................
United
States
17,000
1,075,567
Franklin
Strategic
Series
Schedule
of
Investments
Franklin
Templeton
SMACS:
Series
E
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
11
a
a
Country
Shares
a
Value
a
a
a
a
a
a
b
Equity-Linked
Securities
(continued)
Metals
&
Mining
(continued)
c
Morgan
Stanley
Finance
LLC
into
Freeport-McMoRan,
Inc.
,
144A,
10
%
,
11/18/26
....................................
United
States
142,593
$
6,568,135
7,643,702
Oil,
Gas
&
Consumable
Fuels
0.6%
c
Royal
Bank
of
Canada
into
BP
plc
,
144A,
10
%
,
10/07/26
......
United
States
100,000
3,897,397
Passenger
Airlines
1.1%
c
Goldman
Sachs
Bank
USA
into
Delta
Air
Lines,
Inc.
,
144A,
11
%
,
3/31/27
.........................................
United
States
100,000
7,448,205
Pharmaceuticals
0.4%
c
Barclays
Bank
plc
into
Merck
&
Co.,
Inc.
,
144A,
8.5
%
,
10/02/26
.
United
States
29,000
2,887,963
Semiconductors
&
Semiconductor
Equipment
5.3%
c
Bank
of
America
NA
into
Microchip
Technology,
Inc.
,
144A,
11
%
,
9/03/26
.........................................
United
States
19,651
1,492,231
c
Barclays
Bank
plc
into
Micron
Technology,
Inc.
,
144A,
10
%
,
9/08/26
.........................................
United
States
32,500
4,949,346
c
JPMorgan
Chase
Bank
NA
into
Marvell
Technology,
Inc.
,
144A,
12
%
,
1/07/27
.....................................
United
States
55,000
6,444,361
c
Toronto-Dominion
Bank
(The)
into
Intel
Corp.
,
144A,
10.5
%
,
9/01/26
.........................................
United
States
23,000
741,686
c
Toronto-Dominion
Bank
(The)
into
QUALCOMM,
Inc.
,
144A,
10
%
,
3/24/27
.........................................
United
States
50,000
7,622,644
c
UBS
AG
into
Marvell
Technology,
Inc.
,
144A,
12
%
,
12/16/26
...
United
States
78,000
10,146,049
c
UBS
AG
into
Texas
Instruments,
Inc.
,
144A,
10
%
,
2/24/27
.....
United
States
22,500
5,415,760
36,812,077
Software
10.8%
c
Citigroup
Global
Markets
Holdings,
Inc.
into
Microsoft
Corp.
,
144A,
9
%
,
3/25/27
.................................
United
States
8,000
3,637,771
c
Citigroup
Global
Markets
Holdings,
Inc.
into
Workday,
Inc.
,
144A,
10
%
,
2/24/27
.....................................
United
States
9,450
1,668,296
c
J.P.
Morgan
Structured
Products
BV
into
Microsoft
Corp.
,
144A,
8
%
,
7/21/27
......................................
United
States
12,500
5,679,881
c
Merrill
Lynch
BV
into
Salesforce,
Inc.
,
144A,
10
%
,
7/30/27
.....
United
States
63,000
13,389,415
c
Mizuho
Markets
Cayman
LP
into
Microsoft
Corp.
,
144A,
8
%
,
7/27/27
.........................................
United
States
11,700
5,342,433
c
Mizuho
Markets
Cayman
LP
into
Palo
Alto
Networks,
Inc.
,
144A,
10
%
,
4/28/27
.....................................
United
States
45,000
9,150,047
c
Royal
Bank
of
Canada
into
Microsoft
Corp.
,
144A,
8
%
,
4/05/27
.
United
States
6,600
2,936,461
c
Royal
Bank
of
Canada
into
Oracle
Corp.
,
144A,
12.5
%
,
7/23/27
.
United
States
52,000
7,606,585
c
Royal
Bank
of
Canada
into
Oracle
Corp.
,
144A,
12.5
%
,
2/29/28
.
United
States
35,000
5,286,246
c
Toronto-Dominion
Bank
(The)
into
Workday,
Inc.
,
144A,
12.5
%
,
6/02/27
.........................................
United
States
60,000
10,617,872
c
Wells
Fargo
Bank
NA
into
Salesforce,
Inc.
,
144A,
10
%
,
7/22/27
.
United
States
45,000
9,310,427
74,625,434
Specialty
Retail
2.0%
c
BNP
Paribas
Issuance
BV
into
Lowe's
Cos.,
Inc.
,
144A,
8.5
%
,
9/15/27
.........................................
United
States
25,000
5,232,834
c
Goldman
Sachs
Bank
USA
into
Home
Depot,
Inc.
(The)
,
144A,
8.25
%
,
10/19/27
...................................
United
States
13,500
4,487,592
c
J.P.
Morgan
Structured
Products
BV
into
Home
Depot,
Inc.
(The)
,
144A,
8
%
,
9/09/27
.................................
United
States
13,150
4,385,330
14,105,756
Franklin
Strategic
Series
Schedule
of
Investments
Franklin
Templeton
SMACS:
Series
E
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
12
a
a
Country
Shares
a
Value
a
a
a
a
a
a
b
Equity-Linked
Securities
(continued)
Technology
Hardware,
Storage
&
Peripherals
2.3%
c
Goldman
Sachs
Bank
USA
into
Dell
Technologies,
Inc.
,
144A,
12.5
%
,
4/14/27
...................................
United
States
38,000
$
8,242,379
c
Mizuho
Markets
Cayman
LP
into
Dell
Technologies,
Inc.
,
144A,
12
%
,
11/09/26
....................................
United
States
39,000
7,726,619
15,968,998
Textiles,
Apparel
&
Luxury
Goods
0.9%
c
Royal
Bank
of
Canada
into
NIKE,
Inc.
,
144A,
10
%
,
9/08/27
....
United
States
159,000
6,345,372
Total
Equity-Linked
Securities
(Cost
$
312,213,074
)
............................
355,214,181
Convertible
Preferred
Stocks
14.4%
Aerospace
&
Defense
2.3%
Boeing
Co.
(The)
,
6
%
................................
United
States
250,000
16,210,000
Capital
Markets
5.5%
Ares
Management
Corp.
,
B
,
6.75
%
......................
United
States
150,000
6,855,000
KKR
&
Co.,
Inc.
,
D
,
6.25
%
.............................
United
States
635,000
30,873,700
37,728,700
Chemicals
1.8%
Albemarle
Corp.
,
7.25
%
..............................
United
States
225,000
12,332,250
Electric
Utilities
2.5%
NextEra
Energy,
Inc.
,
7.234
%
..........................
United
States
175,000
8,380,750
NextEra
Energy,
Inc.
,
7.299
%
..........................
United
States
175,000
8,933,750
17,314,500
Software
1.0%
Oracle
Corp.
,
D
,
6.5
%
................................
United
States
150,000
7,002,000
Trading
Companies
&
Distributors
1.3%
d,e
QXO,
Inc.
,
C
,
4.75
%
.................................
United
States
900
9,233,083
Total
Convertible
Preferred
Stocks
(Cost
$
86,130,246
)
.........................
99,820,533
Total
Long
Term
Investments
(Cost
$
578,210,376
)
.............................
688,645,703
a
Short
Term
Investments
0.7%
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Money
Market
Funds
0.7%
f,g
Franklin
Institutional
U.S.
Government
Money
Market
Fund
,
3.629
%
.........................................
United
States
4,994,647
4,994,647
Total
Money
Market
Funds
(Cost
$
4,994,647
)
.................................
4,994,647
Total
Short
Term
Investments
(Cost
$
4,994,647
)
...............................
4,994,647
a
Total
Investments
(Cost
$
583,205,023
)
100.1
%
................................
$693,640,350
Other
Assets,
less
Liabilities
(
0.1
)
%
.........................................
(1,170,066)
Net
Assets
100.0%
.........................................................
$692,470,284
a
a
a
Franklin
Strategic
Series
Schedule
of
Investments
Franklin
Templeton
SMACS:
Series
E
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
13
See
Abbreviations
on
page
53
.
a
Non-income
producing.
b
See
Note
1(d)
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
August
31,
2026,
the
aggregate
value
of
these
securities
was
$355,214,181,
representing
51.3%
of
net
assets.
d
Fair
valued
using
significant
unobservable
inputs.
See
Note
10
regarding
fair
value
measurements.
e
See
Note
8
regarding
restricted
securities.
f
See
Note
3(d)
regarding
investments
in
affiliated
management
investment
companies.
g
The
rate
shown
is
the
annualized
seven-day
effective
yield
at
period
end.
Franklin
Strategic
Series
Financial
Highlights
Franklin
Templeton
SMACS:
Series
H
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
14
a
Year
Ended
August
31,
2026
2025
2024
2023
2022
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$8.87
$9.41
$8.86
$9.03
$10.57
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
0.48
0.47
0.48
0.38
0.31
Net
realized
and
unrealized
gains
(losses)
...........
0.20
(0.54)
0.53
(0.18)
(1.54)
Total
from
investment
operations
....................
0.68
(0.07)
1.01
0.20
(1.23)
Less
distributions
from:
Net
investment
income
..........................
(0.47)
(0.47)
(0.46)
(0.37)
(0.31)
Net
asset
value,
end
of
year
.......................
$9.08
$8.87
$9.41
$8.86
$9.03
Total
return
....................................
7.74%
(0.84)%
11.79%
2.36%
c
(11.82)%
c
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
0.34%
0.85%
0.85%
1.88%
2.51%
Expenses
net
of
waiver
and
payments
by
affiliates
.......
-%
-%
d
-%
d
-%
-%
d
Net
investment
income
...........................
5.19%
5.20%
5.33%
4.34%
3.14%
Supplemental
data
Net
assets,
end
of
year
(000's)
.....................
$47,536
$26,831
$12,653
$10,059
$3,019
Portfolio
turnover
rate
............................
22.45%
7.25%
42.17%
11.82%
6.89%
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
excluding
payments
by
Advisers
for
acquired
fund
fees
and
expenses
is
2.25%
for
the
year
ended
August
31,
2023
and
(11.90)%
for
the
year
ended
August
31,
2022.
See
Note
3e.
d
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Franklin
Strategic
Series
Schedule
of
Investments,
August
31,
2026
Franklin
Templeton
SMACS:
Series
H
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
15
a
a
Shares
a
Value
a
Management
Investment
Companies
3.9%
Capital
Markets
3.9%
a
Franklin
Dynamic
Municipal
Bond
ETF
...................................
75,000
$
1,836,750
Total
Management
Investment
Companies
(Cost
$
1,829,106
)
.....................
1,836,750
Warrants
a
a
a
a
Warrants
0.0%
Financial
Services
0.0%
b,c
Brightline
Train
Holdings
West
LLC
,
11/26/35
..............................
1,290
-
Total
Warrants
(Cost
$
-
)
......................................................
-
Principal
Amount
Corporate
Bonds
0.5%
Diversified
Consumer
Services
0.5%
Grand
Canyon
University
,
Secured
Note
,
5.125
%
,
10/01/28
....................
$
250,000
247,357
Total
Corporate
Bonds
(Cost
$
237,991
)
........................................
247,357
Municipal
Bonds
94.8%
Alabama
2.9%
Black
Belt
Energy
Gas
District
,
Revenue
,
2025
G
,
5
%
,
10/01/35
................
100,000
103,625
Homewood
Educational
Building
Authority
,
CHF
-
Horizons
II
LLC
,
Revenue
,
2024
C
,
5
%
,
10/01/56
.....................................................
555,000
516,587
MidCity
Improvement
District
,
Assessment
Area
,
Special
Assessment
,
2022
,
4.5
%
,
11/01/42
................
150,000
136,639
Assessment
Area
,
Special
Assessment
,
2022
,
4.75
%
,
11/01/49
...............
100,000
87,353
Mobile
County
Industrial
Development
Authority
,
AM/NS
Calvert
LLC
,
Revenue
,
2024
B
,
4.75
%
,
12/01/54
................................................
160,000
147,409
Southeast
Energy
Authority
A
Cooperative
District
,
Revenue
,
2024
A
,
5
%
,
11/01/35
..
405,000
412,440
1,404,053
Arizona
2.6%
d
Maricopa
County
Industrial
Development
Authority
,
Grand
Canyon
University
Obligated
Group
,
Revenue
,
144A,
2024
,
7.375
%
,
10/01/29
..........................
405,000
419,589
d
Sierra
Vista
Industrial
Development
Authority
,
American
Leadership
Academy,
Inc.
,
Revenue
,
144A,
2023
,
5.75
%
,
6/15/58
......
150,000
135,285
Georgetown
Community
Development
Authority
,
Revenue
,
144A,
2021
A
,
5.375
%
,
10/01/56
.......................................................
250,000
194,881
Tempe
Industrial
Development
Authority
,
Tempe
Life
Care
Village
Obligated
Group
,
Revenue
,
2019
,
5
%
,
12/01/50
........
250,000
230,947
Tempe
Life
Care
Village
Obligated
Group
,
Revenue
,
2025
A
,
5.625
%
,
12/01/55
...
250,000
253,640
1,234,342
Arkansas
0.6%
Arkansas
Development
Finance
Authority
,
United
States
Steel
Corp.
,
Revenue
,
2023
,
5.7
%
,
5/01/53
....................................................
150,000
152,950
Fayetteville
Public
Facilities
Board
,
Butterfield
Trail
Village,
Inc.
,
Revenue
,
2026
,
5.5
%
,
12/01/60
........................................................
115,000
115,156
268,106
California
4.5%
e
California
Community
Choice
Financing
Authority
,
Revenue
,
2023
C
,
Mandatory
Put
,
5.25
%
,
10/01/31
...................................................
130,000
136,444
d
California
Community
Housing
Agency
,
Arbors
Apartments
,
Revenue
,
144A,
2020
A
,
5
%
,
8/01/50
....................
275,000
253,205
Aster
Apartments
,
Revenue,
Junior
Lien
,
144A,
2021
A-2
,
4
%
,
2/01/43
..........
230,000
207,432
Fountains
at
Emerald
Park
,
Revenue,
Junior
Lien
,
144A,
2021
A-2
,
4
%
,
8/01/46
...
195,000
165,961
Franklin
Strategic
Series
Schedule
of
Investments
Franklin
Templeton
SMACS:
Series
H
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
16
a
a
Principal
Amount
a
Value
a
a
a
a
a
Municipal
Bonds
(continued)
California
(continued)
d
California
Community
Housing
Agency,
(continued)
Verdant
at
Green
Valley
Apartments
,
Revenue
,
144A,
2019
A
,
5
%
,
8/01/49
.......
$
105,000
$
95,752
d,f
California
Municipal
Finance
Authority
,
IH
Parkside
Fairfield
LLC
,
Revenue,
Sub.
Lien
,
144A,
2023
B
,
2.617
%,
9/01/43
.......................................
150,000
118,636
d
CMFA
Special
Finance
Agency
,
Solana
at
Grand
,
Revenue,
Junior
Lien
,
144A,
2021
A-2
,
4
%
,
8/01/45
..................................................
100,000
87,777
d
CMFA
Special
Finance
Agency
VII
,
Breakwater
Apartments
(The)
,
Revenue
,
144A,
2021
A-2
,
4
%
,
8/01/47
..............................................
190,000
171,065
d
CMFA
Special
Finance
Agency
XII
,
Allure
Apartments
,
Revenue
,
144A,
2022
A-2
,
4.375
%
,
8/01/49
...................................................
100,000
80,833
d
CSCDA
Community
Improvement
Authority
,
Renaissance
at
City
Center
,
Revenue
,
144A,
2020
A
,
5
%
,
7/01/51
.............
230,000
214,392
Waterscape
Apartments
,
Revenue
,
144A,
2021
B
,
4
%
,
9/01/46
................
135,000
112,983
d
Golden
State
Connect
Authority
,
Revenue
,
144A,
2025
,
6.5
%
,
12/01/60
...........
300,000
286,485
d
Sacramento
Housing
Authority
,
Revenue
,
144A,
2026
B-2
,
IB
,
6.8
%
,
7/01/38
.......
245,000
234,428
2,165,393
Colorado
1.1%
Colorado
Health
Facilities
Authority
,
BSLC
II
Obligated
Group
,
Revenue,
Second
Tier
,
2025
,
5.25
%
,
9/15/45
.........
195,000
197,320
Christian
Living
Neighborhoods
Obligated
Group
,
Revenue
,
2019
,
Refunding
,
4
%
,
1/01/38
........................................................
100,000
98,169
Denver
Health
&
Hospital
Authority
,
Revenue
,
2019
A
,
Refunding
,
4
%
,
12/01/39
....
250,000
224,626
520,115
Connecticut
0.5%
f
Aquarion
Water
Authority
,
Water
System
,
Revenue
,
2026
C
,
5.42
%,
8/01/54
..........................
250,000
57,316
Water
System
,
Revenue
,
2026
E
,
BAM
Insured
,
5.44
%,
8/01/52
...............
250,000
63,337
Stamford
Housing
Authority
,
TJH
Senior
Living
LLC
Obligated
Group
,
Revenue
,
2025
A
,
Refunding
,
6.5
%
,
10/01/55
.........................................
100,000
102,778
223,431
Florida
27.6%
Acacia
Fields
Community
Development
District
,
Special
Assessment
,
2026
,
5.7
%
,
6/15/56
.........................................................
130,000
125,150
Angeline
Community
Development
District
,
Assessment
Area
1
,
Special
Assessment
,
2025
,
5.75
%
,
5/01/56
...............................................
130,000
126,087
Avenir
Community
Development
District
,
Parcel
A-18
,
Special
Assessment
,
2024
A
,
6
%
,
5/01/55
......................................................
100,000
98,588
d
Babcock
Ranch
Community
Independent
Special
District
,
Assessment
Area
,
Special
Assessment
,
144A,
2024
,
5.25
%
,
5/01/55
...............................
150,000
145,573
Bella
Tara
Community
Development
District
,
Assessment
Area
1
,
Special
Assessment
,
2025
,
6.125
%
,
5/01/56
..............................................
100,000
101,023
Big
Cypress
Stewardship
District
,
Assessment
Area
1
,
Special
Assessment
,
2026
,
5.75
%
,
5/01/55
...................................................
150,000
142,835
Bridle
Creek
Community
Development
District
,
Special
Assessment
,
2025
,
6.375
%
,
5/01/56
.........................................................
160,000
161,550
Brightshore
Community
Development
District
,
Assessments
,
Special
Assessment
,
2026
,
5.7
%
,
5/01/57
................................................
145,000
137,727
Buena
Lago
Community
Development
District
,
Assessment
Area
2
,
Special
Assessment
,
2024
,
5.55
%
,
5/01/54
....................................
75,000
71,912
d
Capital
Projects
Finance
Authority
,
PRG
-
UnionWest
Properties
LLC
,
Revenue,
Senior
Lien
,
144A,
2024
A-1
,
5
%
,
6/01/58
.....................................
250,000
196,496
d
Capital
Trust
Authority
,
Madrone
Florida
Tech
Student
Housing
I
LLC
,
Revenue
,
144A,
2025
A
,
5.375
%
,
7/01/65
............................................
500,000
465,027
Franklin
Strategic
Series
Schedule
of
Investments
Franklin
Templeton
SMACS:
Series
H
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
17
a
a
Principal
Amount
a
Value
a
a
a
a
a
Municipal
Bonds
(continued)
Florida
(continued)
Caymas
Community
Development
District
,
Assessment
Area
2
,
Special
Assessment
,
2026
,
5.625
%
,
5/01/56
..............................................
$
160,000
$
152,631
d
Center
Lake
Ranch
West
Community
Development
District
,
Assessment
Area
2
,
Special
Assessment
,
144A,
2025
,
5.6
%
,
5/01/55
..........................
135,000
131,897
Chaparral
Palm
Bay
Community
Development
District
,
Assessment
Area
2
,
Special
Assessment
,
2024
,
5.5
%
,
5/01/55
.....................................
80,000
76,614
Charlotte
County
Industrial
Development
Authority
,
MSKP
Town
&
Country
Utility
LLC
,
Revenue
,
2025
,
6.125
%
,
10/01/55
.....................................
150,000
152,448
d
County
of
Okaloosa
,
AIR
Force
Enlisted
Village,
Inc.
Obligated
Group
,
Revenue
,
144A,
2025
,
5.75
%
,
5/15/60
...............................................
185,000
185,467
Creekside
Community
Development
District
,
Assessment
Area
2
-
Parcel
C
and
D
,
Special
Assessment
,
2026
,
5.6
%
,
5/01/56
...............................
120,000
114,862
Cypress
Bluff
Community
Development
District
,
Assessment
Area
1
,
Special
Assessment
,
2025
,
5.55
%
,
5/01/55
....................................
100,000
96,191
d
Dean
River
Community
Development
District
,
Assessment
Area
1
,
Special
Assessment
,
144A,
2026
,
5.875
%
,
5/01/56
.........................................
100,000
97,767
Deering
Park
Stewardship
District
,
DPSD
JV1
No.
1
Assessment
Area
,
Special
Assessment
,
2025
,
6
%
,
5/01/45
.......................................
115,000
117,953
East
Ridge
Community
Development
District
,
Assessment
Area
1
,
Special
Assessment
,
2026
,
6
%
,
5/01/57
.................................................
115,000
111,522
Edgewater
West
Community
Development
District
,
Master
Infrastructure
Bond
Area
,
Special
Assessment
,
2026
,
6
%
,
5/01/41
.................................
150,000
147,097
Epperson
North
Community
Development
District
,
Assessment
Area
4
,
Special
Assessment
,
2024
,
5.6
%
,
5/01/55
.....................................
110,000
105,392
Esplanade
at
Wellen
Park
Community
Development
District
,
Special
Assessment
,
2026
,
5.7
%
,
5/01/56
................................................
100,000
96,568
d
Everlands
Community
Development
District
,
Assessment
Area
2
Phase
2
,
Special
Assessment
,
144A,
2024
,
5.5
%
,
6/15/54
................................
150,000
144,948
Feed
Mill
Community
Development
District
,
Parcel
1
Assessment
Area
1
,
Special
Assessment
,
2025
,
5.875
%
,
5/01/56
...................................
100,000
97,363
Florida
Development
Finance
Corp.
,
d
Mayflower
Retirement
Center,
Inc.
Obligated
Group
,
Revenue
,
144A,
2021
A
,
Refunding
,
4
%
,
6/01/55
............................................
100,000
73,784
Shands
Jacksonville
Medical
Center
Obligated
Group
,
Revenue
,
2022
A
,
Refunding
,
5
%
,
2/01/52
....................................................
105,000
94,820
Fox
Branch
Ranch
Community
Development
District
,
Assessment
Area
1
,
Special
Assessment
,
2025
,
5.4
%
,
5/01/55
.....................................
100,000
95,181
d
Gas
Worx
Community
Development
District
,
Special
Assessment
,
144A,
2025
,
6
%
,
5/01/57
.........................................................
150,000
150,180
GIR
East
Community
Development
District
,
Assessment
Area
1
,
Special
Assessment
,
2025
,
5.5
%
,
5/01/55
................................................
100,000
93,652
d
Governors
Park
South
Community
Development
District
,
Assessment
Area
2
,
Special
Assessment
,
144A,
2026
,
5.8
%
,
5/01/56
................................
150,000
144,107
d
Grace
Groves
Community
Development
District
,
Assessment
Area
1
,
Special
Assessment
,
144A,
2026
,
5.8
%
,
5/01/57
................................
145,000
141,113
Hammock
Oaks
Community
Development
District
,
Assessment
Area
2
,
Special
Assessment
,
2024
,
5.85
%
,
5/01/44
....................................
110,000
111,028
Harvest
Hills
South
Community
Development
District
,
Assessment
Area
1
,
Special
Assessment
,
2025
,
5.75
%
,
5/01/56
....................................
165,000
157,392
Highland
Park
Community
Development
District
,
Assessments
,
Special
Assessment
,
2026
,
6.125
%
,
5/01/56
..............................................
125,000
124,614
Highland
Trails
Community
Development
District
,
Assessment
Area
2
,
Special
Assessment
,
2025
,
5.85
%
,
5/01/56
....................................
100,000
96,092
d
Hillcrest
Preserve
Community
Development
District
,
Special
Assessment
,
144A,
2024
,
5.3
%
,
5/01/54
....................................................
180,000
167,387
Hunt
Club
Grove
Community
Development
District
,
Assessment
Area
1
,
Special
Assessment
,
2024
,
5.625
%
,
6/15/54
...................................
75,000
73,870
Franklin
Strategic
Series
Schedule
of
Investments
Franklin
Templeton
SMACS:
Series
H
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
18
a
a
Principal
Amount
a
Value
a
a
a
a
a
Municipal
Bonds
(continued)
Florida
(continued)
d
K-Bar
Ranch
III
Community
Development
District
,
Special
Assessment
,
144A,
2025
,
6.125
%
,
5/01/55
...................................................
$
110,000
$
112,001
Kindred
Community
Development
District
II
,
Special
Assessment
,
2021
,
3.125
%
,
5/01/41
.........................................................
100,000
83,328
Kings
Creek
I
Community
Development
District
,
Assessment
Area
1
,
Special
Assessment
,
2025
,
6
%
,
5/01/55
.......................................
100,000
99,797
Kingston
One
Community
Development
District
,
Assessment
Area
1
-
2025
Project
,
Special
Assessment
,
2025
,
6
%
,
5/01/57
.................................
130,000
130,520
Kissimmee
Park
Community
Development
District
,
Assessment
Area
1
,
Special
Assessment
,
2025
,
6.125
%
,
5/01/56
...................................
100,000
101,023
d
Knightsbridge
Community
Development
District
,
Special
Assessment
,
144A,
2024
,
5.5
%
,
6/15/54
....................................................
175,000
170,290
Lake
Flores
Community
Development
District
,
Assessment
Area
,
Special
Assessment
,
2026
,
5.75
%
,
5/01/56
...............................................
100,000
96,990
Lakeside
Preserve
Community
Development
District
,
Special
Assessment
,
2023
,
6.375
%
,
5/01/54
...................................................
85,000
87,392
Langley
South
Community
Development
District
,
Assessment
Area
1
,
Special
Assessment
,
2024
,
5.4
%
,
5/01/55
.....................................
55,000
53,174
Lecanto
Preserve
Community
Development
District
,
Assessment
Area
1
,
Special
Assessment
,
2026
,
5.7
%
,
5/01/56
.....................................
105,000
101,538
Lee
County
Industrial
Development
Authority
,
Shell
Point
Obligated
Group
,
Revenue
,
2024
C
,
5
%
,
11/15/54
...............................................
500,000
482,476
LT
Ranch
Community
Development
District
,
Phase
IIA
Assessment
Area
,
Special
Assessment
,
2022-2
,
5.7
%
,
5/01/53
....................................
100,000
100,772
Marion
Ranch
Community
Development
District
,
Special
Assessment
,
2024
,
5.7
%
,
5/01/44
.........................................................
85,000
85,168
North
AR-1
Pasco
Community
Development
District
,
Assessment
Area
3
,
Special
Assessment
,
2023
,
6
%
,
5/01/54
.......................................
70,000
70,945
North
Loop
Community
Development
District
,
Special
Assessment
,
2023
,
6.625
%
,
5/01/54
.........................................................
130,000
136,208
Northlake
Stewardship
District
,
Rye
Ranch
Pod
B
-
Assessment
Area
2
,
Special
Assessment
,
2026
,
5.7
%
,
5/01/56
.....................................
100,000
96,568
Pacific
Ace
Community
Development
District
,
Special
Assessment
,
2024
,
5.5
%
,
5/01/55
.........................................................
125,000
121,579
Palermo
Community
Development
District
,
Special
Assessment
,
2023
,
5
%
,
6/15/43
.................................
100,000
100,162
Assessment
Area
2
,
Special
Assessment
,
2025
,
5.5
%
,
6/15/55
................
100,000
100,228
Palm
Beach
County
Health
Facilities
Authority
,
Lifespace
Communities,
Inc.
Obligated
Group
,
Revenue
,
2026
B
,
5.625
%
,
5/15/61
...............................
570,000
565,101
Palm
Coast
Park
Community
Development
District
,
Special
Assessment
,
2023
,
5.6
%
,
5/01/53
.........................................................
100,000
98,525
Palm
Gate
Community
Development
District
,
Expansion
Area
,
Special
Assessment
,
2026
,
5.6
%
,
5/01/56
................................................
145,000
136,860
Parker
Pointe
Community
Development
District
,
Special
Assessment
,
2024
,
5.5
%
,
5/01/44
.........................................................
100,000
101,261
Parkside
Trails
Community
Development
District
,
2025
Project
Area
,
Special
Assessment
,
2025
,
5.55
%
,
5/01/55
....................................
145,000
137,929
Parrish
Lakes
Community
Development
District
,
Assessment
Area
2
,
Special
Assessment
,
2023
A
,
5.625
%
,
5/01/53
..................................
90,000
89,101
Pasadena
Ridge
Community
Development
District
,
Assessment
Area
1
,
Special
Assessment
,
2024
,
5.375
%
,
5/01/55
...................................
130,000
125,583
Preserve
at
Savannah
Lakes
Community
Development
District
,
Assessment
Area
1
,
Special
Assessment
,
2024
,
5.45
%
,
5/01/44
..............................
140,000
140,979
Prosperity
Lakes
Community
Development
District
,
Assessment
Area
1
,
Special
Assessment
,
2023
,
6.125
%
,
12/15/53
...................................
160,000
166,153
Quail
Roost
Community
Development
District
,
Expansion
Area
,
Special
Assessment
,
2021
,
4
%
,
12/15/51
................................................
70,000
58,162
Franklin
Strategic
Series
Schedule
of
Investments
Franklin
Templeton
SMACS:
Series
H
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
19
a
a
Principal
Amount
a
Value
a
a
a
a
a
Municipal
Bonds
(continued)
Florida
(continued)
Reflection
Bay
Community
Development
District
,
Special
Assessment
,
2025
,
5.875
%
,
5/01/55
.........................................................
$
160,000
$
158,905
Regal
Village
Community
Development
District
,
Special
Assessment
,
2024
,
5.5
%
,
5/01/54
.........................................................
145,000
139,966
Ridge
at
Apopka
Community
Development
District
,
Parcel
2
,
Special
Assessment
,
2023
,
5.75
%
,
5/01/53
...............................................
100,000
98,547
River
Hall
Community
Development
District
,
Assessment
Area
4
,
Special
Assessment
,
2023
A
,
6.5
%
,
5/01/54
..............................................
105,000
108,885
River
Landing
Community
Development
District
,
Assessments
,
Special
Assessment
,
2025
,
5.45
%
,
5/01/55
...............................................
100,000
96,151
d
Saltleaf
Community
Development
District
,
Assessments
,
Special
Assessment
,
144A,
2026
,
6.05
%
,
5/01/57
...............................................
145,000
143,363
d
Saltmeadows
Community
Development
District
,
Assessment
Area
2
,
Special
Assessment
,
144A,
2025
,
6
%
,
5/01/55
..................................
150,000
151,203
Savanna
Lakes
Community
Development
District
,
Assessment
Area
2
,
Special
Assessment
,
2024
,
5.5
%
,
6/15/54
.....................................
135,000
133,974
Sawgrass
Village
Community
Development
District
,
Assessment
Area
1
,
Special
Assessment
,
2023
,
5.75
%
,
5/01/53
...............
100,000
99,348
Assessment
Area
2
,
Special
Assessment
,
2023
,
6.375
%
,
11/01/53
.............
155,000
159,195
Schaller
Preserve
Community
Development
District
,
Assessment
Area
1
,
Special
Assessment
,
2026
,
5.625
%
,
5/01/56
...................................
100,000
97,018
d
Seaton
Creek
Reserve
Community
Development
District
,
Assessment
Area
1
,
Special
Assessment
,
144A,
2023
,
5.5
%
,
6/15/53
................................
100,000
100,275
Seminole
Palms
Community
Development
District
,
Special
Assessment
,
2023
,
5.5
%
,
5/01/43
.........................................................
80,000
80,964
Solaeris
Community
Development
District
,
Assessment
Area
2
,
Special
Assessment
,
2026
,
5.8
%
,
5/01/57
................................................
120,000
115,967
Somerset
Bay
Community
Development
District
,
Assessment
Area
2
,
Special
Assessment
,
2026
,
5.8
%
,
5/01/56
.....................................
100,000
96,871
Southern
Groves
Community
Development
District
No.
5
,
Assessment
Area
,
Special
Assessment
,
2026
,
5.7
%
,
5/01/52
.....................................
140,000
136,031
Springs
at
Lake
Alfred
Community
Development
District
,
Assessment
Area
1
,
Special
Assessment
,
2024
,
5.6
%
,
5/01/54
.....................................
145,000
139,441
Stonegate
Preserve
Community
Development
District
,
Special
Assessment
,
2023
,
6.125
%
,
12/15/53
.............................
150,000
156,593
Special
Assessment
,
2025
,
5.875
%
,
6/15/55
.............................
125,000
125,236
d
Stuart
Crossing
Community
Development
District
,
Assessment
Area
1
,
Special
Assessment
,
144A,
2024
,
5.5
%
,
5/01/54
................................
100,000
96,932
d
Sugarloaf
Community
Development
District
,
Assessment
Area
1
,
Special
Assessment
,
144A,
2026
,
5.625
%
,
12/15/55
........................................
100,000
96,151
Terra
Lago
Community
Development
District
,
Assessment
Area
2
,
Special
Assessment
,
2025
,
5.75
%
,
5/01/56
...............................................
100,000
95,521
Twisted
Oaks
Pointe
Community
Development
District
,
Assessment
Area
1
,
Special
Assessment
,
2023
,
5.375
%
,
5/01/43
..............
100,000
101,407
Assessment
Area
2
,
Special
Assessment
,
2023
,
6.125
%
,
5/01/54
..............
75,000
76,484
Two
Rivers
West
Community
Development
District
,
Special
Assessment
,
2024
,
5.875
%
,
5/01/54
...................................................
75,000
74,621
V-Dana
Community
Development
District
,
Assessment
Area
2
,
Special
Assessment
,
2025
,
5.55
%
,
5/01/55
...............................................
90,000
88,669
Waterset
South
Community
Development
District
,
Assessment
Area
,
Special
Assessment
,
2026
,
5.65
%
,
5/01/56
....................................
175,000
171,604
Wellness
Ridge
Community
Development
District
,
d
Assessment
Area
2
,
Special
Assessment
,
144A,
2024
,
5.2
%
,
6/15/55
...........
100,000
94,500
Assessment
Area
3
,
Special
Assessment
,
2026
,
5.625
%
,
6/15/56
..............
120,000
117,050
d
West
Port
East
Community
Development
District
,
Assessment
Area
1
,
Special
Assessment
,
144A,
2025
,
6
%
,
5/01/55
..................................
120,000
120,456
Franklin
Strategic
Series
Schedule
of
Investments
Franklin
Templeton
SMACS:
Series
H
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
20
a
a
Principal
Amount
a
Value
a
a
a
a
a
Municipal
Bonds
(continued)
Florida
(continued)
West
Villages
Improvement
District
,
Unit
of
Development
No.
10
Assessment
Area
2
,
Special
Assessment
,
2025
,
5.5
%
,
5/01/55
........................................................
$
145,000
$
140,435
Unit
of
Development
No.
12
Assessment
Area
2
,
Special
Assessment
,
2026
,
5.65
%
,
5/01/56
........................................................
100,000
96,009
Westwood
of
Pasco
Community
Development
District
,
Assessments
,
Special
Assessment
,
2023
,
5.625
%
,
5/01/53
...................................
130,000
130,615
Winding
Oaks
Community
Development
District
,
Special
Assessment
,
2024
,
5.7
%
,
5/01/55
.........................................................
100,000
97,590
d
Woodland
Preserve
Community
Development
District
,
Assessment
Area
1
,
Special
Assessment
,
144A,
2025
,
5.5
%
,
5/01/55
................................
100,000
96,172
13,105,870
Georgia
0.2%
Georgia
Housing
&
Finance
Authority
,
Revenue
,
2025
C
,
5.125
%
,
12/01/50
........
100,000
100,835
Illinois
7.9%
Chicago
Board
of
Education
,
GO
,
2023
A
,
5.875
%
,
12/01/47
........................................
250,000
251,185
GO
,
2025
A
,
5.75
%
,
12/01/50
.........................................
405,000
392,791
GO
,
2025
A
,
6.25
%
,
12/01/50
.........................................
100,000
101,698
GO
,
2025
B
,
Refunding
,
6
%
,
12/01/44
..................................
315,000
320,145
Dedicated
Capital
Improvement
Tax
,
Revenue
,
2023
,
5.75
%
,
4/01/48
...........
225,000
235,163
City
of
Chicago
,
GO
,
2025
A
,
6
%
,
1/01/50
.................................
350,000
360,613
Illinois
Finance
Authority
,
Westminster
Village,
Inc.
Obligated
Group
,
Revenue
,
2018
A
,
Refunding
,
5
%
,
5/01/48
.............................................
100,000
85,863
Metropolitan
Pier
&
Exposition
Authority
,
State
of
Illinois
McCormick
Place
Expansion
Project
Fund
,
Revenue
,
2024
B
,
Refunding
,
5
%
,
6/15/53
....................
500,000
489,171
State
of
Illinois
,
GO
,
2024
B
,
5.25
%
,
5/01/47
...............................
1,500,000
1,533,979
3,770,608
Indiana
1.1%
d
City
of
Goshen
,
Green
Oaks
of
Goshen
LLC
,
Revenue
,
144A,
2021
A
,
5
%
,
8/01/41
..
100,000
85,020
Indiana
Finance
Authority
,
CHF
-
Tippecanoe
LLC
,
Revenue
,
2023
A
,
5.375
%
,
6/01/64
350,000
336,521
Indianapolis
Local
Public
Improvement
Bond
Bank
,
Revenue,
Senior
Lien
,
2023
E
,
6.125
%
,
3/01/57
...................................................
110,000
112,982
534,523
Iowa
1.3%
Iowa
Finance
Authority
,
Iowa
Fertilizer
Co.
LLC
,
Revenue
,
2022
,
Pre-Refunded
,
5
%
,
12/01/50
..........
235,000
260,902
Lifespace
Communities,
Inc.
Obligated
Group
,
Revenue
,
2016
A
,
5
%
,
5/15/36
....
100,000
100,026
Presbyterian
Homes
Mill
Pond
Apartment,
Inc.
,
Revenue
,
2025
,
5.875
%
,
10/01/65
.
125,000
126,141
Iowa
Higher
Education
Loan
Authority
,
University
of
Dubuque
,
Revenue
,
2025
,
6
%
,
10/01/55
........................................................
130,000
132,930
619,999
Louisiana
2.2%
Calcasieu
Parish
Memorial
Hospital
Service
District
,
Southwest
Louisiana
Healthcare
System
Obligated
Group
,
Revenue
,
2019
,
Refunding
,
5
%
,
12/01/39
............
100,000
97,907
Lakeshore
Villages
Master
Community
Development
District
,
Special
Assessment
,
2025
,
6
%
,
6/01/54
.................................................
170,000
173,308
d
Louisiana
Local
Government
Environmental
Facilities
&
Community
Development
Authority
,
Parish
of
St.
Martin
,
Revenue
,
144A,
2019
,
4.4
%
,
11/01/44
...........
135,000
126,863
Louisiana
Public
Facilities
Authority
,
d
Acadiana
Renaissance
Charter
Academy
,
Revenue
,
144A,
2025
,
6
%
,
6/15/59
....
100,000
98,839
Calcasieu
Bridge
Partners
LLC
,
Revenue,
Senior
Lien
,
2024
,
5.5
%
,
9/01/59
......
195,000
196,740
Franklin
Strategic
Series
Schedule
of
Investments
Franklin
Templeton
SMACS:
Series
H
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
21
a
a
Principal
Amount
a
Value
a
a
a
a
a
Municipal
Bonds
(continued)
Louisiana
(continued)
Louisiana
Public
Facilities
Authority,
(continued)
Calcasieu
Bridge
Partners
LLC
,
Revenue,
Senior
Lien
,
2024
,
5.75
%
,
9/01/64
.....
$
330,000
$
338,471
1,032,128
Maryland
0.9%
Maryland
Economic
Development
Corp.
,
Morgan
State
University
Student
Housing
,
Revenue
,
2020
,
4.25
%
,
7/01/50
.......
170,000
147,468
Morgan
State
University
Student
Housing
,
Revenue
,
2022
A
,
6
%
,
7/01/58
.......
75,000
78,627
d
Town
of
La
Plata
,
Heritage
Green
Special
Taxing
District
,
Special
Tax
,
144A,
2023
A
,
6.5
%
,
2/15/53
....................................................
190,000
190,049
416,144
Massachusetts
0.7%
d
Massachusetts
Development
Finance
Agency
,
CHF
Wentworth,
Inc.
,
Revenue
,
144A,
2026
A
,
5.5
%
,
7/01/66
.................
100,000
96,380
Lowell
Community
Charter
Public
School
,
Revenue
,
144A,
2026
,
5.375
%
,
7/01/56
.
250,000
240,148
336,528
Michigan
1.0%
City
of
Detroit
,
GO
,
2023
C
,
6
%
,
5/01/43
..................................
100,000
108,180
Grand
Rapids
Economic
Development
Corp.
,
Michigan
Christian
Home
Obligated
Group
,
Revenue
,
2025
A
,
6
%
,
11/01/50
.................................
100,000
99,688
Michigan
Finance
Authority
,
Provident
Group
-
HFH
Energy
LLC
,
Revenue
,
2024
,
4.375
%
,
2/28/54
...................................................
150,000
135,571
Michigan
State
Housing
Development
Authority
,
Revenue
,
2025
C
,
5.05
%
,
6/01/51
..
150,000
150,065
493,504
Minnesota
0.2%
City
of
Apple
Valley
,
PHS
Apple
Valley
Senior
Housing,
Inc.
,
Revenue
,
2021
,
4
%
,
9/01/36
.........................................................
105,000
101,529
Nevada
0.5%
City
of
Las
Vegas
,
Special
Improvement
District
No.
819
,
Special
Assessment
,
2025
,
5.5
%
,
6/01/55
....................................................
150,000
150,968
Henderson
Local
Improvement
Districts
,
Local
Improvement
District
No.
T-22
,
Special
Assessment
,
2023
,
5.25
%
,
3/01/53
....................................
95,000
92,933
243,901
New
Hampshire
1.8%
New
Hampshire
Business
Finance
Authority
,
Adventist
Health
System/West
Obligated
Group
,
Revenue
,
2024
C
,
5.25
%
,
7/01/49
355,000
349,574
Greater
Raleigh
Area
Christian
Education,
Inc.
,
Revenue
,
2025
,
6
%
,
8/01/65
.....
250,000
241,554
Presbyterian
Homes
Obligated
Group
,
Revenue
,
2023
A
,
5.25
%
,
7/01/48
........
250,000
251,656
842,784
New
Mexico
0.2%
d
Mesa
Del
Sol
Public
Improvement
District
No.
1
,
Revenue
,
144A,
2026
A
,
5.45
%
,
10/01/55
........................................................
100,000
97,724
New
York
5.8%
Metropolitan
Transportation
Authority
,
Revenue
,
2021
A-2
,
4
%
,
11/15/41
..........
375,000
340,374
New
York
City
Housing
Development
Corp.
,
8
Spruce
NY
Owner
LLC
,
Revenue
,
2024
,
F
,
Refunding
,
5.25
%
,
12/15/31
........................................
250,000
256,234
New
York
Transportation
Development
Corp.
,
Delta
Air
Lines,
Inc.
,
Revenue
,
2020
,
4
%
,
10/01/30
.........................
100,000
101,301
Delta
Air
Lines,
Inc.
,
Revenue
,
2020
,
4.375
%
,
10/01/45
.....................
465,000
433,465
JFK
International
Air
Terminal
LLC
,
Revenue
,
2022
,
5
%
,
12/01/41
.............
185,000
188,475
JFK
NTO
LLC
,
Revenue
,
2023
,
6
%
,
6/30/54
..............................
35,000
35,930
Franklin
Strategic
Series
Schedule
of
Investments
Franklin
Templeton
SMACS:
Series
H
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
22
a
a
Principal
Amount
a
Value
a
a
a
a
a
Municipal
Bonds
(continued)
New
York
(continued)
New
York
Transportation
Development
Corp.,
(continued)
JFK
NTO
LLC
,
Revenue
,
2024
,
5.5
%
,
6/30/60
............................
$
1,275,000
$
1,281,278
d
Oneida
Indian
Nation
of
New
York
,
Revenue
,
144A,
2024
B
,
6
%
,
9/01/43
..........
100,000
106,062
2,743,119
Ohio
0.9%
Ohio
Higher
Educational
Facility
Commission
,
Cleveland
Institute
of
Art
(The)
,
Revenue
,
5.5
%
,
12/01/53
............................................
200,000
178,654
Ohio
Housing
Finance
Agency
,
Revenue,
Sub.
Lien
,
2023
C
,
8
%
,
8/01/34
.........
100,000
103,335
Summit
County
Development
Finance
Authority
,
UAkronPark,
Inc.
,
Revenue
,
2023
,
6
%
,
12/01/58
........................................................
125,000
131,571
413,560
Oklahoma
0.3%
Tulsa
Municipal
Airport
Trust
Trustees
,
American
Airlines,
Inc.
,
Revenue
,
2025
,
Refunding
,
6.25
%
,
12/01/40
..........................................
135,000
146,346
Pennsylvania
2.6%
d
Allentown
Commercial
and
Industrial
Development
Authority
,
Executive
Education
Academy
Charter
School
,
Revenue
,
144A,
2024
,
Refunding
,
5
%
,
7/01/59
........
250,000
220,398
Berks
County
Municipal
Authority
(The)
,
Tower
Health
Obligated
Group
,
Revenue
,
2024
A-1
,
8
%
,
6/30/34
..............
18,000
18,075
Tower
Health
Obligated
Group
,
Revenue
,
2024
A-2
,
6
%
,
6/30/34
..............
8,000
8,380
Tower
Health
Obligated
Group
,
Revenue
,
2024
A-3
,
5
%
,
6/30/39
..............
120,000
112,687
f
Tower
Health
Obligated
Group
,
Revenue
,
2024
B-1
,
1.357
%,
6/30/44
...........
59,000
44,902
d
Chester
County
Industrial
Development
Authority
,
Woodlands
at
Greystone
Neighborhood
Improvement
District
,
Special
Assessment
,
144A,
2018
,
5.125
%
,
3/01/48
.........................................................
128,000
125,453
Montgomery
County
Higher
Education
and
Health
Authority
,
Thomas
Jefferson
University
Obligated
Group
,
Revenue
,
2022
B
,
Refunding
,
5
%
,
5/01/57
.........
720,000
705,416
1,235,311
Rhode
Island
0.8%
Rhode
Island
Health
and
Educational
Building
Corp.
,
PRG
-
RI
Properties
LLC
,
Revenue
,
2025
A
,
AG
Insured
,
5
%
,
7/01/55
..........
230,000
228,809
PRG
-
RI
Properties
LLC
,
Revenue
,
2025
B
,
AG
Insured
,
5.625
%
,
7/01/65
.......
150,000
152,285
381,094
Texas
15.1%
d
Arlington
Higher
Education
Finance
Corp.
,
BASIS
Texas
Charter
Schools,
Inc.
,
Revenue
,
144A,
2024
,
4.875
%
,
6/15/59
......
100,000
86,734
BASIS
Texas
Charter
Schools,
Inc.
,
Revenue
,
144A,
2025
,
Refunding
,
5.875
%
,
6/15/65
........................................................
150,000
150,264
City
of
Anna
,
Special
Assessment
,
2026
,
5.75
%
,
9/15/56
..............................
150,000
143,772
d
Landing
Public
Improvement
District
(The)
Improvement
Area
No.
1
,
Special
Assessment
,
144A,
2026
,
5.875
%
,
9/15/56
.............................
145,000
141,671
Liberty
Hills
Public
Improvement
District
No.
1
Improvement
Area
No.
1
,
Special
Assessment
,
2026
,
6.05
%
,
9/15/56
...................................
100,000
98,079
d
Woods
at
Lindsey
Place
(The)
Public
Improvement
District
Area
1
,
Special
Assessment
,
144A,
2023
,
5.875
%
,
9/15/53
.............................
116,000
118,436
City
of
Aransas
Pass
,
Aransas
Oaks
Public
Improvement
District
Improvement
Area
No.
1
,
Special
Assessment
,
2026
,
6
%
,
9/01/56
............................
100,000
97,406
d
City
of
Austin
,
Whisper
Valley
Public
Improvement
District
Improvement
Area
No.
2
,
Special
Assessment
,
144A,
2022
,
5.5
%
,
11/01/51
..........................
100,000
100,273
City
of
Celina
,
g
Celina
241
Public
Improvement
District
Improvement
Area
No.
1
,
Special
Assessment
,
2026
,
5.875
%
,
9/01/56
..................................
146,000
143,048
Franklin
Strategic
Series
Schedule
of
Investments
Franklin
Templeton
SMACS:
Series
H
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
23
a
a
Principal
Amount
a
Value
a
a
a
a
a
Municipal
Bonds
(continued)
Texas
(continued)
City
of
Celina,
(continued)
d,g
Creekbend
Public
Improvement
District
Improvement
Area
No.
1
,
Special
Assessment
,
144A,
2026
,
5.875
%
,
9/01/56
.............................
$
163,000
$
159,705
d
Lakes
at
Mustang
Ranch
Public
Improvement
District
Phases
8-9
,
Special
Assessment
,
144A,
2025
,
5.625
%
,
9/01/55
.............................
150,000
145,759
d
Pravin
Public
Improvement
District
,
Special
Assessment
,
144A,
2023
,
6.75
%
,
9/01/53
100,000
100,429
d
City
of
Dayton
,
Dayton
Public
Improvement
District
No.
5
Improvement
Area
No.
1
,
Special
Assessment
,
144A,
2025
,
5.5
%
,
9/01/55
..........................
102,000
100,285
City
of
Dripping
Springs
,
Special
Assessment
,
2025
,
5.625
%
,
9/01/55
............
125,000
121,636
d
City
of
Ennis
,
Special
Assessment
,
144A,
2025
,
5.5
%
,
9/15/55
.................
100,000
99,441
d
City
of
Fate
,
Williamsburg
Public
Improvement
District
No.
1
Phase
3B
,
Special
Assessment
,
144A,
2023
,
5.375
%
,
8/15/53
...............................
100,000
100,098
City
of
Gunter
,
Preserve
Public
Improvement
District
,
Special
Assessment
,
2026
,
6
%
,
9/15/56
.........................................................
135,000
132,212
City
of
Houston
Airport
System
,
United
Airlines,
Inc.
,
Revenue
,
2024
B
,
5.5
%
,
7/15/39
350,000
364,669
d
City
of
Hutto
,
Cottonwood
Creek
Public
Improvement
District
Improvement
Area
No.
3
,
Special
Assessment
,
144A,
2026
,
5.625
%
,
9/01/56
.............................
138,000
132,480
Emory
Crossing
Public
Improvement
District
Improvement
Area
No.
2
,
Special
Assessment
,
144A,
2023
,
5.625
%
,
9/01/58
.............................
115,000
115,415
Prairie
Winds
Public
Improvement
District
Improvement
Area
No.
2
,
Special
Assessment
,
144A,
2026
,
5.75
%
,
9/01/61
..............................
100,000
96,908
City
of
Josephine
,
Public
Improvement
District
No.
1
Improvement
Area
No.
1
,
Special
Assessment
,
2026
,
5.75
%
,
9/15/56
....................................
107,000
104,290
d
City
of
Kyle
,
6
Creeks
Public
Improvement
District
Improvement
Area
No.
5
,
Special
Assessment
,
144A,
2025
,
5.375
%
,
9/01/50
...............................
141,000
137,953
City
of
Lavon
,
Elevon
Public
Improvement
District
Improvement
Area
No.
3-5
,
Special
Assessment
,
2025
,
5.75
%
,
9/15/55
.............................................
100,000
98,214
d
Lakepointe
Public
Improvement
District
,
Special
Assessment
,
144A,
2022
,
6.125
%
,
9/15/52
........................................................
200,000
206,043
City
of
Liberty
,
Liberty
Ranch
Public
Improvement
District
,
Special
Assessment
,
2026
,
5.875
%
,
9/01/56
...................................................
128,000
125,240
City
of
Lockhart
,
Seawillow
Public
Improvement
District
Improvement
Area
No.
1
,
Special
Assessment
,
2026
,
6.125
%
,
9/01/56
.............................
100,000
98,431
d
City
of
Lowry
Crossing
,
Lowry
Trails
Public
Improvement
District
Improvement
Area
No.
2
,
Special
Assessment
,
144A,
2026
,
5.625
%
,
9/15/56
.......................
125,000
119,993
d
City
of
Manor
,
EntradenGlen
Public
Improvement
District
Improvement
Area
No.
1
,
Special
Assessment
,
144A,
2025
,
7
%
,
9/15/55
............................
100,000
103,867
City
of
Mclendon-Chisholm
,
Special
Assessment
,
2026
,
5.7
%
,
9/15/56
...............................
110,000
106,000
d
Sonoma
Public
Improvement
District
Improvement
Area
No.
4
,
Special
Assessment
,
144A,
2022
,
5.75
%
,
9/15/52
........................................
135,000
137,480
City
of
Mesquite
,
Solterra
Public
Improvement
District
Improvement
Area
A-2-A-4
,
Special
Assessment
,
2025
,
5.75
%
,
9/01/55
..............................
143,000
139,106
d,g
City
of
Oak
Point
,
Prairie
Oaks
Public
Improvement
District
No.
1
Phase
No.
4
,
Special
Assessment
,
144A,
2026
,
6
%
,
9/15/56
..................................
160,000
159,308
City
of
Princeton
,
Special
Assessment
,
2026
,
5.625
%
,
9/01/56
.............................
100,000
96,817
d
Southbridge
Public
Improvement
District
Improvement
Area
No.
2
,
Special
Assessment
,
144A,
2024
,
5.5
%
,
9/01/54
...............................
132,000
127,680
Windmore
Public
Improvement
District
Improvement
Area
No.
3
,
Special
Assessment
,
2025
,
5.625
%
,
9/01/55
..................................
195,000
192,987
City
of
Rowlett
,
Trails
at
Cottonwood
Creek
Public
Improvement
District
Neighborhood
Improvement
No.
2-3
,
Special
Assessment
,
2026
,
5.75
%
,
9/15/56
.............
111,000
107,434
d
City
of
Royse
City
,
Waterscape
Annex
Public
Improvement
District
,
Special
Assessment
,
144A,
2026
,
5.625
%
,
9/15/56
...............................
150,000
143,992
Franklin
Strategic
Series
Schedule
of
Investments
Franklin
Templeton
SMACS:
Series
H
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
24
a
a
Principal
Amount
a
Value
a
a
a
a
a
Municipal
Bonds
(continued)
Texas
(continued)
d
City
of
Sachse
,
Sachse
Public
Improvement
District
No.
1
,
Special
Assessment
,
144A,
2022
,
7
%
,
9/15/52
.................................................
$
200,000
$
212,711
d
City
of
Tomball
,
Raburn
Reserve
Public
Improvement
District
Area
No.
2
,
Special
Assessment
,
144A,
2023
,
5.75
%
,
9/15/52
...............................
112,000
113,514
d
County
of
Bastrop
,
Double
Eagle
Ranch
Public
Improvement
District
Improvement
Area
No.
2
,
Special
Assessment
,
144A,
2024
,
5.25
%
,
9/01/44
....................
105,000
106,415
d
County
of
Denton
,
Green
Meadows
Public
Improvement
District
Major
Improvement
Area
,
Special
Assessment
,
144A,
2025
,
6.125
%
,
12/31/55
...................
100,000
101,784
d
County
of
Hays
,
La
Cima
Public
Improvement
District
,
Special
Assessment
,
144A,
2020
,
3.25
%
,
9/15/30
...............................................
100,000
94,726
County
of
Medina
,
d
Haby
Farms
Public
Improvement
District
Improvement
Area
No.
2
,
Special
Assessment
,
144A,
2026
,
5.65
%
,
9/01/56
..............................
178,000
168,874
Viera
Public
Improvement
District
1
Improvement
Area
No.
1
Project
,
Special
Assessment
,
2026
,
5.75
%
,
9/01/56
...................................
150,000
145,799
County
of
Montgomery
,
Crockett
Meadows
Public
Improvement
District
Improvement
Area
No.
1
,
Special
Assessment
,
2025
,
5.5
%
,
9/15/54
......................
123,000
119,127
d
East
Waller
County
Management
District
,
Sofi
Lakes
Sections
1
&
2
Assessments
,
Special
Assessment
,
144A,
2025
,
6.25
%
,
9/15/55
.........................
131,000
132,720
EP
Cimarron
Ventanas
PFC
,
Revenue
,
2024
,
Refunding
,
4.125
%
,
12/01/39
........
150,000
140,615
Harris
County
Municipal
Utility
District
No.
540
,
GO
,
2022
,
5.5
%
,
9/01/49
..........
100,000
91,969
New
Hope
Cultural
Education
Facilities
Finance
Corp.
,
NCCD-College
Station
Properties
LLC
,
Revenue
,
A
,
5
%
,
7/01/47
..............
90,000
84,023
Quality
Senior
Housing
Foundation
of
East
Texas,
Inc.
,
Revenue
,
2019
A-1
,
5
%
,
12/01/39
.......................................................
85,000
84,973
Quality
Senior
Housing
Foundation
of
East
Texas,
Inc.
,
Revenue,
Second
Tier,
Sub.
Lien
,
2019
B
,
5.5
%
,
12/01/54
.......................................
460,000
439,713
d
Travis
County
Development
Authority
,
Turner's
Crossing
Public
Improvement
District
Improvement
Area
No.
3
,
Special
Assessment
,
144A,
2026
,
5.75
%
,
9/01/56
......
145,000
141,334
Walden
Pond
Fresh
Water
Supply
District
,
GO
,
2022
,
6.25
%
,
9/01/47
............
45,000
45,178
7,177,030
Utah
0.8%
Utah
Infrastructure
Agency
,
Revenue
,
2025
,
5.25
%
,
10/15/49
..................
375,000
365,360
Washington
0.4%
Washington
State
Housing
Finance
Commission
,
Eastside
Retirement
Association
Obligated
Group
,
Revenue
,
2023
A
,
Refunding
,
5
%
,
7/01/48
........................................................
120,000
120,862
d
Presbyterian
Retirement
Communities
Northwest
Obligated
Group
,
Revenue
,
144A,
2019
A
,
5
%
,
1/01/55
..............................................
100,000
90,207
211,069
Wisconsin
4.1%
Public
Finance
Authority
,
Campus
Real
Estate
Holding
Corp.
LLC
,
Revenue
,
2025
A
,
Refunding
,
5.5
%
,
6/01/55
310,000
303,049
d
Foundation
Academy
Charter
School
A
NJ
Nonprofit
Corp.
,
Revenue
,
144A,
2024
,
5
%
,
7/01/60
....................................................
300,000
260,168
d
Friends
Homes
Obligated
Group
,
Revenue
,
144A,
2019
,
Refunding
,
5
%
,
9/01/49
..
125,000
119,786
KSU
Bixby
Real
Estate
Foundation
LLC
,
Revenue,
Sub.
Lien
,
2025
B
,
5.5
%
,
6/15/55
100,000
101,325
NC
A&T
Real
Estate
Foundation
LLC
,
Revenue
,
2024
A
,
5.25
%
,
6/01/54
........
200,000
193,013
RED
River
Valley
Alliance
LLC
,
Revenue
,
2021
,
4
%
,
9/30/51
.................
345,000
284,030
SR
400
Peach
Partners
LLC
,
Revenue,
Senior
Lien
,
2025
,
6.5
%
,
12/31/65
.......
100,000
109,463
Triad
Math
&
Science
Academy
Co.
,
Revenue
,
2025
,
Refunding
,
5.5
%
,
6/15/55
...
100,000
96,009
Triad
Math
&
Science
Academy
Co.
,
Revenue
,
2025
,
Refunding
,
5.25
%
,
6/15/65
..
100,000
90,389
Wisconsin
Health
&
Educational
Facilities
Authority
,
PHW
Menomonee
Falls,
Inc.
,
Revenue
,
2024
,
6.125
%
,
10/01/59
..............
100,000
102,903
Franklin
Strategic
Series
Schedule
of
Investments
Franklin
Templeton
SMACS:
Series
H
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
25
See
A
bbreviations
on
page
53
.
a
a
Principal
Amount
a
Value
a
a
a
a
a
Municipal
Bonds
(continued)
Wisconsin
(continued)
Wisconsin
Health
&
Educational
Facilities
Authority,
(continued)
Wisconsin
Masonic
Home
Obligated
Group
,
Revenue
,
2024
A
,
5.75
%
,
8/15/54
....
$
275,000
$
281,406
1,941,541
U.S.
Territories
6.2%
District
of
Columbia
0.5%
District
of
Columbia
,
International
School
Obligated
Group
,
Revenue
,
2019
,
5
%
,
7/01/49
............
140,000
133,285
Plenary
Infrastructure
DC
LLC
,
Revenue
,
2022
A
,
5.5
%
,
8/31/33
..............
100,000
108,793
242,078
Puerto
Rico
5.7%
Commonwealth
of
Puerto
Rico
,
GO
,
2022
A-1
,
4
%
,
7/01/41
..........................................
350,382
325,441
GO
,
2022
A-1
,
4
%
,
7/01/46
..........................................
296,826
263,723
GDB
Debt
Recovery
Authority
of
Puerto
Rico
,
7.5
%
,
8/20/40
...................
62,945
62,120
Puerto
Rico
Sales
Tax
Financing
Corp.
,
Sales
Tax
,
Revenue
,
A-1
,
5
%
,
7/01/58
.....
2,102,000
2,039,960
2,691,244
Total
U.S.
Territories
....................................................................
2,933,322
Total
Municipal
Bonds
(Cost
$
45,477,916
)
......................................
45,059,269
Total
Long
Term
Investments
(Cost
$
47,545,013
)
................................
47,143,376
a
a
a
a
a
a
Total
Investments
(Cost
$
47,545,013
)
99.2
%
....................................
$47,143,376
Other
Assets,
less
Liabilities
0.8
%
.............................................
392,653
Net
Assets
100.0%
...........................................................
$47,536,029
a
See
Note
3(d)
regarding
investments
in
affiliated
management
investment
companies.
b
Fair
valued
using
significant
unobservable
inputs.
See
Note
10
regarding
fair
value
measurements.
c
Non-income
producing.
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
August
31,
2026,
the
aggregate
value
of
these
securities
was
$11,717,182,
representing
24.6%
of
net
assets.
e
The
maturity
date
shown
represents
the
mandatory
put
date.
f
The
rate
shown
represents
the
yield
at
period
end.
g
Security
purchased
on
a
when-issued
basis.
See
Note
1(c).
Franklin
Strategic
Series
Financial
Highlights
Franklin
Templeton
SMACS:
Series
I
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
26
a
Year
Ended
August
31,
2026
2025
2024
2023
2022
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$8.07
$8.11
$7.78
$7.83
$9.73
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
0.61
0.61
0.61
0.64
0.65
Net
realized
and
unrealized
gains
(losses)
...........
(-)
c
(0.03)
0.33
(0.07)
(1.85)
Total
from
investment
operations
....................
0.61
0.58
0.94
0.57
(1.20)
Less
distributions
from:
Net
investment
income
..........................
(0.62)
(0.62)
(0.61)
(0.62)
(0.70)
Tax
return
of
capital
............................
(-)
c
-
-
(-)
c
(-)
c
Total
distributions
...............................
(0.62)
(0.62)
(0.61)
(0.62)
(0.70)
Net
asset
value,
end
of
year
.......................
$8.06
$8.07
$8.11
$7.78
$7.83
Total
return
....................................
7.76%
7.57%
12.71%
7.57%
(12.87)%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
0.05%
0.06%
0.08%
0.20%
1.27%
Expenses
net
of
waiver
and
payments
by
affiliates
.......
-%
-%
-%
-%
d
-%
Net
investment
income
...........................
7.58%
7.68%
7.81%
8.24%
7.72%
Supplemental
data
Net
assets
,
end
of
year
(000's)
.....................
$989,611
$615,016
$373,874
$109,051
$19,910
Portfolio
turnover
rate
............................
33.18%
52.45%
16.69%
27.73%
30.22%
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
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Franklin
Strategic
Series
Schedule
of
Investments,
August
31,
2026
Franklin
Templeton
SMACS:
Series
I
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
27
a
a
Shares
a
Value
a
Common
Stocks
0.3%
Banks
0.3%
Bank
of
America
Corp.
...............................................
45,000
$
2,787,300
Total
Common
Stocks
(Cost
$
1,242,963
)
.......................................
2,787,300
a
a
Equity-Linked
Securities
0.0%
†
Energy
Equipment
&
Services
0.0%
†
b
Citigroup
Global
Markets
Holdings,
Inc.
into
Halliburton
Co.
,
144A,
10
%
,
1/21/27
....
6,000
214,033
Total
Equity-Linked
Securities
(Cost
$
196,320
)
..................................
214,033
Principal
Amount
a
a
a
a
Corporate
Bonds
80.9%
Aerospace
&
Defense
1.7%
b
TransDigm,
Inc.
,
Senior
Secured
Note
,
144A,
6.75
%
,
8/15/28
..............................
$
1,500,000
1,511,403
Senior
Secured
Note
,
144A,
6.875
%
,
12/15/30
............................
2,500,000
2,564,780
Senior
Secured
Note
,
144A,
6.625
%
,
3/01/32
.............................
8,000,000
8,179,776
Senior
Sub.
Note
,
144A,
6.75
%
,
1/31/34
.................................
4,250,000
4,319,912
16,575,871
Automobile
Components
0.6%
b
Dexko
Global,
Inc.
,
Senior
Note
,
144A,
7.5
%
,
4/15/32
........................
7,000,000
5,881,350
Automobiles
0.2%
b
Rivian
Holdings
LLC
/
Rivian
LLC
/
Rivian
Automotive
LLC
,
Senior
Secured
Note
,
144A,
10
%
,
1/15/31
................................................
2,000,000
2,045,136
Banks
0.8%
Bank
of
America
Corp.
,
Sub.
Bond
,
5.425%
to
8/14/34,
FRN
thereafter
,
8/15/35
.....
50,000
49,119
Barclays
plc
,
c
Junior
Sub.
Bond
,
7.625%
to
9/14/35,
FRN
thereafter
,
Perpetual
...............
2,000,000
2,076,518
Sub.
Bond
,
7.119%
to
6/26/33,
FRN
thereafter
,
6/27/34
.....................
200,000
214,500
c
Citigroup,
Inc.
,
GG
,
Junior
Sub.
Bond
,
6.875%
to
8/14/30,
FRN
thereafter
,
Perpetual
.
5,000,000
5,069,710
Fifth
Third
Bancorp
,
Senior
Note
,
6.339%
to
7/26/28,
FRN
thereafter
,
7/27/29
......
50,000
51,394
Wells
Fargo
&
Co.
,
Senior
Bond
,
6.491%
to
10/22/33,
FRN
thereafter
,
10/23/34
.....
100,000
106,057
7,567,298
Biotechnology
0.4%
b
Genmab
A/S
/
Genmab
Finance
LLC
,
Senior
Note
,
144A,
7.25
%
,
12/15/33
....................................
1,250,000
1,303,072
Senior
Secured
Note
,
144A,
6.25
%
,
12/15/32
.............................
2,750,000
2,792,169
4,095,241
Building
Products
0.5%
b
EMRLD
Borrower
LP
/
Emerald
Co-Issuer,
Inc.
,
Senior
Secured
Note
,
144A,
6.625
%
,
12/15/30
........................................................
2,000,000
2,042,166
b
Quikrete
Holdings,
Inc.
,
Senior
Secured
Note
,
144A,
6.375
%
,
3/01/32
............
3,000,000
3,038,820
5,080,986
Capital
Markets
1.0%
Blackstone
Private
Credit
Fund
,
Senior
Note
,
6
%
,
1/29/32
.....................
5,000,000
4,906,039
Charles
Schwab
Corp.
(The)
,
Senior
Note
,
5.643%
to
5/18/28,
FRN
thereafter
,
5/19/29
50,000
50,800
c
Goldman
Sachs
Group,
Inc.
(The)
,
Z
,
Junior
Sub.
Bond
,
6.85%
to
2/09/30,
FRN
thereafter
,
Perpetual
...............................................
5,000,000
5,127,540
Morgan
Stanley
,
Senior
Bond
,
6.627%
to
10/31/33,
FRN
thereafter
,
11/01/34
..................
100,000
106,408
Franklin
Strategic
Series
Schedule
of
Investments
Franklin
Templeton
SMACS:
Series
I
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
28
a
a
Principal
Amount
a
Value
a
a
a
a
a
Corporate
Bonds
(continued)
Capital
Markets
(continued)
Morgan
Stanley,
(continued)
Sub.
Bond
,
5.948%
to
1/18/33,
FRN
thereafter
,
1/19/38
.....................
$
50,000
$
50,600
10,241,387
Chemicals
4.5%
b
ARC
Falcon
I,
Inc.
/
Arclin
USA
LLC
/
New
Arclin
US
Holding
Corp.
,
Senior
Secured
Note
,
144A,
9.75
%
,
3/01/33
..........................................
4,000,000
4,012,834
Celanese
US
Holdings
LLC
,
Senior
Bond
,
7.379
%
,
7/15/32
........................................
2,000,000
2,096,042
Senior
Bond
,
7.7
%
,
11/15/33
.........................................
3,500,000
3,739,292
Senior
Note
,
7.55
%
,
11/15/30
.........................................
1,000,000
1,059,218
b
Rain
Carbon,
Inc.
,
Senior
Secured
Note
,
144A,
12.25
%
,
9/01/29
................
3,500,000
3,724,294
b
SCIH
Salt
Holdings,
Inc.
,
Senior
Note
,
144A,
8
%
,
8/15/32
.......................................
2,500,000
2,528,469
Senior
Secured
Note
,
144A,
6.625
%
,
8/15/31
.............................
6,500,000
6,569,154
b
Tronox,
Inc.
,
Senior
Note
,
144A,
4.625
%
,
3/15/29
....................................
16,000,000
10,734,107
Senior
Secured
Note
,
144A,
9.125
%
,
9/30/30
.............................
10,000,000
10,025,270
44,488,680
Commercial
Services
&
Supplies
0.7%
d
,e
BX
Frontier
Member
II
LLC
,
6.1
%
,
12/31/60
................................
3,808,177
3,912,302
b
RR
Donnelley
&
Sons
Co.
,
Senior
Secured
Note
,
144A,
9.5
%
,
8/01/29
...........
2,500,000
2,606,769
6,519,071
Consumer
Finance
0.3%
AerCap
Ireland
Capital
DAC
/
AerCap
Global
Aviation
Trust
,
Senior
Bond
,
5.3
%
,
1/19/34
.........................................................
200,000
196,691
Ford
Motor
Credit
Co.
LLC
,
Senior
Note
,
7.2
%
,
6/10/30
.......................
3,000,000
3,145,167
b
Macquarie
Airfinance
Holdings
Ltd.
,
Senior
Note
,
144A,
6.4
%
,
3/26/29
............
50,000
51,355
3,393,213
Containers
&
Packaging
4.8%
b
Ardagh
Group
SA
,
f
Secured
Note
,
144A,
PIK,
11
%
,
12/01/30
................................
6,214,500
5,875,974
Senior
Secured
Note
,
144A,
9.5
%
,
12/01/30
..............................
7,315,000
7,647,542
b
Ardagh
Metal
Packaging
Finance
USA
LLC
/
Ardagh
Metal
Packaging
Finance
plc
,
Senior
Note
,
144A,
4
%
,
9/01/29
.......................................
1,000,000
960,560
b
Clydesdale
Acquisition
Holdings,
Inc.
,
Senior
Secured
Note
,
144A,
6.75
%
,
4/15/32
..
3,500,000
3,420,186
b
Mauser
Packaging
Solutions
Holding
Co.
,
Secured
Note
,
144A,
9.25
%
,
4/15/30
...................................
14,000,000
13,989,619
Senior
Secured
Note
,
144A,
7.875
%
,
4/15/30
.............................
7,500,000
7,652,864
b
Sword
Purchaser
LLC
,
Senior
Secured
Note
,
144A,
8.25
%
,
4/15/33
.............
7,500,000
7,767,270
47,314,015
Diversified
REITs
0.0%
†
b
VICI
Properties
LP
/
VICI
Note
Co.,
Inc.
,
Senior
Bond
,
144A,
4.625
%
,
12/01/29
.....
50,000
48,846
Diversified
Telecommunication
Services
7.2%
b
CCO
Holdings
LLC
/
CCO
Holdings
Capital
Corp.
,
Senior
Bond
,
144A,
5.125
%
,
5/01/27
...................................
1,538,000
1,536,886
Senior
Note
,
144A,
7.375
%
,
3/01/31
....................................
20,000,000
20,267,220
Senior
Note
,
144A,
7
%
,
2/01/33
.......................................
12,500,000
12,210,854
b
Connect
Holding
II
LLC
,
Senior
Secured
Note
,
144A,
10.5
%
,
4/03/31
.............
5,500,000
4,956,130
b
QTS
Central
Issuer
LLC
/
QTS
TRS
Central
Issuer
LLC
,
Senior
Secured
Note
,
144A,
6.625
%
,
9/01/31
...................................................
3,000,000
2,957,933
Franklin
Strategic
Series
Schedule
of
Investments
Franklin
Templeton
SMACS:
Series
I
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
29
a
a
Principal
Amount
a
Value
a
a
a
a
a
Corporate
Bonds
(continued)
Diversified
Telecommunication
Services
(continued)
b
QTS
Fayetteville
I
DC1-2
LLC
/
QTS
TRS
Fayetteville
I
DC1-2
LLC
,
Senior
Secured
Bond
,
144A,
5.7
%
,
4/15/36
...........................................
$
5,000,000
$
4,527,110
b
RD
Michigan
Property
Owner
I
LLC
,
Senior
Secured
Bond
,
144A,
7.5
%
,
3/30/45
....
10,000,000
9,539,595
b
Sopaipilla
Investor
LLC
,
Senior
Secured
Bond
,
144A,
7.534
%
,
11/30/48
..........
5,000,000
5,124,330
b
Space
Exploration
Technologies
Corp.
,
Senior
Bond
,
144A,
5.875
%
,
7/15/36
.......
7,500,000
7,071,877
Verizon
Communications,
Inc.
,
Junior
Sub.
Bond
,
6.2%
to
5/13/36,
FRN
thereafter
,
5/14/56
.........................................................
3,000,000
2,904,034
71,095,969
Electric
Utilities
4.5%
b
NRG
Energy,
Inc.
,
Senior
Bond
,
144A,
6.25
%
,
11/01/34
...................................
3,000,000
2,992,920
Senior
Bond
,
144A,
6
%
,
1/15/36
.......................................
10,000,000
9,728,923
Senior
Bond
,
144A,
6.125
%
,
5/15/36
...................................
17,500,000
17,153,084
Senior
Note
,
144A,
6
%
,
2/01/33
.......................................
3,000,000
2,987,663
Senior
Secured
Bond
,
144A,
7
%
,
3/15/33
................................
50,000
53,084
Pacific
Gas
and
Electric
Co.
,
Senior
Bond
,
6.4
%
,
6/15/33
.....................
50,000
51,871
PG&E
Corp.
,
Senior
Secured
Note
,
5
%
,
7/01/28
............................
50,000
49,279
Southern
Co.
(The)
,
Junior
Sub.
Bond
,
6%
to
3/31/33,
FRN
thereafter
,
4/01/58
.....
7,500,000
7,394,116
b
Vistra
Operations
Co.
LLC
,
Senior
Bond
,
144A,
6.95
%
,
10/15/33
...................................
50,000
53,206
Senior
Note
,
144A,
6.875
%
,
4/15/32
....................................
4,000,000
4,130,128
44,594,274
Electrical
Equipment
0.0%
†
Regal
Rexnord
Corp.
,
Senior
Note
,
6.05
%
,
4/15/28
..........................
50,000
50,869
Energy
Equipment
&
Services
0.7%
b
Transocean
International
Ltd.
,
Senior
Note
,
144A,
8.5
%
,
5/15/31
................
2,500,000
2,629,550
b
Weatherford
International
Ltd.
,
Senior
Note
,
144A,
8.625
%
,
4/30/30
....................................
2,384,000
2,414,022
Senior
Note
,
144A,
6.75
%
,
10/15/33
....................................
2,000,000
2,040,966
7,084,538
Entertainment
0.0%
†
b
Netflix,
Inc.
,
Senior
Bond
,
144A,
5.375
%
,
11/15/29
..........................
100,000
101,686
Food
Products
0.2%
JBS
NV
/
JBS
USA
Foods
Group
Holdings,
Inc.
/
JBS
USA
Food
Co.
Holdings
,
Senior
Note
,
5.75
%
,
4/01/33
...............................................
50,000
50,744
b
Post
Holdings,
Inc.
,
Senior
Secured
Note
,
144A,
6.25
%
,
2/15/32
................
2,000,000
2,019,242
2,069,986
Ground
Transportation
0.0%
†
b
Ashtead
Capital,
Inc.
,
Senior
Bond
,
144A,
5.95
%
,
10/15/33
....................
200,000
203,532
Health
Care
Equipment
&
Supplies
0.5%
b
Medline
Borrower
LP
,
Senior
Note
,
144A,
5.25
%
,
10/01/29
....................
5,000,000
4,974,265
Health
Care
Providers
&
Services
16.2%
b
CHS/Community
Health
Systems,
Inc.
,
144A,
10.75
%
,
6/15/33
..............................................
17,500,000
18,605,353
Secured
Note
,
144A,
6.875
%
,
4/15/29
..................................
15,000,000
14,404,218
Secured
Note
,
144A,
6.125
%
,
4/01/30
..................................
40,000,000
34,223,712
Senior
Secured
Note
,
144A,
10.875
%
,
1/15/32
............................
15,000,000
15,935,520
Senior
Secured
Note
,
144A,
9.75
%
,
1/15/34
..............................
20,000,000
20,425,754
CVS
Health
Corp.
,
Junior
Sub.
Bond
,
6.75%
to
12/09/34,
FRN
thereafter
,
12/10/54
...............
2,500,000
2,565,827
Junior
Sub.
Bond
,
7%
to
3/09/30,
FRN
thereafter
,
3/10/55
...................
5,000,000
5,164,417
Franklin
Strategic
Series
Schedule
of
Investments
Franklin
Templeton
SMACS:
Series
I
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
30
a
a
Principal
Amount
a
Value
a
a
a
a
a
Corporate
Bonds
(continued)
Health
Care
Providers
&
Services
(continued)
b
DaVita,
Inc.
,
Senior
Bond
,
144A,
3.75
%
,
2/15/31
....................................
$
6,000,000
$
5,546,351
Senior
Note
,
144A,
6.875
%
,
9/01/32
....................................
3,000,000
3,074,406
Senior
Note
,
144A,
6.75
%
,
7/15/33
.....................................
500,000
511,956
b
Kedrion
SpA
,
Senior
Secured
Note
,
144A,
6.5
%
,
9/01/29
......................
1,000,000
1,002,194
Tenet
Healthcare
Corp.
,
Senior
Note
,
6.125
%
,
10/01/28
........................................
12,000,000
12,016,668
Senior
Secured
Note
,
6.125
%
,
6/15/30
..................................
11,000,000
11,089,452
Senior
Secured
Note
,
6.75
%
,
5/15/31
...................................
15,000,000
15,326,520
159,892,348
Hotels,
Restaurants
&
Leisure
6.6%
b
Caesars
Entertainment,
Inc.
,
Senior
Note
,
144A,
6
%
,
10/15/32
......................................
10,000,000
8,990,232
Senior
Secured
Note
,
144A,
7
%
,
2/15/30
................................
4,500,000
4,528,760
Senior
Secured
Note
,
144A,
6.5
%
,
2/15/32
...............................
10,000,000
9,675,070
b
Carnival
Corp.
Ltd.
,
Senior
Note
,
144A,
6.125
%
,
2/15/33
......................
8,500,000
8,525,568
b
Fertitta
Entertainment
LLC
/
Fertitta
Entertainment
Finance
Co.,
Inc.
,
Senior
Note
,
144A,
6.75
%
,
1/15/30
...............................................
20,000,000
19,591,302
b
Mohegan
Tribal
Gaming
Authority
/
MS
Digital
Entertainment
Holdings
LLC
,
Senior
Secured
Note
,
144A,
8.25
%
,
4/15/30
...................................
3,000,000
3,133,254
b
NCL
Corp.
Ltd.
,
Senior
Note
,
144A,
6.75
%
,
2/01/32
..........................
750,000
730,149
b
Wynn
Resorts
Finance
LLC
/
Wynn
Resorts
Capital
Corp.
,
Senior
Note
,
144A,
7.125
%
,
2/15/31
.........................................................
10,000,000
10,504,180
65,678,515
Household
Durables
1.7%
Newell
Brands,
Inc.
,
b
Senior
Note
,
144A,
8.5
%
,
6/01/28
.....................................
5,000,000
5,215,060
Senior
Note
,
6.375
%
,
5/15/30
.........................................
2,000,000
2,031,646
b
Whirlpool
Corp.
,
Senior
Secured
Note
,
144A,
7.875
%
,
7/01/34
.................
10,000,000
9,807,714
17,054,420
Independent
Power
and
Renewable
Electricity
Producers
2.7%
b
Talen
Energy
Supply
LLC
,
Senior
Note
,
144A,
6.125
%
,
5/01/31
....................................
11,000,000
10,978,287
Senior
Note
,
144A,
6.375
%
,
5/01/33
....................................
6,000,000
5,927,368
b
,c
Vistra
Corp.
,
Junior
Sub.
Bond
,
144A,
8%
to
10/14/26,
FRN
thereafter
,
Perpetual
....
10,000,000
10,028,530
26,934,185
Insurance
1.4%
b
Asurion
LLC
/
Asurion
Co-Issuer,
Inc.
,
Secured
Note
,
144A,
8.375
%
,
2/01/34
..................................
10,000,000
9,031,909
Senior
Secured
Note
,
144A,
8
%
,
12/31/32
...............................
5,000,000
4,978,169
14,010,078
IT
Services
0.5%
b
Beignet
Investor
LLC
,
Senior
Secured
Bond
,
144A,
6.581
%
,
5/30/49
.............
5,000,000
4,792,884
b
CoreWeave,
Inc.
,
Senior
Note
,
144A,
9.25
%
,
6/01/30
........................
705,000
655,308
5,448,192
Media
1.7%
b
Stagwell
Global
LLC
,
Senior
Note
,
144A,
5.625
%
,
8/15/29
.....................
200,000
194,928
b
Univision
Communications,
Inc.
,
Senior
Secured
Note
,
144A,
8.5
%
,
7/31/31
...............................
5,000,000
5,042,735
Senior
Secured
Note
,
144A,
9.375
%
,
8/01/32
.............................
5,000,000
5,105,755
Franklin
Strategic
Series
Schedule
of
Investments
Franklin
Templeton
SMACS:
Series
I
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
31
a
a
Principal
Amount
a
Value
a
a
a
a
a
Corporate
Bonds
(continued)
Media
(continued)
b
VZ
Secured
Financing
BV
,
Senior
Secured
Note
,
144A,
7.5
%
,
1/15/33
............
$
7,000,000
$
6,338,677
16,682,095
Metals
&
Mining
3.1%
b
Alcoa
Nederland
Holding
BV
,
Senior
Note
,
144A,
4.125
%
,
3/31/29
...............
750,000
726,576
ArcelorMittal
SA
,
Senior
Bond
,
6.8
%
,
11/29/32
..............................
50,000
54,095
b
Cleveland-Cliffs,
Inc.
,
Senior
Note
,
144A,
7.5
%
,
9/15/31
.....................................
3,700,000
3,806,175
Senior
Note
,
144A,
7.375
%
,
5/01/33
....................................
8,000,000
8,164,192
Senior
Note
,
144A,
7.625
%
,
1/15/34
....................................
10,000,000
10,209,510
b
Fortescue
Treasury
Pty.
Ltd.
,
Senior
Bond
,
144A,
4.375
%
,
4/01/31
...................................
800,000
755,708
Senior
Bond
,
144A,
6.125
%
,
4/15/32
...................................
6,000,000
6,070,777
b
Mineral
Resources
Ltd.
,
Senior
Note
,
144A,
8.5
%
,
5/01/30
....................
550,000
567,923
30,354,956
Oil,
Gas
&
Consumable
Fuels
8.3%
b
Calumet
Specialty
Products
Partners
LP
/
Calumet
Finance
Corp.
,
Senior
Note
,
144A,
9.75
%
,
7/15/28
.....................................
3,000,000
3,095,490
Senior
Note
,
144A,
9.75
%
,
2/15/31
.....................................
4,000,000
4,336,212
Senior
Secured
Note
,
144A,
9.25
%
,
7/15/29
..............................
3,000,000
3,063,750
Cheniere
Corpus
Christi
Holdings
LLC
,
Senior
Secured
Note
,
3.7
%
,
11/15/29
......
100,000
96,429
Energy
Transfer
LP
,
Senior
Bond
,
6.55
%
,
12/01/33
..........................
50,000
53,116
b
Hilcorp
Energy
I
LP
/
Hilcorp
Finance
Co.
,
Senior
Bond
,
144A,
7.25
%
,
2/15/35
....................................
7,000,000
7,059,143
Senior
Note
,
144A,
6
%
,
4/15/30
.......................................
1,000,000
999,584
b
Matador
Resources
Co.
,
Senior
Note
,
144A,
6.5
%
,
4/15/32
....................
4,000,000
4,043,052
Occidental
Petroleum
Corp.
,
Senior
Note
,
8.875
%
,
7/15/30
....................
50,000
55,726
b
Venture
Global
LNG,
Inc.
,
c
Junior
Sub.
Bond
,
144A,
9%
to
9/29/29,
FRN
thereafter
,
Perpetual
.............
30,000,000
30,424,692
Senior
Secured
Note
,
144A,
9.875
%
,
2/01/32
.............................
20,000,000
21,328,660
b
Venture
Global
Plaquemines
LNG
LLC
,
Senior
Secured
Bond
,
144A,
7.75
%
,
5/01/35
.............................
2,000,000
2,225,286
Senior
Secured
Note
,
144A,
6.125
%
,
12/15/30
............................
2,000,000
2,042,764
Senior
Secured
Note
,
144A,
6.5
%
,
6/15/34
...............................
3,000,000
3,103,578
Williams
Cos.,
Inc.
(The)
,
Senior
Bond
,
5.65
%
,
3/15/33
.......................
100,000
101,246
82,028,728
Passenger
Airlines
0.9%
b
Delta
Air
Lines,
Inc.
/
SkyMiles
IP
Ltd.
,
Senior
Secured
Note
,
144A,
4.75
%
,
10/20/28
.
37,500
37,430
b
JetBlue
Airways
Corp.
/
JetBlue
Loyalty
LP
,
Senior
Secured
Note
,
144A,
9.875
%
,
9/20/31
.........................................................
10,000,000
8,596,131
8,633,561
Personal
Care
Products
0.3%
b
Opal
Bidco
SAS
,
Senior
Secured
Note
,
144A,
6.5
%
,
3/31/32
...................
3,000,000
3,030,255
Pharmaceuticals
3.2%
b
1261229
BC
Ltd.
,
Senior
Secured
Note
,
144A,
10
%
,
4/15/32
...................
13,000,000
13,541,450
b
Endo
Finance
Holdings
LP
,
Senior
Secured
Note
,
144A,
8.5
%
,
4/15/31
...........
2,000,000
2,109,328
b
Organon
&
Co.
/
Organon
Foreign
Debt
Co-Issuer
BV
,
Senior
Bond
,
144A,
5.125
%
,
4/30/31
...................................
2,500,000
2,499,569
Senior
Note
,
144A,
7.875
%
,
5/15/34
....................................
10,000,000
10,724,170
Senior
Secured
Note
,
144A,
4.125
%
,
4/30/28
.............................
3,000,000
2,971,305
31,845,822
Franklin
Strategic
Series
Schedule
of
Investments
Franklin
Templeton
SMACS:
Series
I
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
32
a
a
Principal
Amount
a
Value
a
a
a
a
a
Corporate
Bonds
(continued)
Semiconductors
&
Semiconductor
Equipment
0.3%
b
Qnity
Electronics,
Inc.
,
Senior
Note
,
144A,
6.25
%
,
8/15/33
.....................................
$
1,000,000
$
1,007,850
Senior
Secured
Note
,
144A,
5.75
%
,
8/15/32
..............................
1,500,000
1,492,259
2,500,109
Software
2.2%
b
Cloud
Software
Group
LLC
,
Secured
Note
,
144A,
9
%
,
9/30/29
.....................................
7,500,000
7,526,190
Senior
Secured
Note
,
144A,
6.5
%
,
3/31/29
...............................
7,500,000
7,469,887
b
McAfee
Corp.
,
Senior
Note
,
144A,
7.375
%
,
2/15/30
..........................
7,500,000
6,789,912
21,785,989
Specialized
REITs
0.3%
American
Tower
Corp.
,
Senior
Note
,
4.05
%
,
3/15/32
.........................
50,000
47,099
b
Millrose
Properties,
Inc.
,
Senior
Note
,
144A,
6.375
%
,
8/01/30
..................
2,500,000
2,536,975
2,584,074
Specialty
Retail
0.0%
†
Lowe's
Cos.,
Inc.
,
Senior
Bond
,
5
%
,
4/15/33
...............................
60,000
59,252
Technology
Hardware,
Storage
&
Peripherals
0.0%
†
Hewlett
Packard
Enterprise
Co.
,
Senior
Bond
,
5
%
,
10/15/34
...................
50,000
47,972
HP,
Inc.
,
Senior
Bond
,
5.5
%
,
1/15/33
.....................................
80,000
80,347
128,319
Textiles,
Apparel
&
Luxury
Goods
1.4%
b
,f
Beach
Acquisition
Bidco
LLC
,
Senior
Note
,
144A,
PIK,
10
%
,
7/15/33
.............
13,175,607
14,148,784
Tobacco
0.0%
†
BAT
Capital
Corp.
,
Senior
Bond
,
6.421
%
,
8/02/33
...........................
50,000
52,886
Trading
Companies
&
Distributors
1.5%
b
EquipmentShare.com,
Inc.
,
Secured
Note
,
144A,
7.125
%
,
7/01/34
...............
6,000,000
5,912,421
b
Herc
Holdings,
Inc.
,
Senior
Note
,
144A,
7
%
,
6/15/30
.........................
2,000,000
2,070,438
b
QXO
Building
Products,
Inc.
,
Senior
Note
,
144A,
6.5
%
,
7/15/31
.....................................
3,000,000
3,035,245
Senior
Note
,
144A,
6.875
%
,
7/15/34
....................................
3,500,000
3,543,432
b
United
Rentals
North
America,
Inc.
,
Senior
Secured
Note
,
144A,
6
%
,
12/15/29
.....
50,000
50,637
14,612,173
Total
Corporate
Bonds
(Cost
$
786,992,236
)
.....................................
800,890,954
g
Senior
Floating
Rate
Interests
3.4%
Containers
&
Packaging
0.2%
h
Clydesdale
Acquisition
Holdings,
Inc.,
First
Lien,
2025
Incremental
Closing
Date
CME
Term
Loan,
B
,
6.936
%
,
(
1-month
SOFR
+
3.25
%
),
4/01/32
...................
2,468,001
2,437,151
Health
Care
Equipment
&
Supplies
1.0%
h
TPG,
Inc.,
First
Lien,
CME
Term
Loan,
B
,
5.995
%
,
(
3-month
SOFR
+
2.25
%
),
4/07/33
3,000,000
2,960,505
d
,h
TPG,
Inc.,
Second
Lien,
Initial
CME
Term
Loan
,
8.745
%
,
(
3-month
SOFR
+
5
%
),
4/07/34
.........................................................
7,000,000
6,947,500
9,908,005
a
a
a
a
a
Health
Care
Providers
&
Services
0.1%
h
MPH
Acquisition
Holdings
LLC,
First
Lien,
Exchange
First
Out
CME
Term
Loan
,
7.573
%
,
(
3-month
SOFR
+
3.75
%
),
12/31/30
.............................
530,683
533,671
Franklin
Strategic
Series
Schedule
of
Investments
Franklin
Templeton
SMACS:
Series
I
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
33
a
a
Principal
Amount
a
Value
a
a
a
a
a
g
Senior
Floating
Rate
Interests
(continued)
Oil,
Gas
&
Consumable
Fuels
0.8%
h
Venture
Global
Calcasieu
Pass
LLC,
First
Lien,
Initial
CME
Term
Loan
,
6.954
%
,
(
6-month
SOFR
+
3.25
%
),
4/11/33
.....................................
$
7,500,000
$
7,561,463
Passenger
Airlines
1.1%
h
American
Airlines,
Inc.,
First
Lien,
2026
CME
Term
Loan
,
6.764
%
,
(
3-month
SOFR
+
3
%
),
5/30/33
.....................................................
11,000,000
10,984,545
Personal
Care
Products
0.2%
h
OPAL
US
LLC,
First
Lien,
CME
Term
Loan,
B6
,
6.232
%
,
(
3-month
SOFR
+
2.5
%
),
4/28/32
.........................................................
1,985,025
1,997,610
Total
Senior
Floating
Rate
Interests
(Cost
$
33,179,979
)
..........................
33,422,445
Mortgage-Backed
Securities
12.8%
Federal
Home
Loan
Mortgage
Corp.
(FHLMC)
Fixed
Rate
4.4%
FHLMC
Pool,
30
Year
,
5
%,
5/01/53
-
11/01/54
..............................
5,706,301
5,524,621
FHLMC
Pool,
30
Year
,
5
%,
12/01/54
.....................................
9,618,688
9,321,711
FHLMC
Pool,
30
Year
,
5.5
%,
12/01/54
....................................
8,485,176
8,410,790
FHLMC
Pool,
30
Year
,
5.5
%,
7/01/53
-
2/01/55
.............................
13,603,024
13,529,986
FHLMC
Pool,
30
Year
,
6
%,
6/01/53
-
9/01/55
...............................
6,988,838
7,080,801
43,867,909
Federal
National
Mortgage
Association
(FNMA)
Fixed
Rate
2.7%
FNMA,
30
Year
,
5
%,
5/01/53
-
11/01/53
...................................
5,495,937
5,348,787
FNMA,
30
Year
,
5.5
%,
11/01/54
-
1/01/56
.................................
16,642,583
16,492,723
FNMA,
30
Year
,
6
%,
8/01/55
...........................................
4,285,530
4,336,587
26,178,097
Government
National
Mortgage
Association
(GNMA)
Fixed
Rate
5.7%
GNMA
II,
Single-family,
30
Year
,
5.5
%,
5/20/55
-
8/20/55
......................
14,849,367
14,780,854
GNMA
II,
Single-family,
30
Year
,
5.5
%,
10/20/55
............................
20,059,873
19,947,863
GNMA
II,
Single-family,
30
Year
,
5.5
%,
12/20/55
............................
10,336,556
10,278,839
GNMA
II,
Single-family,
30
Year
,
6
%,
8/20/55
-
1/20/56
.......................
10,938,944
11,109,734
56,117,290
Total
Mortgage-Backed
Securities
(Cost
$
127,132,447
)
...........................
126,163,296
Total
Long
Term
Investments
(Cost
$
948,743,945
)
...............................
963,478,028
a
a
a
a
a
Short
Term
Investments
0.7%
Shares
a
Money
Market
Funds
0.7%
i,j
Franklin
Institutional
U.S.
Government
Money
Market
Fund
,
3.629
%
.............
6,897,277
6,897,277
Total
Money
Market
Funds
(Cost
$
6,897,277
)
...................................
6,897,277
Total
Short
Term
Investments
(Cost
$
6,897,277
)
.................................
6,897,277
a
Total
Investments
(Cost
$
955,641,222
)
98.1
%
...................................
$970,375,305
Other
Assets,
less
Liabilities
1.9
%
.............................................
19,235,796
Net
Assets
100.0%
...........................................................
$989,611,101
Franklin
Strategic
Series
Schedule
of
Investments
Franklin
Templeton
SMACS:
Series
I
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
34
See
Abbreviations
on
page
53
.
†
Rounds
to
less
than
0.1%
of
net
assets.
a
See
Note
1(d)
regarding
equity-linked
securities.
b
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
August
31,
2026,
the
aggregate
value
of
these
securities
was
$709,803,979,
representing
71.7%
of
net
assets.
c
Perpetual
security
with
no
stated
maturity
date.
d
Fair
valued
using
significant
unobservable
inputs.
See
Note
10
regarding
fair
value
measurements.
e
See
Note
8
regarding
restricted
securities.
f
Income
may
be
received
in
additional
securities
and/or
cash.
g
See
Note
1(e)
regarding
senior
floating
rate
interests.
h
The
coupon
rate
shown
represents
the
rate
inclusive
of
any
caps
or
floors,
if
applicable,
in
effect
at
period
end.
i
See
Note
3(d)
regarding
investments
in
affiliated
management
investment
companies.
j
The
rate
shown
is
the
annualized
seven-day
effective
yield
at
period
end.
Franklin
Strategic
Series
Financial
Statements
Statements
of
Assets
and
Liabilities
August
31,
2026
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
35
Franklin
Templeton
SMACS:
Series
CH
Franklin
Templeton
SMACS:
Series
E
Franklin
Templeton
SMACS:
Series
H
Franklin
Templeton
SMACS:
Series
I
Assets:
Investments
in
securities:
Cost
-
Unaffiliated
issuers
................
$38,500,565
$578,210,376
$45,715,907
$948,743,945
Cost
-
Non-controlled
affiliates
(Note
3
d
)
.....
-
4,994,647
1,829,106
6,897,277
Value
-
Unaffiliated
issuers
...............
$38,381,874
$688,645,703
$45,306,626
$963,478,028
Value
-
Non-controlled
affiliates
(Note
3
d
)
....
-
4,994,647
1,836,750
6,897,277
Cash
.................................
76,587
508,258
48,116
224,531
Receivables:
Investment
securities
sold
................
-
-
4,287,500
-
Capital
shares
sold
.....................
-
1,645,266
4,351
2,351,891
Dividends
and
interest
..................
771,181
1,736,056
699,976
17,082,327
Affiliates
.............................
5,589
90,962
3,873
72,365
Total
assets
.......................
39,235,231
697,620,892
52,187,192
990,106,419
Liabilities:
Payables:
Investment
securities
purchased
...........
407,214
4,781,986
469,000
-
Capital
shares
redeemed
................
-
253,637
3,898,594
354,852
Transfer
agent
fees
.....................
1,735
44,352
2,188
41,754
Professional
fees
......................
61,610
64,422
56,739
91,779
Trustees'
fees
and
expenses
..............
246
2
225
18
Distributions
to
shareholders
..............
169,459
199
216,953
367
Accrued
expenses
and
other
liabilities
........
6,198
6,010
7,464
6,548
Total
liabilities
......................
646,462
5,150,608
4,651,163
495,318
Net
assets,
at
value
..............
$38,588,769
$692,470,284
$47,536,029
$989,611,101
Net
assets
consist
of:
Paid-in
capital
..........................
$38,849,850
$587,400,321
$48,299,616
$980,788,505
Total
distributable
earnings
(losses)
..........
(261,081)
105,069,963
(763,587)
8,822,596
Net
assets,
at
value
..............
$38,588,769
$692,470,284
$47,536,029
$989,611,101
Shares
outstanding
......................
4,554,856
45,436,935
5,233,502
122,732,800
Net
asset
value
per
share
a
.................
$8.47
$15.24
$9.08
$8.06
a
Net
asset
value
per
share
may
not
recalculate
due
to
rounding.
Franklin
Strategic
Series
Financial
Statements
Statements
of
Operations
for
the
year
ended
August
31,
2026
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
36
Franklin
Templeton
SMACS:
Series
CH
Franklin
Templeton
SMACS:
Series
E
Franklin
Templeton
SMACS:
Series
H
Franklin
Templeton
SMACS:
Series
I
Investment
income:
Dividends:
(net
of
foreign
taxes
of
$-,
$464,386,
$-
and
$-,
respectively)
Unaffiliated
issuers
.....................
$-
$13,918,663
$-
$50,400
Non-controlled
affiliates
(Note
3
d
)
..........
-
257,379
137,773
312,195
Interest:
Unaffiliated
issuers:
Paydown
gain
(loss)
..................
179,680
-
-
108,361
Paid
in
cash
a
........................
1,932,452
2,962
1,983,138
59,450,482
Other
income
b
..........................
-
18,050
10,809
24,176
Total
investment
income
................
2,112,132
14,197,054
2,131,720
59,945,614
Expenses:
Transfer
agent
fees
(Note
3c)
..............
6,561
138,210
7,803
162,938
Custodian
fees
..........................
181
6,350
182
4,413
Reports
to
shareholders
fees
...............
4,204
13,700
4,867
13,698
Registration
and
filing
fees
.................
8,432
54,163
8,309
72,627
Professional
fees
........................
81,608
105,104
77,226
144,923
Trustees'
fees
and
expenses
...............
522
5,376
555
7,913
Pricing
fees
............................
17,513
3,186
33,570
9,681
Other
.................................
6,553
9,831
6,148
12,983
Total
expenses
......................
125,574
335,920
138,660
429,176
Expenses
waived/paid
by
affiliates
(Note
3
d
and
3
e
)
...........................
(125,574)
(335,920)
(138,660)
(429,176)
Net
expenses
......................
-
-
-
-
Net
investment
income
.............
2,112,132
14,197,054
2,131,720
59,945,614
Realized
and
unrealized
gains
(losses):
Net
realized
gain
(loss)
from:
Investments:
Unaffiliated
issuers
...................
(133,974)
23,296,111
(130,355)
(3,801,565)
Non-controlled
affiliates
(Note
3
d
)
........
-
-
(92,321)
-
Foreign
currency
transactions
.............
-
11,044
-
(5,260)
Net
realized
gain
(loss)
...............
(133,974)
23,307,155
(222,676)
(3,806,825)
Net
change
in
unrealized
appreciation
(depreciation)
on:
Investments:
Unaffiliated
issuers
...................
97,536
66,826,462
417,915
977,828
Non-controlled
affiliates
(Note
3
d
)
........
-
-
(2,740)
-
Translation
of
other
assets
and
liabilities
denominated
in
foreign
currencies
........
-
(3,561)
-
-
Net
change
in
unrealized
appreciation
(depreciation)
......................
97,536
66,822,901
415,175
977,828
Net
realized
and
unrealized
gain
(loss)
.........
(36,438)
90,130,056
192,499
(2,828,997)
Net
increase
(decrease)
in
net
assets
resulting
from
operations
...............................
$2,075,694
$104,327,110
$2,324,219
$57,116,617
a
Includes
amortization
of
premium
and
accretion
of
discount.
b
Other
income
includes
payments
by
Advisers
for
acquired
fund
fees
and
expenses
(See
Note
3e).
Franklin
Strategic
Series
Financial
Statements
Statements
of
Changes
in
Net
Assets
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
37
Franklin
Templeton
SMACS:
Series
CH
Franklin
Templeton
SMACS:
Series
E
Year
Ended
August
31,
2026
Year
Ended
August
31,
2025
Year
Ended
August
31,
2026
Year
Ended
August
31,
2025
Increase
(decrease)
in
net
assets:
Operations:
Net
investment
income
............
$2,112,132
$1,479,743
$14,197,054
$8,043,888
Net
realized
gain
(loss)
............
(133,974)
(123,303)
23,307,155
8,987,380
Net
change
in
unrealized
appreciation
(depreciation)
.................
97,536
(1,774,015)
66,822,901
24,089,546
Net
increase
(decrease)
in
net
assets
resulting
from
operations
.
2,075,694
(417,575)
104,327,110
41,120,814
Distributions
to
shareholders
.........
(1,922,816)
(1,467,378)
(37,195,273)
(19,727,030)
Capital
share
transactions
(Note
2
)
.....
11,029,040
6,382,300
211,489,014
174,524,065
Net
increase
(decrease)
in
net
assets
.....................
11,181,918
4,497,347
278,620,851
195,917,849
Net
assets:
Beginning
of
year
..................
27,406,851
22,909,504
413,849,433
217,931,584
End
of
year
......................
$38,588,769
$27,406,851
$692,470,284
$413,849,433
Franklin
Strategic
Series
Financial
Statements
Statements
of
Changes
in
Net
Assets
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
38
Franklin
Templeton
SMACS:
Series
H
Franklin
Templeton
SMACS:
Series
I
Year
Ended
August
31,
2026
Year
Ended
August
31,
2025
Year
Ended
August
31,
2026
Year
Ended
August
31,
2025
Increase
(decrease)
in
net
assets:
Operations:
Net
investment
income
............
$2,131,720
$1,058,965
$59,945,614
$37,222,883
Net
realized
gain
(loss)
............
(222,676)
18,748
(3,806,825)
447,152
Net
change
in
unrealized
appreciation
(depreciation)
.................
415,175
(1,384,681)
977,828
1,112,773
Net
increase
(decrease)
in
net
assets
resulting
from
operations
.
2,324,219
(306,968)
57,116,617
38,782,808
Distributions
to
shareholders
.........
(2,113,088)
(1,045,091)
(60,704,461)
(38,285,671)
Distributions
to
shareholders
from
tax
return
of
capital
..................
-
-
(333,379)
-
Total
distributions
to
shareholders
.....
(2,113,088)
(1,045,091)
(61,037,840)
(38,285,671)
Capital
share
transactions
(Note
2
)
.....
20,493,828
15,530,069
378,516,160
240,644,721
Net
increase
(decrease)
in
net
assets
.....................
20,704,959
14,178,010
374,594,937
241,141,858
Net
assets:
Beginning
of
year
..................
26,831,070
12,653,060
615,016,164
373,874,306
End
of
year
......................
$47,536,029
$26,831,070
$989,611,101
$615,016,164
Franklin
Strategic
Series
39
franklintempleton.com
Annual
Report
Notes
to
Financial
Statements
1.
Organization
and
Significant
Accounting
Policies
Franklin
Strategic
Series (Trust)
is
registered
under
the
Investment
Company
Act
of
1940
(1940
Act)
as
an
open-
end
management
investment
company,
consisting
of
twelve
separate
funds, four of
which
are
included
in
this
report
(Funds).
The Funds
follow
the
accounting
and
reporting
guidance
in
Financial
Accounting
Standards
Board
(FASB)
Accounting
Standards
Codification
Topic
946,
Financial
Services
-
Investment
Companies
(ASC
946)
and
apply
the
specialized
accounting
and
reporting
guidance
in
U.S.
Generally
Accepted
Accounting
Principles
(U.S.
GAAP),
including,
but
not
limited
to,
ASC
946.
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
Board
has
designated
the
Funds'
investment
manager
as
the
valuation
designee
and
has
responsibility
for
oversight
of
valuation.
The
investment
manager
is
assisted
by
the
Funds'
administrator
in
performing
this
responsibility,
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
and
exchange
traded
funds 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.
Investments
in open-end mutual
funds
are
valued
at
the
closing
NAV.
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,
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
Franklin
Strategic
Series
Notes
to
Financial
Statements
40
franklintempleton.com
Annual
Report
4
p.m.
Eastern
time.
In
order
to
minimize
the
potential
for
these
differences,
an
independent
pricing
service
may
be
used
to
adjust
the
value
of
the
Funds'
portfolio
securities
to
the
latest
indications
of
fair
value
at
4
p.m.
Eastern
time.
At
August
31,
2026,
certain
securities
may
have
been
fair
valued
using
these
procedures,
in
which
case
the
securities
were
categorized
as
Level
2
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.
Securities
Purchased
on
a
When-Issued,
Forward
Commitment or
Delayed
Delivery
Basis
Certain
or
all
Funds
may
purchase
securities
on
a
when-
issued,
forward
commitment
or
delayed
delivery
basis,
with
payment
and
delivery
scheduled
for
a
future
date.
These
transactions
are
subject
to
market
fluctuations
and
are
subject
to
the
risk
that
the
value
at
delivery
may
be
more
or
less
than
the
trade
date
purchase
price.
Although
the
Funds
will
generally
purchase
these
securities
with
the
intention
of
holding
the
securities, they
may
sell
the
securities
before
the
settlement
date.
d.
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.
e.
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
Secured
Overnight
Financing
Rate
(SOFR).
Senior
secured
corporate
loans
often
require
1.
Organization
and
Significant
Accounting
Policies
(continued)
a.
Financial
Instrument
Valuation
(continued)
Franklin
Strategic
Series
Notes
to
Financial
Statements
41
franklintempleton.com
Annual
Report
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.
f.
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
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.
In
some
cases,
the
Funds
may
be
entitled
to
reclaim
all
or
a
portion
of
such
taxes,
and
such
reclaim
amounts,
if
any,
are
reflected
as
a
dividend
receivable
in
the
Statements
of
Assets
and
Liabilities
and
dividend
income
in
the
Statements
of
Operations.
In
many
cases,
however,
the
Funds
may
not
receive
such
amounts
for
an
extended
period
of
time,
depending
on
the
country
of
investment.
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
August
31,
2026, 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).
The
Funds'
federal
and
state
income
and
federal
excise
tax
returns
for
the
prior
three
fiscal
years
are
subject
to
examination
by
the
Internal
Revenue
Service
and
state
departments
of
revenue.
g.
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
(including
interest
income
from
payment-in-kind
securities,
if
any)
and
estimated
expenses
are
accrued
daily.
Amortization
of
premium
and
accretion
of
discount
on
debt
securities
are
included
in
interest
income.
Paydown
gains
and
losses
are
recorded separately
on
the
Statements
of
Operations.
Certain
or
all
Funds
may
receive
other
income
from
investments
in
senior
secured
corporate loans
or
unfunded
commitments,
including
amendment
fees,
consent
fees
or
commitment
fees.
These
fees
are
recorded
as
income
when
received
by
the
Funds.
Facility
fees
are
recognized
as
income
over
the
expected
term
of
the
loan.
Dividend
income
is
recorded
on
the
ex-dividend
date
except
for
certain
dividends
from
securities
where
the
dividend
rate
is
not
available.
In
such
cases,
the
dividend
is
recorded
as
soon
as
the
information
is
received
by
the
Funds.
Dividends
from
net
investment
income
are
normally
declared
daily;
these
dividends
may
be
reinvested
or
paid
monthly
to
shareholders
for
Franklin
Templeton
SMACS:
Series
CH
and
Franklin
Templeton
SMACS:
Series
H,
and
recorded
on
ex-dividend
date
for
Franklin
Templeton
SMACS:
Series
E
and
Franklin
Templeton SMACS:
Series
I.
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.
1.
Organization
and
Significant
Accounting
Policies
(continued)
e.
Senior
Floating
Rate
Interests
(continued)
Franklin
Strategic
Series
Notes
to
Financial
Statements
42
franklintempleton.com
Annual
Report
h.
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.
i.
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
August
31,
2026,
there
were
an
unlimited
number
of
shares
authorized
(without
par value).
Transactions
in
the
Funds'
shares
were
as
follows:
Franklin
Templeton
SMACS:
Series
CH
Franklin
Templeton
SMACS:
Series
E
Shares
Amount
Shares
Amount
Single
Class
Year
ended
August
31,
2026
Shares
sold
...................................
1,602,298
$13,790,617
19,833,419
$284,326,891
Shares
issued
in
reinvestment
of
distributions
..........
-
-
63
907
Shares
redeemed
...............................
(320,439)
(2,761,577)
(5,087,522)
(72,838,784)
Net
increase
(decrease)
..........................
1,281,859
$11,029,040
14,745,960
$211,489,014
Year
ended
August
31,
2025
Shares
sold
...................................
1,560,906
$13,711,654
17,441,028
$222,731,933
Shares
issued
in
reinvestment
of
distributions
..........
53
474
48
602
Shares
redeemed
...............................
(846,140)
(7,329,828)
(3,811,874)
(48,208,470)
Net
increase
(decrease)
..........................
714,819
$6,382,300
13,629,202
$174,524,065
Franklin
Templeton
SMACS:
Series
H
Franklin
Templeton
SMACS:
Series
I
Shares
Amount
Shares
Amount
Single
Class
Year
ended
August
31,
2026
Shares
sold
...................................
3,470,265
$32,052,739
59,447,235
$483,217,495
Shares
issued
in
reinvestment
of
distributions
..........
-
-
201
1,622
Shares
redeemed
...............................
(1,261,797)
(11,558,911)
(12,887,548)
(104,702,957)
Net
increase
(decrease)
..........................
2,208,468
$20,493,828
46,559,888
$378,516,160
Year
ended
August
31,
2025
Shares
sold
...................................
2,030,344
$18,797,350
39,769,515
$318,217,572
Shares
issued
in
reinvestment
of
distributions
..........
50
478
193
1,539
Shares
redeemed
...............................
(350,266)
(3,267,759)
(9,715,769)
(77,574,390)
Net
increase
(decrease)
..........................
1,680,128
$15,530,069
30,053,939
$240,644,721
1.
Organization
and
Significant
Accounting
Policies
(continued)
Franklin
Strategic
Series
Notes
to
Financial
Statements
43
franklintempleton.com
Annual
Report
3.
Transactions
with
Affiliates
Effective
August
17,
2026,
Franklin
Resources,
Inc.
was
renamed
Franklin
Templeton,
Inc.
Franklin
Templeton,
Inc.
is
the
holding
company
for
various
subsidiaries.
Certain
officers
and
trustees
of
the Trust are
also
officers
and/or
directors
of
the
following
subsidiaries:
a.
Management
Fees
Advisers provides
investment
management
services
to
the
Funds.
The
Funds
do
not
pay
a
fee
for
these
services.
b.
Administrative
Fees
Under
an
agreement
with
Advisers,
FT
Services
provides
administrative
services
to
the
Funds
and
is
not
paid
by
the
Funds
for
the
services.
c.
Transfer
Agent
Fees
The
Funds
pay
transfer
agent
fees,
calculated
monthly
and
paid
monthly, to
Investor
Services
for
its
performance
of
shareholder
servicing
obligations. The
fees
are based
on
a
fixed
margin
earned
by
Investor
Services
and
are allocated
to
the Funds
based
upon
relative
assets
and
relative
transactions. In
addition,
the
Fund reimburses
Investor
Services
for
out
of
pocket
expenses
incurred
and reimburses
shareholder
servicing
fees
paid
to
third
parties.
For
the
year
ended
August
31,
2026,
the Funds
paid
transfer
agent
fees
as
noted
in
the
Statements of
Operations,
of
which
the
following
amounts
were
retained
by
Investor
Services:
d.
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. Advisers
has
contractually
agreed
to
reimburse
expenses
of
the
Funds
in
an
amount
equal
to
fees
indirectly
borne
by
the
Funds
on
assets
invested
in
the
affiliated
management
investment
companies,
as
noted
in
the
Statements
of
Operations.
During
the year
ended
August
31,
2026,
investments
in
affiliated
management
investment
companies
were
as
follows:
Subsidiary
Affiliation
Franklin
Advisers,
Inc.
(Advisers)
Investment
manager
Franklin
Templeton
Services,
LLC
(FT
Services)
Administrative
manager
Franklin
Distributors,
LLC
(Distributors)
Principal
underwriter
Franklin
Templeton
Investor
Services,
LLC
(Investor
Services)
Transfer
agent
Franklin
Templeton
SMACS:
Series
CH
Franklin
Templeton
SMACS:
Series
E
Franklin
Templeton
SMACS:
Series
H
Franklin
Templeton
SMACS:
Series
I
Transfer
agent
fees
........................
$5,426
$117,596
$6,430
$162,938
Franklin
Strategic
Series
Notes
to
Financial
Statements
44
franklintempleton.com
Annual
Report
e.
Waiver
and
Expense
Reimbursements
Advisers
has
contractually
agreed
in
advance
to
waive
or
limit
its
fees
and
to
assume
as
its
own
expense
certain
expenses
otherwise
payable
by
the
Funds
so
that
the
operating
expenses
(excluding
certain
non-routine
expenses
or
costs,
including
those
relating
to
litigation,
indemnification,
reorganizations,
and
liquidations)
and
acquired
fund
fees
and
expenses
of
the
Funds do
not
exceed
0.00%
based
on
the
average
net
assets
of
each
class
until
December
31,
2026.
Total
expenses
waived
or
paid
are
not
subject
to
recapture
subsequent
to
the
Funds'
fiscal
year
end.
Acquired
fund
fees
and
expenses
are
indirect
expenses,
and
therefore
Advisers
may
make
payments,
if
necessary,
to
the
Funds
to
offset
these
estimated
indirect
expenses.
Payments
by
Advisers for
the year
ended
August
31,
2026,
are
reflected
as
other
income
in
the
Statements
of
Operations.
f.
Interfund
Transactions
Certain
or
all
Funds
engaged
in
purchases
and
sales
of
investments
with
funds
or
other
accounts
that
have
common
investment
managers
(or
affiliated
investment
managers),
directors,
trustees
or
officers.
These
purchases,
sales
and
the
related
net
realized
gains
(losses),
if
any,
for
the
year
ended
August
31,
2026,
were
as
follows:
aa
Value
at
Beginning
of
Year
Purchases
Sales
Realized
Gain
(Loss)
Net
Change
in
Unrealized
Appreciation
(Depreciation)
Value
at
End
of
Year
Number
of
Shares
Held
at
End
of
Year
Investment
Income
a
a
a
a
a
a
a
a
Franklin
Templeton
SMACS:
Series
E
Non-Controlled
Affiliates
Dividends
Franklin
Institutional
U.S.
Government
Money
Market
Fund,
3.629%
............
$2,925,813
$380,204,829
$(378,135,995)
$-
$-
$4,994,647
4,994,647
$257,379
Total
Affiliated
Securities
...
$2,925,813
$380,204,829
$(378,135,995)
$-
$-
$4,994,647
$257,379
Franklin
Templeton
SMACS:
Series
H
Non-Controlled
Affiliates
Dividends
Franklin
Dynamic
Municipal
Bond
ETF
...................
$531,300
$7,235,500
$(5,834,989)
$(92,321)
$(2,740)
$1,836,750
75,000
$137,773
Total
Affiliated
Securities
...
$531,300
$7,235,500
$(5,834,989)
$(92,321)
$(2,740)
$1,836,750
$137,773
Franklin
Templeton
SMACS:
Series
I
Non-Controlled
Affiliates
Dividends
Franklin
Institutional
U.S.
Government
Money
Market
Fund,
3.629%
............
$2,921,629
$418,072,958
$(414,097,310)
$-
$-
$6,897,277
6,897,277
$312,195
Total
Affiliated
Securities
...
$2,921,629
$418,072,958
$(414,097,310)
$-
$-
$6,897,277
$312,195
3.
Transactions
with
Affiliates
(continued)
d.
Investments
in
Affiliated
Management
Investment
Companies
(continued)
Franklin
Strategic
Series
Notes
to
Financial
Statements
45
franklintempleton.com
Annual
Report
4.
Income
Taxes
For
tax
purposes,
capital
losses
may
be
carried
over
to
offset
future
capital
gains.
At
August
31,
2026,
the
capital
loss
carryforwards
were
as
follows:
During
the
year
ended August
31,
2026,
the
utilized
capital
loss
carryforwards
were
as
follows:
The
tax
character
of
distributions
paid
during
the
years
ended
August
31,
2026
and
2025,
was
as
follows:
Franklin
Templeton
SMACS:
Series
CH
Franklin
Templeton
SMACS:
Series
H
Purchases
................................................................
$7,460,000
$15,000,000
Sales
....................................................................
$8,035,000
$18,265,000
Net
Realized
Gains
(Losses)
...................................................
-
-
Franklin
Templeton
SMACS:
Series
CH
Franklin
Templeton
SMACS:
Series
H
Franklin
Templeton
SMACS:
Series
I
1
1
1
1
Capital
loss
carryforwards
not
subject
to
expiration:
Short
term
..............................................
$
118,701
$
187,438
$
2,140,538
Long
term
..............................................
240,629
211,864
2,941,217
Total
capital
loss
carryforwards
.............................
$359,330
$399,302
$5,081,755
Franklin
Templeton
SMACS:
Series
E
Capital
loss
utilized
carryforwards
................................................................
$2,296,983
Franklin
Templeton
SMACS:
Series
CH
Franklin
Templeton
SMACS:
Series
E
2026
2025
2026
2025
Distributions
paid
from:
Ordinary
income
........................
$253,799
$53,936
$37,195,273
$19,727,030
Tax
exempt
income
......................
1,669,017
1,413,442
-
-
$1,922,816
$1,467,378
$37,195,273
$19,727,030
Franklin
Templeton
SMACS:
Series
H
Franklin
Templeton
SMACS:
Series
I
2026
2025
2026
2025
Distributions
paid
from:
Ordinary
income
........................
$77,779
$46,839
$60,704,461
$38,285,671
Tax
exempt
income
......................
2,035,309
998,252
-
-
3.
Transactions
with
Affiliates
(continued)
f.
Interfund
Transactions
(continued)
Franklin
Strategic
Series
Notes
to
Financial
Statements
46
franklintempleton.com
Annual
Report
At
August
31,
2026,
the
cost
of
investments,
net
unrealized
appreciation
(depreciation)
,
undistributed
tax
exempt
income,
undistributed
ordinary
income
and
undistributed
long
term
capital
gains
for
income
tax
purposes
were
as
follows:
Differences
between
income
and/or
capital
gains
as
determined
on
a
book
basis
and
a
tax
basis
are
primarily
due
to
differing
treatments
of
wash
sales,
bond
discounts
and
premiums,
equity-linked
securities
and
perpetual
bonds.
Franklin
Templeton
SMACS:
Series
E
utilized
a
tax
accounting
practice
to
treat
a
portion
of
the
proceeds
from
capital
shares
redeemed
as
a
distribution
from realized
capital
gains.
5.
Investment
Transactions
Purchases
and
sales
of
investments
and
ETFs
(excluding
short
term
securities)
for
the
year
ended
August
31,
2026,
were
as
follows:
6.
Credit
Risk
At
August
31,
2026, certain
or
all
Funds had a
portion of their
portfolio
invested
in
high
yield
or
other
securities
rated
below
investment
grade
as
determined
by
Nationally
Recognized
Statistical
Credit
Ratings
Organizations
and/or
internally,
by
investment
management
and
unrated
securities.
These
securities
may
be
more
sensitive
to
economic
conditions
causing
greater
price
volatility
and
are
potentially
subject
to
a
greater
risk
of
loss
due
to
default
than
higher
rated
securities.
Franklin
Templeton
SMACS:
Series
H
Franklin
Templeton
SMACS:
Series
I
2026
2025
2026
2025
Return
of
capital
.........................
-
-
333,379
-
$2,113,088
$1,045,091
$61,037,840
$38,285,671
Franklin
Templeton
SMACS:
Series
CH
Franklin
Templeton
SMACS:
Series
E
Franklin
Templeton
SMACS:
Series
H
Franklin
Templeton
SMACS:
Series
I
a
a
a
a
a
Cost
of
investments
.......................
$38,460,421
$589,763,849
$47,492,011
$956,470,587
Unrealized
appreciation
.....................
$866,615
$111,393,201
$540,212
$23,905,746
Unrealized
depreciation
.....................
(945,162)
(7,516,700)
(888,847)
(10,001,028)
Net
unrealized
appreciation
(depreciation)
.......
$(78,547)
$103,876,501
$(348,635)
$13,904,718
Distributable
earnings:
Undistributed
ordinary
income
................
$-
$184,434
$-
$-
Undistributed
tax
exempt
income
..............
346,254
-
201,304
-
Undistributed
long
term
capital
gains
...........
-
1,007,349
-
-
Total
distributable
earnings
..................
$346,254
$1,191,783
$201,304
$-
Franklin
Templeton
SMACS:
Series
CH
Franklin
Templeton
SMACS:
Series
E
Franklin
Templeton
SMACS:
Series
H
Franklin
Templeton
SMACS:
Series
I
Purchases
..............................
$14,811,101
$908,658,418
$29,035,877
$618,856,644
Sales
..................................
$4,311,344
$696,119,921
$8,962,173
$257,302,641
4.
Income
Taxes
(continued)
Franklin
Strategic
Series
Notes
to
Financial
Statements
47
franklintempleton.com
Annual
Report
7.
Concentration
of
Risk
Franklin
Templeton
SMACS:
Series
CH
invests
a
large
percentage
of
its total
assets
in
obligations
of
issuers
within California
and
U.S.
territories.
Such
concentration
may
subject
the
Fund
to
risks
associated
with
industrial
or
regional
matters,
and
economic,
political
or
legal
developments
occurring
within California
and
U.S.
territories. Investments
in
these
securities
are
sensitive
to
interest
rate
changes
and
credit
risk
of
the
issuer
and
may
subject
the
Fund
to
increased
market
volatility.
The
market
for
these
investments
may
be
limited,
which
may
make
them
difficult
to
buy
or
sell.
8.
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
August
31,
2026,
investments
in
restricted
securities,
excluding
securities
exempt
from
registration
under
the
1933
Act,
were
as
follows:
9.
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
$2.995
billion
(Global
Credit
Facility)
which
matures
on
January
29,
2027.
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
may,
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
Franklin
Templeton
SMACS:
Series
CH
Franklin
Templeton
SMACS:
Series
H
Franklin
Templeton
SMACS:
Series
I
Credit
risk
.....................................................
53.2%
44.2%
76.9%
Shares
Issuer
Acquisition
Date
Cost
Value
Franklin
Templeton
SMACS:
Series
E
900
QXO,
Inc.,
C
...............................
3/23/26
-
6/25/26
$
9,000,396
$
9,233,083
Total
Restricted
Securities
(Value
is
1.3%
of
Net
Assets)
...............
$9,000,396
$9,233,083
Principal
Amount
*
Issuer
Acquisition
Date
Cost
Value
Franklin
Templeton
SMACS:
Series
I
3,808,177
BX
Frontier
Member
II
LLC,
6.1%,
12/31/60
........
3/17/26
$
3,808,177
$
3,912,302
Total
Restricted
Securities
(Value
is
0.4%
of
Net
Assets)
...............
$3,808,177
$3,912,302
*
In
U.S.
dollars
unless
otherwise
indicated.
6.
Credit
Risk
(continued)
Franklin
Strategic
Series
Notes
to
Financial
Statements
48
franklintempleton.com
Annual
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
year ended
August
31,
2026,
the
Funds
did
not
use
the
Global
Credit
Facility.
10.
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
August
31,
2026,
in
valuing
the
Funds' assets
carried
at
fair
value,
is
as
follows:
Level
1
Level
2
Level
3
Total
Franklin
Templeton
SMACS:
Series
CH
Assets:
Investments
in
Securities:
a
Warrants
...............................
$
-
$
-
$
-
b
$
-
Corporate
Bonds
........................
-
247,358
-
247,358
Municipal
Bonds
:
Arizona
..............................
-
523,192
-
523,192
California
.............................
-
36,017,446
594,489
36,611,935
U.S.
Territories
Puerto
Rico
...........................
-
99,389
-
99,389
Short
Term
Investments
...................
-
900,000
-
900,000
Total
Investments
in
Securities
...........
$-
$37,787,385
$594,489
$38,381,874
Franklin
Templeton
SMACS:
Series
E
Assets:
Investments
in
Securities:
a
Common
Stocks
:
Aerospace
&
Defense
...................
13,910,700
-
-
13,910,700
Banks
...............................
15,369,410
-
-
15,369,410
Beverages
...........................
11,083,750
-
-
11,083,750
Biotechnology
.........................
6,410,500
-
-
6,410,500
Broadline
Retail
.......................
9,158,451
-
-
9,158,451
Capital
Markets
........................
9,244,880
-
-
9,244,880
Diversified
Telecommunication
Services
.....
7,002,800
-
-
7,002,800
Electric
Utilities
........................
3,027,600
-
-
3,027,600
Energy
Equipment
&
Services
.............
9,015,000
-
-
9,015,000
Food
Products
........................
-
5,836,467
-
5,836,467
Ground
Transportation
..................
5,141,850
-
-
5,141,850
Health
Care
Equipment
&
Supplies
.........
22,662,500
-
-
22,662,500
Health
Care
Providers
&
Services
..........
16,726,596
-
-
16,726,596
Hotels,
Restaurants
&
Leisure
.............
10,638,045
-
-
10,638,045
Household
Products
....................
2,902,400
-
-
2,902,400
9.
Credit
Facility
(continued)
Franklin
Strategic
Series
Notes
to
Financial
Statements
49
franklintempleton.com
Annual
Report
Level
1
Level
2
Level
3
Total
Franklin
Templeton
SMACS:
Series
E
(continued)
Assets:
(continued)
Investments
in
Securities:
a
(continued)
Common
Stocks:
(continued)
Machinery
............................
$
4,784,820
$
-
$
-
$
4,784,820
Metals
&
Mining
.......................
7,574,000
-
-
7,574,000
Oil,
Gas
&
Consumable
Fuels
.............
11,480,300
20,617,301
-
32,097,601
Pharmaceuticals
.......................
6,740,101
-
-
6,740,101
Semiconductors
&
Semiconductor
Equipment
.
15,084,168
-
-
15,084,168
Specialty
Retail
........................
6,556,600
-
-
6,556,600
Tobacco
.............................
12,642,750
-
-
12,642,750
Equity-Linked
Securities
...................
-
355,214,181
-
355,214,181
Convertible
Preferred
Stocks
:
Aerospace
&
Defense
...................
16,210,000
-
-
16,210,000
Capital
Markets
........................
37,728,700
-
-
37,728,700
Chemicals
...........................
12,332,250
-
-
12,332,250
Electric
Utilities
........................
17,314,500
-
-
17,314,500
Software
.............................
7,002,000
-
-
7,002,000
Trading
Companies
&
Distributors
..........
-
-
9,233,083
9,233,083
Short
Term
Investments
...................
4,994,647
-
-
4,994,647
Total
Investments
in
Securities
...........
$302,739,318
$381,667,949
c
$9,233,083
$693,640,350
Franklin
Templeton
SMACS:
Series
H
Assets:
Investments
in
Securities:
a
Management
Investment
Companies
.........
1,836,750
-
-
1,836,750
Warrants
...............................
-
-
-
b
-
Corporate
Bonds
........................
-
247,357
-
247,357
Municipal
Bonds
.........................
-
45,059,269
-
45,059,269
Total
Investments
in
Securities
...........
$1,836,750
$45,306,626
$-
$47,143,376
Franklin
Templeton
SMACS:
Series
I
Assets:
Investments
in
Securities:
a
Common
Stocks
.........................
2,787,300
-
-
2,787,300
Equity-Linked
Securities
...................
-
214,033
-
214,033
Corporate
Bonds
:
Aerospace
&
Defense
...................
-
16,575,871
-
16,575,871
Automobile
Components
.................
-
5,881,350
-
5,881,350
Automobiles
..........................
-
2,045,136
-
2,045,136
Banks
...............................
-
7,567,298
-
7,567,298
Biotechnology
.........................
-
4,095,241
-
4,095,241
Building
Products
......................
-
5,080,986
-
5,080,986
Capital
Markets
........................
-
10,241,387
-
10,241,387
Chemicals
...........................
-
44,488,680
-
44,488,680
Commercial
Services
&
Supplies
...........
-
2,606,769
3,912,302
6,519,071
Consumer
Finance
.....................
-
3,393,213
-
3,393,213
Containers
&
Packaging
.................
-
47,314,015
-
47,314,015
Diversified
REITs
......................
-
48,846
-
48,846
Diversified
Telecommunication
Services
.....
-
71,095,969
-
71,095,969
Electric
Utilities
........................
-
44,594,274
-
44,594,274
Electrical
Equipment
....................
-
50,869
-
50,869
Energy
Equipment
&
Services
.............
-
7,084,538
-
7,084,538
Entertainment
.........................
-
101,686
-
101,686
Food
Products
........................
-
2,069,986
-
2,069,986
Ground
Transportation
..................
-
203,532
-
203,532
Health
Care
Equipment
&
Supplies
.........
-
4,974,265
-
4,974,265
Health
Care
Providers
&
Services
..........
-
159,892,348
-
159,892,348
10.
Fair
Value
Measurements
(continued)
Franklin
Strategic
Series
Notes
to
Financial
Statements
50
franklintempleton.com
Annual
Report
A
reconciliation
in
which
Level
3
inputs
are
used
in
determining
fair
value
is
presented
when
there
are
significant
Level
3
assets
and/or
liabilities
at
the
beginning
and/or
end
of
the year.
At
August
31,
2026,
the
reconciliation
is
as
follows:
Level
1
Level
2
Level
3
Total
Franklin
Templeton
SMACS:
Series
I
(continued)
Assets:
(continued)
Investments
in
Securities:
a
(continued)
Corporate
Bonds:
(continued)
Hotels,
Restaurants
&
Leisure
.............
$
-
$
65,678,515
$
-
$
65,678,515
Household
Durables
....................
-
17,054,420
-
17,054,420
Independent
Power
and
Renewable
Electricity
Producers
..........................
-
26,934,185
-
26,934,185
Insurance
............................
-
14,010,078
-
14,010,078
IT
Services
...........................
-
5,448,192
-
5,448,192
Media
...............................
-
16,682,095
-
16,682,095
Metals
&
Mining
.......................
-
30,354,956
-
30,354,956
Oil,
Gas
&
Consumable
Fuels
.............
-
82,028,728
-
82,028,728
Passenger
Airlines
.....................
-
8,633,561
-
8,633,561
Personal
Care
Products
.................
-
3,030,255
-
3,030,255
Pharmaceuticals
.......................
-
31,845,822
-
31,845,822
Semiconductors
&
Semiconductor
Equipment
.
-
2,500,109
-
2,500,109
Software
.............................
-
21,785,989
-
21,785,989
Specialized
REITs
......................
-
2,584,074
-
2,584,074
Specialty
Retail
........................
-
59,252
-
59,252
Technology
Hardware,
Storage
&
Peripherals
.
-
128,319
-
128,319
Textiles,
Apparel
&
Luxury
Goods
..........
-
14,148,784
-
14,148,784
Tobacco
.............................
-
52,886
-
52,886
Trading
Companies
&
Distributors
..........
-
14,612,173
-
14,612,173
Senior
Floating
Rate
Interests
...............
-
26,474,945
6,947,500
33,422,445
Mortgage-Backed
Securities
................
-
126,163,296
-
126,163,296
Short
Term
Investments
...................
6,897,277
-
-
6,897,277
Total
Investments
in
Securities
...........
$9,684,577
$949,830,926
$10,859,802
$970,375,305
a
For
detailed
categories,
see
the
accompanying
Schedule
of
Investments.
b
Includes
financial
instruments
determined
to
have
no
value.
c
Includes
foreign
securities
valued
at
$26,453,768,
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.
Balance
at
Beginning
of
Year
Purchases
a
Sales
b
Transfer
Into
Level
3
Transfer
Out
of
Level
3
Net
Accretion
(Amortiza-
tion)
Net
Realized
Gain
(Loss)
Net
Unr
ealized
Appreciation
(Depreciation)
Balance
at
End
of
Year
Net
Change
in
Unrealized
Appreciation
(Depreciation)
on
Assets
Held
at
Year
End
a
a
a
a
a
a
a
a
a
a
a
Franklin
Templeton
SMACS:
Series
CH
Assets:
Investments
in
Securities:
Warrants
:
United
States
.
$
-
$
-
c
$
-
$
-
$
-
$
-
$
-
$
-
$
-
c
$
-
Municipal
Bonds
:
United
States
.
603,985
-
-
-
-
-
-
(9,496)
594,489
(9,496)
Total
Investments
in
Securities
.......
$603,985
$-
$-
$-
$-
$-
$-
$(9,496)
$594,489
$(9,496)
10.
Fair
Value
Measurements
(continued)
Franklin
Strategic
Series
Notes
to
Financial
Statements
51
franklintempleton.com
Annual
Report
Significant
unobservable
valuation
inputs
for
material
Level
3 assets
and/or
liabilities and
impact
to
fair
value
as
a
result
of
changes
in
unobservable
valuation
inputs
as
of
August
31,
2026,
are
as
follows:
Balance
at
Beginning
of
Year
Purchases
a
Sales
b
Transfer
Into
Level
3
Transfer
Out
of
Level
3
Net
Accretion
(Amortiza-
tion)
Net
Realized
Gain
(Loss)
Net
Unr
ealized
Appreciatio
n
(
Depreciation
)
Balance
at
End
of
Year
Net
Change
in
Unrealized
Appreciation
(Depreciation)
on
Assets
Held
at
Year
End
a
a
a
a
a
a
a
a
a
a
a
Franklin
Templeton
SMACS:
Series
E
Assets:
Investments
in
Securities:
Convertible
Preferred
Stocks
:
Trading
Companies
&
Distributors
......
$
-
$
9,000,396
$
-
$
-
$
-
$
-
$
-
$
232,687
$
9,233,083
$
232,687
Total
Investments
in
Securities
............
$-
$9,000,396
$-
$-
$-
$-
$-
$232,687
$9,233,083
$232,687
Franklin
Templeton
SMACS:
Series
I
Assets:
Investments
in
Securities:
Common
Stocks
:
Pharmaceuticals
....
117,208
52
(103,456)
-
-
-
(
50)
(13,754)
-
-
Corporate
Bonds
:
Commercial
Services
&
Supplies
........
-
3,808,177
-
-
-
-
-
104,125
3,912,302
104,125
Senior
Floating
Rate
Interests
:
Health
Care
Equipment
&
Supplies
.......
-
6,930,000
-
-
-
2,704
-
14,796
6,947,500
14,796
Escrows
and
Litigation
Trusts
:
-
c
-
(607)
-
-
-
607
-
-
-
Total
Investments
in
Securities
............
$117,208
$10,738,229
$(104,063)
$-
$-
$2,704
$557
$105,167
$10,859,802
$118,921
a
Purchases
include
all
purchases
of
securities
and
securities
received
in
corporate
actions.
b
Sales
include
all
sales
of
securities,
maturities,
paydowns
and
securities
tendered
in
corporate
actions.
c
Includes
financial
instruments
determined
to
have
no
value.
Description
Fair
Value
at
End
of
Year
Valuation
Technique
Unobservable
Inputs
Amount
Impact
to
Fair
Value
if
Input
Increases
a
Franklin
Templeton
SMACS:
Series
CH
Assets:
Investments
in
Securities:
Municipal
Bonds
California
.....................
$594,489
Discounted
cash
flow
Discount
rate
8.5%
Decrease
All
Other
Investments
.............
-
b
Total
$594,489
10.
Fair
Value
Measurements
(continued)
Franklin
Strategic
Series
Notes
to
Financial
Statements
52
franklintempleton.com
Annual
Report
Level
3
financial
instruments,
for
Franklin
Templeton
SMACS:
Series
I
include
the
fair
value
of
assets
and/or
liabilities
derived
from
recent
transactions,
private
transaction
prices,
or
non-public
third-party
pricing
information
that
is
unobservable.
11.
Operating
Segments
Each
Fund
operates
as
a
single
operating
segment,
which
is
an
investment
portfolio.
The portfolio
managers
assigned
to
the
Fund
within the
Funds'
investment
manager
serve
as
the
Chief
Operating
Decision
Maker
("CODM")
and are
responsible
for
evaluating each
Fund's
operating
results
and
allocating
resources
in
accordance
with each
Fund's
investment
strategy.
Internal
reporting
provided
to
the
CODM
aligns
with
the
accounting
policies
and
measurement
principles
used
in
the
financial
statements.
For
information
regarding
segment
assets,
segment
profit
or
loss,
and
significant
expenses,
refer
to
the
Statements
of
Assets
and
Liabilities
and
the
Statements
of
Operations,
along
with
the
related
notes
to
the
financial
statements.
The
Schedules
of
Investments
provide
details
of
the
Funds'
investments
that
generate
returns
such
as
interest,
dividends,
and
realized
and
unrealized
gains
or
losses.
Performance
metrics,
including
portfolio
turnover
and
expense
ratios,
are
disclosed
in
the
Financial
Highlights.
12.
New
Accounting
Pronouncements
In
September
2026,
the
FASB
issued
Accounting
Standards
Update
(ASU)
No.
2026-03,
Fair
Value
Measurement
(Topic
820)-Investment
Companies
with
Equity
Securities
Subject
to
Contractual
Sale
Restrictions.
The
amendments
in
the
ASU
require
contractual
sale
restrictions
to
be
considered
in
measuring
the
fair
value
of
equity
securities
and
require
disclosure
of
the
amount
of
the
discount
attributable
to
the
contractual
sale
restriction.
The
ASU
is
effective
for
interim
and
annual
reporting
periods
beginning
after
December
15,
2027,
with
early
adoption
permitted.
Management
is
currently
evaluating
the
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.
Description
Fair
Value
at
End
of
Year
Valuation
Technique
Unobservable
Inputs
Amount
Impact
to
Fair
Value
if
Input
Increases
a
Franklin
Templeton
SMACS:
Series
E
Assets:
Investments
in
Securities:
Convertible
Preferred
Stocks:
Trading
Companies
&
Distributors
$9,233,083
Warrant
pricing
model
Discount
for
lack
of
marketability
10.5%
Decrease
Expected
term
0.6
years
Increase
Total
$9,233,083
a
Represents
the
directional
change
in
the
fair
value
of
the
Level
3
financial
instruments
that
would
result
from
a
significant
and
reasonable
increase
in
the
corresponding
input.
A
significant
and
reasonable
decrease
in
the
input
would
have
the
opposite
effect.
Significant
increases
and
decreases
in
these
inputs
in
isolation
could
result
in
significantly
higher
or
lower
fair
value
measurements.
b
Includes
financial
instruments
determined
to
have
no
value.
10.
Fair
Value
Measurements
(continued)
Franklin
Strategic
Series
Notes
to
Financial
Statements
53
franklintempleton.com
Annual
Report
Abbreviations
Selected
Portfolio
AG
Assured
Guaranty,
Inc.
BAM
Build
America
Mutual
Assurance
Co.
CME
Chicago
Mercantile
Exchange
ETF
Exchange-Traded
Fund
FHLMC
Federal
Home
Loan
Mortgage
Corp.
FNMA
Federal
National
Mortgage
Association
FRN
Floating
Rate
Note
GNMA
Government
National
Mortgage
Association
GO
General
Obligation
LOC
Letter
of
Credit
PIK
Payment-In-Kind
REIT
Real
Estate
Investment
Trust
SOFR
Secured
Overnight
Financing
Rate
Franklin
Strategic
Series
Report
of
Independent
Registered
Public
Accounting
Firm
54
franklintempleton.com
Annual
Report
To
the
Board
of
Trustees
of
Franklin
Strategic
Series
and
Shareholders
of
Franklin
Templeton
SMACS:
Series
CH,
Franklin
Templeton
SMACS:
Series
E,
Franklin
Templeton
SMACS:
Series
H
and
Franklin
Templeton
SMACS:
Series
I
Opinions
on
the
Financial
Statements
We
have
audited
the
accompanying
statements
of
assets
and
liabilities,
including
the
schedules
of
investments,
of
Franklin
Templeton
SMACS:
Series
CH,
Franklin
Templeton
SMACS:
Series
E,
Franklin
Templeton
SMACS:
Series
H
and
Franklin
Templeton
SMACS:
Series
I
(four
of
the
funds
constituting
Franklin
Strategic
Series,
hereafter
collectively
referred
to
as
the
"Funds")
as
of
August
31,
2026,
the
related
statements
of
operations
for
the
year
ended
August
31,
2026,
the
statements
of
changes
in
net
assets
for
each
of
the
two
years
in
the
period
ended
August
31,
2026,
including
the
related
notes,
and
the
financial
highlights
for
each
of
the
five
years
in
the
period
ended
August
31,
2026
(collectively
referred
to
as
the
"financial
statements").
In
our
opinion,
the
financial
statements
present
fairly,
in
all
material
respects,
the
financial
position
of
each
of
the
Funds
as
of
August
31,
2026,
the
results
of
each
of
their
operations
for
the
year
then
ended,
the
changes
in
each
of
their
net
assets
for
each
of
the
two
years
in
the
period
ended
August
31,
2026
and
each
of
the
financial
highlights
for
each
of
the
five
years
in
the
period
ended
August
31,
2026
in
conformity
with
accounting
principles
generally
accepted
in
the
United
States
of
America.
Basis
for
Opinions
These
financial
statements
are
the
responsibility
of
the
Funds'
management.
Our
responsibility
is
to
express
an
opinion
on
the
Funds'
financial
statements
based
on
our
audits.
We
are
a
public
accounting
firm
registered
with
the
Public
Company
Accounting
Oversight
Board
(United
States)
(PCAOB)
and
are
required
to
be
independent
with
respect
to
the
Funds
in
accordance
with
the
U.S.
federal
securities
laws
and
the
applicable
rules
and
regulations
of
the
Securities
and
Exchange
Commission
and
the
PCAOB.
We
conducted
our
audits
of
these
financial
statements
in
accordance
with
the
standards
of
the
PCAOB.
Those
standards
require
that
we
plan
and
perform
the
audit
to
obtain
reasonable
assurance
about
whether
the
financial
statements
are
free
of
material
misstatement,
whether
due
to
error
or
fraud.
Our
audits
included
performing
procedures
to
assess
the
risks
of
material
misstatement
of
the
financial
statements,
whether
due
to
error
or
fraud,
and
performing
procedures
that
respond
to
those
risks.
Such
procedures
included
examining,
on
a
test
basis,
evidence
regarding
the
amounts
and
disclosures
in
the
financial
statements.
Our
audits
also
included
evaluating
the
accounting
principles
used
and
significant
estimates
made
by
management,
as
well
as
evaluating
the
overall
presentation
of
the
financial
statements.
Our
procedures
included
confirmation
of
securities
owned
as
of
August
31,
2026
by
correspondence
with
the
custodian,
private
placement
agents,
transfer
agent,
agent
banks
and
brokers;
when
replies
were
not
received
from
brokers
or
the
private
placement
agent,
we
performed
other
auditing
procedures.
We
believe
that
our
audits
provide
a
reasonable
basis
for
our
opinions.
/s/
PricewaterhouseCoopers
LLP
San
Francisco,
California
October
19,
2026
We
have
served
as
the
auditor
of
one
or
more
investment
companies
in
the
Franklin
Templeton
Group
of
Funds
since
1948.
Franklin
Strategic
Series
Tax
Information
(unaudited)
55
franklintempleton.com
Annual
Report
By
mid-February,
tax
information
related
to
a
shareholder's
proportionate
share
of
distributions
paid
during
the
preceding
calendar
year
will
be
received,
if
applicable.
Please
also
refer
to
www.franklintempleton.com
for
per
share
tax
information
related
to
any
distributions
paid
during
the
preceding
calendar
year.
Shareholders
are
advised
to
consult
with
their
tax
advisors
for
further
information
on
the
treatment
of
these
amounts
on
their
tax
returns.
The
following
tax
information
for
the
Funds
is
required
to
be
furnished
to
shareholders
with
respect
to
income
earned
and
distributions
paid
during their
fiscal
year.
The
Funds
below hereby
report
the
following
amounts,
or
if
subsequently
determined
to
be
different,
the
maximum
allowable
amounts,
for
the
fiscal
year
ended
August
31,
2026:
Note
(1)
-
The
Law
varies
in
each
state
as
to
whether
and
what
percentage
of
dividend
income
attributable
to
Federal
obligations
is
exempt
from
state
income
tax.
Shareholders
are
advised
to
consult
with
their
tax
advisors
to
determine
if
any
portion
of
the
dividends
received
is
exempt
from
state
income
taxes.
Pursuant
to:
Franklin
Templeton
SMACS:
Series
CH
Franklin
Templeton
SMACS:
Series
E
Long-Term
Capital
Gain
Dividends
Distributed
§852(b)(3)(C)
-
$1,242,191
Income
Eligible
for
Dividends
Received
Deduction
(DRD)
§854(b)(1)(A)
-
$6,305,200
Qualified
Dividend
Income
Earned
(QDI)
§854(b)(1)(B)
-
$8,068,527
Exempt-Interest
Dividends
Distributed
§852(b)(5)(A)
$1,669,017
-
Section
163(j)
Interest
Dividends
Earned
§163(j)
$63,887
$257,242
Pursuant
to:
Franklin
Templeton
SMACS:
Series
H
Franklin
Templeton
SMACS:
Series
I
Income
Eligible
for
Dividends
Received
Deduction
(DRD)
§854(b)(1)(A)
-
$50,400
Qualified
Dividend
Income
Earned
(QDI)
§854(b)(1)(B)
-
$50,400
Exempt-Interest
Dividends
Distributed
§852(b)(5)(A)
$2,035,309
-
Section
163(j)
Interest
Dividends
Earned
§163(j)
$77,779
$59,235,578
Interest
Earned
from
Federal
Obligations
Note
(1)
-
$7,304,069
Franklin
Strategic
Series
56
franklintempleton.com
Annual
Report
BOARD
APPROVAL
OF
INVESTMENT
MANAGEMENT
AGREEMENTS
(unaudited)
FRANKLIN
STRATEGIC
SERIES
Franklin
Templeton
SMACS:
Series
CH
Franklin
Templeton
SMACS:
Series
E
Franklin
Templeton
SMACS:
Series
H
Franklin
Templeton
SMACS:
Series
I
(each
a
Fund)
At
an
in-person
meeting
held
on
April
14,
2026
(Meeting),
the
Board
of
Trustees
(Board)
of
Franklin
Strategic
Series
(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
to
consider
the
renewal
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
continuance
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
virtual
contract
renewal
meeting
at
which
the
Independent
Trustees
first
conferred
amongst
themselves
and
Independent
Trustee
counsel
about
contract
renewal
matters,
and
then
met
with
management
to
request
additional
information
that
the
Independent
Trustees
also
considered
prior
to
and
at
the
Meeting.
The
Board
further
considered
all
of
the
factors
it
deemed
relevant
in
approving
the
continuance
of
each
Management
Changes
In
and
Disagreements
with
Accountants
For
the
period
covered
by
this
report
Not
applicable.
Results
of
Meeting(s)
of
Shareholders
For
the
period
covered
by
this
report
Not
applicable.
Remuneration
Paid
to
Directors,
Officers
and
Others
For
the
period
covered
by
this
report
Refer
to
the
financial
statements
included
herein.
Remuneration
to
officers
is
paid
by
the
Fund's
investment
manager
according
to
the
terms
of
the
agreement.
Board
Approval
of
Management
and
Subadvisory
Agreements
For
the
period
covered
by
this
report
Franklin
Strategic
Series
57
franklintempleton.com
Annual
Report
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,
through
the
exercise
of
its
business
judgment,
that
the
terms
of
the
Management
Agreement
are
fair
and
reasonable
and
that
the
continuance
of
the
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
the
information
it
received
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.
The
Board
acknowledged
FT's
regular
updates
to
the
Board
on
strategic
initiatives,
ongoing
attention
to
the
service
level
quality
of
third-party
service
providers,
ongoing
efforts
to
modernize
its
mutual
fund
lineup,
mutual
fund
to
ETF
conversions,
integration
of
private
market
investments
into
existing
mutual
funds,
creation
of
additional
blockchain-compatible
money
market
funds,
and
sharpening
of
its
active,
income-oriented
offerings,
along
with
the
impact
on
FT
of
team
integrations
and
staff
reductions.
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
the
Manager's
parent,
Franklin
Templeton,
Inc.
(FTI),
FTI's
continued
growth
of
its
global,
multi-asset
franchise,
and
its
commitment
to
the
mutual
fund
business.
The
Board
further
noted
FTI's
continued
reassessment
of
fund
offerings
in
response
to
FT
acquisitions
and
the
market
environment,
FTI's
focus
on
technology-driven
transformation,
expansion
of
its
private
market
investment
capabilities
and
global
alternatives
platform,
and
leveraging
of
artificial
intelligence
(AI),
blockchain
and
digital
wealth
platforms.
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.
They
specifically
noted
that
the
Funds
are
used
exclusively
for
separately
managed
accounts
advised
or
sub-advised
by
Franklin
Advisers,
Inc.
or
its
affiliates.
Fund
Performance
The
Board
reviewed
and
considered
the
performance
results
of
each
Fund
over
various
time
periods
ended
December
31,
2025.
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
Strategic
Series
58
franklintempleton.com
Annual
Report
Franklin
Templeton
SMACS:
Series
CH,
Franklin
Templeton
SMACS:
Series
E
and
Franklin
Templeton
SMACS:
Series
H
-
The
Performance
Universe
for
the
Franklin
Templeton
SMACS:
Series
CH
included
the
Fund
and
all
retail
and
institutional
California
municipal
debt
funds.
The
Performance
Universe
for
the
Franklin
Templeton
SMACS:
Series
E
included
the
Fund
and
all
retail
and
institutional
equity
income
funds.
The
Performance
Universe
for
the
Franklin
Templeton
SMACS:
Series
H
included
the
Fund
and
all
retail
and
institutional
high
yield
municipal
debt
funds.
The
Board
noted
that
the
Funds'
annualized
total
returns
for
the
one-,
three-
and
five-year
periods
were
above
the
medians
of
their
respective
Performance
Universes.
The
Board
concluded
that
each
Fund's
performance
was
satisfactory.
Franklin
Templeton
SMACS:
Series
I
-
The
Performance
Universe
for
the
Fund
included
the
Fund
and
all
retail
and
institutional
alternative
credit
focus
funds.
The
Board
noted
that
the
Fund's
annualized
total
return
for
the
one-
and
three-year
periods
was
above
the
median
and
in
the
first
quintile
(best)
of
its
Performance
Universe,
but
for
the
five-year
period
was
below
the
median
of
its
Performance
Universe.
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
considered
the
actual
total
expense
ratio
and,
separately,
the
actual
management
fee
rate
(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
or
semi-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
comparable
share
classes
for
Funds
with
multiple
classes
of
shares.
The
Board
received
a
description
of
the
methodology
used
by
Broadridge
to
select
the
mutual
funds
included
in
an
Expense
Group.
The
Expense
Group
for
the
Franklin
Templeton
SMACS:
Series
CH
included
the
Fund
and
nine
other
California
municipal
debt
funds.
The
Expense
Group
for
the
Franklin
Templeton
SMACS:
Series
E
included
the
Fund
and
nine
other
equity
income
funds.
The
Expense
Group
for
the
Franklin
Templeton
SMACS:
Series
H
included
the
Fund
and
five
other
high
yield
municipal
debt
funds.
The
Expense
Group
for
the
Franklin
Templeton
SMACS:
Series
I
included
the
Fund,
one
short
high
yield
fund
and
13
high
yield
funds.
The
Board
noted
that
the
actual
total
expense
ratios
for
the
Funds
were
below
the
medians
and
in
the
first
quintile
(least
expensive)
of
their
respective
Expense
Groups.
The
Board
also
noted
that
the
Manager
provides
general
investment
management
and
administrative
services
to
each
Fund
for
a
zero
management
fee.
The
Board
further
noted
that
each
Fund's
actual
total
expense
ratio
reflected
an
expense
cap
on
operating
expenses.
The
Board
also
noted
that
the
Manager
assumes
certain
expenses
incurred
by
each
Fund
(including
acquired
fund
fees
and
expenses,
but
excluding
certain
non-routine
expenses,
such
as
those
relating
to
litigation,
indemnification,
reorganizations
and
liquidations)
so
that
total
annual
fund
operating
expenses
do
not
exceed
0.00%.
The
Board
concluded
that
each
Fund's
zero
contractual
management
fee
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.
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
also
noted
that
an
independent
registered
public
accounting
firm
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.
Franklin
Strategic
Series
59
franklintempleton.com
Annual
Report
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
up-front
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,
and
in
light
of
the
fact
that
the
Manager
assumes
certain
expenses
to
ensure
that
the
Funds'
operating
expenses
remain
at
0.00%,
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.
In
connection
with
this
review,
the
Board
noted
that
because
each
Fund
pays
a
zero
management
fee,
the
consideration
of
possible
economies
of
scale
in
the
future
was
not
relevant.
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
continuance
of
each
Management
Agreement
for
an
additional
one-year
period.
FSS3-AFSOI
10/26
©
2026
Franklin
Templeton.
All
rights
reserved.
| ITEM 8. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS FOR OPEN-END MANAGEMENT INVESTMENT COMPANIES. |
The information is disclosed as part of the Financial Statements included in Item 7 of this Form N-CSR.
| ITEM 9. | PROXY DISCLOSURES FOR OPEN-END MANAGEMENT INVESTMENT COMPANIES. |
The information is disclosed as part of the Financial Statements included in Item 7 of this Form N-CSR.
| ITEM 10. | REMUNERATION PAID TO DIRECTORS, OFFICERS, AND OTHERS OF OPEN-END MANAGEMENT INVESTMENT COMPANIES. |
The information is disclosed as part of the Financial Statements included in Item 7 of this Form N-CSR.
| ITEM 11. | STATEMENT REGARDING BASIS FOR APPROVAL OF INVESTMENT ADVISORY CONTRACT. |
The information is disclosed as part of the Financial Statements included in Item 7 of this Form N-CSR, as applicable.
| ITEM 12. | DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
| ITEM 13. | PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
| ITEM 14. | PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. |
Not applicable.
| ITEM 15. | 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 16. | CONTROLS AND PROCEDURES. |
| (a) | The Registrants acknowledge the Staff's comment. In future filings on Form N-CSR, the certifications required by Rule 30a-2 and Item 19(a)(3) will include the designations "principal executive officer" and "principal financial officer" in the signature blocks, reflecting the capacity in which each signatory executes the certification, in conformity with the language of the Rule and Form N-CSR. The Registrants may also include each signatory's actual title with respect to the Funds alongside the required designation. |
| (b) | There were no changes in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the period covered by this report that have materially affected or are likely to materially affect the Registrant's internal control over financial reporting. |
| ITEM 17. | DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
| ITEM 18. | RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION. |
| (a) | Not applicable. |
| (b) | Not applicable. |
| ITEM 19. | EXHIBITS. |
(a) (1) Code of Ethics attached hereto.
Exhibit 99.CODE ETH
(a) (3) Certifications pursuant to section 302 of the Sarbanes-Oxley Act of 2002 attached hereto.
Exhibit 99.CERT
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 attached hereto.
Exhibit 99.906CERT
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, there unto duly authorized.
Franklin Strategic Series
| By: | /s/ Christopher Kings | |
| Christopher Kings | ||
| Chief Executive Officer - Finance and Administration | ||
| Date: | October 27, 2026 |
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/ Christopher Kings | |
| Christopher Kings | ||
| Chief Executive Officer - Finance and Administration | ||
| Date: | October 27, 2026 |
| By: | /s/ Jeffrey White | |
| Jeffrey White | ||
| Chief Financial Officer, Chief Accounting Officer and Treasurer | ||
| Date: | October 27, 2026 |
Franklin Strategic Series published this content on October 27, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on October 27, 2026 at 17:55 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]