UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-00537

Franklin Custodian Funds

(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, 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: 9/30

Date of reporting period: 9/30/22

Item 1.  Reports to Stockholders.

a.)

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

b.)

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

Not Applicable

.

ANNUAL

REPORT

AND

SHAREHOLDER

LETTER

Franklin

Custodian

Funds

September

30,

2022

Sign

up

for

electronic

delivery

at

franklintempleton.com/edelivery

Franklin

DynaTech

Fund

Franklin

Focused

Growth

Fund

Franklin

Growth

Fund

Franklin

Income

Fund

Franklin

U.S.

Government

Securities

Fund

Franklin

Utilities

Fund

Not

FDIC

Insured

May

Lose

Value

No

Bank

Guarantee

franklintempleton.com

Annual

Report

1

Shareholder

Letter

Dear

Shareholder:

U.S.

economic

performance

was

mixed

during

the

12

months

ended

September

30,

2022.

Gross

domestic

product

grew

in

2021’s

last

quarter

amid

an

ongoing

pandemic

recovery,

but

it

contracted

in

2022’s

first

half

due

to

declines

in

inventory

investment

and

federal

government

spending.

Consumer

spending

slowly

expanded,

helped

by

the

reopening

of

businesses,

widespread

vaccinations,

and

federal

assistance

programs.

Inflation

increased

during

the

12-month

period,

influenced

by

pandemic-related

supply-

chain

issues,

higher

energy

prices,

Russia’s

invasion

of

Ukraine

and

broader

price

pressures.

To

combat

high

inflation,

the

U.S.

Federal

Reserve

began

decreasing

its

monthly

asset

purchases

in

November

2021

and

ended

them

in

March

2022.

The

Federal

Reserve

also

raised

the

federal

funds

rate

by

0.25%

in

March,

0.50%

in

May,

and

0.75%

in

each

of

June,

July

and

September,

for

a

total

of

3.00%,

increasing

the

rate

from

0.25%

to

3.25%

during

the

period.

Additionally,

the

Federal

Reserve

stated

its

intention

to

continue

reducing

its

U.S.

Treasury,

government

agency

debt

and

agency

mortgage-backed

securities

holdings,

and

anticipated

future

federal

funds

rate

increases

would

be

appropriate.

The

10-year

U.S.

Treasury

yield

was

1.52%

on

September

30,

2021,

and

it

increased

to

3.83%

by

the

end

of

September

2022.

In

this

environment,

the

prices

of

U.S.

stocks,

as

measured

by

the

Standard

&

Poor’s

®

500

Index

(S&P

500

®

),

declined

16.76%,

(the

index

decreasing

from

4,307.54

to

3,585.62).

1,2

Reflecting

the

rise

in

interest

rates,

investment-

grade

bonds,

as

measured

by

the

Bloomberg

U.S.

Aggregate

Bond

Index

(Bloomberg

Index),

posted

a

-14.60%

total

return

(an

index

decrease

from

2,354.86

to

2,011.06),

which

includes

reinvestment

of

interest

income.

3

We

are

committed

to

our

long-term

perspective

and

disciplined

investment

approach

as

we

conduct

a

rigorous,

fundamental

analysis

of

securities

with

a

regular

emphasis

on

investment

risk

management.

We

believe

active,

professional

investment

management

serves

investors

well.

We

also

recognize

the

important

role

of

financial

professionals

in

today’s

markets

and

encourage

investors

to

continue

to

seek

their

advice.

Amid

changing

markets

and

economic

conditions,

we

are

confident

investors

with

a

well-diversified

portfolio

and

a

patient,

long-term

outlook

should

be

well

positioned

for

the

years

ahead.

Franklin

Custodian

Funds’

annual

report,

covering

Franklin

DynaTech

Fund,

Franklin

Focused

Growth

Fund,

Franklin

Growth

Fund,

Franklin

Income

Fund,

Franklin

U.S.

Government

Securities

Fund

and

Franklin

Utilities

Fund,

includes

more

detail

about

investment

decisions

during

the

period.

All

securities

markets

fluctuate

in

value,

as

do

mutual

fund

share

prices.

We

thank

you

for

investing

with

Franklin,

welcome

your

questions

and

comments,

and

look

forward

to

serving

your

future

investment

needs.

Sincerely,

Rupert

H.

Johnson,

Jr.

Chairman

Franklin

Custodian

Funds

This

letter

reflects

our

analysis

and

opinions

as

of

September

30,

2022,

unless

otherwise

indicated.

The

information

is

not

a

complete

analysis

of

every

aspect

of

any

market,

country,

industry,

security

or

fund.

Statements

of

fact

are

from

sources

considered

reliable.

1.

Source:

Copyright

©

2022,

S&P

Dow

Jones

Indices

LLC.

All

rights

reserved.

2.

Source:

Morningstar.

The

changes

in

index

prices

shown

for

the

S&P

500

do

not

include

reinvestments

of

income

and

distributions,

which

are

included

in

its

total

return,

which

was:

S&P

500

-15.47%

(index

total

return

resulting

in

a

decrease

from

8,994.83

to

7,603.14).

3.

Sources:

Morningstar

and

Bloomberg

indexes.

For

the

Bloomberg

Index,

only

total

return

as

shown

is

available,

not

price

change

without

the

inclusion

of

reinvested

income

and

distributions.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

franklintempleton.com

Annual

Report

2

Contents

Annual

Report

Economic

and

Market

Overview

3

Franklin

DynaTech

Fund

4

Franklin

Focused

Growth

Fund

12

Franklin

Growth

Fund

20

Franklin

Income

Fund

26

Franklin

U.S.

Government

Securities

Fund

34

Franklin

Utilities

Fund

40

Financial

Highlights

and

Schedules

of

Investments

47

Financial

Statements

118

Notes

to

Financial

Statements

128

Report

of

Independent

Registered

Public

Accounting

Firm

156

Tax

Information

157

Board

Members

and

Officers

158

Shareholder

Information

163

Visit

franklintempleton.com

for

fund

updates,

to

access

your

account,

or

to

find

helpful

financial

planning

tools.

3

franklintempleton.com

Annual

Report

ANNUAL

REPORT

Economic

and

Market

Overview

U.S.

equities,

as

measured

by

the

Standard

&

Poor’s

®

500

Index,

posted

a

-15.47%

total

return

for

the

12

months

ended

September

30,

2022.

1

High

inflation,

rising

interest

rates

and

geopolitical

instability

contributed

to

a

sharp

decline

in

equity

prices.

Although

consumer

spending

continued

to

rise,

deteriorating

financial

conditions

negatively

impacted

consumer

sentiment,

which

improved

slightly

at

the

end

of

the

period

after

falling

in

June

2022

to

the

lowest

level

in

over

60

years.

Elevated

inflation

was

a

major

concern

for

both

consumers

and

investors,

as

inflation

accelerated

in

June

2022

to

the

highest

rate

since

1981.

Continued

supply-chain

disruptions,

strong

consumer

demand,

and

volatile

energy

prices

drove

inflation

higher.

Russia’s

invasion

of

Ukraine

also

disrupted

financial

markets

and

led

to

a

rise

in

oil

and

commodity

prices,

although

much

of

that

increase

abated

by

period-

end.

The

U.S.

unemployment

rate

declined

from

4.7%

in

September

2021

to

3.5%

in

September

2022

as

notable

employment

gains

occurred

in

the

leisure

and

hospitality

and

health

care

sectors.

Wages

climbed

at

the

fastest

rate

in

decades,

which

added

to

some

investors’

inflation

concerns.

Following

a

robust

expansion

in

2021,

U.S.

gross

domestic

product

contracted

in

the

first

half

of

2022,

despite

continued

job

growth.

An

inventory

drawdown,

declining

residential

and

business

investment

and

lower

levels

of

government

spending

contributed

to

the

economic

slowdown.

Rising

interest

rates

translated

to

higher

borrowing

costs

for

individuals

and

businesses,

which

dampened

economic

activity.

Mortgage

rates

reached

the

highest

level

since

2007,

and

new

home

construction

slowed

toward

period-end.

In

an

effort

to

control

inflation,

the

U.S.

Federal

Reserve

(Fed)

began

to

raise

the

federal

funds

target

rate

in

March

2022,

the

first

such

increase

since

2018.

The

Fed

raised

the

federal

funds

rate

again

at

each

of

its

four

subsequent

meetings

to

end

the

period

at

a

range

of

3.00%–3.25%.

The

Fed

noted

in

its

September

2022

meeting

that

inflation

remained

elevated

amid

robust

job

growth

and

low

unemployment.

Furthermore,

the

Fed

said

it

would

continue

to

reduce

its

bond

holdings,

and

Fed

Chair

Jerome

Powell

indicated

that

reducing

inflation

was

likely

to

require

a

period

of

below-trend

growth.

The

foregoing

information

reflects

our

analysis

and

opinions

as

of

September

30,

2022.

The

information

is

not

a

complete

analysis

of

every

aspect

of

any

market,

country,

industry,

security

or

fund.

Statements

of

fact

are

from

sources

considered

reliable.

1.

Source:

Morningstar.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

4

franklintempleton.com

Annual

Report

Franklin

DynaTech

Fund

This

annual

report

for

Franklin

DynaTech

Fund

covers

the

fiscal

year

ended

September

30,

2022.

Your

Fund’s

Goal

and

Main

Investments

The

Fund

seeks

capital

appreciation

by

investing

primarily

in

equity

securities

of

companies

that

emphasize

innovation

and

new

technologies,

have

superior

management

and

that

benefit

from

new

industry

conditions

in

the

dynamically

changing

global

economy.

Performance

Overview

The

Fund’s

Class

A

shares

posted

a

-40.15%

cumulative

total

return

for

the

12

months

under

review.

In

comparison,

the

Russell

1000

®

Growth

Index,

which

is

market

capitalization

weighted

and

measures

performance

of

those

Russell

1000

®

Index

companies

with

relatively

higher

price-

to-book

ratios

and

higher

forecasted

growth

rates,

posted

a

cumulative

total

return

of

-22.59%.

1

Also

for

comparison,

the

broad

U.S.

stock

market,

as

measured

by

the

Standard

&

Poor’s

500

Index

(S&P

500),

posted

a

-15.47%

cumulative

total

return.

1

You

can

find

the

Fund’s

long-term

performance

data

in

the

Performance

Summary

beginning

on

page

8

.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

For

most

recent

month-end

performance,

go

to

franklintempleton.com

or

call

(800)

342-5236.

Investment

Strategy

We

use

fundamental,

bottom-up

research

to

seek

companies

meeting

our

criteria

of

growth

potential,

quality

and

valuation.

In

seeking

sustainable

growth

characteristics,

we

look

for

companies

we

believe

can

produce

sustainable

earnings

and

cash

flow

growth,

evaluating

the

long-term

market

opportunity

and

competitive

structure

of

an

industry

to

target

leaders

and

emerging

leaders.

We

define

quality

companies

as

those

with

strong

and

improving

competitive

positions

in

attractive

markets.

We

also

believe

important

attributes

of

quality

are

experienced

and

talented

management

teams

as

well

as

financial

strength

reflected

in

the

capital

structure,

gross

and

operating

margins,

free

cash

flow

generation

and

returns

on

capital

employed.

Our

valuation

analysis

includes

a

range

of

potential

outcomes

based

on

an

assessment

of

multiple

scenarios.

In

assessing

value,

we

consider

whether

security

prices

fully

reflect

the

balance

of

the

sustainable

growth

opportunities

relative

to

business

and

financial

risks.

Manager’s

Discussion

During

the

period

under

review,

the

Fund’s

prolonged

stretch

of

gains

reversed

into

significant

and

widespread

losses,

with

most

of

the

selling

occurring

from

November

2021

through

September

2022

(while

October

2021,

and

both

March

and

July

2022

were

the

Fund’s

only

positive

months).

In

general,

many

investors

expressed

their

valuation

concerns

by

divesting

innovative

and

high-tech

companies

that

held

the

potential

to

disrupt

lots

of

businesses

in

the

future

but

offered

little

or

no

earnings

in

the

present.

The

Fund

was

broadly

undermined

by

an

investment

style

rotation

in

the

equity

market

as

U.S.

and

global

growth

stocks,

whose

valuations

were

negatively

impacted

by

sharply

rising

interest

rates,

declined

substantially

more

than

their

value-oriented

counterparts

across

all

market

capitalizations.

Portfolio

Composition

9/30/22

%

of

Total

Net

Assets

Software

28.4%

Semiconductors

&

Semiconductor

Equipment

11.5%

Life

Sciences

Tools

&

Services

8.5%

IT

Services

7.9%

Internet

&

Direct

Marketing

Retail

7.8%

Health

Care

Equipment

&

Supplies

6.6%

Interactive

Media

&

Services

5.3%

Automobiles

4.2%

Capital

Markets

2.2%

Technology

Hardware,

Storage

&

Peripherals

1.9%

Pharmaceuticals

1.9%

Electric

Utilities

1.7%

Health

Care

Providers

&

Services

1.7%

Chemicals

1.6%

Other

7.7%

Short-Term

Investments

&

Other

Net

Assets

1.1%

1.

Source:

Morningstar.

Frank

Russell

Company

is

the

source

and

owner

of

the

trademarks,

service

marks

and

copyrights

related

to

the

Russell

Indexes.

Russell

®

is

a

trademark

of

Frank

Russell

Company.

The

indexes

are

unmanaged

and

include

reinvestment

of

any

income

or

distributions.

They

do

not

reflect

any

fees,

expenses

or

sales

charges.

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

The

dollar

value,

number

of

shares

or

principal

amount,

and

names

of

all

portfolio

holdings

are

listed

in

the

Fund’s

Schedule

of

Investments

(SOI).

The

SOI

begins

on

page

52

.

Franklin

DynaTech

Fund

5

franklintempleton.com

Annual

Report

Various

challenges

tested

innovative

companies

in

a

deteriorating

macroeconomic

environment.

A

combination

of

rising

interest

rates,

elevated

inflation

and

recession

fears

contributed

to

increased

equity

market

uncertainty

and

downside

volatility.

We

think

meaningful

resolution

of

this

uncertainty

has

been

deferred

beyond

September

of

2022.

However,

we

also

saw

increasing

clarity

around

which

companies

will

structurally

grow

faster

post-

pandemic.

In

particular,

the

information

technology

(IT)

and

communication

services

sectors

and

e-commerce

companies

in

the

consumer

discretionary

sector

have

sold

off

dramatically.

Immature

growth-focused

businesses,

whose

heavy

investing

led

to

negative

free

cash

flow,

have

seen

their

equity

valuation

multiples

compress

with

the

sharp

climb

in

the

cost

of

capital,

as

inflation

fears

caused

nominal

rates

to

rise.

In

our

view,

a

higher

cost

of

capital

can

serve

as

a

positive

longer-term

catalyst

because

it

encourages

companies

to

develop

resilience

and

restraint

from

not

being

overfunded.

We

believe

it

can

also

contribute

to

dwindling

competition

and

potentially

more

profitability

over

time

as

it

forces

rationality

into

the

marketplace.

We

view

this

as

a

healthy

part

of

the

economic

cycle.

History

has

shown

us

that

exogenous

shocks

can

accelerate

change

beyond

the

natural

organic

adoption

rate.

Two

such

exogenous

shocks

such

as

COVID-19

and

the

Russia-

Ukraine

war

appear

to

be

providing

catalysts

to

drive

the

adoption

of

new

technologies,

in

our

view.

We

saw

an

opportunity

for

the

war

to

accelerate

pre-existing

innovation

trends

in

agriculture,

renewable

energy,

cybersecurity

and

supply-chain

logistics,

to

name

a

few.

For

example,

within

agriculture

this

included

innovations

to

increase

crop

yields

which

included

gene-edited

seeds

that

are

herbicide

resistant

and

synthetic

biology-derived

crop

protection

products.

We

believe

technologies

and

advancements

accelerated

by

exogenous

shocks

often

become

permanent

and

pervasive

in

society,

thereby

displacing

legacy

processes

or

technologies.

The

pandemic

accelerated

many

of

the

trends

we

highlighted

in

2019

and

earlier,

and

we

expect

the

following

to

endure

beyond

2022

including

cashless

payments,

workplace

collaboration,

e-commerce

in

non-

traditional

areas

such

as

automobiles

and

health

care,

genetic

medicine,

bioprocessing,

and

digital

transformation/

cloud

infrastructure

adoption.

As

it

pertains

to

portfolio

performance,

all

11

of

the

Fund’s

sector

allocations

were

net

detractors

from

performance

in

absolute

terms

amid

the

market

environment

outlined

above,

with

most

of

the

overall

losses

occurring

in

the

IT,

health

care,

communication

services

and

consumer

discretionary

sectors;

when

combined,

these

holdings

comprised

a

predominant

portion

of

the

Fund’s

total

net

assets.

For

most

of

the

annual

period,

the

Fund’s

substantial

absolute

declines

in

the

IT

sector

(averaging

around

half

of

total

net

assets)

were

related

to

stock

multiples

compressing

with

higher

interest

rates.

However,

by

the

latter

half

of

the

period,

we

began

to

see

fundamental

weakness

in

consumer-oriented

hardware

such

as

personal

computers

(PCs),

electronics,

and

smartphones,

which

had

a

disproportionate

impact

on

NVIDIA,

ASML

Holding

and

most

of

our

other

holdings

in

the

semiconductor

industry.

In

particular,

graphics

chip

company

NVIDIA,

our

largest

position

in

the

semiconductors

and

semiconductor

equipment

industry,

lowered

its

forward

guidance

on

an

unexpected

decline

in

demand

for

graphics

chips

targeted

at

video

game

consoles

but

also

used

for

cryptocurrency

mining.

NVIDIA

joined

a

host

of

other

companies

that

curbed

their

prior

guidance

or

offered

an

outlook

for

the

remainder

of

2022

that

was

below

Wall

Street

estimates,

pointing

to

soft

sales

in

PCs,

smartphones

and

other

devices,

with

reduced

demand

in

some

cases

spreading

to

cloud

data

center,

automotive

and

industrial

customers.

We

continue

to

hold

NVIDIA

shares

for

an

expected

rebound

over

the

longer

term.

Once

mostly

a

graphics

chip

company,

NVIDIA

now

participates

in

nearly

every

disruptive

tech

trend

such

as

cloud

computing,

cryptocurrency

mining,

artificial

intelligence,

autonomous

cars,

and

even

the

metaverse,

which

has

recently

helped

its

revenues

to

grow

solidly.

E-commerce

companies

Amazon.com

and

MercadoLibre

were

a

primary

point

of

weakness

in

the

consumer

discretionary

sector.

IT

services

and

software

companies

Top

10

Holdings

9/30/22

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

Amazon.com,

Inc.

6.8%

Internet

&

Direct

Marketing

Retail,

United

States

Microsoft

Corp.

5.8%

Software,

United

States

Alphabet,

Inc.

4.6%

Interactive

Media

&

Services,

United

States

Tesla,

Inc.

4.2%

Automobiles,

United

States

Danaher

Corp.

3.1%

Life

Sciences

Tools

&

Services,

United

States

Thermo

Fisher

Scientific,

Inc.

3.0%

Life

Sciences

Tools

&

Services,

United

States

NVIDIA

Corp.

2.9%

Semiconductors

&

Semiconductor

Equipment,

United

States

Mastercard,

Inc.

2.9%

IT

Services,

United

States

ServiceNow,

Inc.

2.6%

Software,

United

States

Intuit,

Inc.

2.4%

Software,

United

States

Franklin

DynaTech

Fund

6

franklintempleton.com

Annual

Report

involved

in

advertising,

marketing,

customer

relations

and

payments

processing,

which

also

have

strong

ties

to

e-commerce

sales

and

business

activity,

generally

sold

off

as

the

robust

levels

of

consumer

spending

seen

in

2020

and

2021

were

perceived

as

decelerating

against

a

backdrop

of

negative

real

wage

growth,

including

key

detractors

Shopify,

Adyen,

Mastercard,

HubSpot

and

Salesforce,

all

of

which

began

to

see

more

difficult

year-over-year

comparisons

in

their

quarterly

financial

reports

over

the

period.

The

Fund’s

smaller

portion

of

communication

services

holdings,

which

also

had

been

greatly

reduced

during

the

12-month

period

under

review,

were

major

net

detractors

that

collectively

shed

more

than

half

of

their

equity

value.

The

declines

were

most

severe

in

the

entertainment

industry

where

Sea,

a

Singapore-based

consumer

internet

company

was

the

largest

detractor,

having

lost

considerable

share

value

following

a

stellar

rise

in

previous

reporting

periods

(not

held

at

period-end).

Sea

is

a

Southeast

Asian

internet

and

mobile

platform

company

that

has

been

investing

heavily

to

grow

its

business

in

three

high-growth

industries,

which

include

e-commerce

(Shopee),

digital

payments

and

financial

services

(SeaMoney),

and

video

game

development

and

publishing

(Garena).

Revenue

and

gross

profit

began

to

miss

consensus

expectations

and

management

began

lowering

its

full-year

guidance

for

2022.

Garena

continued

to

be

the

most

profitable

segment,

which

allows

Sea

to

invest

in

its

other

businesses,

but

its

growth

has

decelerated

on

normalization

of

hours

spent

playing

video

games

post-Covid.

At

the

same

time,

Shopee’s

operational

loss

more

than

doubled

on

a

year-ago

basis

despite

a

strong

competitive

position

in

Southeast

Asia,

but

likely

associated

with

aggressive

expansions

into

Latin

America

and

Europe

along

with

parent-company

research

and

development

costs,

both

of

which

Sea

is

now

tempering.

Elsewhere

in

the

communication

services

sector,

technology

and

social

media

giants

Alphabet

(Google’s

parent

company)

and

Meta

Platforms

(formerly

Facebook,

not

held

at

period-end)

were

significant

Fund

holdings

that

saw

steep

declines

from

all-time

highs

during

the

year

under

review.

These

companies

began

to

post

revenues

that

came

up

shy

of

consensus

estimates

as

a

stalling

economy

hurt

advertising-based

companies.

Additionally,

some

investors

grew

concerned

that

Meta

Platforms

would

find

it

difficult

to

navigate

Apple’s

(also

a

Fund

holding)

new

privacy

restrictions,

which

had

negatively

impacted

its

ability

to

target

its

customers’

ads.

Meta

Platforms

and

Alphabet

were

also

contending

with

heightened

scrutiny

from

regulators

after

numerous

reports

of

the

companies’

failing

to

properly

address

misinformation,

hate

speech,

and

other

troubling

behavior

on

their

sites.

In

general,

companies

that

advertise

to

make

money,

like

Alphabet,

were

pointing

out

economic

turbulence

on

the

horizon

and

bracing

for

a

more

challenging

operating

environment.

Alphabet

makes

most

of

its

money

by

selling

ads

on

its

two

most

popular

internet

platforms,

Google

Search

and

YouTube,

with

projections

into

2023

suggesting

business

spending,

and

therefore

discretionary

ad

budgets,

might

shrink

when

the

economy

is

doing

poorly.

We

saw

this

play

out

in

Alphabet’s

revenue

growth

over

the

past

year,

which

has

dramatically

decelerated,

going

from

40%

growth

year-over-year

to

12%

growth

in

the

four

quarters

through

June

2022.

At

period-end,

Alphabet

was

trading

at

its

lowest

price-to-earnings

(P/E)

ratio

in

a

decade,

while

its

two

largest

platforms

(Google

and

YouTube)

remained

top-notch

internet

traffic

magnets,

suggesting

the

company’s

ad

revenue

will

recover

once

the

economy

improves

because

its

websites

remain

the

dominant

internet

destinations

where

brands

prioritize

their

ad

budgets.

Conversely,

the

declines

described

above

were

partially

offset

by

minimal

contributions

from

individual

holdings

that

bucked

the

overall

downtrend.

It

was

a

relatively

short

list

with

a

combined

positive

impact

that

was

negligible

given

the

magnitude

of

the

detractors.

Some

of

them

advanced

on

better-than-expected

earnings

and

company-specific

successes

during

a

time

when

most

of

their

competitors

were

suffering.

In

some

cases,

the

overall

contribution

was

due

in

part

to

our

decisions

to

opportunistically

divest

select

holdings,

decisions

that

often

allowed

us

to

avoid

the

one-

year

losses

that

would

have

resulted

if

we

had

held

them

for

the

full

annual

period.

Among

the

notable

contributors

that

were

held

for

the

entire

period

and

rose

against

the

market’s

downdraft,

we

saw

solid

results

in

managed

healthcare

and

insurance

provider

UnitedHealth

Group,

within

health

care

providers

and

services,

Enphase

Energy,

a

manufacturer

of

energy

solutions

which

specializes

in

micro

inverter

systems

for

the

residential

solar

photovoltaic

industry,

within

semiconductors

and

semiconductor

equipment,

Cadence

Design

Systems,

an

electronic

design

automation

and

computational

software

developer,

within

software

and

Argenx,

a

Netherlands-based

developer

of

therapies

for

the

treatment

of

autoimmune

diseases,

within

biotechnology.

Key

contributor

Enphase

Energy,

stood

in

stark

contrast

to

its

peers

in

the

semiconductor

industry,

as

nearly

all

other

related

portfolio

holdings

posted

double-digit

percentage

declines.

Enphase

Energy

reported

a

strong

showing

as

demand

for

renewable

energy

sources

rose

in

its

primary

market,

North

America,

and

secondary

market,

Europe.

Solar-related

stocks

initially

came

under

pressure

in

an

environment

of

rising

interest

rates

(since

most

residential

solar

equipment

is

financed),

supply

chain

disruptions

and

high

inflation.

Sentiment

toward

solar

stocks

shifted

Franklin

DynaTech

Fund

7

franklintempleton.com

Annual

Report

in

June

2022,

however,

after

news

broke

that

the

Biden

administration

was

preparing

executive

actions

intended

to

eliminate

U.S.

supply

chain

bottlenecks

for

solar

panel

imports.

The

administration

will

use

the

Defense

Production

Act

(DPA)

to

set

an

estimated

goal

of

22.5

gigawatts

of

domestic

manufacturing

capacity

by

2024,

a

tripling

of

the

current

target;

interestingly,

the

DPA

will

be

used

as

a

lever

to

stop

any

new

solar

tariffs

from

being

implemented

until

after

this

capacity

is

in

place,

effectively

creating

a

two-year

safe

harbor

for

Chinese

solar

panel

imports.

Elsewhere

in

the

IT

sector,

within

software,

investors

bid

up

Cadence

Design

Systems

as

it

continued

to

benefit

from

strong

microchip

design

activity,

market-share

gains,

a

durable

and

highly

visible

recurring

revenue

stream,

and

strong

incremental

earnings

before

interest,

taxes,

depreciation,

and

amortization

margins.

All

product

groups

appear

strong,

but

we

believe

Cadence

Design

Systems

verification

hardware

business

and

focus

on

developing

higher-return

intellectual

property

are

the

largest

drivers

of

upside

relative

to

management’s

expectations.

We

continue

to

see

Cadence

Design

Systems

as

a

high-quality

company

with

room

for

further

growth

acceleration.

The

company

has

a

go-to-market

plan

of

selling

multiple

software

licenses

to

be

run

in

parallel

by

one

engineer,

allowing

companies

to

meet

accelerated

timelines

for

chip

and

system

design

cycles.

In

addition,

Cadence

Design

Systems

has

made

tuck-in

acquisitions

entering

the

non-semiconductor

simulation

markets,

which

we

believe

will

experience

secular

growth

as

simulation

replaces

physical

prototypes.

In

the

health

care

sector,

within

biotechnology,

we

think

mid-capitalization

biotechnology

company

Argenx

is

a

high-

quality,

commercial-stage

company

with

a

best-in-class

antibody

discovery

platform,

a

top

management

team

and

a

best-in-class

drug

(Vyvgart)

with

potential

applicability

across

four

severe

autoimmune

diseases.

The

company

is

now

in

the

commercial

stage

with

sales

ramping

up

better-

than-expected

and

positive

developments

on

several

fronts,

in

our

view,

including

the

addition

of

new

high-value

pipeline

programs.

These

contributors

were

joined

by

a

robust

rally

within

software

by

Aspen

Technology.

Vertical

software

provider

Aspen

makes

software

primarily

used

to

engineer

and

manage

performance

of

energy

assets,

though

it

has

smaller

exposures

to

many

other

industries

including

mining.

Among

other

boosts

to

its

bottom

line,

Aspen’s

business

has

expanded

with

the

development

of

large

liquefied

natural

gas

(LNG)

terminals

in

the

U.S.,

and

investors

were

attracted

to

projections

for

brisk

(though

decelerating)

growth

through

midyear

2023.

We

view

innovation

as

spastic

and

non-linear,

sometimes

accelerating

rapidly

and

sometimes

appearing

to

take

a

step

backward.

Subsequently,

innovation-driven

stocks

may

also

experience

periods

of

outperformance

and

periods

of

drawdowns.

However,

fundamental

strength

will

usually

translate

to

stock

performance

over

time.

We

believe

that

the

fundamentals

of

our

portfolio

are

still

strong,

with

forecasted

growth

well

above

expected

gross

domestic

product

(GDP)

growth

and

the

vast

majority

of

the

portfolio

profitable

on

cash

flow

from

operations.

Thank

you

for

your

continued

participation

in

Franklin

DynaTech

Fund.

We

look

forward

to

serving

your

future

investment

needs.

Matthew

J.

Moberg,

CPA

Rupert

H.

Johnson,

Jr.

Portfolio

Management

Team

The

foregoing

information

reflects

our

analysis,

opinions

and

portfolio

holdings

as

of

September

30,

2022,

the

end

of

the

reporting

period.

The

way

we

implement

our

main

investment

strategies

and

the

resulting

portfolio

holdings

may

change

depending

on

factors

such

as

market

and

economic

conditions.

These

opinions

may

not

be

relied

upon

as

investment

advice

or

an

offer

for

a

particular

security.

The

information

is

not

a

complete

analysis

of

every

aspect

of

any

market,

country,

industry,

security

or

the

Fund.

Statements

of

fact

are

from

sources

considered

reliable,

but

the

investment

manager

makes

no

representation

or

warranty

as

to

their

completeness

or

accuracy.

Although

historical

performance

is

no

guarantee

of

future

results,

these

insights

may

help

you

understand

our

investment

management

philosophy.

Performance

Summary

as

of

September

30,

2022

Franklin

DynaTech

Fund

8

franklintempleton.com

Annual

Report

The

performance

table

and

graphs

do

not

reflect

any

taxes

that

a

shareholder

would

pay

on

Fund

dividends,

capital

gain

distributions,

if

any,

or

any

realized

gains

on

the

sale

of

Fund

shares.

Total

return

reflects

reinvestment

of

the

Fund’s

dividends

and

capital

gain

distributions,

if

any,

and

any

unrealized

gains

or

losses.

Your

dividend

income

will

vary

depending

on

dividends

or

interest

paid

by

securities

in

the

Fund’s

portfolio,

adjusted

for

operating

expenses

of

each

class.

Capital

gain

distributions

are

net

profits

realized

from

the

sale

of

portfolio

securities.

Performance

as

of

9/30/22

1

Cumulative

total

return

excludes

sales

charges.

Average

annual

total

return

includes

maximum

sales

charges.

Sales

charges

will

vary

depending

on

the

size

of

the

investment

and

the

class

of

share

purchased.

The

maximum

is

5.50%

and

the

minimum

is

0%.

Class

A:

5.50%

maximum

initial

sales

charge;

Advisor

Class:

no

sales

charges.

For

other

share

classes,

visit

franklintempleton.com.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

For

most

recent

month-end

performance,

go

to

franklintempleton.com

or

call

(800)

342-5236.

Share

Class

Cumulative

Total

Return

2

Average

Annual

Total

Return

3

–

A

4

1-Year

-40.15%

-43.44%

5-Year

+56.96%

+8.20%

10-Year

+233.33%

+12.16%

Advisor

1-Year

-39.99%

-39.99%

5-Year

+58.95%

+9.71%

10-Year

+241.72%

+13.08%

See

page

10

for

Performance

Summary

footnotes.

Franklin

DynaTech

Fund

Performance

Summary

9

franklintempleton.com

Annual

Report