UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-04986

Franklin Investors Securities Trust

(Exact name of registrant as specified in charter)

One Franklin Parkway, San Mateo, CA  94403-1906

(Address of principal executive offices)(Zip code)

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

(Name and address of agent for service)

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

Date of fiscal year end: 10/31

Date of reporting period: 10/31/21

Item 1. Reports to Stockholders.

a.)

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

b.)

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

Not Applicable

.

ANNUAL

REPORT

AND

SHAREHOLDER

LETTER

Franklin

Investors

Securities

Trust

October

31,

2021

Sign

up

for

electronic

delivery

at

franklintempleton.com/edelivery

Franklin

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

Franklin

Managed

Income

Fund

Not

FDIC

Insured

May

Lose

Value

No

Bank

Guarantee

franklintempleton.com

Annual

Report

1

Shareholder

Letter

Dear

Shareholder:

During

the

12

months

ended

October

31,

2021,

the

U.S.

economy

continued

to

recover

from

the

COVID-19

pandemic,

benefiting

equities.

Growth

accelerated

in

2021’s

first

half

as

the

reopening

of

businesses,

widespread

COVID-19

vaccinations

and

federal

assistance

programs

continued

to

boost

consumer

spending.

Inflation

increased

in

April

and

rose

further

during

the

remainder

of

the

reporting

period

due

to

increased

demand

for

goods

amid

supply-

chain

bottlenecks.

During

the

summer,

investors

became

concerned

the

swiftly

spreading

Delta

variant

of

COVID-19

could

hinder

the

economic

recovery,

and

growth

slowed

in

2021’s

third

quarter.

During

the

reporting

period,

the

U.S.

Federal

Reserve,

in

its

efforts

to

support

U.S.

economic

activity,

held

the

federal

funds

rate

unchanged

at

0.25%,

and

it

continued

broad

quantitative

easing

measures

to

bolster

credit

markets.

The

Federal

Reserve

also

adjusted

its

economic

growth

and

inflation

projections

higher

and

expected

to

begin

decreasing

its

asset

purchases

later

this

year,

while

delaying

any

interest

rate

increases

until

reaching

its

goal

of

maximum

U.S.

employment.

In

this

environment,

the

prices

of

U.S.

stocks,

as

measured

by

the

Standard

&

Poor’s

®

500

Index

(S&P

500

®

),

rose

40.84%,

(the

index

increasing

from

3,269.96

to

4,605.38).

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

-0.48%

total

return

(an

index

decrease

from

2,365.52

to

2,354.21),

which

includes

reinvestment

of

income

and

distributions.

3

We

are

committed

to

our

long-term

perspective

and

disciplined

investment

approach

as

we

conduct

a

rigorous,

fundamental

analysis

of

securities

with

a

regular

emphasis

on

investment

risk

management.

We

believe

active,

professional

investment

management

serves

investors

well.

We

also

recognize

the

important

role

of

financial

professionals

in

today’s

markets

and

encourage

investors

to

continue

to

seek

their

advice.

Amid

changing

markets

and

economic

conditions,

we

are

confident

investors

with

a

well-diversified

portfolio

and

a

patient,

long-term

outlook

should

be

well-positioned

for

the

years

ahead.

Franklin

Investors

Securities

Trust’s

annual

report,

covering

Franklin

Convertible

Securities

Fund,

Franklin

Equity

Income

Fund

and

Franklin

Managed

Income

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

Investors

Securities

Trust

This

letter

reflects

our

analysis

and

opinions

as

of

October

31,

2021,

unless

otherwise

indicated.

The

information

is

not

a

complete

analysis

of

every

aspect

of

any

market,

country,

industry,

security

or

fund.

Statements

of

fact

are

from

sources

considered

reliable.

1.

Source:

Copyright

©

2021,

S&P

Dow

Jones

Indices

LLC.

All

rights

reserved.

2.

Source:

Morningstar.

The

changes

in

index

prices

shown

for

the

S&P

500

do

not

include

reinvestments

of

income

and

distributions,

which

are

included

in

its

total

return,

which

was:

S&P

500

+42.91%

(index

total

return

resulting

in

an

increase

from

6,734.84

to

9,625.02).

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

Convertible

Securities

Fund

4

Franklin

Equity

Income

Fund

11

Franklin

Managed

Income

Fund

17

Financial

Highlights

and

Statements

of

Investments

27

Financial

Statements

60

Notes

to

Financial

Statements

66

Report

of

Independent

Registered

Public

Accounting

Firm

85

Tax

Information

86

Board

Members

and

Officers

87

Shareholder

Information

92

Visit

franklintempleton.com

for

fund

updates,

to

access

your

account,

or

to

find

helpful

financial

planning

tools.

3

franklintempleton.com

Annual

Report

ANNUAL

REPORT

Economic

and

Market

Overview

U.S.

equities,

as

measured

by

the

Standard

&

Poor’s

®

500

Index

(S&P

500

®

),

posted

a

+42.91%

total

return

for

the

12

months

ended

October

31,

2021.

1

Stocks

benefited

from

the

continued

economic

recovery,

monetary

and

fiscal

stimulus

measures,

development

of

highly

effective

COVID-19

vaccines,

implementation

of

vaccination

programs

and

easing

pandemic

restrictions.

As

many

businesses

reopened,

stimulus

payments

and

generally

high

household

savings

contributed

to

increased

consumer

spending.

A

rebound

in

corporate

earnings

and

the

U.S.

Senate’s

passage

of

a

bipartisan

infrastructure

bill

further

bolstered

investor

sentiment,

helping

equities

to

reach

new

all-time

price

highs

late

in

the

12-month

period.

Gross

domestic

product

growth

was

robust

during

most

of

the

period,

as

the

lifting

of

many

COVID-19

restrictions

and

strong

consumer

spending

continued

to

support

the

economy.

Both

exports

and

imports

increased

significantly

in

an

environment

of

high

business

confidence

and

recovering

industrial

production.

The

continued

growth

of

the

economy

led

the

U.S.

to

surpass

its

pre-pandemic

output

in

2021’s

second

quarter.

The

inflation

rate

was

elevated

during

the

12-month

period

amid

increased

demand

and

supply-chain

bottlenecks.

U.S.

consumer

spending

on

goods

remained

strong,

adding

to

pressure

on

the

prices

of

many

products.

Consequently,

the

personal

consumption

expenditures

index,

a

measure

of

inflation,

rose

dramatically

during

the

period,

representing

the

highest

12-month

increase

in

decades.

The

unemployment

rate

declined

from

6.9%

in

October

2020

to

4.6%

in

October

2021

as

job

openings

increased,

but

a

relative

lack

of

available

workers

fueled

wage

growth,

adding

to

some

investors’

inflation

concerns.

In

an

effort

to

support

the

economy,

the

U.S.

Federal

Reserve

(Fed)

kept

the

federal

funds

target

rate

at

a

record-low

range

of

0.00%–0.25%.

The

Fed

also

maintained

quantitative

easing

measures

aimed

at

ensuring

credit

flows

to

borrowers

and

supporting

credit

markets

with

open-

ended

U.S.

Treasury

and

mortgage

bond

purchasing.

In

its

September

2021

meeting

statement,

the

Fed

indicated

that

it

soon

plans

to

reduce

its

purchases

of

U.S.

Treasury

and

mortgage-backed

securities.

The

Fed

also

noted

that

it

views

inflation

as

partially

transitory,

and

that

further

employment

progress

was

needed

before

the

Fed

would

consider

raising

the

range

for

the

federal

funds

target

rate.

The

foregoing

information

reflects

our

analysis

and

opinions

as

of

October

31,

2021.

The

information

is

not

a

complete

analysis

of

every

aspect

of

any

market,

country,

industry,

security

or

fund.

Statements

of

fact

are

from

sources

considered

reliable.

1.

Source:

Morningstar.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

4

franklintempleton.com

Annual

Report

Franklin

Convertible

Securities

Fund

This

annual

report

for

Franklin

Convertible

Securities

Fund

covers

the

fiscal

year

ended

October

31,

2021.

The

Fund

closed

to

new

investors

with

limited

exceptions

on

August

29,

2018.

Existing

investors

may

continue

to

purchase

additional

shares

of

the

Fund.

Your

Fund’s

Goal

and

Main

Investments

The

Fund

seeks

to

maximize

total

return,

consistent

with

reasonable

risk,

by

seeking

to

optimize

capital

appreciation

and

high

current

income

under

varying

market

conditions.

The

Fund

normally

invests

at

least

80%

of

its

net

assets

in

convertible

securities

and

common

stock

received

upon

conversion

of

convertible

securities.

Performance

Overview

For

the

12

months

under

review,

the

Fund’s

Class

A

shares

posted

a

+27.98%

cumulative

total

return.

In

comparison,

the

Fund’s

benchmark,

the

ICE

BofA

All

Alternatives

U.S.

Convertibles

Index,

which

tracks

the

domestic

convertible

securities

market,

posted

a

+27.07%

cumulative

total

return.

1

You

can

find

the

Fund’s

long-term

performance

data

in

the

Performance

Summary

beginning

on

page

7

.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

For

most

recent

month-end

performance,

go

to

franklintempleton.com

or

call

(800)

342-5236

.

Investment

Strategy

When

choosing

convertible

securities

for

the

Fund,

we

attempt

to

maintain

a

balance

in

the

portfolio

between

the

equity

and

debt

characteristics

of

convertible

securities

with

an

emphasis

on

the

equity

features.

We

also

consider

the

company’s

long-term

earnings,

asset

value

and

cash

flow

potential.

By

investing

in

convertible

securities,

the

Fund

seeks

the

opportunity

to

participate

in

the

capital

appreciation

of

underlying

stocks,

while

at

the

same

time

relying

on

the

fixed

income

aspect

of

the

convertible

securities

to

provide

current

income

and

reduced

price

volatility,

which

can

limit

the

risk

of

loss

in

a

down

equity

market.

Some

of

the

convertible

securities

in

which

the

Fund

may

invest

have

been

structured

to

provide

enhanced

yield,

increased

equity

exposure

or

enhanced

downside

protection.

These

securities,

generally

referred

to

as

enhanced

convertible

securities,

typically

provide

a

benefit

to

the

issuer

in

exchange

for

the

enhanced

features,

such

as

a

conversion

premium

that

is

paid

by

the

Fund.

We

may

invest

in

convertible

securities

of

companies

of

any

capitalization

size,

but

we

generally

seek

to

make

the

portfolio

representative

of

the

entire

convertible

securities

market.

Manager’s

Discussion

The

Fund

had

a

very

strong

year

as

its

absolute

returns

were

supported

by

all

equity

sector

allocations.

The

bulk

of

the

overall

gain

occurred

within

our

three

largest

allocations,

which

comprised

nearly

two-thirds

of

the

overall

portfolio:

information

technology

(IT),

consumer

discretionary

and

health

care.

In

general,

publicly

traded

companies

have

been

selling

bonds

that

can

convert

into

stock

at

a

record

pace,

particularly

in

2021,

as

they

seek

to

take

advantage

of

flexible

forms

of

capital,

low

rates

and

investors’

robust

appetite

for

fast-growing

firms.

There

was

a

noticeable

pickup

in

convertible

financing

by

companies

tied

to

cyber

security,

biotechnology,

electric

vehicles,

and

other

innovative

companies

tackling

climate

change,

energy

transition

and

digital

transformation.

We

participated

in

many

such

deals

as

the

Fund’s

opportunity

set

widened.

As

it

pertained

to

the

portfolio

structure,

we

continued

to

focus

investments

on

balanced

convertibles,

which

tread

the

middle

ground

with

a

moderate

level

of

conversion

premium

and

equity

sensitivity.

One

of

their

typical

primary

advantages

is

an

asymmetric

risk/return

profile,

which

can

result

in

greater

potential

for

participation

in

the

upside

return

of

the

underlying

stock

and

lower

participation

in

the

stock’s

downside

return.

Portfolio

Composition

10/31/21

%

of

Total

Net

Assets

Convertible

Bonds

73.4%

Convertible

Preferred

Stocks

20.2%

Common

Stocks

2.4%

Short-Term

Investments

&

Other

Net

Assets

4.0%

1.

Source:

Morningstar.

The

index

is

unmanaged

and

includes

reinvestment

of

any

income

or

distributions.

It

does

not

reflect

any

fees,

expenses

or

sales

charges.

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

The

dollar

value,

number

of

shares

or

principal

amount,

and

names

of

all

portfolio

holdings

are

listed

in

the

Fund’s

Statement

of

Investments

(SOI).

The

SOI

begins

on

page

31

.

Franklin

Convertible

Securities

Fund

5

franklintempleton.com

Annual

Report

IT

holdings

were

the

Fund’s

largest

sector

allocation.

Our

related

holdings

followed

a

fairly

steady

upward

trajectory

and

appreciated

solidly,

so

we

eventually

began

to

trim

our

exposure

amid

the

prolonged

rally.

Nearly

all

related

holdings

advanced,

and

several

key

contributors

nearly

doubled

or

more

than

doubled

in

value

including

HubSpot

(cloud-based

marketing

and

customer

service

gateway),

Bill.com

Holdings

(next-generation

automated

payables

and

receivables

platform;

purchased

during

the

period)

and

Atlassian

(software

platform

for

software

developers;

sold

by

period-

end).

Cloud-based

“intelligent”

bill/invoice

management

system

provider

Bill.com

was

a

standout,

particularly

in

the

latter

half

of

the

reporting

period.

Bill.com

offers

businesses

a

uniquely

streamlined,

timesaving

fintech

product

powered

by

an

artificial

intelligence

(AI)

/

machine

learning

program

that

can

anticipate

customer

needs

through

automation.

The

company’s

equity

value

surged

as

it

reported

impressive

financial

results

with

upgraded

guidance

through

the

end

of

2021.

Additionally,

more

analysts

and

investors

have

grown

enthusiastic

about

Bill.com’s

potential

as

it

consolidates

its

position

in

what

could

be

a

US$40

billion

addressable

global

market

opportunity.

Atlassian

is

an

Australia-based

provider

of

workplace

collaboration

software.

Its

equity

value

increased

sharply

on

robust

financial

results

throughout

the

year,

as

its

software

tools

have

proven

quite

valuable

in

an

era

of

digital

transformation.

The

company

repeatedly

posted

impressive

sales

and

subscription-based

revenue

metrics

over

the

period

as

Atlassian’s

switch

toward

cloud-only

installations

gained

traction.

Atlassian’s

business

opportunity

grew

in

terms

of

helping

knowledge

workers

be

more

productive,

especially

in

this

emerging

era

of

hybrid

work.

We

also

believe

Atlassian

possesses

close

relationships

with

software

developers,

who

need

to

be

more

productive;

in

brief,

Atlassian

offers

IT

managers

an

opportunity

to

simplify

their

lives.

In

addition,

the

company

is

highly

efficient,

and

we

think

management

is

very

thoughtful

regarding

capital

allocation.

All

but

one

of

the

Fund’s

consumer

discretionary

sector

holdings

advanced,

and

they

were

led

higher

by

upscale

home-furnishings

retailer

RH

(the

holding

company

for

Restoration

Hardware);

and

Ireland-based

Aptiv,

which

designs

and

manufactures

vehicle

components

and

safety

solutions

for

the

automotive

and

commercial

vehicle

markets,

including

automated-driving

satellite

computer

programs.

Mixed

but

overall

positive

outcomes

in

the

health

care

sector

were

supported

foremost

by

Avantor

(specialty

chemicals

and

laboratory

supplies

to

the

biopharma

and

other

health

care

industries),

Danaher

and

DexCom

(advanced,

minimally-invasive

blood

glucose

monitors).

Danaher

designs

and

manufactures

professional,

medical,

industrial,

and

commercial

products

and

services.

Danaher’s

financials

repeatedly

came

in

substantially

ahead

of

prior

guidance

and

consensus

estimates.

The

combination

of

stronger-

than-expected

COVID

tailwinds

and

a

broadening

and

strengthening

of

non-COVID-related

business

activity

drove

Danaher’s

upside.

Elsewhere

in

the

portfolio,

some

of

the

other

notable

contributors

included

private

equity

asset

management

KKR

&

Co.

(better

known

as

Kohlberg,

Kravis

and

Roberts)

in

financials;

and

Singapore-based

mobile

platform

Sea

Limited

in

communication

services.

The

value

of

our

convertible

investments

in

both

companies

more

than

doubled

during

the

year

under

review.

In

particular,

Sea

Limited

has

an

unusual

business

model

that

catalyzed

a

tremendous

spike

in

demand

across

the

three

highly

popular

segments

in

which

it

operates:

digital

gaming/

entertainment,

e-commerce,

and

digital

financial

services.

Sea’s

equity

value

skyrocketed

from

its

pandemic

lows

as

its

gaming

division

(Garena)

emerged

as

the

dominant

player

in

Southeast

Asia

and

Taiwan,

while

its

online

shopping

platform

(Shopee)

grew

to

become

the

e-commerce

leader

in

that

region,

having

surpassed

industry

giant

Alibaba

along

the

way

(Alibaba

is

not

held

by

the

Fund).

Sea

also

saw

its

fintech

push

gain

traction

as

total

payment

volumes

experienced

a

parabolic

rise,

with

more

than

20

million

consumers

adopting

Sea’s

mobile

wallet

services;

and

Top

10

Holdings

10/31/21

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

KKR

&

Co.,

Inc.

2.6%

Capital

Markets,

United

States

Bill.com

Holdings,

Inc.

2.3%

Software,

United

States

Broadcom,

Inc.

2.2%

Semiconductors

&

Semiconductor

Equipment,

United

States

Etsy,

Inc.

2.2%

Internet

&

Direct

Marketing

Retail,

United

States

HubSpot

,

Inc.

2.2%

Software,

United

States

Workday,

Inc.

2.1%

Software,

United

States

Silicon

Laboratories,

Inc.

2.1%

Semiconductors

&

Semiconductor

Equipment,

United

States

Danaher

Corp.

2.1%

Health

Care

Equipment

&

Supplies,

United

States

Sea

Ltd.

2.0%

Entertainment,

Taiwan

Okta

,

Inc.

2.0%

IT

Services,

United

States

Franklin

Convertible

Securities

Fund

6

franklintempleton.com

Annual

Report

secured

a

digital

banking

license

in

Singapore,

paving

the

way

for

it

to

become

a

leading

regional

financial

services

player.

Given

the

strength

and

breadth

of

the

Fund’s

annual

performance,

there

were

only

a

handful

of

detractors

of

consequence

scattered

across

the

portfolio,

and

their

combined

impact

on

absolute

returns

was

mild.

Most

of

them

served

to

reduce

the

overall

contribution

from

the

sector

allocations

mentioned

above.

IT

sector

returns

were

impacted

by

the

losses

associated

with

Wix.com—the

largest

overall

detractor

of

the

year—and

Splunk

(software

for

searching,

monitoring,

and

analyzing

machine-generated

data

via

a

Web-style

interface).

Wix.com,

a

drag-and-drop

website-building

platform

that

helps

individuals

and

small

businesses

build

their

online

presences,

posted

solid

earnings

but

investors

still

sold

off

the

stock

during

the

latter

half

of

the

reporting

period.

Wix

exceeded

expectations

on

most

key

business

metrics

as

it

continued

to

attract,

retain

and

upsell

users,

but

disappointed

some

investors

by

lowering

its

full-year

2021

guidance

(in

terms

of

both

revenues

and

free

cash

flow).

Wix

was

spending

heavily

to

expand

operations

and

fortify

its

long-term

vision

(it

aims

to

be

the

primary

online

platform

for

all

users

and

businesses).

Despite

the

near-term

uncertainty,

its

customer

growth

trajectory

looked

promising—Wix

continued

to

add

millions

of

new

users

and,

with

the

added

support

of

high

user

retention

rates,

had

over

210

million

total

users

by

the

end

of

September.

Overall

gains

in

the

consumer

discretionary

sector

were

hindered

by

authenticated

luxury

consignment

marketplace

The

RealReal

(purchased

during

the

period),

while

the

contribution

from

health

care

holdings

was

reduced

foremost

by

Revance

Therapeutics

(biotech

company

focused

on

aesthetic

and

therapeutic

offerings),

Haemonetics

(a

global

provider

of

blood

and

plasma

supplies

and

services)

and

PTC

Therapeutics,

a

biopharmaceutical

firm

that

develops

orally

administered

small

molecule

drugs

and

gene

therapies

for

rare

diseases.

Most

of

PTC’s

depreciation

occurred

over

the

summer,

after

a

competitor

discontinued

a

Huntington’s

Disease

(HD)

clinical

trial

mid-Phase

3.

Some

investors

perceived

this

as

a

negative

for

PTC’s

most

important

pipeline

program,

PTC-518,

which

was

in

early-stage

clinical

trials

for

HD,

as

both

trials

target

the

reduction

of

a

mutant

protein

that

causes

HD.

However,

we

think

PTC-518

is

the

most-likely-to-succeed

HD

drug,

and

PTC

might

be

the

first

to

market

in

what

could

be

a

multibillion-dollar

market

opportunity.

Elsewhere

in

the

portfolio,

four

holdings

in

the

communication

services

sector

posted

modest

declines

for

the

period,

though

China-based

movie

and

video

streaming

platform

iQiyi

was

the

only

one

to

have

a

substantial

negative

impact.

Our

convertible

investment

in

iQiyi

posted

a

modest

decline

as

it

tracked

the

company’s

equity

value

to

roughly

a

three-year

low.

iQiyi,

one

of

the

biggest

streaming-

media

sites

in

the

world

(with

over

500

million

active

users

and

nearly

six

billion

hours

spent

on

its

service

each

month),

recorded

a

loss

in

subscribers

versus

key

competitor

Tencent

(not

a

Fund

holding).

In

addition

to

the

reversal

in

its

growth,

iQiyi

has

shown

a

lack

of

profits

(though

it

continued

to

narrow

its

net

losses

on

a

quarter-over-quarter

basis)

and

rising

leverage

and

was

also

impacted

by

a

wave

of

large

“block”

sales

by

several

institutional

investors.

And

in

general,

Chinese

tech

and

digital

entertainment

companies

have

been

squeezed

by

regulators

in

both

China

and

the

U.S.

recently.

Executives

said

that

they

had

a

plan

for

boosting

profitability,

including

recent

moves

into

new

content

offerings

like

original

movies,

which

may

help

it

return

to

subscriber

growth.

Thank

you

for

your

continued

participation

in

Franklin

Convertible

Securities

Fund.

We

look

forward

to

serving

your

future

investment

needs.

Alan

E.

Muschott,

CFA

Lead

Portfolio

Manager

Eric

Webster,

CFA

Portfolio

Manager

The

foregoing

information

reflects

our

analysis,

opinions

and

portfolio

holdings

as

of

October

31,

2021,

the

end

of

the

reporting

period.

The

way

we

implement

our

main

investment

strategies

and

the

resulting

portfolio

holdings

may

change

depending

on

factors

such

as

market

and

economic

conditions.

These

opinions

may

not

be

relied

upon

as

investment

advice

or

an

offer

for

a

particular

security.

The

information

is

not

a

complete

analysis

of

every

aspect

of

any

market,

country,

industry,

security

or

the

Fund.

Statements

of

fact

are

from

sources

considered

reliable,

but

the

investment

manager

makes

no

representation

or

warranty

as

to

their

completeness

or

accuracy.

Although

historical

performance

is

no

guarantee

of

future

results,

these

insights

may

help

you

understand

our

investment

management

philosophy.

CFA

®

is

a

trademark

owned

by

CFA

Institute.

Performance

Summary

as

of

October

31,

2021

Franklin

Convertible

Securities

Fund

7

franklintempleton.com

Annual

Report

The

performance

tables

and

graphs

do

not

reflect

any

taxes

that

a

shareholder

would

pay

on

Fund

dividends,

capital

gain

distributions,

if

any,

or

any

realized

gains

on

the

sale

of

Fund

shares.

Total

return

reflects

reinvestment

of

the

Fund’s

dividends

and

capital

gain

distributions,

if

any,

and

any

unrealized

gains

or

losses.

Your

dividend

income

will

vary

depending

on

dividends

or

interest

paid

by

securities

in

the

Fund’s

portfolio,

adjusted

for

operating

expenses

of

each

class.

Capital

gain

distributions

are

net

profits

realized

from

the

sale

of

portfolio

securities.

Performance

as

of

10/31/21

Cumulative

total

return

excludes

sales

charges.

Average

annual

total

return

includes

maximum

sales

charges.

Sales

charges

will

vary

depending

on

the

size

of

the

investment

and

the

class

of

share

purchased.

The

maximum

is

5.50%

and

the

minimum

is

0%.

Class

A

:

5.50%

maximum

initial

sales

charge;

Advisor

Class:

no

sales

charges.

For

other

share

classes,

visit

franklintempleton.com.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

For

most

recent

month-end

performance,

go

to

franklintempleton.com

or

call

(800)

342-5236

.

Share

Class

Cumulative

Total

Return

1

Average

Annual

Total

Return

2

–

A

3

1-Year

+27.98%

+20.93%

5-Year

+147.88%

+18.56%

10-Year

+282.44%

+13.71%

Advisor

1-Year

+28.34%

+28.34%

5-Year

+151.11%

+20.22%

10-Year

+292.14%

+14.64%

30-Day

Standardized

Yield

5

Share

Class

Distribution

Rate

4

(with

fee

waiver)

(without

fee

waiver)

A

0.71%

0.39%

0.38%

Advisor

0.99%

0.65%

0.65%

See

page

9

for

Performance

Summary

footnotes.

Franklin

Convertible

Securities

Fund

Performance

Summary

8

franklintempleton.com

Annual

Report

See

page

9

for

Performance

Summary

footnotes.

Total

Return

Index

Comparison

for

a

Hypothetical

$10,000

Investment

Total

return

represents

the

change

in

value

of

an

investment

over

the

periods

shown.

It

includes

any

applicable

maximum

sales

charge,

Fund

expenses,

account

fees

and

reinvested

distributions.

The

unmanaged

index

includes

reinvestment

of

any

income

or

distributions.

It

differs

from

the

Fund

in

composition

and

does

not

pay

management

fees

or

expenses.

One

cannot

invest

directly

in

an

index.

Class

A

(11/1/11–10/31/21)

Advisor

Class

(11/1/11–10/31/21)

Franklin

Convertible

Securities

Fund

Performance

Summary

9

franklintempleton.com

Annual

Report

Each

class

of

shares

is

available

to

certain

eligible

investors

and

has

different

annual

fees

and

expenses,

as

described

in

the

prospectus.

All

investments

involve

risks,

including

possible

loss

of

principal.

Convertible

securities

are

subject

to

the

risks

of

stocks

when

the

underlying

stock

price

is

high

relative

to

the

conversion

price

(because

more

of

the

security’s

value

resides

in

the

conversion

feature)

and

debt

securities

when

the

underlying

stock

price

is

low

relative

to

the

conversion

price

(because

the

conversion

feature

is

less

valuable).

A

convertible

security

is

not

as

sensitive

to

interest

rate

changes

as

a

similar

non-convertible

debt

security,

and

generally

has

less

potential

for

gain

or

loss

than

the

underlying

stock.

The

Fund

may

invest

in

high-yielding,

fixed

income

securities.

High

yields

reflect

the

higher

credit

risk

associated

with

these

lower-rated

securities

and,

in

some

cases,

the

lower

market

prices

for

these

in-

struments.

Interest

rate

movements

may

affect

the

Fund’s

share

price

and

yield.

Bond

prices

generally

move

in

the

opposite

direction

of

interest

rates.

As

prices

of

bonds

in

the

Fund

adjust

to

a

rise

in

interest

rates,

the

Fund’s

share

price

may

decline.

The

Fund

may

also

invest

in

foreign

securities,

which

involve

special

risks,

including

political

uncertainty

and

currency

volatility.

Events

such

as

the

spread

of

deadly

diseases,

disasters,

and

financial,

political

or

social

disruptions,

may

heighten

risks

and

adversely

affect

performance.

The

Fund’s

prospectus

also

includes

a

description

of

the

main

investment

risks.

1.

Cumulative

total

return

represents

the

change

in

value

of

an

investment

over

the

periods

indicated.

2.

Average

annual

total

return

represents

the

average

annual

change

in

value

of

an

investment

over

the

periods

indicated.

Return

for

less

than

one

year,

if

any,

has

not

been

annualized.

3.

Prior

to

9/10/18,

these

shares

were

offered

at

a

higher

initial

sales

charge

of

5.75%,

thus

actual

returns

(with

sales

charges)

would

have

differed.

Average

annual

total

returns

(with

sales

charges)

have

been

restated

to

reflect

the

current

maximum

initial

sales

charge

of

5.50%.

4.

Distribution

rate

is

based

on

an

annualization

of

the

respective

class’s

past

four

quarterly

dividends

and

the

maximum

offering

price

(NAV

for

Advisor

Class)

per

share

on

10/31/21.

5.

The

Fund’s

30-day

standardized

yield

is

calculated

over

a

trailing

30-day

period

using

the

yield

to

maturity

on

bonds

and/or

the

dividends

accrued

on

stocks.

It

may

not

equal

the

Fund’s

actual

income

distribution

rate,

which

reflects

the

Fund’s

past

dividends

paid

to

shareholders.

6.

Source:

Morningstar.

The

ICE

BofA

All

Alternatives

U.S.

Convertibles

Index

comprises

domestic

securities

of

all

quality

grades

that

are

convertible

into

U.S.

dollar-denom-

inated

common

stock,

ADRs

or

cash

equivalents

and

have

a

delta

(measure

of

equity

sensitivity)

that

indicates

the

security

likely

has

a

balance

between

the

debt

and

equity

characteristics

of

the

security.

7.

Figures

are

as

stated

in

the

Fund’s

current

prospectus

and

may

differ

from

the

expense

ratios

disclosed

in

the

Your

Fund’s

Expenses

and

Financial

Highlights

sections

in

this

report.

In

periods

of

market

volatility,

assets

may

decline

significantly,

causing

total

annual

Fund

operating

expenses

to

become

higher

than

the

figures

shown.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

Distributions

(11/1/20–10/31/21)

Share

Class

Net

Investment

Income

Short-Term

Capital

Gain

Long-Term

Capital

Gain

Total

A

$0.2337

$0.3098

$2.6152

$3.1587

C

$0.0601

$0.3098

$2.6152

$2.9851

R6

$0.3291

$0.3098

$2.6152

$3.2541

Advisor

$0.3076

$0.3098

$2.6152

$3.2326

Total

Annual

Operating

Expenses

7

Share

Class

A

0.84%

Advisor

0.59%

Your

Fund’s

Expenses

Franklin

Convertible

Securities

Fund

10

franklintempleton.com

Annual

Report

As

a

Fund

shareholder,

you

can

incur

two

types

of

costs:

(1)

transaction

costs,

including

sales

charges

(loads)

on

Fund

purchases

and

redemptions;

and

(2)

ongoing

Fund

costs,

including

management

fees,

distribution

and

service

(12b-1)

fees,

and

other

Fund

expenses.

All

mutual

funds

have

ongoing

costs,

sometimes

referred

to

as

operating

expenses.

The

table

below

shows

ongoing

costs

of

investing

in

the

Fund

and

can

help

you

understand

these

costs

and

compare

them

with

those

of

other

mutual

funds.

The

table

assumes

a

$1,000

investment

held

for

the

six

months

indicated.

Actual

Fund

Expenses

The

table

below

provides

information

about

actual

account

values

and

actual

expenses

in

the

columns

under

the

heading

“Actual.”

In

these

columns

the

Fund’s

actual

return,

which

includes

the

effect

of

Fund

expenses,

is

used

to

calculate

the

“Ending

Account

Value”

for

each

class

of

shares.

You

can

estimate

the

expenses

you

paid

during

the

period

by

following

these

steps

(

of

course,

your

account

value

and

expenses

will

differ

from

those

in

this

illustration

):

Divide

your

account

value

by

$1,000

(

if

your

account

had

an

$8,600

value,

then

$8,600

÷

$1,000

=

8.6

).

Then

multiply

the

result

by

the

number

in

the

row

for

your

class

of

shares

under

the

headings

“Actual”

and

“Expenses

Paid

During

Period”

(

if

Actual

Expenses

Paid

During

Period

were

$7.50,

then

8.6

x

$7.50

=

$64.50

).

In

this

illustration,

the

actual

expenses

paid

this

period

are

$64.50.

Hypothetical

Example

for

Comparison

with

Other

Funds

Under

the

heading

“Hypothetical”

in

the

table,

information

is

provided

about

hypothetical

account

values

and

hypothetical

expenses

based

on

the

Fund’s

actual

expense

ratio

and

an

assumed

rate

of

return

of

5%

per

year

before

expenses,

which

is

not

the

Fund’s

actual

return.

This

information

may

not

be

used

to

estimate

the

actual

ending

account

balance

or

expenses

you

paid

for

the

period,

but

it

can

help

you

compare

ongoing

costs

of

investing

in

the

Fund

with

those

of

other

funds.

To

do

so,

compare

this

5%

hypothetical

example

for

the

class

of

shares

you

hold

with

the

5%

hypothetical

examples

that

appear

in

the

shareholder

reports

of

other

funds.

Please

note

that

expenses

shown

in

the

table

are

meant

to

highlight

ongoing

costs

and

do

not

reflect

any

transactional

costs.

Therefore,

information

under

the

heading

“Hypothetical”

is

useful

in

comparing

ongoing

costs

only,

and

will

not

help

you

compare

total

costs

of

owning

different

funds.

In

addition,

if

transactional

costs

were

included,

your

total

costs

would

have

been

higher.

1.

Expenses

are

equal

to

the

annualized

expense

ratio

for

the

six-month

period

as

indicated

above—in

the

far

right

column—multiplied

by

the

simple

average

account

value

over

the

period

indicated,

and

then

multiplied

by

184/365

to

reflect

the

one-half

year

period.

2.

Reflects

expenses

after

fee

waivers

and

expense

reimbursements.

Does

not

include

acquired

fund

fees

and

expenses.

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Share

Class

Beginning

Account

Value

5/1/21

Ending

Account

Value

10/31/21

Expenses

Paid

During

Period

5/1/21–10/31/21

1,2

Ending

Account

Value

10/31/21

Expenses

Paid

During

Period

5/1/21–10/31/21

1,2

a

Net

Annualized

Expense

Ratio

2

A

$1,000

$1,054.70

$4.32

$1,021.01

$4.25

0.83%

C

$1,000

$1,050.60

$8.18

$1,017.22

$8.05

1.58%

R6

$1,000

$1,056.30

$2.58

$1,022.70

$2.54

0.50%

Advisor

$1,000

$1,056.00

$3.02

$1,022.27

$2.97

0.58%

11

franklintempleton.com

Annual

Report

Franklin

Equity

Income

Fund

This

annual

report

for

Franklin

Equity

Income

Fund

covers

the

fiscal

year

ended

October

31,

2021.

Your

Fund’s

Goal

and

Main

Investments

The

Fund

seeks

to

maximize

total

return

by

emphasizing

high

current

income

and

long-term

capital

appreciation,

consistent

with

reasonable

risk,

by

normally

investing

at

least

80%

of

its

net

assets

in

equity

securities,

including

securities

convertible

into

common

stocks.

The

Fund

generally

invests

the

remainder

of

its

assets

in

other

equity-related

instruments

such

as

convertible

securities

and

equity-linked

notes

(ELNs)

and

may

also

invest

in

foreign

securities.

Performance

Overview

For

the

12

months

under

review,

the

Fund’s

Class

A

shares

posted

a

+40.58%

cumulative

total

return.

In

comparison,

the

Fund’s

primary

benchmark,

the

Russell

1000

®

Value

Index,

which

measures

performance

of

those

Russell

1000

®

Index

companies

with

relatively

lower

price-to-book

ratios

and

lower

forecasted

growth

values,

posted

a

+43.76%

cumulative

total

return.

1

The

Fund’s

secondary

benchmark,

the

Standard

&

Poor’s

500

Index,

which

tracks

the

broad

U.S.

stock

market,

posted

a

+42.91%

cumulative

total

return.

1

You

can

find

the

Fund’s

long-term

performance

data

in

the

Performance

Summary

beginning

on

page

13

.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

For

most

recent

month-end

performance,

go

to

franklintempleton.com

or

call

(800)

342-5236

.

Investment

Strategy

We

seek

to

invest

in

a

broadly

diversified

portfolio

of

equity

securities

that

we

consider

to

be

financially

strong,

with

a

focus

on

blue

chip

companies.

We

apply

a

bottom-up

approach

to

investing

in

individual

securities.

We

will

assess

the

market

price

of

a

company’s

securities

relative

to

our

evaluation

of

the

company’s

long-term

earnings,

cash

flow

potential

and

balance

sheet

strength.

We

also

consider

a

company’s

price/earnings

ratio,

return

on

capital,

profit

margins

and

asset

value.

We

consider

dividend

yield

and

the

opportunity

for

dividend

growth

in

selecting

stocks

for

the

Fund

because

we

believe

that,

over

time,

dividend

income

can

contribute

significantly

to

total

return

and

can

be

a

more

consistent

source

of

investment

return

than

capital

appreciation.

We

seek

to

take

advantage

of

price

dislocations

that

result

from

the

market’s

short-term

focus

and

choose

to

invest

in

those

companies

that,

in

our

opinion,

offer

the

best

trade-off

between

growth

opportunity,

business

and

financial

risk,

and

valuation.

*Categories

within

the

Other

category

are

listed

in

full

in

the

Fund’s

Statement

of

Investments

(SOI),

which

can

be

found

later

in

this

report.

Manager’s

Discussion

All

sectors

contributed

to

annual

performance

for

Franklin

Equity

Income

Fund.

The

financials

sector

was

the

largest

contributor

as

that

sector

benefited

from

a

rise

in

Treasury

yields,

improving

capital

positions,

and

strong

performances

across

most

of

their

business

segments

as

the

economic

recovery

continued.

Positive

results

from

government

stress

tests

of

banks

over

the

summer

demonstrated

that

bank

balance

sheets

have

remained

strong

throughout

the

pandemic,

which

was

a

boost

to

banking

stocks.

The

Fund

Portfolio

Composition

10/31/21

%

of

Total

Net

Assets

Banks

11.1%

Capital

Markets

10.5%

Electric

Utilities

5.7%

Health

Care

Equipment

&

Supplies

5.7%

Oil,

Gas

&

Consumable

Fuels

5.5%

Pharmaceuticals

4.3%

Beverages

3.6%

Health

Care

Providers

&

Services

3.5%

Chemicals

3.5%

Aerospace

&

Defense

3.4%

Specialty

Retail

3.3%

Semiconductors

&

Semiconductor

Equipment

3.2%

Multiline

Retail

3.1%

Software

3.1%

Other*

28.6%

Short-Term

Investments

&

Other

Net

Assets

1.9%

1.

Source:

Morningstar.

Frank

Russell

Company

is

the

source

and

owner

of

the

trademarks,

service

marks

and

copyrights

related

to

the

Russell

Indexes.

Russell

®

is

a

trademark

of

Frank

Russell

Company.

The

indexes

are

unmanaged

and

include

reinvestment

of

any

income

or

distributions.

They

do

not

include

any

fees,

expenses

or

sales

charges.

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

The

dollar

value,

number

of

shares

or

principal

amount,

and

names

of

all

portfolio

holdings

are

listed

in

the

Fund’s

Statement

of

Investments

(SOI).

The

SOI

begins

on

page

41

.

Franklin

Equity

Income

Fund

12

franklintempleton.com

Annual

Report

has

also

benefited

from

exposure

to

several

alternative

asset

managers

that

have

seen

strong

capital

inflows

and

increasing

fee-related

earnings.

At

the

stock

level,

Morgan

Stanley,

JPMorgan

Chase

and

Bank

of

America

were

performance

leaders

due,

in

part,

to

the

distribution

of

COVID-19

vaccines,

which

drove

a

rally

among

economically

sensitive

sectors,

including

financials.

The

industrials

sector

also

supported

Fund

performance

from

a

position

in

Raytheon

Technologies,

which

has

leading

defense

and

aerospace

businesses.

We

expect

that

increases

in

passenger

activity

will

support

revenue

opportunities

for

components

to

new

planes

and

maintenance

requirements.

Results

from

retailer

Target

in

the

consumer

discretionary

sector

aided

performance

as

well.

Customers

have

been

attracted

to

Target’s

low

prices,

improving

merchandise

and

stable

inventory

through

a

variety

of

fulfillment

options.

The

Fund

lacked

any

sector

detractors.

The

largest

individual

detractors

included

electric

utility

company

Xcel

Energy

in

the

utilities

sector,

for

which

we

reduced

our

weighting,

and

fintech

company

Fidelity

National

Information

Services

in

the

information

technology

sector.

Consumer

goods

company

Unilever

in

the

consumer

staples

sector

was

also

a

detractor

due

to

weaker-than-expected

organic

growth

trends.

We

exited

that

position

by

period-end.

Thank

you

for

your

continued

participation

in

Franklin

Equity

Income

Fund.

We

look

forward

to

serving

your

future

investment

needs.

Matthew

D.

Quinlan

Lead

Portfolio

Manager

Alan

E.

Muschott,

CFA

Todd

Brighton,

CFA

Portfolio

Management

Team

The

foregoing

information

reflects

our

analysis,

opinions

and

portfolio

holdings

as

of

October

31,

2021,

the

end

of

the

reporting

period.

The

way

we

implement

our

main

investment

strategies

and

the

resulting

portfolio

holdings

may

change

depending

on

factors

such

as

market

and

economic

conditions.

These

opinions

may

not

be

relied

upon

as

investment

advice

or

an

offer

for

a

particular

security.

The

information

is

not

a

complete

analysis

of

every

aspect

of

any

market,

country,

industry,

security

or

the

Fund.

Statements

of

fact

are

from

sources

considered

reliable,

but

the

investment

manager

makes

no

representation

or

warranty

as

to

their

completeness

or

accuracy.

Although

historical

performance

is

no

guarantee

of

future

results,

these

insights

may

help

you

understand

our

investment

management

philosophy.

Top

10

Holdings

10/31/21

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

JPMorgan

Chase

&

Co.

4.1%

Banks,

United

States

Morgan

Stanley

3.8%

Capital

Markets,

United

States

Bank

of

America

Corp.

3.5%

Banks,

United

States

Johnson

&

Johnson

3.1%

Pharmaceuticals,

United

States

United

Parcel

Service,

Inc.

2.8%

Air

Freight

&

Logistics,

United

States

Raytheon

Technologies

Corp.

2.7%

Aerospace

&

Defense,

United

States

Medtronic

plc

2.6%

Health

Care

Equipment

&

Supplies,

United

States

Target

Corp.

2.6%

Multiline

Retail,

United

States

Procter

&

Gamble

Co.

(The)

2.5%

Household

Products,

United

States

Duke

Energy

Corp.

2.4%

Electric

Utilities,

United

States

Performance

Summary

as

of

October

31,

2021

Franklin

Equity

Income

Fund

13

franklintempleton.com

Annual

Report

The

performance

tables

and

graphs

do

not

reflect

any

taxes

that

a

shareholder

would

pay

on

Fund

dividends,

capital

gain

distributions,

if

any,

or

any

realized

gains

on

the

sale

of

Fund

shares.

Total

return

reflects

reinvestment

of

the

Fund’s

dividends

and

capital

gain

distributions,

if

any,

and

any

unrealized

gains

or

losses.

Your

dividend

income

will

vary

depending

on

dividends

or

interest

paid

by

securities

in

the

Fund’s

portfolio,

adjusted

for

operating

expenses

of

each

class.

Capital

gain

distributions

are

net

profits

realized

from

the

sale

of

portfolio

securities.

Performance

as

of

10/31/21

1

Cumulative

total

return

excludes

sales

charges.

Average

annual

total

return

includes

maximum

sales

charges.

Sales

charges

will

vary

depending

on

the

size

of

the

investment

and

the

class

of

share

purchased.

The

maximum

is

5.50%

and

the

minimum

is

0%.

Class

A

:

5.50%

maximum

initial

sales

charge;

Advisor

Class:

no

sales

charges.

For

other

share

classes,

visit

franklintempleton.com.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

For

most

recent

month-end

performance,

go

to

franklintempleton.com

or

call

(800)

342-5236

.

Share

Class

Cumulative

Total

Return

2

Average

Annual

Total

Return

3

–

A

4

1-Year

+40.58%

+32.85%

5-Year

+90.61%

+12.49%

10-Year

+218.43%

+11.65%

Advisor

1-Year

+40.94%

+40.94%

5-Year

+93.08%

+14.06%

10-Year

+226.65%

+12.57%

30-Day

Standardized

Yield

6

Share

Class

Distribution

Rate

5

(with

fee

waiver)

(without

fee

waiver)

A

1.71%

1.17%

1.17%

Advisor

2.05%

1.48%

1.48%

See

page

15

for

Performance

Summary

footnotes.

Franklin

Equity

Income

Fund

Performance

Summary

14

franklintempleton.com

Annual

Report

See

page

15

for

Performance

Summary

footnotes.

Total

Return

Index

Comparison

for

a

Hypothetical

$10,000

Investment

1

Total

return

represents

the

change

in

value

of

an

investment

over

the

periods

shown.

It

includes

any

applicable

maximum

sales

charge,

Fund

expenses,

account

fees

and

reinvested

distributions.

The

unmanaged

indexes

include

reinvestment

of

any

income

or

distributions.

They

differ

from

the

Fund

in

composition

and

do

not

pay

management

fees

or

expenses.

One

cannot

invest

directly

in

an

index.

Class

A

(11/1/11–10/31/21)

Advisor

Class

(11/1/11–10/31/21)

Franklin

Equity

Income

Fund

Performance

Summary

15

franklintempleton.com

Annual

Report

Each

class

of

shares

is

available

to

certain

eligible

investors

and

has

different

annual

fees

and

expenses,

as

described

in

the

prospectus.

All

investments

involve

risks,

including

possible

loss

of

principal.

Stock

prices

fluctuate,

sometimes

rapidly

and

dramatically,

due

to

factors

affecting

individual

companies,

particular

industries

or

sectors,

or

general

market

conditions.

Investments

in

ELNs

often

have

risks

similar

to

their

underlying

securities,

which

could

include

management

risk,

market

risk

and,

as

applicable,

foreign

securities

and

currency

risks.

Convertible

securities

are

subject

to

the

risks

of

stocks

when

the

underlying

stock

price

is

high

relative

to

the

conversion

price

and

debt

securities

when

the

underlying

stock

price

is

low

relative

to

the

conversion

price.

The

Fund’s

investment

in

foreign

securities

also

involves

special

risks,

including

currency

fluctuations

and

economic

as

well

as

political

uncertainty.

Events

such

as

the

spread

of

deadly

diseases,

disasters,

and

financial,

political

or

social

disruptions,

may

heighten

risks

and

adversely

affect

performance.

The

Fund’s

prospectus

also

includes

a

description

of

the

main

investment

risks.

1.

The

Fund

has

a

fee

waiver

associated

with

any

investment

it

makes

in

a

Franklin

Templeton

money

fund

and/or

other

Franklin

Templeton

fund,

contractually

guaranteed

through

2/28/22.

Fund

investment

results

reflect

the

fee

waiver;

without

this

waiver,

the

results

would

have

been

lower.

2.

Cumulative

total

return

represents

the

change

in

value

of

an

investment

over

the

periods

indicated.

3.

Average

annual

total

return

represents

the

average

annual

change

in

value

of

an

investment

over

the

periods

indicated.

Return

for

less

than

one

year,

if

any,

has

not

been

annualized.

4.

Prior

to

9/10/18,

these

shares

were

offered

at

a

higher

initial

sales

charge

of

5.75%,

thus

actual

returns

(with

sales

charges)

would

have

differed.

Average

annual

total

returns

(with

sales

charges)

have

been

restated

to

reflect

the

current

maximum

initial

sales

charge

of

5.50%.

5.

Distribution

rate

is

based

on

an

annualization

of

the

respective

class’s

current

quarterly

dividend

and

the

maximum

offering

price

(NAV

for

Advisor

Class)

per

share

on

10/31/21.

6.

The

Fund’s

30-day

standardized

yield

is

calculated

over

a

trailing

30-day

period

using

the

yield

to

maturity

on

bonds

and/or

the

dividends

accrued

on

stocks.

It

may

not

equal

the

Fund’s

actual

income

distribution

rate,

which

reflects

the

Fund’s

past

dividends

paid

to

shareholders.

7.

Source:

Morningstar.

The

Russell

1000

Value

Index

is

market

capitalization

weighted

and

measures

the

performance

of

those

Russell

1000

Index

companies

with

relatively

lower

price-to-book

ratios

and

lower

forecasted

growth

rates.

The

S&P

500

is

a

market

capitalization-weighted

index

of

500

stocks

designed

to

measure

total

U.S.

equity

market

performance.

8.

Figures

are

as

stated

in

the

Fund’s

current

prospectus

and

may

differ

from

the

expense

ratios

disclosed

in

the

Your

Fund’s

Expenses

and

Financial

Highlights

sections

in

this

report.

In

periods

of

market

volatility,

assets

may

decline

significantly,

causing

total

annual

Fund

operating

expenses

to

become

higher

than

the

figures

shown.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

Distributions

(11/1/20–10/31/21)

Share

Class

Net

Investment

Income

Long-Term

Capital

Gain

Total

A

$0.5967

$0.2184

$0.8151

C

$0.3741

$0.2184

$0.5925

R

$0.5275

$0.2184

$0.7459

R6

$0.6903

$0.2184

$0.9087

Advisor

$0.6688

$0.2184

$0.8872

Total

Annual

Operating

Expenses

8

Share

Class

With

Fee

Waiver

Without

Fee

Waiver

A

0.85%

0.86%

Advisor

0.60%

0.61%

Your

Fund’s

Expenses

Franklin

Equity

Income

Fund

16

franklintempleton.com

Annual

Report

As

a

Fund

shareholder,

you

can

incur

two

types

of

costs:

(1)

transaction

costs,

including

sales

charges

(loads)

on

Fund

purchases

and

redemptions;

and

(2)

ongoing

Fund

costs,

including

management

fees,

distribution

and

service

(12b-1)

fees,

and

other

Fund

expenses.

All

mutual

funds

have

ongoing

costs,

sometimes

referred

to

as

operating

expenses.

The

table

below

shows

ongoing

costs

of

investing

in

the

Fund

and

can

help

you

understand

these

costs

and

compare

them

with

those

of

other

mutual

funds.

The

table

assumes

a

$1,000

investment

held

for

the

six

months

indicated.

Actual

Fund

Expenses

The

table

below

provides

information

about

actual

account

values

and

actual

expenses

in

the

columns

under

the

heading

“Actual.”

In

these

columns

the

Fund’s

actual

return,

which

includes

the

effect

of

Fund

expenses,

is

used

to

calculate

the

“Ending

Account

Value”

for

each

class

of

shares.

You

can

estimate

the

expenses

you

paid

during

the

period

by

following

these

steps

(

of

course,

your

account

value

and

expenses

will

differ

from

those

in

this

illustration

):

Divide

your

account

value

by

$1,000

(

if

your

account

had

an

$8,600

value,

then

$8,600

÷

$1,000

=

8.6

).

Then

multiply

the

result

by

the

number

in

the

row

for

your

class

of

shares

under

the

headings

“Actual”

and

“Expenses

Paid

During

Period”

(

if

Actual

Expenses

Paid

During

Period

were

$7.50,

then

8.6

x

$7.50

=

$64.50

).

In

this

illustration,

the

actual

expenses

paid

this

period

are

$64.50.

Hypothetical

Example

for

Comparison

with

Other

Funds

Under

the

heading

“Hypothetical”

in

the

table,

information

is

provided

about

hypothetical

account

values

and

hypothetical

expenses

based

on

the

Fund’s

actual

expense

ratio

and

an

assumed

rate

of

return

of

5%

per

year

before

expenses,

which

is

not

the

Fund’s

actual

return.

This

information

may

not

be

used

to

estimate

the

actual

ending

account

balance

or

expenses

you

paid

for

the

period,

but

it

can

help

you

compare

ongoing

costs

of

investing

in

the

Fund

with

those

of

other

funds.

To

do

so,

compare

this

5%

hypothetical

example

for

the

class

of

shares

you

hold

with

the

5%

hypothetical

examples

that

appear

in

the

shareholder

reports

of

other

funds.

Please

note

that

expenses

shown

in

the

table

are

meant

to

highlight

ongoing

costs

and

do

not

reflect

any

transactional

costs.

Therefore,

information

under

the

heading

“Hypothetical”

is

useful

in

comparing

ongoing

costs

only,

and

will

not

help

you

compare

total

costs

of

owning

different

funds.

In

addition,

if

transactional

costs

were

included,

your

total

costs

would

have

been

higher.

1.

Expenses

are

equal

to

the

annualized

expense

ratio

for

the

six-month

period

as

indicated

above—in

the

far

right

column—multiplied

by

the

simple

average

account

value

over

the

period

indicated,

and

then

multiplied

by

184/365

to

reflect

the

one-half

year

period.

2.

Reflects

expenses

after

fee

waivers

and

expense

reimbursements.

Does

not

include

acquired

fund

fees

and

expenses.

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Share

Class

Beginning

Account

Value

5/1/21

Ending

Account

Value

10/31/21

Expenses

Paid

During

Period

5/1/21–10/31/21

1,2

Ending

Account

Value

10/31/21

Expenses

Paid

During

Period

5/1/21–10/31/21

1,2

a

Net

Annualized

Expense

Ratio

2

A

$1,000

$1,105.80

$4.51

$1,020.92

$4.33

0.85%

C

$1,000

$1,101.40

$8.47

$1,017.14

$8.13

1.60%

R

$1,000

$1,104.40

$5.83

$1,019.66

$5.60

1.10%

R6

$1,000

$1,107.70

$2.70

$1,022.65

$2.59

0.51%

Advisor

$1,000

$1,107.40

$3.19

$1,022.18

$3.06

0.60%

17

franklintempleton.com

Annual

Report

Franklin

Managed

Income

Fund

This

annual

report

for

Franklin

Managed

Income

Fund

covers

the

fiscal

year

ended

October

31,

2021.

Your

Fund’s

Goal

and

Main

Investments

The

Fund

seeks

to

maximize

income

to

support

monthly

distributions,

while

maintaining

the

prospects

for

capital

appreciation

by

investing,

under

normal

market

conditions,

in

a

diversified

portfolio

of

stocks

(substantially

dividend

paying)

and

debt

securities.

The

Fund

normally

invests

at

least

25%

of

its

total

assets

in

debt

securities,

including

bonds,

notes,

debentures

and

money

market

securities,

and

at

least

25%

of

its

total

assets

in

equity

securities,

primarily

common

and

preferred

stock.

Performance

Overview

For

the

12

months

under

review,

the

Fund’s

Class

A

shares

posted

a

cumulative

total

return

of

+23.01%.

In

comparison,

the

Fund’s

new

primary

and

former

third

benchmark,

the

Standard

&

Poor’s

500

Index

(S&P

500),

which

is

a

broad

measure

of

U.S.

stock

performance,

posted

a

+42.91%

cumulative

total

return.

1

The

Fund’s

secondary

benchmark,

the

Bloomberg

U.S.

Aggregate

Bond

Index,

which

tracks

the

U.S.

investment-grade,

taxable

bond

market,

posted

a

-0.48%

cumulative

total

return.

1

The

Fund’s

new

third

and

former

primary

benchmark,

the

blended

50%

MSCI

USA

High

Dividend

Yield

Index,

25%

ICE

BofA

U.S.

Corporate

&

High

Yield

Index

and

25%

Bloomberg

U.S.

Aggregate

Bond

Index

(Blended

Benchmark),

which

is

a

combination

of

leading

stock

and

bond

indexes,

posted

a

+14.87%

cumulative

total

return.

2

The

MSCI

USA

High

Dividend

Yield

Index

is

designed

to

reflect

the

performance

of

equities

in

the

MSCI

USA

Index

(excluding

REITs)

with

higher

dividend

income

and

quality

characteristics

than

average

dividend

yields

that

are

both

sustainable

and

persistent.

The

ICE

BofA

U.S.

Corporate

&

High

Yield

Index

tracks

the

performance

of

U.S.

dollar-denominated

investment-grade

corporate

debt

publicly

issued

in

the

U.S.

domestic

market,

and

below

investment

grade,

but

not

in

default,

U.S.

dollar-denominated

corporate

bonds

publicly

issued

in

the

U.S.

domestic

market,

and

includes

issues

with

a

credit

rating

of

BBB

or

below,

as

rated

by

credit

rating

agencies

Moody’s

and

Standard

&

Poor’s.

You

can

find

the

Fund’s

long-term

performance

data

in

the

Performance

Summary

beginning

on

page

21

.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

For

most

recent

month-end

performance,

go

to

franklintempleton.com

or

call

(800)

342-5236

.

Investment

Strategy

We

apply

a

bottom-up

approach

to

investing

in

individual

securities.

We

will

assess

the

market

price

of

a

company’s

securities

relative

to

our

evaluation

of

the

company’s

long-

term

earnings,

asset

value

and

cash

flow

potential.

We

also

consider

a

company’s

price/earnings

ratio,

profit

margins

and

liquidation

value.

In

determining

an

optimal

mix

of

equity

and

fixed

income

investments

for

the

Fund,

we

assess

changing

economic,

market

and

industry

conditions.

The

Fund

seeks

income

by

investing

in

a

combination

of

corporate,

agency

and

government

bonds

issued

in

the

U.S.

and

other

countries,

as

well

as

common

stocks

of

companies

in

any

market

capitalization

range

and

convertible

securities.

The

Fund

seeks

capital

appreciation

by

investing

in

equity

securities

and

convertible

securities

of

companies

from

a

variety

of

industries.

The

Fund

also

invests

in

equity-linked

notes,

which

are

hybrid

derivative-type

instruments

designed

to

combine

the

characteristics

of

one

or

more

securities

(usually

a

single

stock,

a

stock

index

or

a

basket

of

stocks)

and

a

related

equity

derivative.

We

may,

from

time

to

time,

use

for

various

purposes

equity-related

derivatives,

including

call

and

put

options

and

futures

on

equity

securities

and

equity

indexes,

options

on

equity

index

futures,

as

well

as

interest-rate,

currency

and

credit-related

derivatives.

Portfolio

Composition

10/31/21

%

of

Total

Net

Assets

Common

Stocks

46.2%

Corporate

Bonds

22.4%

Equity-Linked

Securities

11.3%

Convertible

Preferred

Stocks

9.7%

U.S.

Government

and

Agency

Securities

4.0%

Management

Investment

Companies

2.9%

Other

0.5%

Short-Term

Investments

&

Other

Net

Assets

3.0%

1.

Source:

Morningstar.

2.

Source:

FactSet.

The

Blended

Benchmark

was

calculated

internally.

The

indexes

are

unmanaged

and

include

reinvestment

of

any

income

or

distributions.

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

The

dollar

value,

number

of

shares

or

principal

amount,

and

names

of

all

portfolio

holdings

are

listed

in

the

Fund’s

Statement

of

Investments

(SOI).

The

SOI

begins

on

page

51

.

Franklin

Managed

Income

Fund

18

franklintempleton.com

Annual

Report

These

purposes

include

enhancing

Fund

returns,

increasing

liquidity,

gaining

exposure

to

securities

or

markets

in

more

efficient

or

less

expensive

ways

and/or

hedging

risks.

Manager’s

Discussion

During

the

period

under

review,

our

equity

weighting

modestly

increased,

while

our

fixed

income

weighting

modestly

decreased

and

the

Fund’s

cash

position

slightly

increased.

The

Fund

generated

positive

returns

during

the

period,

with

strong

performance

across

equity

and

fixed

income.

Overweight

Fund

exposure

to

the

equity

markets

helped

drive

strong

returns,

while

lower

exposure

to

interest-rate

sensitive

fixed

income

securities

led

to

strong

performance

from

the

Fund

relative

to

its

blended

benchmark.

Dividend

stocks,

particularly

value-oriented

sectors,

outperformed

considerably

during

the

first

half

of

the

period

under

review.

The

outperformance

narrowed

compared

to

other

growth-oriented

sectors

by

the

end

of

the

period.

The

equity

component

of

the

Fund’s

blended

benchmark

increased,

with

the

MSCI

USA

High

Dividend

Yield

Index

posting

positive

returns

for

the

12-month

period.

The

Fund’s

equity

positions

outperformed

the

Fund’s

blended

benchmark.

Corporate

credit

spreads

continued

to

narrow

during

the

period

as

economic

reopening

and

the

lingering

positive

effects

of

the

record

fiscal

and

monetary

accommodation

continued

to

support

markets.

Offsetting

narrowing

credit

spreads

were

rising

interest

rates,

which

weighed

on

the

more

duration

sensitive

portions

of

the

Fund’s

benchmark.

Fixed

income

returns

for

the

Fund

outperformed

the

Fund’s

blended

benchmark.

The

Bloomberg

U.S.

Aggregate

Bond

Index

posted

a

negative

return,

while

the

ICE

BofAML

U.S.

Corporate

&

High

Yield

Index

posted

a

positive

return

at

period-end.

Fixed

Income

Fixed

income

holdings

posted

positive

returns

during

the

period,

outperforming

the

Fund’s

blended

fixed

income

benchmark.

While

U.S.

10-year

Treasury

yields

did

not

move

in

a

straight

line

over

the

course

of

the

year,

the

broad

trend

over

the

period

under

review

saw

yields

move

higher

(0.84%

at

the

start

of

the

period

under

review,

peaking

at

1.74%

on

March

31

before

finishing

the

period

at

1.55%).

The

Fund’s

duration

positioning

at

the

front

end

of

the

yield

curve

in

the

face

of

rising

interest

rates

during

the

period

was

a

key

source

driving

the

outperformance

relative

to

the

Fund’s

benchmark.

Additionally,

spread

compression

across

the

corporate

credit

market

helped

support

strong

performance

across

the

Fund’s

fixed

income

allocation.

The

Fund

was

underweight

fixed

income

relative

to

its

benchmark

given

what

were

perceived

to

be

better

opportunities

in

the

equity

market

during

the

period

under

review.

Every

corporate

credit

sector

generated

positive

absolute

returns

during

the

period

under

review,

with

health

care

and

consumer

discretionary

leading

the

way

in

terms

of

performance

contribution

relative

to

the

Fund’s

blended

benchmark.

Our

holdings

in

U.S.

Treasuries

and

Agency

mortgage-backed

securities

(MBS)

were

minor

absolute

detractors

during

the

period

but

these

positions

were

shorter

in

duration

and

much

smaller

in

size

relative

to

the

benchmark,

so

these

sectors

were

positive

contributors

relative

to

the

Fund’s

blended

benchmark.

Corporate

credit

spreads

continued

to

narrow

during

the

period

under

review,

which

benefited

high-yield

exposures

in

particular.

High-yield

corporate

bonds

are

generally

lower

in

duration

than

investment-grade

corporate

bonds.

Within

health

care,

the

largest

contributor

to

performance

was

high-yield

rated

hospital

company

CHS/Community

Health

Systems.

The

company

moved

past

COVID-19-

induced

disruptions

and

was

able

to

access

both

the

debt

and

equity

markets

during

the

period

to

reduce

interest

expense

and

improve

the

health

of

its

balance

sheet,

which

led

to

strong

performance.

In

health

care

outside

of

Community

Health

Systems,

managed

care

provider

Centene

and

integrated

pharmacy

health

care

provider

CVS

Health

within

the

investment-grade

corporate

credit

market

benefited

Fund

returns

during

the

period.

The

consumer

discretionary

sector

saw

strong

performance

from

bonds

issued

by

Ford

Motor

Company,

as

the

company

saw

strong

demand

from

customers

coming

out

of

the

pandemic.

Similarly,

the

Fund

saw

strong

performance

from

consumer

discretionary

peers

Las

Vegas

Sands,

Wynn

Resorts

and

Vail

Resorts

as

consumers

looked

to

spend

on

travel

and

leisure

after

the

pandemic.

Top

Five

Equity

Holdings

10/31/21

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

Texas

Instruments,

Inc.

2.3%

Semiconductors

&

Semiconductor

Equipment

,

United

States

Bank

of

America

Corp.

2.3%

Banks

,

United

States

Procter

&

Gamble

Co.

(The)

2.0%

Household

Products

,

United

States

Southern

Co.

(The)

1.7%

Electric

Utilities

,

United

States

Honeywell

International,

Inc.

1.6%

Industrial

Conglomerates

,

United

States

Franklin

Managed

Income

Fund

19

franklintempleton.com

Annual

Report

No

other

corporate

sectors

stood

out

in

terms

of

outsized

performance

contributions

relative

to

the

Fund’s

benchmark.

However,

other

strong

individual

contributors

came

from

Occidental

Petroleum

and

Calumet

Specialty

Products

Partners

in

the

energy

sector.

U.S.

Treasury

and

agency

MBS

holdings

were

small

absolute

detractors

during

the

period,

as

described

above.

However,

the

reduced

size

and

shorter

duration

of

our

U.S.

Treasury

holdings

relative

to

the

Fund’s

blended

benchmark

led

to

the

strongest

relative

performance

within

fixed

income

after

health

care.

Equity

Equity

holdings

increased

over

the

period.

As

an

asset

class,

equities

outperformed

fixed

income

during

the

period.

An

overweight

allocation

to

the

equity

markets

relative

to

the

Fund’s

blended

benchmark

benefited

overall

Fund

performance

during

the

period

under

review.

While

the

absolute

level

of

our

equity

allocation

increased

by

period-

end,

our

allocation

to

the

equity

markets

increased

through

the

first

three

quarters

of

the

period

under

review,

before

a

reduction

in

the

Fund’s

equity

allocation

over

the

final

quarter

of

the

period

under

review.

All

sectors

were

positive

absolute

contributors

to

Fund

performance

during

the

period.

Financials

and

energy

holdings

were

large

positive

absolute

contributors

during

the

period

(also

large

positive

returns

relative

to

the

Fund’s

benchmark

as

well),

with

the

industrials,

utilities

and

information

technology

sectors

providing

notable

positive

relative

contributions

as

well.

All

the

Fund’s

equity

positions

in

the

financials

sector

were

positive

contributors

during

the

period

amidst

rising

interest

rates.

Holdings

of

JPMorgan

Chase,

Bank

of

America

and

Morgan

Stanley

led

returns.

Other

notable

contributors

included

Truist

Financial,

U.S.

Bancorp,

Citigroup

and

KKR

&

Co.

Energy

peers

Chevron

and

Exxon

Mobil

were

notable

positive

contributors

during

the

period,

as

a

much

better

macro

supply

and

demand

forecast

for

the

industry

led

to

strong

performance

from

depressed

valuations.

Top

performers

in

the

Fund

outside

of

financials

and

energy

were

Raytheon

Technologies

and

Honeywell

International

in

the

industrials

sector,

as

well

as

Cisco

Systems

and

Analog

Devices

in

the

information

technology

sector.

Despite

positive

absolute

contributions,

equity

holdings

in

the

consumer

staples

and

consumer

discretionary

sectors

were

modest

detractors

in

the

period

relative

to

the

Fund’s

benchmark.

There

were

no

notable

detractors

from

performance

during

the

period

at

the

individual

security

level

with

nominal

detractors

from

communications

peers

AT&T

and

Verizon

Communications,

as

well

as

utility

company

American

Electric

Power.

During

the

period,

the

Fund

used

derivatives,

such

as

equity

call

and

put

options

to

sell

and

reduce

positions

(call

options)

and/or

to

initiate

and

add

to

positions

(put

options)

on

individual

common

stocks,

which

generated

gains

during

the

period

under

review.

Separately,

the

Fund

used

put

option

spreads

on

the

S&P

500

during

the

period

under

review,

and

while

they

were

the

Fund’s

top

contributor

to

performance

during

September

2021,

when

the

market

traded

lower,

the

positions

generated

losses

during

the

period.

Thank

you

for

your

continued

participation

in

Franklin

Managed

Income

Fund.

We

look

forward

to

serving

your

future

investment

needs.

Edward

D.

Perks,

CFA

Co-Lead

Portfolio

Manager

Brendan

Circle,

CFA

Co-Lead

Portfolio

Manager

Todd

Brighton,

CFA

Portfolio

Manager

The

foregoing

information

reflects

our

analysis,

opinions

and

portfolio

holdings

as

of

October

31,

2021,

the

end

of

the

reporting

period.

The

way

we

implement

our

main

investment

strategies

and

the

resulting

portfolio

holdings

may

change

depending

on

factors

such

as

market

and

economic

conditions.

These

opinions

may

not

be

relied

upon

as

investment

advice

or

an

offer

for

a

particular

security.

The

information

is

not

a

complete

analysis

of

every

aspect

of

any

market,

country,

industry,

security

or

the

Fund.

Statements

of

fact

are

from

sources

considered

reliable,

but

the

investment

Top

Five

Fixed

Income

Holdings

10/31/21

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

U.S.

Treasury

Notes

4.0%

Diversified

Financial

Services

,

United

States

CHS/Community

Health

Systems,

Inc.

2.1%

Health

Care

Providers

&

Services

,

United

States

Bank

of

America

Corp.

0.8%

Banks

,

United

States

Bausch

Health

Cos.,

Inc.

0.7%

Pharmaceuticals

,

United

States

Ford

Motor

Credit

Co.

LLC

0.7%

Consumer

Finance

,

United

States

Franklin

Managed

Income

Fund

20

franklintempleton.com

Annual

Report

manager

makes

no

representation

or

warranty

as

to

their

completeness

or

accuracy.

Although

historical

performance

is

no

guarantee

of

future

results,

these

insights

may

help

you

understand

our

investment

management

philosophy.

Performance

Summary

as

of

October

31,

2021

Franklin

Managed

Income

Fund

21

franklintempleton.com

Annual

Report

The

performance

tables

and

graphs

do

not

reflect

any

taxes

that

a

shareholder

would

pay

on

Fund

dividends,

capital

gain

distributions,

if

any,

or

any

realized

gains

on

the

sale

of

Fund

shares.

Total

return

reflects

reinvestment

of

the

Fund’s

dividends

and

capital

gain

distributions,

if

any,

and

any

unrealized

gains

or

losses.

Your

dividend

income

will

vary

depending

on

dividends

or

interest

paid

by

securities

in

the

Fund’s

portfolio,

adjusted

for

operating

expenses

of

each

class.

Capital

gain

distributions

are

net

profits

realized

from

the

sale

of

portfolio

securities.

Performance

as

of

10/31/21

1

Cumulative

total

return

excludes

sales

charges.

Average

annual

total

return

includes

maximum

sales

charges.

Sales

charges

will

vary

depending

on

the

size

of

the

investment

and

the

class

of

share

purchased.

The

maximum

is

5.50%

and

the

minimum

is

0%.

Class

A:

5.50%

maximum

initial

sales

charge;

Advisor

Class:

no

sales

charges.

For

other

share

classes,

visit

franklintempleton.com.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

For

most

recent

month-end

performance,

go

to

franklintempleton.com

or

call

(800)

342-5236.

Share

Class

Cumulative

Total

Return

2

Average

Annual

Total

Return

3

–

A

4

1-Year

+23.01%

+16.27%

5-Year

+53.37%

+7.70%

10-Year

+122.17%

+7.70%

Advisor

1-Year

+23.34%

+23.34%

5-Year

+55.38%

+9.21%

10-Year

+128.17%

+8.60%

30-Day

Standardized

Yield

6

Share

Class

Distribution

Rate

5

(with

fee

waiver)

(without

fee

waiver)

A

3.25%

1.62%

1.59%

Advisor

3.66%

1.96%

1.93%

See

page

24

for

Performance

Summary

footnotes.

Franklin

Managed

Income

Fund

Performance

Summary

22

franklintempleton.com

Annual

Report

See

page

24

for

Performance

Summary

footnotes.

Total

Return

Index

Comparison

for

a

Hypothetical

$10,000

Investment

1

Total

return

represents

the

change

in

value

of

an

investment

over

the

periods

shown.

It

includes

any

applicable

maximum

sales

charge,

Fund

expenses,

account

fees

and

reinvested

distributions.

The

unmanaged

indexes

include

reinvestment

of

any

income

or

distributions.

They

differ

from

the

Fund

in

composition

and

do

not

pay

management

fees

or

expenses.

One

cannot

invest

directly

in

an

index.

Class

A

(11/1/11–10/31/21)

Franklin

Managed

Income

Fund

Performance

Summary

23

franklintempleton.com

Annual

Report

See

page

24

for

Performance

Summary

footnotes.

Advisor

Class

(11/1/11–10/31/21)

Franklin

Managed

Income

Fund

Performance

Summary

24

franklintempleton.com

Annual

Report

Each

class

of

shares

is

available

to

certain

eligible

investors

and

has

different

annual

fees

and

expenses,

as

described

in

the

prospectus.

All

investments

involve

risks,

including

possible

loss

of

principal.

The

Fund’s

share

price

and

yield

will

be

affected

by

interest

rate

movements.

Bond

prices

generally

move

in

the

opposite

direction

of

interest

rates.

As

the

prices

of

bonds

in

the

Fund

adjust

to

a

rise

in

interest

rates,

the

Fund’s

share

price

may

decline.

Stock

prices

fluctuate,

sometimes

rapidly

and

dramatically,

due

to

factors

affecting

individual

companies,

particular

industries

or

sectors,

or

general

market

conditions.

Events

such

as

the

spread

of

deadly

diseases,

disasters,

and

financial,

political

or

social

disruptions,

may

heighten

risks

and

adversely

affect

perfor-

mance.

The

Fund’s

prospectus

also

includes

a

description

of

the

main

investment

risks.

The

Fund

is

not

guaranteed

to

achieve

its

investment

goal

of

making

monthly

distributions,

while

maintaining

prospects

for

capital

appreciation

nor

is

there

any

guarantee

that

the

Fund

will

provide

sufficient

income

at

or

through

the

investor’s

retirement.

In

addition,

some

of

its

distributions

may

be

treated

in

part

as

a

return

of

capital,

which

will

decrease

shareholders’

cost

basis

in

the

Fund

and

affect

the

amount

of

any

capital

gain

or

loss

that

they

realize

when

selling

or

exchanging

fund

shares.

The

annual

payout

rate

may

be

adjusted

higher

or

lower

from

year

to

year

and

could

vary

substantially

over

time.

It

is

possible

for

the

Fund

to

suffer

substantial

investment

losses

and

simultaneously

experience

additional

asset

reductions

as

a

result

of

its

distributions

to

shareholders

under

the

managed

distribution

policy.

Investors

who

hold

the

Fund

within

a

tax-advantaged

retirement

account

should

consult

their

tax

advisors

to

discuss

tax

consequences

of

receiving

cash

distributions.

In

addition,

use

of

the

Fund

or

election

of

the

option

to

receive

distribution

payments

in

cash

may

be

restricted

in

certain

retirement

plans

by

the

terms

of

the

governing

plan

documents

and/or

the

discretion

of

the

plan

administrator.

Investors

are

strongly

advised

to

consult

with

their

financial

advisor

for

assistance

before

selecting

the

appropriate

fund,

based

on

their

goals

and

personal

situations,

including

time

horizon,

retirement

income

needs,

risk

tolerance

and

tax

bracket.

1.

The

Fund

has

an

expense

reduction

and

a

fee

waiver

associated

with

any

investments

it

makes

in

a

Franklin

Templeton

money

fund

and/or

other

Franklin

Templeton

fund,

contractually

guaranteed

through

2/28/22.

Fund

investment

results

reflect

the

expense

reduction

and

fee

waiver;

without

these

reductions,

the

results

would

have

been

lower.

2.

Cumulative

total

return

represents

the

change

in

value

of

an

investment

over

the

periods

indicated.

3.

Average

annual

total

return

represents

the

average

annual

change

in

value

of

an

investment

over

the

periods

indicated.

Return

for

less

than

one

year,

if

any,

has

not

been

annualized.

4.

Prior

to

9/10/18,

these

shares

were

offered

at

a

higher

initial

sales

charge

of

5.75%,

thus

actual

returns

(with

sales

charges)

would

have

differed.

Average

annual

total

returns

(with

sales

charges)

have

been

restated

to

reflect

the

current

maximum

initial

sales

charge

of

5.50%.

5.

Distribution

rate

is

based

on

an

annualization

of

the

respective

class’s

April

dividend

and

the

maximum

offering

price

(NAV

for

Advisor

Class)

per

share

on

10/31/21.

6.

The

Fund’s

30-day

standardized

yield

is

calculated

over

a

trailing

30-day

period

using

the

yield

to

maturity

on

bonds

and/or

the

dividends

accrued

on

stocks.

It

may

not

equal

the

Fund’s

actual

income

distribution

rate,

which

reflects

the

Fund’s

past

dividends

paid

to

shareholders.

7.

Source:

Morningstar.

The

S&P

500

is

a

market

capitalization-weighted

index

of

500

stocks

designed

to

measure

total

U.S.

equity

market

performance.

The

Bloomberg

U.S.

Aggregate

Bond

Index

measures

the

performance

of

the

investment-grade,

U.S.

dollar-denominated,

fixed-rate

taxable

bond

market.

The

index

includes

Treasuries,

government-related

and

corporate

securities,

mortgage-backed

securities

(agency

fixed-rate

and

hybrid

adjustable-rate

mortgage

pass-throughs),

asset-backed

securities

and

commercial

mortgage-backed

securities

(agency

and

nonagency).

Net

Asset

Value

Share

Class

(Symbol)

10/31/21

10/31/20

Change

A

(FBLAX)

$13.83

$11.73

+$2.10

C

(FBMCX)

$13.68

$11.61

+$2.07

R

(FBFQX)

$13.88

$11.76

+$2.12

R6

(FBFRX)

$13.88

$11.76

+$2.12

Advisor

(FBFZX)

$13.87

$11.76

+$2.11

Distributions

(11/1/20–10/31/21)

Share

Class

Net

Investment

Income

Long-Term

Capital

Gain

Total

A

$0.4746

$0.0860

$0.5606

C

$0.3752

$0.0860

$0.4612

R

$0.4436

$0.0860

$0.5296

R6

$0.5178

$0.0860

$0.6038

Advisor

$0.5072

$0.0860

$0.5932

Total

Annual

Operating

Expenses

9

Share

Class

With

Fee

Waiver

Without

Fee

Waiver

A

0.93%

0.94%

Advisor

0.68%

0.69%

Franklin

Managed

Income

Fund

Performance

Summary

25

franklintempleton.com

Annual

Report

8.

FactSet.

The

Blended

Benchmark

(50%

MSCI

USA

High

Dividend

Yield

Index,

25%

ICE

BofA

U.S.

Corporate

&

High

Yield

Index

and

25%

Bloomberg

U.S.

Aggregate

Bond

Index)

is

a

combination

of

leading

stock

and

bond

indexes.

The

ICE

BofA

U.S.

Corporate

&

High

Yield

Index

tracks

the

performance

of

U.S.

dollar-denominated

investment-grade

corporate

debt

publicly

issued

in

the

U.S.

domestic

market,

and

below

investment

grade,

but

not

in

default,

U.S.

dollar-denominated

corporate

bonds

pub-

licly

issued

in

the

U.S.

domestic

market,

and

includes

issues

with

a

credit

rating

of

BBB

or

below,

as

rated

by

credit

rating

agencies

Moody’s

and

S&P.

The

MSCI

USA

High

Dividend

Yield

Index

is

based

on

the

MSCI

USA

Index,

its

parent

index,

and

includes

large-

and

mid-capitalization

stocks.

The

index

is

designed

to

reflect

the

performance

of

equities

in

the

parent

index

(excluding

real

estate

investment

trusts)

with

higher

dividend

income

and

quality

characteristics

than

average

dividend

yields

that

are

both

sustainable

and

persistent.

9.

Figures

are

as

stated

in

the

Fund’s

current

prospectus

and

may

differ

from

the

expense

ratios

disclosed

in

the

Your

Fund’s

Expenses

and

Financial

Highlights

sections

in

this

report.

In

periods

of

market

volatility,

assets

may

decline

significantly,

causing

total

annual

Fund

operating

expenses

to

become

higher

than

the

figures

shown.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

Your

Fund’s

Expenses

Franklin

Managed

Income

Fund

26

franklintempleton.com

Annual

Report

As

a

Fund

shareholder,

you

can

incur

two

types

of

costs:

(1)

transaction

costs,

including

sales

charges

(loads)

on

Fund

purchases

and

redemptions;

and

(2)

ongoing

Fund

costs,

including

management

fees,

distribution

and

service

(12b-1)

fees,

and

other

Fund

expenses.

All

mutual

funds

have

ongoing

costs,

sometimes

referred

to

as

operating

expenses.

The

table

below

shows

ongoing

costs

of

investing

in

the

Fund

and

can

help

you

understand

these

costs

and

compare

them

with

those

of

other

mutual

funds.

The

table

assumes

a

$1,000

investment

held

for

the

six

months

indicated.

Actual

Fund

Expenses

The

table

below

provides

information

about

actual

account

values

and

actual

expenses

in

the

columns

under

the

heading

“Actual.”

In

these

columns

the

Fund’s

actual

return,

which

includes

the

effect

of

Fund

expenses,

is

used

to

calculate

the

“Ending

Account

Value”

for

each

class

of

shares.

You

can

estimate

the

expenses

you

paid

during

the

period

by

following

these

steps

(

of

course,

your

account

value

and

expenses

will

differ

from

those

in

this

illustration

):

Divide

your

account

value

by

$1,000

(

if

your

account

had

an

$8,600

value,

then

$8,600

÷

$1,000

=

8.6

).

Then

multiply

the

result

by

the

number

in

the

row

for

your

class

of

shares

under

the

headings

“Actual”

and

“Expenses

Paid

During

Period”

(

if

Actual

Expenses

Paid

During

Period

were

$7.50,

then

8.6

x

$7.50

=

$64.50

).

In

this

illustration,

the

actual

expenses

paid

this

period

are

$64.50.

Hypothetical

Example

for

Comparison

with

Other

Funds

Under

the

heading

“Hypothetical”

in

the

table,

information

is

provided

about

hypothetical

account

values

and

hypothetical

expenses

based

on

the

Fund’s

actual

expense

ratio

and

an

assumed

rate

of

return

of

5%

per

year

before

expenses,

which

is

not

the

Fund’s

actual

return.

This

information

may

not

be

used

to

estimate

the

actual

ending

account

balance

or

expenses

you

paid

for

the

period,

but

it

can

help

you

compare

ongoing

costs

of

investing

in

the

Fund

with

those

of

other

funds.

To

do

so,

compare

this

5%

hypothetical

example

for

the

class

of

shares

you

hold

with

the

5%

hypothetical

examples

that

appear

in

the

shareholder

reports

of

other

funds.

Please

note

that

expenses

shown

in

the

table

are

meant

to

highlight

ongoing

costs

and

do

not

reflect

any

transactional

costs.

Therefore,

information

under

the

heading

“Hypothetical”

is

useful

in

comparing

ongoing

costs

only,

and

will

not

help

you

compare

total

costs

of

owning

different

funds.

In

addition,

if

transactional

costs

were

included,

your

total

costs

would

have

been

higher.

1.

Expenses

are

equal

to

the

annualized

expense

ratio

for

the

six-month

period

as

indicated

above—in

the

far

right

column—multiplied

by

the

simple

average

account

value

over

the

period

indicated,

and

then

multiplied

by

184/365

to

reflect

the

one-half

year

period.

2.

Reflects

expenses

after

fee

waivers

and

expense

reimbursements.

Does

not

include

acquired

fund

fees

and

expenses.

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Share

Class

Beginning

Account

Value

5/1/21

Ending

Account

Value

10/31/21

Expenses

Paid

During

Period

5/1/21–10/31/21

1,2

Ending

Account

Value

10/31/21

Expenses

Paid

During

Period

5/1/21–10/31/21

1,2

a

Net

Annualized

Expense

Ratio

2

A

$1,000

$1,043.10

$4.65

$1,020.65

$4.60

0.90%

C

$1,000

$1,039.00

$8.50

$1,016.87

$8.41

1.65%

R

$1,000

$1,041.80

$5.93

$1,019.40

$5.87

1.15%

R6

$1,000

$1,044.60

$3.02

$1,022.25

$2.99

0.59%

Advisor

$1,000

$1,044.20

$3.37

$1,021.91

$3.33

0.65%

Franklin

Investors

Securities

Trust

Financial

Highlights

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Convertible

Securities

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

27

o

a

Year

Ended

October

31,

2021

2020

2019

2018

2017

Class

A

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

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

$27.11

$22.13

$20.65

$20.68

$18.24

Income

from

investment

operations

a

:

Net

investment

income

b

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

0.19

0.22

0.21

0.16

0.27

Net

realized

and

unrealized

gains

(losses)

...........

7.01

6.67

2.47

1.35

2.98

Total

from

investment

operations

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

7.20

6.89

2.68

1.51

3.25

Less

distributions

from:

Net

investment

income

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

(0.23)

(0.30)

(0.45)

(0.49)

(0.47)

Net

realized

gains

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

(2.93)

(1.61)

(0.75)

(1.05)

(0.34)

Total

distributions

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

(3.16)

(1.91)

(1.20)

(1.54)

(0.81)

Net

asset

value,

end

of

year

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

$31.15

$27.11

$22.13

$20.65

$20.68

Total

return

c

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

27.98%

33.49%

13.84%

7.65%

18.39%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.83%

0.83%

0.85%

0.86%

0.85%

Expenses

net

of

waiver

and

payments

by

affiliates

d

......

0.82%

0.83%

e

0.83%

0.84%

0.84%

Net

investment

income

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

0.64%

0.96%

0.97%

0.76%

1.39%

Supplemental

data

Net

assets,

end

of

year

(000’s)

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

$1,621,832

$1,385,821

$1,169,928

$1,153,875

$815,491

Portfolio

turnover

rate

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

32.67%

32.46%

26.83%

35.90%

27.24%

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

e

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

Franklin

Investors

Securities

Trust

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Convertible

Securities

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(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

28

a

Year

Ended

October

31,

2021

2020

2019

2018

2017

Class

C

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

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

$26.66

$21.77

$20.31

$20.37

$17.98

Income

from

investment

operations

a

:

Net

investment

income

(loss)

b

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

(0.03)

0.05

0.04

(—)

c

0.12

Net

realized

and

unrealized

gains

(losses)

...........

6.89

6.56

2.45

1.33

2.93

Total

from

investment

operations

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

6.86

6.61

2.49

1.33

3.05

Less

distributions

from:

Net

investment

income

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

(0.06)

(0.11)

(0.28)

(0.34)

(0.32)

Net

realized

gains

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

(2.93)

(1.61)

(0.75)

(1.05)

(0.34)

Total

distributions

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

(2.99)

(1.72)

(1.03)

(1.39)

(0.66)

Net

asset

value,

end

of

year

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

$30.53

$26.66

$21.77

$20.31

$20.37

Total

return

d

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

27.04%

32.48%

13.03%

6.84%

17.49%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

1.57%

1.59%

1.60%

1.61%

1.60%

Expenses

net

of

waiver

and

payments

by

affiliates

e

......

1.57%

f

1.58%

1.58%

1.59%

1.59%

Net

investment

income

(loss)

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

(0.10)%

0.21%

0.22%

0.01%

0.64%

Supplemental

data

Net

assets,

end

of

year

(000’s)

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

$198,611

$233,295

$256,075

$299,716

$303,243

Portfolio

turnover

rate

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

32.67%

32.46%

26.83%

35.90%

27.24%

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Amount

rounds

to

less

than

$0.01

per

share.

d

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable.

e

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

f

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

Franklin

Investors

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Trust

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Convertible

Securities

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(continued)

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The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

29

a

Year

Ended

October

31,

2021

2020

2019

2018

2017

Class

R6

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

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

$27.29

$22.28

$20.78

$20.79

$18.33

Income

from

investment

operations

a

:

Net

investment

income

b

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

0.29

0.31

0.28

0.24

0.34

Net

realized

and

unrealized

gains

(losses)

...........

7.07

6.69

2.50

1.36

3.00

Total

from

investment

operations

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

7.36

7.00

2.78

1.60

3.34

Less

distributions

from:

Net

investment

income

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

(0.33)

(0.38)

(0.53)

(0.56)

(0.54)

Net

realized

gains

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

(2.93)

(1.61)

(0.75)

(1.05)

(0.34)

Total

distributions

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

(3.26)

(1.99)

(1.28)

(1.61)

(0.88)

Net

asset

value,

end

of

year

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

$31.39

$27.29

$22.28

$20.78

$20.79

Total

return

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

28.43%

33.89%

14.26%

8.07%

18.84%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.53%

0.55%

0.54%

0.55%

0.49%

Expenses

net

of

waiver

and

payments

by

affiliates

c

......

0.50%

0.50%

0.49%

0.49%

0.48%

Net

investment

income

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

0.97%

1.30%

1.31%

1.11%

1.75%

Supplemental

data

Net

assets,

end

of

year

(000’s)

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

$127,846

$113,642

$51,791

$57,824

$22,950

Portfolio

turnover

rate

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

32.67%

32.46%

26.83%

35.90%

27.24%

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

Investors

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accompanying

notes

are

an

integral

part

of

these

financial

statements.

30

a

Year

Ended

October

31,

2021

2020

2019

2018

2017

Advisor

Class

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

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

$27.11

$22.14

$20.65

$20.68

$18.24

Income

from

investment

operations

a

:

Net

investment

income

b

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

0.26

0.28

0.26

0.21

0.32

Net

realized

and

unrealized

gains

(losses)

...........

7.03

6.66

2.49

1.35

2.98

Total

from

investment

operations

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

7.29

6.94

2.75

1.56

3.30

Less

distributions

from:

Net

investment

income

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

(0.31)

(0.36)

(0.51)

(0.54)

(0.52)

Net

realized

gains

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

(2.93)

(1.61)

(0.75)

(1.05)

(0.34)

Total

distributions

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

(3.24)

(1.97)

(1.26)

(1.59)

(0.86)

Net

asset

value,

end

of

year

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

$31.16

$27.11

$22.14

$20.65

$20.68

Total

return

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

28.34%

33.80%

14.18%

7.91%

18.69%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.58%

0.58%

0.60%

0.61%

0.60%

Expenses

net

of

waiver

and

payments

by

affiliates

c

......

0.57%

0.58%

d

0.58%

0.59%

0.59%

Net

investment

income

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

0.89%

1.20%

1.22%

1.01%

1.64%

Supplemental

data

Net

assets,

end

of

year

(000’s)

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

$3,355,546

$2,773,524

$2,379,435

$2,189,462

$1,542,254

Portfolio

turnover

rate

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

32.67%

32.46%

26.83%

35.90%

27.24%

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

d

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

Franklin

Investors

Securities

Trust

Statement

of

Investments,

October

31,

2021

Franklin

Convertible

Securities

Fund

franklintempleton.com

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accompanying

notes

are

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integral

part

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financial

statements.

Annual

Report

31

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

2.4%

Chemicals

1.1%

International

Flavors

&

Fragrances,

Inc.

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

United

States

394,525

$

58,172,711

Diversified

Financial

Services

0.8%

Equitable

Holdings,

Inc.

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

United

States

1,325,915

44,418,153

Machinery

0.5%

Fortive

Corp.

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

United

States

334,259

25,306,749

Total

Common

Stocks

(Cost

$116,637,711)

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

127,897,613

Convertible

Preferred

Stocks

20.2%

Auto

Components

1.9%

Aptiv

plc,

5.5%,

A

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

United

States

530,000

102,396,000

Capital

Markets

2.6%

KKR

&

Co.,

Inc.,

6%,

C

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

United

States

1,360,000

136,054,400

Electric

Utilities

3.6%

American

Electric

Power

Co.,

Inc.,

6.125%

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

United

States

440,000

21,881,200

American

Electric

Power

Co.,

Inc.,

6.125%

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

United

States

600,000

30,984,000

NextEra

Energy,

Inc.,

5.279%

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

United

States

1,100,000

59,917,000

PG&E

Corp.,

5.5%

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

United

States

430,000

48,633,000

Southern

Co.

(The),

6.75%,

2019

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

United

States

550,000

28,154,500

189,569,700

Food

Products

1.5%

Bunge

Ltd.,

4.875%

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

United

States

630,000

80,085,600

Health

Care

Equipment

&

Supplies

2.1%

Danaher

Corp.,

4.75%,

A

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

United

States

41,200

85,912,300

Danaher

Corp.,

5%,

B

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

United

States

14,045

23,325,234

109,237,534

Health

Care

Technology

0.4%

Change

Healthcare,

Inc.,

6%

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

United

States

300,000

21,438,000

Life

Sciences

Tools

&

Services

1.9%

Avantor

,

Inc.,

6.25%,

A

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

United

States

820,000

101,499,600

Machinery

0.6%

a

RBC

Bearings,

Inc.,

5%,

A

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

United

States

250,000

29,897,500

a

Multi-Utilities

1.7%

DTE

Energy

Co.,

6.25%

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

United

States

800,000

40,384,000

NiSource,

Inc.,

7.75%

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

United

States

450,000

48,253,500

88,637,500

Semiconductors

&

Semiconductor

Equipment

2.2%

Broadcom,

Inc.,

8%,

A

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

United

States

71,100

119,258,874

Water

Utilities

0.8%

Essential

Utilities,

Inc.,

6%

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

United

States

770,000

44,475,200

Wireless

Telecommunication

Services

0.9%

a,b

2020

Cash

Mandatory

Exchangeable

Trust,

144A,

5.25%

.......

United

States

48,000

50,352,344

a

Total

Convertible

Preferred

Stocks

(Cost

$746,676,180)

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

1,072,902,252

Franklin

Investors

Securities

Trust

Statement

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Investments

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Convertible

Securities

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(continued)

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notes

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part

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statements.

32

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Convertible

Bonds

73.4%

Biotechnology

3.4%

Insmed

,

Inc.

,

Senior

Note

,

0.75

%

,

6/01/28

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

United

States

46,000,000

$

53,801,630

Intercept

Pharmaceuticals,

Inc.

,

Senior

Note

,

2

%

,

5/15/26

.......

United

States

21,000,000

12,852,000

Neurocrine

Biosciences,

Inc.

,

Senior

Note

,

2.25

%

,

5/15/24

......

United

States

44,750,000

63,656,875

b

PTC

Therapeutics,

Inc.

,

Senior

Note

,

144A,

1.5

%

,

9/15/26

.......

United

States

48,000,000

50,035,200

180,345,705

Communications

Equipment

1.4%

Viavi

Solutions,

Inc.

,

Senior

Note,

1.75%,

6/01/23

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

United

States

40,969,000

50,495,599

Senior

Note,

1%,

3/01/24

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

United

States

20,000,000

25,721,700

76,217,299

Energy

Equipment

&

Services

0.5%

b

Oil

States

International,

Inc.

,

Senior

Note

,

144A,

4.75

%

,

4/01/26

..

United

States

28,000,000

26,627,844

Entertainment

3.9%

iQIYI

,

Inc.

,

Senior

Note,

3.75%,

12/01/23

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

China

40,000,000

39,839,998

Senior

Note,

2%,

4/01/25

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

China

26,000,000

23,089,301

Sea

Ltd.

,

Senior

Note,

2.375%,

12/01/25

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

Taiwan

10,500,000

40,129,687

Senior

Note,

0.25%,

9/15/26

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

Taiwan

65,000,000

68,589,626

b

Zynga,

Inc.

,

Senior

Note

,

144A,

Zero

Cpn

.,

12/15/26

...........

United

States

37,000,000

35,732,852

207,381,464

Equity

Real

Estate

Investment

Trusts

(REITs)

0.5%

Pebblebrook

Hotel

Trust

,

Senior

Note

,

1.75

%

,

12/15/26

.........

United

States

26,000,000

29,070,647

Health

Care

Equipment

&

Supplies

4.4%

Dexcom

,

Inc.

,

Senior

Note

,

0.25

%

,

11/15/25

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

United

States

79,000,000

101,242,580

b

Haemonetics

Corp.

,

Senior

Note

,

144A,

Zero

Cpn

.,

3/01/26

......

United

States

37,500,000

32,927,799

Insulet

Corp.

,

Senior

Note

,

0.375

%

,

9/01/26

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

United

States

65,000,000

96,740,248

230,910,627

Health

Care

Providers

&

Services

0.8%

b

Accolade,

Inc.

,

Senior

Note

,

144A,

0.5

%

,

4/01/26

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

United

States

19,000,000

20,417,979

b

Guardant

Health,

Inc.

,

Senior

Note

,

144A,

Zero

Cpn

.,

11/15/27

...

United

States

20,000,000

22,125,797

42,543,776

Hotels,

Restaurants

&

Leisure

1.5%

Booking

Holdings,

Inc.

,

Senior

Note

,

0.75

%

,

5/01/25

...........

United

States

19,000,000

28,281,365

b

Vail

Resorts,

Inc.

,

Senior

Note

,

144A,

Zero

Cpn

.,

1/01/26

........

United

States

48,000,000

53,075,856

81,357,221

Interactive

Media

&

Services

3.2%

Snap,

Inc.

,

Senior

Note,

0.75%,

8/01/26

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

United

States

7,400,000

17,717,307

b

Senior

Note,

144A,

Zero

Cpn

.,

5/01/27

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

United

States

46,000,000

46,809,986

Weibo

Corp.

,

Senior

Note

,

1.25

%

,

11/15/22

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

China

53,000,000

52,204,853

Zillow

Group,

Inc.

,

Senior

Note

,

2.75

%

,

5/15/25

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

United

States

31,500,000

55,008,450

171,740,596

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Convertible

Securities

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

33

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Convertible

Bonds

(continued)

Internet

&

Direct

Marketing

Retail

5.9%

Etsy,

Inc.

,

Senior

Note

,

0.125

%

,

9/01/27

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

United

States

80,000,000

$

118,665,985

Pinduoduo

,

Inc.

,

Senior

Note

,

Zero

Cpn

.,

12/01/25

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

China

93,000,000

87,436,793

b

RealReal

,

Inc.

(The)

,

Senior

Note

,

144A,

1

%

,

3/01/28

..........

United

States

30,000,000

24,951,000

Wayfair,

Inc.

,

Senior

Note

,

0.625

%

,

10/01/25

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

United

States

85,000,000

84,157,650

315,211,428

IT

Services

8.4%

b

Cloudflare

,

Inc.

,

Senior

Note

,

144A,

Zero

Cpn

.,

8/15/26

.........

United

States

66,200,000

83,654,162

Okta

,

Inc.

,

Senior

Note

,

0.125

%

,

9/01/25

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

United

States

73,000,000

106,168,370

b

Repay

Holdings

Corp.

,

Senior

Note

,

144A,

Zero

Cpn

.,

2/01/26

....

United

States

19,000,000

17,639,255

b

Shift4

Payments,

Inc.

,

Senior

Note,

144A,

Zero

Cpn

.,

12/15/25

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

United

States

36,000,000

39,218,400

Senior

Note,

144A,

0.5%,

8/01/27

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

United

States

35,000,000

32,396,000

b

Square,

Inc.

,

Senior

Note,

144A,

Zero

Cpn

.,

5/01/26

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

United

States

39,500,000

46,444,369

Senior

Note,

144A,

0.25%,

11/01/27

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

United

States

45,000,000

54,591,796

Wix.com

Ltd.

,

Senior

Note,

Zero

Cpn

.,

7/01/23

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

Israel

34,800,000

49,561,342

Senior

Note,

Zero

Cpn

.,

8/15/25

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

Israel

15,400,000

14,421,141

444,094,835

Life

Sciences

Tools

&

Services

0.8%

c

Illumina,

Inc.

,

Senior

Note

,

Zero

Cpn

.,

8/15/23

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

United

States

25,750,000

30,282,746

NeoGenomics

,

Inc.

,

Senior

Note

,

0.25

%

,

1/15/28

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

United

States

9,500,000

9,642,513

39,925,259

Machinery

0.8%

Fortive

Corp.

,

Senior

Note

,

0.875

%

,

2/15/22

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

United

States

40,270,000

40,495,948

Media

3.7%

b

Cable

One,

Inc.

,

Senior

Note,

144A,

Zero

Cpn

.,

3/15/26

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

United

States

48,750,000

46,471,784

Senior

Note,

144A,

1.125%,

3/15/28

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

United

States

26,250,000

25,842,046

b

Liberty

Broadband

Corp.

,

Senior

Bond,

144A,

1.25%,

9/30/50

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

United

States

57,000,000

57,011,799

Senior

Bond,

144A,

2.75%,

9/30/50

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

United

States

34,500,000

35,980,136

Liberty

Media

Corp.

,

Senior

Note

,

1.375

%

,

10/15/23

...........

United

States

21,200,000

30,753,757

196,059,522

Metals

&

Mining

1.5%

b

Ivanhoe

Mines

Ltd.

,

Senior

Note

,

144A,

2.5

%

,

4/15/26

..........

Canada

60,000,000

78,228,000

Pharmaceuticals

2.0%

Jazz

Investments

I

Ltd.

,

Senior

Note,

1.5%,

8/15/24

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

United

States

39,750,000

40,495,312

Senior

Note,

2%,

6/15/26

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

United

States

35,000,000

40,916,953

Revance

Therapeutics,

Inc.

,

Senior

Note

,

1.75

%

,

2/15/27

.......

United

States

27,000,000

22,522,581

103,934,846

Professional

Services

0.9%

b

Upwork

,

Inc.

,

Senior

Note

,

144A,

0.25

%

,

8/15/26

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

United

States

44,000,000

47,317,912

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Convertible

Securities

Fund

(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

34

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Convertible

Bonds

(continued)

Road

&

Rail

2.1%

Lyft,

Inc.

,

Senior

Note

,

1.5

%

,

5/15/25

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

United

States

61,000,000

$

85,052,745

b

Uber

Technologies,

Inc.

,

Senior

Note

,

144A,

Zero

Cpn

.,

12/15/25

..

United

States

30,000,000

29,010,778

114,063,523

Semiconductors

&

Semiconductor

Equipment

4.4%

b

MACOM

Technology

Solutions

Holdings,

Inc.

,

Senior

Note

,

144A,

0.25

%

,

3/15/26

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

United

States

31,000,000

34,123,235

Microchip

Technology,

Inc.

,

Senior

Sub.

Bond

,

1.625

%

,

2/15/27

...

United

States

39,750,000

87,402,859

Silicon

Laboratories,

Inc.

,

Senior

Note

,

0.625

%

,

6/15/25

........

United

States

68,000,000

109,779,200

231,305,294

Software

20.5%

Alteryx

,

Inc.

,

Senior

Note,

0.5%,

8/01/24

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

United

States

20,000,000

18,976,000

Senior

Note,

1%,

8/01/26

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

United

States

20,000,000

18,778,875

b

Avalara,

Inc.

,

Senior

Note

,

144A,

0.25

%

,

8/01/26

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

United

States

70,000,000

73,449,825

b

Bill.com

Holdings,

Inc.

,

Senior

Note,

144A,

Zero

Cpn

.,

12/01/25

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

United

States

42,500,000

82,265,125

Senior

Note,

144A,

Zero

Cpn

.,

4/01/27

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

United

States

37,000,000

39,737,202

Blackline,

Inc.

,

Senior

Note

,

0.125

%

,

8/01/24

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

United

States

9,500,000

16,925,256

Coupa

Software,

Inc.

,

Senior

Note

,

0.375

%

,

6/15/26

...........

United

States

74,000,000

81,357,590

b

DocuSign,

Inc.

,

Senior

Note

,

144A,

Zero

Cpn

.,

1/15/24

.........

United

States

76,000,000

80,400,058

Envestnet

,

Inc.

,

Senior

Note,

1.75%,

6/01/23

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

United

States

51,500,000

67,335,634

b

Senior

Note,

144A,

0.75%,

8/15/25

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

United

States

11,500,000

11,787,500

Guidewire

Software,

Inc.

,

Senior

Note

,

1.25

%

,

3/15/25

.........

United

States

44,000,000

54,731,759

HubSpot

,

Inc.

,

Senior

Note

,

0.375

%

,

6/01/25

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

United

States

40,500,000

116,822,479

Palo

Alto

Networks,

Inc.

,

Senior

Note

,

0.75

%

,

7/01/23

..........

United

States

43,000,000

82,813,407

b

Q2

Holdings,

Inc.

,

Senior

Note

,

144A,

0.125

%

,

11/15/25

........

United

States

56,000,000

51,374,459

Splunk

,

Inc.

,

Senior

Note,

1.125%,

9/15/25

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

United

States

22,500,000

29,441,301

Senior

Note,

1.125%,

6/15/27

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

United

States

6,500,000

6,820,938

Workday,

Inc.

,

Senior

Note

,

0.25

%

,

10/01/22

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

United

States

57,500,000

113,637,250

Workiva

,

Inc.

,

Senior

Note

,

1.125

%

,

8/15/26

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

United

States

22,000,000

43,498,852

Zendesk

,

Inc.

,

Senior

Note

,

0.625

%

,

6/15/25

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

United

States

80,000,000

94,550,382

1,084,703,892

Specialty

Retail

2.8%

Burlington

Stores,

Inc.

,

Senior

Note

,

2.25

%

,

4/15/25

...........

United

States

53,000,000

76,209,719

RH

,

Senior

Note

,

Zero

Cpn

.,

9/15/24

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

United

States

24,000,000

74,871,531

151,081,250

Total

Convertible

Bonds

(Cost

$3,150,830,631)

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

3,892,616,888

Total

Long

Term

Investments

(Cost

$4,014,144,522)

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

5,093,416,753

a

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Convertible

Securities

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

35

Short

Term

Investments

4.0%

a

a

Country

Shares

a

Value

a

Money

Market

Funds

3.9%

d,e

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

207,020,838

$

207,020,838

Total

Money

Market

Funds

(Cost

$207,020,838)

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

207,020,838

f

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

0.1%

a

a

a

a

a

Money

Market

Funds

0.1%

d,e

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

5,838,000

5,838,000

Principal

Amount

*

Repurchase

Agreements

0.0%

†

g

Joint

Repurchase

Agreement,

BNP

Paribas

SA,

0.05%,

11/01/21

(Maturity

Value

$1,460,275)

Collateralized

by

U.S.

Treasury

Bond,

6.25%,

8/15/23;

U.S.

Treasury

Bond,

Strip,

11/15/22;

U.S.

Treasury

Notes,

0.125%

-

2.625%,

9/30/22

-

5/31/26;

and

U.S.

Treasury

Bills,

Discount

Notes,

2/24/22

-

9/08/22

(valued

at

$1,489,475)

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

1,460,269

1,460,269

Total

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

(Cost

$7,298,269)

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

7,298,269

Total

Short

Term

Investments

(Cost

$214,319,107

)

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

214,319,107

a

Total

Investments

(Cost

$4,228,463,629)

100.0%

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

$5,307,735,860

Other

Assets,

less

Liabilities

(0.0)%

†

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

(3,899,913)

Net

Assets

100.0%

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

$5,303,835,947

See

Abbreviations

on

page

84

.

*

The

principal

amount

is

stated

in

U.S.

dollars

unless

otherwise

indicated.

†

Rounds

to

less

than

0.1%

of

net

assets.

a

Non-income

producing.

b

Security

was

purchased

pursuant

to

Rule

144A

or

Regulation

S

under

the

Securities

Act

of

1933.

144A

securities

may

be

sold

in

transactions

exempt

from

registration

only

to

qualified

institutional

buyers

or

in

a

public

offering

registered

under

the

Securities

Act

of

1933.

Regulation

S

securities

cannot

be

sold

in

the

United

States

without

either

an

effective

registration

statement

filed

pursuant

to

the

Securities

Act

of

1933,

or

pursuant

to

an

exemption

from

registration.

At

October

31,

2021,

the

aggregate

value

of

these

securities

was

$1,330,000,498,

representing

25.1%

of

net

assets.

c

A

portion

or

all

of

the

security

is

on

loan

at

October

31,

2021.

See

Note

1(g).

d

See

Note

3(f)

regarding

investments

in

affiliated

management

investment

companies.

e

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

f

See

Note

1(g)

regarding

securities

on

loan.

g

See

Note

1(c)

regarding

joint

repurchase

agreement.

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Equity

Income

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

36

a

Year

Ended

October

31,

2021

2020

2019

2018

2017

Class

A

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

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

$24.22

$26.23

$24.86

$25.06

$22.50

Income

from

investment

operations

a

:

Net

investment

income

b

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

0.44

0.49

0.46

0.42

0.48

Net

realized

and

unrealized

gains

(losses)

...........

9.26

(1.11)

2.49

0.58

3.55

Total

from

investment

operations

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

9.70

(0.62)

2.95

1.00

4.03

Less

distributions

from:

Net

investment

income

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

(0.60)

(0.63)

(0.58)

(0.57)

(0.58)

Net

realized

gains

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

(0.22)

(0.76)

(1.00)

(0.63)

(0.89)

Total

distributions

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

(0.82)

(1.39)

(1.58)

(1.20)

(1.47)

Net

asset

value,

end

of

year

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

$33.10

$24.22

$26.23

$24.86

$25.06

Total

return

c

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

40.58%

(2.43)%

12.73%

3.98%

18.55%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.85%

0.86%

0.86%

0.85%

0.86%

Expenses

net

of

waiver

and

payments

by

affiliates

d

......

0.85%

e

0.85%

0.85%

0.84%

0.86%

e

Net

investment

income

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

1.47%

1.98%

1.85%

1.66%

2.02%

Supplemental

data

Net

assets,

end

of

year

(000’s)

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

$2,952,462

$1,953,985

$2,017,910

$1,752,181

$1,753,135

Portfolio

turnover

rate

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

25.49%

26.90%

23.23%

28.40%

27.18%

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

e

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Equity

Income

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

37

a

Year

Ended

October

31,

2021

2020

2019

2018

2017

Class

C

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

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

$24.03

$26.01

$24.64

$24.86

$22.32

Income

from

investment

operations

a

:

Net

investment

income

b

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

0.22

0.30

0.28

0.26

0.30

Net

realized

and

unrealized

gains

(losses)

...........

9.17

(1.10)

2.47

0.53

3.54

Total

from

investment

operations

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

9.39

(0.80)

2.75

0.79

3.84

Less

distributions

from:

Net

investment

income

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

(0.37)

(0.42)

(0.38)

(0.38)

(0.41)

Net

realized

gains

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

(0.22)

(0.76)

(1.00)

(0.63)

(0.89)

Total

distributions

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

(0.59)

(1.18)

(1.38)

(1.01)

(1.30)

Net

asset

value,

end

of

year

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

$32.83

$24.03

$26.01

$24.64

$24.86

Total

return

c

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

39.51%

(3.19)%

11.91%

3.16%

17.73%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

1.60%

1.61%

1.61%

1.60%

1.61%

Expenses

net

of

waiver

and

payments

by

affiliates

d

......

1.60%

e

1.60%

1.60%

1.59%

1.61%

e

Net

investment

income

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

0.73%

1.23%

1.10%

0.91%

1.27%

Supplemental

data

Net

assets,

end

of

year

(000’s)

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

$202,148

$161,707

$208,734

$204,402

$267,450

Portfolio

turnover

rate

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

25.49%

26.90%

23.23%

28.40%

27.18%

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

e

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Equity

Income

Fund

(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

38

a

Year

Ended

October

31,

2021

2020

2019

2018

2017

Class

R

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

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

$24.24

$26.23

$24.85

$25.05

$22.49

Income

from

investment

operations

a

:

Net

investment

income

b

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

0.36

0.43

0.41

0.36

0.42

Net

realized

and

unrealized

gains

(losses)

...........

9.27

(1.10)

2.49

0.58

3.56

Total

from

investment

operations

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

9.63

(0.67)

2.90

0.94

3.98

Less

distributions

from:

Net

investment

income

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

(0.53)

(0.56)

(0.52)

(0.51)

(0.53)

Net

realized

gains

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

(0.22)

(0.76)

(1.00)

(0.63)

(0.89)

Total

distributions

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

(0.75)

(1.32)

(1.52)

(1.14)

(1.42)

Net

asset

value,

end

of

year

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

$33.12

$24.24

$26.23

$24.85

$25.05

Total

return

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

40.22%

(2.62)%

12.50%

3.75%

18.29%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

1.09%

1.08%

1.09%

1.08%

1.09%

Expenses

net

of

waiver

and

payments

by

affiliates

c

......

1.09%

d

1.08%

d

1.08%

1.07%

1.09%

d

Net

investment

income

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

1.22%

1.75%

1.62%

1.43%

1.79%

Supplemental

data

Net

assets,

end

of

year

(000’s)

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

$9,426

$5,795

$7,284

$6,750

$7,074

Portfolio

turnover

rate

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

25.49%

26.90%

23.23%

28.40%

27.18%

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

d

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Equity

Income

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

39

a

Year

Ended

October

31,

2021

2020

2019

2018

2017

Class

R6

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

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

$24.27

$26.29

$24.91

$25.11

$22.54

Income

from

investment

operations

a

:

Net

investment

income

b

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

0.54

0.57

0.54

0.50

0.56

Net

realized

and

unrealized

gains

(losses)

...........

9.27

(1.11)

2.50

0.59

3.57

Total

from

investment

operations

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

9.81

(0.54)

3.04

1.09

4.13

Less

distributions

from:

Net

investment

income

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

(0.69)

(0.72)

(0.66)

(0.66)

(0.67)

Net

realized

gains

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

(0.22)

(0.76)

(1.00)

(0.63)

(0.89)

Total

distributions

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

(0.91)

(1.48)

(1.66)

(1.29)

(1.56)

Net

asset

value,

end

of

year

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

$33.17

$24.27

$26.29

$24.91

$25.11

Total

return

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

41.02%

(2.07)%

13.12%

4.35%

19.00%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.53%

0.52%

0.53%

0.52%

0.49%

Expenses

net

of

waiver

and

payments

by

affiliates

c

......

0.51%

0.51%

0.51%

0.50%

0.49%

d

Net

investment

income

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

1.80%

2.32%

2.19%

2.00%

2.39%

Supplemental

data

Net

assets,

end

of

year

(000’s)

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

$150,328

$97,565

$96,406

$81,171

$12,728

Portfolio

turnover

rate

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

25.49%

26.90%

23.23%

28.40%

27.18%

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

d

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Equity

Income

Fund

(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

40

a

Year

Ended

October

31,

2021

2020

2019

2018

2017

Advisor

Class

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

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

$24.26

$26.27

$24.90

$25.10

$22.53

Income

from

investment

operations

a

:

Net

investment

income

b

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

0.51

0.55

0.50

0.46

0.50

Net

realized

and

unrealized

gains

(losses)

...........

9.28

(1.11)

2.51

0.60

3.60

Total

from

investment

operations

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

9.79

(0.56)

3.01

1.06

4.10

Less

distributions

from:

Net

investment

income

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

(0.67)

(0.69)

(0.64)

(0.63)

(0.64)

Net

realized

gains

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

(0.22)

(0.76)

(1.00)

(0.63)

(0.89)

Total

distributions

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

(0.89)

(1.45)

(1.64)

(1.26)

(1.53)

Net

asset

value,

end

of

year

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

$33.16

$24.26

$26.27

$24.90

$25.10

Total

return

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

40.94%

(2.18)%

13.04%

4.22%

18.88%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.60%

0.61%

0.61%

0.60%

0.61%

Expenses

net

of

waiver

and

payments

by

affiliates

c

......

0.60%

d

0.60%

0.60%

0.59%

0.61%

d

Net

investment

income

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

1.70%

2.21%

2.10%

1.91%

2.27%

Supplemental

data

Net

assets,

end

of

year

(000’s)

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

$378,891

$219,362

$173,739

$109,435

$147,681

Portfolio

turnover

rate

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

25.49%

26.90%

23.23%

28.40%

27.18%

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

d

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

Franklin

Investors

Securities

Trust

Statement

of

Investments,

October

31,

2021

Franklin

Equity

Income

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

41

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

82.1%

Aerospace

&

Defense

3.4%

Lockheed

Martin

Corp.

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

United

States

82,000

$

27,250,240

Raytheon

Technologies

Corp.

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

United

States

1,128,500

100,278,510

127,528,750

Air

Freight

&

Logistics

2.8%

United

Parcel

Service,

Inc.,

B

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

United

States

478,500

102,145,395

Banks

10.4%

Bank

of

America

Corp.

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

United

States

2,740,000

130,917,200

Citigroup,

Inc.

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

United

States

660,000

45,645,600

JPMorgan

Chase

&

Co.

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

United

States

895,000

152,051,550

Truist

Financial

Corp.

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

United

States

855,000

54,266,850

382,881,200

Beverages

3.6%

Coca-Cola

Co.

(The)

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

United

States

1,150,000

64,825,500

PepsiCo,

Inc.

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

United

States

415,000

67,064,000

131,889,500

Capital

Markets

9.0%

Apollo

Global

Management,

Inc.

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

United

States

825,000

63,483,750

Ares

Management

Corp.

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

United

States

830,000

70,334,200

BlackRock,

Inc.

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

United

States

61,800

58,305,828

Morgan

Stanley

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

United

States

1,350,000

138,753,000

330,876,778

Chemicals

3.5%

BASF

SE

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

Germany

355,000

25,548,440

Huntsman

Corp.

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

United

States

1,415,000

46,100,700

Linde

plc

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

United

Kingdom

70,000

22,344,000

Sherwin-Williams

Co.

(The)

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

United

States

113,500

35,935,235

129,928,375

Commercial

Services

&

Supplies

1.7%

Republic

Services,

Inc.

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

United

States

467,000

62,858,200

Communications

Equipment

0.6%

Cisco

Systems,

Inc.

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

United

States

375,000

20,988,750

Diversified

Telecommunication

Services

0.4%

TELUS

Corp.

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

Canada

634,000

14,540,157

Electric

Utilities

5.7%

Duke

Energy

Corp.

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

United

States

886,500

90,431,865

Entergy

Corp.

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

United

States

285,000

29,360,700

NextEra

Energy,

Inc.

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

United

States

961,250

82,023,462

Xcel

Energy,

Inc.

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

United

States

160,000

10,334,400

212,150,427

Electrical

Equipment

2.2%

Eaton

Corp.

plc

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

United

States

346,500

57,089,340

Emerson

Electric

Co.

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

United

States

255,000

24,737,550

81,826,890

Equity

Real

Estate

Investment

Trusts

(REITs)

1.3%

Prologis,

Inc.

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

United

States

240,000

34,790,400

Public

Storage

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

United

States

44,000

14,615,920

49,406,320

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Equity

Income

Fund

(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

42

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Food

&

Staples

Retailing

1.2%

Walmart,

Inc.

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

United

States

300,500

$

44,900,710

Food

Products

0.6%

Mondelez

International,

Inc.,

A

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

United

States

360,000

21,866,400

Health

Care

Equipment

&

Supplies

2.6%

Medtronic

plc

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

United

States

807,500

96,786,950

Health

Care

Providers

&

Services

2.7%

HCA

Healthcare,

Inc.

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

United

States

182,500

45,708,950

UnitedHealth

Group,

Inc.

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

United

States

119,500

55,026,165

100,735,115

Hotels,

Restaurants

&

Leisure

1.5%

McDonald's

Corp.

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

United

States

230,000

56,476,500

Household

Products

2.5%

Procter

&

Gamble

Co.

(The)

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

United

States

640,000

91,513,600

Insurance

0.6%

Arthur

J

Gallagher

&

Co.

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

United

States

131,500

22,048,605

IT

Services

1.1%

Fidelity

National

Information

Services,

Inc.

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

United

States

148,000

16,389,520

Visa,

Inc.,

A

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

United

States

111,500

23,612,355

40,001,875

Life

Sciences

Tools

&

Services

0.9%

Thermo

Fisher

Scientific,

Inc.

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

United

States

55,500

35,135,385

Machinery

1.7%

Fortive

Corp.

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

United

States

295,008

22,335,056

Illinois

Tool

Works,

Inc.

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

United

States

100,000

22,787,000

Stanley

Black

&

Decker,

Inc.

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

United

States

92,500

16,625,025

61,747,081

Media

1.6%

Comcast

Corp.,

A

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

United

States

1,125,000

57,858,750

Multiline

Retail

2.6%

Target

Corp.

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

United

States

370,000

96,059,400

Oil,

Gas

&

Consumable

Fuels

5.5%

Canadian

Natural

Resources

Ltd.

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

Canada

715,000

30,394,650

Chevron

Corp.

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

United

States

721,500

82,604,535

Royal

Dutch

Shell

plc,

ADR,

A

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

Netherlands

920,000

42,246,400

Suncor

Energy,

Inc.

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

Canada

1,875,000

49,312,500

204,558,085

Pharmaceuticals

4.3%

Johnson

&

Johnson

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

United

States

695,000

113,201,600

Merck

&

Co.,

Inc.

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

United

States

195,000

17,169,750

Pfizer,

Inc.

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

United

States

620,000

27,118,800

157,490,150

Road

&

Rail

1.0%

Norfolk

Southern

Corp.

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

United

States

125,166

36,679,896

Semiconductors

&

Semiconductor

Equipment

1.8%

Broadcom,

Inc.

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

United

States

43,500

23,127,645

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Equity

Income

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

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part

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financial

statements.

Annual

Report

43

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Semiconductors

&

Semiconductor

Equipment

(continued)

Texas

Instruments,

Inc.

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

United

States

233,000

$

43,682,840

66,810,485

Software

2.3%

Microsoft

Corp.

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

United

States

125,500

41,618,310

Oracle

Corp.

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

United

States

445,000

42,693,300

84,311,610

Specialty

Retail

2.6%

Lowe's

Cos.,

Inc.

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

United

States

250,000

58,455,000

TJX

Cos.,

Inc.

(The)

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

United

States

560,000

36,674,400

95,129,400

Technology

Hardware,

Storage

&

Peripherals

0.4%

Apple,

Inc.

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

United

States

97,000

14,530,600

Total

Common

Stocks

(Cost

$1,794,637,470)

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

3,031,661,339

a

Equity-Linked

Securities

9.2%

Banks

0.7%

b

Royal

Bank

of

Canada

into

Bank

of

America

Corp.,

144A,

7.75%,

11/01/21

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

United

States

902,000

26,640,652

Electrical

Equipment

0.6%

b

Royal

Bank

of

Canada

into

Eaton

Corp.

plc,

144A,

5.75%,

8/26/22

United

States

127,000

21,276,899

Equity

Real

Estate

Investment

Trusts

(REITs)

0.6%

b

Royal

Bank

of

Canada

into

Healthpeak

Properties,

Inc.,

144A,

9.5%,

12/01/21

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

United

States

660,000

23,328,664

Food

&

Staples

Retailing

0.7%

b

Citigroup

Global

Markets

Holdings,

Inc.

into

Tractor

Supply

Co.,

144A,

6.5%,

1/10/22

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

United

Kingdom

149,700

24,409,375

Health

Care

Providers

&

Services

0.8%

b

Royal

Bank

of

Canada

into

HCA

Healthcare,

Inc.,

Senior

Note,

144A,

6%,

7/15/22

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

United

States

130,400

29,552,895

Internet

&

Direct

Marketing

Retail

0.9%

b

Credit

Suisse

AG

into

Amazon.com,

Inc.,

144A,

5%,

4/22/22

.....

United

States

9,650

32,400,297

IT

Services

0.7%

b

Credit

Suisse

AG

into

Visa,

Inc.,

144A,

5%,

11/30/21

...........

United

States

70,500

15,067,710

b

Royal

Bank

of

Canada

into

Fidelity

National

Information

Services,

Inc.,

144A,

5%,

5/27/22

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

United

States

109,700

12,630,669

27,698,379

Life

Sciences

Tools

&

Services

0.7%

b

Credit

Suisse

AG

into

Thermo

Fisher

Scientific,

Inc.,

144A,

4.5%,

8/05/22

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

United

States

43,000

24,570,921

Machinery

0.7%

b

Credit

Suisse

AG

into

Stanley

Black

&

Decker,

Inc.,

144A,

6.5%,

3/31/22

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

United

States

133,000

24,449,757

Multiline

Retail

0.5%

b

Barclays

Bank

plc

into

Dollar

Tree,

Inc.,

144A,

5.5%,

1/14/22

.....

United

States

185,800

20,144,758

Road

&

Rail

0.8%

b,c

Credit

Suisse

AG

into

Norfolk

Southern

Corp.,

144A,

6%,

11/18/22

United

States

100,200

29,070,024

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Equity

Income

Fund

(continued)

franklintempleton.com

Annual

Report

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accompanying

notes

are

an

integral

part

of

these

financial

statements.

44

a

a

Country

Shares

a

Value

a

a

a

a

a

a

a

Equity-Linked

Securities

(continued)

Software

0.8%

b

Citigroup

Global

Markets

Holdings,

Inc.

into

salesforce.com,

Inc.,

144A,

5%,

8/19/22

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

United

States

107,500

$

29,629,860

Specialty

Retail

0.7%

b

BNP

Paribas

Issuance

BV

into

TJX

Cos.,

Inc.

(The),

144A,

5.75%,

9/30/22

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

United

States

410,100

27,404,096

Total

Equity-Linked

Securities

(Cost

$324,841,357)

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

340,576,577

Convertible

Preferred

Stocks

6.8%

Capital

Markets

1.5%

KKR

&

Co.,

Inc.,

6%,

C

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

United

States

530,000

53,021,200

Health

Care

Equipment

&

Supplies

3.1%

d

Becton

Dickinson

and

Co.,

6%,

B

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

United

States

636,500

33,479,900

Boston

Scientific

Corp.,

5.5%,

A

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

United

States

250,000

29,260,000

Danaher

Corp.,

4.75%,

A

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

United

States

20,700

43,164,675

Danaher

Corp.,

5%,

B

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

United

States

5,552

9,220,484

115,125,059

Semiconductors

&

Semiconductor

Equipment

1.4%

Broadcom,

Inc.,

8%,

A

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

United

States

31,500

52,836,210

Water

Utilities

0.8%

Essential

Utilities,

Inc.,

6%

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

United

States

495,000

28,591,200

Total

Convertible

Preferred

Stocks

(Cost

$196,309,534)

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

249,573,669

Total

Long

Term

Investments

(Cost

$2,315,788,361)

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

3,621,811,585

a

Short

Term

Investments

2.3%

a

a

Country

Shares

a

Value

a

Money

Market

Funds

2.0%

e,f

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.0

1%

.....

United

States

73,775,321

73,775,321

Total

Money

Market

Funds

(Cost

$73,775,321)

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

73,775,321

g

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

0.3%

a

a

a

a

a

Money

Market

Funds

0.2%

e,f

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

7,746,000

7,746,000

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Equity

Income

Fund

(continued)

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accompanying

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45

Short

Term

Investments

(continued)

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Repurchase

Agreements

0.1%

h

Joint

Repurchase

Agreement,

BNP

Paribas

SA,

0.05%,

11/01/21

(Maturity

Value

$1,937,547)

Collateralized

by

U.S.

Treasury

Bond,

6.25%,

8/15/23;

U.S.

Treasury

Bond,

Strip,

11/15/22;

U.S.

Treasury

Notes,

0.125%

-

2.625%,

9/30/22

-

5/31/26;

and

U.S.

Treasury

Bills,

Discount

Notes,

2/24/22

-

9/08/22

(valued

at

$1,976,290)

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

1,937,539

$

1,937,539

Total

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

(Cost

$9,683,539)

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

9,683,539

Total

Short

Term

Investments

(Cost

$83,458,860

)

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

83,458,860

a

Total

Investments

(Cost

$2,399,247,221)

100.4%

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

$3,705,270,445

Other

Assets,

less

Liabilities

(0.4)%

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

(12,014,954)

Net

Assets

100.0%

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

$3,693,255,491

See

Abbreviations

on

page

84

.

*

The

principal

amount

is

stated

in

U.S.

dollars

unless

otherwise

indicated.

a

See

Note

1(f)

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

October

31,

2021,

the

aggregate

value

of

these

securities

was

$340,576,577,

representing

9.2%

of

net

assets.

c

A

portion

or

all

of

the

security

purchased

on

a

delayed

delivery

basis.

See

Note

1(d).

d

A

portion

or

all

of

the

security

is

on

loan

at

October

31,

2021.

See

Note

1(g).

e

See

Note

3(f)

regarding

investments

in

affiliated

management

investment

companies.

f

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

g

See

Note

1(g)

regarding

securities

on

loan.

h

See

Note

1(c)

regarding

joint

repurchase

agreement.

Franklin

Investors

Securities

Trust

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Highlights

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46

a

Year

Ended

October

31,

2021

2020

2019

2018

2017

Class

A

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

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

$11.73

$12.80

$11.89

$12.36

$11.65

Income

from

investment

operations

a

:

Net

investment

income

b

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

0.30

0.31

0.29

0.27

0.33

Net

realized

and

unrealized

gains

(losses)

...........

2.36

(0.44)

1.17

(0.16)

0.91

Total

from

investment

operations

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

2.66

(0.13)

1.46

0.11

1.24

Less

distributions

from:

Net

investment

income

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

(0.47)

(0.46)

(0.41)

(0.38)

(0.36)

Net

realized

gains

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

(0.09)

(0.48)

(0.14)

(0.20)

(0.17)

Total

distributions

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

(0.56)

(0.94)

(0.55)

(0.58)

(0.53)

Net

asset

value,

end

of

year

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

$13.83

$11.73

$12.80

$11.89

$12.36

Total

return

c

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

23.01%

(1.06)%

12.64%

0.89%

10.88%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.92%

0.93%

0.96%

1.02%

1.02%

Expenses

net

of

waiver

and

payments

by

affiliates

d

......

0.91%

0.91%

0.94%

1.01%

1.00%

Net

investment

income

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

2.27%

2.55%

2.36%

2.22%

2.72%

Supplemental

data

Net

assets,

end

of

year

(000’s)

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

$3,523,379

$2,860,390

$2,966,899

$2,586,246

$2,646,599

Portfolio

turnover

rate

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

39.64%

64.69%

53.02%

63.64%

34.99%

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Managed

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Fund

(continued)

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Annual

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47

a

Year

Ended

October

31,

2021

2020

2019

2018

2017

Class

C

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

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

$11.61

$12.67

$11.78

$12.25

$11.55

Income

from

investment

operations

a

:

Net

investment

income

b

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

0.20

0.22

0.20

0.19

0.24

Net

realized

and

unrealized

gains

(losses)

...........

2.34

(0.43)

1.15

(0.17)

0.90

Total

from

investment

operations

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

2.54

(0.21)

1.35

0.02

1.14

Less

distributions

from:

Net

investment

income

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

(0.38)

(0.37)

(0.32)

(0.29)

(0.27)

Net

realized

gains

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

(0.09)

(0.48)

(0.14)

(0.20)

(0.17)

Total

distributions

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

(0.47)

(0.85)

(0.46)

(0.49)

(0.44)

Net

asset

value,

end

of

year

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

$13.68

$11.61

$12.67

$11.78

$12.25

Total

return

c

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

22.07%

(1.79)%

11.79%

0.14%

10.06%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

1.66%

1.68%

1.71%

1.76%

1.77%

Expenses

net

of

waiver

and

payments

by

affiliates

d

......

1.65%

1.66%

1.69%

1.75%

1.75%

Net

investment

income

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

1.54%

1.84%

1.61%

1.48%

1.97%

Supplemental

data

Net

assets,

end

of

year

(000’s)

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

$259,206

$341,521

$491,751

$493,762

$633,108

Portfolio

turnover

rate

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

39.64%

64.69%

53.02%

63.64%

34.99%

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Investors

Securities

Trust

Financial

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Franklin

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part

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these

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statements.

48

a

Year

Ended

October

31,

2021

2020

2019

2018

2017

Class

R

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

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

$11.76

$12.84

$11.92

$12.39

$11.67

Income

from

investment

operations

a

:

Net

investment

income

b

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

0.27

0.28

0.26

0.26

0.30

Net

realized

and

unrealized

gains

(losses)

...........

2.38

(0.45)

1.18

(0.18)

0.92

Total

from

investment

operations

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

2.65

(0.17)

1.44

0.08

1.22

Less

distributions

from:

Net

investment

income

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

(0.44)

(0.43)

(0.38)

(0.35)

(0.33)

Net

realized

gains

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

(0.09)

(0.48)

(0.14)

(0.20)

(0.17)

Total

distributions

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

(0.53)

(0.91)

(0.52)

(0.55)

(0.50)

Net

asset

value,

end

of

year

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

$13.88

$11.76

$12.84

$11.92

$12.39

Total

return

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

22.84%

(1.38)%

12.43%

0.63%

10.66%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

1.16%

1.18%

1.21%

1.27%

1.27%

Expenses

net

of

waiver

and

payments

by

affiliates

c

......

1.15%

1.16%

1.19%

1.26%

1.25%

Net

investment

income

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

2.03%

2.33%

2.11%

1.97%

2.47%

Supplemental

data

Net

assets,

end

of

year

(000’s)

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

$3,435

$3,093

$4,081

$3,371

$4,763

Portfolio

turnover

rate

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

39.64%

64.69%

53.02%

63.64%

34.99%

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

Investors

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`

a

Year

Ended

October

31,

2021

2020

2019

2018

2017

Class

R6

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

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

$11.76

$12.85

$11.93

$12.39

$11.67

Income

from

investment

operations

a

:

Net

investment

income

b

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

0.34

0.35

0.33

0.31

0.41

Net

realized

and

unrealized

gains

(losses)

...........

2.39

(0.45)

1.18

(0.14)

0.88

Total

from

investment

operations

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

2.73

(0.10)

1.51

0.17

1.29

Less

distributions

from:

Net

investment

income

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

(0.52)

(0.51)

(0.45)

(0.43)

(0.40)

Net

realized

gains

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

(0.09)

(0.48)

(0.14)

(0.20)

(0.17)

Total

distributions

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

(0.61)

(0.99)

(0.59)

(0.63)

(0.57)

Net

asset

value,

end

of

year

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

$13.88

$11.76

$12.85

$11.93

$12.39

Total

return

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

23.52%

(0.86)%

13.14%

1.23%

11.33%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.60%

0.60%

0.63%

0.68%

0.71%

Expenses

net

of

waiver

and

payments

by

affiliates

c

......

0.59%

0.58%

0.61%

0.66%

0.64%

Net

investment

income

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

2.59%

2.87%

2.69%

2.56%

3.08%

Supplemental

data

Net

assets,

end

of

year

(000’s)

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

$184,084

$155,563

$159,877

$138,923

$342

Portfolio

turnover

rate

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

39.64%

64.69%

53.02%

63.64%

34.99%

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

Investors

Securities

Trust

Financial

Highlights

Franklin

Managed

Income

Fund

(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

50

a

Year

Ended

October

31,

2021

2020

2019

2018

2017

Advisor

Class

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

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

$11.76

$12.84

$11.92

$12.39

$11.67

Income

from

investment

operations

a

:

Net

investment

income

b

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

0.34

0.34

0.32

0.30

0.35

Net

realized

and

unrealized

gains

(losses)

...........

2.37

(0.44)

1.18

(0.16)

0.93

Total

from

investment

operations

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

2.71

(0.10)

1.50

0.14

1.28

Less

distributions

from:

Net

investment

income

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

(0.51)

(0.50)

(0.44)

(0.41)

(0.39)

Net

realized

gains

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

(0.09)

(0.48)

(0.14)

(0.20)

(0.17)

Total

distributions

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

(0.60)

(0.98)

(0.58)

(0.61)

(0.56)

Net

asset

value,

end

of

year

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

$13.87

$11.76

$12.84

$11.92

$12.39

Total

return

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

23.34%

(0.86)%

12.96%

1.14%

11.21%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.67%

0.68%

0.71%

0.77%

0.77%

Expenses

net

of

waiver

and

payments

by

affiliates

c

......

0.66%

0.66%

0.69%

0.76%

0.75%

Net

investment

income

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

2.52%

2.79%

2.61%

2.47%

2.97%

Supplemental

data

Net

assets,

end

of

year

(000’s)

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

$228,617

$166,947

$180,882

$124,265

$243,674

Portfolio

turnover

rate

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

39.64%

64.69%

53.02%

63.64%

34.99%

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

Investors

Securities

Trust

Statement

of

Investments,

October

31,

2021

Franklin

Managed

Income

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

51

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

46.2%

Aerospace

&

Defense

2.2%

a

Lockheed

Martin

Corp.

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

United

States

75,000

$

24,924,000

a

Northrop

Grumman

Corp.

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

United

States

42,900

15,324,738

a

Raytheon

Technologies

Corp.

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

United

States

600,000

53,316,000

93,564,738

Air

Freight

&

Logistics

0.9%

United

Parcel

Service,

Inc.,

B

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

United

States

175,000

37,357,250

Banks

6.0%

Bank

of

America

Corp.

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

United

States

2,000,000

95,560,000

a

Citigroup,

Inc.

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

United

States

350,000

24,206,000

JPMorgan

Chase

&

Co.

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

United

States

350,000

59,461,500

Truist

Financial

Corp.

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

United

States

700,100

44,435,347

US

Bancorp

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

United

States

500,000

30,185,000

253,847,847

Beverages

2.4%

a

Coca-Cola

Co.

(The)

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

United

States

785,000

44,250,450

a

PepsiCo,

Inc.

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

United

States

350,000

56,560,000

100,810,450

Biotechnology

1.3%

a

AbbVie,

Inc.

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

United

States

475,000

54,468,250

Capital

Markets

0.9%

a

Morgan

Stanley

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

United

States

350,000

35,973,000

Chemicals

1.8%

a

Air

Products

and

Chemicals,

Inc.

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

United

States

150,000

44,971,500

a

Huntsman

Corp.

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

United

States

1,000,000

32,580,000

77,551,500

Communications

Equipment

1.4%

Cisco

Systems,

Inc.

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

United

States

1,039,339

58,171,804

Diversified

Telecommunication

Services

2.8%

AT&T,

Inc.

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

United

States

700,000

17,682,000

BCE,

Inc.

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

Canada

450,000

23,159,787

Deutsche

Telekom

AG

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

Germany

1,200,000

22,314,656

Verizon

Communications,

Inc.

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

United

States

1,000,000

52,990,000

116,146,443

Electric

Utilities

2.4%

a

American

Electric

Power

Co.,

Inc.

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

United

States

125,000

10,588,750

a

Duke

Energy

Corp.

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

United

States

450,000

45,904,500

Edison

International

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

United

States

500,000

31,465,000

a

Southern

Co.

(The)

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

United

States

175,000

10,906,000

98,864,250

Health

Care

Providers

&

Services

2.1%

a

CVS

Health

Corp.

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

United

States

520,000

46,425,600

a

Quest

Diagnostics,

Inc.

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

United

States

300,000

44,034,000

90,459,600

Household

Products

2.0%

a

Procter

&

Gamble

Co.

(The)

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

United

States

600,000

85,794,000

Industrial

Conglomerates

1.6%

a

Honeywell

International,

Inc.

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

United

States

300,000

65,586,000

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Managed

Income

Fund

(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

52

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

(continued)

Insurance

0.4%

a

Travelers

Cos.,

Inc.

(The)

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

United

States

100,000

$

16,088,000

IT

Services

0.9%

Fidelity

National

Information

Services,

Inc.

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

United

States

222,014

24,585,831

a

International

Business

Machines

Corp.

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

United

States

100,000

12,510,000

37,095,831

Media

0.8%

Comcast

Corp.,

A

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

United

States

617,970

31,782,197

Multiline

Retail

0.6%

a

Target

Corp.

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

United

States

100,000

25,962,000

Multi-Utilities

2.4%

Dominion

Energy,

Inc.

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

United

States

500,000

37,965,000

DTE

Energy

Co.

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

United

States

200,000

22,670,000

Sempra

Energy

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

United

States

300,000

38,289,000

98,924,000

Oil,

Gas

&

Consumable

Fuels

2.8%

a

BP

plc,

ADR

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

United

Kingdom

500,000

14,395,000

a

Chevron

Corp.

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

United

States

450,000

51,520,500

Exxon

Mobil

Corp.

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

United

States

500,000

32,235,000

TotalEnergies

SE,

ADR

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

France

400,000

20,044,000

118,194,500

Pharmaceuticals

5.7%

AstraZeneca

plc,

ADR

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

United

Kingdom

550,000

34,309,000

a

Bristol-Myers

Squibb

Co.

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

United

States

750,000

43,800,000

Eli

Lilly

&

Co.

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

United

States

90,000

22,928,400

Johnson

&

Johnson

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

United

States

250,000

40,720,000

a

Merck

&

Co.,

Inc.

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

United

States

500,000

44,025,000

Pfizer,

Inc.

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

United

States

1,271,323

55,607,668

241,390,068

Road

&

Rail

1.2%

Union

Pacific

Corp.

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

United

States

205,000

49,487,000

Semiconductors

&

Semiconductor

Equipment

2.3%

a

Texas

Instruments,

Inc.

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

United

States

517,361

96,994,840

Specialty

Retail

1.3%

a

Home

Depot,

Inc.

(The)

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

United

States

150,000

55,761,000

Total

Common

Stocks

(Cost

$1,469,519,008)

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

1,940,274,568

Management

Investment

Companies

2.9%

Capital

Markets

2.9%

b

Franklin

FTSE

Japan

ETF

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

United

States

700,000

21,021,000

b

Franklin

FTSE

United

Kingdom

ETF

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

United

States

1,250,000

31,950,000

b

Franklin

Liberty

Systematic

Style

Premia

ETF

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

United

States

1,175,000

24,348,115

b

Franklin

Liberty

U.S.

Low

Volatility

ETF

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

United

States

860,000

42,197,018

119,516,133

Total

Management

Investment

Companies

(Cost

$110,440,137)

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

119,516,133

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Managed

Income

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

53

a

a

Country

Shares

a

Value

a

a

a

a

a

a

c

Equity-Linked

Securities

11.3%

Banks

0.9%

d

Citigroup

Global

Markets

Holdings,

Inc.

into

JPMorgan

Chase

&

Co.,

144A,

8%,

8/15/22

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

United

States

230,000

$

37,153,366

Capital

Markets

0.5%

d

UBS

AG

into

Morgan

Stanley,

144A,

8.5%,

2/11/22

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

United

States

220,000

18,882,988

Chemicals

0.6%

d

National

Bank

of

Canada

into

Air

Products

and

Chemicals,

Inc.,

144A,

8.5%,

4/13/22

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

United

States

86,000

25,073,739

Energy

Equipment

&

Services

0.6%

d

Royal

Bank

of

Canada

into

Schlumberger

NV,

144A,

10%,

3/01/22

United

States

850,000

26,768,838

Internet

&

Direct

Marketing

Retail

1.5%

d

Credit

Suisse

AG

into

Amazon.com,

Inc.,

144A,

6%,

9/09/22

.....

United

States

18,000

61,528,266

Multiline

Retail

0.8%

d

Societe

Generale

SA

into

Target

Corp.,

144A,

8%,

12/20/21

......

United

States

168,000

33,485,578

Oil,

Gas

&

Consumable

Fuels

0.8%

d

UBS

AG

into

Chevron

Corp.,

144A,

10%,

8/16/22

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

United

States

310,000

34,102,873

Semiconductors

&

Semiconductor

Equipment

2.0%

d

National

Bank

of

Canada

into

Microchip

Technology,

Inc.,

144A,

6.5%,

6/01/22

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

United

States

284,200

42,194,640

d

Royal

Bank

of

Canada

into

Analog

Devices,

Inc.,

144A,

8%,

2/01/22

United

States

246,000

42,583,214

84,777,854

Software

2.1%

d

Merrill

Lynch

International

&

Co.

CV

into

Oracle

Corp.,

144A,

8%,

11/08/21

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

United

States

470,000

31,183,037

d

Societe

Generale

SA

into

Workday,

Inc.,

144A,

8%,

9/02/22

......

United

States

218,000

57,333,990

88,517,027

Technology

Hardware,

Storage

&

Peripherals

0.5%

d

BNP

Paribas

Issuance

BV

into

Apple,

Inc.,

144A,

10%,

12/22/21

..

United

States

164,000

22,971,738

Trading

Companies

&

Distributors

1.0%

d

JPMorgan

Chase

Bank

NA

into

Fastenal

Co.,

144A,

7.5%,

12/03/21

United

States

770,000

42,469,455

Total

Equity-Linked

Securities

(Cost

$437,654,736)

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

475,731,722

Convertible

Preferred

Stocks

9.7%

Capital

Markets

0.5%

KKR

&

Co.,

Inc.,

6%,

C

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

United

States

200,000

20,008,000

Electric

Utilities

4.0%

American

Electric

Power

Co.,

Inc.,

6.125%

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

United

States

700,000

34,811,000

American

Electric

Power

Co.,

Inc.,

6.125%

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

United

States

200,000

10,328,000

NextEra

Energy,

Inc.,

5.279%

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

United

States

1,200,000

65,364,000

Southern

Co.

(The),

6.75%,

2019

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

United

States

1,150,000

58,868,500

169,371,500

Health

Care

Equipment

&

Supplies

1.9%

Boston

Scientific

Corp.,

5.5%,

A

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

United

States

250,000

29,260,000

Danaher

Corp.,

5%,

B

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

United

States

30,000

49,822,500

79,082,500

Health

Care

Technology

0.4%

Change

Healthcare,

Inc.,

6%

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

United

States

250,000

17,865,000

Machinery

0.3%

e

RBC

Bearings,

Inc.,

5%,

A

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

United

States

125,000

14,948,750

e

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Managed

Income

Fund

(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

54

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Convertible

Preferred

Stocks

(continued)

Multi-Utilities

1.3%

Dominion

Energy,

Inc.,

7.25%,

A

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

United

States

150,000

$

15,025,500

DTE

Energy

Co.,

6.25%

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

United

States

750,000

37,860,000

52,885,500

Semiconductors

&

Semiconductor

Equipment

1.3%

Broadcom,

Inc.,

8%,

A

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

United

States

32,000

53,674,880

Total

Convertible

Preferred

Stocks

(Cost

$318,543,951)

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

407,836,130

Principal

Amount

*

Corporate

Bonds

22.4%

Automobiles

0.3%

General

Motors

Co.

,

Senior

Note

,

5.4

%

,

10/02/23

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

United

States

10,000,000

10,825,117

Banks

1.7%

Bank

of

America

Corp.

,

Senior

Bond,

3.419%

to

12/20/27,

FRN

thereafter,

12/20/28

...

United

States

15,000,000

16,048,289

Senior

Note,

3.55%

to

3/05/23,

FRN

thereafter,

3/05/24

.......

United

States

7,500,000

7,781,840

L,

Sub.

Bond,

4.183%,

11/25/27

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

United

States

10,000,000

11,022,653

Barclays

plc

,

Senior

Bond

,

3.65

%

,

3/16/25

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

United

Kingdom

15,000,000

16,000,590

Citigroup,

Inc.

,

Sub.

Bond

,

4.125

%

,

7/25/28

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

United

States

20,000,000

22,251,499

73,104,871

Biotechnology

0.9%

AbbVie,

Inc.

,

Senior

Note

,

3.25

%

,

10/01/22

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

United

States

5,000,000

5,088,068

Biogen,

Inc.

,

Senior

Note

,

3.625

%

,

9/15/22

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

United

States

10,000,000

10,276,883

d

Grifols

Escrow

Issuer

SA

,

Senior

Note

,

144A,

4.75

%

,

10/15/28

...

Spain

20,000,000

20,325,000

35,689,951

Capital

Markets

1.0%

Goldman

Sachs

Group,

Inc.

(The)

,

Senior

Bond

,

3.5

%

,

11/16/26

..

United

States

15,000,000

16,078,264

Morgan

Stanley

,

Senior

Bond,

3.75%,

2/25/23

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

United

States

10,000,000

10,409,000

Sub.

Bond,

4.35%,

9/08/26

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

United

States

15,000,000

16,673,369

43,160,633

Chemicals

0.5%

DuPont

de

Nemours,

Inc.

,

Senior

Note

,

4.493

%

,

11/15/25

.......

United

States

20,000,000

22,259,394

Communications

Equipment

0.5%

d

CommScope

Technologies

LLC

,

Senior

Bond

,

144A,

5

%

,

3/15/27

.

United

States

20,000,000

18,597,088

Consumer

Finance

1.4%

AerCap

Ireland

Capital

DAC

/

AerCap

Global

Aviation

Trust

,

Senior

Note

,

3.15

%

,

2/15/24

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

Ireland

5,000,000

5,197,655

Capital

One

Financial

Corp.

,

Senior

Bond,

3.75%,

3/09/27

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

United

States

10,000,000

10,910,299

Sub.

Bond,

3.75%,

7/28/26

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

United

States

10,000,000

10,817,858

Ford

Motor

Credit

Co.

LLC

,

Senior

Bond

,

5.113

%

,

5/03/29

.......

United

States

25,000,000

27,812,500

General

Motors

Financial

Co.,

Inc.

,

Senior

Note

,

3.7

%

,

5/09/23

...

United

States

5,000,000

5,192,414

59,930,726

Containers

&

Packaging

0.2%

d

Ardagh

Metal

Packaging

Finance

USA

LLC

/

Ardagh

Metal

Packaging

Finance

plc

,

Senior

Note

,

144A,

4

%

,

9/01/29

.......

United

States

10,000,000

9,956,500

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Managed

Income

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

55

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Diversified

Telecommunication

Services

0.6%

d

CCO

Holdings

LLC

/

CCO

Holdings

Capital

Corp.

,

Senior

Bond

,

144A,

5.125

%

,

5/01/27

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

United

States

15,000,000

$

15,562,500

Verizon

Communications,

Inc.

,

Senior

Bond

,

2.55

%

,

3/21/31

.....

United

States

10,000,000

10,085,147

25,647,647

Electric

Utilities

0.8%

Pacific

Gas

and

Electric

Co.

,

Senior

Note

,

3.15

%

,

1/01/26

.......

United

States

10,000,000

10,301,038

d

Vistra

Operations

Co.

LLC

,

Senior

Secured

Bond

,

144A,

4.3

%

,

7/15/29

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

United

States

20,000,000

21,417,972

31,719,010

Equity

Real

Estate

Investment

Trusts

(REITs)

0.5%

American

Tower

Corp.

,

Senior

Bond,

3.5%,

1/31/23

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

United

States

5,000,000

5,178,683

Senior

Bond,

3.375%,

10/15/26

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

United

States

15,000,000

16,035,648

21,214,331

Food

Products

0.4%

d

Post

Holdings,

Inc.

,

Senior

Bond

,

144A,

4.5

%

,

9/15/31

.........

United

States

15,000,000

14,718,225

Health

Care

Equipment

&

Supplies

0.3%

Edwards

Lifesciences

Corp.

,

Senior

Bond

,

4.3

%

,

6/15/28

.......

United

States

9,700,000

11,104,212

Health

Care

Providers

&

Services

3.5%

Anthem,

Inc.

,

Senior

Bond

,

3.3

%

,

1/15/23

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

United

States

5,000,000

5,163,917

d

CHS/Community

Health

Systems,

Inc.

,

Secured

Note,

144A,

6.875%,

4/15/29

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

United

States

20,000,000

20,605,300

Secured

Note,

144A,

6.125%,

4/01/30

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

United

States

15,000,000

14,766,000

Senior

Secured

Note,

144A,

6.625%,

2/15/25

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

United

States

25,000,000

26,031,250

Senior

Secured

Note,

144A,

8%,

3/15/26

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

United

States

25,000,000

26,406,250

Cigna

Corp.

,

Senior

Note,

3.75%,

7/15/23

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

United

States

7,216,000

7,575,667

Senior

Note,

3.4%,

3/01/27

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

United

States

15,000,000

16,144,894

CVS

Health

Corp.

,

Senior

Bond,

3.875%,

7/20/25

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

United

States

15,000,000

16,287,042

Senior

Note,

3.7%,

3/09/23

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

United

States

7,500,000

7,791,795

Tenet

Healthcare

Corp.

,

Senior

Secured

Note

,

4.625

%

,

7/15/24

...

United

States

7,004,000

7,100,305

147,872,420

Hotels,

Restaurants

&

Leisure

0.7%

Las

Vegas

Sands

Corp.

,

Senior

Bond,

3.9%,

8/08/29

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

United

States

10,000,000

10,182,607

Senior

Note,

3.2%,

8/08/24

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

United

States

10,000,000

10,226,789

d

Wynn

Las

Vegas

LLC

/

Wynn

Las

Vegas

Capital

Corp.

,

Senior

Bond

,

144A,

5.5

%

,

3/01/25

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

United

States

10,000,000

10,181,250

30,590,646

Household

Products

0.4%

d

Kimberly-Clark

de

Mexico

SAB

de

CV

,

Senior

Bond

,

144A,

2.431

%

,

7/01/31

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

Mexico

15,500,000

15,391,268

Insurance

0.4%

d

Liberty

Mutual

Group,

Inc.

,

Senior

Note

,

144A,

4.95

%

,

5/01/22

...

United

States

7,100,000

7,247,859

Prudential

Financial,

Inc.

,

Junior

Sub.

Bond

,

3.7%

to

10/01/30,

FRN

thereafter

,

10/01/50

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

United

States

10,000,000

10,320,720

17,568,579

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Managed

Income

Fund

(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

56

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

IT

Services

0.5%

Fiserv,

Inc.

,

Senior

Bond

,

4.2

%

,

10/01/28

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

United

States

20,000,000

$

22,658,096

Machinery

0.2%

CNH

Industrial

NV

,

Senior

Bond

,

3.85

%

,

11/15/27

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

United

Kingdom

7,500,000

8,250,392

Media

0.3%

DISH

DBS

Corp.

,

Senior

Note

,

5.875

%

,

7/15/22

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

United

States

12,000,000

12,315,000

Metals

&

Mining

0.5%

d

Cleveland-Cliffs,

Inc.

,

Senior

Secured

Note

,

144A,

9.875

%

,

10/17/25

United

States

6,620,000

7,588,175

d

FMG

Resources

August

2006

Pty.

Ltd.

,

Senior

Bond

,

144A,

4.375

%

,

4/01/31

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

Australia

15,000,000

15,206,250

22,794,425

Oil,

Gas

&

Consumable

Fuels

0.7%

d

Calumet

Specialty

Products

Partners

LP

/

Calumet

Finance

Corp.

,

Senior

Note

,

144A,

11

%

,

4/15/25

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

United

States

15,000,000

16,317,450

Occidental

Petroleum

Corp.

,

Senior

Note

,

6.375

%

,

9/01/28

......

United

States

10,000,000

11,733,800

28,051,250

Paper

&

Forest

Products

0.3%

Suzano

Austria

GmbH

,

DM3N

,

Senior

Bond

,

3.125

%

,

1/15/32

....

Brazil

15,000,000

14,192,025

Pharmaceuticals

3.2%

d

Bausch

Health

Cos.,

Inc.

,

Senior

Note,

144A,

5%,

1/30/28

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

United

States

10,000,000

9,250,000

Senior

Note,

144A,

5%,

2/15/29

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

United

States

10,000,000

9,193,350

Senior

Secured

Note,

144A,

5.5%,

11/01/25

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

United

States

10,000,000

10,173,200

d

Bayer

US

Finance

II

LLC

,

Senior

Note

,

144A,

4.25

%

,

12/15/25

...

Germany

15,000,000

16,450,818

Bristol-Myers

Squibb

Co.

,

Senior

Note

,

3.4

%

,

7/26/29

..........

United

States

10,000,000

11,000,002

d

Endo

Luxembourg

Finance

Co.

I

SARL

/

Endo

US,

Inc.

,

Senior

Secured

Note

,

144A,

6.125

%

,

4/01/29

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

United

States

15,000,000

14,797,050

d

Jazz

Securities

DAC

,

Senior

Secured

Note

,

144A,

4.375

%

,

1/15/29

United

States

25,000,000

25,718,750

Mylan,

Inc.

,

Senior

Note

,

4.55

%

,

4/15/28

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

United

States

19,000,000

21,545,519

d

Organon

&

Co.

/

Organon

Foreign

Debt

Co-Issuer

BV

,

Senior

Secured

Note

,

144A,

4.125

%

,

4/30/28

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

United

States

15,000,000

15,225,000

133,353,689

Semiconductors

&

Semiconductor

Equipment

0.4%

Microchip

Technology,

Inc.

,

Senior

Secured

Note

,

4.333

%

,

6/01/23

United

States

15,000,000

15,764,071

Tobacco

1.1%

Altria

Group,

Inc.

,

Senior

Bond

,

2.45

%

,

2/04/32

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

United

States

15,000,000

14,248,242

BAT

Capital

Corp.

,

Senior

Note

,

3.557

%

,

8/15/27

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

United

Kingdom

15,000,000

15,893,368

Reynolds

American,

Inc.

,

Senior

Bond

,

4.45

%

,

6/12/25

.........

United

Kingdom

15,000,000

16,370,287

46,511,897

Wireless

Telecommunication

Services

1.1%

Sprint

Corp.

,

Senior

Note

,

7.625

%

,

2/15/25

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

United

States

10,000,000

11,637,500

d

Sprint

Spectrum

Co.

LLC

/

Sprint

Spectrum

Co.

II

LLC

/

Sprint

Spectrum

Co.

III

LLC

,

Senior

Secured

Note

,

144A,

4.738

%

,

9/20/29

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

United

States

6,562,500

6,931,641

T-Mobile

USA,

Inc.

,

Senior

Secured

Note

,

3.875

%

,

4/15/30

......

United

States

25,000,000

27,353,267

45,922,408

Total

Corporate

Bonds

(Cost

$888,837,753)

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

939,163,871

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Managed

Income

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

57

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

U.S.

Government

and

Agency

Securities

4.0%

U.S.

Treasury

Notes

,

2.875%,

10/31/23

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

United

States

50,000,000

$

52,361,328

0.25%,

3/15/24

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

United

States

25,000,000

24,785,644

0.375%,

9/15/24

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

United

States

40,000,000

39,598,438

0.5%,

3/31/25

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

United

States

50,000,000

49,357,422

Total

U.S.

Government

and

Agency

Securities

(Cost

$164,457,175)

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

166,102,832

Asset-Backed

Securities

0.5%

Airlines

0.5%

United

Airlines

Pass-Through

Trust

,

2020-1,

A,

5.875%,

10/15/27

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

United

States

9,033,000

10,124,281

2020-1,

B,

4.875%,

7/15/27

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

United

States

10,776,000

11,404,053

21,528,334

a

a

a

a

a

a

Total

Asset-Backed

Securities

(Cost

$19,809,000)

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

21,528,334

Mortgage-Backed

Securities

0.0%

†

Federal

National

Mortgage

Association

(FNMA)

Fixed

Rate

0.0%

†

FNMA,

30

Year,

4%,

8/01/49

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

United

States

1,528,915

1,666,480

Total

Mortgage-Backed

Securities

(Cost

$1,619,695)

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

1,666,480

Total

Long

Term

Investments

(Cost

$3,410,881,455)

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

4,071,820,070

a

Number

of

Contracts

Notional

Amount

#

a

a

aa

Options

Purchased

0.0%

†

Puts

-

Exchange-Traded

Equity

Options

Texas

Instruments,

Inc.,

January

Strike

Price

$175.00,

Expires

1/21/22

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

3,000

56,244,000

1,050,000

Total

Options

Purchased

(Cost

$3,215,084)

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

1,050,000

Short

Term

Investments

2.8%

a

a

Country

Shares

a

Value

a

Money

Market

Funds

2.8%

b,f

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

117,838,554

117,838,554

Total

Money

Market

Funds

(Cost

$117,838,554)

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

117,838,554

Total

Short

Term

Investments

(Cost

$117,838,554

)

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

117,838,554

a

Total

Investments

(Cost

$3,531,935,093)

99.8%

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

$4,190,708,624

Options

Written

(0.2)%

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

(6,546,800)

Other

Assets,

less

Liabilities

0.4%

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

14,559,557

Net

Assets

100.0%

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

$4,198,721,381

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Managed

Income

Fund

(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

58

See

Abbreviations

on

page

84

.

a

a

a

Number

of

Contracts

Notional

Amount

#

a

Value

a

a

a

a

a

g

Options

Written

(0.2)%

Calls

-

Exchange-Traded

Equity

Options

AbbVie,

Inc.,

January

Strike

Price

$135.00,

Expires

1/21/22

......

4,750

54,468,250

$

(156,750)

Air

Products

and

Chemicals,

Inc.,

January

Strike

Price

$320.00,

Expires

1/21/22

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

500

14,990,500

(225,000)

American

Electric

Power

Co.,

Inc.,

January

Strike

Price

$95.00,

Expires

1/21/22

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

1,250

10,588,750

(26,250)

BP

plc,

January

Strike

Price

$30.00,

Expires

1/21/22

...........

5,000

14,395,000

(470,000)

Bristol-Myers

Squibb

Co.,

January

Strike

Price

$80.00,

Expires

1/21/22

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

6,000

35,040,000

(36,000)

Chevron

Corp.,

January

Strike

Price

$120.00,

Expires

1/21/22

....

1,500

17,173,500

(367,500)

Citigroup,

Inc.,

January

Strike

Price

$82.50,

Expires

1/21/22

.....

3,500

24,206,000

(122,500)

Coca-Cola

Co.

(The),

January

Strike

Price

$65.00,

Expires

1/21/22

5,000

28,185,000

(15,000)

CVS

Health

Corp.,

January

Strike

Price

$100.00,

Expires

1/21/22

.

5,000

44,640,000

(420,000)

Duke

Energy

Corp.,

January

Strike

Price

$115.00,

Expires

1/21/22

3,000

30,603,000

(60,000)

Home

Depot,

Inc.

(The),

January

Strike

Price

$360.00,

Expires

1/21/22

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

750

27,880,500

(1,730,250)

Honeywell

International,

Inc.,

January

Strike

Price

$260.00,

Expires

1/21/22

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

2,000

43,724,000

(56,000)

Huntsman

Corp.,

January

Strike

Price

$35.00,

Expires

1/21/22

...

5,000

16,290,000

(375,000)

International

Business

Machines

Corp.,

January

Strike

Price

$160.00,

Expires

1/21/22

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

1,000

12,510,000

(14,000)

Lockheed

Martin

Corp.,

January

Strike

Price

$410.00,

Expires

1/21/22

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

750

24,924,000

(43,500)

Merck

&

Co.,

Inc.,

January

Strike

Price

$85.00,

Expires

1/21/22

...

2,000

17,610,000

(1,074,000)

Morgan

Stanley,

December

Strike

Price

$115.00,

Expires

12/17/21

3,500

35,973,000

(157,500)

Northrop

Grumman

Corp.,

January

Strike

Price

$400.00,

Expires

1/21/22

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

429

15,324,738

(85,800)

PepsiCo,

Inc.,

January

Strike

Price

$175.00,

Expires

1/21/22

.....

3,500

56,560,000

(199,500)

Procter

&

Gamble

Co.

(The),

January

Strike

Price

$160.00,

Expires

1/21/22

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

3,000

42,897,000

(84,000)

Quest

Diagnostics,

Inc.,

January

Strike

Price

$170.00,

Expires

1/21/22

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

2,000

29,356,000

(145,000)

Raytheon

Technologies

Corp.,

January

Strike

Price

$100.00,

Expires

1/21/22

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

2,500

22,215,000

(100,000)

Southern

Co.

(The),

January

Strike

Price

$70.00,

Expires

1/21/22

.

1,750

10,906,000

(26,250)

Target

Corp.,

January

Strike

Price

$300.00,

Expires

1/21/22

.....

1,000

25,962,000

(187,000)

Texas

Instruments,

Inc.,

January

Strike

Price

$230.00,

Expires

1/21/22

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

5,000

93,740,000

(125,000)

Travelers

Cos.,

Inc.

(The),

January

Strike

Price

$170.00,

Expires

1/21/22

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

1,000

16,088,000

(245,000)

(6,546,800)

Total

Options

Written

(Premiums

received

$9,743,752)

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

$

(6,546,800)

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Managed

Income

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

59

#

Notional

amount

is

the

number

of

units

specified

in

the

contract,

and

can

include

currency

units,

bushels,

shares,

pounds,

barrels

or

other

units.

Currency

units

are

stated

in

U.S.

dollars

unless

otherwise

indicated.

*

The

principal

amount

is

stated

in

U.S.

dollars

unless

otherwise

indicated.

†

Rounds

to

less

than

0.1%

of

net

assets.

a

A

portion

or

all

of

the

security

is

held

in

connection

with

written

option

contracts

open

at

year

end.

b

See

Note

3(f)

regarding

investments

in

affiliated

management

investment

companies.

c

See

Note

1(f)

regarding

equity-linked

securities.

d

Security

was

purchased

pursuant

to

Rule

144A

or

Regulation

S

under

the

Securities

Act

of

1933.

144A

securities

may

be

sold

in

transactions

exempt

from

registration

only

to

qualified

institutional

buyers

or

in

a

public

offering

registered

under

the

Securities

Act

of

1933.

Regulation

S

securities

cannot

be

sold

in

the

United

States

without

either

an

effective

registration

statement

filed

pursuant

to

the

Securities

Act

of

1933,

or

pursuant

to

an

exemption

from

registration.

At

October

31,

2021,

the

aggregate

value

of

these

securities

was

$843,789,868,

representing

20.1%

of

net

assets.

e

Non-income

producing.

f

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

g

See

Note

1(e)

regarding

written

options.

Franklin

Investors

Securities

Trust

Financial

Statements

Statements

of

Assets

and

Liabilities

October

31,

2021

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

60

Franklin

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

Franklin

Managed

Income

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

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

$4,014,144,522

$2,315,788,361

$3,303,656,402

Cost

-

Controlled

affiliates

(Note

3f)

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

—

—

61,442,012

Cost

-

Non-controlled

affiliates

(Note

3f)

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

212,858,838

81,521,321

166,836,679

Cost

-

Unaffiliated

repurchase

agreements

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

1,460,269

1,937,539

—

Value

-

Unaffiliated

issuers

(Includes

securities

loaned

of

$7,152,432,

$9,520,547

and

$—

respectively)

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

$5,093,416,753

$3,621,811,585

$3,953,353,937

Value

-

Controlled

affiliates

(Note

3f)

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

—

—

66,545,133

Value

-

Non-controlled

affiliates

(Note

3f)

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

212,858,838

81,521,321

170,809,554

Value

-

Unaffiliated

repurchase

agreements

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

1,460,269

1,937,539

—

Cash

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

582,746

1,527,401

1,732,154

Receivables:

Investment

securities

sold

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

—

25,953,300

—

Capital

shares

sold

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

3,864,689

4,390,950

2,947,313

Dividends

and

interest

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

8,057,500

3,012,129

15,835,163

European

Union

tax

reclaims

(Note

1

h

)

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

—

534,943

817,326

Affiliates

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

—

—

9,857

Other

assets

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

—

17,043

14,929

Total

assets

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

5,320,240,795

3,740,706,211

4,212,065,366

Liabilities:

Payables:

Investment

securities

purchased

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

—

31,927,330

—

Capital

shares

redeemed

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

5,309,997

2,748,299

2,992,750

Management

fees

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

1,986,530

1,400,331

1,906,241

Distribution

fees

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

507,535

775,764

960,591

Transfer

agent

fees

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

941,593

669,634

566,362

Options

written,

at

value

(premiums

received

$–,

$–

and

$9,743,752

respectively)

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

—

—

6,546,800

Payable

upon

return

of

securities

loaned

(Note

1

g

)

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

7,298,269

9,683,539

—

Accrued

expenses

and

other

liabilities

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

360,924

245,823

371,241

Total

liabilities

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

16,404,848

47,450,720

13,343,985

Net

assets,

at

value

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

$5,303,835,947

$3,693,255,491

$4,198,721,381

Net

assets

consist

of:

Paid-in

capital

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

$3,333,224,772

$2,198,278,712

$3,393,703,033

Total

distributable

earnings

(losses)

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

1,970,611,175

1,494,976,779

805,018,348

Net

assets,

at

value

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

$5,303,835,947

$3,693,255,491

$4,198,721,381

Franklin

Investors

Securities

Trust

Financial

Statements

Statements

of

Assets

and

Liabilities

(continued)

October

31,

2021

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

61

Franklin

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

Franklin

Managed

Income

Fund

Class

A:

Net

assets,

at

value

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

$1,621,832,266

$2,952,461,842

$3,523,378,809

Shares

outstanding

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

52,062,811

89,199,036

254,682,674

Net

asset

value

per

share

a

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

$31.15

$33.10

$13.83

Maximum

offering

price

per

share

(net

asset

value

per

share

÷

94.50%,

94.50%

and

94.50%,

respectively)

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

$32.96

$35.03

$14.63

Class

C:

Net

assets,

at

value

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

$198,611,327

$202,148,037

$259,206,247

Shares

outstanding

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

6,505,916

6,156,966

18,941,270

Net

asset

value

and

maximum

offering

price

per

share

a

...........

$30.53

$32.83

$13.68

Class

R:

Net

assets,

at

value

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

$—

$9,426,134

$3,435,217

Shares

outstanding

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

—

284,639

247,577

Net

asset

value

and

maximum

offering

price

per

share

...........

$—

$33.12

$13.88

Class

R6:

Net

assets,

at

value

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

$127,846,155

$150,328,216

$184,084,083

Shares

outstanding

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

4,072,499

4,531,982

13,261,854

Net

asset

value

and

maximum

offering

price

per

share

...........

$31.39

$33.17

$13.88

Advisor

Class:

Net

assets,

at

value

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

$3,355,546,199

$378,891,262

$228,617,025

Shares

outstanding

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

107,693,862

11,427,644

16,480,687

Net

asset

value

and

maximum

offering

price

per

share

...........

$31.16

$33.16

$13.87

a

Redemption

price

is

equal

to

net

asset

value

less

contingent

deferred

sales

charges,

if

applicable.

Franklin

Investors

Securities

Trust

Financial

Statements

Statements

of

Operations

for

the

year

ended

October

31,

2021

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

62

Franklin

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

Franklin

Managed

Income

Fund

Investment

income:

Dividends:

(net

of

foreign

taxes

of

$–,

$841,270

and

$538,173,

respectively)

Unaffiliated

issuers

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

$47,615,805

$73,229,211

$79,036,254

Controlled

affiliates

(Note

3f)

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

—

—

943,965

Non-controlled

affiliates

(Note

3f)

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

10,316

2,779

1,057,901

Interest:

Unaffiliated

issuers

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

27,615,827

—

45,745,599

Income

from

securities

loaned:

Unaffiliated

entities

(net

of

fees

and

rebates)

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

333,119

17,299

64,100

Non-controlled

affiliates

(Note

3f)

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

1,128

473

759

Other

income

(Note

1

h

)

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

—

4,675

253,604

Total

investment

income

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

75,576,195

73,254,437

127,102,182

Expenses:

Management

fees

(Note

3

a

)

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

23,559,906

14,628,142

21,864,559

Distribution

fees:

(Note

3c

)

    Class

A

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

3,929,809

6,291,370

8,234,709

    Class

C

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

2,362,858

1,990,636

3,278,652

    Class

R

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

—

40,316

16,302

Transfer

agent

fees:

(Note

3e

)

    Class

A

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

1,655,064

2,970,580

3,281,661

    Class

C

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

246,449

234,115

326,792

    Class

R

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

—

9,621

3,256

    Class

R6

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

71,933

55,800

61,508

    Advisor

Class

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

3,397,024

366,205

198,831

Custodian

fees

(Note

4

)

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

29,583

20,617

35,641

Reports

to

shareholders

fees

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

367,443

257,573

353,619

Registration

and

filing

fees

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

142,998

180,148

178,101

Professional

fees

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

86,194

74,127

90,832

Trustees'

fees

and

expenses

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

45,864

27,086

35,915

Other

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

98,122

74,837

108,975

Total

expenses

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

35,993,247

27,221,173

38,069,353

Expense

reductions

(Note

4

)

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

(901)

(125)

(19,147)

Expenses

waived/paid

by

affiliates

(Note

3

f

and

3

g

)

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

(156,077)

(85,703)

(421,208)

Net

expenses

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

35,836,269

27,135,345

37,628,998

Net

investment

income

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

39,739,926

46,119,092

89,473,184

Franklin

Investors

Securities

Trust

Financial

Statements

Statements

of

Operations

(continued)

for

the

year

ended

October

31,

2021

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

63

Franklin

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

Franklin

Managed

Income

Fund

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

Unaffiliated

issuers

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

1,021,610,424

216,840,847

213,189,078

Controlled

affiliates

(Note

3

f

)

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

—

—

1,596,666

Non-controlled

affiliates

(Note

3f)

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

—

—

326,243

Written

options

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

—

—

21,532

Foreign

currency

transactions

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

—

(34,753)

(56,854)

Capital

gain

distributions

from

management

investment

companies:

Controlled

affiliates

(Note

3

f

)

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

—

—

1,805,826

Net

realized

gain

(loss)

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

1,021,610,424

216,806,094

216,882,491

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

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

174,443,700

756,337,182

473,175,015

Controlled

affiliates

(Note

3

f

)

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

—

—

8,251,578

Non-controlled

affiliates

(Note

3f)

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

—

—

10,004,976

Translation

of

other

assets

and

liabilities

denominated

in

foreign

currencies

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

—

7,647

3,594

Written

options

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

—

—

3,234,823

Net

change

in

unrealized

appreciation

(depreciation)

..........

174,443,700

756,344,829

494,669,986

Net

realized

and

unrealized

gain

(loss)

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

1,196,054,124

973,150,923

711,552,477

Net

increase

(decrease)

in

net

assets

resulting

from

operations

........

$1,235,794,050

$1,019,270,015

$801,025,661

Franklin

Investors

Securities

Trust

Financial

Statements

Statements

of

Changes

in

Net

Assets

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

64

Franklin

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

Year

Ended

October

31,

2021

Year

Ended

October

31,

2020

Year

Ended

October

31,

2021

Year

Ended

October

31,

2020

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

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

$39,739,926

$42,939,240

$46,119,092

$47,722,036

Net

realized

gain

(loss)

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

1,021,610,424

564,693,488

216,806,094

35,390,855

Net

change

in

unrealized

appreciation

(depreciation)

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

174,443,700

507,214,078

756,344,829

(149,216,848)

Net

increase

(decrease)

in

net

assets

resulting

from

operations

.

1,235,794,050

1,114,846,806

1,019,270,015

(66,103,957)

Distributions

to

shareholders:

Class

A

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

(161,091,091)

(100,126,924)

(68,232,913)

(108,336,733)

Class

C

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

(25,406,482)

(19,635,749)

(3,991,992)

(9,211,870)

Class

R

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

—

—

(198,008)

(349,918)

Class

R6

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

(13,893,644)

(8,435,869)

(3,826,554)

(5,610,985)

Advisor

Class

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

(331,976,078)

(205,378,395)

(8,906,515)

(10,606,257)

Total

distributions

to

shareholders

.....

(532,367,295)

(333,576,937)

(85,155,982)

(134,115,763)

Capital

share

transactions:

(Note

2

)

Class

A

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

20,650,058

(32,527,936)

254,492,254

97,596,429

Class

C

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

(67,123,083)

(71,327,737)

(19,532,223)

(30,492,088)

Class

R

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

—

—

1,271,821

(937,037)

Class

R6

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

(3,600,846)

42,503,124

14,905,089

9,077,163

Advisor

Class

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

144,200,012

(70,863,853)

69,590,927

59,317,042

Total

capital

share

transactions

.......

94,126,141

(132,216,402)

320,727,868

134,561,509

Net

increase

(decrease)

in

net

assets

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

797,552,896

649,053,467

1,254,841,901

(65,658,211)

Net

assets:

Beginning

of

year

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

4,506,283,051

3,857,229,584

2,438,413,590

2,504,071,801

End

of

year

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

$5,303,835,947

$4,506,283,051

$3,693,255,491

$2,438,413,590

Franklin

Investors

Securities

Trust

Financial

Statements

Statements

of

Changes

in

Net

Assets

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

65

Franklin

Managed

Income

Fund

Year

Ended

October

31,

2021

Year

Ended

October

31,

2020

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

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

$89,473,184

$91,288,516

Net

realized

gain

(loss)

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

216,882,491

74,815,248

Net

change

in

unrealized

appreciation

(depreciation)

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

494,669,986

(218,412,724)

Net

increase

(decrease)

in

net

assets

resulting

from

operations

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

801,025,661

(52,308,960)

Distributions

to

shareholders:

Class

A

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

(138,637,968)

(224,726,464)

Class

C

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

(11,772,741)

(31,740,281)

Class

R

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

(130,672)

(279,688)

Class

R6

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

(7,932,996)

(12,745,644)

Advisor

Class

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

(8,842,810)

(14,013,214)

Total

distributions

to

shareholders

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

(167,317,187)

(283,505,291)

Capital

share

transactions:

(Note

2

)

Class

A

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

145,799,247

158,395,068

Class

C

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

(139,846,669)

(109,248,688)

Class

R

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

(191,205)

(658,458)

Class

R6

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

674,475

10,102,120

Advisor

Class

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

31,063,232

1,247,711

Total

capital

share

transactions

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

37,499,080

59,837,753

Net

increase

(decrease)

in

net

assets

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

671,207,554

(275,976,498)

Net

assets:

Beginning

of

year

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

3,527,513,827

3,803,490,325

End

of

year

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

$4,198,721,381

$3,527,513,827

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

66

franklintempleton.com

Annual

Report

1.

Organization

and

Significant

Accounting

Policies

Franklin

Investors

Securities

Trust (Trust)

is

registered

under

the

Investment

Company

Act

of

1940

(1940

Act)

as

an

open-

end

management

investment

company,

consisting

of

seven

separate

funds,

three

of

which

are

included

in

this

report

(Funds)

and

applies

the

specialized

accounting

and

reporting

guidance

in

U.S.

Generally

Accepted

Accounting

Principles

(U.S.

GAAP).

The

classes

of

shares

offered

within

each

of

the

Funds

are

indicated

below.

Effective

August

2,

2021,

Class

C

shares

automatically

convert

to

Class

A

shares

on

a

monthly

basis

after

they

have

been

held

for

8

years.

Prior

to

August

2,

2021,

Class

C

shares

converted

to

Class

A

shares

after

a

10-year

holding

period.

Each

class

of

shares

may

differ

by

its initial

sales

load,

contingent

deferred

sales

charges,

voting

rights

on

matters

affecting

a

single

class,

its

exchange

privilege

and

fees

due

to

differing

arrangements

for

distribution

and

transfer

agent

fees.

Franklin

Convertible

Securities

Fund

closed

to

new

investors

with

limited

exceptions

on

August

29,

2018.

Class

A,

Class

C,

Class

R,

Class

R6

&

Advisor

Class

Franklin

Managed

Income

Fund

Franklin

Equity

Income

Fund

Class

A,

Class

C,

Class

R6

&

Advisor

Class

Franklin

Convertible

Securities

Fund

The

following

summarizes

the Funds'

significant

accounting

policies. 

a.

Financial

Instrument

Valuation 

The Funds'

investments

in

financial

instruments

are

carried

at

fair

value

daily.

Fair

value

is

the

price

that

would

be

received

to

sell

an

asset

or

paid

to

transfer

a

liability

in

an

orderly

transaction

between

market

participants

on

the

measurement

date.

The Funds calculate the

net

asset

value

(NAV)

per

share

each

business

day

as

of

4

p.m.

Eastern

time

or

the

regularly

scheduled

close

of

the

New

York

Stock

Exchange

(NYSE),

whichever

is

earlier.

Under

compliance

policies

and

procedures

approved

by

the

Trust's

Board

of

Trustees

(the

Board),

the

Funds' administrator

has

responsibility

for

oversight

of

valuation,

including

leading

the

cross-functional

Valuation

Committee

(VC).

The

Funds

may

utilize

independent

pricing

services,

quotations

from

securities

and

financial

instrument

dealers,

and

other

market

sources

to

determine

fair

value. 

Equity

securities,

exchange

traded

funds,

and

derivative

financial

instruments

listed

on

an

exchange

or

on

the

NASDAQ

National

Market

System

are

valued

at

the

last

quoted

sale

price

or

the

official

closing

price of

the

day,

respectively.

Foreign

equity

securities

are

valued

as

of

the

close

of

trading

on

the

foreign

stock

exchange

on

which

the

security

is

primarily

traded,

or

as

of

4

p.m.

Eastern

time.

The

value

is

then

converted

into

its

U.S.

dollar

equivalent

at

the

foreign

exchange

rate

in

effect

at

4

p.m.

Eastern

time

on

the

day

that

the

value

of

the

security

is

determined.

Over-the-

counter

(OTC)

securities

are

valued

within

the

range

of

the

most

recent

quoted

bid

and

ask

prices.

Securities

that

trade

in

multiple

markets

or

on

multiple

exchanges

are

valued

according

to

the

broadest

and

most

representative

market.

Certain

equity

securities

are

valued

based

upon

fundamental

characteristics

or

relationships

to

similar

securities. 

Debt

and

certain

preferred

securities

generally

trade

in

the

OTC

market rather

than

on

a

securities

exchange.

The

Funds'

pricing

services

use

multiple

valuation

techniques

to

determine

fair

value.

In

instances

where

sufficient

market

activity

exists,

the

pricing

services

may

utilize

a

market-based

approach

through

which

quotes

from

market

makers

are

used

to

determine

fair

value.

In

instances

where

sufficient

market

activity

may

not

exist

or

is

limited,

the

pricing

services

also

utilize

proprietary

valuation

models

which

may

consider

market

characteristics

such

as

benchmark

yield

curves,

credit

spreads,

estimated

default

rates,

anticipated

market

interest

rate

volatility,

coupon

rates,

anticipated

timing

of

principal

repayments,

underlying

collateral,

and

other

unique

security

features

in

order

to

estimate

the

relevant

cash

flows,

which

are

then

discounted

to

calculate

the

fair

value.

Investments

in open-end mutual

funds

are

valued

at

the

closing

NAV.

Investments

in

repurchase

agreements

are

valued

at

cost,

which

approximates

fair

value.

The

Funds

have

procedures

to

determine

the

fair

value

of

financial

instruments

for

which

market

prices

are

not

reliable

or

readily

available.

Under

these

procedures,

the

Funds

primarily

employ

a

market-based

approach

which

may

use

related

or

comparable

assets

or

liabilities,

recent

transactions,

market

multiples,

book

values,

and

other

relevant

information

for

the

investment

to

determine

the

fair

value

of

the

investment.

An

income-based

valuation

approach

may

also

be

used

in

which

the

anticipated

future

cash

flows

of

the

investment

are

discounted

to

calculate

fair

value.

Discounts

may

also

be

applied

due

to

the

nature

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

67

franklintempleton.com

Annual

Report

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

Funds.

As

a

result,

differences

may

arise

between

the

value

of

the

Funds'

portfolio

securities

as

determined

at

the

foreign

market

close

and

the

latest

indications

of

value

at

4

p.m.

Eastern

time.

In

order

to

minimize

the

potential

for

these

differences,

an

independent

pricing

service

may

be

used

to

adjust

the

value

of

the

Funds'

portfolio

securities

to

the

latest

indications

of

fair

value

at

4

p.m.

Eastern

time.

At

October

31,

2021,

certain

securities

may

have

been

fair

valued

using

these

procedures,

in

which

case

the

securities

were

categorized

as

Level

2

inputs

within

the

fair

value

hierarchy

(referred

to

as

“market

level

fair

value”).

See

the

Fair

Value

Measurements

note

for

more

information.

When

the

last

day

of

the

reporting

period

is

a

non-business

day,

certain

foreign

markets

may

be

open

on

those

days

that

the

Funds'

NAV

is

not

calculated,

which

could

result

in

differences

between

the

value

of

the

Funds'

portfolio

securities

on

the

last

business

day

and

the

last

calendar

day

of

the

reporting

period.

Any

security

valuation

changes

due

to

an

open

foreign

market

are

adjusted

and

reflected

by

the

Funds

for

financial

reporting

purposes.

b.

Foreign

Currency

Translation 

Portfolio

securities

and

other

assets

and

liabilities

denominated

in

foreign

currencies

are

translated

into

U.S.

dollars

based

on

the

exchange

rate

of

such

currencies

against

U.S.

dollars

on

the

date

of

valuation.

The

Funds

may

enter

into

foreign

currency

exchange

contracts

to

facilitate

transactions

denominated

in

a

foreign

currency.

Purchases

and

sales

of

securities,

income

and

expense

items

denominated

in

foreign

currencies

are

translated

into

U.S.

dollars

at

the

exchange

rate

in

effect

on

the

transaction

date.

Portfolio

securities

and

assets

and

liabilities

denominated

in

foreign

currencies

contain

risks

that

those

currencies

will

decline

in

value

relative

to

the

U.S.

dollar.

Occasionally,

events

may

impact

the

availability

or

reliability

of

foreign

exchange

rates

used

to

convert

the

U.S.

dollar

equivalent

value.

If

such

an

event

occurs,

the

foreign

exchange

rate

will

be

valued

at

fair

value

using

procedures

established

and

approved

by

the

Board.

The

Funds

do

not

separately

report

the

effect

of

changes

in

foreign

exchange

rates

from

changes

in

market

prices

on

securities

held.

Such

changes

are

included

in

net

realized

and

unrealized

gain

or

loss

from

investments

in

the

Statements

of

Operations.

Realized

foreign

exchange

gains

or

losses

arise

from

sales

of

foreign

currencies,

currency

gains

or

losses

realized

between

the

trade

and

settlement

dates

on

securities

transactions

and

the

difference

between

the

recorded

amounts

of

dividends,

interest,

and

foreign

withholding

taxes

and

the

U.S.

dollar

equivalent

of

the

amounts

actually

received

or

paid.

Net

unrealized

foreign

exchange

gains

and

losses

arise

from

changes

in

foreign

exchange

rates

on

foreign

denominated

assets

and

liabilities

other

than

investments

in

securities

held

at

the

end

of

the

reporting

period.

c.

Joint

Repurchase

Agreement

Certain

or

all

Funds

enter

into

a

joint

repurchase

agreement

whereby

their

uninvested

cash

balance

is

deposited

into

a

joint

cash

account

with

other

funds

managed

by

the

investment

manager

or

an

affiliate

of

the

investment

manager

and

is

used

to

invest

in

one

or

more

repurchase

agreements.

The

value

and

face

amount

of

the

joint

repurchase

agreement

are

allocated

to

the

funds

based

on

their

pro-rata

interest.

A

repurchase

agreement

is

accounted

for

as

a

loan

by

the

Fund

to

the

seller,

collateralized

by

securities

which

are

delivered

to

the

Funds'

custodian.

The

fair

value,

including

accrued

interest,

of

the

initial

collateralization

is

required

to

be

at

least

102%

of

the

dollar

amount

invested

by

the

funds,

with

the

value

of

the

underlying

securities

marked

to

market

daily

to

maintain

coverage

of

at

least

100%.

Repurchase

agreements

are

subject

to

the

terms

of

Master

Repurchase

Agreements

(MRAs)

with

approved

counterparties

(sellers).

The

MRAs

contain

various

provisions,

including

but

not

limited

to

events

of

default

and

maintenance

of

collateral

for

repurchase

agreements.

In

the

event

of

default

by

either

the

seller

or

the

Funds,

certain

MRAs

may

permit

the

non-defaulting

party

1.

Organization

and

Significant

Accounting

Policies

(continued)

a.

Financial

Instrument

Valuation 

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

68

franklintempleton.com

Annual

Report

to

net

and

close-out

all

transactions,

if

any,

traded

under

such

agreements.

The

Funds

may

sell

securities

it

holds

as

collateral

and

apply

the

proceeds

towards

the

repurchase

price

and

any

other

amounts

owed

by

the

seller

to

the

Funds

in

the

event

of

default

by

the

seller.

This

could

involve

costs

or

delays

in

addition

to

a

loss

on

the

securities

if

their

value

falls

below

the

repurchase

price

owed

by

the

seller.

The

joint

repurchase

agreement

held

by

the

Funds

at

year

end,

as

indicated

in

the

Statements

of

Investments,

had

been

entered

into

on

October

29,

2021.

d.

Securities

Purchased

on

a

Delayed

Delivery

Basis

Certain

or

all

Funds

purchase

securities

on

a

delayed

delivery

basis,

with

payment

and

delivery

scheduled

for

a

future

date.

These

transactions

are

subject

to

market

fluctuations

and

are

subject

to

the

risk

that

the

value

at

delivery

may

be

more

or

less

than

the

trade

date

purchase

price.

Although

the

Funds

will

generally

purchase

these

securities

with

the

intention

of

holding

the

securities,

they

may

sell

the

securities

before

the

settlement

date.

e.

Derivative

Financial

Instruments

Certain

or

all

Funds

invested

in

derivative

financial

instruments

in

order

to

manage

risk

or

gain

exposure

to

various

other

investments

or

markets.

Derivatives

are

financial

contracts

based

on

an

underlying

or

notional

amount,

require

no

initial

investment

or

an

initial

net

investment

that

is

smaller

than

would

normally

be

required

to

have

a

similar

response

to

changes

in

market

factors,

and

require

or

permit

net

settlement.

Derivatives

contain

various

risks

including

the

potential

inability

of

the

counterparty

to

fulfill

their

obligations

under

the

terms

of

the

contract,

the

potential

for

an

illiquid

secondary

market,

and/or

the

potential

for

market

movements

which

expose

the

Fund

to

gains

or

losses

in

excess

of

the

amounts

shown

in

the

Statements

of

Assets

and

Liabilities.

Realized

gain

and

loss

and

unrealized

appreciation

and

depreciation

on

these

contracts

for

the

period

are

included

in

the

Statements

of

Operations.

Collateral

requirements

differ

by

type

of

derivative.

Collateral

or

initial

margin

requirements

are

set

by

the

broker

or

exchange

clearing

house

for

exchange

traded

and

centrally

cleared

derivatives.

Initial

margin

deposited

is

held

at

the

exchange

and

can

be

in

the

form

of

cash

and/or

securities.

Certain

or

all

Funds

purchased

or

wrote

exchange

traded

option

contracts

primarily

to

manage

and/or

gain

exposure

to

equity

volatility

risk.

An

option

is

a

contract

entitling

the

holder

to

purchase

or

sell

a

specific

amount

of

shares

or

units

of

an

asset

or

notional

amount

of

a

swap

(swaption),

at

a

specified

price.

When

an

option

is

purchased

or

written,

an

amount

equal

to

the

premium

paid

or

received

is

recorded

as

an

asset

or

liability,

respectively.

Upon

exercise

of

an

option,

the

acquisition

cost

or

sales

proceeds

of

the

underlying

investment

is

adjusted

by

any

premium

received

or

paid.

Upon

expiration

of

an

option,

any

premium

received

or

paid

is

recorded

as

a

realized

gain

or

loss.

Upon

closing

an

option

other

than

through

expiration

or

exercise,

the

difference

between

the

premium

received

or

paid

and

the

cost

to

close

the

position

is

recorded

as

a

realized

gain

or

loss.

See

Note

9 regarding

other

derivative

information.

f.

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.

g.

Securities

Lending

Certain

or

all

Funds

participate

in

an

agency

based

securities

lending

program

to

earn

additional

income.

The

Fund

receives

collateral

in

the

form

of

cash

and/or

U.S.

Government

and

Agency

securities

against

the

loaned

securities

in

an

amount

equal

to

at

least

102%

of

the

fair

value

of

the

loaned

securities.

Collateral

is

maintained

over

the

life

of

the

loan

in

an

amount

not

less

than

100%

of

the

fair

value

of

loaned

securities,

as

determined

at

the

close

of

Fund

business

each

day;

any

additional

collateral

required

due

to

changes

in

security

values

is

delivered

to

the

Fund

on

the

next

business

day.

Any

cash

collateral

received

is

deposited

into

a

joint

cash

account

with

other

funds

and

is

used

to

invest

in

a

money

market

fund

managed

1.

Organization

and

Significant

Accounting

Policies

(continued)

c.

Joint

Repurchase

Agreement

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

69

franklintempleton.com

Annual

Report

by

Franklin

Advisers,

Inc.,

an

affiliate

of

the

Funds,

and/

or

a

joint

repurchase

agreement.

The

Fund

may

receive

income

from

the

investment

of

cash

collateral,

in

addition

to

lending

fees

and

rebates

paid

by

the

borrower.

Income

from

securities

loaned,

net

of

fees

paid

to

the

securities

lending

agent

and/or

third-party

vendor,

is

reported

separately

in

the

Statements

of

Operations.

The

Fund

bears

the

market

risk

with

respect

to any

cash collateral

investment,

securities

loaned,

and

the

risk

that

the

agent

may

default

on

its

obligations

to

the

Fund.

If

the

borrower

defaults

on

its

obligation

to

return

the

securities

loaned,

the

Fund

has

the

right

to

repurchase

the

securities

in

the

open

market

using

the

collateral

received.

The

securities

lending

agent

has

agreed

to

indemnify

the

Fund

in

the

event

of

default

by

a

third

party

borrower. 

h.

Income

and

Deferred

Taxes

It

is each

Fund's

policy

to

qualify

as

a

regulated

investment

company

under

the

Internal

Revenue

Code. Each

Fund

intends

to

distribute

to

shareholders

substantially

all

of

its

taxable

income

and

net

realized

gains

to

relieve

it

from

federal

income

and excise

taxes.

As

a

result,

no

provision

for

U.S.

federal

income

taxes

is

required.

The

Funds

may

be

subject

to

foreign

taxation

related

to

income

received,

capital

gains

on

the

sale

of

securities

and

certain

foreign

currency

transactions

in

the

foreign

jurisdictions

in

which

the

Funds

invest.

Foreign

taxes,

if

any,

are

recorded

based

on

the

tax

regulations

and

rates

that

exist

in

the

foreign

markets

in

which

the

Funds

invest.

When

a

capital

gain

tax

is

determined

to

apply,

certain

or

all

Funds

record

an

estimated

deferred

tax

liability

in

an

amount

that

would

be

payable

if

the

securities

were

disposed

of

on

the

valuation

date.

As

a

result

of

several

court

cases,

in

certain

countries

across

the

European

Union,

certain

or

all

Funds

filed

additional

tax

reclaims

for

previously

withheld

taxes

on

dividends

earned

in

those

countries

(EU

reclaims). Income

recognized,

if

any,

for

EU

reclaims

is

reflected

as

other

income

in

the

Statements of

Operations

and

any

related

receivable,

if

any,

is

reflected

as

European

Union

tax

reclaims

in

the

Statements

of

Assets

and

Liabilities.

When

uncertainty

exists

as

to

the

ultimate

resolution

of

these

proceedings,

the

likelihood

of

receipt

of

these

EU

reclaims,

and

the

potential

timing

of

payment,

no

amounts

are

reflected

in

the

financial

statements.

For

U.S.

income

tax

purposes,

EU

reclaims

received

by

the

Funds,

if

any,

reduce

the

amount

of

foreign

taxes

Fund

shareholders

can

use

as

tax

deductions

or credits

on

their income

tax

returns.

In

the

event

that

EU

reclaims

received

by

the

Funds during a

fiscal

year

exceed

foreign

withholding

taxes

paid

by

the

Funds,

and

the Funds

previously

passed through

to

its

shareholders

foreign

taxes

incurred

by

the

Funds

to

be

used

as

a

credit

or

deduction

on

a

shareholder’s

income

tax

return,

the

Funds will

enter

into

a

closing

agreement

with

the

Internal

Revenue

Service

(IRS)

in

order

to

pay

the

associated

tax

liability

on

behalf

of

the Funds'

shareholders.

Each

Fund

may

recognize

an

income

tax

liability

related

to

its

uncertain

tax

positions

under

U.S.

GAAP

when

the

uncertain

tax

position

has

a

less

than

50%

probability

that

it

will

be

sustained

upon

examination

by

the

tax

authorities

based

on

its

technical

merits.

As

of

October

31,

2021, each

Fund

has

determined

that

no

tax

liability

is

required

in

its

financial

statements

related

to

uncertain

tax

positions

for

any

open

tax

years

(or

expected

to

be

taken

in

future

tax

years).

Open

tax

years

are

those

that

remain

subject

to

examination

and

are

based

on

the

statute

of

limitations

in

each

jurisdiction

in

which

the

Fund

invests. 

i.

Security

Transactions,

Investment

Income,

Expenses

and

Distributions

Security

transactions

are

accounted

for

on

trade

date.

Realized

gains

and

losses

on

security

transactions

are

determined

on

a

specific

identification

basis.

Interest

income

and

estimated

expenses

are

accrued

daily.

Amortization

of

premium

and

accretion

of

discount

on

debt

securities

are

included

in

interest

income.

Facility

fees

are

recognized

as

income

over

the

expected

term

of

the

loan.

Dividend

income

and

capital

gain

distributions

by

Underlying

Funds

are

recorded

on

the

ex-dividend

date

except

for

certain

dividends

from

securities

where

the

dividend

rate

is

not

available.

In

such

cases,

the

dividend

is

recorded

as

soon

as

the

information

is

received

by

the

Funds.

Distributions

to

shareholders

are

recorded

on

the

ex-dividend

date.

The

Franklin

Managed

Income

Fund

employs

a

managed

distribution

policy.

Under

this

policy,

the

fund

will

distribute

level

monthly

distributions

in

any

given

year

regardless

of

the

performance

of

the

fund;

however,

the

twelfth

monthly

payment

may

be

greater

than

the

initially

anticipated

amount

if

additional

income

or

capital

gains

are

required

to

be

distributed.

These

distributions

may

include

income

and

1.

Organization

and

Significant

Accounting

Policies

(continued)

g.

Securities

Lending

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

70

franklintempleton.com

Annual

Report

capital

gains

generated

by

the

Fund,

as

well

as

a

possible

return

of

capital

component,

if

necessary,

to

meet

the

annual

distribution

rate.

The

annual

payout

rate

may

be

adjusted

higher

or

lower

from

year

to

year

in

response

to

market

conditions.

Distributable

earnings

are

determined

according

to

income

tax

regulations

(tax

basis)

and

may

differ

from

earnings

recorded

in

accordance

with

U.S.

GAAP.

These

differences

may

be

permanent

or

temporary.

Permanent

differences

are

reclassified

among

capital

accounts

to

reflect

their

tax

character.

These

reclassifications

have

no

impact

on

net

assets

or

the

results

of

operations.

Temporary

differences

are

not

reclassified,

as

they

may

reverse

in

subsequent

periods.

Common

expenses

incurred

by

the

Trust

are

allocated

among

the

Funds

based

on

the

ratio

of

net

assets

of

each

Fund

to

the

combined

net

assets

of

the

Trust

or

based

on

the

ratio

of

number

of

shareholders

of

each

Fund

to

the

combined

number

of

shareholders

of

the

Trust.

Fund

specific

expenses

are

charged

directly

to

the

Fund

that

incurred

the

expense.

Realized

and

unrealized

gains

and

losses

and

net

investment

income,

excluding

class

specific

expenses,

are

allocated

daily

to

each

class

of

shares

based

upon

the

relative

proportion

of

net

assets

of

each

class.

Differences

in

per

share

distributions

by

class

are

generally

due

to

differences

in

class

specific

expenses.

j.

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.

k.

Guarantees

and

Indemnifications

Under

the

Trust's

organizational

documents,

its

officers

and

trustees

are

indemnified

by

the

Trust

against

certain

liabilities

arising

out

of

the

performance

of

their

duties

to

the

Trust.

Additionally,

in

the

normal

course

of

business,

the

Trust,

on

behalf

of

the

Funds,

enters

into

contracts

with

service

providers

that

contain

general

indemnification

clauses.

The

Trust's

maximum

exposure

under

these

arrangements

is

unknown

as

this

would

involve

future

claims

that

may

be

made

against

the

Trust

that

have

not

yet

occurred.

Currently,

the

Trust

expects

the

risk

of

loss

to

be

remote.

1.

Organization

and

Significant

Accounting

Policies

(continued)

i.

Security

Transactions,

Investment

Income,

Expenses

and

Distributions

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

71

franklintempleton.com

Annual

Report

2.

Shares

of

Beneficial

Interest

At

October

31,

2021,

there

were

an

unlimited

number

of

shares

authorized

(without

par

value).

Transactions

in

the

Funds'

shares

were

as

follows:

Franklin

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

Shares

Amount

Shares

Amount

Class

A

Class

A

Shares:

Year

ended

October

31,

2021

Shares

sold

a

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

4,937,574

$146,094,915

17,470,808

$517,469,631

Shares

issued

in

reinvestment

of

distributions

..........

5,440,750

151,879,128

2,317,289

66,673,240

Shares

redeemed

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

(9,438,787)

(277,323,985)

(11,251,315)

(329,650,617)

Net

increase

(decrease)

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

939,537

$20,650,058

8,536,782

$254,492,254

Year

ended

October

31,

2020

Shares

sold

a

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

5,850,734

$139,679,271

15,203,458

$367,436,854

Shares

issued

in

reinvestment

of

distributions

..........

4,470,194

95,912,693

4,273,011

105,999,994

Shares

redeemed

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

(12,063,859)

(268,119,900)

(15,752,185)

(375,840,419)

Net

increase

(decrease)

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

(1,742,931)

$(32,527,936)

3,724,284

$97,596,429

Class

C

Class

C

Shares:

Year

ended

October

31,

2021

Shares

sold

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

328,928

$9,438,196

2,157,227

$62,281,514

Shares

issued

in

reinvestment

of

distributions

..........

888,774

24,309,964

140,464

3,953,128

Shares

redeemed

a

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

(3,463,483)

(100,871,243)

(2,869,291)

(85,766,865)

Net

increase

(decrease)

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

(2,245,781)

$(67,123,083)

(571,600)

$(19,532,223)

Year

ended

October

31,

2020

Shares

sold

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

619,567

$14,330,154

1,933,557

$47,371,567

Shares

issued

in

reinvestment

of

distributions

..........

809,713

17,051,309

357,077

8,915,280

Shares

redeemed

a

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

(4,440,559)

(102,709,200)

(3,588,237)

(86,778,935)

Net

increase

(decrease)

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

(3,011,279)

$(71,327,737)

(1,297,603)

$(30,492,088)

Class

R

Class

R

Shares:

Year

ended

October

31,

2021

Shares

sold

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

—

$—

78,749

$2,268,727

Shares

issued

in

reinvestment

of

distributions

..........

—

—

6,867

197,538

Shares

redeemed

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

—

—

(40,053)

(1,194,444)

Net

increase

(decrease)

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

—

$—

45,563

$1,271,821

Year

ended

October

31,

2020

Shares

sold

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

—

$—

31,941

$797,707

Shares

issued

in

reinvestment

of

distributions

..........

—

—

13,393

334,537

Shares

redeemed

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

—

—

(83,928)

(2,069,281)

Net

increase

(decrease)

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

—

$—

(38,594)

$(937,037)

Class

R6

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

72

franklintempleton.com

Annual

Report

Franklin

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

Shares

Amount

Shares

Amount

Class

R6

Shares:

Year

ended

October

31,

2021

Shares

sold

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

1,039,252

$30,519,920

1,486,382

$43,776,796

Shares

issued

in

reinvestment

of

distributions

..........

487,561

13,723,917

107,946

3,121,649

Shares

redeemed

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

(1,617,933)

(47,844,683)

(1,082,454)

(31,993,356)

Net

increase

(decrease)

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

(91,120)

$(3,600,846)

511,874

$14,905,089

Year

ended

October

31,

2020

Shares

sold

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

3,267,482

$75,404,210

1,357,448

$33,390,556

Shares

issued

in

reinvestment

of

distributions

..........

388,985

8,411,655

180,063

4,449,934

Shares

redeemed

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

(1,817,799)

(41,312,741)

(1,184,933)

(28,763,327)

Net

increase

(decrease)

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

1,838,668

$42,503,124

352,578

$9,077,163

Advisor

Class

Advisor

Class

Shares:

Year

ended

October

31,

2021

Shares

sold

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

21,725,688

$638,671,312

4,426,078

$129,619,095

Shares

issued

in

reinvestment

of

distributions

..........

10,035,293

280,485,747

293,186

8,501,090

Shares

redeemed

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

(26,365,874)

(774,957,047)

(2,332,918)

(68,529,258)

Net

increase

(decrease)

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

5,395,107

$144,200,012

2,386,346

$69,590,927

Year

ended

October

31,

2020

Shares

sold

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

29,352,686

$687,281,747

4,631,310

$110,786,281

Shares

issued

in

reinvestment

of

distributions

..........

8,255,321

177,255,222

398,372

9,845,978

Shares

redeemed

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

(42,789,544)

(935,400,822)

(2,600,761)

(61,315,217)

Net

increase

(decrease)

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

(5,181,537)

$(70,863,853)

2,428,921

$59,317,042

Franklin

Managed

Income

Fund

Shares

Amount

Class

A

Class

A

Shares:

Year

ended

October

31,

2021

Shares

sold

a

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

35,821,926

$476,776,038

Shares

issued

in

reinvestment

of

distributions

..........

10,212,982

134,727,740

Shares

redeemed

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

(35,280,175)

(465,704,531)

Net

increase

(decrease)

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

10,754,733

$145,799,247

Year

ended

October

31,

2020

Shares

sold

a

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

46,128,007

$550,402,800

Shares

issued

in

reinvestment

of

distributions

..........

17,971,520

219,203,827

Shares

redeemed

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

(51,901,964)

(611,211,559)

Net

increase

(decrease)

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

12,197,563

$158,395,068

Class

C

2.

Shares

of

Beneficial

Interest

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

73

franklintempleton.com

Annual

Report

Franklin

Managed

Income

Fund

Shares

Amount

Class

C

Shares:

Year

ended

October

31,

2021

Shares

sold

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

2,687,404

$35,260,905

Shares

issued

in

reinvestment

of

distributions

..........

894,302

11,600,013

Shares

redeemed

a

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

(14,068,653)

(186,707,587)

Net

increase

(decrease)

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

(10,486,947)

$(139,846,669)

Year

ended

October

31,

2020

Shares

sold

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

5,329,297

$62,900,103

Shares

issued

in

reinvestment

of

distributions

..........

2,513,851

30,475,395

Shares

redeemed

a

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

(17,214,160)

(202,624,186)

Net

increase

(decrease)

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

(9,371,012)

$(109,248,688)

Class

R

Class

R

Shares:

Year

ended

October

31,

2021

Shares

sold

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

47,054

$621,063

Shares

issued

in

reinvestment

of

distributions

..........

9,862

130,274

Shares

redeemed

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

(72,336)

(942,542)

Net

increase

(decrease)

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

(15,420)

$(191,205)

Year

ended

October

31,

2020

Shares

sold

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

39,218

$475,079

Shares

issued

in

reinvestment

of

distributions

..........

22,757

278,538

Shares

redeemed

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

(116,833)

(1,412,075)

Net

increase

(decrease)

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

(54,858)

$(658,458)

Class

R6

Class

R6

Shares:

Year

ended

October

31,

2021

Shares

sold

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

2,366,403

$31,537,937

Shares

issued

in

reinvestment

of

distributions

..........

597,411

7,908,728

Shares

redeemed

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

(2,925,070)

(38,772,190)

Net

increase

(decrease)

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

38,744

$674,475

Year

ended

October

31,

2020

Shares

sold

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

3,106,638

$37,375,347

Shares

issued

in

reinvestment

of

distributions

..........

1,041,392

12,723,008

Shares

redeemed

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

(3,371,512)

(39,996,235)

Net

increase

(decrease)

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

776,518

$10,102,120

Advisor

Class

2.

Shares

of

Beneficial

Interest

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

74

franklintempleton.com

Annual

Report

3.

Transactions

with

Affiliates

Franklin

Resources,

Inc.

is

the

holding

company

for

various

subsidiaries

that

together

are

referred

to

as

Franklin

Templeton.

Certain

officers

and

trustees

of

the

Trust

are

also

officers

and/or

directors

of

the

following

subsidiaries:

a.

Management

Fees

Franklin

Managed

Income

Fund

pays

an

investment

management

fee

to

Advisers

based

on

the

average

daily

net

assets

of

the

Fund

as

follows:

Franklin

Managed

Income

Fund

Shares

Amount

Advisor

Class

Shares:

Year

ended

October

31,

2021

Shares

sold

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

5,010,677

$66,860,591

Shares

issued

in

reinvestment

of

distributions

..........

586,276

7,766,957

Shares

redeemed

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

(3,317,057)

(43,564,316)

Net

increase

(decrease)

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

2,279,896

$31,063,232

Year

ended

October

31,

2020

Shares

sold

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

5,713,128

$68,045,247

Shares

issued

in

reinvestment

of

distributions

..........

996,705

12,186,523

Shares

redeemed

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

(6,600,817)

(78,984,059)

Net

increase

(decrease)

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

109,016

$1,247,711

a

May

include

a

portion

of

Class

C

shares

that

were

automatically

converted

to

Class

A.

Subsidiary

Affiliation

Franklin

Advisers,

Inc.

(Advisers)

Investment

manager

Franklin

Templeton

Services,

LLC

(FT

Services)

Administrative

manager

Franklin

Distributors,

LLC

(Distributors)

(formerly

Franklin

Templeton

Distributors,

Inc.)

Principal

underwriter

Franklin

Templeton

Investor

Services,

LLC

(Investor

Services)

Transfer

agent

Annualized

Fee

Rate

Net

Assets

0.620%

Up

to

and

including

$250

million

0.595%

Over

$250

million,

up

to

and

including

$500

million

0.570%

Over

$500

million,

up

to

and

including

$1

billion

0.545%

Over

$1

billion,

up

to

and

including

$2.5

billion

0.520%

Over

$2.5

billion,

up

to

and

including

$5

billion

0.495%

Over

$5

billion,

up

to

and

including

$10

billion

0.470%

Over

$10

billion,

up

to

and

including

$15

billion

0.445%

Over

$15

billion,

up

to

and

including

$20

billion

0.420%

In

excess

of

$20

billion

2.

Shares

of

Beneficial

Interest

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

75

franklintempleton.com

Annual

Report

Franklin

Convertible

Securities

Fund

and

Franklin

Equity

Income

Fund

pay

an

investment

management

fee

to

Advisers

based

on

the

month-end

net

assets

of

each

of

the

Funds

as

follows:

For

the

year

ended

October

31,

2021,

each

Fund's

gross

effective

investment

management

fee

rate

based

on

average

daily

net

assets

was

as

follows:

b.

Administrative

Fees

Under

an

agreement

with

Advisers,

FT

Services

provides

administrative

services

to

the

Funds.

The

fee

is

paid

by

Advisers

based

on

each

of

the

Funds'

average

daily

net

assets,

and

is

not

an

additional

expense

of

the

Funds.

c.

Distribution

Fees

The

Board

has

adopted

distribution

plans

for

each

share

class,

with

the

exception

of

Class

R6

and

Advisor

Class

shares,

pursuant

to

Rule

12b-1

under

the

1940

Act.

Under

the

Funds’

Class

A

reimbursement

distribution

plans,

the

Funds

reimburse

Distributors

for

costs

incurred

in

connection

with

the

servicing,

sale

and

distribution

of each

Fund's

shares

up

to

the

maximum

annual

plan

rate

for

each

class.

Under

the

Class

A

reimbursement

distribution

plans,

costs

exceeding

the

maximum

for

the

current

plan

year

cannot

be

reimbursed

in

subsequent

periods.

In

addition,

under

the

Funds’

Class

C

and

R

compensation

distribution

plans,

the

Funds

pay

Distributors

for

costs

incurred

in

connection

with

the

servicing,

sale

and

distribution

of

each

Fund's

shares

up

to

the

maximum

annual

plan

rate

for

each

class.

The

plan

year,

for

purposes

of

monitoring

compliance

with

the

maximum

annual

plan

rates,

is

February

1

through

January

31

for

each

Fund.

The

maximum

annual

plan

rates,

based

on

the

average

daily

net

assets,

for

each

class,

are

as

follows:

Annualized

Fee

Rate

Net

Assets

0.625%

Up

to

and

including

$100

million

0.500%

Over

$100

million,

up

to

and

including

$250

million

0.450%

Over

$250

million,

up

to

and

including

$7.5

billion

0.440%

Over

$7.5

billion,

up

to

and

including

$10

billion

0.430%

Over

$10

billion,

up

to

and

including

$12.5

billion

0.420%

Over

$12.5

billion,

up

to

and

including

$15

billion

0.400%

Over

$15

billion,

up

to

and

including

$17.5

billion

0.380%

Over

$17.5

billion,

up

to

and

including

$20

billion

0.360%

Over

$20

billion,

up

to

and

including

$35

billion

0.355%

Over

$35

billion,

up

to

and

including

$50

billion

0.350%

In

excess

of

$50

billion

Franklin

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

Franklin

Managed

Income

Fund

Gross

effective

investment

management

fee

rate

........

0.456%

0.462%

0.546%

3.

Transactions

with

Affiliates

(continued)

a.

Management

Fees

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

76

franklintempleton.com

Annual

Report

For

Franklin

Managed

Income

Fund,

the

Board

has

set

the

current

rate

at

0.25%

per

year

for

Class

A

shares

until

further

notice

and

approval

by

the

Board.

d.

Sales

Charges/Underwriting

Agreements

Front-end

sales

charges

and

contingent

deferred

sales

charges

(CDSC)

do

not

represent

expenses

of

the

Funds.

These

charges

are

deducted

from

the

proceeds

of

sales

of

fund

shares

prior

to

investment

or

from

redemption

proceeds

prior

to

remittance,

as

applicable.

Distributors

has

advised

the

Funds

of

the

following

commission

transactions

related

to

the

sales

and

redemptions

of

the

Funds'

shares

for

the

year:

e.

Transfer

Agent

Fees

Each

class

of

shares

pays

transfer

agent

fees

to

Investor

Services

for

its

performance

of

shareholder

servicing

obligations.

The

fees

are

based

on

an

annualized

asset

based

fee

of

0.02%

plus

a

transaction

based

fee.

In

addition,

each

class

reimburses

Investor

Services

for

out

of

pocket

expenses

incurred

and,

except

for

Class

R6,

reimburses

shareholder

servicing

fees

paid

to

third

parties.

These

fees

are

allocated

daily

based

upon

their

relative

proportion

of

such

classes'

aggregate

net

assets.

Class

R6

pays

Investor

Services

transfer

agent

fees

specific

to

that

class.

For

the

year

ended

October

31,

2021,

the

Funds

paid

transfer

agent

fees

as

noted

in

the

Statements

of

Operations

of

which

the

following

amounts

were

retained

by

Investor

Services:

f.

Investments

in

Affiliated

Management

Investment

Companies

Certain

or

all

Funds

invest

in

one

or

more

affiliated

management

investment

companies.

As

defined

in

the

1940

Act,

an

investment

is

deemed

to

be

a

“Controlled

Affiliate”

of

a

fund

when

a

fund

owns,

either

directly

or

indirectly,

25%

or

more

of

the

affiliated

fund’s

outstanding

shares

or

has

the

power

to

exercise

control

over

management

or

policies

of

such

fund.

The

Funds

do

not

invest

for

purposes

of

exercising

a

controlling

influence

over

the

management

or

policies.

Management

fees

paid

by

Franklin

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

Franklin

Managed

Income

Fund

Reimbursement

Plans:

Class

A

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

0.25%

0.25%

0.35%

Compensation

Plans:

Class

C

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

1.00%

1.00%

1.00%

Class

R

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

—%

0.50%

0.50%

Franklin

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

Franklin

Managed

Income

Fund

Sales

charges

retained

net

of

commissions

paid

to

unaffiliated

brokers/dealers

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

$35,090

$551,403

$552,960

CDSC

retained

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

$4,338

$26,278

$32,859

Franklin

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

Franklin

Managed

Income

Fund

Transfer

agent

fees

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

$1,537,636

$1,379,291

$1,607,966

3.

Transactions

with

Affiliates

(continued)

c.

Distribution

Fees

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

77

franklintempleton.com

Annual

Report

the

Funds

are

waived

on

assets

invested

in

the

affiliated

management

investment

companies,

as

noted

in

the

Statements

of

Operations,

in

an

amount

not

to

exceed

the

management

and

administrative

fees

paid

directly

or

indirectly

by

each

affiliate.

During

the

year

ended

October

31,

2021,

investments

in

affiliated

management

investment

companies

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

Convertible

Securities

Fund

Non-Controlled

Affiliates

Dividends

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.

$211,356,904

$1,032,198,530

$(1,036,534,596)

$—

$—

$207,020,838

207,020,838

$10,316

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.

6,200,000

158,751,000

(159,113,000)

—

—

5,838,000

5,838,000

1,128

Total

Affiliated

Securities

...

$217,556,904

$1,190,949,530

$(1,195,647,596)

$—

$—

$212,858,838

$11,444

Franklin

Equity

Income

Fund

Non-Controlled

Affiliates

Dividends

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.

$13,813,242

$598,752,853

$(538,790,774)

$—

$—

$73,775,321

73,775,321

$2,779

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.

14,180,000

111,158,000

(117,592,000)

—

—

7,746,000

7,746,000

473

Total

Affiliated

Securities

...

$27,993,242

$709,910,853

$(656,382,774)

$—

$—

$81,521,321

$3,252

Franklin

Managed

Income

Fund

Controlled

Affiliates

Dividends

Franklin

Liberty

Systematic

Style

Premia

ETF

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

$25,719,105

$—

$—

$

—

$

(1,370,990)

$

24,348,115

1,175,000

$

2,086,048

a

Franklin

Liberty

U.S.

Low

Volatility

ETF

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

37,699,500

—

(6,721,716)

1,596,666

9,622,568

42,197,018

860,000

663,743

Total

Controlled

Affiliates

...

$63,418,605

$—

$(6,721,716)

$

1,596,666

$

8,251,578

$66,545,133

$

2,749,791

Non-Controlled

Affiliates

Dividends

Franklin

FTSE

Japan

ETF

....

$—

$21,166,249

$—

$—

$(145,249)

$21,021,000

700,000

$—

3.

Transactions

with

Affiliates

(continued)

f.

Investments

in

Affiliated

Management

Investment

Companies

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

78

franklintempleton.com

Annual

Report

g.

Waiver

and

Expense

Reimbursements

Advisers

has

contractually

agreed

in

advance

to

waive

or

limit

its

respective

fees

and

to

assume

as

its

own

expense

certain

expenses

otherwise

payable

by

Franklin

Managed

Income

Fund

so

that

the

operating

expenses

(excluding

distribution

fees,

and

certain

non-routine

expenses

or

costs,

including

those

relating

to

litigation,

indemnification,

reorganizations,

and

liquidations)

and

acquired

fund

fees

and

expenses

for

each

class

of

the

Fund

does

not

exceed

0.68%

based

on

the

average

net

assets

of

each

class

until

February

28,

2022.

Total

expenses

waived

or

paid

are

not

subject

to

recapture

subsequent

to

the

Fund’s

fiscal

year

end.

Investor

Services

has

contractually

agreed

in

advance

to

waive

or

limit

its

fees

so

that

the

Class

R6

transfer

agent

fees

do

not

exceed

0.03%

based

on

the

average

net

assets

of

the

class

until

February

28,

2022.

h.

Interfund

Transactions

The

Franklin

Managed

Income

Fund

engaged

in

purchases

and

sales

of

investments

with

funds

or

other

accounts

that

have

common

investment

managers

(or

affiliated

investment

managers),

directors,

trustees

or

officers.

During

the

year

ended

October

31,

2021,

these

purchases

and

sales

transactions

aggregated

$0

and

$30,267,000,

respectively.

4.

Expense

Offset

Arrangement

The

Funds

have entered

into

an

arrangement

with

their

custodian

whereby

credits

realized

as

a

result

of

uninvested

cash

balances

are

used

to

reduce

a

portion

of

the

Funds'

custodian

expenses. During

the year

ended

October

31,

2021, the

custodian

fees

were

reduced

as

noted

in

the

Statements

of

Operations.

    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

Franklin

Managed

Income

Fund

(continued)

Franklin

FTSE

United

Kingdom

ETF

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

27,669,150

—

(6,195,618)

326,243

10,150,225

31,950,000

1,250,000

1,051,847

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.

28,554,890

1,308,802,550

(1,219,518,886)

—

—

117,838,554

117,838,554

6,054

Total

Non-Controlled

Affiliates

$56,224,040

$1,329,968,799

$(1,225,714,504)

$

326,243

$

10,004,976

$170,809,554

$

1,057,901

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.

$2,956,000

$106,716,000

$(109,672,000)

—

—

$—

—

$759

Total

Affiliated

Securities

...

$122,598,645

$1,436,684,799

$(1,342,108,220)

$1,922,909

$18,256,554

$237,354,687

$3,808,451

a

Dividend

income

includes

capital

gain

distributions

received,

if

any,

from

underlying

funds,

and

are

presented

in

corresponding

line

item

in

the

Statement

of

Operations.

3.

Transactions

with

Affiliates

(continued)

f.

Investments

in

Affiliated

Management

Investment

Companies

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

79

franklintempleton.com

Annual

Report

5.

Income

Taxes

The

tax

character

of

distributions

paid

during

the

years

ended

October

31,

2021

and

2020,

was

as

follows:

At

October

31,

2021,

the

cost

of

investments,

net

unrealized

appreciation

(depreciation),

undistributed

ordinary

income

and

undistributed

long

term

capital

gains

for

income

tax

purposes

were

as

follows:

Differences

between

income

and/or

capital

gains

as

determined

on

a

book

basis

and

a

tax

basis

are

primarily

due

to

differing

treatments

of

foreign

currency

transactions,

EU

Reclaims,

bond

discounts

and

premiums,

equity-linked

securities

and

wash

sales.

The

Funds

utilized

a

tax

accounting

practice

to

treat

a

portion

of

the

proceeds

from

capital

shares

redeemed

as

a

distribution

from

net

realized

capital

gains.

Franklin

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

2021

2020

2021

2020

Distributions

paid

from:

Ordinary

income

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

$98,961,812

$144,316,737

$63,040,031

$61,251,863

Long

term

capital

gain

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

433,405,483

189,260,200

22,115,951

72,863,900

$532,367,295

$333,576,937

$85,155,982

$134,115,763

Franklin

Managed

Income

Fund

2021

2020

Distributions

paid

from:

Ordinary

income

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

$141,543,233

$158,461,426

Long

term

capital

gain

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

25,773,954

125,043,865

$167,317,187

$283,505,291

Franklin

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

Franklin

Managed

Income

Fund

a

a

a

a

Cost

of

investments

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

$4,222,149,201

$2,400,033,061

$3,528,386,578

Unrealized

appreciation

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

$1,169,746,642

$1,328,478,935

$690,650,239

Unrealized

depreciation

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

(84,159,983)

(23,241,551)

(34,874,993)

Net

unrealized

appreciation

(depreciation)

.......

$1,085,586,659

$1,305,237,384

$655,775,246

Distributable

earnings:

Undistributed

ordinary

income

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

$48,300,624

$10,090,479

$19,921,228

Undistributed

long

term

capital

gains

...........

836,723,902

179,075,402

128,431,515

Total

distributable

earnings

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

$885,024,526

$189,165,881

$148,352,743

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

80

franklintempleton.com

Annual

Report

6.

Investment

Transactions

Purchases

and

sales

of

investments

(excluding

short

term

securities)

for

the

year

ended

October

31,

2021,

were

as

follows:

At

October

31,

2021,

in

connection

with

securities

lending

transactions,

certain

or

all

Funds

loaned

investments

and

received

cash

collateral

as

follows:

7.

Credit Risk

and

Defaulted

Securities

At

October

31,

2021,

Franklin

Convertible

Securities

Fund

and

Franklin

Managed

Income

Fund

had

83.2%

and

22.2%,

respectively,

of

their

portfolio

invested

in

high

yield

securities,

senior

secured

floating

rate

loans,

or

other

securities

rated

below

investment

grade

and

unrated

securities.

These

securities

may

be

more

sensitive

to

economic

conditions

causing

greater

price

volatility

and

are

potentially

subject

to

a

greater

risk

of

loss

due

to

default

than

higher

rated

securities.

8.

Novel

Coronavirus

Pandemic 

The

global

outbreak

of

the

novel

coronavirus

disease,

known

as

COVID-19, has

caused

adverse

effects

on

many

companies,

sectors,

nations,

regions

and

the

markets

in

general, and

may

continue for

an unpredictable duration.

The

effects

of

this

pandemic

may

materially

impact

the

value

and

performance

of

the

Funds, their ability

to

buy

and

sell

fund

investments

at

appropriate

valuations

and their ability

to

achieve their investment

objectives.

9.

Other

Derivative

Information

At

October

31,

2021,

investments

in

derivative

contracts

are

reflected

in

the

Statements

of

Assets

and

Liabilities

as

follows:

Franklin

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

Franklin

Managed

Income

Fund

Purchases

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

$1,622,586,476

$1,039,208,198

$1,536,143,056

Sales

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

$2,003,404,657

$788,317,390

$1,574,251,424

Franklin

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

Franklin

Managed

Income

Fund

Securities

lending

transactions

a

:

Equity

investments

b

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

$7,298,269

$9,683,539

$—

a

The

agreements

can

be

terminated

at

any

time.

b

The

gross

amount

of

recognized

liability

for

such

transactions

is

included

in

payable

upon

return

of

securities

loaned

in

the

Statements

of

Assets

and

Liabilities.

Asset

Derivatives

Liability

Derivatives

Derivative

Contracts

Not

Accounted

for

as

Hedging

Instruments

Statement

of

Assets

and

Liabilities

Location

Fair

Value

Statement

of

Assets

and

Liabilities

Location

Fair

Value

Franklin

Managed

Income

Fund

Equity

contracts

...........

Investments

in

securities,

at

value

$

1,050,000

a

Options

written,

at

value

$

6,546,800

Total

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

$1,050,000

$6,546,800

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

81

franklintempleton.com

Annual

Report

For

the

year

ended

October

31,

2021,

the

effect

of

derivative

contracts

in

the

Statements

of

Operations

was

as

follows:

For

the

year

ended

October

31,

2021,

the

average

month

end

notional

amount

of

options

contracts

represented

3,937,046

shares.

See

Note

1(e) regarding

derivative

financial

instruments. 

10.

Credit

Facility

The

Funds

together

with

other

U.S.

registered

and

foreign

investment

funds

(collectively,

Borrowers),

managed

by

Franklin

Templeton,

are

borrowers

in

a

joint

syndicated

senior

unsecured

credit

facility

totaling

$2.675

billion

(Global

Credit

Facility)

which

matures

on

February

4,

2022.

This

Global

Credit

Facility

provides

a

source

of

funds

to

the

Borrowers

for

temporary

and

emergency

purposes,

including

the

ability

to

meet

future

unanticipated

or

unusually

large

redemption

requests.

Under

the

terms

of

the

Global

Credit

Facility,

the

Funds

shall,

in

addition

to

interest

charged

on

any

borrowings

made

by

the

Funds

and

other

costs

incurred

by

the

Funds,

pay

their

share

of

fees

and

expenses

incurred

in

connection

with

the

implementation

and

maintenance

of

the

Global

Credit

Facility,

based

upon

their

relative

share

of

the

aggregate

net

assets

of

all

of

the

Borrowers,

including

an

annual

commitment

fee

of

0.15%

based

upon

the

unused

portion

of

the

Global

Credit

Facility.

These

fees

are

reflected

in

other

expenses

in

the

Statements

of

Operations.

During

the

year ended

October

31,

2021,

the

Funds

did

not

use

the

Global

Credit

Facility.

11.

Fair

Value

Measurements

The Funds

follow

a

fair

value

hierarchy

that

distinguishes

between

market

data

obtained

from

independent

sources

(observable

inputs)

and

the Funds'

own

market

assumptions

(unobservable

inputs).

These

inputs

are

used

in

determining

the

value

of

the Funds' financial

instruments

and

are

summarized

in

the

following

fair

value

hierarchy:

Level

1

–

quoted

prices

in

active

markets

for

identical

financial

instruments

Level

2

–

other

significant

observable

inputs

(including

quoted

prices

for

similar

financial

instruments,

interest

rates,

prepayment

speed,

credit

risk,

etc.)

a

Purchased

option

contracts

are

included

in

investments

in

securities,

at

value

in

the

Statements

of

Assets

and

Liabilities.

Derivative

Contracts

Not

Accounted

for

as

Hedging

Instruments

Statement

of

Operations

Location

Net

Realized

Gain

(Loss)

for

the

Year

Statement

of

Operations

Location

Net

Change

in

Unrealized

Appreciation

(Depreciation)

for

the

Year

Franklin

Managed

Income

Fund

Net

realized

gain

(loss)

from:

Net

change

in

unrealized

  appreciation

(depreciation)

on:

Equity

Contracts

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

Investments

$(11,942,922)

a

Investments

$(2,165,084)

a

Written

options

21,532

Written

options

3,234,823

Total

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

$(11,921,390)

$1,069,739

a

Purchased

option

contracts

are

included

in

net

realized

gain

(loss)

from

investments

and

net

change

in

unrealized

appreciation

(depreciation)  on

investments

in

the

Statements

of

Operations.

9.

Other

Derivative

Information

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

82

franklintempleton.com

Annual

Report

Level

3

–

significant

unobservable

inputs

(including

the Funds'

own

assumptions

in

determining

the

fair

value

of

financial

instruments)

The

input

levels

are

not

necessarily

an

indication

of

the

risk

or

liquidity

associated

with

financial

instruments

at

that

level.

A

summary

of

inputs

used

as

of

October

31,

2021,

in

valuing

the

Funds’

assets

and

liabilities

carried

at

fair

value,

is

as

follows:

Level

1

Level

2

Level

3

Total

Franklin

Convertible

Securities

Fund

Assets:

Investments

in

Securities:

Common

Stocks

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

$

127,897,613

$

—

$

—

$

127,897,613

Convertible

Preferred

Stocks

:

Auto

Components

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

102,396,000

—

—

102,396,000

Capital

Markets

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

136,054,400

—

—

136,054,400

Electric

Utilities

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

189,569,700

—

—

189,569,700

Food

Products

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

80,085,600

—

—

80,085,600

Health

Care

Equipment

&

Supplies

.........

109,237,534

—

—

109,237,534

Health

Care

Technology

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

21,438,000

—

—

21,438,000

Life

Sciences

Tools

&

Services

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

101,499,600

—

—

101,499,600

Machinery

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

29,897,500

—

—

29,897,500

Multi-Utilities

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

88,637,500

—

—

88,637,500

Semiconductors

&

Semiconductor

Equipment

.

119,258,874

—

—

119,258,874

Water

Utilities

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

44,475,200

—

—

44,475,200

Wireless

Telecommunication

Services

.......

—

50,352,344

—

50,352,344

Convertible

Bonds

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

—

3,892,616,888

—

3,892,616,888

Short

Term

Investments

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

212,858,838

1,460,269

—

214,319,107

Total

Investments

in

Securities

...........

$1,363,306,359

$3,944,429,501

$—

$5,307,735,860

Franklin

Equity

Income

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Aerospace

&

Defense

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

127,528,750

—

—

127,528,750

Air

Freight

&

Logistics

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

102,145,395

—

—

102,145,395

Banks

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

382,881,200

—

—

382,881,200

Beverages

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

131,889,500

—

—

131,889,500

Capital

Markets

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

330,876,778

—

—

330,876,778

Chemicals

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

104,379,935

25,548,440

—

129,928,375

Commercial

Services

&

Supplies

...........

62,858,200

—

—

62,858,200

Communications

Equipment

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

20,988,750

—

—

20,988,750

Diversified

Telecommunication

Services

.....

14,540,157

—

—

14,540,157

Electric

Utilities

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

212,150,427

—

—

212,150,427

Electrical

Equipment

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

81,826,890

—

—

81,826,890

Equity

Real

Estate

Investment

Trusts

(REITs)

.

49,406,320

—

—

49,406,320

Food

&

Staples

Retailing

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

44,900,710

—

—

44,900,710

Food

Products

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

21,866,400

—

—

21,866,400

Health

Care

Equipment

&

Supplies

.........

96,786,950

—

—

96,786,950

Health

Care

Providers

&

Services

..........

100,735,115

—

—

100,735,115

Hotels,

Restaurants

&

Leisure

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

56,476,500

—

—

56,476,500

Household

Products

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

91,513,600

—

—

91,513,600

Insurance

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

22,048,605

—

—

22,048,605

IT

Services

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

40,001,875

—

—

40,001,875

Life

Sciences

Tools

&

Services

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

35,135,385

—

—

35,135,385

Machinery

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

61,747,081

—

—

61,747,081

Media

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

57,858,750

—

—

57,858,750

Multiline

Retail

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

96,059,400

—

—

96,059,400

Oil,

Gas

&

Consumable

Fuels

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

204,558,085

—

—

204,558,085

11.

Fair

Value

Measurements

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

83

franklintempleton.com

Annual

Report

Level

1

Level

2

Level

3

Total

Franklin

Equity

Income

Fund

(continued)

Assets:

(continued)

Investments

in

Securities:

Common

Stocks:

Pharmaceuticals

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

$

157,490,150

$

—

$

—

$

157,490,150

Road

&

Rail

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

36,679,896

—

—

36,679,896

Semiconductors

&

Semiconductor

Equipment

.

66,810,485

—

—

66,810,485

Software

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

84,311,610

—

—

84,311,610

Specialty

Retail

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

95,129,400

—

—

95,129,400

Technology

Hardware,

Storage

&

Peripherals

.

14,530,600

—

—

14,530,600

Equity-Linked

Securities

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

—

340,576,577

—

340,576,577

Convertible

Preferred

Stocks

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

249,573,669

—

—

249,573,669

Short

Term

Investments

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

81,521,321

1,937,539

—

83,458,860

Total

Investments

in

Securities

...........

$3,337,207,889

$368,062,556

a

$—

$3,705,270,445

Franklin

Managed

Income

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Aerospace

&

Defense

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

93,564,738

—

—

93,564,738

Air

Freight

&

Logistics

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

37,357,250

—

—

37,357,250

Banks

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

253,847,847

—

—

253,847,847

Beverages

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

100,810,450

—

—

100,810,450

Biotechnology

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

54,468,250

—

—

54,468,250

Capital

Markets

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

35,973,000

—

—

35,973,000

Chemicals

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

77,551,500

—

—

77,551,500

Communications

Equipment

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

58,171,804

—

—

58,171,804

Diversified

Telecommunication

Services

.....

93,831,787

22,314,656

—

116,146,443

Electric

Utilities

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

98,864,250

—

—

98,864,250

Health

Care

Providers

&

Services

..........

90,459,600

—

—

90,459,600

Household

Products

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

85,794,000

—

—

85,794,000

Industrial

Conglomerates

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

65,586,000

—

—

65,586,000

Insurance

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

16,088,000

—

—

16,088,000

IT

Services

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

37,095,831

—

—

37,095,831

Media

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

31,782,197

—

—

31,782,197

Multiline

Retail

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

25,962,000

—

—

25,962,000

Multi-Utilities

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

98,924,000

—

—

98,924,000

Oil,

Gas

&

Consumable

Fuels

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

118,194,500

—

—

118,194,500

Pharmaceuticals

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

241,390,068

—

—

241,390,068

Road

&

Rail

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

49,487,000

—

—

49,487,000

Semiconductors

&

Semiconductor

Equipment

.

96,994,840

—

—

96,994,840

Specialty

Retail

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

55,761,000

—

—

55,761,000

Management

Investment

Companies

.........

119,516,133

—

—

119,516,133

Equity-Linked

Securities

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

—

475,731,722

—

475,731,722

Convertible

Preferred

Stocks

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

407,836,130

—

—

407,836,130

Corporate

Bonds

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

—

939,163,871

—

939,163,871

U.S.

Government

and

Agency

Securities

.......

—

166,102,832

—

166,102,832

Asset-Backed

Securities

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

—

21,528,334

—

21,528,334

Mortgage-Backed

Securities

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

—

1,666,480

—

1,666,480

Options

purchased

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

1,050,000

—

—

1,050,000

Short

Term

Investments

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

117,838,554

—

—

117,838,554

Total

Investments

in

Securities

...........

$2,564,200,729

$1,626,507,895

b

$—

$4,190,708,624

Liabilities:

Other

Financial

Instruments:

Options

written

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

$

6,546,800

$

—

$

—

$

6,546,800

11.

Fair

Value

Measurements

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

84

franklintempleton.com

Annual

Report

12.

New

Accounting

Pronouncements

In

March

2020,

the

Financial

Accounting

Standards

Board

(FASB)

issued

Accounting

Standards

Update

(ASU)

No.

2020-04,

Reference

Rate

Reform

(Topic

848)

–

Facilitation

of

the

Effects

of

Reference

Rate

Reform

on

Financial

Reporting.

In

January

2021,

the

FASB

issued

ASU

No.

2021-01,

with

further

amendments

to

Topic

848.

The

amendments

in

the

ASUs

provide

optional

temporary

accounting

recognition

and financial

reporting

relief

from

the

effect

of

certain

types

of

contract

modifications

due

to

the

planned

discontinuation

of

the

London

Interbank

Offered

Rate

(LIBOR)

and

other

interbank-offered

based

reference

rates

as

of

the

end

of

2021

for

certain

LIBOR

settings

and

2023

for

the

remainder. The

ASUs

are

effective

for

certain

reference

rate-related

contract

modifications

that

occur

during

the

period

March

12,

2020

through

December

31,

2022.

Management

has

reviewed

the

requirements

and

believes

the

adoption

of

these

ASUs

will

not

have

a

material

impact

on

the

financial

statements. 

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.

Abbreviations

a

Includes

foreign

securities

valued

at

$25,548,440,

which

were

categorized

as

Level

2

as

a

result

of

the

application

of

market

level

fair

value

procedures.

See

the

Financial

Instrument

Valuation

note

for

more

information.

b

Includes

foreign

securities

valued

at

$22,314,656,

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.

Selected

Portfolio

ADR

American

Depositary

Receipt

ETF

Exchange-Traded

Fund

FNMA

Federal

National

Mortgage

Association

FRN

Floating

Rate

Note

11.

Fair

Value

Measurements

(continued)

Franklin

Investors

Securities

Trust

Report

of

Independent

Registered

Public

Accounting

Firm

85

franklintempleton.com

Annual

Report

To

the

Board

of

Trustees

of

Franklin

Investors

Securities

Trust

and

Shareholders

of

Franklin

Convertible

Securities

Fund,

Franklin

Equity

Income

Fund,

and

Franklin

Managed

Income

Fund

Opinions

on

the

Financial

Statements

We

have

audited

the

accompanying

statements

of

assets

and

liabilities,

including

the

statements

of

investments,

of

Franklin

Convertible

Securities

Fund,

Franklin

Equity

Income

Fund,

and

Franklin

Managed

Income

Fund

(three

of

the

funds

constituting

Franklin

Investors

Securities

Trust,

hereafter

collectively

referred

to

as

the

"Funds")

as

of

October

31,

2021,

the

related

statements

of

operations

for

the

year

ended

October

31,

2021,

the

statements

of

changes

in

net

assets

for

each

of

the

two

years

in

the

period

ended

October

31,

2021,

including

the

related

notes,

and

the

financial

highlights

for

each

of

the

five

years

in

the

period

ended

October

31,

2021

(collectively

referred

to

as

the

“financial

statements”).

In

our

opinion,

the

financial

statements

present

fairly,

in

all

material

respects,

the

financial

position

of

each

of

the

Funds

as

of

October

31,

2021,

the

results

of

each

of

their

operations

for

the

year

then

ended,

the

changes

in

each

of

their

net

assets

for

each

of

the

two

years

in

the

period

ended

October

31,

2021

and

each

of

the

financial

highlights

for

each

of

the

five

years

in

the

period

ended

October

31,

2021

in

conformity

with

accounting

principles

generally

accepted

in

the

United

States

of

America.

Basis

for

Opinions

These

financial

statements

are

the

responsibility

of

the

Funds’

management.

Our

responsibility

is

to

express

an

opinion

on

the

Funds’

financial

statements

based

on

our

audits.

We

are

a

public

accounting

firm

registered

with

the

Public

Company

Accounting

Oversight

Board

(United

States)

(PCAOB)

and

are

required

to

be

independent

with

respect

to

the

Funds

in

accordance

with

the

U.S.

federal

securities

laws

and

the

applicable

rules

and

regulations

of

the

Securities

and

Exchange

Commission

and

the

PCAOB.

We

conducted

our

audits

of

these

financial

statements

in

accordance

with

the

standards

of

the

PCAOB.

Those

standards

require

that

we

plan

and

perform

the

audit

to

obtain

reasonable

assurance

about

whether

the

financial

statements

are

free

of

material

misstatement,

whether

due

to

error

or

fraud.

Our

audits

included

performing

procedures

to

assess

the

risks

of

material

misstatement

of

the

financial

statements,

whether

due

to

error

or

fraud,

and

performing

procedures

that

respond

to

those

risks.

Such

procedures

included

examining,

on

a

test

basis,

evidence

regarding

the

amounts

and

disclosures

in

the

financial

statements.

Our

audits

also

included

evaluating

the

accounting

principles

used

and

significant

estimates

made

by

management,

as

well

as

evaluating

the

overall

presentation

of

the

financial

statements.

Our

procedures

included

confirmation

of

securities

owned

as

of

October

31,

2021

by

correspondence

with

the

custodian,

transfer

agent

and

brokers;

when

replies

were

not

received

from

brokers,

we

performed

other

auditing

procedures.

We

believe

that

our

audits

provide

a

reasonable

basis

for

our

opinions.

PricewaterhouseCoopers

LLP

San

Francisco,

California

December

17,

2021

We

have

served

as

the

auditor

of

one

or

more

investment

companies

in

the

Franklin

Templeton

Group

of

Funds

since

1948.

Franklin

Investors

Securities

Trust

Tax

Information

(unaudited)

86

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.

a

The

Funds

below

hereby

report

the

following

amounts,

or

if

subsequently

determined

to

be

different,

the

maximum

allowable

amounts,

for

the

fiscal

year

ended

October

31,

2021:

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

Convertible

Securities

Fund

Franklin

Equity

Income

Fund

Franklin

Managed

Income

Fund

Long-Term

Capital

Gain

Dividends

Distributed

§852(b)(3)(C)

$536,943,582

$35,913,533

$38,163,808

Income

Eligible

for

Dividends

Received

Deduction

(DRD)

§854(b)(1)(A)

$20,104,066

$66,486,735

$48,309,159

Qualified

Dividend

Income

Earned

(QDI)

§854(b)(1)(B)

$23,008,466

$73,539,884

$64,353,459

Qualified

Net

Interest

Income

(QII)

§871(k)(1)(C)

$10,887,416

$—

$—

Short-Term

Capital

Gain

Dividends

Distributed

§871(k)(2)(C)

$51,341,778

$—

$12,081,423

Interest

Earned

from

Federal

Obligations

Note

(1)

$—

$—

$2,387,033

Franklin

Investors

Securities

Trust

Board

Members

and

Officers

87

franklintempleton.com

Annual

Report

The

name,

year

of

birth

and

address

of

the

officers

and

board

members,

as

well

as

their

affiliations,

positions

held

with

the

Trust,

principal

occupations

during

at

least

the

past

five

years

and

number

of

U.S.

registered

portfolios

overseen

in

the

Franklin

Templeton/Legg

Mason

fund

complex,

are

shown

below.

Generally,

each

board

member

serves

until

that

person’s

successor

is

elected

and

qualified.

Independent

Board

Members

Name,

Year

of

Birth

and

Address

Position

Length

of

Time

Served

Number

of

Portfolios

in

Fund

Complex

Overseen

by

Board

Member*

Other

Directorships

Held

During

at

Least

the

Past

5

Years

Harris

J.

Ashton

(1932)

Trustee

Since

1986

123

Bar-S

Foods

(meat

packing

company)

(1981-2010).

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Director

of

various

companies;

and

formerly

,

Director,

RBC

Holdings,

Inc.

(bank

holding

company)

(until

2002);

and

President,

Chief

Executive

Officer

and

Chairman

of

the

Board,

General

Host

Corporation

(nursery

and

craft

centers)

(until

1998).

Terrence

J.

Checki

(1945)

Trustee

Since

2017

104

Hess

Corporation

(exploration

of

oil

and

gas)

(2014-present).

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Member

of

the

Council

on

Foreign

Relations

(1996-present);

Member

of

the

National

Committee

on

U.S.-China

Relations

(1999-present);

member

of

the

board

of

trustees

of

the

Economic

Club

of

New

York

(2013-present);

member

of

the

board

of

trustees

of

the

Foreign

Policy

Association

(2005-present);

member

of

the

board

of

directors

of

Council

of

the

Americas

(2007-present)

and

the

Tallberg

Foundation

(2018–

present);

and

formerly

,

Executive

Vice

President

of

the

Federal

Reserve

Bank

of

New

York

and

Head

of

its

Emerging

Markets

and

Internal

Affairs

Group

and

Member

of

Management

Committee

(1995-2014);

and

Visiting

Fellow

at

the

Council

on

Foreign

Relations

(2014).

Mary

C.

Choksi

(1950)

Trustee

Since

2014

124

Omnicom

Group

Inc.

(advertising

and

marketing

communications

services)

(2011-present)

and

White

Mountains

Insurance

Group,

Ltd.

(holding

company)

(2017-present);

and

formerly

,

Avis

Budget

Group

Inc.

(car

rental)

(2007-2020).

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Director

of

various

companies;

and

formerly

,

Founder

and

Senior

Advisor,

Strategic

Investment

Group

(investment

management

group)

(2015-2017);

Founding

Partner

and

Senior

Managing

Director,

Strategic

Investment

Group

(1987–2015);

Founding

Partner

and

Managing

Director,

Emerging

Markets

Management

LLC

(investment

management

firm)

(1987-2011);

and

Loan

Officer/Senior

Loan

Officer/Senior

Pension

Investment

Officer,

World

Bank

Group

(international

financial

institution)

(1977-1987).

Franklin

Investors

Securities

Trust

88

franklintempleton.com

Annual

Report

Name,

Year

of

Birth

and

Address

Position

Length

of

Time

Served

Number

of

Portfolios

in

Fund

Complex

Overseen

by

Board

Member*

Other

Directorships

Held

During

at

Least

the

Past

5

Years

Edith

E.

Holiday

(1952)

Lead

Independent

Trustee

Trustee

since

1998

and

Lead

Independent

Trustee

since

2019

124

Hess

Corporation

(exploration

of

oil

and

gas)

(1993-present),

Santander

Consumer

USA

Holdings,

Inc.

(consumer

finance)

(2016-present);

Santander

Holdings

USA

(holding

company)

(2019-present);

and

formerly

,

Canadian

National

Railway

(railroad)

(2001-April

2021),

White

Mountains

Insurance

Group,

Ltd.

(holding

company)

(2004-May

2021),

RTI

International

Metals,

Inc.

(manufacture

and

distribution

of

titanium)

(1999-2015)

and

H.J.

Heinz

Company

(processed

foods

and

allied

products)

(1994-2013).

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Director

or

Trustee

of

various

companies

and

trusts;

and

formerly

,

Assistant

to

the

President

of

the

United

States

and

Secretary

of

the

Cabinet

(1990-1993);

General

Counsel

to

the

United

States

Treasury

Department

(1989-1990);

and

Counselor

to

the

Secretary

and

Assistant

Secretary

for

Public

Affairs

and

Public

Liaison-United

States

Treasury

Department

(1988-1989).

J.

Michael

Luttig

(1954)

Trustee

Since

2009

124

Boeing

Capital

Corporation

(aircraft

financing)

(2006-2010).

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Private

investor;

and

formerly

,

Counselor

and

Senior

Advisor

to

the

Chairman,

CEO,

and

Board

of

Directors,

of

The

Boeing

Company

(aerospace

company),

and

member

of

the

Executive

Council

(May

2019-January

1,

2020);

Executive

Vice

President,

General

Counsel

and

member

of

the

Executive

Council,

The

Boeing

Company

(2006-2019);

and

Federal

Appeals

Court

Judge,

United

States

Court

of

Appeals

for

the

Fourth

Circuit

(1991-2006).

Larry

D.

Thompson

(1945)

Trustee

Since

2007

124

Graham

Holdings

Company

(education

and

media

organization)

(2011-May

2021);

The

Southern

Company

(energy

company)

(2014-2020;

previously

2010-

2012)

and

Cbeyond,

Inc.

(business

communications

provider)

(2010-

2012).

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Director

of

various

companies;

Counsel,

Finch

McCranie,

LLP

(law

firm)

(2015-present);

John

A.

Sibley

Professor

of

Corporate

and

Business

Law,

University

of

Georgia

School

of

Law

(2015-present;

previously

2011-2012);

and

formerly

,

Independent

Compliance

Monitor

and

Auditor,

Volkswagen

AG

(manufacturer

of

automobiles

and

commercial

vehicles)

(2017-2020);

Executive

Vice

President

-

Government

Affairs,

General

Counsel

and

Corporate

Secretary,

PepsiCo,

Inc.

(consumer

products)

(2012-2014);

Senior

Vice

President

-

Government

Affairs,

General

Counsel

and

Secretary,

PepsiCo,

Inc.

(2004-2011);

Senior

Fellow

of

The

Brookings

Institution

(2003-2004);

Visiting

Professor,

University

of

Georgia

School

of

Law

(2004);

and

Deputy

Attorney

General,

U.S.

Department

of

Justice

(2001-2003).

Independent

Board

Members

(continued)

Franklin

Investors

Securities

Trust

89

franklintempleton.com

Annual

Report

Interested

Board

Members

and

Officers

Name,

Year

of

Birth

and

Address

Position

Length

of

Time

Served

Number

of

Portfolios

in

Fund

Complex

Overseen

by

Board

Member*

Other

Directorships

Held

During

at

Least

the

Past

5

Years

Valerie

M.

Williams

(1956)

Trustee

Since

May

2021

104

Omnicom

Group,

Inc.

(advertising

and

marketing

communications

services)

(2016-present),

DTE

Energy

Co.

(gas

and

electric

utility)

(2018-present),

Devon

Energy

Corporation

(exploration

and

production

of

oil

and

gas)

(January

2021-present);

and

formerly

,

WPX

Energy,

Inc.

(exploration

and

production

of

oil

and

gas)

(2018-January

2021).

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Director

of

various

companies;

and

formerly

,

Regional

Assurance

Managing

Partner,

Ernst

&

Young

LLP

(public

accounting)

(2005-2016),

various

roles

of

increasing

responsibility

at

Ernst

&

Young

(1981-2005).

Name,

Year

of

Birth

and

Address

Position

Length

of

Time

Served

Number

of

Portfolios

in

Fund

Complex

Overseen

by

Board

Member*

Other

Directorships

Held

During

at

Least

the

Past

5

Years

**Gregory

E.

Johnson

(1961)

Trustee

Since

2013

135

None

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Executive

Chairman,

Chairman

of

the

Board

and

Director,

Franklin

Resources,

Inc.;

officer

and/or

director

or

trustee,

as

the

case

may

be,

of

some

of

the

other

subsidiaries

of

Franklin

Resources,

Inc.

and

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex;

Vice

Chairman,

Investment

Company

Institute;

and

formerly

,

Chief

Executive

Officer

(2013-2020)

and

President

(1994-2015)

Franklin

Resources,

Inc.

**Rupert

H.

Johnson,

Jr.

(1940)

Chairman

of

the

Board,

Trustee

and

Vice

President

Chairman

of

the

Board

since

2013,

Trustee

since

1987

and

Vice

President

since

1986

124

None

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Director

(Vice

Chairman),

Franklin

Resources,

Inc.;

Director,

Franklin

Advisers,

Inc.;

and

officer

and/or

director

or

trustee,

as

the

case

may

be,

of

some

of

the

other

subsidiaries

of

Franklin

Resources,

Inc.

and

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Reema

Agarwal

(1974)

Vice

President

Since

2019

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Senior

Vice

President,

Franklin

Advisers,

Inc.;

and

officer

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Alison

E.

Baur

(1964)

Vice

President

Since

2012

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Deputy

General

Counsel,

Franklin

Templeton;

and

officer

of

some

of

the

other

subsidiaries

of

Franklin

Resources,

Inc.

and

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Independent

Board

Members

(continued)

Franklin

Investors

Securities

Trust

90

franklintempleton.com

Annual

Report

Name,

Year

of

Birth

and

Address

Position

Length

of

Time

Served

Number

of

Portfolios

in

Fund

Complex

Overseen

by

Board

Member*

Other

Directorships

Held

During

at

Least

the

Past

5

Years

Breda

M.

Beckerle

(1958)

Chief

Compliance

Officer

Since

2020

Not

Applicable

Not

Applicable

280

Park

Avenue

New

York,

NY

10017

Principal

Occupation

During

at

Least

the

Past

5

Years:

Chief

Compliance

Officer,

Fiduciary

Investment

Management

International,

Inc.,

Franklin

Advisers,

Inc.,

Franklin

Mutual

Advisers,

LLC,

Franklin

Templeton

Institutional,

LLC;

and

officer

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Steven

J.

Gray

(1955)

Vice

President

and

Co-Secretary

Vice

President

since

2009

and

Co-Secretary

since

2019

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Senior

Associate

General

Counsel,

Franklin

Templeton;

Vice

President,

FASA,

LLC;

Assistant

Secretary,

Franklin

Distributors,

LLC;

and

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Matthew

T.

Hinkle

(1971)

Chief

Executive

Officer

–

Finance

and

Administration

Since

2017

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Senior

Vice

President,

Franklin

Templeton

Services,

LLC;

officer

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex;

and

formerly

,

Vice

President,

Global

Tax

(2012-April

2017)

and

Treasurer/Assistant

Treasurer,

Franklin

Templeton

(2009-2017).

Susan

Kerr

(1949)

Vice

President

–

AML

Compliance

Since

July

2021

Not

Applicable

Not

Applicable

620

Eighth

Avenue

New

York,

NY

10018

Principal

Occupation

During

at

Least

the

Past

5

Years:

Senior

Compliance

Analyst,

Franklin

Templeton;

Chief

Anti-Money

Laundering

Compliance

Officer,

Legg

Mason

&

Co.,

or

its

affiliates;

Anti

Money

Laundering

Compliance

Officer;

Senior

Compliance

Officer,

LMIS;

and

officer

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Edward

D.

Perks

(1970)

President

and

Chief

Executive

Officer

–

Investment

Management

Since

2018

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

President

and

Director,

Franklin

Advisers,

Inc.;

and

officer

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Navid

J.

Tofigh

(1972)

Vice

President

Since

2015

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Associate

General

Counsel,

Franklin

Templeton;

and

officer

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Interested

Board

Members

and

Officers

(continued)

Franklin

Investors

Securities

Trust

91

franklintempleton.com

Annual

Report

*We

base

the

number

of

portfolios

on

each

separate

series

of

the

U.S.

registered

investment

companies

within

the

Franklin

Templeton/Legg

Mason

fund

complex.

These

portfolios

have

a

common

investment

manager

or

affiliated

investment

managers.

**Gregory

E.

Johnson

is

considered

to

be

an

interested

person

of

the

Fund

under

the

federal

securities

laws

due

to

his

position

as

an

officer

and

director

of

Franklin

Resources,

Inc.

(Resources),

which

is

the

parent

company

of

the

Fund’s

investment

manager

and

distributor.

Rupert

H.

Johnson,

Jr.

is

considered

to

be

an

interested

person

of

the

Fund

under

the

federal

securities

laws

due

to

his

position

as

an

officer

and

director

and

major

shareholder

of

Resources.

Note

1:

Rupert

H.

Johnson,

Jr.

is

the

uncle

of

Gregory

E.

Johnson.

Note

2:

Officer

information

is

current

as

of

the

date

of

this

report.

It

is

possible

that

after

this

date,

information

about

officers

may

change.

The

Sarbanes-Oxley

Act

of

2002

and

Rules

adopted

by

the

Securities

and

Exchange

Commission

require

the

Fund

to

disclose

whether

the

Fund’s

Audit

Committee

includes

at

least

one

member

who

is

an

audit

committee

financial

expert

within

the

meaning

of

such

Act

and

Rules.

The

Fund’s

Board

has

determined

that

there

is

at

least

one

such

financial

expert

on

the

Audit

Committee

and

has

designated

Mary

C.

Choksi

as

its

audit

committee

financial

expert.

The

Board

believes

that

Ms.

Choksi

qualifies

as

such

an

expert

in

view

of

her

extensive

business

background

and

experience.

She

served

as

a

director

of

Avis

Budget

Group,

Inc.

(2007

to

2020)

and

formerly,

Founder

and

Senior

Advisor,

Strategic

Investment

Group

(1987

to

2017).

Ms.

Choksi

has

been

a

Member

of

the

Fund’s

Audit

Committee

since

2014.

As

a

result

of

such

background

and

experience,

the

Board

believes

that

Ms.

Choksi

has

acquired

an

understanding

of

generally

accepted

accounting

principles

and

financial

statements,

the

general

application

of

such

principles

in

connection

with

the

accounting

estimates,

accruals

and

reserves,

and

analyzing

and

evaluating

financial

statements

that

present

a

breadth

and

level

of

complexity

of

accounting

issues

generally

comparable

to

those

of

the

Fund,

as

well

as

an

understanding

of

internal

controls

and

procedures

for

financial

reporting

and

an

understanding

of

audit

committee

functions.

Ms.

Choksi

is

an

independent

Board

member

as

that

term

is

defined

under

the

relevant

Securities

and

Exchange

Commission

Rules

and

Releases.

The

Statement

of

Additional

Information

(SAI)

includes

additional

information

about

the

board

members

and

is

available,

without

charge,

upon

request.

Shareholders

may

call

(800)

DIAL

BEN/342-5236

to

request

the

SAI.

Name,

Year

of

Birth

and

Address

Position

Length

of

Time

Served

Number

of

Portfolios

in

Fund

Complex

Overseen

by

Board

Member*

Other

Directorships

Held

During

at

Least

the

Past

5

Years

Craig

S.

Tyle

(1960)

Vice

President

Since

2005

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

General

Counsel

and

Executive

Vice

President,

Franklin

Resources,

Inc.;

and

officer

of

some

of

the

other

subsidiaries

of

Franklin

Resources,

Inc.

and

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Lori

A.

Weber

(1964)

Vice

President

and

Co-Secretary

Vice

President

since

2011

and

Co-Secretary

since

2019

Not

Applicable

Not

Applicable

300

S.E.

2nd

Street

Fort

Lauderdale,

FL

33301-

1923

Principal

Occupation

During

at

Least

the

Past

5

Years:

Senior

Associate

General

Counsel,

Franklin

Templeton;

Assistant

Secretary,

Franklin

Resources,

Inc.;

Vice

President

and

Secretary,

Templeton

Investment

Counsel,

LLC;

and

officer

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Jeffrey

W.

White

(1971)

Interim

Chief

Financial

Officer,

Chief

Accounting

Officer

and

Treasurer

Since

October

2021

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Director,

Fund

Administration

&

Reporting;

officer

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex;

and

formerly

,

Manager,

Fund

Administration

&

Reporting

(2009-2017).

Interested

Board

Members

and

Officers

(continued)

Franklin

Investors

Securities

Trust

Shareholder

Information

92

franklintempleton.com

Annual

Report

Liquidity

Risk

Management

Program

–

Funds

no

HLIM

Each

Fund

has

adopted

and

implemented

a

written

Liquidity

Risk

Management

Program

(the

“LRMP”)

as

required

by

Rule

22e-4

under

the

Investment

Company

Act

of

1940

(the

“Liquidity

Rule”).

The

LRMP

is

designed

to

assess

and

manage

each

Fund’s

liquidity

risk,

which

is

defined

as

the

risk

that

the

Fund

could

not

meet

requests

to

redeem

shares

issued

by

the

Fund

without

significant

dilution

of

remaining

investors’

interests

in

the

Fund.

In

accordance

with

the

Liquidity

Rule,

the

LRMP

includes

policies

and

procedures

that

provide

for:

(1)

assessment,

management,

and

review

(no

less

frequently

than

annually)

of

each

Fund’s

liquidity

risk;

(2)

classification

of

each

Fund’s

portfolio

holdings

into

one

of

four

liquidity

categories

(Highly

Liquid,

Moderately

Liquid,

Less

Liquid,

and

Illiquid);

(3)

for

Funds

that

do

not

primarily

hold

assets

that

are

Highly

Liquid,

establishing

and

maintaining

a

minimum

percentage

of

the

Fund’s

net

assets

in

Highly

Liquid

investments

(called

a

“Highly

Liquid

Investment

Minimum”

or

“HLIM”);

and

(4)

prohibiting

the

Fund’s

acquisition

of

Illiquid

investments

that

would

result

in

the

Fund

holding

more

than

15%

of

its

net

assets

in

Illiquid

assets.

The

LRMP

also

requires

reporting

to

the

Securities

and

Exchange

Commission

(“SEC”)

(on

a

non-public

basis)

and

to

the

Board

if

the

Fund’s

holdings

of

Illiquid

assets

exceed

15%

of

the

Fund’s

net

assets.

Funds

with

HLIMs

must

have

procedures

for

addressing

HLIM

shortfalls,

including

reporting

to

the

Board

and,

with

respect

to

HLIM

shortfalls

lasting

more

than

seven

consecutive

calendar

days,

reporting

to

the

SEC

(on

a

non-public

basis).

The

Director

of

Liquidity

Risk

within

the

Investment

Risk

Management

Group

(the

“IRMG”)

is

the

appointed

Administrator

of

the

LRMP.

The

IRMG

maintains

the

Investment

Liquidity

Committee

(the

“ILC”)

to

provide

oversight

and

administration

of

policies

and

procedures

governing

liquidity

risk

management

for

FT

products

and

portfolios.

The

ILC

includes

representatives

from

Franklin

Templeton’s

Risk,

Trading,

Global

Compliance,

Investment

Compliance,

Investment

Operations,

Valuation

Committee,

Product

Management

and

Global

Product

Strategy.

In

assessing

and

managing

each

Fund’s

liquidity

risk,

the

ILC

considers,

as

relevant,

a

variety

of

factors,

including

the

Fund’s

investment

strategy

and

the

liquidity

of

its

portfolio

investments

during

both

normal

and

reasonably

foreseeable

stressed

conditions;

its

short

and

long-term

cash

flow

projections;

and

its

cash

holdings

and

access

to

other

funding

sources

including

the

Funds’

interfund

lending

facility

and

line

of

credit.

Classification

of

the

Fund’s

portfolio

holdings

in

the

four

liquidity

categories

is

based

on

the

number

of

days

it

is

reasonably

expected

to

take

to

convert

the

investment

to

cash

(for

Highly

Liquid

and

Moderately

Liquid

holdings)

or

sell

or

dispose

of

the

investment

(for

Less

Liquid

and

Illiquid

investments),

in

current

market

conditions

without

significantly

changing

the

investment’s

market

value.

Each

Fund

primarily

holds

liquid

assets

that

are

defined

under

the

Liquidity

Rule

as

"Highly

Liquid

Investments,"

and

therefore

is

not

required

to

establish

an

HLIM.

Highly

Liquid

Investments

are

defined

as

cash

and

any

investment

reasonably

expected

to

be

convertible

to

cash

in

current

market

conditions

in

three

business

days

or

less

without

the

conversion

to

cash

significantly

changing

the

market

value

of

the

investment.

At

meetings

of

the

Funds’

Board

of

Trustees

held

in

May

2021,

the

Program

Administrator

provided

a

written

report

to

the

Board

addressing

the

adequacy

and

effectiveness

of

the

program

for

the

year

ended

December

31,

2020.

The

Program

Administrator

report

concluded

that

(i.)

the

LRMP,

as

adopted

and

implemented,

remains

reasonably

designed

to

assess

and

manage

each

Fund’s

liquidity

risk;

(ii.)

the

LRMP,

including

the

Highly

Liquid

Investment

Minimum

(“HLIM”)

where

applicable,

was

implemented

and

operated

effectively

to

achieve

the

goal

of

assessing

and

managing

each

Fund’s

liquidity

risk;

and

(iii.)

each

Fund

was

able

to

meet

requests

for

redemption

without

significant

dilution

of

remaining

investors’

interests

in

the

Fund.

Proxy

Voting

Policies

and

Procedures

The

Trust’s

investment

manager

has

established

Proxy

Voting

Policies

and

Procedures

(Policies)

that

the

Trust

uses

to

determine

how

to

vote

proxies

relating

to

portfolio

securities.

Shareholders

may

view

the

Trust’s

complete

Policies

online

at

franklintempleton.com.

Alternatively,

shareholders

may

request

copies

of

the

Policies

free

of

charge

by

calling

the

Proxy

Group

collect

at

(954)

527-

7678

or

by

sending

a

written

request

to:

Franklin

Templeton

Companies,

LLC,

300

S.E.

2nd

Street,

Fort

Lauderdale,

FL

33301,

Attention:

Proxy

Group.

Copies

of

the

Trust’s

proxy

voting

records

are

also

made

available

online

at

franklintempleton.com

and

posted

on

the

U.S.

Securities

and

Exchange

Commission’s

website

at

sec.gov

and

reflect

the

most

recent

12-month

period

ended

June

30.

Franklin

Investors

Securities

Trust

Shareholder

Information

93

franklintempleton.com

Annual

Report

Quarterly

Statement

of

Investments

The

Trust

files

a

complete

statement

of

investments

with

the

U.S.

Securities

and

Exchange

Commission

for

the

first

and

third

quarters

for

each

fiscal

year

as

an

exhibit

to

its

report

on

Form

N-PORT.

Shareholders

may

view

the

filed

Form

N-PORT

by

visiting

the

Commission’s

website

at

sec.

gov.

The

filed

form

may

also

be

viewed

and

copied

at

the

Commission’s

Public

Reference

Room

in

Washington,

DC.

Information

regarding

the

operations

of

the

Public

Reference

Room

may

be

obtained

by

calling

(800)

SEC-0330.

Householding

of

Reports

and

Prospectuses

You

will

receive,

or

receive

notice

of

the

availability

of,

each

Fund's

financial

reports

every

six

months.

In

addition,

you

will

receive

an

annual

updated

summary

prospectus

(detail

prospectus

available

upon

request).

To

reduce

Fund

expenses,

we

try

to

identify

related

shareholders

in

a

household

and

send

only

one

copy

of

the

financial

reports

(to

the

extent

received

by

mail)

and

summary

prospectus.

This

process,

called

“householding,”

will

continue

indefinitely

unless

you

instruct

us

otherwise.

If

you

prefer

not

to

have

these

documents

householded,

please

call

us

at

(800)

632-2301.

At

any

time

you

may

view

current

prospectuses/

summary

prospectuses

and

financial

reports

on

our

website.

If

you

choose,

you

may

receive

these

documents

through

electronic

delivery.

FIST1

A

12/21

©

2021

Franklin

Templeton

Investments.

All

rights

reserved.

Authorized

for

distribution

only

when

accompanied

or

preceded

by

a

summary

prospectus

and/or

prospectus.

Investors

should

carefully

consider

a

fund’s

investment

goals,

risks,

charges

and

expenses

before

investing.

A

prospectus

contains

this

and

other

information;

please

read

it

carefully

before

investing.

To

help

ensure

we

provide

you

with

quality

service,

all

calls

to

and

from

our

service

areas

are

monitored

and/or

recorded.

Annual

Report

and

Shareholder

Letter

Franklin

Investors

Securities

Trust

Investment

Manager

Distributor

Shareholder

Services

Franklin

Advisers,

Inc.

Franklin

Distributors,

LLC

(800)

DIAL

BEN

®

/

342-5236

franklintempleton.com

(800)

632-2301

ANNUAL

REPORT

AND

SHAREHOLDER

LETTER

Franklin

Investors

Securities

Trust

October

31,

2021

Sign

up

for

electronic

delivery

at

franklintempleton.com/edelivery

Franklin

Adjustable

U.S.

Government

Securi-

ties

Fund

Franklin

Floating

Rate

Daily

Access

Fund

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

Not

FDIC

Insured

May

Lose

Value

No

Bank

Guarantee

franklintempleton.com

Annual

Report

1

Shareholder

Letter

Dear

Shareholder:

During

the

12

months

ended

October

31,

2021,

the

U.S.

economy

continued

to

recover

from

the

COVID-19

pandemic,

benefiting

equities.

Growth

accelerated

in

2021’s

first

half

as

the

reopening

of

businesses,

widespread

COVID-19

vaccinations

and

federal

assistance

programs

continued

to

boost

consumer

spending.

Inflation

increased

in

April

and

rose

further

during

the

remainder

of

the

reporting

period

due

to

increased

demand

for

goods

amid

supply-

chain

bottlenecks.

During

the

summer,

investors

became

concerned

the

swiftly

spreading

Delta

variant

of

COVID-19

could

hinder

the

economic

recovery,

and

growth

slowed

in

2021’s

third

quarter.

During

the

reporting

period,

the

U.S.

Federal

Reserve,

in

its

efforts

to

support

U.S.

economic

activity,

held

the

federal

funds

rate

unchanged

at

0.25%,

and

it

continued

broad

quantitative

easing

measures

to

bolster

credit

markets.

The

Federal

Reserve

also

adjusted

its

economic

growth

and

inflation

projections

higher

and

expected

to

begin

decreasing

its

asset

purchases

later

this

year,

while

delaying

any

interest

rate

increases

until

reaching

its

goal

of

maximum

U.S.

employment.

In

this

environment,

the

prices

of

U.S.

stocks,

as

measured

by

the

Standard

&

Poor’s

®

500

Index

(S&P

500

®

),

rose

40.84%,

(the

index

increasing

from

3,269.96

to

4,605.38).

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

-0.48%

total

return

(an

index

decrease

from

2,365.52

to

2,354.21),

which

includes

reinvestment

of

income

and

distributions.

3

We

are

committed

to

our

long-term

perspective

and

disciplined

investment

approach

as

we

conduct

a

rigorous,

fundamental

analysis

of

securities

with

a

regular

emphasis

on

investment

risk

management.

We

believe

active,

professional

investment

management

serves

investors

well.

We

also

recognize

the

important

role

of

financial

professionals

in

today’s

markets

and

encourage

investors

to

continue

to

seek

their

advice.

Amid

changing

markets

and

economic

conditions,

we

are

confident

investors

with

a

well-diversified

portfolio

and

a

patient,

long-term

outlook

should

be

well-positioned

for

the

years

ahead.

Franklin

Investors

Securities

Trust’s

annual

report,

covering

Franklin

Adjustable

U.S.

Government

Securities

Fund,

Franklin

Floating

Rate

Daily

Access

Fund,

Franklin

Low

Duration

Total

Return

Fund

and

Franklin

Total

Return

Fund,

includes

more

detail

about

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

Investors

Securities

Trust

This

letter

reflects

our

analysis

and

opinions

as

of

October

31,

2021,

unless

otherwise

indicated.

The

information

is

not

a

complete

analysis

of

every

aspect

of

any

market,

country,

industry,

security

or

fund.

Statements

of

fact

are

from

sources

considered

reliable.

1.

Source:

Copyright

©

2021,

S&P

Dow

Jones

Indices

LLC.

All

rights

reserved.

2.

Source:

Morningstar.

The

changes

in

index

prices

shown

for

the

S&P

500

do

not

include

reinvestments

of

income

and

distributions,

which

are

included

in

its

total

return,

which

was:

S&P

500

+42.91%

(index

total

return

resulting

in

an

increase

from

6,734.84

to

9,625.02).

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

Adjustable

U.S.

Government

Securities

Fund

4

Franklin

Floating

Rate

Daily

Access

Fund

10

Franklin

Low

Duration

Total

Return

Fund

17

Franklin

Total

Return

Fund

23

Financial

Highlights

and

Statements

of

Investments

29

Financial

Statements

113

Notes

to

Financial

Statements

120

Report

of

Independent

Registered

Public

Accounting

Firm

157

Tax

Information

158

Board

Members

and

Officers

159

Shareholder

Information

164

Visit

franklintempleton.com

for

fund

updates,

to

access

your

account,

or

to

find

helpful

financial

planning

tools.

3

franklintempleton.com

Annual

Report

ANNUAL

REPORT

Economic

and

Market

Overview

The

U.S.

bond

market,

as

measured

by

the

Bloomberg

U.S.

Aggregate

Bond

Index,

posted

a

-0.48%

total

return

for

the

12

months

ended

October

31,

2021.

1

As

the

U.S.

economy

continued

to

recover

from

the

COVID-19

pandemic,

investor

appetite

for

risk

increased

and

inflation

concerns

rose.

Consequently,

lower-rated

bonds

posted

significantly

greater

returns

than

higher-rated

bonds,

while

shorter-term

bonds

generally

outperformed

longer-term

bonds,

which

tend

to

be

more

sensitive

to

inflation.

The

inflation

rate

was

elevated

during

the

12-month

period

amid

increased

demand

and

supply-chain

bottlenecks.

In

an

effort

to

support

the

economy,

the

U.S.

Federal

Reserve

(Fed)

kept

the

federal

funds

target

rate

at

a

record-low

range

of

0.00%–0.25%.

The

Fed

also

maintained

quantitative

easing

measures

aimed

at

ensuring

credit

flows

to

borrowers

and

supporting

credit

markets

with

open-

ended

U.S.

Treasury

and

mortgage

bond

purchasing.

In

its

September

2021

meeting

statement,

the

Fed

indicated

that

it

soon

plans

to

reduce

its

purchases

of

U.S.

Treasury

and

mortgage-backed

securities.

The

Fed

also

noted

that

it

views

inflation

as

partially

transitory,

and

that

further

employment

progress

was

needed

before

the

Fed

would

consider

raising

the

range

for

the

federal

funds

target

rate.

U.S.

Treasury

bonds,

as

measured

by

the

Bloomberg

U.S.

Treasury

Index,

posted

a

-2.45%

total

return

for

the

12-month

period.

1

The

10-year

U.S.

Treasury

yield

(which

moves

inversely

to

price)

was

relatively

low

as

the

period

began.

However,

yields

rose

thereafter

amid

many

investors’

increasing

inflation

expectations.

Mortgage-backed

securities

(MBS),

as

measured

by

the

Bloomberg

MBS

Index,

posted

a

-0.58%

total

return

for

the

period,

despite

ongoing

Fed

support.

1

Fed

action

was

a

catalyst

for

the

recovery

in

the

corporate

bond

market,

which

advanced

overall

but

varied

significantly

based

on

credit

rating.

The

strengthening

economy

and

prospect

of

a

return

to

normal

conditions

tempered

concerns

about

credit

quality,

which

benefited

lower-rated

bonds.

In

this

environment,

high-yield

corporate

bonds,

as

represented

by

the

Bloomberg

U.S.

Corporate

High

Yield

Bond

Index,

posted

a

+10.53%

total

return,

outpacing

investment-grade

corporate

bonds,

as

represented

by

the

Bloomberg

U.S.

Corporate

Bond

Index,

which

nevertheless

posted

a

+2.18%

total

return.

1

The

foregoing

information

reflects

our

analysis

and

opinions

as

of

October

31,

2021.

The

information

is

not

a

complete

analysis

of

every

aspect

of

any

market,

country,

industry,

security

or

fund.

Statements

of

fact

are

from

sources

considered

reliable.

1.

Source:

Morningstar.

Treasuries,

if

held

to

maturity,

offer

a

fixed

rate

of

return

and

a

fixed

principal

value;

their

interest

payments

and

principal

are

guaranteed.

The

index

is

unmanaged

and

includes

reinvestment

of

any

income

or

distributions.

It

does

not

reflect

any

fees,

expenses

or

sales

charges.

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund's

portfolio.

4

franklintempleton.com

Annual

Report

Franklin

Adjustable

U.S.

Government

Securities

Fund

This

annual

report

for

Franklin

Adjustable

U.S.

Government

Securities

Fund

covers

the

fiscal

year

ended

October

31,

2021.

Your

Fund’s

Goal

and

Main

Investments

The

Fund

seeks

to

provide

a

high

level

of

current

income,

while

providing

lower

volatility

of

principal

than

a

fund

that

invests

in

fixed-rate

securities

by

investing

at

least

80%

of

its

net

assets

in

adjustable-rate

U.S.

government

mortgage

securities,

which

are

issued

or

guaranteed

by

the

U.S.

government,

its

agencies

or

instrumentalities.

1

The

Fund’s

investments

may

include

securities

issued

by

Ginnie

Mae

(GNMA)

and

government-sponsored

entities,

such

as

Fannie

Mae

(FNMA)

and

Freddie

Mac

(FHLMC).

2

Performance

Overview

The

Fund’s

Class

A

shares

posted

a

+0.20%

cumulative

total

return

for

the

12

months

under

review.

In

comparison,

the

Fund’s

benchmark,

the

Bloomberg

U.S.

Government

Index:

1-2

Year

Component

posted

a

-0.03%

cumulative

total

return.

3

The

index

measures

public

obligations

of

the

U.S.

Treasury

with

one

to

two

years

to

final

maturity

and

publicly

issued

debt

of

U.S.

government

agencies,

quasi-federal

corporations,

and

corporate

or

foreign

debt

guaranteed

by

the

U.S.

government.

You

can

find

the

Fund’s

long-term

performance

data

in

the

Performance

Summary

beginning

on

page

6

.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

For

most

recent

month-end

performance,

go

to

franklintempleton.com

or

call

(800)

342-5236

.

Investment

Strategy

We

employ

a

conservative

investment

strategy

as

we

strive

to

produce

solid

performance

in

a

variety

of

interest

rate

climates.

We

choose

securities

using

a

value-oriented

approach,

emphasizing

the

bonds’

economic

fundamentals

in

relation

to

comparable

securities

as

well

as

their

historical

prepayment

performance.

Manager’s

Discussion

The

Fund

employed

a

conservative

strategy

that

invested

primarily

in

adjustable-rate

mortgage

securities

(ARMs)

that

are

either

explicitly

or

implicitly

backed

by

the

U.S.

government.

1

During

the

period,

the

Fund

invested

predominantly

in

securities

issued

or

guaranteed

by

FNMA

and

FHLMC.

The

Fund

took

a

collateral-intensive

research

approach

to

analyze

the

prepayment

behavior

of

individual

ARMs

to

identify

those

with

the

most

attractive

prepayment

profiles

and

focused

on

seasoned

ARMs.

Such

securities

have

typically

been

through

several

interest-rate

cycles

and

therefore

tend

to

be

less

sensitive

to

changes

in

interest

rates,

compared

to

newer

issued

counterparts.

We

have

found

such

securities

historically

to

have

experienced

lower

volatility

than

comparable

maturity

Treasuries

and

have

provided

more

consistent

income.

During

the

period,

the

fund

remained

invested

in

seasoned,

shorter-maturity,

high-quality

ARMs

that

tend

to

be

less

sensitive

to

interest-rate

changes,

which

benefited

performance.

We

also

deployed

capital

into

the

agency

collateralized

mortgage

obligation

(CMO)

floating-rate

securities

backed

by

seasoned

ARM

collateral

and

15-year

fixed-rate

mortgage-backed

security

(MBS)

markets

as

we

found

them

to

offer

attractive

yield

relative

to

the

agency

hybrid

ARM

markets.

We

continued

to

focus

on

diverse,

seasoned,

post-reset

Fannie

Mae

(FNMA)

and

Freddie

Mac

(FHLMC)

ARMs

with

average

coupons

of

2.0%

to

3.0%

with

collateral

pools

containing

larger

loan

counts

as

well

as

sequential

CMO

floaters

backed

by

seasoned

hybrid

ARM

collateral.

Secondary

activity

remained

muted

in

the

post

reset

hybrid

ARM

sector

with

CMO

desks

being

better

buyers

of

the

underlying

collateral.

Portfolio

Composition

10/31/21

%

of

Total

Net

Assets

Mortgage-Backed

Securities

80.2%

Commercial

Mortgage-Backed

Securities

17.1%

Short-Term

Investments

&

Other

Net

Assets

2.7%

1.

Securities

owned

by

the

Fund,

but

not

shares

of

the

Fund,

are

issued

or

guaranteed

by

the

U.S.

government,

its

agencies

or

instrumentalities,

including

government

sponsored

entities,

as

to

timely

payment

of

principal

and

interest.

2.

Although

U.S.

government-sponsored

entities

may

be

chartered

by

acts

of

Congress,

their

securities

are

neither

issued

nor

guaranteed

by

the

U.S.

Government.

Please

see

the

Fund’s

prospectus

for

a

detailed

discussion

regarding

various

levels

of

credit

support

for

government

agency

or

instrumentality

securities.

The

Fund’s

yield

and

share

price

are

not

guaranteed

and

will

vary

with

market

conditions.

3.

Source:

Morningstar.

Treasuries,

if

held

to

maturity,

offer

a

fixed

rate

of

return

and

a

fixed

principal

value;

their

interest

payments

and

principal

are

guaranteed.

The

index

is

unmanaged

and

includes

reinvestment

of

any

income

or

distributions.

It

does

not

reflect

any

fees,

expenses

or

sales

charges.

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

The

dollar

value,

number

of

shares

or

principal

amount,

and

names

of

all

portfolio

holdings

are

listed

in

the

Fund’s

Statement

of

Investments

(SOI).

The

SOI

begins

on

page

34

.

Franklin

Adjustable

U.S.

Government

Securities

Fund

5

franklintempleton.com

Annual

Report

Underlying

coupons

continued

to

reset

lower

with

the

London

Interbank

Offered

Rate

(LIBOR)

4

marginally

declining

over

the

period.

Prepayment

risk

remained

elevated

for

fixed-rate

and

ARM

markets,

creating

caution

in

the

ARM

sector

and

leading

to

downward

pressure

on

dollar

prices.

We

expect

prepayment

levels

will

remain

in

their

current

range

despite

a

marginal

uptick

in

mortgage

rates.

We

remain

cautious

on

high

premium

priced

post

reset

ARMs

with

securities

trading

at

significant

premiums

and

higher

prepayments

remaining

elevated.

Our

preference

remains

towards

bonds

linked

to

the

LIBOR

index

which

would

have

slower

speeds

relative

to

those

that

are

indexed

off

the

One-Year

Constant

Maturity

Treasury.

LIBOR

transition

has

been

a

topic

of

discussion

for

investors

and

remains

on

track

as

expected.

We

feel

the

market

will

adjust

to

the

Secured

Overnight

Financing

Rate

with

minimal

disruption.

Given

the

high

probability

of

elevated

speeds

for

the

foreseeable

future

in

a

market

where

the

premiums

are

quite

significant,

we

have

retained

a

slightly

higher

cash

allocation.

Thank

you

for

your

continued

participation

in

Franklin

Adjustable

U.S.

Government

Securities

Fund.

We

look

forward

to

serving

your

future

investment

needs.

Paul

Varunok

Portfolio

Manager

The

foregoing

information

reflects

our

analysis,

opinions

and

portfolio

holdings

as

of

October

31,

2021,

the

end

of

the

reporting

period.

The

way

we

implement

our

main

investment

strategies

and

the

resulting

portfolio

holdings

may

change

depending

on

factors

such

as

market

and

economic

conditions.

These

opinions

may

not

be

relied

upon

as

investment

advice

or

an

offer

for

a

particular

security.

The

information

is

not

a

complete

analysis

of

every

aspect

of

any

market,

country,

industry,

security

or

the

Fund.

Statements

of

fact

are

from

sources

considered

reliable,

but

the

investment

manager

makes

no

representation

or

warranty

as

to

their

completeness

or

accuracy.

Although

historical

performance

is

no

guarantee

of

future

results,

these

insights

may

help

you

understand

our

investment

management

philosophy.

4.

The

London

Interbank

Offered

Rate

(LIBOR)

is

the

interest

rate

banks

charge

each

other

for

loans.

LIBOR

is

a

widely

used

benchmark

for

short-term

interest

rates.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

Performance

Summary

as

of

October

31,

2021

Franklin

Adjustable

U.S.

Government

Securities

Fund

6

franklintempleton.com

Annual

Report

The

performance

tables

and

graphs

do

not

reflect

any

taxes

that

a

shareholder

would

pay

on

Fund

dividends,

capital

gain

distributions,

if

any,

or

any

realized

gains

on

the

sale

of

Fund

shares.

Total

return

reflects

reinvestment

of

the

Fund’s

dividends

and

capital

gain

distributions,

if

any,

and

any

unrealized

gains

or

losses.

Your

dividend

income

will

vary

depending

on

dividends

or

interest

paid

by

securities

in

the

Fund’s

portfolio,

adjusted

for

operating

expenses

of

each

class.

Capital

gain

distributions

are

net

profits

realized

from

the

sale

of

portfolio

securities.

Performance

as

of

10/31/21

1

Cumulative

total

return

excludes

sales

charges.

Average

annual

total

return

includes

maximum

sales

charges.

Sales

charges

will

vary

depending

on

the

size

of

the

investment

and

the

class

of

share

purchased.

The

maximum

is

2.25%

and

the

minimum

is

0%.

Class

A:

2.25%

maximum

initial

sales

charge;

Advisor

Class:

no

sales

charges.

For

other

share

classes,

visit

franklintempleton.com.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

For

most

recent

month-end

performance,

go

to

franklintempleton.com

or

call

(800)

342-5236

.

Share

Class

Cumulative

Total

Return

2

Average

Annual

Total

Return

3

–

A

1-Year

+0.20%

-2.01%

5-Year

+4.12%

+0.36%

10-Year

+5.83%

+0.34%

Advisor

1-Year

+0.33%

+0.33%

5-Year

+5.30%

+1.04%

10-Year

+8.38%

+0.81%

30-Day

Standardized

Yield

5

Share

Class

Distribution

Rate

4

(with

fee

waiver)

(without

fee

waiver)

A

0.74%

0.33%

0.25%

Advisor

1.00%

0.59%

0.51%

See

page

8

for

Performance

Summary

footnotes.

Franklin

Adjustable

U.S.

Government

Securities

Fund

Performance

Summary

7

franklintempleton.com

Annual

Report

See

page

8

for

Performance

Summary

footnotes.

Total

Return

Index

Comparison

for

a

Hypothetical

$10,000

Investment

1

Total

return

represents

the

change

in

value

of

an

investment

over

the

periods

shown.

It

includes

any

applicable

maximum

sales

charge,

Fund

expenses,

account

fees

and

reinvested

distributions.

The

unmanaged

index

includes

reinvestment

of

any

income

or

distributions.

It

differs

from

the

Fund

in

composition

and

does

not

pay

management

fees

or

expenses.

One

cannot

invest

directly

in

an

index.

Class

A

(11/1/11–10/31/21)

Advisor

Class

(11/1/11–10/31/21)

Franklin

Adjustable

U.S.

Government

Securities

Fund

Performance

Summary

8

franklintempleton.com

Annual

Report

Each

class

of

shares

is

available

to

certain

eligible

investors

and

has

different

annual

fees

and

expenses,

as

described

in

the

prospectus.

All

investments

involve

risks,

including

possible

loss

of

principal.

Interest

rate

movements,

unscheduled

mortgage

prepayments

and

other

risk

factors

will

affect

the

Fund’s

share

price

and

yield.

Bond

prices

generally

move

in

the

opposite

direction

of

interest

rates.

As

the

prices

of

bonds

in

a

Fund

adjust

to

a

rise

in

interest

rates,

the

Fund’s

share

price

may

decline.

Changes

in

the

financial

strength

of

a

bond

issuer

or

in

a

bond’s

credit

rating

may

affect

its

value.

Events

such

as

the

spread

of

deadly

diseases,

disasters,

and

financial,

political

or

social

disruptions,

may

heighten

risks

and

adversely

affect

performance.

The

Fund’s

prospectus

also

includes

a

description

of

the

main

investment

risks.

1.

The

Fund

has

a

fee

waiver

associated

with

any

investment

it

makes

in

a

Franklin

Templeton

money

fund

and/or

other

Franklin

Templeton

fund,

contractually

guaranteed

through

2/28/22.

Fund

investment

results

reflect

the

fee

waiver;

without

this

waiver,

the

results

would

have

been

lower.

2.

Cumulative

total

return

represents

the

change

in

value

of

an

investment

over

the

periods

indicated.

3.

Average

annual

total

return

represents

the

average

annual

change

in

value

of

an

investment

over

the

periods

indicated.

Return

for

less

than

one

year,

if

any,

has

not

been

annualized.

4.

Distribution

rate

is

based

on

an

annualization

of

the

sum

of

the

respective

class’s

past

month’s

daily

distributions

and

the

maximum

offering

price

(NAV

for

Advisor

Class)

per

share

on

10/31/21.

5.

The

Fund’s

30-day

standardized

yield

is

calculated

over

a

trailing

30-day

period

using

the

yield

to

maturity

on

bonds

and/or

the

dividends

accrued

on

stocks.

It

may

not

equal

the

Fund’s

actual

income

distribution

rate,

which

reflects

the

Fund’s

past

dividends

paid

to

shareholders.

6.

Source:

Morningstar.

The

Bloomberg

U.S.

Government

Index:

1-2

Year

Component

includes

U.S.

dollar-denominated,

fixed-rate,

nominal

U.S.

Treasuries

and

U.S.

agency

debentures

(securities

issued

by

U.S.

government-owned

or

government-sponsored

entities,

and

debt

explicitly

guaranteed

by

the

U.S.

government)

with

at

least

one

year

up

to,

but

not

including,

two

years

to

final

maturity.

7.

Figures

are

as

stated

in

the

Fund’s

current

prospectus

and

may

differ

from

the

expense

ratios

disclosed

in

the

Your

Fund’s

Expenses

and

Financial

Highlights

sections

in

this

report.

In

periods

of

market

volatility,

assets

may

decline

significantly,

causing

total

annual

Fund

operating

expenses

to

become

higher

than

the

figures

shown.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

Distributions

(11/1/20–10/31/21)

Share

Class

Net

Investment

Income

A

$0.076341

A1

$0.088205

C

$0.044730

R6

$0.104746

Advisor

$0.096108

Total

Annual

Operating

Expenses

7

Share

Class

With

Fee

Waiver

Without

Fee

Waiver

A

0.98%

0.99%

Advisor

0.73%

0.74%

Your

Fund’s

Expenses

Franklin

Adjustable

U.S.

Government

Securities

Fund

9

franklintempleton.com

Annual

Report

As

a

Fund

shareholder,

you

can

incur

two

types

of

costs:

(1)

transaction

costs,

including

sales

charges

(loads)

on

Fund

purchases

and

redemptions;

and

(2)

ongoing

Fund

costs,

including

management

fees,

distribution

and

service

(12b-1)

fees,

and

other

Fund

expenses.

All

mutual

funds

have

ongoing

costs,

sometimes

referred

to

as

operating

expenses.

The

table

below

shows

ongoing

costs

of

investing

in

the

Fund

and

can

help

you

understand

these

costs

and

compare

them

with

those

of

other

mutual

funds.

The

table

assumes

a

$1,000

investment

held

for

the

six

months

indicated.

Actual

Fund

Expenses

The

table

below

provides

information

about

actual

account

values

and

actual

expenses

in

the

columns

under

the

heading

“Actual.”

In

these

columns

the

Fund’s

actual

return,

which

includes

the

effect

of

Fund

expenses,

is

used

to

calculate

the

“Ending

Account

Value”

for

each

class

of

shares.

You

can

estimate

the

expenses

you

paid

during

the

period

by

following

these

steps

(

of

course,

your

account

value

and

expenses

will

differ

from

those

in

this

illustr

ation

):

Divide

your

account

value

by

$1,000

(

if

your

account

had

an

$8,600

value,

then

$8,600

÷

$1,000

=

8.6

).

Then

multiply

the

result

by

the

number

in

the

row

for

your

class

of

shares

under

the

headings

“Actual”

and

“Expenses

Paid

During

Period”

(

if

Actual

Expenses

Paid

During

Period

were

$7.50,

then

8.6

x

$7.50

=$64.50

).

In

this

illustration,

the

actual

expenses

paid

this

period

are

$64.50.

Hypothetical

Example

for

Comparison

with

Other

Funds

Under

the

heading

“Hypothetical”

in

the

table,

information

is

provided

about

hypothetical

account

values

and

hypothetical

expenses

based

on

the

Fund’s

actual

expense

ratio

and

an

assumed

rate

of

return

of

5%

per

year

before

expenses,

which

is

not

the

Fund’s

actual

return.

This

information

may

not

be

used

to

estimate

the

actual

ending

account

balance

or

expenses

you

paid

for

the

period,

but

it

can

help

you

compare

ongoing

costs

of

investing

in

the

Fund

with

those

of

other

funds.

To

do

so,

compare

this

5%

hypothetical

example

for

the

class

of

shares

you

hold

with

the

5%

hypothetical

examples

that

appear

in

the

shareholder

reports

of

other

funds.

Please

note

that

expenses

shown

in

the

table

are

meant

to

highlight

ongoing

costs

and

do

not

reflect

any

transactional

costs.

Therefore,

information

under

the

heading

“Hypothetical”

is

useful

in

comparing

ongoing

costs

only,

and

will

not

help

you

compare

total

costs

of

owning

different

funds.

In

addition,

if

transactional

costs

were

included,

your

total

costs

would

have

been

higher.

1.

Expenses

are

equal

to

the

annualized

expense

ratio

for

the

six-month

period

as

indicated

above—in

the

far

right

column—multiplied

by

the

simple

average

account

value

over

the

period

indicated,

and

then

multiplied

by

184/365

to

reflect

the

one-half

year

period.

2.

Reflects

expenses

after

fee

waivers

and

expense

reimbursements.

Does

not

include

acquired

fund

fees

and

expenses.

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Share

Class

Beginning

Account

Value

5/1/21

Ending

Account

Value

10/31/21

Expenses

Paid

During

Period

5/1/21–10/31/21

1,2

Ending

Account

Value

10/31/21

Expenses

Paid

During

Period

5/1/21–10/31/21

1,2

a

Net

Annualized

Expense

Ratio

2

A

$1,000

$997.70

$4.48

$1,020.72

$4.53

0.89%

A1

$1,000

$997.20

$3.73

$1,021.47

$3.78

0.74%

C

$1,000

$994.50

$6.54

$1,018.65

$6.62

1.30%

R6

$1,000

$998.30

$2.65

$1,022.55

$2.68

0.53%

Advisor

$1,000

$997.70

$3.22

$1,021.98

$3.26

0.64%

10

franklintempleton.com

Annual

Report

Franklin

Floating

Rate

Daily

Access

Fund

This

annual

report

for

Franklin

Floating

Rate

Daily

Access

Fund

covers

the

fiscal

year

ended

October

31,

2021.

Your

Fund’s

Goal

and

Main

Investments

The

Fund

seeks

to

provide

a

high

level

of

current

income.

A

secondary

goal

is

preservation

of

capital

by

investing

at

least

80%

of

its

net

assets

in

income-producing

floating

interest-

rate

corporate

loans

and

corporate

debt

securities

made

to

or

issued

by

U.S.

companies,

non-U.S.

entities

and

U.S.

subsidiaries

of

non-U.S.

entities.

Performance

Overview

The

Fund’s

Class

A

shares

posted

a

+11.79%

cumulative

total

return

for

the

12

months

under

review.

In

comparison,

the

Credit

Suisse

Leveraged

Loan

Index

(CS

LLI),

which

is

designed

to

mirror

the

investable

universe

of

the

U.S.

dollar-denominated

leveraged

loan

market,

posted

a

+8.53%

cumulative

total

return.

1

You

can

find

more

of

the

Fund’s

performance

data

in

the

Performance

Summary

beginning

on

page

13

.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

For

most

recent

month-end

performance,

go

to

franklintempleton.com

or

call

(800)

342-5236

.

Corporate

Loan

Market

Overview

Positive

developments

on

the

vaccine

front

and

meaningful

fiscal

stimulus

helped

to

drive

favorable

technical

conditions

in

the

loan

market

and

strong

principal

returns.

The

more

favorable

environment

supported

demand

for

lower-rated

loans

trading

at

deeper

discounts

to

par,

especially

those

in

industries

that

were

expected

to

benefit

from

a

reopening

economy.

Inflows

into

retail

loan

investment

vehicles

accelerated,

and

record

issuance

of

collateralized

loan

obligation

(CLO)

vehicles

contributed

to

the

rally.

New

issuance

to

finance

mergers-and-acquisitions

and

leveraged

buyouts

also

significantly

increased,

but

the

strength

of

demand

helped

to

absorb

the

net

issuance.

Although

rising

COVID

cases

at

the

end

of

the

period

renewed

concerns

about

potential

virus-related

disruptions

and

caused

uncertainty

regarding

the

pace

of

recovery,

fundamental

conditions

also

improved,

as

the

default

rate

declined

further,

and

credit

rating

upgrades

continued

to

outpace

downgrades.

Following

consecutive

months

of

outflows,

retail

loan

investment

vehicle

flows

reversed

course

in

December

2020

as

more

investors

looked

to

the

asset

class

in

response

to

rising

U.S.

Treasury

yields

and

potential

inflation.

Assets

under

management

reached

a

two-year

high,

helping

to

offset

prior

years

of

net

outflows.

Technical

conditions

in

the

loan

market

remained

robust

as

demand

from

CLOs

also

bolstered

support

for

loan

prices.

Liability

spreads

tightened

amid

renewed

investor

interest

in

floating

rate

assets.

Issuance

of

new

CLOs

reached

a

record

for

annual

issuance

in

2021,

outpacing

the

rate

from

the

prior

years,

as

managers

looked

to

issue

vehicles

ahead

of

the

transition

away

from

the

London

Interbank

Offered

Rate

(LIBOR)

2

based

liabilities.

Positive

flows

and

CLO

issuance

led

to

a

supply

and

demand

imbalance

at

the

beginning

of

2021,

resulting

in

arrangers

launching

more

repricing

deals

to

reduce

spreads

on

existing

loans,

after

those

deals

were

largely

absent

from

the

market

for

most

of

2020.

Net

new

issuance

eventually

increased

significantly,

driven

by

deals

to

finance

mergers

and

acquisitions

and

leveraged

buyouts.

In

2021,

the

volume

of

acquisition-related

deals

from

private

equity

sponsors

was

the

highest

since

the

global

financial

crisis

and

included

the

largest

loan

deal

since

2013.

Issuance

of

B-rated

loans

exceeded

the

pace

from

prior

periods,

leading

to

a

further

shift

in

the

ratings

mix

within

the

loan

market.

The

primary

market

also

saw

an

increase

in

opportunistic

deals

for

second

lien

loans

or

those

to

finance

dividends.

Portfolio

Composition

10/31/21

%

of

Total

Net

Assets

Senior

Floating

Rate

Interests

79.9%

Common

Stocks

6.2%

Corporate

Bonds

5.6%

Management

Investment

Companies

3.2%

Warrants

1.2%

Other

0.9%

Short-Term

Investments

&

Other

Net

Assets

3.0%

1.

Source:

Credit

Suisse

Group.

2.

The

London

Interbank

Offered

Rate

(LIBOR)

is

the

interest

rate

banks

charge

each

other

for

loans.

LIBOR

is

a

widely

used

benchmark

for

short-term

interest

rates.

The

index

is

unmanaged

and

includes

reinvestment

of

any

income

or

distributions.

It

does

not

reflect

any

fees,

expenses

or

sales

charges.

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

The

dollar

value,

number

of

shares

or

principal

amount,

and

names

of

all

portfolio

holdings

are

listed

in

the

Fund’s

Statement

of

Investments

(SOI).

The

SOI

begins

on

page

40

.

Franklin

Floating

Rate

Daily

Access

Fund

11

franklintempleton.com

Annual

Report

The

default

rate

fell

below

the

historical

average

by

the

end

of

the

period,

nearing

a

record

low.

Recovery

rates

also

improved.

While

renewed

virus

fears

contributed

to

continued

bifurcation

between

issuers

in

industries

less

impacted

by

the

COVID-19

crisis

and

those

affected

by

continued

virus

fears,

the

percentage

of

loans

trading

at

distressed

levels

sharply

declined.

Companies

with

access

to

the

market

were

able

to

push

out

debt

maturities.

In

response

to

the

improved

earnings

and

outlook,

the

pace

of

credit

rating

upgrades

significantly

outpaced

downgrades.

Investment

Strategy

We

use

a

detailed

credit

analysis

process

to

select

corporate

loan

and

corporate

debt

securities

that

meet

our

criteria.

We

conduct

ongoing

credit

monitoring

of

our

investments.

To

help

manage

the

credit

risk

associated

with

investing

in

securities

rated

below

investment

grade

(or

if

unrated,

of

comparable

quality),

we

seek

to

diversify

the

Fund

by

investing

in

a

large

number

of

loans

of

companies

that

we

have

identified

as

having

attractive

risk/reward

profiles,

favorable

capital

structures,

strong

asset

coverage

and

dominant

market

shares.

This

diversification

potentially

reduces

credit

risk

by

spreading

assets

across

many

different

industries.

Manager’s

Discussion

During

the

one-year

period

under

review,

the

Fund

outperformed

its

benchmark,

the

CSLLI.

Upper

tier

loans

(BB-rated)

in

the

index

returned

4.94%,

middle

tier

(B-rated)

loans

returned

8.17%,

and

lower

tier

loans

(CCC-rated

and

below)

returned

23.05%,

according

to

the

CSLLI.

Over

the

period,

the

Fund

shifted

toward

an

overweight

position

in

B-rated

loans

and

underweight

in

BB-rated

loans,

which

contributed

to

relative

performance.

However,

outperformance

versus

the

benchmark

was

primarily

driven

by

a

select

number

of

investments

that

traded

higher

due

to

positive

catalysts.

Among

the

top

contributors

were

issuers

that

benefited

from

a

reopening

economy

and/or

recently

underwent

restructurings

that

led

to

higher

expected

recoveries.

Quarternorth

Energy

(a

producer

of

oil

and

gas

formerly

known

as

Fieldwood

Energy)

was

the

top

contributor

to

performance

as

higher

oil

prices

were

expected

to

positively

impact

financial

results.

In

addition

to

higher

oil

prices,

fees

and

equity

shares

received

in

the

course

of

the

company’s

restructuring

contributed

to

a

higher

ultimate

recovery

from

our

investment.

Appvion

Operations

(a

manufacturer

of

carbonless

paper)

also

contributed

to

performance

as

the

company

executed

asset

sales

during

the

period,

which

paid

down

our

term

loan

position

at

par,

while

its

equity

shares

traded

higher

on

expectations

for

further

transactions.

Finally,

Alloy

FinCo

(a

manufacturer

of

components

for

the

aerospace

and

industrial

markets)

contributed

to

performance

as

the

company

continued

to

execute

on

its

turnaround

strategy,

resulting

in

higher

recovery

expectations

for

the

term

loan.

Major

detractors

from

performance

included

investments

that

had

declined

due

to

concerns

about

ultimate

recovery

values

as

they

underwent

reorganizations

or

faced

operational

challenges.

The

term

loan

for

FGI

Operating

(a

manufacturer

of

firearms

and

ammunition)

was

marked

lower

due

to

reduced

recovery

estimates

following

the

sale

of

its

assets

and

updated

budget

plans.

24

Hour

Fitness

Worldwide

(a

fitness

club

owner

and

operator)

detracted

from

performance

as

the

company

continued

to

be

negatively

impacted

by

club

closures

after

emerging

from

bankruptcy.

During

the

period,

we

continued

to

invest

in

a

diversified

set

of

middle

tier

(B-rated)

loans,

while

reducing

higher

priced,

tighter

spread

upper

tier

(BB-rated)

loans.

The

Fund

shifted

its

overweight

position

in

upper

tier

loans

to

underweight

by

the

end

of

the

period.

The

largest

additions

to

the

portfolio

included

higher

spread

loans

that

launched

in

the

primary

market,

including

loans

in

the

diversified

media,

chemicals,

and

cable/wireless

sectors.

We

increased

our

weightings

in

the

information

technology

and

diversified

media

sectors,

while

our

weightings

in

the

automotive

and

broadcasting

industries

declined.

During

the

period,

we

continued

to

add

secured

high-yield

bonds,

which

contributed

to

increased

potential

for

income

generation

and

principal

appreciation,

Top

10

Holdings

10/31/21

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

Quarternorth

Energy

Holding,

Inc.

5.0%

Oil,

Gas

&

Consumable

Fuels,

United

States

Franklin

Floating

Rate

Income

Fund

2.8%

Capital

Markets,

United

States

Appvion

Operations,

Inc.

2.3%

Paper

&

Forest

Products,

United

States

Onsite

Rental

Group

Operations

Pty.

Ltd.

1.7%

Road

&

Rail,

Australia

Global

Tel*Link

Corp.

1.5%

Diversified

Telecommunication

Services,

United

States

Ventia

Midco

Pty.

Ltd.

1.5%

Road

&

Rail,

Australia

Asurion

LLC

1.4%

Insurance,

United

States

GNC

Holdings,

Inc.

1.3%

Food

&

Staples

Retailing,

United

States

UTEX

Industries,

Inc.

1.2%

Machinery,

United

States

Waystar

Technologies,

Inc.

1.1%

Health

Care

Providers

&

Services,

United

States

Franklin

Floating

Rate

Daily

Access

Fund

12

franklintempleton.com

Annual

Report

while

we

reduced

our

weighting

in

CLO

tranches.

We

maintained

the

Fund’s

investment

in

the

Franklin

Floating

Rate

Income

Fund

and

added

exposure

to

the

Invesco

Senior

Loan

ETF

for

continued

exposure

to

credit

and

improved

settlement

liquidity.

The

Fund

had

no

exposure

to

derivatives

during

the

period.

Thank

you

for

your

continued

participation

in

Franklin

Floating

Rate

Daily

Access

Fund.

We

look

forward

to

serving

your

future

investment

needs.

Reema

Agarwal,

CFA

Justin

Ma,

CFA

Margaret

Chiu,

CFA

Judy

Sher

Portfolio

Management

Team

The

foregoing

information

reflects

our

analysis,

opinions

and

portfolio

holdings

as

of

October

31,

2021,

the

end

of

the

reporting

period.

The

way

we

implement

our

main

investment

strategies

and

the

resulting

portfolio

holdings

may

change

depending

on

factors

such

as

market

and

economic

conditions.

These

opinions

may

not

be

relied

upon

as

investment

advice

or

an

offer

for

a

particular

security.

The

information

is

not

a

complete

analysis

of

every

aspect

of

any

market,

country,

industry,

security

or

the

Fund.

Statements

of

fact

are

from

sources

considered

reliable,

but

the

investment

manager

makes

no

representation

or

warranty

as

to

their

completeness

or

accuracy.

Although

historical

performance

is

no

guarantee

of

future

results,

these

insights

may

help

you

understand

our

investment

management

philosophy.

CFA

®

is

a

trademark

owned

by

CFA

Institute.

Performance

Summary

as

of

October

31,

2021

Franklin

Floating

Rate

Daily

Access

Fund

13

franklintempleton.com

Annual

Report

The

performance

tables

and

graphs

do

not

reflect

any

taxes

that

a

shareholder

would

pay

on

Fund

dividends,

capital

gain

distributions,

if

any,

or

any

realized

gains

on

the

sale

of

Fund

shares.

Total

return

reflects

reinvestment

of

the

Fund’s

dividends

and

capital

gain

distributions,

if

any,

and

any

unrealized

gains

or

losses.

Your

dividend

income

will

vary

depending

on

dividends

or

interest

paid

by

securities

in

the

Fund’s

portfolio,

adjusted

for

operating

expenses

of

each

class.

Capital

gain

distributions

are

net

profits

realized

from

the

sale

of

portfolio

securities.

Performance

as

of

10/31/21

1

Cumulative

total

return

excludes

sales

charges.

Average

annual

total

return

includes

maximum

sales

charges.

Sales

charges

will

vary

depending

on

the

size

of

the

investment

and

the

class

of

share

purchased.

The

maximum

is

2.25%

and

the

minimum

is

0%.

Class

A:

2.25%

maximum

initial

sales

charge;

Advisor

Class:

no

sales

charges.

For

other

share

classes,

visit

franklintempleton.com.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

For

most

recent

month-end

performance,

go

to

franklintempleton.com

or

call

(800)

342-5236

.

Share

Class

Cumulative

Total

Return

2

Average

Annual

Total

Return

3

–

A

1-Year

+11.79%

+9.26%

5-Year

+11.01%

+1.65%

10-Year

+36.15%

+2.90%

Advisor

1-Year

+12.06%

+12.06%

5-Year

+12.25%

+2.34%

10-Year

+39.56%

+3.39%

30-Day

Standardized

Yield

5

Share

Class

Distribution

Rate

4

(with

fee

waiver)

(without

fee

waiver)

A

3.09%

2.72%

2.69%

Advisor

3.42%

3.03%

3.00%

See

page

15

for

Performance

Summary

footnotes.

Franklin

Floating

Rate

Daily

Access

Fund

Performance

Summary

14

franklintempleton.com

Annual

Report

See

page

15

for

Performance

Summary

footnotes

Total

Return

Index

Comparison

for

a

Hypothetical

$10,000

Investment

1

Total

return

represents

the

change

in

value

of

an

investment

over

the

periods

shown.

It

includes

any

applicable

maximum

sales

charge,

Fund

expenses,

account

fees

and

reinvested

distributions.

The

unmanaged

index

includes

reinvestment

of

any

income

or

distributions.

It

differs

from

the

Fund

in

composition

and

does

not

pay

management

fees

or

expenses.

One

cannot

invest

directly

in

an

index.

Class

A

(11/1/11–10/31/21)

Advisor

Class

(11/1/11–10/31/21)

Franklin

Floating

Rate

Daily

Access

Fund

Performance

Summary

15

franklintempleton.com

Annual

Report

Each

class

of

shares

is

available

to

certain

eligible

investors

and

has

different

annual

fees

and

expenses,

as

described

in

the

prospectus.

All

investments

involve

risks,

including

loss

of

principal.

Investors

should

be

aware

that

the

Fund’s

share

price

and

yield

will

fluctuate

with

market

conditions.

The

Fund

should

not

be

considered

alternative

to

money

market

funds

or

certificates

of

deposit

(CDs).

The

floating-rate

loans

and

debt

securities

in

which

the

Fund

invests

tend

to

be

rated

below

investment

grade

and

may

be

subject

to

resale

restrictions.

Investing

in

higher-yielding,

lower-rated,

floating-rate

loans

and

debt

securities

involves

greater

risk

of

default,

which

could

result

in

loss

of

principal—a

risk

that

may

be

heightened

in

a

slowing

economy.

Interest

earned

on

floating-rate

loans

varies

with

changes

in

prevailing

interest

rates.

Therefore,

while

floating-rate

loans

offer

higher

interest

income

when

interest

rates

rise,

they

will

also

generate

less

income

when

interest

rates

decline.

Changes

in

the

financial

strength

of

a

bond

issuer

or

in

a

bond’s

credit

rating

may

affect

its

value.

Events

such

as

the

spread

of

deadly

diseases,

disasters,

and

financial,

political

or

social

disruptions,

may

heighten

risks

and

adversely

affect

performance.

The

Fund’s

prospectus

also

includes

a

description

of

the

main

investment

risks.

1.

The

Fund

has

a

fee

waiver

associated

with

any

investment

it

makes

in

a

Franklin

Templeton

money

fund

and/or

other

Franklin

Templeton

fund,

contractually

guaranteed

through

2/28/22.

Fund

investment

results

reflect

the

fee

waiver;

without

this

waiver,

the

results

would

have

been

lower.

2.

Cumulative

total

return

represents

the

change

in

value

of

an

investment

over

the

periods

indicated.

3.

Average

annual

total

return

represents

the

average

annual

change

in

value

of

an

investment

over

the

periods

indicated.

Return

for

less

than

one

year,

if

any,

has

not

been

annualized.

4.

Distribution

rate

is

based

on

an

annualization

of

the

sum

of

the

respective

class’s

past

month’s

daily

distributions

and

the

maximum

offering

price

(NAV

for

Advisor

Class)

per

share

on

10/31/21.

5.

The

Fund’s

30-day

standardized

yield

is

calculated

over

a

trailing

30-day

period

using

the

yield

to

maturity

on

bonds

and/or

the

dividends

accrued

on

stocks.

It

may

not

equal

the

Fund’s

actual

income

distribution

rate,

which

reflects

the

Fund’s

past

dividends

paid

to

shareholders.

6.

Source:

Credit

Suisse

Group.

The

CS

LLI

is

designed

to

mirror

the

investable

universe

of

the

U.S.

dollar-denominated

leveraged

loan

market.

Loans

must

be

below

invest-

ment

grade

and

rated

no

higher

than

Baa/BB+

or

Ba1/BBB+

by

Moody’s

or

S&P.

7.

Figures

are

as

stated

in

the

Fund’s

current

prospectus

and

may

differ

from

the

expense

ratios

disclosed

in

the

Your

Fund’s

Expenses

and

Financial

Highlights

sections

in

this

report.

In

periods

of

market

volatility,

assets

may

decline

significantly,

causing

total

annual

Fund

operating

expenses

to

become

higher

than

the

figures

shown.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

Distributions

(11/1/20–10/31/21)

Share

Class

Net

Investment

Income

A

$0.300851

C

$0.270149

R6

$0.327748

Advisor

$0.319979

Total

Annual

Operating

Expenses

7

Share

Class

With

Fee

Waiver

Without

Fee

Waiver

A

0.96%

0.99%

Advisor

0.71%

0.74%

Your

Fund’s

Expenses

Franklin

Floating

Rate

Daily

Access

Fund

16

franklintempleton.com

Annual

Report

As

a

Fund

shareholder,

you

can

incur

two

types

of

costs:

(1)

transaction

costs,

including

sales

charges

(loads)

on

Fund

purchases

and

redemptions;

and

(2)

ongoing

Fund

costs,

including

management

fees,

distribution

and

service

(12b-1)

fees,

and

other

Fund

expenses.

All

mutual

funds

have

ongoing

costs,

sometimes

referred

to

as

operating

expenses.

The

table

below

shows

ongoing

costs

of

investing

in

the

Fund

and

can

help

you

understand

these

costs

and

compare

them

with

those

of

other

mutual

funds.

The

table

assumes

a

$1,000

investment

held

for

the

six

months

indicated.

Actual

Fund

Expenses

The

table

below

provides

information

about

actual

account

values

and

actual

expenses

in

the

columns

under

the

heading

“Actual.”

In

these

columns

the

Fund’s

actual

return,

which

includes

the

effect

of

Fund

expenses,

is

used

to

calculate

the

“Ending

Account

Value”

for

each

class

of

shares.

You

can

estimate

the

expenses

you

paid

during

the

period

by

following

these

steps

(

of

course,

your

account

value

and

expenses

will

differ

from

those

in

this

illustration

):

Divide

your

account

value

by

$1,000

(

if

your

account

had

an

$8,600

value,

then

$8,600

÷

$1,000

=

8.6

).

Then

multiply

the

result

by

the

number

in

the

row

for

your

class

of

shares

under

the

headings

“Actual”

and

“Expenses

Paid

During

Period”

(

if

Actual

Expenses

Paid

During

Period

were

$7.50,

then

8.6

x

$7.50

=$64.50

).

In

this

illustration,

the

actual

expenses

paid

this

period

are

$64.50.

Hypothetical

Example

for

Comparison

with

Other

Funds

Under

the

heading

“Hypothetical”

in

the

table,

information

is

provided

about

hypothetical

account

values

and

hypothetical

expenses

based

on

the

Fund’s

actual

expense

ratio

and

an

assumed

rate

of

return

of

5%

per

year

before

expenses,

which

is

not

the

Fund’s

actual

return.

This

information

may

not

be

used

to

estimate

the

actual

ending

account

balance

or

expenses

you

paid

for

the

period,

but

it

can

help

you

compare

ongoing

costs

of

investing

in

the

Fund

with

those

of

other

funds.

To

do

so,

compare

this

5%

hypothetical

example

for

the

class

of

shares

you

hold

with

the

5%

hypothetical

examples

that

appear

in

the

shareholder

reports

of

other

funds.

Please

note

that

expenses

shown

in

the

table

are

meant

to

highlight

ongoing

costs

and

do

not

reflect

any

transactional

costs.

Therefore,

information

under

the

heading

“Hypothetical”

is

useful

in

comparing

ongoing

costs

only,

and

will

not

help

you

compare

total

costs

of

owning

different

funds.

In

addition,

if

transactional

costs

were

included,

your

total

costs

would

have

been

higher.

1.

Expenses

are

equal

to

the

annualized

expense

ratio

for

the

six-month

period

as

indicated

above—in

the

far

right

column—multiplied

by

the

simple

average

account

value

over

the

period

indicated,

and

then

multiplied

by

184/365

to

reflect

the

one-half

year

period.

2.

Reflects

expenses

after

fee

waivers

and

expense

reimbursements.

Does

not

include

acquired

fund

fees

and

expenses.

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Share

Class

Beginning

Account

Value

5/1/21

Ending

Account

Value

10/31/21

Expenses

Paid

During

Period

5/1/21–10/31/21

1,2

Ending

Account

Value

10/31/21

Expenses

Paid

During

Period

5/1/21–10/31/21

1,2

a

Net

Annualized

Expense

Ratio

2

A

$1,000

$1,047.90

$5.04

$1,020.29

$4.97

0.98%

C

$1,000

$1,045.80

$7.11

$1,018.25

$7.02

1.38%

R6

$1,000

$1,048.20

$3.27

$1,022.02

$3.23

0.63%

Advisor

$1,000

$1,049.20

$3.75

$1,021.55

$3.70

0.73%

17

franklintempleton.com

Annual

Report

Franklin

Low

Duration

Total

Return

Fund

This

annual

report

for

Franklin

Low

Duration

Total

Return

Fund

covers

the

fiscal

year

ended

October

31,

2021

.

Your

Fund’s

Goal

and

Main

Investments

The

Fund

seeks

a

high

level

of

current

income

as

is

consistent

with

prudent

investing,

while

seeking

preservation

of

capital.

Under

normal

market

conditions,

the

Fund

invests

primarily

in

investment-grade

debt

securities

and

investments,

including

government

and

corporate

debt

securities

and

mortgage-

and

asset-backed

securities,

targeting

an

estimated

average

portfolio

duration

of

three

years

or

less.

Performance

Overview

The

Fund’s

Class

A

shares

posted

a

+2.90%

cumulative

total

return

for

the

12

months

under

review.

In

comparison,

the

Fund’s

benchmark,

the

Bloomberg

U.S.

Government/Credit

Index:

1-3

Year

Component,

posted

a

-0.05%

cumulative

total

return.

1

The

index

measures

the

performance

of

investment-grade,

U.S.

dollar-denominated,

fixed-rate

Treasuries,

government-related

and

corporate

securities

with

at

least

one

year

up

to,

but

not

including,

three

years

to

final

maturity.

You

can

find

more

of

the

Fund’s

performance

data

in

the

Performance

Summary

beginning

on

page

19

.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

For

most

recent

month-end

performance,

go

to

franklintempleton.com

or

call

(800)

342-5236

.

Investment

Strategy

We

seek

to

invest

in

a

combination

of

fixed

income

securities,

primarily

from

across

the

investment-grade

debt

universe.

We

analyze

securities

using

proprietary

and

nonproprietary

research

to

help

us

identify

attractive

investment

opportunities

across

the

entire

fixed

income

opportunity

set,

on

a

relative

basis.

When

making

investment

decisions,

we

evaluate

business

cycles,

yield

curves,

and

values

between

and

within

markets.

Through

a

low

duration

portfolio,

we

seek

to

position

the

Fund

to

be

less

affected

by

interest-rate

changes

than

a

fund

with

a

higher

duration.

In

addition,

we

may

use

derivative

transactions,

such

as

forwards,

futures

contracts

and

swap

agreements

to

obtain

net

long

or

short

exposures

to

select

currencies,

interest

rates,

countries,

duration

or

credit

risks.

*Includes

non-agency

residential

mortgage

backed

securities,

collateralized

loan

obligations

and

consumer

loan

certificates.

Manager’s

Discussion

Performance

was

mixed

over

the

period,

with

spread

sectors

generally

posting

positive

total

returns,

while

higher

quality

government

and

agency

sectors

lagged.

On

an

excess

returns

basis,

most

fixed

income

sectors

outperformed

U.S.

Treasuries

with

the

exception

of

agency

mortgage-backed

securities

(MBS).

During

the

period,

overweight

allocations

to

the

non-

agency

residential

mortgage-backed

securities

(RMBS)

and

corporate

credit

sectors

of

senior

secured

floating-rate

loans,

high

yield

and

collateralized

loan

obligations

(CLOs)

were

the

primary

contributors

to

returns.

Positive

security

selection

in

senior

secured

loans

provided

a

significant

boost

to

performance,

as

did

selection

in

sovereign

emerging

markets

securities

and

investment-grade

corporate

credit.

Marketplace

loans

and

Treasury

Inflation-

Protected

Securities

(TIPS)

allocation

were

also

positive

for

performance.

In

contrast,

the

Fund’s

U.S.

yield

curve

positioning

detracted

from

performance.

The

Fund’s

foreign

currency

exposure

also

detracted

as

gains

mainly

from

our

long

Colombian

and

Mexican

peso

and

South

African

rand

Portfolio

Composition

10/31/21

%

of

Total

Net

Assets

U.S.

Government

and

Agency

Securities

36.9%

Corporate

Bonds

19.5%

Asset-Backed

Securities*

14.1%

Residential

Mortgage-Backed

Securities

6.8%

Foreign

Government

and

Agency

Securities

5.8%

Management

Investment

Companies

4.5%

Mortgage-Backed

Securities

2.5%

Commercial

Mortgage-Backed

Securities

2.3%

Municipal

Bonds

1.6%

Marketplace

Loans

1.4%

Other

1.0%

Short-Term

Investments

&

Other

Net

Assets

3.6%

1.

Source:

Morningstar.

The

index

is

unmanaged

and

includes

reinvestment

of

any

income

or

distributions.

It

does

not

reflect

any

fees,

expenses

or

sales

charges.

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

The

dollar

value,

number

of

shares

or

principal

amount,

and

names

of

all

portfolio

holdings

are

listed

in

the

Fund’s

Statement

of

Investments

(SOI).

The

SOI

begins

on

page

60

.

Franklin

Low

Duration

Total

Return

Fund

18

franklintempleton.com

Annual

Report

positions

were

offset

by

losses

from

our

short

euro

and

long

Canadian

dollar,

Japanese

yen

and

Australian

dollar

positions.

U.S.

Treasury

yields

were

the

Fund’s

largest

absolute

allocation

at

period-end,

but

the

portfolio

remained

underweight

the

sector

relative

to

the

benchmark

given

the

potential

for

a

further

steepening

of

the

yield

curve

and

better

relative

opportunities

in

other

asset

classes.

While

investment-grade

corporate

credit

was

one

of

the

Fund’s

largest

allocations,

the

portfolio

remained

underweight

the

sector

relative

to

the

benchmark

and

we

further

reduced

exposure

over

the

period.

We

remained

generally

positive

with

investment-grade

corporate

credit

fundamentals

and

market

technical

conditions

and

believed

the

sector

should

still

benefit

from

above

trend

growth,

even

if

gross

domestic

product

and

earnings

growth

had

peaked.

However,

the

investment

opportunity

had

become

less

compelling

given

full

valuations,

even

as

credit

spreads

have

come

off

from

recent

tight

levels.

Although

supportive

investment-grade

corporate

credit

fundamentals

and

technical

conditions

persist,

valuations

remained

stretched.

We

trimmed

our

exposure

in

CLOs,

while

increasing

our

U.S.

high-yield

corporate

bond

allocation.

Credit

fundamentals

for

the

U.S.

high-yield

corporate

bond

market

had

meaningfully

improved

towards

period-end

and

we

retained

our

moderately

bullish

outlook

but

continue

to

be

of

the

view

that

careful

credit

selection

will

be

an

important

driver

of

outperformance.

We

pared

our

RMBS

and

TIPS

exposure

over

the

period

amid

continued

strength

in

the

sectors.

The

U.S.

housing

market

continued

to

be

strong

with

significant

demand

for

homes

despite

large

increases

in

prices.

Supply

and

demand

imbalances

combined

with

mortgage

rates

still

near

historic

lows

continued

to

support

a

strong

housing

market.

This

fundamental

backdrop

should

bolster

solid

risk-

adjusted

returns

for

the

RMBS

sector

in

the

near-term

as

we

continued

to

favor

2016

credit

risk

transfer

securities

over

other

cohorts

on

a

risk

adjusted

basis.

We

added

to

commercial

mortgage-backed

securities,

while

reducing

taxable

municipal

bond

exposure.

We

shifted

currency

exposure,

moving

our

short

Australian

and

Singapore

dollar

and

Korean

won

positions

to

long

exposures,

unwound

our

short

Canadian

dollar

and

long

Indonesian

rupiah,

South

African

rand

and

Colombian

and

Mexican

peso

positions

and

reduced

our

long

yen

exposure.

Thank

you

for

your

continued

participation

in

Franklin

Low

Duration

Total

Return

Fund.

We

look

forward

to

serving

your

future

investment

needs.

Sonal

Desai,

Ph.D.

David

Yuen,

CFA,

FRM

Tina

Chou

Kent

Burns,

CFA

Portfolio

Management

Team

The

foregoing

information

reflects

our

analysis,

opinions

and

portfolio

holdings

as

of

October

31,

2021,

the

end

of

the

reporting

period.

The

way

we

implement

our

main

investment

strategies

and

the

resulting

portfolio

holdings

may

change

depending

on

factors

such

as

market

and

economic

conditions.

These

opinions

may

not

be

relied

upon

as

investment

advice

or

an

offer

for

a

particular

security.

The

information

is

not

a

complete

analysis

of

every

aspect

of

any

market,

country,

industry,

security

or

the

Fund.

Statements

of

fact

are

from

sources

considered

reliable,

but

the

investment

manager

makes

no

representation

or

warranty

as

to

their

completeness

or

accuracy.

Although

historical

performance

is

no

guarantee

of

future

results,

these

insights

may

help

you

understand

our

investment

management

philosophy.

Performance

Summary

as

of

October

31,

2021

Franklin

Low

Duration

Total

Return

Fund

19

franklintempleton.com

Annual

Report

The

performance

tables

and

graphs

do

not

reflect

any

taxes

that

a

shareholder

would

pay

on

Fund

dividends,

capital

gain

distributions,

if

any,

or

any

realized

gains

on

the

sale

of

Fund

shares.

Total

return

reflects

reinvestment

of

the

Fund’s

dividends

and

capital

gain

distributions,

if

any,

and

any

unrealized

gains

or

losses.

Your

dividend

income

will

vary

depending

on

dividends

or

interest

paid

by

securities

in

the

Fund’s

portfolio,

adjusted

for

operating

expenses

of

each

class.

Capital

gain

distributions

are

net

profits

realized

from

the

sale

of

portfolio

securities.

Performance

as

of

10/31/21

1

Cumulative

total

return

excludes

sales

charges.

Average

annual

total

return

includes

maximum

sales

charges.

Sales

charges

will

vary

depending

on

the

size

of

the

investment

and

the

class

of

share

purchased.

The

maximum

is

2.25%

and

the

minimum

is

0%.

Class

A

:

2.25%

maximum

initial

sales

charge;

Advisor

Class:

no

sales

charges.

For

other

share

classes,

visit

franklintempleton.com.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

For

most

recent

month-end

performance,

go

to

franklintempleton.com

or

call

(800)

342-5236

.

Share

Class

Cumulative

Total

Return

2

Average

Annual

Total

Return

3

–

A

1-Year

+2.90%

+0.58%

5-Year

+10.90%

+1.62%

10-Year

+19.75%

+1.58%

Advisor

1-Year

+3.03%

+3.03%

5-Year

+12.18%

+2.33%

10-Year

+22.70%

+2.07%

30-Day

Standardized

Yield

5

Share

Class

Distribution

Rate

4

(with

fee

waiver)

(without

fee

waiver)

A

1.54%

0.47%

0.23%

Advisor

1.81%

0.73%

0.48%

See

page

21

for

Performance

Summary

footnotes.

Franklin

Low

Duration

Total

Return

Fund

Performance

Summary

20

franklintempleton.com

Annual

Report

See

page

for

21

Performance

Summary

footnotes.

Total

Return

Index

Comparison

for

a

Hypothetical

$10,000

Investment

1

Total

return

represents

the

change

in

value

of

an

investment

over

the

periods

shown.

It

includes

any

applicable

maximum

sales

charge,

Fund

expenses,

account

fees

and

reinvested

distributions.

The

unmanaged

index

includes

reinvestment

of

any

income

or

distributions.

It

differs

from

the

Fund

in

composition

and

does

not

pay

management

fees

or

expenses.

One

cannot

invest

directly

in

an

index.

Class

A

(11/1/11–10/31/21)

Advisor

Class

(11/1/11–10/31/21)

Franklin

Low

Duration

Total

Return

Fund

Performance

Summary

21

franklintempleton.com

Annual

Report

Each

class

of

shares

is

available

to

certain

eligible

investors

and

has

different

annual

fees

and

expenses,

as

described

in

the

prospectus.

All

investments

involve

risks,

including

loss

of

principal.

Interest

rate

movements

and

mortgage

prepayments

will

affect

the

Fund’s

share

price

and

yield.

Bond

prices

generally

move

in

the

opposite

direction

of

interest

rates.

Thus,

as

the

prices

of

bonds

in

the

Fund

adjust

to

a

rise

in

interest

rates,

the

Fund’s

share

price

may

decline.

Changes

in

the

financial

strength

of

a

bond

issuer

or

in

a

bond’s

credit

rating

may

affect

its

value.

The

risks

associated

with

higher-yielding,

low-

er-rated

securities

include

higher

risk

of

default

and

loss

of

principal.

Investment

in

foreign

securities

also

involves

special

risks,

including

currency

fluctuations,

and

political

and

economic

uncertainty.

Derivatives,

including

currency

management

strategies,

involve

costs

and

can

create

economic

leverage

in

the

portfolio

which

may

result

in

significant

volatility

and

cause

the

Fund

to

participate

in

losses

(as

well

as

gains)

on

an

amount

that

exceeds

the

Fund’s

initial

investment.

The

Fund

may

not

achieve

the

anticipated

benefits,

and

may

realize

losses

when

a

counterparty

fails

to

perform.

Events

such

as

the

spread

of

deadly

diseases,

disasters,

and

financial,

political

or

social

disruptions,

may

heighten

risks

and

adversely

affect

performance.

The

Fund’s

prospectus

also

includes

a

description

of

the

main

investment

risks.

1.

The

Fund

has

an

expense

reduction

and

a

fee

waiver

associated

with

any

investments

it

makes

in

a

Franklin

Templeton

money

fund

and/or

other

Franklin

Templeton

fund,

contractually

guaranteed

through

2/28/22.

Fund

investment

results

reflect

the

expense

reduction

and

fee

waiver;

without

these

reductions,

the

results

would

have

been

lower.

2.

Cumulative

total

return

represents

the

change

in

value

of

an

investment

over

the

periods

indicated.

3.

Average

annual

total

return

represents

the

average

annual

change

in

value

of

an

investment

over

the

periods

indicated.

Return

for

less

than

one

year,

if

any,

has

not

been

annualized.

4.

Distribution

rate

is

based

on

an

annualization

of

the

sum

of

the

respective

class’s

past

month’s

daily

distributions

and

the

maximum

offering

price

(NAV

for

Advisor

Class)

per

share

on

10/31/21.

5.

The

Fund’s

30-day

standardized

yield

is

calculated

over

a

trailing

30-day

period

using

the

yield

to

maturity

on

bonds

and/or

the

dividends

accrued

on

stocks.

It

may

not

equal

the

Fund’s

actual

income

distribution

rate,

which

reflects

the

Fund’s

past

dividends

paid

to

shareholders.

6.

Source:

Morningstar.

The

Bloomberg

U.S.

Government/Credit

Index:

1-3

Year

Component

includes

investment-grade,

U.S.

dollar-denominated,

fixed-rate

Treasuries,

government-related

(sovereign,

agency,

local

authority

and

supranational)

and

corporate

securities

with

at

least

one

year

up

to,

but

not

including,

three

years

to

final

maturity.

7.

Figures

are

as

stated

in

the

Fund’s

current

prospectus

and

may

differ

from

the

expense

ratios

disclosed

in

the

Your

Fund’s

Expenses

and

Financial

Highlights

sections

in

this

report.

In

periods

of

market

volatility,

assets

may

decline

significantly,

causing

total

annual

Fund

operating

expenses

to

become

higher

than

the

figures

shown.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

Distributions

(11/1/20–10/31/21)

Share

Class

Net

Investment

Income

A

$0.264870

C

$0.226897

R

$0.240939

R6

$0.300240

Advisor

$0.288773

Total

Annual

Operating

Expenses

7

Share

Class

With

Fee

Waiver

Without

Fee

Waiver

A

0.71%

0.96%

Advisor

0.46%

0.71%

Your

Fund’s

Expenses

Franklin

Low

Duration

Total

Return

Fund

22

franklintempleton.com

Annual

Report

As

a

Fund

shareholder,

you

can

incur

two

types

of

costs:

(1)

transaction

costs,

including

sales

charges

(loads)

on

Fund

purchases

and

redemptions;

and

(2)

ongoing

Fund

costs,

including

management

fees,

distribution

and

service

(12b-1)

fees,

and

other

Fund

expenses.

All

mutual

funds

have

ongoing

costs,

sometimes

referred

to

as

operating

expenses.

The

table

below

shows

ongoing

costs

of

investing

in

the

Fund

and

can

help

you

understand

these

costs

and

compare

them

with

those

of

other

mutual

funds.

The

table

assumes

a

$1,000

investment

held

for

the

six

months

indicated.

Actual

Fund

Expenses

The

table

below

provides

information

about

actual

account

values

and

actual

expenses

in

the

columns

under

the

heading

“Actual.”

In

these

columns

the

Fund’s

actual

return,

which

includes

the

effect

of

Fund

expenses,

is

used

to

calculate

the

“Ending

Account

Value”

for

each

class

of

shares.

You

can

estimate

the

expenses

you

paid

during

the

period

by

following

these

steps

(

of

course,

your

account

value

and

expenses

will

differ

from

those

in

this

illustration

):

Divide

your

account

value

by

$1,000

(

if

your

account

had

an

$8,600

value,

then

$8,600

÷

$1,000

=

8.6

).

Then

multiply

the

result

by

the

number

in

the

row

for

your

class

of

shares

under

the

headings

“Actual”

and

“Expenses

Paid

During

Period”

(

if

Actual

Expenses

Paid

During

Period

were

$7.50,

then

8.6

x

$7.50

=$64.50

).

In

this

illustration,

the

actual

expenses

paid

this

period

are

$64.50.

Hypothetical

Example

for

Comparison

with

Other

Funds

Under

the

heading

“Hypothetical”

in

the

table,

information

is

provided

about

hypothetical

account

values

and

hypothetical

expenses

based

on

the

Fund’s

actual

expense

ratio

and

an

assumed

rate

of

return

of

5%

per

year

before

expenses,

which

is

not

the

Fund’s

actual

return.

This

information

may

not

be

used

to

estimate

the

actual

ending

account

balance

or

expenses

you

paid

for

the

period,

but

it

can

help

you

compare

ongoing

costs

of

investing

in

the

Fund

with

those

of

other

funds.

To

do

so,

compare

this

5%

hypothetical

example

for

the

class

of

shares

you

hold

with

the

5%

hypothetical

examples

that

appear

in

the

shareholder

reports

of

other

funds.

Please

note

that

expenses

shown

in

the

table

are

meant

to

highlight

ongoing

costs

and

do

not

reflect

any

transactional

costs.

Therefore,

information

under

the

heading

“Hypothetical”

is

useful

in

comparing

ongoing

costs

only,

and

will

not

help

you

compare

total

costs

of

owning

different

funds.

In

addition,

if

transactional

costs

were

included,

your

total

costs

would

have

been

higher.

1.

Expenses

are

equal

to

the

annualized

expense

ratio

for

the

six-month

period

as

indicated

above—in

the

far

right

column—multiplied

by

the

simple

average

account

value

over

the

period

indicated,

and

then

multiplied

by

184/365

to

reflect

the

one-half

year

period.

2.

Reflects

expenses

after

fee

waivers

and

expense

reimbursements.

Does

not

include

acquired

fund

fees

and

expenses.

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Share

Class

Beginning

Account

Value

5/1/21

Ending

Account

Value

10/31/21

Expenses

Paid

During

Period

5/1/21–10/31/21

1,2

Ending

Account

Value

10/31/21

Expenses

Paid

During

Period

5/1/21–10/31/21

1,2

a

Net

Annualized

Expense

Ratio

2

A

$1,000

$1,003.30

$3.42

$1,021.79

$3.45

0.68%

C

$1,000

$1,002.40

$5.47

$1,019.74

$5.52

1.08%

R

$1,000

$1,003.10

$4.68

$1,020.53

$4.72

0.93%

R6

$1,000

$1,005.10

$1.51

$1,023.70

$1.53

0.30%

Advisor

$1,000

$1,004.50

$2.16

$1,023.05

$2.18

0.43%

23

franklintempleton.com

Annual

Report

Franklin

Total

Return

Fund

This

annual

report

for

Franklin

Total

Return

Fund

covers

the

fiscal

year

ended

October

31,

2021.

Your

Fund’s

Goal

and

Main

Investments

The

Fund

seeks

to

provide

high

current

income,

consistent

with

preservation

of

capital.

As

a

secondary

goal,

capital

appreciation

over

the

long

term.

The

Fund

invests

primarily

in

investment

grade

debt

securities

(including

unrated

securities

of

comparable

quality)

and

other

investments

that

provide

exposure

to

such

securities.

The

Fund

currently

focuses

on

government

and

corporate

debt

securities

and

mortgage-

and

asset-backed

securities,

but

may

invest

in

other

securities

and

investments,

such

as

floating-rate

corporate

loans

and

securities

and

municipal

securities.

Performance

Overview

The

Fund’s

Class

A

shares

posted

a

+2.12%

cumulative

total

return

for

the

12

months

under

review.

In

comparison,

the

Fund’s

benchmark,

the

Bloomberg

U.S.

Aggregate

Bond

Index

posted

a

-0.48%

cumulative

total

return.

1

The

index

measures

the

U.S.

investment-grade,

fixed-rate,

taxable

bond

market

with

index

components

for

government

and

corporate,

mortgage

pass

through

and

asset-backed

securities.

You

can

find

the

Fund’s

long-term

performance

data

in

the

Performance

Summary

beginning

on

page

25

.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

For

most

recent

month-end

performance,

go

to

franklintempleton.com

or

call

(800)

342-5236

.

Investment

Strategy

We

seek

to

invest

in

a

combination

of

fixed

income

securities,

primarily

from

across

the

investment-grade

debt

universe.

We

analyze

securities

using

proprietary

and

nonproprietary

research

to

help

us

identify

attractive

investment

opportunities,

across

the

entire

fixed

income

opportunity

set,

on

a

relative

basis.

The

Fund

may

also

invest

up

to

20%

of

its

total

assets

in

noninvestment-

grade

debt

securities.

In

addition,

we

may

use

derivative

transactions,

such

as

currency

and

cross-currency

forwards,

futures

contracts

and

swap

agreements,

to

obtain

net

long

or

short

exposures

to

select

currencies,

interest

rates,

countries,

duration

or

credit

risks.

*Includes

non-agency

residential

mortgage-backed

securities,

collateralized

loan

obligations

and

consumer

loan

certificates.

Manager’s

Discussion

As

U.S.

Treasury

(UST)

yields

increased

during

the

period

and

investors

debated

potential

inflation

concerns

related

to

monetary

and

fiscal

stimulus,

fixed

income

total

return

performance

was

mixed.

However,

most

fixed

income

markets,

with

the

exception

of

fixed-rate

agency

mortgage-

backed

securities

(MBS),

posted

positive

excess

returns

over

the

period

and

outperformed

USTs.

High-yield

corporate

credit,

Treasury

Inflation-Protected

Securities

(TIPS),

senior

secured

floating-rate

loans,

municipal

securities

and

non-

agency

residential

mortgage-backed

securities

(RMBS)

were

the

top

performers

on

an

excess

return

basis.

During

the

period,

the

Fund’s

overweight

allocation

to

the

corporate

credit

sectors

of

high-yield,

senior

secured

floating-rate

loans

and

RMBS,

as

well

as

strong

security

selection

in

senior

secured

floating-rate

loans,

were

significant

contributors

to

returns

relative

to

its

benchmark.

The

Fund’s

allocation

to

collateralized

loan

obligations,

marketplace

loans

and

taxable

municipal

securities

also

contributed

to

outperformance.

In

contrast,

our

U.S.

yield

curve

positioning

detracted

from

performance,

primarily

from

long

exposure

on

the

five-year

part

of

the

curve.

The

Fund’s

foreign

currency

exposure

also

detracted

as

gains

mainly

Portfolio

Composition

10/31/21

%

of

Total

Net

Assets

U.S.

Government

and

Agency

Securities

23.9%

Management

Investment

Companies

18.9%

Corporate

Bonds

17.7%

Mortgage-Backed

Securities

14.5%

Asset-Backed

Securities*

12.0%

Residential

Mortgage-Backed

Securities

7.2%

Foreign

Government

and

Agency

Securities

6.0%

Municipal

Bonds

5.1%

Senior

Floating

Rate

Interests

1.3%

Marketplace

Loans

1.2%

Other

0.8%

Short-Term

Investments

&

Other

Net

Assets

-8.6%

1.

Source:

Morningstar.

The

index

is

unmanaged

and

includes

reinvestment

of

any

income

or

distributions.

It

does

not

reflect

any

fees,

expenses

or

sales

charges.

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

The

dollar

value,

number

of

shares

or

principal

amount,

and

names

of

all

portfolio

holdings

are

listed

in

the

Fund’s

Statement

of

Investments

(SOI).

The

SOI

begins

on

page

87

.

Franklin

Total

Return

Fund

24

franklintempleton.com

Annual

Report

from

our

long

Colombian

peso,

South

African

rand

and

Mexican

peso

positions

were

offset

by

losses

from

our

long

Australian

dollar,

Japanese

yen,

Canadian

dollar,

Korean

won

and

short

euro

positions.

USTs

were

the

Fund’s

largest

absolute

allocation

at

period-end,

but

the

portfolio

remained

underweight

the

sector

relative

to

the

benchmark

given

the

potential

for

a

further

steepening

of

the

yield

curve

and

better

relative

opportunities

in

other

asset

classes.

While

investment-

grade

corporate

credit

remained

one

of

the

Fund’s

largest

allocations,

the

portfolio

was

underweight

the

sector

relative

to

the

benchmark

and

we

further

reduced

exposure

over

the

period.

We

remained

generally

positive

with

investment-

grade

corporate

credit

fundamentals

and

market

technical

conditions

and

believed

the

sector

should

benefit

from

above

trend

growth,

even

if

gross

domestic

product

and

earnings

growth

had

peaked.

However,

the

investment

opportunity

had

become

less

compelling

given

full

valuations,

even

as

credit

spreads

have

come

off

from

recent

tight

levels.

We

increased

our

high-yield

and

senior

secured

floating-rate

loan

allocations.

Credit

fundamentals

for

the

U.S.

high-yield

corporate

bond

market

had

meaningfully

improved

towards

period-end.

Although

we

retained

our

moderately

bullish

outlook,

we

continued

to

be

of

the

view

that

careful

credit

selection

would

be

an

important

driver

of

outperformance.

We

also

added

to

UST,

taxable

municipal

bond,

commercial

mortgage-backed

securities

and

sovereign

emerging

markets

securities.

We

reduced

our

TIPS

and

RMBS

exposure

over

the

period

amid

continued

strength

in

the

sectors.

The

U.S.

housing

market

continued

to

be

strong

with

significant

demand

for

homes

despite

large

increases

in

prices.

Supply

and

demand

imbalances

combined

with

mortgage

rates

still

near

historic

lows

continued

to

support

a

strong

housing

market.

This

fundamental

backdrop

should

bolster

solid

risk-

adjusted

returns

for

the

RMBS

sector

in

the

near-term

as

we

continued

to

favor

2016

credit

risk

transfer

securities

over

other

cohorts

on

a

risk

adjusted

basis.

We

shifted

currency

exposure,

moving

our

short

Australian

and

Singapore

dollar

and

Korean

won

positions

to

long

exposures,

unwound

our

short

Canadian

dollar

and

long

South

African

rand

and

Colombian

and

Mexican

peso

positions

and

reduced

our

long

yen

exposure.

We

initiated

a

short

position

in

the

New

Zealand

dollar

and

added

long

exposure

in

the

Russian

ruble

and

Norwegian

krone

against

the

euro.

During

the

period,

the

portfolio

utilized

derivatives,

including

credit

default

and

currency

swaps,

currency

forwards,

Treasury

futures,

inflation

index

swaps

and

credit

default

swap

options,

principally

as

a

tool

for

efficient

portfolio

management

and

to

manage

overall

portfolio

risk.

These

derivative

transactions

may

provide

the

same,

or

similar,

net

long

or

short

exposure

to

select

currencies,

interest

rates,

countries,

duration

or

credit

risks

in

a

less

expensive

way

than

by

directly

purchasing

securities.

In

those

markets

where

non-derivative

securities

are

readily

available,

the

cost

difference

in

normal

market

conditions

may

be

small.

Thank

you

for

your

continued

participation

in

Franklin

Total

Return

Fund.

We

look

forward

to

serving

your

future

investment

needs.

Sonal

Desai,

Ph.D.

Tina

Chou

David

Yuen,

CFA,

FRM

Patrick

Klein,

Ph.D.

Portfolio

Management

Team

The

foregoing

information

reflects

our

analysis,

opinions

and

portfolio

holdings

as

of

October

31,

2021,

the

end

of

the

reporting

period.

The

way

we

implement

our

main

investment

strategies

and

the

resulting

portfolio

holdings

may

change

depending

on

factors

such

as

market

and

economic

conditions.

These

opinions

may

not

be

relied

upon

as

investment

advice

or

an

offer

for

a

particular

security.

The

information

is

not

a

complete

analysis

of

every

aspect

of

any

market,

country,

industry,

security

or

the

Fund.

Statements

of

fact

are

from

sources

considered

reliable,

but

the

investment

manager

makes

no

representation

or

warranty

as

to

their

completeness

or

accuracy.

Although

historical

performance

is

no

guarantee

of

future

results,

these

insights

may

help

you

understand

our

investment

management

philosophy.

Performance

Summary

as

of

October

31,

2021

Franklin

Total

Return

Fund

25

franklintempleton.com

Annual

Report

The

performance

tables

and

graphs

do

not

reflect

any

taxes

that

a

shareholder

would

pay

on

Fund

dividends,

capital

gain

distributions,

if

any,

or

any

realized

gains

on

the

sale

of

Fund

shares.

Total

return

reflects

reinvestment

of

the

Fund’s

dividends

and

capital

gain

distributions,

if

any,

and

any

unrealized

gains

or

losses.

Your

dividend

income

will

vary

depending

on

dividends

or

interest

paid

by

securities

in

the

Fund’s

portfolio,

adjusted

for

operating

expenses

of

each

class.

Capital

gain

distributions

are

net

profits

realized

from

the

sale

of

portfolio

securities.

Performance

as

of

10/31/21

1

Cumulative

total

return

excludes

sales

charges.

Average

annual

total

return

includes

maximum

sales

charges.

Sales

charges

will

vary

depending

on

the

size

of

the

investment

and

the

class

of

share

purchased.

The

maximum

is

3.75%

and

the

minimum

is

0%.

Class

A:

3.75%

maximum

initial

sales

charge;

Advisor

Class:

no

sales

charges.

For

other

share

classes,

visit

franklintempleton.com.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

For

most

recent

month-end

performance,

go

to

franklintempleton.com

or

call

(800)

342-5236

.

Share

Class

Cumulative

Total

Return

2

Average

Annual

Total

Return

3

–

A

4

1-Year

+2.12%

-1.70%

5-Year

+15.93%

+2.21%

10-Year

+35.86%

+2.72%

Advisor

1-Year

+2.36%

+2.36%

5-Year

+17.30%

+3.24%

10-Year

+39.23%

+3.37%

30-Day

Standardized

Yield

6

Share

Class

Distribution

Rate

5

(with

fee

waiver)

(without

fee

waiver)

A

1.82%

1.43%

1.35%

Advisor

2.12%

1.72%

1.64%

See

page

27

for

Performance

Summary

footnotes.

Franklin

Total

Return

Fund

Performance

Summary

26

franklintempleton.com

Annual

Report

Total

Return

Index

Comparison

for

a

Hypothetical

$10,000

Investment

1

Total

return

represents

the

change

in

value

of

an

investment

over

the

periods

shown.

It

includes

any

applicable

maximum

sales

charge,

Fund

expenses,

account

fees

and

reinvested

distributions.

The

unmanaged

index

includes

reinvestment

of

any

income

or

distributions.

It

differs

from

the

Fund

in

composition

and

does

not

pay

management

fees

or

expenses.

One

cannot

invest

directly

in

an

index.

Class

A

(11/1/11–10/31/21)

Advisor

Class

(11/1/11–10/31/21)

Franklin

Total

Return

Fund

Performance

Summary

27

franklintempleton.com

Annual

Report

Each

class

of

shares

is

available

to

certain

eligible

investors

and

has

different

annual

fees

and

expenses,

as

described

in

the

prospectus.

All

investments

involve

risks,

including

loss

of

principal.

Interest

rate

movements

and

mortgage

prepayments

will

affect

the

Fund’s

share

price

and

yield.

Bond

prices

generally

move

in

the

opposite

direction

of

interest

rates.

Thus,

as

the

prices

of

bonds

in

the

Fund

adjust

to

a

rise

in

interest

rates,

the

Fund’s

share

price

may

decline.

Changes

in

the

financial

strength

of

a

bond

issuer

or

in

a

bond’s

credit

rating

may

affect

its

value.

The

risks

associated

with

higher-yielding,

low-

er-rated

securities

include

higher

risk

of

default

and

loss

of

principal.

Investment

in

foreign

securities

also

involves

special

risks,

including

currency

fluctuations,

and

political

and

economic

uncertainty.

Derivatives,

including

currency

management

strategies,

involve

costs

and

can

create

economic

leverage

in

the

portfolio

which

may

result

in

significant

volatility

and

cause

the

Fund

to

participate

in

losses

(as

well

as

gains)

on

an

amount

that

exceeds

the

Fund’s

initial

investment.

The

Fund

may

not

achieve

the

anticipated

benefits,

and

may

realize

losses

when

a

counterparty

fails

to

perform.

Events

such

as

the

spread

of

deadly

diseases,

disasters,

and

financial,

political

or

social

disruptions,

may

heighten

risks

and

adversely

affect

performance.

The

Fund’s

prospectus

also

includes

a

description

of

the

main

investment

risks.

1.

The

Fund

has

an

expense

reduction

and

a

fee

waiver

associated

with

any

investments

it

makes

in

a

Franklin

Templeton

money

fund

and/or

other

Franklin

Templeton

fund,

contractually

guaranteed

through

2/28/22.

Fund

investment

results

reflect

the

expense

reduction

and

fee

waiver;

without

these

reductions,

the

results

would

have

been

lower.

2.

Cumulative

total

return

represents

the

change

in

value

of

an

investment

over

the

periods

indicated.

3.

Average

annual

total

return

represents

the

average

annual

change

in

value

of

an

investment

over

the

periods

indicated.

Return

for

less

than

one

year,

if

any,

has

not

been

annualized.

4.

Prior

to

3/1/19,

these

shares

were

offered

at

a

higher

initial

sales

charge

of

4.25%,

thus

actual

returns

(with

sales

charges)

would

have

differed.

Average

annual

total

returns

(with

sales

charges)

have

been

restated

to

reflect

the

current

maximum

initial

sales

charge

of

3.75%.

5.

Distribution

rate

is

based

on

an

annualization

of

the

sum

of

the

respective

class’s

past

month’s

daily

distributions

and

the

maximum

offering

price

(NAV

for

Advisor

Class)

per

share

on

4/30/21.

6.

The

Fund’s

30-day

standardized

yield

is

calculated

over

a

trailing

30-day

period

using

the

yield

to

maturity

on

bonds

and/or

the

dividends

accrued

on

stocks.

It

may

not

equal

the

Fund’s

actual

income

distribution

rate,

which

reflects

the

Fund’s

past

dividends

paid

to

shareholders.

7.

Source:

Morningstar.

The

Bloomberg

U.S.

Aggregate

Bond

measures

the

performance

of

the

investment-grade,

U.S.

dollar-denominated,

fixed-rate

taxable

bond

market.

The

index

includes

Treasuries,

government-related

and

corporate

securities,

mortgage-backed

securities

(agency

fixed-rate

and

hybrid

adjustable-rate

mortgage

pass-

throughs),

asset-backed

securities

and

commercial

mortgage-backed

securities

(agency

and

nonagency).

8.

Figures

are

as

stated

in

the

Fund’s

current

prospectus

and

may

differ

from

the

expense

ratios

disclosed

in

the

Your

Fund’s

Expenses

and

Financial

Highlights

sections

in

this

report.

In

periods

of

market

volatility,

assets

may

decline

significantly,

causing

total

annual

Fund

operating

expenses

to

become

higher

than

the

figures

shown.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

Distributions

(11/1/20–10/31/21)

Share

Class

Net

Investment

Income

A

$0.271909

C

$0.232312

R

$0.247133

R6

$0.308317

Advisor

$0.296869

Total

Annual

Operating

Expenses

8

Share

Class

With

Fee

Waiver

Without

Fee

Waiver

A

0.90%

0.95%

Advisor

0.65%

0.70%

Your

Fund’s

Expenses

Franklin

Total

Return

Fund

28

franklintempleton.com

Annual

Report

As

a

Fund

shareholder,

you

can

incur

two

types

of

costs:

(1)

transaction

costs,

including

sales

charges

(loads)

on

Fund

purchases

and

redemptions;

and

(2)

ongoing

Fund

costs,

including

management

fees,

distribution

and

service

(12b-1)

fees,

and

other

Fund

expenses.

All

mutual

funds

have

ongoing

costs,

sometimes

referred

to

as

operating

expenses.

The

table

below

shows

ongoing

costs

of

investing

in

the

Fund

and

can

help

you

understand

these

costs

and

compare

them

with

those

of

other

mutual

funds.

The

table

assumes

a

$1,000

investment

held

for

the

six

months

indicated.

Actual

Fund

Expenses

The

table

below

provides

information

about

actual

account

values

and

actual

expenses

in

the

columns

under

the

heading

“Actual.”

In

these

columns

the

Fund’s

actual

return,

which

includes

the

effect

of

Fund

expenses,

is

used

to

calculate

the

“Ending

Account

Value”

for

each

class

of

shares.

You

can

estimate

the

expenses

you

paid

during

the

period

by

following

these

steps

(

of

course,

your

account

value

and

expenses

will

differ

from

those

in

this

illustration

):

Divide

your

account

value

by

$1,000

(

if

your

account

had

an

$8,600

value,

then

$8,600

÷

$1,000

=

8.6

).

Then

multiply

the

result

by

the

number

in

the

row

for

your

class

of

shares

under

the

headings

“Actual”

and

“Expenses

Paid

During

Period”

(

if

Actual

Expenses

Paid

During

Period

were

$7.50,

then

8.6

x

$7.50

=$64.50

).

In

this

illustration,

the

actual

expenses

paid

this

period

are

$64.50.

Hypothetical

Example

for

Comparison

with

Other

Funds

Under

the

heading

“Hypothetical”

in

the

table,

information

is

provided

about

hypothetical

account

values

and

hypothetical

expenses

based

on

the

Fund’s

actual

expense

ratio

and

an

assumed

rate

of

return

of

5%

per

year

before

expenses,

which

is

not

the

Fund’s

actual

return.

This

information

may

not

be

used

to

estimate

the

actual

ending

account

balance

or

expenses

you

paid

for

the

period,

but

it

can

help

you

compare

ongoing

costs

of

investing

in

the

Fund

with

those

of

other

funds.

To

do

so,

compare

this

5%

hypothetical

example

for

the

class

of

shares

you

hold

with

the

5%

hypothetical

examples

that

appear

in

the

shareholder

reports

of

other

funds.

Please

note

that

expenses

shown

in

the

table

are

meant

to

highlight

ongoing

costs

and

do

not

reflect

any

transactional

costs.

Therefore,

information

under

the

heading

“Hypothetical”

is

useful

in

comparing

ongoing

costs

only,

and

will

not

help

you

compare

total

costs

of

owning

different

funds.

In

addition,

if

transactional

costs

were

included,

your

total

costs

would

have

been

higher.

1.

Expenses

are

equal

to

the

annualized

expense

ratio

for

the

six-month

period

as

indicated

above—in

the

far

right

column—multiplied

by

the

simple

average

account

value

over

the

period

indicated,

and

then

multiplied

by

184/365

to

reflect

the

one-half

year

period.

2.

Reflects

expenses

after

fee

waivers

and

expense

reimbursements.

Does

not

include

acquired

fund

fees

and

expenses.

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Share

Class

Beginning

Account

Value

5/1/21

Ending

Account

Value

10/31/21

Expenses

Paid

During

Period

5/1/21–10/31/21

1,2

Ending

Account

Value

10/31/21

Expenses

Paid

During

Period

5/1/21–10/31/21

1,2

a

Net

Annualized

Expense

Ratio

2

A

$1,000

$1,015.60

$4.21

$1,021.03

$4.22

0.83%

C

$1,000

$1,013.70

$6.29

$1,018.96

$6.31

1.24%

R

$1,000

$1,014.40

$5.51

$1,019.74

$5.52

1.08%

R6

$1,000

$1,017.30

$2.32

$1,022.91

$2.32

0.46%

Advisor

$1,000

$1,016.70

$2.95

$1,022.28

$2.96

0.58%

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Adjustable

U.S.

Government

Securities

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

29

a

Year

Ended

October

31,

2021

2020

2019

2018

2017

Class

A

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

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

$7.95

$8.02

$8.10

$8.24

$8.40

Income

from

investment

operations

a

:

Net

investment

income

(loss)

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

(0.006)

b

0.125

b

0.140

b

0.088

b

0.026

Net

realized

and

unrealized

gains

(losses)

...........

0.022

(0.025)

0.021

(0.035)

(0.031)

Total

from

investment

operations

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

0.016

0.100

0.161

0.053

(0.005)

Less

distributions

from:

Net

investment

income

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

(0.076)

(0.170)

(0.241)

(0.193)

(0.155)

Net

asset

value,

end

of

year

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

$7.89

$7.95

$8.02

$8.10

$8.24

Total

return

c

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

0.20%

1.26%

2.01%

0.65%

(0.06)%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.97%

0.97%

0.95%

0.96%

0.95%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

0.91%

0.96%

d

0.94%

d

0.95%

d

0.94%

d

Net

investment

income

(loss)

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

(0.07)%

1.57%

1.73%

1.07%

0.54%

Supplemental

data

Net

assets,

end

of

year

(000’s)

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

$432,447

$460,621

$393,736

$419,055

$492,319

Portfolio

turnover

rate

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

68.61%

35.03%

12.72%

11.39%

2.81%

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchas-

es

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Adjustable

U.S.

Government

Securities

Fund

(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

30

a

Year

Ended

October

31,

2021

2020

2019

2018

2017

Class

A1

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

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

$7.95

$8.02

$8.09

$8.24

$8.40

Income

from

investment

operations

a

:

Net

investment

income

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

0.006

b

0.137

b

0.151

b

0.100

b

0.059

Net

realized

and

unrealized

gains

(losses)

...........

0.012

(0.024)

0.031

(0.044)

(0.051)

Total

from

investment

operations

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

0.018

0.113

0.182

0.056

0.008

Less

distributions

from:

Net

investment

income

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

(0.088)

(0.182)

(0.252)

(0.206)

(0.168)

Net

asset

value,

end

of

year

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

$7.88

$7.95

$8.02

$8.09

$8.24

Total

return

c

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

0.23%

1.41%

2.29%

0.68%

0.10%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.82%

0.82%

0.80%

0.80%

0.79%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

0.77%

0.81%

d

0.79%

d

0.79%

d

0.78%

d

Net

investment

income

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

0.08%

1.72%

1.88%

1.23%

0.70%

Supplemental

data

Net

assets,

end

of

year

(000’s)

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

$66,942

$77,910

$86,471

$100,477

$121,012

Portfolio

turnover

rate

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

68.61%

35.03%

12.72%

11.39%

2.81%

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchas-

es

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Adjustable

U.S.

Government

Securities

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

31

a

Year

Ended

October

31,

2021

2020

2019

2018

2017

Class

C

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

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

$7.95

$8.02

$8.09

$8.24

$8.40

Income

from

investment

operations

a

:

Net

investment

income

(loss)

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

(0.035)

b

0.093

b

0.106

b

0.054

b

(0.014)

Net

realized

and

unrealized

gains

(losses)

...........

0.010

(0.024)

0.032

(0.044)

(0.024)

Total

from

investment

operations

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

(0.025)

0.069

0.138

0.010

(0.038)

Less

distributions

from:

Net

investment

income

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

(0.045)

(0.138)

(0.208)

(0.160)

(0.122)

Net

asset

value,

end

of

year

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

$7.88

$7.95

$8.02

$8.09

$8.24

Total

return

c

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

(0.32)%

0.86%

1.73%

0.13%

(0.45)%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

1.38%

1.37%

1.35%

1.36%

1.35%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

1.33%

1.36%

d

1.34%

d

1.35%

d

1.34%

d

Net

investment

income

(loss)

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

(0.45)%

1.16%

1.33%

0.67%

0.14%

Supplemental

data

Net

assets,

end

of

year

(000’s)

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

$36,318

$71,212

$84,685

$126,585

$189,634

Portfolio

turnover

rate

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

68.61%

35.03%

12.72%

11.39%

2.81%

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchas-

es

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Adjustable

U.S.

Government

Securities

Fund

(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

32

a

Year

Ended

October

31,

2021

2020

2019

2018

2017

Class

R6

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

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

$7.97

$8.03

$8.11

$8.25

$8.41

Income

from

investment

operations

a

:

Net

investment

income

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

0.021

b

0.154

b

0.169

b

0.121

b

0.074

Net

realized

and

unrealized

gains

(losses)

...........

0.014

(0.014)

0.021

(0.037)

(0.046)

Total

from

investment

operations

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

0.035

0.140

0.190

0.084

0.028

Less

distributions

from:

Net

investment

income

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

(0.105)

(0.199)

(0.270)

(0.224)

(0.188)

Net

asset

value,

end

of

year

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

$7.90

$7.97

$8.03

$8.11

$8.25

Total

return

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

0.44%

1.75%

2.39%

1.03%

0.34%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.63%

0.64%

0.62%

0.62%

0.58%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

0.55%

0.60%

c

0.58%

c

0.57%

c

0.55%

c

Net

investment

income

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

0.27%

1.93%

2.09%

1.45%

0.93%

Supplemental

data

Net

assets,

end

of

year

(000’s)

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

$41,913

$33,530

$31,953

$36,026

$2,196

Portfolio

turnover

rate

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

68.61%

35.03%

12.72%

11.39%

2.81%

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchas-

es

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Investors

Securities

Trust

Financial

Highlights

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Adjustable

U.S.

Government

Securities

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

33

a

Year

Ended

October

31,

2021

2020

2019

2018

2017

Advisor

Class

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

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

$7.96

$8.03

$8.10

$8.25

$8.41

Income

from

investment

operations

a

:

Net

investment

income

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

0.014

b

0.146

b

0.160

b

0.108

b

0.052

Net

realized

and

unrealized

gains

(losses)

...........

0.012

(0.025)

0.031

(0.044)

(0.036)

Total

from

investment

operations

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

0.026

0.121

0.191

0.064

0.016

Less

distributions

from:

Net

investment

income

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

(0.096)

(0.190)

(0.261)

(0.214)

(0.176)

Net

asset

value,

end

of

year

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

$7.89

$7.96

$8.03

$8.10

$8.25

Total

return

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

0.33%

1.51%

2.39%

0.78%

0.20%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.72%

0.72%

0.70%

0.71%

0.70%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

0.66%

0.71%

c

0.69%

c

0.70%

c

0.69%

c

Net

investment

income

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

0.18%

1.82%

1.98%

1.32%

0.79%

Supplemental

data

Net

assets,

end

of

year

(000’s)

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

$86,615

$98,851

$103,639

$112,441

$184,299

Portfolio

turnover

rate

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

68.61%

35.03%

12.72%

11.39%

2.81%

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchas-

es

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Investors

Securities

Trust

Statement

of

Investments,

October

31,

2021

Franklin

Adjustable

U.S.

Government

Securities

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

34

a

a

Principal

Amount

a

Value

a

a

a

a

a

Commercial

Mortgage-Backed

Securities

17.1%

Diversified

Financial

Services

0.1%

a

GNMA

,

2010-12

,

FD

,

FRN

,

0.686

%

,

(

1-month

USD

LIBOR

+

0.6

%

),

1/16/40

.......

$

764,510

$

774,567

Thrifts

&

Mortgage

Finance

17.0%

a

FHLMC

,

4988,

AF,

FRN,

0.436%,

(1-month

USD

LIBOR

+

0.35%),

10/15/37

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

7,699,783

7,738,362

4891,

AF,

FRN,

0.486%,

(1-month

USD

LIBOR

+

0.4%),

7/15/42

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

13,250,311

13,328,201

343,

F4,

FRN,

0.436%,

Strip,

(1-month

USD

LIBOR

+

0.35%),

10/15/37

.........

7,554,748

7,621,054

4915,

FE,

FRN,

0.486%,

(1-month

USD

LIBOR

+

0.4%),

2/15/38

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

12,710,146

12,781,800

4895,

GF,

FRN,

0.486%,

(1-month

USD

LIBOR

+

0.4%),

11/15/43

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

10,245,695

10,313,301

4197,

KF,

FRN,

0.386%,

(1-month

USD

LIBOR

+

0.3%),

9/15/37

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

3,512,524

3,532,003

4107,

KF,

FRN,

0.476%,

(1-month

USD

LIBOR

+

0.39%),

6/15/38

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

3,939,556

3,971,121

4215,

KF,

FRN,

0.386%,

(1-month

USD

LIBOR

+

0.3%),

2/15/40

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

3,325,751

3,342,428

4845,

QF,

FRN,

0.39%,

(1-month

USD

LIBOR

+

0.3%),

12/15/48

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

6,998,414

7,031,909

4730,

WF,

FRN,

0.436%,

(1-month

USD

LIBOR

+

0.35%),

8/15/38

.............

6,206,607

6,223,645

a

FNMA

,

2019-38,

AF,

FRN,

0.486%,

(1-month

USD

LIBOR

+

0.4%),

7/25/49

............

6,890,962

6,930,750

2019-59,

BF,

FRN,

0.486%,

(1-month

USD

LIBOR

+

0.4%),

10/25/49

...........

11,828,602

11,901,682

2019-38,

CF,

FRN,

0.539%,

(1-month

USD

LIBOR

+

0.45%),

7/25/49

...........

2,009,111

2,029,431

2020-54,

WF,

FRN,

0.536%,

(1-month

USD

LIBOR

+

0.45%),

8/25/50

..........

7,139,491

7,176,519

2021-36,

YF,

FRN,

0.25%,

(30-day

SOFR

Average

+

0.2%),

6/25/61

............

8,796,022

8,799,569

112,721,775

a

a

a

a

a

Total

Commercial

Mortgage-Backed

Securities

(Cost

$113,371,422)

...............

113,496,342

Mortgage-Backed

Securities

80.2%

b

Federal

Home

Loan

Mortgage

Corp.

(FHLMC)

Adjustable

Rate

14.7%

FHLMC,

1.595%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

9/01/35

..............

2,803,355

2,928,986

FHLMC,

1.931%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

6/01/47

..............

11,773,431

12,276,736

FHLMC,

1.948%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

5/01/45

..............

3,043,201

3,173,349

FHLMC,

2.014%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

10/01/43

.............

3,942,020

4,165,178

FHLMC,

2.083%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

7/01/43

..............

3,580,771

3,782,207

FHLMC,

2.113%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

7/01/43

..............

3,907,316

4,136,533

FHLMC,

2.128%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

9/01/37

..............

7,619,915

8,085,851

FHLMC,

2.144%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

7/01/35

..............

3,341,358

3,544,022

FHLMC,

2.232%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

11/01/40

.............

2,018,586

2,144,995

FHLMC,

2.243%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

6/01/37

..............

3,398,747

3,624,731

FHLMC,

2.309%,

(1-year

CMT

T-Note

+/-

MBS

Margin),

3/01/35

................

2,018,177

2,158,748

FHLMC,

2.559%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

1/01/44

..............

4,090,537

4,308,122

FHLMC,

1.677%

-

3.585%,

(6-month

USD

LIBOR

+/-

MBS

Margin),

8/01/33

-

11/01/41

41,055,271

43,253,335

97,582,793

Federal

Home

Loan

Mortgage

Corp.

(FHLMC)

Fixed

Rate

10.8%

FHLMC

Pool,

15

Year,

2%,

7/01/36

......................................

33,148,415

34,052,511

FHLMC

Pool,

15

Year,

2.5%,

3/01/35

.....................................

19,422,862

20,376,567

FHLMC

Pool,

15

Year,

2.5%,

3/01/35

.....................................

16,915,881

17,745,712

72,174,790

b

Federal

National

Mortgage

Association

(FNMA)

Adjustable

Rate

46.8%

FNMA,

1.733%,

(6-month

USD

LIBOR

+/-

MBS

Margin),

12/01/34

...............

2,378,981

2,471,876

FNMA,

1.739%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

2/01/36

...............

2,788,076

2,922,562

FNMA,

1.864%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

3/01/37

...............

2,083,071

2,196,461

FNMA,

1.919%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

3/01/35

...............

3,549,600

3,738,017

FNMA,

1.955%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

1/01/36

...............

1,976,409

2,082,753

FNMA,

1.964%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

9/01/38

...............

7,602,002

8,048,081

FNMA,

1.986%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

1/01/39

...............

2,749,646

2,892,476

FNMA,

1.996%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

4/01/47

...............

31,096,061

32,896,240

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Adjustable

U.S.

Government

Securities

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

35

See

Abbreviations

on

page

156

.

a

a

Principal

Amount

a

Value

a

a

a

a

a

Mortgage-Backed

Securities

(continued)

b

Federal

National

Mortgage

Association

(FNMA)

Adjustable

Rate

(continued)

FNMA,

2.01%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

4/01/40

................

$

4,824,597

$

5,098,795

FNMA,

2.031%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

4/01/44

...............

64,905,081

68,814,787

FNMA,

2.035%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

7/01/42

...............

4,798,970

5,087,182

FNMA,

2.045%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

11/01/34

..............

2,678,727

2,828,616

FNMA,

2.11%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

1/01/37

................

2,163,420

2,290,775

FNMA,

2.28%,

(1-year

CMT

T-Note

+/-

MBS

Margin),

1/01/38

..................

2,213,036

2,371,994

FNMA,

2.301%,

(1-year

CMT

T-Note

+/-

MBS

Margin),

5/01/36

.................

8,081,197

8,644,209

FNMA,

2.55%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

9/01/45

................

6,655,936

6,973,351

FNMA,

2.965%,

(COFI

11th

District

+/-

MBS

Margin),

4/01/34

..................

9,308,303

9,989,369

FNMA,

0.865%

-

6.12%,

(1-month

USD

LIBOR

+/-

MBS

Margin),

4/01/22

-

5/01/48

..

137,217,232

141,628,236

FNMA,

2.115%

-

6.31%,

(6-month

H15BDI

+/-

MBS

Margin),

12/01/21

-

11/01/34

....

61,600

62,829

311,038,609

Federal

National

Mortgage

Association

(FNMA)

Fixed

Rate

7.8%

FNMA,

15

Year,

2%,

7/01/36

...........................................

33,147,532

34,051,604

FNMA,

15

Year,

2%,

10/01/36

..........................................

6,654,371

6,835,864

FNMA,

15

Year,

2.5%,

3/01/35

.........................................

10,036,642

10,526,141

51,413,609

b

Government

National

Mortgage

Association

(GNMA)

Adjustable

Rate

0.1%

GNMA

II,

1.625%

-

2.125%,

(1-year

CMT

T-Note

+/-

MBS

Margin),

9/20/33

-

5/20/36

.

390,855

403,358

403,358

Total

Mortgage-Backed

Securities

(Cost

$532,065,340)

...........................

532,613,159

Total

Long

Term

Investments

(Cost

$645,436,762)

...............................

646,109,501

a

a

a

a

a

Short

Term

Investments

2.2%

Shares

a

Money

Market

Funds

2.2%

c,d

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

...................

14,899,131

14,899,131

Total

Money

Market

Funds

(Cost

$14,899,131)

..................................

14,899,131

Total

Short

Term

Investments

(Cost

$14,899,131

)

................................

14,899,131

a

Total

Investments

(Cost

$660,335,893)

99.5%

...................................

$661,008,632

Other

Assets,

less

Liabilities

0.5%

.............................................

3,225,544

Net

Assets

100.0%

...........................................................

$664,234,176

a

The

coupon

rate

shown

represents

the

rate

inclusive

of

any

caps

or

floors,

if

applicable,

in

effect

at

period

end.

b

Adjustable

Rate

Mortgage-Backed

Security

(ARM);

the

rate

shown

is

the

effective

rate

at

period

end.

ARM

rates

are

not

based

on

a

published

reference

rate

and

spread,

but

instead

pass-through

weighted

average

interest

income

inclusive

of

any

caps

or

floors,

if

applicable,

from

the

underlying

mortgage

loans

in

which

the

majority

of

mortgages

pay

interest

based

on

the

index

shown

at

their

designated

reset

dates

plus

a

spread,

less

the

applicable

servicing

and

guaranty

fee

(MBS

margin).

c

See

Note

3(f)

regarding

investments

in

affiliated

management

investment

companies.

d

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Floating

Rate

Daily

Access

Fund

franklintempleton.com

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Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

36

a

Year

Ended

October

31,

2021

2020

2019

2018

2017

Class

A

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$7.35

$8.18

$8.70

$8.83

$8.84

Income

from

investment

operations

a

:

Net

investment

income

..........................

0.296

b

0.332

b

0.441

b

0.396

0.307

Net

realized

and

unrealized

gains

(losses)

...........

0.545

(0.808)

(0.515)

(0.129)

(0.011)

Total

from

investment

operations

....................

0.841

(0.476)

(0.074)

0.267

0.296

Less

distributions

from:

Net

investment

income

..........................

(0.301)

(0.355)

(0.446)

(0.397)

(0.306)

Net

asset

value,

end

of

year

.......................

$7.89

$7.35

$8.18

$8.70

$8.83

Total

return

c

...................................

11.79%

(6.00)%

(0.88)%

2.97%

3.51%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

1.00%

0.96%

0.89%

0.87%

0.87%

Expenses

net

of

waiver

and

payments

by

affiliates

d

......

0.98%

0.93%

0.86%

0.81%

0.82%

Net

investment

income

...........................

3.86%

4.33%

5.21%

4.53%

3.45%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$803,542

$717,021

$1,049,359

$1,344,473

$1,362,220

Portfolio

turnover

rate

............................

66.03%

32.39%

23.23%

e

58.07%

64.21%

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

e

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Floating

Rate

Daily

Access

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

37

a

Year

Ended

October

31,

2021

2020

2019

2018

2017

Class

C

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$7.36

$8.18

$8.70

$8.83

$8.84

Income

from

investment

operations

a

:

Net

investment

income

..........................

0.268

b

0.306

b

0.407

b

0.364

0.271

Net

realized

and

unrealized

gains

(losses)

...........

0.532

(0.804)

(0.514)

(0.131)

(0.010)

Total

from

investment

operations

....................

0.800

(0.498)

(0.107)

0.233

0.261

Less

distributions

from:

Net

investment

income

..........................

(0.270)

(0.323)

(0.413)

(0.363)

(0.271)

Net

asset

value,

end

of

year

.......................

$7.89

$7.36

$8.18

$8.70

$8.83

Total

return

c

...................................

11.34%

(6.39)%

(1.39)%

2.68%

3.11%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

1.40%

1.36%

1.29%

1.27%

1.27%

Expenses

net

of

waiver

and

payments

by

affiliates

d

......

1.38%

1.33%

1.26%

1.21%

1.22%

Net

investment

income

...........................

3.50%

3.98%

4.81%

4.13%

3.05%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$100,317

$160,194

$296,134

$438,480

$550,797

Portfolio

turnover

rate

............................

66.03%

32.39%

23.23%

e

58.07%

64.21%

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

e

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Floating

Rate

Daily

Access

Fund

(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

38

a

Year

Ended

October

31,

2021

2020

2019

2018

2017

Class

R6

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$7.37

$8.19

$8.71

$8.84

$8.84

Income

from

investment

operations

a

:

Net

investment

income

..........................

0.317

b

0.363

b

0.463

b

0.427

0.338

Net

realized

and

unrealized

gains

(losses)

...........

0.541

(0.804)

(0.508)

(0.130)

(0.002)

Total

from

investment

operations

....................

0.858

(0.441)

(0.045)

0.297

0.336

Less

distributions

from:

Net

investment

income

..........................

(0.328)

(0.380)

(0.475)

(0.427)

(0.336)

Net

asset

value,

end

of

year

.......................

$7.90

$7.37

$8.19

$8.71

$8.84

Total

return

....................................

12.15%

(5.69)%

(0.54)%

3.43%

3.85%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.72%

0.69%

0.57%

0.55%

0.52%

Expenses

net

of

waiver

and

payments

by

affiliates

c

......

0.63%

0.59%

0.53%

0.48%

0.47%

Net

investment

income

...........................

4.09%

4.71%

5.54%

4.86%

3.80%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$24,999

$9,568

$18,764

$142,075

$130,180

Portfolio

turnover

rate

............................

66.03%

32.39%

23.23%

d

58.07%

64.21%

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchas-

es

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

d

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

Franklin

Investors

Securities

Trust

Financial

Highlights

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Floating

Rate

Daily

Access

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(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

39

a

Year

Ended

October

31,

2021

2020

2019

2018

2017

Advisor

Class

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$7.36

$8.18

$8.71

$8.84

$8.85

Income

from

investment

operations

a

:

Net

investment

income

..........................

0.315

b

0.358

b

0.463

b

0.418

0.327

Net

realized

and

unrealized

gains

(losses)

...........

0.535

(0.806)

(0.525)

(0.129)

(0.010)

Total

from

investment

operations

....................

0.850

(0.448)

(0.062)

0.289

0.317

Less

distributions

from:

Net

investment

income

..........................

(0.320)

(0.373)

(0.468)

(0.419)

(0.327)

Net

asset

value,

end

of

year

.......................

$7.89

$7.36

$8.18

$8.71

$8.84

Total

return

....................................

12.06%

(5.78)%

(0.74)%

3.35%

3.64%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.75%

0.71%

0.64%

0.62%

0.62%

Expenses

net

of

waiver

and

payments

by

affiliates

c

......

0.73%

0.68%

0.61%

0.56%

0.57%

Net

investment

income

...........................

4.09%

4.65%

5.46%

4.78%

3.70%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$434,688

$376,997

$858,071

$1,743,880

$1,672,724

Portfolio

turnover

rate

............................

66.03%

32.39%

23.23%

d

58.07%

64.21%

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

d

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

Franklin

Investors

Securities

Trust

Statement

of

Investments,

October

31,

2021

Franklin

Floating

Rate

Daily

Access

Fund

franklintempleton.com

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The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

40

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

6.2%

Hotels,

Restaurants

&

Leisure

0.0%

†

24

Hour

Fitness

Worldwide,

Inc.

..........................

United

States

287,830

$

599,694

Machinery

1.0%

a

UTEX

Industries,

Inc.

..................................

United

States

261,340

13,067,000

Oil,

Gas

&

Consumable

Fuels

2.8%

a,b

Quarternorth

Energy

Holding,

Inc.

.........................

United

States

370,321

38,698,545

Paper

&

Forest

Products

2.3%

a,b,c,d

Appvion

Operations,

Inc.

................................

United

States

1,219,956

31,283,822

Road

&

Rail

0.1%

a,c

Onsite

Rental

Group

Operations

Pty.

Ltd.

...................

Australia

11,563,612

1,380,592

Total

Common

Stocks

(Cost

$83,286,020)

......................................

85,029,653

Management

Investment

Companies

3.2%

Capital

Markets

3.2%

e

Franklin

Floating

Rate

Income

Fund

.......................

United

States

4,630,114

37,735,428

f

Invesco

Senior

Loan

ETF

...............................

United

States

280,416

6,191,585

43,927,013

Total

Management

Investment

Companies

(Cost

$51,562,905)

....................

43,927,013

Preferred

Stocks

0.2%

Hotels,

Restaurants

&

Leisure

0.2%

a

24

Hour

Fitness

Worldwide,

Inc.

..........................

United

States

681,685

2,045,055

a

Total

Preferred

Stocks

(Cost

$919,936)

.........................................

2,045,055

Warrants

Warrants

1.2%

Machinery

0.0%

†

a,c

UTEX

Industries,

Inc.,

2/20/49

............................

United

States

634

1,351

Oil,

Gas

&

Consumable

Fuels

1.2%

a,b

Quarternorth

Energy

Holding,

Inc.,

2/01/49

..................

United

States

145,487

15,858,083

Total

Warrants

(Cost

$17,531,183)

.............................................

15,859,434

Principal

Amount

*

Corporate

Bonds

5.6%

Airlines

1.0%

g

American

Airlines

Inc

/

AAdvantage

Loyalty

IP

Ltd.

,

Senior

Secured

Note

,

144A,

5.5

%

,

4/20/26

.............................

United

States

5,800,000

6,091,450

g

Delta

Air

Lines,

Inc.

/

SkyMiles

IP

Ltd.

,

Senior

Secured

Note

,

144A,

4.5

%

,

10/20/25

.....................................

United

States

6,000,000

6,403,215

g

United

Airlines,

Inc.

,

Senior

Secured

Note

,

144A,

4.375

%

,

4/15/26

.

United

States

585,000

605,896

13,100,561

Chemicals

0.4%

g

SCIH

Salt

Holdings,

Inc.

,

Senior

Secured

Note

,

144A,

4.875

%

,

5/01/28

...........................................

United

States

3,900,000

3,817,125

g

Unifrax

Escrow

Issuer

Corp.

,

Senior

Secured

Note

,

144A,

5.25

%

,

9/30/28

...........................................

United

States

1,935,400

1,932,981

5,750,106

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Floating

Rate

Daily

Access

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

41

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Communications

Equipment

0.1%

g

CommScope

,

Inc.

,

Senior

Secured

Note

,

144A,

4.75

%

,

9/01/29

...

United

States

2,019,200

$

1,983,763

Construction

Materials

0.3%

g

Cemex

SAB

de

CV

,

Senior

Bond

,

144A,

5.2

%

,

9/17/30

.........

Mexico

3,875,000

4,200,655

Containers

&

Packaging

0.3%

g

Pactiv

Evergreen

Group

Issuer

LLC

/

Pactiv

Evergreen

Group

Issuer,

Inc.

,

Senior

Secured

Note

,

144A,

4.375

%

,

10/15/28

..........

United

States

1,125,000

1,110,937

g

Pactiv

Evergreen

Group

Issuer,

Inc./Pactiv

Evergreen

Group

Issuer

LLC/Reynolds

Group

Holdings

Ltd.

,

Senior

Secured

Note

,

144A,

4

%

,

10/15/27

.......................................

United

States

2,500,000

2,449,375

3,560,312

Diversified

Consumer

Services

0.3%

g

WW

International,

Inc.

,

Senior

Secured

Note

,

144A,

4.5

%

,

4/15/29

United

States

3,500,000

3,355,625

Diversified

Financial

Services

0.1%

g

MPH

Acquisition

Holdings

LLC

,

Senior

Secured

Note

,

144A,

5.5

%

,

9/01/28

...........................................

United

States

1,334,000

1,326,373

Diversified

Telecommunication

Services

0.4%

g

Altice

France

SA

,

Senior

Secured

Note,

144A,

5.125%,

7/15/29

..............

France

2,000,000

1,950,360

Senior

Secured

Note,

144A,

5.5%,

10/15/29

...............

France

3,730,000

3,660,883

5,611,243

Energy

Equipment

&

Services

0.1%

g

Weatherford

International

Ltd.

,

Senior

Secured

Note

,

144A,

6.5

%

,

9/15/28

...........................................

United

States

714,300

755,372

Hotels,

Restaurants

&

Leisure

0.0%

†

g

International

Game

Technology

plc

,

Senior

Secured

Note

,

144A,

5.25

%

,

1/15/29

.....................................

United

States

500,000

526,250

Independent

Power

and

Renewable

Electricity

Producers

0.1%

g

Talen

Energy

Supply

LLC

,

Senior

Secured

Note

,

144A,

6.625

%

,

1/15/28

...........................................

United

States

1,556,000

1,473,244

Insurance

0.1%

g

Acrisure

LLC

/

Acrisure

Finance,

Inc.

,

Senior

Secured

Note

,

144A,

4.25

%

,

2/15/29

.....................................

United

States

1,470,600

1,420,967

Media

0.3%

g

Diamond

Sports

Group

LLC

/

Diamond

Sports

Finance

Co.

,

Senior

Secured

Note

,

144A,

5.375

%

,

8/15/26

....................

United

States

5,300,000

3,005,126

g

Univision

Communications,

Inc.

,

Senior

Secured

Note

,

144A,

5.125

%

,

2/15/25

.....................................

United

States

1,555,556

1,580,834

4,585,960

Oil,

Gas

&

Consumable

Fuels

0.2%

Cheniere

Energy,

Inc.

,

Senior

Secured

Note

,

4.625

%

,

10/15/28

...

United

States

2,400,000

2,519,880

Road

&

Rail

1.6%

g

First

Student

Bidco

,

Inc.

/

First

Transit

Parent,

Inc.

,

Senior

Secured

Note

,

144A,

4

%

,

7/31/29

..............................

United

States

500,000

489,375

c,h

Onsite

Rental

Group

Operations

Pty.

Ltd.

,

PIK,

6.1

%

,

10/26/23

...

Australia

21,096,262

21,606,300

22,095,675

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Floating

Rate

Daily

Access

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

42

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Specialty

Retail

0.2%

g

99

Escrow

Issuer,

Inc.

,

Senior

Secured

Note

,

144A,

7.5

%

,

1/15/26

United

States

2,500,000

$

2,253,888

Wireless

Telecommunication

Services

0.1%

g

Vmed

O2

UK

Financing

I

plc

,

Senior

Secured

Bond

,

144A,

4.25

%

,

1/31/31

...........................................

United

Kingdom

1,430,000

1,394,186

Total

Corporate

Bonds

(Cost

$78,997,730)

......................................

75,914,060

a

i,j

Senior

Floating

Rate

Interests

79.9%

Aerospace

&

Defense

1.5%

AI

Convoy

(Luxembourg)

SARL,

USD

Term

Loan,

B,

4.5%,

(2-month

USD

LIBOR

+

3.5%;

6-month

USD

LIBOR

+

3.5%),

1/18/27

....

Luxembourg

3,603,124

3,615,231

h

Alloy

FinCo

Ltd.,

Term

Loan,

B,

14%,

PIK,

(3-month

USD

LIBOR

+

0.5%),

3/06/25

......................................

United

Kingdom

8,322,194

8,316,285

Dynasty

Acquisition

Co.,

Inc.,

2020

Term

Loan,

B1,

3.632%,

(3-month

USD

LIBOR

+

3.5%),

4/06/26

...........................................

United

States

5,328,860

5,214,235

2020

Term

Loan,

B2,

3.632%,

(3-month

USD

LIBOR

+

3.5%),

4/06/26

...........................................

United

States

2,864,979

2,803,353

19,949,104

a

a

a

a

a

a

Air

Freight

&

Logistics

0.4%

Kenan

Advantage

Group,

Inc.

(The),

U.S.

Term

Loan,

B1,

4.5%,

(1-month

USD

LIBOR

+

3.75%),

3/24/26

..................

United

States

6,023,417

6,027,182

Airlines

2.4%

AAdvantage

Loyalty

IP

Ltd.

(American

Airlines,

Inc.),

Initial

Term

Loan,

5.5%,

(3-month

USD

LIBOR

+

4.75%),

4/20/28

.........

United

States

3,548,233

3,700,151

Air

Canada,

Term

Loan,

4.25%,

(3-month

USD

LIBOR

+

3.5%),

8/11/28

...........................................

Canada

2,728,682

2,761,085

Allegiant

Travel

Co.,

Replacement

Term

Loan,

3.124%,

(3-month

USD

LIBOR

+

3%),

2/05/24

............................

United

States

3,044,070

3,029,808

American

Airlines,

Inc.,

2017

Term

Loan,

B,

2.09%,

(1-month

USD

LIBOR

+

2%),

12/15/23

United

States

1,979,381

1,953,719

2018

Replacement

Term

Loan,

1.838%,

(1-month

USD

LIBOR

+

1.75%),

6/27/25

.....................................

United

States

2,622,959

2,543,785

Kestrel

Bidco

,

Inc.,

Term

Loan,

4%,

(3-month

USD

LIBOR

+

3%),

12/11/26

..........................................

Canada

10,017,688

9,874,485

SkyMiles

IP

Ltd.

(Delta

Air

Lines,

Inc.),

Initial

Term

Loan,

4.75%,

(3-month

USD

LIBOR

+

3.75%),

10/20/27

.................

United

States

4,371,107

4,660,082

United

AirLines

,

Inc.,

Term

Loan,

B,

4.5%,

(3-month

USD

LIBOR

+

3.75%),

4/21/28

.....................................

United

States

3,531,362

3,586,221

32,109,336

a

a

a

a

a

a

Auto

Components

2.3%

Adient

US

LLC,

Term

Loan,

B1,

3.587%,

(1-month

USD

LIBOR

+

3.5%),

4/10/28

......................................

United

States

6,483,750

6,494,156

Clarios

Global

LP,

First

Lien,

Amendment

No.

1

Dollar

Term

Loan,

3.337%,

(1-month

USD

LIBOR

+

3.25%),

4/30/26

............

United

States

5,198,692

5,173,764

k

DexKo

Global,

Inc.,

First

Lien,

Closing

Date

Term

Loan,

4.25%,

(3-month

USD

LIBOR

+

3.75%),

10/04/28

.................

United

States

4,438,269

4,443,817

First

Brands

Group

LLC,

First

Lien,

2021

Term

Loan,

6%,

(3-month

USD

LIBOR

+

5%),

3/30/27

...........................................

United

States

4,520,149

4,569,871

Second

Lien,

2021

Term

Loan,

9.5%,

(3-month

USD

LIBOR

+

8.5%),

3/30/28

......................................

United

States

843,750

854,297

Highline

Aftermarket

Acquisition

LLC,

First

Lien,

Initial

Term

Loan,

5.25%,

(1-month

USD

LIBOR

+

4.5%),

11/09/27

.............

United

States

2,635,232

2,647,578

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Floating

Rate

Daily

Access

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

43

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

i,j

Senior

Floating

Rate

Interests

(continued)

Auto

Components

(continued)

TI

Group

Automotive

Systems

LLC,

Refinancing

US

Term

Loan,

3.75%,

(3-month

USD

LIBOR

+

3.25%),

12/16/26

............

United

States

2,186,923

$

2,189,657

Truck

Hero,

Inc.,

Initial

Term

Loan,

4%,

(1-month

USD

LIBOR

+

3.25%),

1/31/28

.....................................

United

States

5,433,978

5,416,996

31,790,136

a

a

a

a

a

a

Automobiles

0.4%

American

Trailer

World

Corp.,

First

Lien,

Initial

Term

Loan,

4.5%,

(1-month

USD

LIBOR

+

3.75%),

3/03/28

..................

United

States

5,738,030

5,721,906

Banks

1.0%

k

Finastra

Ltd.,

First

Lien,

Dollar

Term

Loan,

4.5%,

(3-month

USD

LIBOR

+

3.5%),

6/13/24

...............................

United

Kingdom

13,458,814

13,409,487

Beverages

0.8%

City

Brewing

Co.

LLC,

First

Lien,

Closing

Date

Term

Loan,

4.25%,

(3-month

USD

LIBOR

+

3.5%),

4/05/28

...................

United

States

4,010,884

3,978,316

k

Triton

Water

Holdings,

Inc.,

First

Lien,

Initial

Term

Loan,

4%,

(3-month

USD

LIBOR

+

3.5%),

3/31/28

...................

United

States

6,614,888

6,613,399

10,591,715

a

a

a

a

a

a

Building

Products

0.2%

Cornerstone

Building

Brands,

Inc.,

Term

Loan,

B,

3.75%,

(1-month

USD

LIBOR

+

3.25%),

4/12/28

..........................

United

States

2,954,921

2,956,398

Capital

Markets

2.1%

Citadel

Securities

LP,

2021

Term

Loan,

2.587%,

(1-month

USD

LIBOR

+

2.5%),

2/02/28

...............................

United

States

4,278,500

4,246,754

Deerfield

Dakota

Holding

LLC,

First

Lien,

Initial

Dollar

Term

Loan,

4.75%,

(1-month

USD

LIBOR

+

3.75%),

4/09/27

.............

United

States

5,907,322

5,929,504

Edelman

Financial

Engines

Center

LLC

(The),

First

Lien,

2021

Initial

Term

Loan,

4.25%,

(1-month

USD

LIBOR

+

3.5%),

4/07/28

....

United

States

7,581,000

7,587,671

Jane

Street

Group

LLC,

Dollar

Term

Loan,

2.837%,

(1-month

USD

LIBOR

+

2.75%),

1/26/28

..............................

United

States

1,119,354

1,109,039

Russell

Investments

US

Institutional

Holdco,

Inc.,

2025

Term

Loan,

4.5%,

(3-month

USD

LIBOR

+

3.5%),

5/30/25

..............

United

States

9,912,434

9,960,460

28,833,428

a

a

a

a

a

a

Chemicals

1.9%

ASP

Unifrax

Holdings,

Inc.,

First

Lien,

USD

Term

Loan,

3.882%,

(3-month

USD

LIBOR

+

3.75%),

12/12/25

.................

United

States

2,487,212

2,455,500

CPC

Acquisition

Corp.,

First

Lien,

Initial

Term

Loan,

4.5%,

(3-month

USD

LIBOR

+

3.75%),

12/29/27

.........................

United

States

4,597,859

4,597,859

Cyanco

Intermediate

2

Corp.,

First

Lien,

Initial

Term

Loan,

3.587%,

(1-month

USD

LIBOR

+

3.5%),

3/16/25

...................

United

States

5,183,220

5,124,909

INEOS

Styrolution

Group

GmbH,

2026

Dollar

Term

Loan,

B,

3.25%,

(1-month

USD

LIBOR

+

2.75%),

1/29/26

..................

United

Kingdom

1,868,648

1,870,592

LSF11

A5

Holdco

LLC,

Term

Loan,

4.25%,

(3-month

USD

LIBOR

+

3.75%),

10/15/28

....................................

United

States

830,769

830,935

Lummus

Technology

Holdings

V

LLC,

2021

Refinancing

Term

Loan,

B,

3.587%,

(1-month

USD

LIBOR

+

3.5%),

6/30/27

..........

United

States

3,171,378

3,166,763

SCIH

Salt

Holdings,

Inc.,

First

Lien,

Incremental

Term

Loan,

B1,

4.75%,

(3-month

USD

LIBOR

+

4%),

3/16/27

...............

United

States

5,920,144

5,932,162

Sparta

U.S.

Holdco

LLC,

First

Lien,

Initial

Term

Loan,

4.25%,

(3-month

USD

LIBOR

+

3.5%),

8/02/28

...................

United

States

2,515,625

2,517,197

26,495,917

a

a

a

a

a

a

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Floating

Rate

Daily

Access

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

44

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

i,j

Senior

Floating

Rate

Interests

(continued)

Commercial

Services

&

Supplies

2.5%

Allied

Universal

Holdco

LLC,

Initial

U.S.

Dollar

Term

Loan,

4.25%,

(3-month

USD

LIBOR

+

3.75%),

5/12/28

..................

United

States

7,550,599

$

7,556,111

APX

Group,

Inc.,

Initial

Term

Loan,

4%,

(1-month

USD

LIBOR

+

3.5%),

7/10/28

......................................

United

States

5,030,065

5,020,634

CCI

Buyer,

Inc.,

First

Lien,

Initial

Term

Loan,

4.5%,

(3-month

USD

LIBOR

+

3.75%),

12/17/27

.............................

United

States

2,433,444

2,443,847

Madison

IAQ

LLC,

Term

Loan,

3.75%,

(3-month

USD

LIBOR

+

3.25%),

6/21/28

.....................................

United

States

4,994,590

4,990,419

Prime

Security

Services

Borrower

LLC,

First

Lien,

2021

Refinancing

Term

Loan,

B1,

3.5%,

(1-month

USD

LIBOR

+

2.75%;

3-month

USD

LIBOR

+

2.75%),

9/23/26

..........................

United

States

2,239,469

2,238,327

Spin

Holdco,

Inc.,

Initial

Term

Loan,

4.75%,

(3-month

USD

LIBOR

+

4%),

3/04/28

.......................................

United

States

1,895,238

1,903,208

Staples,

Inc.,

2019

Refinancing

New

Term

Loan,

B1,

5.126%,

(3-month

USD

LIBOR

+

5%),

4/16/26

................................

United

States

5,273,678

5,076,996

2019

Refinancing

New

Term

Loan,

B2,

4.626%,

(3-month

USD

LIBOR

+

4.5%),

9/12/24

...............................

United

States

5,472,010

5,349,875

34,579,417

a

a

a

a

a

a

Communications

Equipment

0.6%

CommScope

,

Inc.,

Initial

Term

Loan,

3.337%,

(1-month

USD

LIBOR

+

3.25%),

4/06/26

...................................

United

States

7,976,793

7,883,345

Construction

&

Engineering

0.5%

USIC

Holdings,

Inc.,

First

Lien,

Initial

Term

Loan,

4.25%,

(1-month

USD

LIBOR

+

3.5%),

5/12/28

...........................

United

States

6,255,172

6,256,173

Construction

Materials

0.6%

Park

River

Holdings,

Inc.,

First

Lien,

Initial

Term

Loan,

4%,

(3-month

USD

LIBOR

+

3.25%),

12/28/27

.........................

United

States

4,962,151

4,948,604

White

Cap

Buyer

LLC,

Initial

Closing

Date

Term

Loan,

4.5%,

(1-month

USD

LIBOR

+

4%),

10/19/27

....................

United

States

2,970,000

2,980,128

7,928,732

a

a

a

a

a

a

Containers

&

Packaging

1.4%

Charter

Next

Generation,

Inc.,

First

Lien,

2021

Initial

Term

Loan,

4.5%,

(1-month

USD

LIBOR

+

3.75%),

12/01/27

.............

United

States

4,856,975

4,875,553

Kleopatra

Finco

SARL,

USD

Term

Loan,

B,

5.25%,

(6-month

USD

LIBOR

+

4.75%),

2/12/26

..............................

Luxembourg

4,714,224

4,702,438

Mauser

Packaging

Solutions

Holding

Co.,

Initial

Term

Loan,

3.337%,

(1-month

USD

LIBOR

+

3.25%),

4/03/24

..................

United

States

10,410,234

10,153,258

19,731,249

a

a

a

a

a

a

Diversified

Consumer

Services

1.0%

Knot

Worldwide,

Inc.

(The),

First

Lien,

Initial

Term

Loan,

4.629%,

(2-month

USD

LIBOR

+

4.5%;

3-month

USD

LIBOR

+

4.5%),

12/19/25

..........................................

United

States

3,674,983

3,681,102

KUEHG

Corp.,

Term

Loan,

B3,

4.75%,

(3-month

USD

LIBOR

+

3.75%),

2/21/25

.....................................

United

States

2,562,137

2,543,087

k

Learning

Care

Group

(US)

No.

2,

Inc.,

First

Lien,

Initial

Term

Loan,

4.25%,

(3-month

USD

LIBOR

+

3.25%),

3/13/25

.............

United

States

1,944,961

1,924,568

Sedgwick

Claims

Management

Services,

Inc.

(Lightning

Cayman

Merger

Sub

Ltd.),

k

2019

Term

Loan,

3.837%,

(1-month

USD

LIBOR

+

3.75%),

9/03/26

United

States

453,789

453,336

Initial

Term

Loan,

3.337%,

(1-month

USD

LIBOR

+

3.25%),

12/31/25

..........................................

United

States

2,326,760

2,305,435

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Floating

Rate

Daily

Access

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

45

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

i,j

Senior

Floating

Rate

Interests

(continued)

Diversified

Consumer

Services

(continued)

k

WW

International,

Inc.,

Initial

Term

Loan,

4%,

(1-month

USD

LIBOR

+

3.5%),

4/13/28

....................................

United

States

2,303,202

$

2,279,686

13,187,214

a

a

a

a

a

a

Diversified

Financial

Services

2.0%

k,l

Astra

Acquisition

Corp.,

Term

Loan,

TBD,

10/25/28

............

United

States

4,724,409

4,612,205

Mercury

Borrower,

Inc.,

First

Lien,

Initial

Term

Loan,

4%,

(3-month

USD

LIBOR

+

3.5%),

8/02/28

...........................

United

States

7,297,468

7,286,522

Red

Planet

Borrower

LLC,

Initial

Term

Loan,

4.25%,

(3-month

USD

LIBOR

+

3.75%),

10/02/28

.............................

United

States

6,246,835

6,232,218

Verscend

Holding

Corp.,

Term

Loan,

B1,

4.087%,

(1-month

USD

LIBOR

+

4%),

8/27/25

................................

United

States

9,285,488

9,312,555

27,443,500

a

a

a

a

a

a

Diversified

Telecommunication

Services

2.4%

Altice

France

SA,

USD

Incremental

Term

Loan,

B13,

4.125%,

(3-month

USD

LIBOR

+

4%),

8/14/26

.....................

France

4,391,969

4,380,067

Global

Tel*Link

Corp.,

First

Lien,

Term

Loan,

4.337%,

(1-month

USD

LIBOR

+

4.25%),

11/29/25

..........................................

United

States

14,254,610

13,683,142

Second

Lien,

Term

Loan,

8.337%,

(1-month

USD

LIBOR

+

8.25%),

11/29/26

..........................................

United

States

7,895,149

7,413,545

Intrado

Corp.,

Initial

Term

Loan,

B,

5%,

(3-month

USD

LIBOR

+

4%),

10/10/24

..........................................

United

States

3,584,204

3,526,893

Zayo

Group

Holdings,

Inc.,

Initial

Dollar

Term

Loan,

3.087%,

(1-month

USD

LIBOR

+

3%),

3/09/27

.....................

United

States

3,755,569

3,702,221

32,705,868

a

a

a

a

a

a

Electric

Utilities

0.1%

Astoria

Energy

LLC,

2020

Advance

Term

Loan,

B,

4.5%,

(3-month

USD

LIBOR

+

3.5%),

12/10/27

..........................

United

States

1,410,560

1,415,723

Electronic

Equipment,

Instruments

&

Components

0.2%

Verifone

Systems,

Inc.,

First

Lien,

Initial

Term

Loan,

4.129%,

(3-month

USD

LIBOR

+

4%),

8/20/25

.....................

United

States

2,829,233

2,775,208

Entertainment

2.5%

AMC

Entertainment

Holdings,

Inc.,

Term

Loan,

B1,

3.086%,

(1-month

USD

LIBOR

+

3%),

4/22/26

............................

United

States

1,989,796

1,840,153

Banijay

Entertainment

SAS,

USD

Term

Loan,

B,

3.83%,

(1-month

USD

LIBOR

+

3.75%),

3/01/25

..........................

France

5,208,891

5,201,286

Crown

Finance

US,

Inc.,

Initial

Dollar

Term

Loan,

3.5%,

(3-month

USD

LIBOR

+

2.5%),

2/28/25

...........................

United

States

2,972,242

2,465,104

Diamond

Sports

Group

LLC,

Term

Loan,

3.34%,

(1-month

USD

LIBOR

+

3.25%),

8/24/26

..............................

United

States

12,824,849

6,829,232

Lions

Gate

Capital

Holdings

LLC,

2023

Term

Loan,

A,

1.837%,

(1-month

USD

LIBOR

+

1.75%),

3/22/23

..................

United

States

13,809,206

13,757,422

William

Morris

Endeavor

Entertainment

LLC

(IMG

Worldwide

Holdings

LLC),

First

Lien,

Term

Loan,

B1,

2.84%,

(1-month

USD

LIBOR

+

2.75%),

5/18/25

..............................

United

States

4,358,208

4,284,358

34,377,555

a

a

a

a

a

a

Equity

Real

Estate

Investment

Trusts

(REITs)

0.3%

k

Brookfield

Property

REIT,

Inc.,

Initial

Term

Loan,

B,

2.585%,

(1-month

USD

LIBOR

+

2.5%),

8/27/25

...................

United

States

3,702,866

3,667,819

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Floating

Rate

Daily

Access

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

46

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

i,j

Senior

Floating

Rate

Interests

(continued)

Food

&

Staples

Retailing

1.4%

GNC

Holdings,

Inc.,

Second

Lien,

Term

Loan,

6.084%,

(1-month

USD

LIBOR

+

6%),

10/07/26

...........................

United

States

18,611,297

$

17,455,815

Shearer's

Foods

LLC,

First

Lien,

Refinancing

Term

Loan,

4.25%,

(3-month

USD

LIBOR

+

3.5%),

9/23/27

...................

United

States

1,768,328

1,769,221

19,225,036

a

a

a

a

a

a

Food

Products

0.1%

k,l

Primary

Products

Finance

LLC,

Term

Loan,

TBD,

1/01/38

.......

United

States

2,000,000

2,010,630

Health

Care

Equipment

&

Supplies

0.7%

Jazz

Pharmaceuticals

plc,

Initial

Dollar

Term

Loan,

4%,

(1-month

USD

LIBOR

+

3.5%),

5/05/28

...........................

United

States

2,422,500

2,428,859

Medline

Borrower

LP,

Initial

Dollar

Term

Loan,

3.75%,

(1-month

USD

LIBOR

+

3.25%),

10/23/28

.............................

United

States

6,603,774

6,616,156

9,045,015

a

a

a

a

a

a

Health

Care

Providers

&

Services

7.6%

ADMI

Corp.,

Amendment

No.

4

Refinancing

Term

Loan,

3.625%,

(1-month

USD

LIBOR

+

3.125%),

12/23/27

............................

United

States

7,874,313

7,826,949

Amendment

No.

5

Incremental

Term

Loan,

4%,

(1-month

USD

LIBOR

+

3.5%),

12/23/27

..............................

United

States

2,747,485

2,749,449

Aveanna

Healthcare

LLC,

First

Lien,

2021

Extended

Term

Loan,

4.25%,

(1-month

USD

LIBOR

+

3.75%),

7/17/28

.............

United

States

2,546,481

2,545,488

CNT

Holdings

I

Corp.,

First

Lien,

Initial

Term

Loan,

4.5%,

(3-month

USD

LIBOR

+

3.75%),

11/08/27

.........................

United

States

2,356,767

2,363,496

eResearchTechnology

,

Inc.,

First

Lien,

Initial

Term

Loan,

5.5%,

(1-month

USD

LIBOR

+

4.5%),

2/04/27

...................

United

States

6,625,631

6,663,364

Global

Medical

Response,

Inc.,

2018

New

Term

Loan,

5.25%,

(3-month

USD

LIBOR

+

4.25%),

3/14/25

..................

United

States

4,463,081

4,449,134

Heartland

Dental

LLC,

2021

Incremental

Term

Loan,

4.086%,

(1-month

USD

LIBOR

+

4%),

4/30/25

.....................

United

States

4,539,091

4,535,301

ICON

plc,

Term

Loan,

3%,

(3-month

USD

LIBOR

+

2.5%),

7/03/28

.

Luxembourg

2,985,855

2,989,587

MPH

Acquisition

Holdings

LLC,

Initial

Term

Loan,

4.75%,

(3-month

USD

LIBOR

+

4.25%),

9/01/28

..........................

United

States

3,500,000

3,420,288

National

Mentor

Holdings,

Inc.,

First

Lien,

Initial

Term

Loan,

4.5%,

(1-month

USD

LIBOR

+

3.75%;

3-month

USD

LIBOR

+

3.75%),

3/02/28

...................

United

States

9,734,518

9,688,523

First

Lien,

Initial

Term

Loan,

C,

4.5%,

(3-month

USD

LIBOR

+

3.75%),

3/02/28

.....................................

United

States

307,315

305,863

Pathway

Vet

Alliance

LLC,

First

Lien,

2021

Replacement

Term

Loan,

3.837%,

(1-month

USD

LIBOR

+

3.75%),

3/31/27

............

United

States

10,745,055

10,708,092

Phoenix

Guarantor,

Inc.,

First

Lien,

Term

Loan,

B3,

3.586%,

(1-month

USD

LIBOR

+

3.5%),

3/05/26

...................

United

States

4,693,531

4,681,234

Pluto

Acquisition

I,

Inc.,

First

Lien,

2021

Term

Loan,

4.121%,

(3-month

USD

LIBOR

+

4%),

6/22/26

.....................

United

States

2,644,890

2,648,752

k

Radiology

Partners,

Inc.,

First

Lien,

Term

Loan,

B,

4.335%,

(1-month

USD

LIBOR

+

4.25%),

7/09/25

..........................

United

States

7,320,115

7,320,627

Team

Health

Holdings,

Inc.,

Initial

Term

Loan,

3.75%,

(1-month

USD

LIBOR

+

2.75%),

2/06/24

..............................

United

States

4,136,198

3,962,126

U.S.

Anesthesia

Partners,

Inc.,

First

Lien,

Initial

Term

Loan,

4.75%,

(3-month

USD

LIBOR

+

4.25%),

10/01/28

.................

United

States

2,649,921

2,651,750

k

U.S.

Renal

Care,

Inc.,

Initial

Term

Loan,

5.125%,

(1-month

USD

LIBOR

+

5%),

6/26/26

................................

United

States

8,269,767

8,226,350

Waystar

Technologies,

Inc.,

First

Lien,

Initial

Term

Loan,

4.087%,

(1-month

USD

LIBOR

+

4%),

10/22/26

....................

United

States

15,356,117

15,394,585

103,130,958

a

a

a

a

a

a

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Floating

Rate

Daily

Access

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

47

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

i,j

Senior

Floating

Rate

Interests

(continued)

Hotels,

Restaurants

&

Leisure

3.5%

h

24

Hour

Fitness

Worldwide,

Inc.,

Term

Loan,

5.146%,

PIK,

(3-month

USD

LIBOR

+

5%),

12/29/25

...........................

United

States

13,315,228

$

9,896,981

Bally's

Corp.,

Term

Loan,

B,

3.75%,

(1-month

USD

LIBOR

+

3.25%),

10/02/28

..........................................

United

States

4,600,000

4,601,150

Caesars

Resort

Collection

LLC,

Term

Loan,

B,

2.837%,

(1-month

USD

LIBOR

+

2.75%),

12/23/24

United

States

8,858,959

8,826,979

Term

Loan,

B1,

3.587%,

(1-month

USD

LIBOR

+

3.5%),

7/21/25

United

States

1,709,929

1,713,793

Golden

Nugget,

Inc.,

Initial

Term

Loan,

B,

3.25%,

(3-month

USD

LIBOR

+

2.5%),

10/04/23

..............................

United

States

6,677,939

6,653,198

Hilton

Grand

Vacations

Borrower

LLC,

Initial

Term

Loan,

3.5%,

(1-month

USD

LIBOR

+

3%),

8/02/28

.....................

United

States

1,904,762

1,910,476

IRB

Holding

Corp.,

Fourth

Amendment

Incremental

Term

Loan,

4.25%,

(3-month

USD

LIBOR

+

3.25%),

12/15/27

............

United

States

4,706,989

4,712,472

Raptor

Acquisition

Corp.,

First

Lien,

Term

Loan,

B,

4.75%,

(3-month

USD

LIBOR

+

4%),

11/01/26

...........................

United

States

4,916,525

4,947,868

Station

Casinos

LLC,

Term

Loan,

B1,

2.5%,

(1-month

USD

LIBOR

+

2.25%),

2/08/27

.....................................

United

States

6,148

6,096

Whatabrands

LLC,

Initial

Term

Loan,

B,

3.75%,

(1-month

USD

LIBOR

+

3.25%),

8/03/28

..............................

United

States

4,233,577

4,236,413

47,505,426

a

a

a

a

a

a

Household

Durables

1.0%

k,l

Astro

One

Acquisition

Corp.,

Term

Loan,

TBD,

10/20/28

.........

United

States

5,600,000

5,568,528

Osmosis

Buyer

Ltd.,

Initial

Term

Loan,

B,

4.5%,

(1-month

USD

LIBOR

+

4%),

7/31/28

................................

United

States

4,761,905

4,785,214

VC

GB

Holdings

I

Corp.,

First

Lien,

Initial

Term

Loan,

4%,

(3-month

USD

LIBOR

+

3.5%),

7/21/28

...........................

United

States

3,035,037

3,027,191

13,380,933

a

a

a

a

a

a

Household

Products

0.4%

c,h,m

FGI

Operating

Co.

LLC,

Term

Loan,

11%,

PIK,

(3-month

USD

LIBOR

+

10%),

5/16/22

.....................................

United

States

38,376,727

5,172,303

Insurance

3.8%

Acrisure

LLC,

First

Lien,

2020

Term

Loan,

3.632%,

(3-month

USD

LIBOR

+

3.5%),

2/15/27

......................................

United

States

4,925,000

4,868,362

First

Lien,

2021-1

Additional

Term

Loan,

4.25%,

(3-month

USD

LIBOR

+

3.75%),

2/15/27

..............................

United

States

2,282,609

2,278,797

Alliant

Holdings

Intermediate

LLC,

2018

Initial

Term

Loan,

3.337%,

(1-month

USD

LIBOR

+

3.25%),

5/09/25

...........................................

United

States

8,215,221

8,155,743

2020

New

Term

Loan,

4.25%,

(1-month

USD

LIBOR

+

3.75%),

11/05/27

..........................................

United

States

1,066,329

1,066,329

k,l

Term

Loan,

B4,

TBD,

11/19/27

..........................

United

States

4,728,945

4,724,807

AssuredPartners

,

Inc.,

2020

February

Refinancing

Term

Loan,

3.587%,

(1-month

USD

LIBOR

+

3.5%),

2/12/27

...............................

United

States

8,972,182

8,923,597

2021

Term

Loan,

4%,

(1-month

USD

LIBOR

+

3.5%),

2/12/27

...

United

States

2,037,557

2,035,265

Asurion

LLC,

New

Term

Loan,

B8,

3.337%,

(1-month

USD

LIBOR

+

3.25%),

12/23/26

..........................................

United

States

8,937,263

8,857,677

New

Term

Loan,

B9,

3.337%,

(1-month

USD

LIBOR

+

3.25%),

7/31/27

...........................................

United

States

3,557,630

3,527,247

Second

Lien,

New

Term

Loan,

B3,

5.337%,

(1-month

USD

LIBOR

+

5.25%),

1/31/28

...................................

United

States

195,987

195,480

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Floating

Rate

Daily

Access

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

48

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

i,j

Senior

Floating

Rate

Interests

(continued)

Insurance

(continued)

Second

Lien,

New

Term

Loan,

B4,

5.337%,

(1-month

USD

LIBOR

+

5.25%),

1/20/29

...................................

United

States

6,726,293

$

6,704,567

51,337,871

a

a

a

a

a

a

Internet

&

Direct

Marketing

Retail

0.5%

MH

Sub

I

LLC

(Micro

Holding

Corp.),

First

Lien,

2020

June

New

Term

Loan,

4.75%,

(1-month

USD

LIBOR

+

3.75%),

9/13/24

..............................

United

States

2,934,120

2,943,905

First

Lien,

Amendment

No.

2

Initial

Term

Loan,

3.587%,

(1-month

USD

LIBOR

+

3.5%),

9/13/24

...........................

United

States

4,317,584

4,307,827

7,251,732

a

a

a

a

a

a

IT

Services

5.4%

Aptean

Acquiror

,

Inc.,

First

Lien,

Initial

Term

Loan,

4.337%,

(1-month

USD

LIBOR

+

4.25%),

4/23/26

..........................

United

States

7,979,540

7,977,864

Arches

Buyer,

Inc.,

Refinancing

Term

Loan,

3.75%,

(1-month

USD

LIBOR

+

3.25%),

12/06/27

.............................

United

States

2,968,063

2,958,787

Aventiv

Technologies

LLC,

First

Lien,

Initial

Term

Loan,

5.5%,

(3-month

USD

LIBOR

+

4.5%),

11/01/24

..........................................

United

States

10,445,596

10,017,640

Second

Lien,

Initial

Term

Loan,

9.25%,

(3-month

USD

LIBOR

+

8.25%),

11/01/25

....................................

United

States

375,000

347,580

Barracuda

Networks,

Inc.,

First

Lien,

2020

Term

Loan,

4.5%,

(3-month

USD

LIBOR

+

3.75%),

2/12/25

..................

United

States

2,929,314

2,937,414

Gainwell

Acquisition

Corp.,

First

Lien,

Term

Loan,

B,

4.75%,

(3-month

USD

LIBOR

+

4%),

10/01/27

....................

United

States

9,220,980

9,254,913

Hunter

Holdco

3

Ltd.,

First

Lien,

Initial

Dollar

Term

Loan,

4.75%,

(3-month

USD

LIBOR

+

4.25%),

8/19/28

..................

United

Kingdom

3,252,033

3,267,285

Neustar

,

Inc.,

First

Lien,

Term

Loan,

B5,

5.5%,

(1-month

USD

LIBOR

+

4.5%),

8/08/24

....................................

United

States

6,035,470

6,052,067

Peraton

Corp.,

First

Lien,

Term

Loan,

B,

4.5%,

(1-month

USD

LIBOR

+

3.75%),

2/01/28

...................................

United

States

8,661,261

8,693,048

Pitney

Bowes,

Inc.,

Refinancing

Term

Loan,

B,

4.09%,

(1-month

USD

LIBOR

+

4%),

3/17/28

................................

United

States

10,945,000

10,972,362

k

Sitel

Worldwide

Corp.,

Initial

Dollar

Term

Loan,

4.25%,

(3-month

USD

LIBOR

+

3.75%),

8/28/28

..........................

France

3,076,714

3,085,851

Thrasio

LLC,

Initial

Term

Loan,

8%,

(3-month

USD

LIBOR

+

7%),

12/18/26

..........................................

United

States

2,493,719

2,493,719

TIBCO

Software,

Inc.,

Term

Loan,

B3,

3.84%,

(1-month

USD

LIBOR

+

3.75%),

6/30/26

...................................

United

States

5,337,139

5,256,255

73,314,785

a

a

a

a

a

a

Leisure

Products

1.0%

k

Hercules

Achievement,

Inc.

(Varsity

Brands

Holding

Co.,

Inc.),

First

Lien,

Initial

Term

Loan,

4.5%,

(1-month

USD

LIBOR

+

3.5%),

12/16/24

..........................................

United

States

8,834,204

8,737,601

k

Motion

Acquisition

Ltd.,

Term

Loan,

B1,

3.382%,

(3-month

USD

LIBOR

+

3.25%),

11/12/26

United

Kingdom

4,238,282

4,137,941

Term

Loan,

B2,

3.382%,

(3-month

USD

LIBOR

+

3.25%),

11/12/26

United

Kingdom

604,218

589,913

13,465,455

a

a

a

a

a

a

Life

Sciences

Tools

&

Services

0.3%

ICON

plc,

U.S.

Term

Loan,

3%,

(3-month

USD

LIBOR

+

2.5%),

7/03/28

...........................................

Ireland

743,928

744,857

k,l

Parexel

International

Corp.,

Term

Loan,

TBD,

8/11/28

..........

United

States

2,783,871

2,788,896

3,533,753

a

a

a

a

a

a

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Floating

Rate

Daily

Access

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

49

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

i,j

Senior

Floating

Rate

Interests

(continued)

Machinery

0.9%

k

ASP

Blade

Holdings,

Inc.,

Initial

Term

Loan,

4.5%,

(1-month

USD

LIBOR

+

4%),

10/13/28

...............................

United

States

1,711,864

$

1,716,854

Tiger

Acquisition

LLC,

First

Lien,

Initial

Term

Loan,

3.75%,

(3-month

USD

LIBOR

+

3.25%),

6/01/28

..........................

United

States

2,931,429

2,915,863

TK

Elevator

Midco

GmbH,

USD

Term

Loan,

B1,

4%,

(6-month

USD

LIBOR

+

3.5%),

7/30/27

...............................

Germany

4,461,530

4,474,424

UTEX

Industries,

Inc.,

First

Out

Term

Loan,

8.5%,

(1-month

USD

LIBOR

+

7%),

12/03/24

United

States

1,539,398

1,552,229

h

Second

Out

Term

Loan,

5.75%,

PIK,

(1-month

USD

LIBOR

+

3.75%),

12/03/25

....................................

United

States

1,741,382

1,717,331

12,376,701

a

a

a

a

a

a

Media

5.1%

Cengage

Learning,

Inc.,

First

Lien,

Term

Loan,

B,

5.75%,

(3-month

USD

LIBOR

+

4.75%),

7/14/26

..........................

United

States

10,565,741

10,633,415

Clear

Channel

Outdoor

Holdings,

Inc.,

Term

Loan,

B,

3.629%,

(2-month

USD

LIBOR

+

3.5%;

3-month

USD

LIBOR

+

3.5%),

8/21/26

...........................................

United

States

9,508,265

9,370,538

CSC

Holdings

LLC,

March

2017

Refinancing

Term

Loan,

2.34%,

(1-month

USD

LIBOR

+

2.25%),

7/17/25

..................

United

States

10,393,854

10,177,870

Gray

Television,

Inc.,

Term

Loan,

B2,

2.332%,

(1-month

USD

LIBOR

+

2.25%),

2/07/24

...................................

United

States

3,457,244

3,449,552

k

McGraw-Hill

Education,

Inc.,

Initial

Term

Loan,

5.25%,

(1-month

USD

LIBOR

+

4.75%),

7/28/28

..............................

United

States

6,556,563

6,518,305

Nexstar

Media,

Inc.,

Term

Loan,

B3,

2.337%,

(1-month

USD

LIBOR

+

2.25%),

1/17/24

...................................

United

States

1,618,301

1,616,836

k,l

Radiate

Holdco

LLC,

Covenant-lite

Term

Loan,

B,

TBD,

9/25/26

...

United

States

8,931,566

8,919,910

k

Radiate

HoldCo

LLC,

Term

Loan,

B,

4.25%,

(1-month

USD

LIBOR

+

3.5%),

9/25/26

......................................

United

States

3,626,872

3,622,138

Sinclair

Television

Group,

Inc.,

Term

Loan,

B,

2.34%,

(1-month

USD

LIBOR

+

2.25%),

1/03/24

..............................

United

States

1,803,522

1,786,055

Univision

Communications,

Inc.,

First

Lien,

2021

Replacement

Converted

Term

Loan,

4%,

(1-month

USD

LIBOR

+

3.25%),

3/15/26

..........................

United

States

2,307,504

2,310,388

k,l

Term

Loan,

B,

TBD,

5/05/28

............................

United

States

5,508,696

5,512,992

Virgin

Media

Bristol

LLC,

Term

Loan,

Q,

3.34%,

(1-month

USD

LIBOR

+

3.25%),

1/31/29

..............................

United

States

3,155,393

3,157,807

WideOpenWest

Finance

LLC,

Eighth

Amendment

Term

Loan,

B,

4.25%,

(1-month

USD

LIBOR

+

3.25%),

8/18/23

.............

United

States

2,701,900

2,703,103

69,778,909

a

a

a

a

a

a

Metals

&

Mining

0.5%

U.S.

Silica

Co.,

Term

Loan,

5%,

(1-month

USD

LIBOR

+

4%),

5/01/25

...........................................

United

States

7,292,608

7,164,988

Multiline

Retail

0.1%

Franchise

Group,

Inc.,

First

Lien,

Initial

Term

Loan,

5.5%,

(3-month

USD

LIBOR

+

4.75%),

3/10/26

..........................

United

States

1,295,402

1,305,118

Oil,

Gas

&

Consumable

Fuels

1.0%

b

Quarternorth

Energy

Holding,

Inc.,

Second

Lien,

Initial

New

Term

Loan,

9%,

(3-month

USD

LIBOR

+

8%),

8/27/26

.............

United

States

13,723,697

13,818,047

Personal

Products

1.2%

Conair

Holdings

LLC,

First

Lien,

Initial

Term

Loan,

4.25%,

(3-month

USD

LIBOR

+

3.75%),

5/17/28

..........................

United

States

4,654,844

4,660,174

Coty,

Inc.,

USD

Term

Loan,

B,

2.337%,

(1-month

USD

LIBOR

+

2.25%),

4/07/25

.....................................

United

States

2,927,353

2,890,762

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Floating

Rate

Daily

Access

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

50

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

i,j

Senior

Floating

Rate

Interests

(continued)

Personal

Products

(continued)

Sunshine

Luxembourg

VII

SARL,

Term

Loan,

B3,

4.5%,

(3-month

USD

LIBOR

+

3.75%),

10/01/26

.........................

Luxembourg

9,274,992

$

9,305,182

16,856,118

a

a

a

a

a

a

Pharmaceuticals

0.4%

Bausch

Health

Cos.,

Inc.,

Initial

Term

Loan,

3.087%,

(1-month

USD

LIBOR

+

3%),

6/02/25

................................

United

States

2,529,010

2,526,127

Organon

&

Co.,

Dollar

Term

Loan,

3.5%,

(3-month

USD

LIBOR

+

3%),

6/02/28

.......................................

United

States

3,340,277

3,352,118

5,878,245

a

a

a

a

a

a

Professional

Services

0.9%

CCRR

Parent,

Inc.,

First

Lien,

Initial

Term

Loan,

4.5%,

(3-month

USD

LIBOR

+

3.75%),

3/06/28

..............................

United

States

1,625,060

1,634,713

CHG

Healthcare

Services,

Inc.,

First

Lien,

Term

Loan,

4%,

(3-month

USD

LIBOR

+

3.5%),

9/29/28

...........................

United

States

3,446,154

3,451,978

Dun

&

Bradstreet

Corp.

(The),

Initial

Term

Loan,

3.338%,

(1-month

USD

LIBOR

+

3.25%),

2/06/26

..........................

United

States

3,000,102

2,991,536

k,l

Medical

Solutions

LLC,

Term

Loan,

TBD,

10/06/28

.............

United

States

2,369,231

2,373,673

UKG,

Inc.,

First

Lien,

2021

Incremental

Term

Loan,

4%,

(3-month

USD

LIBOR

+

3.25%),

5/04/26

..........................

United

States

2,225,624

2,232,123

12,684,023

a

a

a

a

a

a

Real

Estate

Management

&

Development

0.3%

Cushman

&

Wakefield

U.S.

Borrower

LLC,

Replacement

Term

Loan,

2.837%,

(1-month

USD

LIBOR

+

2.75%),

8/21/25

............

United

States

3,661,414

3,641,954

Road

&

Rail

1.7%

Avis

Budget

Car

Rental

LLC,

New

Term

Loan,

B,

1.84%,

(1-month

USD

LIBOR

+

1.75%),

8/06/27

..........................

United

States

3,301,306

3,236,320

Ventia

Midco

Pty.

Ltd.,

2017

Refinancing

USD

Term

Loan,

B,

5%,

(3-month

USD

LIBOR

+

4%),

5/21/26

.....................

Australia

19,825,761

19,937,380

23,173,700

a

a

a

a

a

a

Software

11.3%

athenahealth

,

Inc.,

First

Lien,

Term

Loan,

B1,

4.377%,

(3-month

USD

LIBOR

+

4.25%),

2/11/26

..............................

United

States

11,720,291

11,771,567

Atlas

Purchaser,

Inc.,

First

Lien,

Initial

Term

Loan,

6%,

(3-month

USD

LIBOR

+

5.25%),

5/08/28

..........................

United

States

3,083,182

3,049,791

k,l

Bali

Finco

,

Inc.,

Term

Loan,

TBD,

6/30/26

...................

United

States

2,051,282

2,021,795

Cloudera,

Inc.,

First

Lien,

Initial

Term

Loan,

4.25%,

(1-month

USD

LIBOR

+

3.75%),

10/08/28

....................................

United

States

4,879,091

4,877,579

Second

Lien,

Initial

Term

Loan,

6.5%,

(1-month

USD

LIBOR

+

6%),

10/08/29

..........................................

United

States

2,723,141

2,733,352

ConnectWise

LLC,

Initial

Term

Loan,

4%,

(3-month

USD

LIBOR

+

3.5%),

9/29/28

......................................

United

States

3,000,000

3,000,270

Cornerstone

OnDemand

,

Inc.,

First

Lien,

Initial

Term

Loan,

4.25%,

(3-month

USD

LIBOR

+

3.75%),

10/16/28

.................

United

States

6,871,084

6,870,226

DCert

Buyer,

Inc.,

First

Lien,

Initial

Term

Loan,

4.087%,

(1-month

USD

LIBOR

+

4%),

10/16/26

..........................................

United

States

12,795,694

12,818,919

Second

Lien,

First

Amendment

Refinancing

Term

Loan,

7.087%,

(1-month

USD

LIBOR

+

7%),

2/19/29

.....................

United

States

2,168,879

2,194,439

ECI

Macola

/MAX

Holding

LLC,

First

Lien,

Initial

Term

Loan,

4.5%,

(3-month

USD

LIBOR

+

3.75%),

11/09/27

..................

United

States

5,654,966

5,678,830

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Floating

Rate

Daily

Access

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

51

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

i,j

Senior

Floating

Rate

Interests

(continued)

Software

(continued)

Epicor

Software

Corp.,

Term

Loan,

C,

4%,

(1-month

USD

LIBOR

+

3.25%),

7/30/27

.....................................

United

States

5,325,142

$

5,326,607

Greeneden

U.S.

Holdings

I

LLC,

2020

Initial

Dollar

Term

Loan,

4.75%,

(1-month

USD

LIBOR

+

4%),

12/01/27

..............

United

States

8,022,628

8,050,186

Hyland

Software,

Inc.,

First

Lien,

2018

Refinancing

Term

Loan,

4.25%,

(1-month

USD

LIBOR

+

3.5%),

7/01/24

...............................

United

States

7,055,130

7,070,193

Second

Lien,

2021

Refinancing

Term

Loan,

7%,

(1-month

USD

LIBOR

+

6.25%),

7/07/25

..............................

United

States

106,061

107,651

Idera

,

Inc.,

First

Lien,

Term

Loan,

B1,

4.5%,

(3-month

USD

LIBOR

+

3.75%),

3/02/28

.....................................

United

States

9,500,424

9,501,421

IGT

Holding

IV

AB,

Term

Loan,

B2,

4.25%,

(3-month

USD

LIBOR

+

3.75%),

3/31/28

.....................................

Sweden

4,132,567

4,137,733

Ivanti

Software,

Inc.,

First

Lien,

First

Amendment

Term

Loan,

4.75%,

(3-month

USD

LIBOR

+

4%),

12/01/27

...............................

United

States

304,874

304,621

First

Lien,

Initial

Term

Loan,

5.75%,

(3-month

USD

LIBOR

+

4.75%),

12/01/27

....................................

United

States

5,472,500

5,477,617

LogMeIn,

Inc.,

First

Lien,

Initial

Term

Loan,

4.834%,

(1-month

USD

LIBOR

+

4.75%),

8/31/27

..............................

United

States

5,889,903

5,888,990

Mitchell

International,

Inc.,

First

Lien,

Initial

Term

Loan,

4.25%,

(1-month

USD

LIBOR

+

3.75%),

10/15/28

....................................

United

States

7,037,560

6,984,989

Second

Lien,

Initial

Term

Loan,

7%,

(1-month

USD

LIBOR

+

6.5%),

10/15/29

..........................................

United

States

428,571

432,804

Perforce

Software,

Inc.,

First

Lien,

New

Term

Loan,

3.837%,

(1-month

USD

LIBOR

+

3.75%),

7/01/26

..................

United

States

5,599,759

5,562,772

Polaris

Newco

LLC,

First

Lien,

Dollar

Term

Loan,

4.5%,

(3-month

USD

LIBOR

+

4%),

6/02/28

............................

United

States

8,816,667

8,847,613

Project

Alpha

Intermediate

Holding,

Inc.,

2021

Refinancing

Term

Loan,

4.09%,

(1-month

USD

LIBOR

+

4%),

4/26/24

..........

United

States

4,843,922

4,844,431

Quest

Software

US

Holdings,

Inc.,

First

Lien,

Initial

Term

Loan,

4.379%,

(3-month

USD

LIBOR

+

4.25%),

5/16/25

............

United

States

5,899,425

5,901,018

RealPage

,

Inc.,

First

Lien,

Initial

Term

Loan,

3.75%,

(1-month

USD

LIBOR

+

3.25%),

4/24/28

..............................

United

States

6,439,631

6,433,771

Rocket

Software,

Inc.,

First

Lien,

Initial

Term

Loan,

4.337%,

(1-month

USD

LIBOR

+

4.25%),

11/28/25

.........................

United

States

1,989,796

1,986,065

Sovos

Compliance

LLC,

First

Lien,

Initial

Term

Loan,

5%,

(3-month

USD

LIBOR

+

4.5%),

8/11/28

...........................

United

States

1,255,918

1,264,942

UKG,

Inc.,

First

Lien,

Initial

Term

Loan,

3.837%,

(1-month

USD

LIBOR

+

3.75%),

5/04/26

..............................

United

States

4,284,422

4,296,204

Vision

Solutions,

Inc.

(Precisely

Software,

Inc.),

First

Lien,

Third

Amendment

Term

Loan,

4.75%,

(3-month

USD

LIBOR

+

4%),

4/24/28

...........................................

United

States

6,002,642

6,006,423

153,442,819

a

a

a

a

a

a

Specialty

Retail

1.8%

Evergreen

AcqCo

1

LP,

Initial

Term

Loan,

6.5%,

(3-month

USD

LIBOR

+

5.75%),

4/26/28

..............................

United

States

3,592,105

3,622,028

Michaels

Cos.,

Inc.

(The),

Term

Loan,

B,

5%,

(3-month

USD

LIBOR

+

4.25%),

4/15/28

...................................

United

States

6,044,850

6,043,913

PetSmart

LLC,

Initial

Term

Loan,

4.5%,

(3-month

USD

LIBOR

+

3.75%),

2/11/28

.....................................

United

States

3,722,772

3,732,414

Rent-A-Center,

Inc.,

2021

Initial

Term

Loan,

3.75%,

(1-month

USD

LIBOR

+

3.25%),

2/17/28

..............................

United

States

1,621,755

1,629,361

k,l

Restoration

Hardware,

Inc.,

Initial

Term

Loan,

TBD,

10/20/28

.....

United

States

3,676,471

3,677,243

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Floating

Rate

Daily

Access

Fund

franklintempleton.com

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Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

52

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

i,j

Senior

Floating

Rate

Interests

(continued)

Specialty

Retail

(continued)

SRS

Distribution,

Inc.,

2021

Refinancing

Term

Loan,

4.25%,

(3-month

USD

LIBOR

+

3.75%),

6/02/28

..................

United

States

3,653,096

$

3,657,662

Woof

Holdings,

Inc.,

First

Lien,

Initial

Term

Loan,

4.5%,

(3-month

USD

LIBOR

+

3.75%),

12/21/27

.........................

United

States

2,356,056

2,361,958

24,724,579

a

a

a

a

a

a

Technology

Hardware,

Storage

&

Peripherals

1.2%

Amentum

Government

Services

Holdings

LLC,

First

Lien,

Term

Loan,

1,

3.587%,

(1-month

USD

LIBOR

+

3.5%),

1/29/27

...........................................

United

States

2,666,250

2,661,810

First

Lien,

Term

Loan,

2,

5.5%,

(3-month

USD

LIBOR

+

4.75%),

1/29/27

...........................................

United

States

3,085,147

3,095,760

k

Electronics

for

Imaging,

Inc.,

First

Lien,

Initial

Term

Loan,

5.087%,

(1-month

USD

LIBOR

+

5%),

7/23/26

.....................

United

States

3,989,848

3,756,063

Magenta

Buyer

LLC,

First

Lien,

Initial

Term

Loan,

5.75%,

(3-month

USD

LIBOR

+

5%),

7/27/28

............................

United

States

7,206,099

7,165,565

16,679,198

a

a

a

a

a

a

Textiles,

Apparel

&

Luxury

Goods

0.4%

Champ

Acquisition

Corp.,

First

Lien,

Initial

Term

Loan,

5.662%,

(3-month

USD

LIBOR

+

5.5%;

6-month

USD

LIBOR

+

5.5%),

12/19/25

..........................................

United

States

2,876,611

2,896,977

Tory

Burch

LLC,

Initial

Term

Loan,

B,

4%,

(1-month

USD

LIBOR

+

3.5%),

4/16/28

......................................

United

States

2,763,272

2,770,429

5,667,406

a

a

a

a

a

a

Transportation

Infrastructure

0.3%

First

Student

Bidco

,

Inc.,

Initial

Term

Loan,

B,

3.5%,

(3-month

USD

LIBOR

+

3%),

7/21/28

United

States

719,807

715,762

Initial

Term

Loan,

C,

3.5%,

(3-month

USD

LIBOR

+

3%),

7/21/28

United

States

265,700

264,207

k

LaserShip

,

Inc.,

First

Lien,

Initial

Term

Loan,

5.25%,

(3-month

USD

LIBOR

+

4.5%),

5/07/28

...............................

United

States

3,508,772

3,519,754

4,499,723

a

a

a

a

a

a

Total

Senior

Floating

Rate

Interests

(Cost

$1,106,206,819)

........................

1,089,901,837

Asset-Backed

Securities

0.7%

Diversified

Financial

Services

0.7%

g,n

Alinea

CLO

Ltd.

,

2018-1A

,

C

,

144A,

FRN

,

2.032

%

,

(

3-month

USD

LIBOR

+

1.9

%

),

7/20/31

...............................

United

States

7,000,000

7,007,350

g,n

Dryden

40

Senior

Loan

Fund

,

2015-40A

,

CR

,

144A,

FRN

,

2.225

%

,

(

3-month

USD

LIBOR

+

2.1

%

),

8/15/31

...................

United

States

2,000,000

2,005,246

g,n

Galaxy

XXV

CLO

Ltd.

,

2018-25A

,

C

,

144A,

FRN

,

2.124

%

,

(

3-month

USD

LIBOR

+

2

%

),

10/25/31

...........................

United

States

500,000

500,799

9,513,395

a

a

a

a

a

a

Total

Asset-Backed

Securities

(Cost

$9,500,000)

................................

9,513,395

Shares/Units

Escrows

and

Litigation

Trusts

0.0%

a,c

Millennium

Corporate

Claim

Trust,

Escrow

Account

............

United

States

13,585,837

—

a,c

Millennium

Lender

Claim

Trust,

Escrow

Account

..............

United

States

13,585,837

—

Franklin

Investors

Securities

Trust

Statement

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Investments

Franklin

Floating

Rate

Daily

Access

Fund

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The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

53

See

Abbreviations

on

page

156

.

a

a

Country

Shares/Units

a

Value

a

a

a

a

a

a

Escrows

and

Litigation

Trusts

(continued)

a,c

Remington

Outdoor

Co.,

Inc.,

Litigation

Units

.................

United

States

170,300

$

—

Total

Escrows

and

Litigation

Trusts

(Cost

$–)

...................................

—

Total

Long

Term

Investments

(Cost

$1,348,004,593)

.............................

1,322,190,447

a

Short

Term

Investments

8.4%

a

a

Country

Shares

a

Value

a

Money

Market

Funds

5.0%

e,o

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

68,461,270

68,461,270

Total

Money

Market

Funds

(Cost

$68,461,270)

..................................

68,461,270

Principal

Amount

*

a

a

a

a

a

Repurchase

Agreements

3.4%

p

Joint

Repurchase

Agreement,

0.02%,

11/01/21

(Maturity

Value

$45,676,165)

BNP

Paribas

Securities

Corp.

(Maturity

Value

$30,134,393)

Deutsche

Bank

Securities,

Inc.

(Maturity

Value

$5,496,670)

HSBC

Securities

(USA)

Inc.

(Maturity

Value

$10,045,102)

Collateralized

by

U.S.

Government

Agency

Securities,

4%

-

5%,

10/20/40

-

2/20/49;

U.S.

Treasury

Bill,

Discount

Note,

4/28/22;

and

U.S.

Treasury

Note,

2.5%,

1/31/24

(valued

at

$46,624,499)

....

45,676,089

45,676,089

Total

Repurchase

Agreements

(Cost

$45,676,089)

...............................

45,676,089

q

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

0.0%

†

Country

Repurchase

Agreements

0.0%

†

p

Joint

Repurchase

Agreement,

BNP

Paribas

SA,

0.05%,

11/01/21

(Maturity

Value

$7)

Collateralized

by

U.S.

Treasury

Bond,

6.25%,

8/15/23;

U.S.

Treasury

Bond,

Strip,

11/15/22;

U.S.

Treasury

Notes,

0.125%

-

2.625%,

9/30/22

-

5/31/26;

and

U.S.

Treasury

Bills,

Discount

Notes,

2/24/22

-

9/08/22

(valued

at

$7)

....................

7

7

Total

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

(Cost

$7)

...................................................................

7

Total

Short

Term

Investments

(Cost

$114,137,366

)

...............................

114,137,366

a

Total

Investments

(Cost

$1,462,141,959)

105.4%

................................

$1,436,327,813

Other

Assets,

less

Liabilities

(5.4)%

...........................................

(72,781,877)

Net

Assets

100.0%

...........................................................

$1,363,545,936

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Floating

Rate

Daily

Access

Fund

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The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

54

*

The

principal

amount

is

stated

in

U.S.

dollars

unless

otherwise

indicated.

†

Rounds

to

less

than

0.1%

of

net

assets.

a

Non-income

producing.

b

See

Note

12

regarding

holdings

of

5%

voting

securities.

c

Fair

valued

using

significant

unobservable

inputs.

See

Note

14

regarding

fair

value

measurements.

d

See

Note

9

regarding

restricted

securities.

e

See

Note

3(f)

regarding

investments

in

affiliated

management

investment

companies.

f

A

portion

or

all

of

the

security

is

on

loan

at

October

31,

2021.

See

Note

1(g).

g

Security

was

purchased

pursuant

to

Rule

144A

or

Regulation

S

under

the

Securities

Act

of

1933.

144A

securities

may

be

sold

in

transactions

exempt

from

registration

only

to

qualified

institutional

buyers

or

in

a

public

offering

registered

under

the

Securities

Act

of

1933.

Regulation

S

securities

cannot

be

sold

in

the

United

States

without

either

an

effective

registration

statement

filed

pursuant

to

the

Securities

Act

of

1933,

or

pursuant

to

an

exemption

from

registration.

At

October

31,

2021,

the

aggregate

value

of

these

securities

was

$61,301,275,

representing

4.5%

of

net

assets.

h

Income

may

be

received

in

additional

securities

and/or

cash.

i

See

Note

1(j)

regarding

senior

floating

rate

interests.

j

The

coupon

rate

shown

represents

the

rate

at

period

end.

k

A

portion

or

all

of

the

security

purchased

on

a

delayed

delivery

basis.

See

Note

1(d).

l

A

portion

or

all

of

the

security

represents

an

unsettled

loan

commitment.

The

coupon

rate

is

to-be

determined

(TBD)

at

the

time

of

the

settlement

and

will

be

based

upon

a

reference

index/floor

plus

a

spread.

m

See

Note

7

regarding

defaulted

securities.

n

The

coupon

rate

shown

represents

the

rate

inclusive

of

any

caps

or

floors,

if

applicable,

in

effect

at

period

end.

o

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

p

See

Note

1(c)

regarding

joint

repurchase

agreement.

q

See

Note

1(g)

regarding

securities

on

loan.

Franklin

Investors

Securities

Trust

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Franklin

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Return

Fund

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part

of

these

financial

statements.

Annual

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55

a

Year

Ended

October

31,

2021

2020

2019

2018

2017

Class

A

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$9.54

$9.65

$9.60

$9.84

$9.89

Income

from

investment

operations

a

:

Net

investment

income

..........................

0.105

b

0.244

b

0.290

0.237

0.170

Net

realized

and

unrealized

gains

(losses)

...........

0.170

(0.079)

0.068

(0.185)

(0.023)

Total

from

investment

operations

....................

0.275

0.165

0.358

0.052

0.147

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

..

(0.265)

(0.275)

(0.308)

(0.292)

(0.197)

Net

asset

value,

end

of

year

.......................

$9.55

$9.54

$9.65

$9.60

$9.84

Total

return

c

...................................

2.90%

1.77%

3.78%

0.54%

1.50%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.94%

0.94%

0.94%

0.96%

0.96%

Expenses

net

of

waiver

and

payments

by

affiliates

d

......

0.67%

0.67%

0.68%

0.72%

0.80%

Net

investment

income

...........................

1.09%

2.58%

2.99%

2.43%

1.73%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$1,915,410

$1,778,666

$1,631,123

$1,499,579

$1,519,902

Portfolio

turnover

rate

............................

85.02%

e

93.23%

51.93%

e

56.12%

50.40%

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

f

....

56.22%

e

67.97%

51.93%

e

44.01%

45.29%

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

e

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

See

Note

3(h)

.

f

See

Note

1(

i

)

regarding

mortgage

dollar

rolls.

Franklin

Investors

Securities

Trust

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Highlights

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Return

Fund

(continued)

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integral

part

of

these

financial

statements.

56

a

Year

Ended

October

31,

2021

2020

2019

2018

2017

Class

C

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$9.50

$9.61

$9.56

$9.80

$9.86

Income

from

investment

operations

a

:

Net

investment

income

..........................

0.068

b

0.205

b

0.251

0.168

0.121

Net

realized

and

unrealized

gains

(losses)

...........

0.169

(0.074)

0.068

(0.155)

(0.015)

Total

from

investment

operations

....................

0.237

0.131

0.319

0.013

0.106

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

..

(0.227)

(0.242)

(0.269)

(0.253)

(0.166)

Net

asset

value,

end

of

year

.......................

$9.51

$9.50

$9.61

$9.56

$9.80

Total

return

c

...................................

2.50%

1.42%

3.38%

0.14%

1.08%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

1.35%

1.34%

1.34%

1.36%

1.36%

Expenses

net

of

waiver

and

payments

by

affiliates

d

......

1.08%

1.07%

1.08%

1.12%

1.20%

Net

investment

income

...........................

0.71%

2.18%

2.59%

2.03%

1.33%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$99,990

$117,893

$135,372

$130,206

$174,754

Portfolio

turnover

rate

............................

85.02%

e

93.23%

51.93%

e

56.12%

50.40%

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

f

....

56.22%

e

67.97%

51.93%

e

44.01%

45.29%

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

e

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

See

Note

3(h)

.

f

See

Note

1(

i

)

regarding

mortgage

dollar

rolls.

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Low

Duration

Total

Return

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

57

a

Year

Ended

October

31,

Year

Ended

October

31,

2019

a

2021

2020

Class

R

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

............................................

$9.54

$9.65

$9.65

Income

from

investment

operations

b

:

Net

investment

income

...................................................

0.077

c

0.219

c

0.012

Net

realized

and

unrealized

gains

(losses)

....................................

0.174

(0.073)

0.001

Total

from

investment

operations

.............................................

0.251

0.146

0.013

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

...........................

(0.241)

(0.256)

(0.013)

Net

asset

value,

end

of

year

................................................

$9.55

$9.54

$9.65

Total

return

d

............................................................

2.64%

1.57%

0.14%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

...............................

1.17%

1.17%

1.19%

Expenses

net

of

waiver

and

payments

by

affiliates

f

...............................

0.92%

0.90%

0.93%

Net

investment

income

....................................................

0.81%

2.33%

2.73%

Supplemental

data

Net

assets,

end

of

year

(000’s)

..............................................

$198

$95

$18

Portfolio

turnover

rate

.....................................................

85.02%

g

93.23%

51.93%

g

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

h

.............................

56.22%

g

67.97%

51.93%

g

a

For

the

period

October

15,

2019

(effective

date)

to

October

31,

2019.

b

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

c

Based

on

average

daily

shares

outstanding.

d

Total

return

is

not

annualized

for

periods

less

than

one

year.

e

Ratios

are

annualized

for

periods

less

than

one

year.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

g

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

See

Note

3(h).

h

See

Note

1(

i

)

regarding

mortgage

dollar

rolls.

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Low

Duration

Total

Return

Fund

(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

58

a

Year

Ended

October

31,

2021

2020

2019

2018

2017

Class

R6

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$9.61

$9.71

$9.66

$9.90

$9.94

Income

from

investment

operations

a

:

Net

investment

income

..........................

0.141

b

0.277

b

0.326

0.271

0.214

Net

realized

and

unrealized

gains

(losses)

...........

0.159

(0.071)

0.071

(0.178)

(0.025)

Total

from

investment

operations

....................

0.300

0.206

0.397

0.093

0.189

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

..

(0.300)

(0.306)

(0.347)

(0.333)

(0.229)

Net

asset

value,

end

of

year

.......................

$9.61

$9.61

$9.71

$9.66

$9.90

Total

return

....................................

3.15%

2.20%

4.17%

0.96%

1.92%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.58%

0.58%

0.56%

0.55%

0.53%

Expenses

net

of

waiver

and

payments

by

affiliates

c

......

0.30%

0.30%

0.30%

0.31%

0.39%

Net

investment

income

...........................

1.46%

2.92%

3.37%

2.84%

2.14%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$543,485

$553,603

$1,003,208

$1,017,856

$591,622

Portfolio

turnover

rate

............................

85.02%

d

93.23%

51.93%

d

56.12%

50.40%

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

e

....

56.22%

d

67.97%

51.93%

d

44.01%

45.29%

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

d

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

See

Note

3(h)

.

e

See

Note

1(

i

)

mortgage

dollar

rolls.

Franklin

Investors

Securities

Trust

Financial

Highlights

Franklin

Low

Duration

Total

Return

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

59

a

Year

Ended

October

31,

2021

2020

2019

2018

2017

Advisor

Class

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$9.60

$9.70

$9.65

$9.89

$9.94

Income

from

investment

operations

a

:

Net

investment

income

..........................

0.128

b

0.269

b

0.315

0.264

0.209

Net

realized

and

unrealized

gains

(losses)

...........

0.161

(0.073)

0.069

(0.187)

(0.042)

Total

from

investment

operations

....................

0.289

0.196

0.384

0.077

0.167

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

..

(0.289)

(0.297)

(0.334)

(0.317)

(0.217)

Net

asset

value,

end

of

year

.......................

$9.60

$9.60

$9.70

$9.65

$9.89

Total

return

....................................

3.03%

2.10%

4.04%

0.80%

1.70%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.69%

0.69%

0.69%

0.71%

0.71%

Expenses

net

of

waiver

and

payments

by

affiliates

c

......

0.42%

0.42%

0.43%

0.47%

0.55%

Net

investment

income

...........................

1.33%

2.83%

3.24%

2.68%

1.98%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$251,429

$229,233

$254,314

$214,339

$428,838

Portfolio

turnover

rate

............................

85.02%

d

93.23%

51.93%

d

56.12%

50.40%

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

e

....

56.22%

d

67.97%

51.93%

d

44.01%

45.29%

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

d

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

See

Note

3(h).

e

See

Note

1(i

)

regarding

mortgage

dollar

rolls.

Franklin

Investors

Securities

Trust

Statement

of

Investments,

October

31,

2021

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

60

,

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

0.0%

†

Multiline

Retail

0.0%

a,b,c

K2016470219

South

Africa

Ltd.,

A

.........................

South

Africa

12,326,925

$

—

a,b,c

K2016470219

South

Africa

Ltd.,

B

.........................

South

Africa

1,226,701

—

—

Oil,

Gas

&

Consumable

Fuels

0.0%

†

a,b

Riviera

Resources,

Inc.

.................................

United

States

2,835

733

Total

Common

Stocks

(Cost

$135,230)

.........................................

733

Management

Investment

Companies

4.5%

Capital

Markets

4.5%

d

Franklin

Floating

Rate

Income

Fund

.......................

United

States

14,835,570

120,909,895

d

Franklin

Liberty

High

Yield

Corporate

ETF

...................

United

States

259,500

6,801,288

127,711,183

Total

Management

Investment

Companies

(Cost

$133,781,192)

...................

127,711,183

Warrants

Warrants

0.0%

†

Oil,

Gas

&

Consumable

Fuels

0.0%

a,b

Battalion

Oil

Corp.,

A,

10/08/22

...........................

United

States

1,093

—

a,b

Battalion

Oil

Corp.,

B,

10/08/22

...........................

United

States

1,366

—

a,b

Battalion

Oil

Corp.,

C,

10/08/22

...........................

United

States

1,757

—

—

Paper

&

Forest

Products

0.0%

†

b

Verso

Corp.,

7/25/23

...................................

United

States

146

803

Total

Warrants

(Cost

$—)

.....................................................

803

Principal

Amount

*

Corporate

Bonds

19.5%

Aerospace

&

Defense

0.6%

Boeing

Co.

(The)

,

Senior

Note

,

2.196

%

,

2/04/26

..............

United

States

10,400,000

10,420,885

General

Dynamics

Corp.

,

Senior

Note

,

3.25

%

,

4/01/25

.........

United

States

4,000,000

4,260,443

e

TransDigm

,

Inc.

,

Senior

Secured

Note

,

144A,

6.25

%

,

3/15/26

....

United

States

1,500,000

1,567,500

16,248,828

Air

Freight

&

Logistics

0.1%

e

DAE

Funding

LLC

,

Senior

Note

,

144A,

1.55

%

,

8/01/24

.........

United

Arab

Emirates

1,700,000

1,679,175

Airlines

0.3%

e

American

Airlines

Inc

/

AAdvantage

Loyalty

IP

Ltd.

,

Senior

Secured

Note

,

144A,

5.5

%

,

4/20/26

.............................

United

States

1,300,000

1,365,325

e

Delta

Air

Lines,

Inc.

/

SkyMiles

IP

Ltd.

,

Senior

Secured

Note

,

144A,

4.5

%

,

10/20/25

.....................................

United

States

4,600,000

4,909,131

e

Hawaiian

Brand

Intellectual

Property

Ltd.

/

HawaiianMiles

Loyalty

Ltd.

,

Senior

Secured

Note

,

144A,

5.75

%

,

1/20/26

............

United

States

2,100,000

2,207,625

e

United

Airlines,

Inc.

,

Senior

Secured

Note

,

144A,

4.375

%

,

4/15/26

.

United

States

300,000

310,716

8,792,797

Auto

Components

0.0%

†

Aptiv

Corp.

,

Senior

Bond

,

4.15

%

,

3/15/24

...................

United

States

900,000

960,660

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

61

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Banks

3.5%

Bank

of

America

Corp.

,

Senior

Note,

3.55%

to

3/05/23,

FRN

thereafter,

3/05/24

.......

United

States

10,350,000

$

10,738,939

Senior

Note,

2.015%

to

2/13/25,

FRN

thereafter,

2/13/26

......

United

States

3,500,000

3,566,539

Barclays

plc

,

Senior

Note

,

4.61%

to

2/15/22,

FRN

thereafter

,

2/15/23

United

Kingdom

6,300,000

6,372,852

Citigroup,

Inc.

,

Senior

Note,

3.106%

to

4/08/25,

FRN

thereafter,

4/08/26

......

United

States

6,500,000

6,848,593

Sub.

Bond,

4.6%,

3/09/26

.............................

United

States

2,600,000

2,901,015

HSBC

Holdings

plc

,

Senior

Bond,

4.3%,

3/08/26

............................

United

Kingdom

800,000

881,448

Senior

Note,

3.262%

to

3/13/22,

FRN

thereafter,

3/13/23

......

United

Kingdom

1,400,000

1,413,935

Senior

Note,

2.013%

to

9/22/27,

FRN

thereafter,

9/22/28

......

United

Kingdom

7,600,000

7,492,044

JPMorgan

Chase

&

Co.

,

Senior

Note,

2.083%

to

4/22/25,

FRN

thereafter,

4/22/26

......

United

States

18,200,000

18,570,077

Sub.

Bond,

3.875%,

9/10/24

...........................

United

States

8,400,000

9,033,690

e

Shinhan

Bank

Co.

Ltd.

,

Senior

Note

,

144A,

1.375

%

,

10/21/26

....

South

Korea

6,500,000

6,425,382

e

Societe

Generale

SA

,

Senior

Note

,

144A,

1.792%

to

6/09/26,

FRN

thereafter

,

6/09/27

...................................

France

3,900,000

3,840,889

e

UniCredit

SpA

,

Senior

Note

,

144A,

1.982%

to

6/03/26,

FRN

thereafter

,

6/03/27

...................................

Italy

3,800,000

3,737,112

Wells

Fargo

&

Co.

,

Senior

Note,

2.188%

to

4/30/25,

FRN

thereafter,

4/30/26

......

United

States

13,400,000

13,699,824

Sub.

Bond,

4.1%,

6/03/26

.............................

United

States

3,000,000

3,290,869

98,813,208

Beverages

0.5%

Anheuser-Busch

Cos.

LLC

/

Anheuser-Busch

InBev

Worldwide,

Inc.

,

Senior

Note

,

3.65

%

,

2/01/26

...........................

Belgium

8,000,000

8,700,060

e

Coca-Cola

Europacific

Partners

plc

,

Senior

Note

,

144A,

1.5

%

,

1/15/27

...........................................

United

Kingdom

4,400,000

4,349,661

13,049,721

Biotechnology

0.2%

AbbVie,

Inc.

,

Senior

Bond,

3.6%,

5/14/25

............................

United

States

4,510,000

4,836,972

Senior

Note,

3.8%,

3/15/25

............................

United

States

600,000

646,848

Senior

Note,

2.95%,

11/21/26

..........................

United

States

500,000

528,807

6,012,627

Capital

Markets

1.1%

Credit

Suisse

Group

AG

,

Senior

Note

,

4.55

%

,

4/17/26

..........

Switzerland

8,000,000

8,891,398

Goldman

Sachs

Group,

Inc.

(The)

,

Senior

Bond

,

3.75

%

,

2/25/26

..

United

States

6,500,000

7,047,632

Morgan

Stanley

,

Senior

Bond,

3.7%,

10/23/24

...........................

United

States

1,400,000

1,501,866

Senior

Note,

2.188%

to

4/28/25,

FRN

thereafter,

4/28/26

......

United

States

3,800,000

3,890,765

Sub.

Bond,

4.35%,

9/08/26

............................

United

States

7,800,000

8,670,152

30,001,813

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

62

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Chemicals

0.6%

e,f

Anagram

International,

Inc.

/

Anagram

Holdings

LLC

,

Secured

Note

,

144A,

PIK,

10

%

,

8/15/26

..............................

United

States

322,028

$

332,147

e

Braskem

Netherlands

Finance

BV

,

Senior

Bond

,

144A,

4.5

%

,

1/31/30

...........................................

Brazil

7,100,000

7,213,813

Methanex

Corp.

,

Senior

Bond

,

4.25

%

,

12/01/24

...............

Canada

1,500,000

1,584,375

e

SABIC

Capital

II

BV

,

Senior

Bond

,

144A,

4.5

%

,

10/10/28

........

Saudi

Arabia

400,000

455,117

Sasol

Financing

USA

LLC

,

Senior

Bond

,

6.5

%

,

9/27/28

.........

South

Africa

6,300,000

6,985,125

16,570,577

Commercial

Services

&

Supplies

0.0%

†

e

APCOA

Parking

Holdings

GmbH

,

Senior

Secured

Note

,

144A,

4.625

%

,

1/15/27

.....................................

Germany

1,200,000

EUR

1,380,561

Communications

Equipment

0.1%

e

CommScope

Technologies

LLC

,

Senior

Bond

,

144A,

6

%

,

6/15/25

.

United

States

1,500,000

1,487,423

Consumer

Finance

0.6%

AerCap

Ireland

Capital

DAC

/

AerCap

Global

Aviation

Trust

,

Senior

Note

,

3

%

,

10/29/28

..................................

Ireland

3,000,000

3,043,857

Capital

One

Financial

Corp.

,

Senior

Note

,

3.05

%

,

3/09/22

.......

United

States

13,800,000

13,899,470

Caterpillar

Financial

Services

Corp.

,

Senior

Note

,

1.45

%

,

5/15/25

.

United

States

1,100,000

1,112,134

18,055,461

Containers

&

Packaging

0.1%

e

Owens-Brockway

Glass

Container,

Inc.

,

Senior

Note

,

144A,

5.875

%

,

8/15/23

...........................................

United

States

1,000,000

1,053,750

e

Sealed

Air

Corp.

,

Senior

Bond

,

144A,

5.25

%

,

4/01/23

..........

United

States

950,000

994,412

2,048,162

Diversified

Financial

Services

0.3%

g

Cia

Securitizadora

de

Creditos

Financeiros

Vert

-Fintech

,

12

,

Senior

Secured

Note

,

FRN

,

0

%

,

(

BZDIOVRA

+

5.75

%

),

2/14/24

......

Brazil

7,676,000

BRL

1,675,400

e

EDP

Finance

BV

,

Senior

Note

,

144A,

1.71

%

,

1/24/28

..........

Portugal

6,500,000

6,342,688

8,018,088

Diversified

Telecommunication

Services

1.0%

AT&T,

Inc.

,

Senior

Bond

,

4.125

%

,

2/17/26

...................

United

States

7,000,000

7,723,275

e

CCO

Holdings

LLC

/

CCO

Holdings

Capital

Corp.

,

Senior

Note

,

144A,

4

%

,

3/01/23

...................................

United

States

1,700,000

1,702,125

e

Iliad

Holding

SAS

,

Senior

Secured

Note

,

144A,

6.5

%

,

10/15/26

...

France

2,000,000

2,063,340

Verizon

Communications,

Inc.

,

Senior

Note

,

1.45

%

,

3/20/26

.....

United

States

15,700,000

15,667,778

27,156,518

Electric

Utilities

1.0%

Exelon

Corp.

,

Senior

Bond

,

3.4

%

,

4/15/26

...................

United

States

7,000,000

7,505,251

e

Korea

East-West

Power

Co.

Ltd.

,

Senior

Note,

144A,

3.875%,

7/19/23

.....................

South

Korea

4,800,000

5,051,428

Senior

Note,

144A,

1.75%,

5/06/25

......................

South

Korea

8,500,000

8,591,688

Southern

Co.

(The)

,

Senior

Bond

,

3.25

%

,

7/01/26

.............

United

States

6,850,000

7,297,903

28,446,270

Energy

Equipment

&

Services

0.3%

Baker

Hughes

Holdings

LLC

/

Baker

Hughes

Co-Obligor,

Inc.

,

Senior

Note

,

2.773

%

,

12/15/22

...............................

United

States

8,800,000

8,999,582

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

63

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Entertainment

0.7%

e

Banijay

Entertainment

SASU

,

Senior

Secured

Note

,

144A,

5.375

%

,

3/01/25

...........................................

France

3,500,000

$

3,605,000

Netflix,

Inc.

,

Senior

Bond,

5.75%,

3/01/24

...........................

United

States

1,800,000

1,984,500

Senior

Bond,

4.375%,

11/15/26

.........................

United

States

3,100,000

3,452,625

e

Senior

Note,

144A,

3.625%,

6/15/25

.....................

United

States

3,100,000

3,299,932

Walt

Disney

Co.

(The)

,

Senior

Note

,

1.75

%

,

1/13/26

...........

United

States

6,600,000

6,698,969

19,041,026

Equity

Real

Estate

Investment

Trusts

(REITs)

0.1%

e

VICI

Properties

LP

/

VICI

Note

Co.,

Inc.

,

Senior

Note

,

144A,

3.5

%

,

2/15/25

...........................................

United

States

3,000,000

3,056,250

Food

&

Staples

Retailing

0.1%

e

Cencosud

SA

,

Senior

Bond

,

144A,

4.375

%

,

7/17/27

...........

Chile

2,900,000

3,086,325

Health

Care

Equipment

&

Supplies

0.0%

†

Edwards

Lifesciences

Corp.

,

Senior

Bond

,

4.3

%

,

6/15/28

.......

United

States

300,000

343,429

Health

Care

Providers

&

Services

0.6%

Centene

Corp.

,

Senior

Note

,

3.375

%

,

2/15/30

................

United

States

2,700,000

2,774,398

Cigna

Corp.

,

Senior

Note

,

1.25

%

,

3/15/26

...................

United

States

8,300,000

8,210,948

Orlando

Health

Obligated

Group

,

3.777

%

,

10/01/28

............

United

States

105,000

114,639

Providence

St

Joseph

Health

Obligated

Group

,

H

,

2.746

%

,

10/01/26

United

States

15,000

15,761

Quest

Diagnostics,

Inc.

,

Senior

Bond

,

3.45

%

,

6/01/26

..........

United

States

4,150,000

4,473,607

15,589,353

Hotels,

Restaurants

&

Leisure

1.0%

e

Carnival

Corp.

,

Senior

Note

,

144A,

5.75

%

,

3/01/27

............

United

States

2,340,000

2,383,875

e

Genting

New

York

LLC

/

GENNY

Capital,

Inc.

,

Senior

Note

,

144A,

3.3

%

,

2/15/26

......................................

United

States

400,000

394,218

e

International

Game

Technology

plc

,

Senior

Secured

Note

,

144A,

4.125

%

,

4/15/26

.....................................

United

States

1,800,000

1,851,750

e

Melco

Resorts

Finance

Ltd.

,

Senior

Note

,

144A,

4.875

%

,

6/06/25

.

Hong

Kong

2,800,000

2,772,700

e

NCL

Corp.

Ltd.

,

Senior

Note

,

144A,

5.875

%

,

3/15/26

...........

United

States

5,450,000

5,470,438

e

Royal

Caribbean

Cruises

Ltd.

,

Senior

Note

,

144A,

5.5

%

,

8/31/26

..

United

States

5,800,000

5,916,000

e

Sands

China

Ltd.

,

Senior

Note

,

144A,

2.3

%

,

3/08/27

...........

Macau

3,400,000

3,221,670

e

Studio

City

Finance

Ltd.

,

Senior

Note

,

144A,

6

%

,

7/15/25

.......

Macau

2,600,000

2,527,642

e

Wynn

Macau

Ltd.

,

Senior

Note

,

144A,

5.625

%

,

8/26/28

.........

Macau

2,500,000

2,338,325

26,876,618

Independent

Power

and

Renewable

Electricity

Producers

0.1%

e

InterGen

NV

,

Senior

Secured

Bond

,

144A,

7

%

,

6/30/23

.........

Netherlands

1,400,000

1,379,427

e

Talen

Energy

Supply

LLC

,

Senior

Note

,

144A,

10.5

%

,

1/15/26

....

United

States

1,500,000

994,627

2,374,054

Interactive

Media

&

Services

0.7%

Baidu,

Inc.

,

Senior

Note

,

4.375

%

,

5/14/24

...................

China

6,500,000

6,980,738

e

Tencent

Holdings

Ltd.

,

Senior

Note,

144A,

2.985%,

1/19/23

.....................

China

9,200,000

9,408,133

Senior

Note,

144A,

1.81%,

1/26/26

......................

China

3,000,000

2,997,586

19,386,457

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

64

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Internet

&

Direct

Marketing

Retail

0.5%

Alibaba

Group

Holding

Ltd.

,

Senior

Note,

2.8%,

6/06/23

............................

China

1,100,000

$

1,133,990

Senior

Note,

3.6%,

11/28/24

...........................

China

11,000,000

11,703,982

Amazon.com,

Inc.

,

Senior

Note

,

2.4

%

,

2/22/23

...............

United

States

2,550,000

2,612,074

15,450,046

IT

Services

0.2%

Fiserv,

Inc.

,

Senior

Note

,

2.25

%

,

6/01/27

....................

United

States

5,200,000

5,289,636

Machinery

0.0%

†

e

Manitowoc

Co.,

Inc.

(The)

,

Secured

Note

,

144A,

9

%

,

4/01/26

....

United

States

1,200,000

1,279,224

Media

0.7%

Charter

Communications

Operating

LLC

/

Charter

Communications

Operating

Capital

,

Senior

Secured

Note

,

4.908

%

,

7/23/25

.....

United

States

8,000,000

8,899,281

CSC

Holdings

LLC

,

Senior

Bond

,

5.25

%

,

6/01/24

.............

United

States

2,000,000

2,107,500

Fox

Corp.

,

Senior

Note

,

3.05

%

,

4/07/25

.....................

United

States

2,000,000

2,112,467

e

Sirius

XM

Radio,

Inc.

,

Senior

Note

,

144A,

3.125

%

,

9/01/26

......

United

States

2,000,000

2,005,000

e

Univision

Communications,

Inc.

,

Senior

Secured

Note

,

144A,

5.125

%

,

2/15/25

.....................................

United

States

3,700,000

3,760,125

18,884,373

Metals

&

Mining

0.0%

†

e

Novelis

Corp.

,

Senior

Note

,

144A,

3.25

%

,

11/15/26

............

United

States

1,000,000

998,750

Multiline

Retail

0.0%

a,e,f

K2016470219

South

Africa

Ltd.

,

Senior

Secured

Note

,

144A,

PIK,

3

%

,

12/31/22

.......................................

South

Africa

1,036,936

—

a,e,f

K2016470260

South

Africa

Ltd.

,

Senior

Secured

Note

,

144A,

PIK,

25

%

,

12/31/22

......................................

South

Africa

371,816

—

—

Multi-Utilities

0.0%

†

Dominion

Energy,

Inc.

,

D

,

Senior

Bond

,

2.85

%

,

8/15/26

.........

United

States

1,300,000

1,370,316

Oil,

Gas

&

Consumable

Fuels

2.3%

Apache

Corp.

,

Senior

Note

,

4.625

%

,

11/15/25

................

United

States

1,500,000

1,618,860

BP

Capital

Markets

America,

Inc.

,

Senior

Note

,

3.41

%

,

2/11/26

...

United

States

7,000,000

7,548,965

Cenovus

Energy,

Inc.

,

Senior

Note

,

5.375

%

,

7/15/25

...........

Canada

2,211,000

2,484,629

Cheniere

Corpus

Christi

Holdings

LLC

,

Senior

Secured

Note

,

5.875

%

,

3/31/25

.....................................

United

States

5,800,000

6,494,413

Chevron

Corp.

,

Senior

Note

,

1.554

%

,

5/11/25

................

United

States

4,500,000

4,568,423

Continental

Resources,

Inc.

,

Senior

Note

,

4.375

%

,

1/15/28

......

United

States

6,900,000

7,538,250

Energy

Transfer

LP

,

Senior

Bond

,

4.75

%

,

1/15/26

.............

United

States

5,200,000

5,759,132

EnLink

Midstream

Partners

LP

,

Senior

Bond

,

4.85

%

,

7/15/26

.....

United

States

4,700,000

4,893,945

e

Harbour

Energy

plc

,

Senior

Note

,

144A,

5.5

%

,

10/15/26

........

United

Kingdom

1,300,000

1,299,857

e

Harvest

Operations

Corp.

,

Senior

Note

,

144A,

4.2

%

,

6/01/23

.....

South

Korea

2,900,000

3,044,699

MPLX

LP

,

Senior

Note

,

4.875

%

,

12/01/24

...................

United

States

6,800,000

7,456,385

Occidental

Petroleum

Corp.

,

Senior

Note,

3.45%,

7/15/24

...........................

United

States

3,000,000

3,078,435

Senior

Note,

5.5%,

12/01/25

...........................

United

States

500,000

550,625

Sabine

Pass

Liquefaction

LLC

,

Senior

Secured

Note,

5.75%,

5/15/24

....................

United

States

2,000,000

2,203,211

Senior

Secured

Note,

5.625%,

3/01/25

...................

United

States

2,000,000

2,246,324

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

65

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Oil,

Gas

&

Consumable

Fuels

(continued)

Williams

Cos.,

Inc.

(The)

,

Senior

Bond

,

4

%

,

9/15/25

...........

United

States

2,300,000

$

2,500,738

63,286,891

Personal

Products

0.2%

Avon

Products,

Inc.

,

Senior

Bond

,

6.75

%

,

3/15/23

.............

United

Kingdom

5,835,000

6,155,925

e

Oriflame

Investment

Holding

plc

,

Senior

Secured

Note

,

144A,

5.125

%

,

5/04/26

.....................................

Switzerland

600,000

595,710

6,751,635

Pharmaceuticals

0.7%

AstraZeneca

plc

,

Senior

Note

,

0.7

%

,

4/08/26

.................

United

Kingdom

6,300,000

6,122,257

e

Bayer

US

Finance

II

LLC

,

Senior

Note,

144A,

3.875%,

12/15/23

....................

Germany

5,800,000

6,126,270

Senior

Note,

144A,

4.25%,

12/15/25

.....................

Germany

4,600,000

5,044,917

Bristol-Myers

Squibb

Co.

,

Senior

Note

,

2.9

%

,

7/26/24

..........

United

States

2,551,000

2,685,805

Royalty

Pharma

plc

,

Senior

Note

,

1.75

%

,

9/02/27

.............

United

States

700,000

686,927

20,666,176

Real

Estate

Management

&

Development

0.1%

e

Country

Garden

Holdings

Co.

Ltd.

,

Senior

Secured

Note

,

Reg

S,

7.25

%

,

4/08/26

.....................................

China

2,200,000

2,287,280

e

Vivion

Investments

SARL

,

Senior

Note

,

Reg

S,

3

%

,

8/08/24

.....

Luxembourg

700,000

EUR

781,345

3,068,625

Semiconductors

&

Semiconductor

Equipment

0.4%

Maxim

Integrated

Products,

Inc.

,

Senior

Bond

,

3.45

%

,

6/15/27

...

United

States

800,000

869,379

e

SK

Hynix,

Inc.

,

Senior

Note

,

144A,

1.5

%

,

1/19/26

.............

South

Korea

9,900,000

9,713,130

10,582,509

Specialty

Retail

0.0%

†

e,g

Party

City

Holdings,

Inc.

,

Senior

Secured

Note

,

144A,

FRN

,

5.75

%

,

(

6-month

USD

LIBOR

+

5

%

),

7/15/25

.....................

United

States

565,890

527,308

Thrifts

&

Mortgage

Finance

0.4%

e

BPCE

SA

,

Senior

Note

,

144A,

2.375

%

,

1/14/25

...............

France

7,000,000

7,178,898

Radian

Group,

Inc.

,

Senior

Note

,

6.625

%

,

3/15/25

.............

United

States

3,000,000

3,341,250

10,520,148

Tobacco

0.3%

Altria

Group,

Inc.

,

Senior

Note

,

2.35

%

,

5/06/25

...............

United

States

4,200,000

4,331,466

e

Imperial

Brands

Finance

plc

,

Senior

Bond,

144A,

4.25%,

7/21/25

......................

United

Kingdom

3,695,000

3,997,434

Senior

Note,

144A,

3.125%,

7/26/24

.....................

United

Kingdom

700,000

731,430

9,060,330

Wireless

Telecommunication

Services

0.1%

e

Sprint

Spectrum

Co.

LLC

/

Sprint

Spectrum

Co.

II

LLC

/

Sprint

Spectrum

Co.

III

LLC

,

Senior

Secured

Note

,

144A,

4.738

%

,

3/20/25

...........................................

United

States

700,000

739,375

T-Mobile

USA,

Inc.

,

Senior

Note

,

2.25

%

,

2/15/26

..............

United

States

3,000,000

3,018,750

3,758,125

Total

Corporate

Bonds

(Cost

$546,847,457)

.....................................

548,969,075

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

66

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

g,h

Senior

Floating

Rate

Interests

1.0%

Aerospace

&

Defense

0.1%

Dynasty

Acquisition

Co.,

Inc.

,

2020

Term

Loan,

B1,

3.632%,

(3-month

USD

LIBOR

+

3.5%),

4/06/26

...........................................

United

States

1,784,719

$

1,746,330

2020

Term

Loan,

B2,

3.632%,

(3-month

USD

LIBOR

+

3.5%),

4/06/26

...........................................

United

States

959,527

938,887

2,685,217

a

a

a

a

a

a

Airlines

0.3%

Air

Canada

,

Term

Loan

,

4.25

%

,

(

3-month

USD

LIBOR

+

3.5

%

),

8/11/28

...........................................

Canada

6,900,000

6,981,938

Kestrel

Bidco

,

Inc.

,

Term

Loan

,

4

%

,

(

3-month

USD

LIBOR

+

3

%

),

12/11/26

..........................................

Canada

2,204,129

2,172,621

9,154,559

a

a

a

a

a

a

Diversified

Consumer

Services

0.0%

†

KUEHG

Corp.

,

Term

Loan,

B3

,

4.75

%

,

(

3-month

USD

LIBOR

+

3.75

%

),

2/21/25

.....................................

United

States

1,621,872

1,609,813

Entertainment

0.1%

Diamond

Sports

Group

LLC

,

Term

Loan

,

3.34

%

,

(

1-month

USD

LIBOR

+

3.25

%

),

8/24/26

..............................

United

States

1,719,298

915,526

William

Morris

Endeavor

Entertainment

LLC

(IMG

Worldwide

Holdings

LLC)

,

First

Lien,

Term

Loan,

B1

,

2.84

%

,

(

1-month

USD

LIBOR

+

2.75

%

),

5/18/25

..............................

United

States

1,397,336

1,373,658

2,289,184

a

a

a

a

a

a

Leisure

Products

0.2%

Hercules

Achievement,

Inc.

(Varsity

Brands

Holding

Co.,

Inc.)

,

First

Lien,

Initial

Term

Loan

,

4.5

%

,

(

1-month

USD

LIBOR

+

3.5

%

),

12/16/24

..........................................

United

States

2,383,988

2,357,919

Motion

Acquisition

Ltd.

,

Term

Loan,

B1,

3.382%,

(3-month

USD

LIBOR

+

3.25%),

11/12/26

United

Kingdom

2,444,506

2,386,633

Term

Loan,

B2,

3.382%,

(3-month

USD

LIBOR

+

3.25%),

11/12/26

United

Kingdom

348,494

340,243

5,084,795

a

a

a

a

a

a

Media

0.2%

Cengage

Learning,

Inc.

,

First

Lien,

Term

Loan,

B

,

5.75

%

,

(

3-month

USD

LIBOR

+

4.75

%

),

7/14/26

..........................

United

States

2,610,029

2,626,746

Clear

Channel

Outdoor

Holdings,

Inc.

,

Term

Loan,

B

,

3.629

%

,

(

2-month

USD

LIBOR

+

3.5%;

3-month

USD

LIBOR

+

3.5%

),

8/21/26

...........................................

United

States

3,191,858

3,145,624

5,772,370

a

a

a

a

a

a

Personal

Products

0.1%

Coty,

Inc.

,

USD

Term

Loan,

B

,

2.337

%

,

(

1-month

USD

LIBOR

+

2.25

%

),

4/07/25

.....................................

United

States

2,257,322

2,229,106

Total

Senior

Floating

Rate

Interests

(Cost

$29,122,604)

..........................

28,825,044

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

67

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

i

Marketplace

Loans

1.4%

Diversified

Financial

Services

1.4%

a

Freedom

Financial

Asset

Management

LLC,

5.99%

-

25.49%,

8/18/23

-

12/01/26

...................................

United

States

5,403,339

$

5,524,334

a

LendingClub

Corp.

-

LCX,

5%

-

28.8%,

5/10/22

-

4/14/25

........

United

States

2,458,710

2,236,008

a

LendingClub

Corp.,

5%

-

28.8%,

9/24/21

-

3/16/25

.............

United

States

7,854,773

7,427,049

a

Prosper

Funding

LLC,

10.5%

-

28.23%,

10/26/24

-

10/28/26

.....

United

States

316,100

316,100

a

Square

Loans,

Zero

Cpn

.,

3/18/22

-

4/26/23

.................

United

States

20,119,873

18,736,277

a

Upgrade,

Inc.,

13.64%

-

30.51%,

9/05/22

-

1/25/25

............

United

States

1,097,732

1,046,203

a

Upstart

Network,

Inc.,

5.26%

-

32.67%,

9/15/24

-

10/20/28

.......

United

States

2,607,654

2,611,621

37,897,592

a

a

a

a

a

a

Total

Marketplace

Loans

(Cost

$39,124,735)

....................................

37,897,592

Foreign

Government

and

Agency

Securities

5.8%

e

Banque

Centrale

de

Tunisie

,

Senior

Bond,

144A,

5.75%,

1/30/25

..

Tunisia

4,700,000

3,778,339

e

Banque

Ouest

Africaine

de

Developpement

,

Senior

Bond,

144A,

5%,

7/27/27

...........................................

Supranational

j

3,900,000

4,334,140

e

Belarus

Government

Bond,

Senior

Bond,

144A,

7.625%,

6/29/27

..

Belarus

3,900,000

3,805,620

Brazil

Government

Bond,

Senior

Bond,

8.75%,

2/04/25

.........

Brazil

2,720,000

3,325,227

Colombia

Government

Bond,

Senior

Bond,

8.125%,

5/21/24

.....

Colombia

5,300,000

6,118,823

e

Comision

Federal

de

Electricidad

,

Senior

Bond,

144A,

4.75%,

2/23/27

...........................................

Mexico

6,300,000

7,002,450

e

Dexia

Credit

Local

SA,

Senior

Note,

144A,

2.375%,

9/20/22

.....

France

4,800,000

4,881,735

e

Dominican

Republic

Government

Bond,

Senior

Note,

144A,

8.9%,

2/15/23

...........................................

Dominican

Republic

218,500,000

DOP

4,122,057

Ecopetrol

SA,

Senior

Bond,

5.375%,

6/26/26

.................

Colombia

6,300,000

6,820,380

e

Egypt

Government

Bond,

Senior

Note,

144A,

5.75%,

5/29/24

....

Egypt

5,200,000

5,382,780

e,k

Electricite

de

France

SA,

Junior

Sub.

Bond,

144A,

5.625%

to

1/22/24,

FRN

thereafter,

Perpetual

.......................

France

2,200,000

2,340,800

Equinor

ASA,

Senior

Note,

2.875%,

4/06/25

...........................

Norway

15,300,000

16,133,404

Senior

Note,

1.75%,

1/22/26

...........................

Norway

5,400,000

5,479,254

e

Export-Import

Bank

of

India,

Senior

Bond,

144A,

3.875%,

2/01/28

.

India

3,400,000

3,648,435

Export-Import

Bank

of

Korea,

Senior

Bond,

2.875%,

1/21/25

.....

South

Korea

2,000,000

2,103,927

e

Gabon

Government

Bond,

Senior

Bond,

144A,

6.95%,

6/16/25

...

Gabon

1,250,000

1,347,750

Hungary

Government

Bond,

Senior

Bond,

5.375%,

2/21/23

......

Hungary

3,400,000

3,606,557

e

Indonesia

Government

Bond,

Senior

Note,

144A,

3.7%,

1/08/22

..

Indonesia

6,330,000

6,366,756

e

Iraq

Government

Bond,

Senior

Bond,

144A,

5.8%,

1/15/28

......

Iraq

6,093,750

5,942,168

e

Israel

Electric

Corp.

Ltd.,

Senior

Secured

Bond,

144A,

Reg

S,

4.25%,

8/14/28

...........................................

Israel

1,400,000

1,564,500

e

Kazakhstan

Government

Bond,

Senior

Bond,

144A,

3.875%,

10/14/24

..........................................

Kazakhstan

5,830,000

6,280,752

Korea

Development

Bank

(The),

Senior

Note,

3.375%,

3/12/23

...

South

Korea

7,100,000

7,369,811

e

Mongolia

Government

Bond,

Senior

Note,

144A,

8.75%,

3/09/24

..

Mongolia

1,360,000

1,530,130

e

Pakistan

Government

Bond,

Senior

Bond,

144A,

8.25%,

9/30/25

..

Pakistan

1,440,000

1,569,430

Peru

Government

Bond,

Senior

Bond,

7.35%,

7/21/25

...........................

Peru

3,300,000

3,970,692

Senior

Bond,

2.783%,

1/23/31

..........................

Peru

800,000

797,600

e

Petroleos

Mexicanos

,

Senior

Note,

144A,

6.875%,

10/16/25

.....

Mexico

990,000

1,082,842

Philippines

Government

Bond,

Senior

Bond,

4.2%,

1/21/24

......

Philippines

1,600,000

1,711,648

Poland

Government

Bond,

Senior

Bond,

5%,

3/23/22

..........

Poland

4,310,000

4,386,546

e

Romania

Government

Bond,

Senior

Bond,

144A,

4.875%,

1/22/24

.

Romania

6,500,000

6,999,512

e

Russia

Government

Bond,

Senior

Bond,

144A,

4.875%,

9/16/23

..

Russia

4,400,000

4,726,044

South

Africa

Government

Bond,

Senior

Bond,

5.875%,

9/16/25

...

South

Africa

5,640,000

6,311,386

Turkey

Government

Bond,

Senior

Note,

6.375%,

10/14/25

.......

Turkey

7,980,000

8,135,897

e

Ukraine

Government

Bond,

Senior

Bond,

144A,

7.375%,

9/25/32

.

Ukraine

4,500,000

4,640,490

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

68

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Foreign

Government

and

Agency

Securities

(continued)

l

Uruguay

Government

Bond,

Index

Linked,

Senior

Bond,

3.7%,

6/26/37

...........................................

Uruguay

173,620,880

UYU

$

4,357,304

Total

Foreign

Government

and

Agency

Securities

(Cost

$161,888,355)

............

161,975,186

U.S.

Government

and

Agency

Securities

36.9%

U.S.

Treasury

Notes

,

1.75%,

5/15/22

.....................................

United

States

117,000,000

118,045,206

1.875%,

8/31/22

.....................................

United

States

75,000,000

76,092,987

2%,

2/15/23

........................................

United

States

95,000,000

97,141,211

2.625%,

2/28/23

.....................................

United

States

52,000,000

53,612,812

1.625%,

4/30/23

.....................................

United

States

90,000,000

91,733,203

1.625%,

5/31/23

.....................................

United

States

50,000,000

51,000,000

2.75%,

5/31/23

.....................................

United

States

98,000,000

101,686,485

2.5%,

8/15/23

......................................

United

States

110,000,000

114,062,695

2.75%,

8/31/23

.....................................

United

States

105,000,000

109,407,129

2.875%,

10/31/23

....................................

United

States

52,000,000

54,455,781

2.75%,

11/15/23

.....................................

United

States

80,000,000

83,642,187

2.875%,

11/30/23

....................................

United

States

70,000,000

73,398,828

2.875%,

7/31/25

.....................................

United

States

12,000,000

12,843,047

Total

U.S.

Government

and

Agency

Securities

(Cost

$1,040,373,312)

..............

1,037,121,571

Asset-Backed

Securities

14.1%

Airlines

0.0%

†

American

Airlines

Pass-Through

Trust,

2016-2,

AA,

3.2%,

6/15/28

.

United

States

39,350

40,125

United

Airlines

Pass-Through

Trust,

2020-1,

B,

4.875%,

7/15/27

..

United

States

404,100

427,652

467,777

a

a

a

a

a

a

Commercial

Services

&

Supplies

0.5%

e,m

Armada

Euro

CLO

IV

DAC,

4A,

B,

144A,

FRN,

1.7%,

7/15/33

....

Ireland

12,400,000

EUR

14,355,263

Consumer

Finance

0.5%

Discover

Card

Execution

Note

Trust,

2019-A3,

A,

1.89%,

10/15/24

United

States

13,340,000

13,539,788

Diversified

Financial

Services

13.1%

e,n

Adagio

CLO

VIII

DAC,

VIII-A,

B1,

144A,

FRN,

1.65%,

(3-month

EURIBOR

+

1.65%),

4/15/32

...........................

Ireland

500,000

EUR

578,276

e

American

Homes

4

Rent

Trust,

2014-SFR3,

A,

144A,

3.678%,

12/17/36

...................

United

States

707,385

744,460

2015-SFR1,

A,

144A,

3.467%,

4/17/52

....................

United

States

5,401,753

5,652,674

e,n

AMMC

CLO

21

Ltd.,

2017-21A,

C,

144A,

FRN,

2.226%,

(3-month

USD

LIBOR

+

2.1%),

11/02/30

..........................

United

States

400,000

398,931

e,n

AMMC

CLO

XI

Ltd.,

2012-11A,

CR2,

144A,

FRN,

2.028%,

(3-month

USD

LIBOR

+

1.9%),

4/30/31

...........................

United

States

1,850,000

1,844,329

e,n

Antares

CLO

Ltd.,

2018-1A,

B,

144A,

FRN,

1.781%,

(3-month

USD

LIBOR

+

1.65%),

4/20/31

..............................

United

States

6,000,000

5,993,461

e,n

Apidos

CLO

XXXV,

2021-35A,

A,

144A,

FRN,

1.181%,

(3-month

USD

LIBOR

+

1.05%),

4/20/34

..........................

United

States

19,306,000

19,340,638

e,n

Ares

European

CLO

VIII

DAC,

8A,

BR,

144A,

FRN,

1.6%,

(3-month

EURIBOR

+

1.6%),

4/17/32

............................

Ireland

700,000

EUR

797,361

e,n

Bain

Capital

Credit

CLO

Ltd.,

2018-1A,

A1,

144A,

FRN,

1.084%,

(3-month

USD

LIBOR

+

0.96%),

4/23/31

..................

United

States

2,000,000

1,999,900

e,n

BCC

Middle

Market

CLO

LLC,

2018-1A,

A2,

144A,

FRN,

2.282%,

(3-month

USD

LIBOR

+

2.15%),

10/20/30

.................

United

States

2,100,000

2,095,300

e,n

Blackrock

European

CLO

IX

DAC,

9A,

A,

144A,

FRN,

0.9%,

(3-month

EURIBOR

+

0.9%),

12/15/32

....................

Ireland

3,300,000

EUR

3,817,364

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

69

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Asset-Backed

Securities

(continued)

Diversified

Financial

Services

(continued)

e,n

BlueMountain

CLO

Ltd.,

2012-2A,

BR2,

144A,

FRN,

1.581%,

(3-month

USD

LIBOR

+

1.45%),

11/20/28

....................................

United

States

2,970,000

$

2,975,126

2012-2A,

DR2,

144A,

FRN,

3.031%,

(3-month

USD

LIBOR

+

2.9%),

11/20/28

.....................................

United

States

2,295,000

2,273,978

e,n

BlueMountain

Fuji

EUR

CLO

V

DAC,

5A,

B,

144A,

FRN,

1.55%,

(3-month

EURIBOR

+

1.55%),

1/15/33

....................

Ireland

4,550,000

EUR

5,265,476

e,n

BlueMountain

Fuji

US

CLO

III

Ltd.,

2017-3A,

A2,

144A,

FRN,

1.274%,

(3-month

USD

LIBOR

+

1.15%),

1/15/30

.....................................

United

States

1,000,000

998,339

2017-3A,

C,

144A,

FRN,

1.824%,

(3-month

USD

LIBOR

+

1.7%),

1/15/30

...........................................

United

States

500,000

495,930

e,n

Carlyle

Global

Market

Strategies

CLO

Ltd.,

2014-1A,

A2R2,

144A,

FRN,

1.252%,

(3-month

USD

LIBOR

+

1.13%),

4/17/31

.....................................

United

States

1,200,000

1,202,035

2014-1A,

DR,

144A,

FRN,

2.722%,

(3-month

USD

LIBOR

+

2.6%),

4/17/31

...........................................

United

States

533,000

511,944

e,n

Carlyle

GMS

Finance

MM

CLO

LLC,

2015-1A,

A2R,

144A,

FRN,

2.324%,

(3-month

USD

LIBOR

+

2.2%),

10/15/31

............

United

States

7,300,000

7,254,503

e,n

Carlyle

US

CLO

Ltd.,

2017-4A,

B,

144A,

FRN,

1.974%,

(3-month

USD

LIBOR

+

1.85%),

1/15/30

...........................................

United

States

1,107,000

1,106,714

2017-4A,

C,

144A,

FRN,

2.924%,

(3-month

USD

LIBOR

+

2.8%),

1/15/30

...........................................

United

States

400,000

383,702

2017-5A,

B,

144A,

FRN,

1.932%,

(3-month

USD

LIBOR

+

1.8%),

1/20/30

...........................................

United

States

2,200,000

2,193,095

2021-1A,

A1,

144A,

FRN,

1.264%,

(3-month

USD

LIBOR

+

1.14%),

4/15/34

.....................................

United

States

17,876,000

17,884,933

e,n

Cent

CLO

21

Ltd.,

2014-21A,

CR2,

144A,

FRN,

3.335%,

(3-month

USD

LIBOR

+

3.2%),

7/27/30

...........................

United

States

502,000

492,279

e

CF

Hippolyta

LLC,

2020-1,

A1,

144A,

1.69%,

7/15/60

..........

United

States

3,410,803

3,413,698

e,m

Consumer

Loan

Underlying

Bond

Certificate

Issuer

Trust

I,

2018-14,

PT,

144A,

FRN,

9.77%,

9/16/41

..................

United

States

16,938

16,398

2018-29,

PT,

144A,

FRN,

26%,

12/15/43

..................

United

States

187,725

186,791

2018-8,

PT,

144A,

FRN,

9.2%,

6/17/41

....................

United

States

2,147

1,865

2019-26,

PT,

144A,

FRN,

19.146%,

8/15/44

................

United

States

748,741

746,974

2019-31,

PT,

144A,

FRN,

17.761%,

9/15/44

................

United

States

695,367

688,288

2019-37,

PT,

144A,

FRN,

19.281%,

10/17/44

...............

United

States

657,517

648,496

2019-42,

PT,

144A,

FRN,

17.966%,

11/15/44

...............

United

States

688,032

685,916

2019-51,

PT,

144A,

FRN,

16.243%,

1/15/45

................

United

States

1,835,197

1,830,712

2019-52,

PT,

144A,

FRN,

16.466%,

1/15/45

................

United

States

2,300,201

2,311,942

2019-S1,

PT,

144A,

FRN,

15.633%,

4/15/44

................

United

States

362,353

355,248

2019-S2,

PT,

144A,

FRN,

14.1%,

5/16/44

..................

United

States

276,147

272,989

2019-S3,

PT,

144A,

FRN,

14.113%,

6/15/44

................

United

States

222,197

220,683

2019-S4,

PT,

144A,

FRN,

11.884%,

8/15/44

................

United

States

512,262

511,601

2019-S5,

PT,

144A,

FRN,

12.928%,

9/15/44

................

United

States

534,481

533,244

2019-S6,

PT,

144A,

FRN,

11.237%,

10/17/44

...............

United

States

515,084

505,072

2019-S7,

PT,

144A,

FRN,

11.038%,

12/15/44

...............

United

States

1,003,678

990,258

2019-S8,

PT,

144A,

FRN,

10.143%,

1/15/45

................

United

States

1,313,676

1,291,834

2020-2,

PT,

144A,

FRN,

15.906%,

3/15/45

.................

United

States

2,161,841

2,164,136

2020-7,

PT,

144A,

FRN,

15.76%,

4/17/45

..................

United

States

1,246,986

1,232,713

e,n

Cook

Park

CLO

Ltd.,

2018-1A,

A2,

144A,

FRN,

1.242%,

(3-month

USD

LIBOR

+

1.12%),

4/17/30

..........................

United

States

1,000,000

1,001,196

n

CWABS,

Inc.,

2004-1,

M1,

FRN,

0.839%,

(1-month

USD

LIBOR

+

0.75%),

3/25/34

.....................................

United

States

36,103

36,092

e,n

Dryden

44

Euro

CLO

BV,

2015-44A,

A1RR,

144A,

FRN,

0.88%,

(3-month

EURIBOR

+

0.88%),

4/15/34

....................

Netherlands

20,020,000

EUR

23,112,191

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

70

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Asset-Backed

Securities

(continued)

Diversified

Financial

Services

(continued)

e,n

Dryden

55

CLO

Ltd.,

2018-55A,

C,

144A,

FRN,

2.024%,

(3-month

USD

LIBOR

+

1.9%),

4/15/31

...........................................

United

States

600,000

$

596,627

2018-55A,

D,

144A,

FRN,

2.974%,

(3-month

USD

LIBOR

+

2.85%),

4/15/31

.....................................

United

States

300,000

296,654

e,n

Dryden

58

CLO

Ltd.,

2018-58A,

A2,

144A,

FRN,

1.372%,

(3-month

USD

LIBOR

+

1.25%),

7/17/31

..........................

United

States

1,600,000

1,594,909

e,n

Dryden

64

CLO

Ltd.,

2018-64A,

C,

144A,

FRN,

1.872%,

(3-month

USD

LIBOR

+

1.75%),

4/18/31

..........................

United

States

750,000

745,884

e,n

Ellington

CLO

III

Ltd.,

2018-3A,

A1,

144A,

FRN,

1.781%,

(3-month

USD

LIBOR

+

1.65%),

7/20/30

..........................

United

States

3,700,639

3,688,485

e

FirstKey

Homes

Trust,

2020-SFR2,

A,

144A,

1.266%,

10/19/37

...

United

States

4,217,967

4,163,586

e,n

Galaxy

XXVII

CLO

Ltd.,

2018-27A,

A,

144A,

FRN,

1.145%,

(3-month

USD

LIBOR

+

1.02%),

5/16/31

..........................

United

States

1,500,000

1,501,871

e,n

Golden

Tree

Loan

Management

US

CLO

1

Ltd.,

2021-9A,

A,

144A,

FRN,

1.202%,

(3-month

USD

LIBOR

+

1.07%),

1/20/33

.......

United

States

15,731,000

15,743,623

e,n

Halcyon

Loan

Advisors

Funding

Ltd.,

2018-1A,

A2,

144A,

FRN,

1.932%,

(3-month

USD

LIBOR

+

1.8%),

7/21/31

.............

United

States

5,000,000

4,994,976

e,n

Holland

Park

CLO

DAC,

1A,

A1RR,

144A,

FRN,

0.92%,

(3-month

EURIBOR

+

0.92%),

11/14/32

..........................

Ireland

15,000,000

EUR

17,351,546

e,n

LCM

26

Ltd.,

26A,

C,

144A,

FRN,

1.932%,

(3-month

USD

LIBOR

+

1.8%),

1/20/31

......................................

United

States

2,000,000

1,992,432

n

Lehman

XS

Trust,

2005-4,

1A4,

FRN,

0.649%,

(1-month

USD

LIBOR

+

0.56%),

10/25/35

..................................

United

States

124,863

125,019

e,n

Long

Point

Park

CLO

Ltd.,

2017-1A,

B,

144A,

FRN,

1.822%,

(3-month

USD

LIBOR

+

1.7%),

1/17/30

...................

United

States

2,000,000

1,985,492

e,n

Madison

Park

Euro

Funding

VIII

DAC,

8A,

ARN,

144A,

FRN,

0.95%,

(3-month

EURIBOR

+

0.95%),

4/15/32

....................

Ireland

17,600,000

EUR

20,390,123

e,n

Madison

Park

Funding

XIII

Ltd.,

2014-13A,

DR2,

144A,

FRN,

2.974%,

(3-month

USD

LIBOR

+

2.85%),

4/19/30

............

United

States

332,000

329,895

e,n

Madison

Park

Funding

XLII

Ltd.,

13A,

C,

144A,

FRN,

1.924%,

(3-month

USD

LIBOR

+

1.8%),

11/21/30

..................

United

States

1,600,000

1,585,942

e,n

Magnetite

XXIX

Ltd.,

2021-29A,

A,

144A,

FRN,

1.114%,

(3-month

USD

LIBOR

+

0.99%),

1/15/34

..........................

United

States

21,809,000

21,825,956

e,m

Mill

City

Mortgage

Loan

Trust,

2017-1,

A1,

144A,

FRN,

2.75%,

11/25/58

..................

United

States

219,714

220,843

2018-1,

A1,

144A,

FRN,

3.25%,

5/25/62

...................

United

States

7,251,077

7,380,697

2018-4,

A1B,

144A,

FRN,

3.5%,

4/25/66

...................

United

States

7,471,382

7,678,833

e,n

Neuberger

Berman

CLO

XVIII

Ltd.,

2014-18A,

A1BR,

144A,

FRN,

1.529%,

(3-month

USD

LIBOR

+

1.4%),

10/21/30

............

United

States

2,295,000

2,299,234

e

New

Economy

Assets

Phase

1

Sponsor

LLC,

2021-1,

A1,

144A,

1.91%,

10/20/61

.....................................

United

States

13,870,000

13,618,536

e,n

Octagon

Investment

Partners

18-R

Ltd.,

2018-18A,

A1A,

144A,

FRN,

1.082%,

(3-month

USD

LIBOR

+

0.96%),

4/16/31

.....................................

United

States

1,000,000

1,001,023

2018-18A,

C,

144A,

FRN,

2.822%,

(3-month

USD

LIBOR

+

2.7%),

4/16/31

...........................................

United

States

1,000,000

983,163

e,n

Octagon

Investment

Partners

26

Ltd.,

2016-1A,

A2R,

144A,

FRN,

1.474%,

(3-month

USD

LIBOR

+

1.35%),

7/15/30

............

United

States

1,600,000

1,599,433

e,n

Octagon

Investment

Partners

33

Ltd.,

2017-1A,

C,

144A,

FRN,

2.882%,

(3-month

USD

LIBOR

+

2.75%),

1/20/31

............

United

States

250,000

247,940

e,n

Octagon

Investment

Partners

35

Ltd.,

2018-1A,

A1B,

144A,

FRN,

1.231%,

(3-month

USD

LIBOR

+

1.1%),

1/20/31

.............

United

States

2,000,000

1,984,341

e,n

OHA

Credit

Partners

VII

Ltd.,

2012-7A,

AR3,

144A,

FRN,

1.201%,

(3-month

USD

LIBOR

+

1.07%),

2/20/34

..................

United

States

17,876,000

17,893,876

e,m

Prosper

Pass-Thru

Trust

III,

2020-PT1,

A,

144A,

FRN,

8.796%,

3/15/26

.................

United

States

1,316,496

1,328,995

2020-PT2,

A,

144A,

FRN,

9.444%,

4/15/26

.................

United

States

1,471,707

1,447,342

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

71

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Asset-Backed

Securities

(continued)

Diversified

Financial

Services

(continued)

2020-PT3,

A,

144A,

FRN,

7.183%,

5/15/26

.................

United

States

482,821

$

485,339

n

RAAC

Trust,

2004-SP1,

AII,

FRN,

0.789%,

(1-month

USD

LIBOR

+

0.7%),

3/25/34

......................................

United

States

154,609

157,193

e,n

RR

14

Ltd.,

2021-14A,

A1,

144A,

FRN,

1.244%,

(3-month

USD

LIBOR

+

1.12%),

4/15/36

..............................

United

States

23,418,000

23,447,213

e,n

Sculptor

CLO

XXV

Ltd.,

25A,

A1,

144A,

FRN,

1.402%,

(3-month

USD

LIBOR

+

1.27%),

1/15/31

..........................

United

States

10,726,000

10,722,927

e,m

Towd

Point

Mortgage

Trust,

2017-1,

A1,

144A,

FRN,

2.75%,

10/25/56

..................

United

States

4,485,842

4,544,448

2018-4,

A1,

144A,

FRN,

3%,

6/25/58

.....................

United

States

12,015,769

12,397,522

2019-1,

A1,

144A,

FRN,

3.692%,

3/25/58

..................

United

States

9,664,344

10,098,868

e,m

Upgrade

Master

Pass-Thru

Trust,

2019-PT1,

A,

144A,

FRN,

13.317%,

6/15/25

................

United

States

238,264

224,379

2019-PT2,

A,

144A,

FRN,

14.028%,

2/15/26

................

United

States

1,282,450

1,300,865

e,n

Voya

CLO

Ltd.,

2013-2A,

A1R,

144A,

FRN,

1.094%,

(3-month

USD

LIBOR

+

0.97%),

4/25/31

.....................................

United

States

11,800,000

11,806,349

2013-2A,

CR,

144A,

FRN,

2.874%,

(3-month

USD

LIBOR

+

2.75%),

4/25/31

.....................................

United

States

375,000

357,036

2014-1A,

BR2,

144A,

FRN,

2.022%,

(3-month

USD

LIBOR

+

1.9%),

4/18/31

......................................

United

States

2,750,000

2,727,064

2014-1A,

CR2,

144A,

FRN,

2.922%,

(3-month

USD

LIBOR

+

2.8%),

4/18/31

......................................

United

States

600,000

584,317

2016-3A,

CR,

144A,

FRN,

3.372%,

(3-month

USD

LIBOR

+

3.25%),

10/18/31

....................................

United

States

1,698,113

1,645,195

2018-2A,

A2,

144A,

FRN,

1.374%,

(3-month

USD

LIBOR

+

1.25%),

7/15/31

.....................................

United

States

2,500,000

2,493,125

368,648,201

a

a

a

a

a

a

Thrifts

&

Mortgage

Finance

0.0%

†

m

Conseco

Finance

Securitizations

Corp.,

2002-2,

M1,

FRN,

7.424%,

3/01/33

...........................................

United

States

334,742

348,413

n

Countrywide

Asset-Backed

Certificates

Trust,

2002-3,

1A1,

FRN,

0.829%,

(1-month

USD

LIBOR

+

0.74%),

5/25/32

............

United

States

1,019

1,010

349,423

a

a

a

a

a

a

Total

Asset-Backed

Securities

(Cost

$392,888,213)

..............................

397,360,452

Commercial

Mortgage-Backed

Securities

2.3%

Diversified

Financial

Services

1.9%

e

BAMLL

Commercial

Mortgage

Securities

Trust

,

2012-PARK,

A,

144A,

2.959%,

12/10/30

...................

United

States

3,300,000

3,372,690

2015-200P,

A,

144A,

3.218%,

4/14/33

....................

United

States

600,000

631,819

e,n

BX

Commercial

Mortgage

Trust

,

2019-XL,

A,

144A,

FRN,

1.01%,

(1-month

USD

LIBOR

+

0.92%),

10/15/36

..........................................

United

States

3,234,714

3,238,843

2020-BXLP,

A,

144A,

FRN,

0.89%,

(1-month

USD

LIBOR

+

0.8%),

12/15/36

..........................................

United

States

9,859,027

9,862,640

2020-FOX,

A,

144A,

FRN,

1.09%,

(1-month

USD

LIBOR

+

1%),

11/15/32

..........................................

United

States

11,612,264

11,628,251

2021-VOLT,

A,

144A,

FRN,

0.79%,

(1-month

USD

LIBOR

+

0.7%),

9/15/36

...........................................

United

States

5,430,000

5,438,819

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

72

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Commercial

Mortgage-Backed

Securities

(continued)

Diversified

Financial

Services

(continued)

e,n,o

BX

Mortgage

Trust

,

2021-PAC

,

A

,

144A,

FRN

,

0.779

%

,

(

1-month

USD

LIBOR

+

0.689

%

),

10/15/36

........................

United

States

5,190,000

$

5,223,813

e

BXP

Trust

,

2017-GM

,

A

,

144A,

3.379

%

,

6/13/39

..............

United

States

2,000,000

2,157,613

Commercial

Mortgage

Trust

,

m

2006-GG7,

AJ,

FRN,

6.012%,

7/10/38

....................

United

States

836,002

703,633

e,m

2014-277P,

A,

144A,

FRN,

3.611%,

8/10/49

................

United

States

3,880,000

4,100,767

e

2015-3BP,

A,

144A,

3.178%,

2/10/35

.....................

United

States

600,000

630,802

e,n

DBCG

Mortgage

Trust

,

2017-BBG

,

A

,

144A,

FRN

,

0.79

%

,

(

1-month

USD

LIBOR

+

0.7

%

),

6/15/34

...........................

United

States

1,500,000

1,497,856

e,m

Eleven

Madison

Mortgage

Trust

,

2015-11MD

,

A

,

144A,

FRN

,

3.555

%

,

9/10/35

.....................................

United

States

2,005,000

2,144,742

e,m

J.P.

Morgan

Chase

Commercial

Mortgage

Securities

Trust

,

2016-

NINE

,

A

,

144A,

FRN

,

2.854

%

,

9/06/38

....................

United

States

600,000

630,722

e

Morgan

Stanley

Capital

I

Trust

,

2014-150E

,

A

,

144A,

3.912

%

,

9/09/32

...........................................

United

States

450,000

475,078

51,738,088

a

a

a

a

a

a

Thrifts

&

Mortgage

Finance

0.4%

Banc

of

America

Commercial

Mortgage

Trust

,

2015-UBS7

,

A4

,

3.705

%

,

9/15/48

.....................................

United

States

100,000

107,223

FHLMC

,

4402

,

PE

,

3.5

%

,

3/15/43

.........................

United

States

267,480

270,881

GS

Mortgage

Securities

Trust

,

2016-GS3,

A4,

2.85%,

10/10/49

.........................

United

States

600,000

631,632

2017-GS6,

A3,

3.433%,

5/10/50

.........................

United

States

2,000,000

2,166,366

JPMBB

Commercial

Mortgage

Securities

Trust

,

2015-C30,

A5,

3.822%,

7/15/48

.........................

United

States

1,500,000

1,624,383

2016-C1,

A5,

3.576%,

3/15/49

..........................

United

States

1,500,000

1,617,380

Wells

Fargo

Commercial

Mortgage

Trust

,

2016-NXS6

,

A2

,

2.399

%

,

11/15/49

..........................................

United

States

5,829,293

5,827,808

12,245,673

a

a

a

a

a

a

Total

Commercial

Mortgage-Backed

Securities

(Cost

$62,683,336)

................

63,983,761

Mortgage-Backed

Securities

2.5%

p

Federal

Home

Loan

Mortgage

Corp.

(FHLMC)

Adjustable

Rate

0.0%

†

FHLMC,

2.175%

-

2.243%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

10/01/36

-

6/01/37

...................................

United

States

861,438

901,551

901,551

Federal

Home

Loan

Mortgage

Corp.

(FHLMC)

Fixed

Rate

0.0%

†

FHLMC

Gold

Pools,

15

Year,

5%,

10/01/23

..................

United

States

26,162

27,106

FHLMC

Gold

Pools,

15

Year,

6%,

6/01/23

...................

United

States

2,585

2,654

FHLMC

Gold

Pools,

30

Year,

5%,

1/01/39

...................

United

States

63,301

72,515

102,275

p

Federal

National

Mortgage

Association

(FNMA)

Adjustable

Rate

0.3%

FNMA,

1.03%

-

3.218%,

(6-month

USD

LIBOR

+/-

MBS

Margin),

9/01/22

-

8/01/37

....................................

United

States

594,762

600,713

FNMA,

1.225%

-

1.3%,

(1-month

USD

LIBOR

+/-

MBS

Margin),

4/01/28

-

7/01/34

....................................

United

States

192,110

192,943

FNMA,

1.287%

-

2.565%,

(12-month

average

of

1-year

CMT

+/-

MBS

Margin),

11/01/30

-

10/01/44

.......................

United

States

226,691

233,309

FNMA,

1.398%

-

2.559%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

11/01/32

-

2/01/44

...................................

United

States

5,133,109

5,339,961

FNMA,

1.488%

-

5.633%,

(COFI

11th

District

+/-

MBS

Margin),

12/01/25

-

12/01/36

..................................

United

States

64,951

67,699

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

73

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Mortgage-Backed

Securities

(continued)

p

Federal

National

Mortgage

Association

(FNMA)

Adjustable

Rate

(continued)

FNMA,

1.645%

-

2.895%,

(1-year

CMT

T-Note

+/-

MBS

Margin),

3/01/24

-

4/01/40

....................................

United

States

1,148,970

$

1,161,742

FNMA,

2.462%

-

3.462%,

(3-year

CMT

T-Note

+/-

MBS

Margin),

2/01/26

-

6/01/34

....................................

United

States

31,464

31,509

FNMA,

2.625%,

(6-month

H15BDI

+/-

MBS

Margin),

8/01/32

.....

United

States

50,394

50,493

FNMA,

4.779%,

(5-year

CMT

T-Note

+/-

MBS

Margin),

2/01/30

...

United

States

27,251

27,293

7,705,662

Federal

National

Mortgage

Association

(FNMA)

Fixed

Rate

2.2%

FNMA,

15

Year,

3.5%,

10/01/25

...........................

United

States

275,716

292,817

FNMA,

15

Year,

4%,

12/01/25

............................

United

States

419,978

444,396

FNMA,

15

Year,

4.5%,

5/01/23

-

6/01/25

....................

United

States

200,651

209,399

FNMA,

30

Year,

5%,

3/01/38

.............................

United

States

8,154

9,329

q

FNMA,

Single-family,

15

Year,

2%,

11/25/36

.................

United

States

59,821,000

61,390,132

62,346,073

p

Government

National

Mortgage

Association

(GNMA)

Adjustable

Rate

0.0%

†

GNMA

II,

1.625%

-

1.875%,

(1-year

CMT

T-Note

+/-

MBS

Margin),

4/20/26

-

9/20/26

....................................

United

States

8,154

8,281

8,281

Total

Mortgage-Backed

Securities

(Cost

$71,187,598)

............................

71,063,842

Municipal

Bonds

1.6%

California

0.2%

San

Jose

Redevelopment

Agency

Successor

Agency

,

Tax

Allocation,

Senior

Lien,

2017

A-T,

Refunding,

2.63%,

8/01/22

United

States

5,320,000

5,417,236

Tax

Allocation,

Senior

Lien,

2017

A-T,

Refunding,

3.226%,

8/01/27

United

States

190,000

206,860

5,624,096

Colorado

0.5%

Board

of

Governors

of

Colorado

State

University

System

,

Revenue

,

2015

E-2

,

5

%

,

3/01/25

................................

United

States

100,000

114,864

Colorado

Bridge

Enterprise

,

Kiewit

Meridiam

Partners

LLC

,

Revenue

,

2021

B

,

0.923

%

,

12/31/23

.....................

United

States

13,400,000

13,394,175

13,509,039

Florida

0.0%

†

Citizens

Property

Insurance,

Inc.

,

Revenue

,

2015

A-1

,

5

%

,

6/01/22

United

States

125,000

125,484

Hawaii

0.1%

City

&

County

Honolulu

,

Wastewater

System

,

Revenue

,

2019

B

,

Refunding

,

2.233

%

,

7/01/24

............................

United

States

2,470,000

2,557,559

Illinois

0.1%

State

of

Illinois

,

GO

,

2003

,

5.1

%

,

6/01/33

...................

United

States

2,415,000

2,818,131

Massachusetts

0.1%

Massachusetts

State

College

Building

Authority

,

Revenue

,

2019

C

,

Refunding

,

2.256

%

,

5/01/26

............................

United

States

2,635,000

2,736,299

New

York

0.4%

Metropolitan

Transportation

Authority

,

Revenue

,

2020

E

,

Refunding

,

4

%

,

11/15/45

.......................................

United

States

1,865,000

2,078,755

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

74

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Municipal

Bonds

(continued)

New

York

(continued)

New

York

State

Urban

Development

Corp.

,

State

of

New

York

Sales

Tax

,

Revenue

,

2019

B

,

Refunding

,

2.25

%

,

3/15/26

...........

United

States

8,750,000

$

9,065,584

11,144,339

Ohio

0.0%

†

City

of

Cincinnati

,

GO

,

2015

A

,

Refunding

,

5

%

,

12/01/25

........

United

States

100,000

115,697

Teays

Valley

Local

School

District

,

GO

,

2015

,

Refunding

,

4

%

,

12/01/26

..........................................

United

States

100,000

107,316

223,013

Texas

0.2%

Texas

State

University

System

,

Revenue

,

2019

B

,

Refunding

,

2.351

%

,

3/15/26

.....................................

United

States

4,825,000

5,036,322

Total

Municipal

Bonds

(Cost

$42,323,150)

......................................

43,774,282

Residential

Mortgage-Backed

Securities

6.8%

Capital

Markets

0.0%

†

n

Merrill

Lynch

Mortgage

Investors

Trust

,

2003-A,

1A,

FRN,

0.829%,

(1-month

USD

LIBOR

+

0.74%),

3/25/28

...........................................

United

States

118,640

119,277

2003-E,

A1,

FRN,

0.709%,

(1-month

USD

LIBOR

+

0.62%),

10/25/28

..........................................

United

States

264,259

262,956

382,233

a

a

a

a

a

a

Diversified

Financial

Services

1.7%

n

American

Home

Mortgage

Investment

Trust

,

2005-1

,

6A

,

FRN

,

2.155

%

,

(

6-month

USD

LIBOR

+

2

%

),

6/25/45

..............

United

States

375,023

385,697

e,m

BRAVO

Residential

Funding

Trust

,

2019-2

,

A3

,

144A,

FRN

,

3.5

%

,

10/25/44

..........................................

United

States

5,288,665

5,471,896

m

CHL

Mortgage

Pass-Through

Trust

,

2004-11

,

2A1

,

FRN

,

2.142

%

,

7/25/34

...........................................

United

States

790,512

804,245

e,m

CIM

Trust

,

2019-INV1

,

A1

,

144A,

FRN

,

4

%

,

2/25/49

...........

United

States

239,068

242,084

Credit

Suisse

First

Boston

Mortgage

Securities

Corp.

,

2004-6

,

3A1

,

5

%

,

9/25/19

........................................

Switzerland

152,682

130,480

e,m

CSMC

Trust

,

2014-IVR3

,

A1

,

144A,

FRN

,

3.5

%

,

7/25/44

........

United

States

512,685

520,585

m

GSR

Mortgage

Loan

Trust

,

2005-AR1

,

1A1

,

FRN

,

2.654

%

,

1/25/35

United

States

96,864

96,956

m

J.P.

Morgan

Mortgage

Trust

,

2004-A1,

5A1,

FRN,

2.385%,

2/25/34

.....................

United

States

20,278

21,723

e

2021-13,

A4,

144A,

FRN,

2.5%,

4/25/52

...................

United

States

14,080,000

14,284,600

MASTR

Alternative

Loan

Trust

,

2003-1

,

3A1

,

5

%

,

6/25/23

.......

United

States

12,709

13,066

e

OBX

Trust

,

n

2018-1,

A2,

144A,

FRN,

0.739%,

(1-month

USD

LIBOR

+

0.65%),

6/25/57

...........................................

United

States

1,288,258

1,292,344

m

2021-J3,

A4,

144A,

FRN,

2.5%,

10/25/51

..................

United

States

2,326,411

2,364,406

e,m

Provident

Funding

Associates

LLP

,

2021-J1

,

A3

,

144A,

FRN

,

2.5

%

,

2/20/49

...........................................

United

States

8,341,042

8,477,267

e,m

PSMC

Trust

,

2021-3

,

A3

,

144A,

FRN

,

2.5

%

,

8/25/51

...........

United

States

13,699,188

13,940,902

n

Thornburg

Mortgage

Securities

Trust

,

2004-3

,

A

,

FRN

,

0.829

%

,

(

1-month

USD

LIBOR

+

0.74

%

),

9/25/34

..................

United

States

366,557

375,746

48,421,997

a

a

a

a

a

a

Thrifts

&

Mortgage

Finance

5.1%

n

FHLMC

Structured

Agency

Credit

Risk

Debt

Notes

,

2013-DN2,

M2,

FRN,

4.339%,

(1-month

USD

LIBOR

+

4.25%),

11/25/23

..........................................

United

States

4,671,810

4,820,521

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

75

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Residential

Mortgage-Backed

Securities

(continued)

Thrifts

&

Mortgage

Finance

(continued)

n

FHLMC

Structured

Agency

Credit

Risk

Debt

Notes,

(continued)

2014-DN2,

M3,

FRN,

3.689%,

(1-month

USD

LIBOR

+

3.6%),

4/25/24

...........................................

United

States

6,293,613

$

6,417,508

2014-DN3,

M3,

FRN,

4.089%,

(1-month

USD

LIBOR

+

4%),

8/25/24

...........................................

United

States

1,221,237

1,251,898

2014-DN4,

M3,

FRN,

4.639%,

(1-month

USD

LIBOR

+

4.55%),

10/25/24

..........................................

United

States

2,385,747

2,459,065

2014-HQ2,

M3,

FRN,

3.839%,

(1-month

USD

LIBOR

+

3.75%),

9/25/24

...........................................

United

States

8,364,081

8,649,474

2014-HQ3,

M3,

FRN,

4.839%,

(1-month

USD

LIBOR

+

4.75%),

10/25/24

..........................................

United

States

245,650

247,060

2016-DNA1,

M3,

FRN,

5.639%,

(1-month

USD

LIBOR

+

5.55%),

7/25/28

...........................................

United

States

8,603,779

9,023,717

2016-DNA2,

M3,

FRN,

4.739%,

(1-month

USD

LIBOR

+

4.65%),

10/25/28

..........................................

United

States

10,876,593

11,291,384

2016-HQA2,

M3,

FRN,

5.239%,

(1-month

USD

LIBOR

+

5.15%),

11/25/28

..........................................

United

States

8,466,782

8,799,313

n

FNMA

Connecticut

Avenue

Securities

,

2013-C01,

M2,

FRN,

5.339%,

(1-month

USD

LIBOR

+

5.25%),

10/25/23

..........................................

United

States

5,489,784

5,716,300

2014-C01,

M2,

FRN,

4.489%,

(1-month

USD

LIBOR

+

4.4%),

1/25/24

...........................................

United

States

1,412,066

1,458,498

2014-C02,

1M2,

FRN,

2.689%,

(1-month

USD

LIBOR

+

2.6%),

5/25/24

...........................................

United

States

6,256,376

6,338,113

2014-C02,

2M2,

FRN,

2.689%,

(1-month

USD

LIBOR

+

2.6%),

5/25/24

...........................................

United

States

1,316,346

1,338,746

2014-C03,

1M2,

FRN,

3.089%,

(1-month

USD

LIBOR

+

3%),

7/25/24

...........................................

United

States

6,295,622

6,406,779

2014-C03,

2M2,

FRN,

2.989%,

(1-month

USD

LIBOR

+

2.9%),

7/25/24

...........................................

United

States

6,970,523

7,103,036

2014-C04,

1M2,

FRN,

4.989%,

(1-month

USD

LIBOR

+

4.9%),

11/25/24

..........................................

United

States

6,105,115

6,356,801

2014-C04,

2M2,

FRN,

5.089%,

(1-month

USD

LIBOR

+

5%),

11/25/24

..........................................

United

States

1,245,177

1,267,841

2015-C01,

1M2,

FRN,

4.389%,

(1-month

USD

LIBOR

+

4.3%),

2/25/25

...........................................

United

States

3,805,280

3,888,562

2015-C02,

1M2,

FRN,

4.089%,

(1-month

USD

LIBOR

+

4%),

5/25/25

...........................................

United

States

4,556,865

4,654,019

2015-C02,

2M2,

FRN,

4.089%,

(1-month

USD

LIBOR

+

4%),

5/25/25

...........................................

United

States

595,633

598,105

2015-C03,

1M2,

FRN,

5.089%,

(1-month

USD

LIBOR

+

5%),

7/25/25

...........................................

United

States

4,710,021

4,853,528

2016-C01,

1M2,

FRN,

6.839%,

(1-month

USD

LIBOR

+

6.75%),

8/25/28

...........................................

United

States

1,278,661

1,351,643

2016-C01,

2M2,

FRN,

7.039%,

(1-month

USD

LIBOR

+

6.95%),

8/25/28

...........................................

United

States

3,949,084

4,193,826

2016-C02,

1M2,

FRN,

6.089%,

(1-month

USD

LIBOR

+

6%),

9/25/28

...........................................

United

States

111,126

116,355

2016-C04,

1M2,

FRN,

4.339%,

(1-month

USD

LIBOR

+

4.25%),

1/25/29

...........................................

United

States

10,961,172

11,355,524

2016-C05,

2M2,

FRN,

4.539%,

(1-month

USD

LIBOR

+

4.45%),

1/25/29

...........................................

United

States

8,450,600

8,804,304

2016-C06,

1M2,

FRN,

4.339%,

(1-month

USD

LIBOR

+

4.25%),

4/25/29

...........................................

United

States

3,392,974

3,528,329

2016-C07,

2M2,

FRN,

4.439%,

(1-month

USD

LIBOR

+

4.35%),

5/25/29

...........................................

United

States

7,284,331

7,602,892

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

76

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Residential

Mortgage-Backed

Securities

(continued)

Thrifts

&

Mortgage

Finance

(continued)

n

FNMA

Connecticut

Avenue

Securities,

(continued)

2017-C03,

1M2,

FRN,

3.089%,

(1-month

USD

LIBOR

+

3%),

10/25/29

..........................................

United

States

2,444,279

$

2,520,480

n

New

York

Mortgage

Trust

,

2005-3

,

M1

,

FRN

,

0.764

%

,

(

1-month

USD

LIBOR

+

0.675

%

),

2/25/36

.............................

United

States

93,536

91,309

142,504,930

a

a

a

a

a

a

Total

Residential

Mortgage-Backed

Securities

(Cost

$201,617,550)

................

191,309,160

Shares

Escrows

and

Litigation

Trusts

0.0%

†

a,b

K2016470219

South

Africa

Ltd.,

Escrow

Account

..............

South

Africa

60,686

ZAR

—

b

Mesquite

Energy,

Inc.,

Escrow

Account

.....................

United

States

1,900,000

61,750

a,b

Millennium

Corporate

Claim

Trust,

Escrow

Account

............

United

States

477,205

—

a,b

Millennium

Lender

Claim

Trust,

Escrow

Account

..............

United

States

477,205

—

Total

Escrows

and

Litigation

Trusts

(Cost

$1,838,967)

...........................

61,750

Total

Long

Term

Investments

(Cost

$2,723,811,699)

.............................

2,710,054,434

a

Number

of

Contracts

Notional

Amount

#

a

a

aa

Options

Purchased

0.0%

†

Puts

-

Over-the-Counter

Currency

Options

Foreign

Exchange

EUR/NOK,

Counterparty

GSCO,

October

Strike

Price

9.37

NOK,

Expires

10/20/22

.......................

1

3,854,000

EUR

47,588

Foreign

Exchange

EUR/RUB,

Counterparty

GSCO,

October

Strike

Price

83.32

RUB,

Expires

10/20/22

......................

1

5,781,000

EUR

101,478

149,066

Total

Options

Purchased

(Cost

$159,285)

......................................

149,066

Short

Term

Investments

5.1%

a

a

Country

Shares

a

Value

a

Money

Market

Funds

2.0%

d,r

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

56,135,533

56,135,533

Total

Money

Market

Funds

(Cost

$56,135,533)

..................................

56,135,533

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

77

Short

Term

Investments

(continued)

a

a

Principal

Amount

*

a

Value

a

a

a

a

a

a

Repurchase

Agreements

3.1%

s

Joint

Repurchase

Agreement,

0.02%,

11/01/21

(Maturity

Value

$85,945,634)

BNP

Paribas

Securities

Corp.

(Maturity

Value

$56,701,772)

Deutsche

Bank

Securities,

Inc.

(Maturity

Value

$10,342,698)

HSBC

Securities

(USA)

Inc.

(Maturity

Value

$18,901,164)

Collateralized

by

U.S.

Government

Agency

Securities,

4%

-

5%,

10/20/40

-

2/20/49;

U.S.

Treasury

Bill,

Discount

Note,

4/28/22;

and

U.S.

Treasury

Note,

2.5%,

1/31/24

(valued

at

$87,730,045)

....

85,945,491

$

85,945,491

Total

Repurchase

Agreements

(Cost

$85,945,491)

...............................

85,945,491

Total

Short

Term

Investments

(Cost

$142,081,024

)

...............................

142,081,024

a

Total

Investments

(Cost

$2,866,052,008)

101.5%

................................

$2,852,284,524

Other

Assets,

less

Liabilities

(1.5)%

...........................................

(41,772,632)

Net

Assets

100.0%

...........................................................

$2,810,511,892

#

Notional

amount

is

the

number

of

units

specified

in

the

contract,

and

can

include

currency

units,

bushels,

shares,

pounds,

barrels

or

other

units.

Currency

units

are

stated

in

U.S.

dollars

unless

otherwise

indicated.

*

The

principal

amount

is

stated

in

U.S.

dollars

unless

otherwise

indicated.

†

Rounds

to

less

than

0.1%

of

net

assets.

a

Fair

valued

using

significant

unobservable

inputs.

See

Note

14

regarding

fair

value

measurements.

b

Non-income

producing.

c

See

Note

9

regarding

restricted

securities.

d

See

Note

3(f)

regarding

investments

in

affiliated

management

investment

companies.

e

Security

was

purchased

pursuant

to

Rule

144A

or

Regulation

S

under

the

Securities

Act

of

1933.

144A

securities

may

be

sold

in

transactions

exempt

from

registration

only

to

qualified

institutional

buyers

or

in

a

public

offering

registered

under

the

Securities

Act

of

1933.

Regulation

S

securities

cannot

be

sold

in

the

United

States

without

either

an

effective

registration

statement

filed

pursuant

to

the

Securities

Act

of

1933,

or

pursuant

to

an

exemption

from

registration.

At

October

31,

2021,

the

aggregate

value

of

these

securities

was

$733,536,087,

representing

26.1%

of

net

assets.

f

Income

may

be

received

in

additional

securities

and/or

cash.

g

The

coupon

rate

shown

represents

the

rate

at

period

end.

h

See

Note

1(j)

regarding

senior

floating

rate

interests.

i

See

Note

1(k)

regarding

Marketplace

Lending.

j

A

supranational

organization

is

an

entity

formed

by

two

or

more

central

governments

through

international

treaties.

k

Perpetual

security

with

no

stated

maturity

date.

l

Principal

amount

of

security

is

adjusted

for

inflation.

See

Note

1(m).

m

Adjustable

rate

security

with

an

interest

rate

that

is

not

based

on

a

published

reference

index

and

spread.  The

rate

is

based

on

the

structure

of

the

agreement

and

current

market

conditions.

The

coupon

rate

shown

represents

the

rate

at

period

end.

n

The

coupon

rate

shown

represents

the

rate

inclusive

of

any

caps

or

floors,

if

applicable,

in

effect

at

period

end.

o

A

portion

or

all

of

the

security

purchased

on

a

delayed

delivery

basis.

See

Note

1(d).

p

Adjustable

Rate

Mortgage-Backed

Security

(ARM);

the

rate

shown

is

the

effective

rate

at

period

end.

ARM

rates

are

not

based

on

a

published

reference

rate

and

spread,

but

instead

pass-through

weighted

average

interest

income

inclusive

of

any

caps

or

floors,

if

applicable,

from

the

underlying

mortgage

loans

in

which

the

majority

of

mortgages

pay

interest

based

on

the

index

shown

at

their

designated

reset

dates

plus

a

spread,

less

the

applicable

servicing

and

guaranty

fee

(MBS

margin).

q

Security

purchased

on

a

to-be-announced

(TBA)

basis.

See

Note

1(d).

r

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

s

See

Note

1(c)

regarding

joint

repurchase

agreement.

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

78

At

October

31,

2021,

the

Fund

had

the

following futures

contracts

outstanding.

See

Note

1(e).

At

October

31,

2021,

the

Fund

had

the

following

forward

exchange

contracts

outstanding.

See

Note

1(e).

Futures

Contracts

Description

Type

Number

of

Contracts

Notional

Amount

*

Expiration

Date

Value/

Unrealized

Appreciation

(Depreciation)

Interest

rate

contracts

U.S.

Treasury

10

Year

Notes

....................

Short

1,280

$

167,300,000

12/21/21

$

2,824,780

U.S.

Treasury

2

Year

Notes

.....................

Long

3,739

819,775,750

12/31/21

(3,067,991)

U.S.

Treasury

5

Year

Notes

.....................

Short

632

76,946,000

12/31/21

1,006,510

Total

Futures

Contracts

......................................................................

$763,299

*

As

of

year

end

.

Forward

Exchange

Contracts

Currency

Counter-

party

a

Type

Quantity

Contract

Amount

*

Settlement

Date

Unrealized

Appreciation

Unrealized

Depreciation

a

a

a

a

a

a

a

a

OTC

Forward

Exchange

Contracts

Brazilian

Real

......

JPHQ

Sell

7,465,623

1,392,239

11/08/21

$

70,513

$

—

Euro

.............

JPHQ

Buy

15,720,000

18,306,716

12/14/21

—

(117,246)

Euro

.............

JPHQ

Sell

3,200,000

3,733,049

12/14/21

31,727

(1,369)

Canadian

Dollar

....

JPHQ

Buy

2,640,000

2,134,651

12/16/21

—

(1,497)

Canadian

Dollar

....

JPHQ

Sell

2,640,000

2,143,301

12/16/21

10,146

—

Japanese

Yen

......

JPHQ

Buy

436,000,000

3,932,126

12/29/21

—

(103,697)

Australian

Dollar

....

JPHQ

Buy

3,490,000

2,576,025

1/19/22

49,963

—

Singapore

Dollar

....

JPHQ

Buy

3,600,000

2,647,390

1/19/22

21,424

—

South

Korean

Won

..

JPHQ

Buy

3,000,000,000

2,595,245

1/19/22

—

(45,512)

Australian

Dollar

....

JPHQ

Buy

4,250,000

3,138,149

3/01/22

59,295

—

New

Zealand

Dollar

.

JPHQ

Sell

4,000,000

2,821,807

3/01/22

—

(37,062)

Turkish

Lira

........

JPHQ

Buy

12,510,000

1,290,888

3/22/22

—

(79,146)

Total

Forward

Exchange

Contracts

...................................................

$243,068

$(385,529)

Net

unrealized

appreciation

(depreciation)

............................................

$(142,461)

*

In

U.S.

dollars

unless

otherwise

indicated.

a

May

be

comprised

of

multiple

contracts

with

the

same

counterparty,

currency

and

settlement

date.

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

79

At

October

31,

2021,

the

Fund

had

the

following credit

default

swap

contracts outstanding.

See

Note

1(e). 

Credit

Default

Swap

Contracts

Description

Periodic

Payment

Rate

Received

(Paid)

Payment

Frequency

Counter-

party

Maturity

Date

Notional

Amount

(a)

Value

Unamortized

Upfront

Payments

(Receipts)

Unrealized

Appreciation

(Depreciation)

Rating

(b)

Centrally

Cleared

Swap

Contracts

Contracts

to

Sell

Protection

(c)(d)

Traded

Index

ITRAXX

E

UROPE

CROSSOVER

36

........

5.00%

Quarterly

12/20/26

24,125,000

EUR

$

3,277,535

$

3,061,535

$

216,000

Non-

Investment

Grade

Total

Centrally

Cleared

Swap

Contracts

.....................................

$3,277,535

$3,061,535

$216,000

OTC

Swap

Contracts

Contracts

to

Buy

Protection

(c)

Single

Name

Avon

Products,

Inc.

.......

(5.00)%

Quarterly

CITI

3/20/23

5,835,000

(354,400)

(234,573

)

(119,827)

HCA,

Inc.

.....

(5.00)%

Quarterly

FBCO

3/20/22

2,050,000

(50,191)

(28,585)

(21,606)

Nabors

Industries,

Inc.

.......

(1.00)%

Quarterly

CITI

12/20/21

6,200,000

61,666

12,12

2

49,544

Contracts

to

Sell

Protection

(c)(d)

Single

Name

Air

France-KLM

.

5.00%

Quarterly

BOFA

6/20/26

600,000

EUR

33,164

11,18

4

21,980

NR

Air

France-KLM

.

5.00%

Quarterly

JPHQ

6/20/26

1,420,000

EUR

78,488

23,123

55,365

NR

Air

France-KLM

.

5.00%

Quarterly

MSCO

12/20/25

1,320,000

EUR

76,591

1,31

3

75,278

NR

American

Airlines

Group,

Inc.

..

5.00%

Quarterly

CITI

12/20/21

1,600,000

10,616

(14,40

4

)

25,020

CCC

American

Airlines

Group,

Inc.

..

5.00%

Quarterly

GSCO

6/20/22

1,000,000

12,848

(5,947)

18,795

CCC

Apache

Corp.

..

1.00%

Quarterly

CITI

12/20/26

4,135,000

(124,366)

(204,86

0

)

80,494

BB+

Carnival

Corp.

..

1.00%

Quarterly

CITI

12/20/26

3,160,000

(426,041)

(407,481)

(18,560)

B-

Mexico

Government

Bond

......

1.00%

Quarterly

GSCO

6/20/26

7,000,000

29,180

18,856

10,324

BBB

Nabors

Industries,

Inc.

.......

1.00%

Quarterly

CITI

12/20/23

6,200,000

(422,649)

(396,09

8

)

(26,551)

CCC-

Nordstrom,

Inc.

.

1.00%

Quarterly

JPHQ

12/20/26

6,600,000

(517,395)

(578,721

)

61,326

BB+

United

Airlines

Holdings,

Inc.

.

5.00%

Quarterly

JPHQ

12/20/26

3,900,000

141,182

123,1

89

17,993

B

Traded

Index

(e)

BNP

Paribas

Haverhill

Index,

Tranche

5-10%

4.10%

Quarterly

BNDP

12/20/23

2,300,000

EUR

23,610

—

23,610

Non-

Investment

Grade

(e)

Citibank

Bespoke

K

enai

Index

,

Equity

Tranche

0-5%

—%

Quarterly

CITI

12/20/23

5,700,000

(

2,087,988

)

(

1,854,637

)

(

233,351

)

Non-

Investment

Grade

(e)

Citibank

Bespoke

K

ona

Index,

Equity

Tranche

0-5%

—%

Quarterly

CITI

12/20/22

2,500,000

(

468,447

)

(

391,943

)

(

76,504

)

Non-

Investment

Grade

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

80

Credit

Default

Swap

Contracts

(continued)

Description

Periodic

Payment

Rate

Received

(Paid)

Payment

Frequency

Counter-

party

Maturity

Date

Notional

Amount

(a)

Value

Unamortized

Upfront

Payments

(Receipts)

Unrealized

Appreciation

(Depreciation)

Rating

(b)

OTC

Swap

Contracts

(continued)

Contracts

to

Sell

Protection

(c)(d)

(continued)

Traded

Index

(continued)

(e)

Citibank

Bespoke

Kona

Index,

Mezzanine

Tranche

5-10%

2.42%

Quarterly

CITI

12/20/22

5,600,000

$

57,202

$

—

$

57,202

Non-

Investment

Grade

(e)

Citibank

Bespoke

Palm

Beach

Index,

Mezzanine

Tranche

5-10%

1.97%

Quarterly

CITI

12/20/2

2

7,400,000

84,128

—

84,128

Non-

Investment

Grade

(e)

Citibank

Bespoke

Phoenix

Index,

Mezzanine

Tranche

5-7%

2.90%

Quarterly

CITI

12/20/21

3,500,000

23,420

—

23,420

Non-

Investment

Grade

MCDX.

NA.MAIN.31

.

1.00%

Quarterly

CITI

12/20/23

12,200,000

129,487

53,675

75,812

Investment

Grade

(e)

Morgan

Stanley

Bespoke

Pecan

Index,

Mezzanine

Tranche

0-5%

—%

Quarterly

MSCO

12/20/21

1,985,000

1,836,447

408,166

1,428,281

Non-

Investment

Grade

(e)

Morgan

Stanley

Bespoke

Pecan

Index,

Mezzanine

Tranche

5-10%

4.10%

Quarterly

MSCO

12/20/21

3,700,000

12,622

—

12,622

Non-

Investment

Grade

(e)

Morgan

Stanley

Bespoke

Pecan

Index,

Mezzanine

Tranche

5-10%

3.98%

Quarterly

MSCO

12/20/21

3,700,000

11,489

—

11,489

Non-

Investment

Grade

Total

OTC

Swap

Contracts

..............................................

$(1,829,337)

$(3,465,621)

$1,636,284

Total

Credit

Default

Swap

Contracts

....................................

$1,448,198

$

(404,08

6

)

$1,852,284

(a)

In

U.S.

dollars

unless

otherwise

indicated.

For

contracts

to

sell

protection,

the

notional

amount

is

equal

to

the

maximum

potential

amount

of

the

future

payments

and

no

recourse

provisions

have

been

entered

into

in

association

with

the

contracts.

(b)

Based

on

Standard

and

Poor's

(S&P)

Rating

for

single

name

swaps

and

internal

ratings

for

index

swaps.

Internal

ratings

based

on

mapping

into

equivalent

ratings

from

external

vendors.

(c)

Performance

triggers

for

settlement

of

contract

include

default,

bankruptcy

or

restructuring

for

single

name

swaps,

and

failure

to

pay

or

bankruptcy

of

the

underlying

securities

for

traded

index

swaps.

(d)

The

fund

enters

contracts

to

sell

protection

to

create

a

long

credit

position.

(e)

Represents

a

custom

index

comprised

of

a

basket

of

underlying

instruments.

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Low

Duration

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

81

At

October

31,

2021,

the

Fund

had

the

following cross-currency

swap

contracts outstanding.

See

Note

1(e). 

Cross-Currency

Swap

Contracts

Description

Payment

Frequency

Counter-

party

Maturity

Date

Notional

Amount

Value/

Unrealized

Appreciation

(Depreciation)

aA

aaa

aaa

aaa

OTC

Swap

Contracts

Receive

Floating

3-month

USD

LIBOR

+

1.175%

.....

Quarterly

25,083,500

USD

Pay

Floating

3-month

EURIBOR

+

1.05%

.........

Quarterly

CITI

11/22/21

22,700,000

EUR

$

(1,120,063)

Receive

Floating

3-month

USD

LIBOR

+

1.175%

.....

Quarterly

4,862,000

USD

Pay

Floating

3-month

EURIBOR

+

1.05%

.........

Quarterly

CITI

11/22/21

4,400,000

EUR

(217,104)

Receive

Floating

3-month

USD

LIBOR

+

1.174%

.....

Quarterly

30,525,000

USD

Pay

Floating

3-month

EURIBOR

+

1.05%

.........

Quarterly

CITI

12/10/21

27,500,000

EUR

(1,235,377)

Receive

Floating

3-month

USD

LIBOR

+

1.318%

.....

Quarterly

13,930,500

USD

Pay

Floating

3-month

EURIBOR

+

1.2%

..........

Quarterly

CITI

12/12/21

12,550,000

EUR

(565,802)

Receive

Floating

3-month

USD

LIBOR

+

0.938%

.....

Quarterly

23,823,800

USD

Pay

Floating

3-month

EURIBOR

+

0.88%

.........

Quarterly

CITI

6/29/22

20,020,000

EUR

690,591

Receive

Floating

3-month

USD

LIBOR

+

0.849%

.....

Quarterly

3,472,000

USD

Pay

Fixed

0.75%

............................

Annual

DBAB

9/14/22

2,800,000

EUR

224,141

Total

Cross

Currency

Swap

Contracts

...........................................................

$(2,223,614)

See

Note

11

regarding

other

derivative

information.

See

Abbreviations

on

page

156

.

Franklin

Investors

Securities

Trust

Consolidated

Financial

Highlights

Franklin

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

82

a

Year

Ended

October

31,

2021*

2020

2019

2018

2017

Class

A

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$10.04

$9.92

$9.31

$9.84

$9.93

Income

from

investment

operations

a

:

Net

investment

income

..........................

0.176

b

0.257

b

0.302

b

0.269

0.251

b

Net

realized

and

unrealized

gains

(losses)

...........

0.036

0.170

0.618

(0.518)

(0.110)

Total

from

investment

operations

....................

0.212

0.427

0.920

(0.249)

0.141

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

..

(0.272)

(0.306)

(0.310)

(0.275)

(0.231)

Tax

return

of

capital

............................

—

—

—

(0.006)

—

Total

distributions

...............................

(0.272)

(0.306)

(0.310)

(0.281)

(0.231)

Net

asset

value,

end

of

year

.......................

$9.98

$10.04

$9.92

$9.31

$9.84

Total

return

c

...................................

2.12%

4.38%

10.01%

(2.57)%

1.47%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.89%

0.90%

0.90%

0.91%

0.91%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

0.83%

0.85%

d

0.86%

d

0.88%

d

0.87%

d

Net

investment

income

...........................

1.75%

2.59%

3.12%

2.91%

2.58%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$3,876,156

$4,031,242

$3,422,747

$2,763,774

$3,153,751

Portfolio

turnover

rate

............................

184.44%

e

228.24%

169.95%

e

151.77%

101.07%

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

f

....

59.70%

e

137.82%

98.83%

e

84.86%

78.46%

*Includes

the

consolidated

operations

of

FT

Holdings

Corporation

I

from

November

1,

2020

through

April

27,

2021.

See

Note

1(g).

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Consolidated

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

e

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

See

Note

3(h).

f

See

Note

1(

i

)

regarding

mortgage

dollar

rolls.

Franklin

Investors

Securities

Trust

Consolidated

Financial

Highlights

Franklin

Total

Return

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

83

a

Year

Ended

October

31,

2021*

2020

2019

2018

2017

Class

C

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$9.97

$9.85

$9.25

$9.77

$9.87

Income

from

investment

operations

a

:

Net

investment

income

..........................

0.137

b

0.216

b

0.262

b

0.183

0.212

b

Net

realized

and

unrealized

gains

(losses)

...........

0.025

0.171

0.609

(0.457)

(0.109)

Total

from

investment

operations

....................

0.162

0.387

0.871

(0.274)

0.103

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

..

(0.232)

(0.267)

(0.271)

(0.241)

(0.203)

Tax

return

of

capital

............................

—

—

—

(0.005)

—

Total

distributions

...............................

(0.232)

(0.267)

(0.271)

(0.246)

(0.203)

Net

asset

value,

end

of

year

.......................

$9.90

$9.97

$9.85

$9.25

$9.77

Total

return

c

...................................

1.63%

4.01%

9.52%

(2.84)%

0.98%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

1.30%

1.30%

1.30%

1.31%

1.31%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

1.24%

1.25%

d

1.26%

d

1.28%

d

1.27%

d

Net

investment

income

...........................

1.37%

2.20%

2.72%

2.51%

2.18%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$141,309

$208,947

$236,838

$243,068

$354,269

Portfolio

turnover

rate

............................

184.44%

e

228.24%

169.95%

e

151.77%

101.07%

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

f

....

59.70%

e

137.82%

98.83%

e

84.86%

78.46%

*Includes

the

consolidated

operations

of

FT

Holdings

Corporation

I

from

November

1,

2020

through

April

27,

2021.

See

Note

1(g).

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Consolidated

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

e

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

See

Note

3(h).

f

See

Note

1(

i

)

regarding

mortgage

dollar

rolls.

Franklin

Investors

Securities

Trust

Consolidated

Financial

Highlights

Franklin

Total

Return

Fund

(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

84

a

Year

Ended

October

31,

2021*

2020

2019

2018

2017

Class

R

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$10.00

$9.88

$9.27

$9.80

$9.90

Income

from

investment

operations

a

:

Net

investment

income

..........................

0.152

b

0.232

b

0.277

b

0.182

0.228

b

Net

realized

and

unrealized

gains

(losses)

...........

0.035

0.171

0.619

(0.453)

(0.115)

Total

from

investment

operations

....................

0.187

0.403

0.896

(0.271)

0.113

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

..

(0.247)

(0.282)

(0.286)

(0.253)

(0.213)

Tax

return

of

capital

............................

—

—

—

(0.006)

—

Total

distributions

...............................

(0.247)

(0.282)

(0.286)

(0.259)

(0.213)

Net

asset

value,

end

of

year

.......................

$9.94

$10.00

$9.88

$9.27

$9.80

Total

return

....................................

1.87%

4.14%

9.66%

(2.70)%

1.19%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

1.14%

1.15%

1.15%

1.16%

1.16%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

1.09%

1.10%

c

1.11%

c

1.13%

c

1.12%

c

Net

investment

income

...........................

1.52%

2.36%

2.87%

2.66%

2.33%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$12,623

$17,274

$21,223

$23,620

$36,337

Portfolio

turnover

rate

............................

184.44%

d

228.24%

169.95%

d

151.77%

101.07%

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

e

....

59.70%

d

137.82%

98.83%

d

84.86%

78.46%

*Includes

the

consolidated

operations

of

FT

Holdings

Corporation

I

from

November

1,

2020

through

April

27,

2021.

See

Note

1(g).

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Consolidated

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

d

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

See

Note

3(h).

e

See

Note

1(

i

)

regarding

mortgage

dollar

rolls.

Franklin

Investors

Securities

Trust

Consolidated

Financial

Highlights

Franklin

Total

Return

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

85

a

Year

Ended

October

31,

2021*

2020

2019

2018

2017

Class

R6

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$10.11

$9.99

$9.38

$9.90

$9.98

Income

from

investment

operations

a

:

Net

investment

income

..........................

0.213

b

0.294

b

0.340

b

0.308

0.296

b

Net

realized

and

unrealized

gains

(losses)

...........

0.035

0.168

0.617

(0.512)

(0.117)

Total

from

investment

operations

....................

0.248

0.462

0.957

(0.204)

0.179

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

..

(0.308)

(0.341)

(0.347)

(0.309)

(0.259)

Tax

return

of

capital

............................

—

—

—

(0.007)

—

Total

distributions

...............................

(0.308)

(0.341)

(0.347)

(0.316)

(0.259)

Net

asset

value,

end

of

year

.......................

$10.05

$10.11

$9.99

$9.38

$9.90

Total

return

....................................

2.47%

4.72%

10.35%

(2.10)%

1.75%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.52%

0.54%

0.53%

0.54%

0.50%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

0.46%

0.48%

c

0.49%

c

0.49%

c

0.48%

c

Net

investment

income

...........................

2.10%

2.95%

3.49%

3.30%

2.97%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$601,624

$547,075

$481,399

$430,637

$398,732

Portfolio

turnover

rate

............................

184.44%

d

228.24%

169.95%

d

151.77%

101.07%

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

e

....

59.70%

d

137.82%

98.83%

d

84.86%

78.46%

*Includes

the

consolidated

operations

of

FT

Holdings

Corporation

I

from

November

1,

2020

through

April

27,

2021.

See

Note

1(g).

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Consolidated

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

d

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

See

Note

3(h).

e

See

Note

1(

i

)

regarding

mortgage

dollar

rolls.

Franklin

Investors

Securities

Trust

Consolidated

Financial

Highlights

Franklin

Total

Return

Fund

(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

86

a

Year

Ended

October

31,

2021*

2020

2019

2018

2017

Advisor

Class

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$10.10

$9.98

$9.37

$9.89

$9.98

Income

from

investment

operations

a

:

Net

investment

income

..........................

0.202

b

0.281

b

0.328

b

0.291

0.275

b

Net

realized

and

unrealized

gains

(losses)

...........

0.035

0.169

0.618

(0.507)

(0.116)

Total

from

investment

operations

....................

0.237

0.450

0.946

(0.216)

0.159

Less

distributions

from:

Net

investment

income

and

net

foreign

currency

gains

..

(0.297)

(0.329)

(0.336)

(0.297)

(0.249)

Tax

return

of

capital

............................

—

—

—

(0.007)

—

Total

distributions

...............................

(0.297)

(0.329)

(0.336)

(0.304)

(0.249)

Net

asset

value,

end

of

year

.......................

$10.04

$10.10

$9.98

$9.37

$9.89

Total

return

....................................

2.36%

4.60%

10.23%

(2.22)%

1.65%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.64%

0.64%

0.65%

0.66%

0.66%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

0.58%

0.60%

c

0.61%

c

0.63%

c

0.62%

c

Net

investment

income

...........................

2.00%

2.84%

3.37%

3.16%

2.83%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$232,016

$293,080

$863,516

$620,803

$595,239

Portfolio

turnover

rate

............................

184.44%

d

228.24%

169.95%

d

151.77%

101.07%

Portfolio

turnover

rate

excluding

mortgage

dollar

rolls

e

....

59.70%

d

137.82%

98.83%

d

8.49%

78.46%

*Includes

the

consolidated

operations

of

FT

Holdings

Corporation

I

from

November

1,

2020

through

April

27,

2021.

See

Note

1(g).

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Consolidated

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

d

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

See

Note

3(h).

e

See

Note

1(

i

)

regarding

mortgage

dollar

rolls.

Franklin

Investors

Securities

Trust

Statement

of

Investments,

October

31,

2021

Franklin

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

Annual

Report

87

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Common

Stocks

0.0%

†

Energy

Equipment

&

Services

0.0%

†

a

Valaris

Ltd.

..........................................

United

States

2,435

$

85,760

a

Weatherford

International

plc

.............................

United

States

34,108

991,181

1,076,941

Multiline

Retail

0.0%

a,b,c

K2016470219

South

Africa

Ltd.,

A

.........................

South

Africa

28,762,824

—

a,b,c

K2016470219

South

Africa

Ltd.,

B

.........................

South

Africa

2,862,311

—

—

Oil,

Gas

&

Consumable

Fuels

0.0%

†

a,b

Riviera

Resources,

Inc.

.................................

United

States

12,605

3,256

Total

Common

Stocks

(Cost

$1,831,532)

.......................................

1,080,197

Management

Investment

Companies

18.9%

Capital

Markets

18.9%

d

Franklin

Floating

Rate

Income

Fund

.......................

United

States

24,116,234

196,547,305

d

Franklin

Liberty

High

Yield

Corporate

ETF

...................

United

States

4,700,000

123,183,240

d

Franklin

Liberty

Investment

Grade

Corporate

ETF

.............

United

States

18,335,000

475,884,925

d,e

Franklin

Liberty

Senior

Loan

ETF

.........................

United

States

1,737,400

43,391,565

SPDR

Blackstone

Senior

Loan

ETF

.......................

United

States

1,725,000

79,177,500

918,184,535

Total

Management

Investment

Companies

(Cost

$895,598,684)

...................

918,184,535

Preferred

Stocks

0.1%

Banks

0.1%

Citigroup

Capital

XIII,

6.502%

............................

United

States

93,000

2,552,850

Total

Preferred

Stocks

(Cost

$2,325,000)

.......................................

2,552,850

Warrants

Warrants

0.0%

†

Oil,

Gas

&

Consumable

Fuels

0.0%

†

a,b

Battalion

Oil

Corp.,

A,

10/08/22

...........................

United

States

2,551

1

a,b

Battalion

Oil

Corp.,

B,

10/08/22

...........................

United

States

3,189

—

a,b

Battalion

Oil

Corp.,

C,

10/08/22

...........................

United

States

4,100

—

1

Paper

&

Forest

Products

0.0%

†

a

Verso

Corp.,

7/25/23

...................................

United

States

732

4,026

Total

Warrants

(Cost

$—)

.....................................................

4,027

Principal

Amount

*

Corporate

Bonds

17.7%

Aerospace

&

Defense

0.3%

Boeing

Co.

(The)

,

Senior

Note

,

2.196

%

,

2/04/26

..............

United

States

9,500,000

9,519,078

Northrop

Grumman

Corp.

,

Senior

Bond

,

5.25

%

,

5/01/50

........

United

States

3,500,000

4,987,438

14,506,516

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

88

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Air

Freight

&

Logistics

0.1%

f

DAE

Funding

LLC

,

Senior

Note

,

144A,

1.55

%

,

8/01/24

.........

United

Arab

Emirates

3,300,000

$

3,259,575

FedEx

Corp.

,

Senior

Bond

,

4.05

%

,

2/15/48

..................

United

States

2,000,000

2,284,253

5,543,828

Airlines

0.6%

f

American

Airlines

Inc

/

AAdvantage

Loyalty

IP

Ltd.

,

Senior

Secured

Note

,

144A,

5.75

%

,

4/20/29

............................

United

States

2,600,000

2,801,500

f

Delta

Air

Lines,

Inc.

/

SkyMiles

IP

Ltd.

,

Senior

Secured

Note

,

144A,

4.5

%

,

10/20/25

.....................................

United

States

10,500,000

11,205,625

f

Hawaiian

Brand

Intellectual

Property

Ltd.

/

HawaiianMiles

Loyalty

Ltd.

,

Senior

Secured

Note

,

144A,

5.75

%

,

1/20/26

............

United

States

12,200,000

12,825,250

f

United

Airlines,

Inc.

,

Senior

Secured

Note

,

144A,

4.375

%

,

4/15/26

.

United

States

2,200,000

2,278,584

29,110,959

Auto

Components

0.1%

f

Allison

Transmission,

Inc.

,

Senior

Bond

,

144A,

5.875

%

,

6/01/29

..

United

States

2,500,000

2,693,750

Banks

1.4%

Banco

Santander

SA

,

Sub.

Bond

,

2.749

%

,

12/03/30

...........

Spain

3,600,000

3,535,627

Bank

of

America

Corp.

,

Senior

Bond,

2.592%

to

4/29/30,

FRN

thereafter,

4/29/31

.....

United

States

6,700,000

6,782,322

Sub.

Bond,

6.11%,

1/29/37

............................

United

States

2,800,000

3,799,669

Citigroup,

Inc.

,

Senior

Bond,

2.572%

to

6/03/30,

FRN

thereafter,

6/03/31

.....

United

States

8,000,000

8,071,701

Senior

Bond,

4.65%,

7/23/48

...........................

United

States

3,700,000

4,867,289

g

Comerica,

Inc.

,

Junior

Sub.

Bond

,

5.625%

to

10/01/25,

FRN

thereafter

,

Perpetual

.................................

United

States

3,800,000

4,203,750

JPMorgan

Chase

&

Co.

,

Senior

Bond,

4.493%

to

3/24/30,

FRN

thereafter,

3/24/31

.....

United

States

17,100,000

19,844,385

Sub.

Bond,

4.95%,

6/01/45

............................

United

States

1,600,000

2,110,140

f

Societe

Generale

SA

,

Senior

Note

,

144A,

1.792%

to

6/09/26,

FRN

thereafter

,

6/09/27

...................................

France

7,500,000

7,386,324

f

UniCredit

SpA

,

Senior

Note

,

144A,

1.982%

to

6/03/26,

FRN

thereafter

,

6/03/27

...................................

Italy

7,300,000

7,179,188

67,780,395

Beverages

0.1%

Anheuser-Busch

Cos.

LLC

/

Anheuser-Busch

InBev

Worldwide,

Inc.

,

Senior

Bond,

4.7%,

2/01/36

............................

Belgium

1,800,000

2,179,279

Senior

Bond,

4.9%,

2/01/46

............................

Belgium

3,400,000

4,342,504

6,521,783

Biotechnology

0.1%

AbbVie,

Inc.

,

Senior

Bond

,

4.7

%

,

5/14/45

...................

United

States

3,200,000

4,019,876

Capital

Markets

0.2%

Goldman

Sachs

Group,

Inc.

(The)

,

Senior

Bond

,

6.25

%

,

2/01/41

..

United

States

2,800,000

4,112,704

f

MSCI,

Inc.

,

Senior

Bond

,

144A,

3.25

%

,

8/15/33

...............

United

States

3,500,000

3,517,920

7,630,624

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

Annual

Report

89

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Chemicals

1.2%

f

Alpek

SAB

de

CV

,

Senior

Bond

,

144A,

3.25

%

,

2/25/31

.........

Mexico

5,800,000

$

5,750,120

f

Braskem

Idesa

SAPI

,

Senior

Secured

Bond

,

144A,

6.99

%

,

2/20/32

Mexico

9,300,000

9,532,500

f

Braskem

Netherlands

Finance

BV

,

Senior

Bond

,

144A,

4.5

%

,

1/31/30

...........................................

Brazil

11,800,000

11,989,154

CF

Industries,

Inc.

,

Senior

Bond

,

5.15

%

,

3/15/34

..............

United

States

10,400,000

12,663,560

Sasol

Financing

USA

LLC

,

Senior

Bond

,

6.5

%

,

9/27/28

.........

South

Africa

12,200,000

13,526,750

f

Unifrax

Escrow

Issuer

Corp.

,

Senior

Secured

Note

,

144A,

5.25

%

,

9/30/28

...........................................

United

States

1,100,000

1,098,625

f

Yara

International

ASA

,

Senior

Bond

,

144A,

3.148

%

,

6/04/30

.....

Brazil

1,700,000

1,782,777

56,343,486

Commercial

Services

&

Supplies

0.1%

f

APCOA

Parking

Holdings

GmbH

,

Senior

Secured

Note

,

144A,

4.625

%

,

1/15/27

.....................................

Germany

2,300,000

EUR

2,646,075

Communications

Equipment

0.1%

f

CommScope

Technologies

LLC

,

Senior

Bond

,

144A,

5

%

,

3/15/27

.

United

States

3,000,000

2,789,563

Consumer

Finance

0.1%

AerCap

Ireland

Capital

DAC

/

AerCap

Global

Aviation

Trust

,

Senior

Bond

,

3.4

%

,

10/29/33

.................................

Ireland

6,200,000

6,317,857

Containers

&

Packaging

0.3%

f

Mauser

Packaging

Solutions

Holding

Co.

,

Senior

Note

,

144A,

7.25

%

,

4/15/25

...........................................

United

States

3,000,000

2,909,190

f

Pactiv

Evergreen

Group

Issuer

LLC

/

Pactiv

Evergreen

Group

Issuer,

Inc.

,

Senior

Secured

Note

,

144A,

4.375

%

,

10/15/28

..........

United

States

700,000

691,250

f

Pactiv

Evergreen

Group

Issuer,

Inc./Pactiv

Evergreen

Group

Issuer

LLC/Reynolds

Group

Holdings

Ltd.

,

Senior

Secured

Note

,

144A,

4

%

,

10/15/27

.......................................

United

States

2,300,000

2,253,425

f

Plastipak

Holdings,

Inc.

,

Senior

Note

,

144A,

6.25

%

,

10/15/25

....

United

States

3,000,000

3,058,140

WRKCo

,

Inc.

,

Senior

Bond

,

3

%

,

6/15/33

....................

United

States

4,700,000

4,883,964

13,795,969

Diversified

Financial

Services

0.1%

f

MPH

Acquisition

Holdings

LLC

,

Senior

Secured

Note

,

144A,

5.5

%

,

9/01/28

...........................................

United

States

5,300,000

5,269,698

Shell

International

Finance

BV

,

Senior

Bond

,

4.55

%

,

8/12/43

.....

Netherlands

1,700,000

2,148,218

7,417,916

Diversified

Telecommunication

Services

0.3%

f

Altice

France

SA

,

Senior

Secured

Note

,

144A,

5.5

%

,

1/15/28

....

France

3,000,000

3,011,250

AT&T,

Inc.

,

Senior

Bond

,

3.5

%

,

6/01/41

.....................

United

States

8,000,000

8,266,365

f

CCO

Holdings

LLC

/

CCO

Holdings

Capital

Corp.

,

Senior

Bond

,

144A,

5

%

,

2/01/28

...................................

United

States

1,500,000

1,561,875

12,839,490

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

90

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Electric

Utilities

1.3%

Commonwealth

Edison

Co.

,

Senior

Bond

,

6.45

%

,

1/15/38

.......

United

States

700,000

$

1,019,186

Duke

Energy

Corp.

,

Senior

Bond

,

3.75

%

,

9/01/46

.............

United

States

2,000,000

2,179,086

Duke

Energy

Florida

LLC

,

Senior

Bond

,

6.4

%

,

6/15/38

.........

United

States

1,300,000

1,892,265

f

Enel

Finance

International

NV

,

Senior

Bond

,

144A,

6.8

%

,

9/15/37

.

Italy

3,000,000

4,344,947

Exelon

Corp.

,

Senior

Bond

,

4.05

%

,

4/15/30

..................

United

States

8,400,000

9,462,791

Georgia

Power

Co.

,

Senior

Bond

,

4.3

%

,

3/15/42

..............

United

States

9,000,000

10,391,006

Southern

Co.

(The)

,

Senior

Bond,

4.4%,

7/01/46

............................

United

States

2,000,000

2,386,754

A,

Senior

Bond,

3.7%,

4/30/30

.........................

United

States

13,900,000

15,075,674

f

State

Grid

Overseas

Investment

BVI

Ltd.

,

Senior

Bond

,

144A,

3.5

%

,

5/04/27

...........................................

China

10,700,000

11,606,347

Virginia

Electric

and

Power

Co.

,

Senior

Bond

,

6.35

%

,

11/30/37

...

United

States

520,000

745,432

f

Vistra

Operations

Co.

LLC

,

Senior

Note

,

144A,

4.375

%

,

5/01/29

..

United

States

3,100,000

3,072,875

62,176,363

Electronic

Equipment,

Instruments

&

Components

0.4%

Flex

Ltd.

,

Senior

Bond

,

4.875

%

,

5/12/30

....................

United

States

16,700,000

19,160,313

Energy

Equipment

&

Services

0.0%

†

Baker

Hughes

Holdings

LLC

/

Baker

Hughes

Co-Obligor,

Inc.

,

Senior

Bond

,

4.08

%

,

12/15/47

................................

United

States

1,200,000

1,372,021

f

Weatherford

International

Ltd.

,

Senior

Note

,

144A,

11

%

,

12/01/24

.

United

States

125,000

130,513

1,502,534

Equity

Real

Estate

Investment

Trusts

(REITs)

0.1%

Equinix

,

Inc.

,

Senior

Bond

,

3.2

%

,

11/18/29

..................

United

States

3,500,000

3,689,811

Food

&

Staples

Retailing

0.2%

f

Cencosud

SA

,

Senior

Bond

,

144A,

4.375

%

,

7/17/27

...........

Chile

9,700,000

10,323,225

Food

Products

0.2%

f

Bimbo

Bakeries

USA,

Inc.

,

Senior

Bond

,

144A,

4

%

,

5/17/51

.....

Mexico

2,700,000

2,980,787

f

JBS

Finance

Luxembourg

SARL

,

Senior

Bond

,

144A,

3.625

%

,

1/15/32

...........................................

United

States

2,500,000

2,471,675

Kraft

Heinz

Foods

Co.

,

Senior

Note

,

3

%

,

6/01/26

..............

United

States

3,100,000

3,243,863

f

Pilgrim's

Pride

Corp.

,

Senior

Bond

,

144A,

3.5

%

,

3/01/32

........

United

States

1,700,000

1,706,375

10,402,700

Health

Care

Equipment

&

Supplies

0.1%

Edwards

Lifesciences

Corp.

,

Senior

Bond

,

4.3

%

,

6/15/28

.......

United

States

1,700,000

1,946,099

STERIS

Irish

FinCo

.

UnLtd

.

Co.

,

Senior

Note

,

2.7

%

,

3/15/31

.....

United

States

2,400,000

2,434,224

4,380,323

Health

Care

Providers

&

Services

1.0%

Anthem,

Inc.

,

Senior

Bond

,

4.65

%

,

1/15/43

..................

United

States

3,100,000

3,835,323

Centene

Corp.

,

Senior

Bond,

3%,

10/15/30

............................

United

States

12,300,000

12,517,587

Senior

Note,

4.25%,

12/15/27

..........................

United

States

2,000,000

2,097,500

f

CHS/Community

Health

Systems,

Inc.

,

Senior

Secured

Note,

144A,

5.625%,

3/15/27

..............

United

States

800,000

838,160

Senior

Secured

Note,

144A,

6%,

1/15/29

..................

United

States

600,000

632,250

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

Annual

Report

91

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Health

Care

Providers

&

Services

(continued)

CVS

Health

Corp.

,

Senior

Bond

,

4.78

%

,

3/25/38

..............

United

States

3,200,000

$

3,918,719

f

DaVita,

Inc.

,

Senior

Note

,

144A,

4.625

%

,

6/01/30

.............

United

States

1,900,000

1,911,875

Kaiser

Foundation

Hospitals

,

2019

,

Senior

Bond

,

3.266

%

,

11/01/49

United

States

11,270,000

12,307,637

Orlando

Health

Obligated

Group

,

3.777

%

,

10/01/28

............

United

States

2,810,000

3,067,945

Providence

St

Joseph

Health

Obligated

Group

,

H

,

2.746

%

,

10/01/26

United

States

8,875,000

9,325,384

50,452,380

Hotels,

Restaurants

&

Leisure

1.4%

f

Carnival

Corp.

,

Senior

Note

,

144A,

5.75

%

,

3/01/27

............

United

States

3,120,000

3,178,500

f

Genting

New

York

LLC

/

GENNY

Capital,

Inc.

,

Senior

Note

,

144A,

3.3

%

,

2/15/26

......................................

United

States

2,100,000

2,069,645

Las

Vegas

Sands

Corp.

,

Senior

Bond

,

3.9

%

,

8/08/29

...........

United

States

8,500,000

8,655,216

f

Melco

Resorts

Finance

Ltd.

,

Senior

Note

,

144A,

5.75

%

,

7/21/28

..

Hong

Kong

7,800,000

7,780,500

f

NCL

Corp.

Ltd.

,

Senior

Note

,

144A,

5.875

%

,

3/15/26

...........

United

States

15,300,000

15,357,375

f

Royal

Caribbean

Cruises

Ltd.

,

Senior

Note

,

144A,

5.5

%

,

8/31/26

..

United

States

13,300,000

13,566,000

f

Studio

City

Finance

Ltd.

,

Senior

Note

,

144A,

5

%

,

1/15/29

.......

Macau

13,000,000

11,788,985

f

Wynn

Macau

Ltd.

,

Senior

Note

,

144A,

5.625

%

,

8/26/28

.........

Macau

5,800,000

5,424,914

67,821,135

Household

Durables

0.3%

f

Ashton

Woods

USA

LLC

/

Ashton

Woods

Finance

Co.

,

Senior

Note

,

144A,

4.625

%

,

8/01/29

................................

United

States

3,000,000

2,977,500

Mohawk

Industries,

Inc.

,

Senior

Bond

,

3.625

%

,

5/15/30

.........

United

States

10,400,000

11,260,822

14,238,322

Independent

Power

and

Renewable

Electricity

Producers

0.3%

f

Calpine

Corp.

,

Senior

Note

,

144A,

5.125

%

,

3/15/28

............

United

States

2,500,000

2,490,625

f

Colbun

SA

,

Senior

Bond

,

144A,

3.15

%

,

3/06/30

...............

Chile

4,400,000

4,429,546

f

InterGen

NV

,

Senior

Secured

Bond

,

144A,

7

%

,

6/30/23

.........

Netherlands

3,300,000

3,251,507

f

Talen

Energy

Supply

LLC

,

Senior

Secured

Note

,

144A,

7.25

%

,

5/15/27

...........................................

United

States

3,000,000

2,874,720

13,046,398

Interactive

Media

&

Services

0.3%

f

Tencent

Holdings

Ltd.

,

Senior

Bond

,

144A,

2.39

%

,

6/03/30

......

China

15,000,000

14,643,683

Internet

&

Direct

Marketing

Retail

0.5%

Alibaba

Group

Holding

Ltd.

,

Senior

Bond,

3.4%,

12/06/27

...........................

China

14,700,000

15,616,063

Senior

Bond,

2.125%,

2/09/31

..........................

China

7,400,000

7,103,883

f

Match

Group

Holdings

II

LLC

,

Senior

Note

,

144A,

3.625

%

,

10/01/31

United

States

1,300,000

1,263,587

23,983,533

IT

Services

0.2%

Fiserv,

Inc.

,

Senior

Bond

,

2.65

%

,

6/01/30

...................

United

States

8,600,000

8,746,643

f

Presidio

Holdings,

Inc.

,

Senior

Note

,

144A,

8.25

%

,

2/01/28

......

United

States

3,000,000

3,191,400

11,938,043

Machinery

0.0%

†

f

Roller

Bearing

Co.

of

America,

Inc.

,

Senior

Secured

Note

,

144A,

4.375

%

,

10/15/29

....................................

United

States

1,900,000

1,938,000

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

92

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Media

0.8%

Charter

Communications

Operating

LLC

/

Charter

Communications

Operating

Capital

,

Senior

Secured

Bond

,

2.8

%

,

4/01/31

.......

United

States

18,200,000

$

18,114,578

Comcast

Corp.

,

Senior

Bond

,

4.25

%

,

1/15/33

................

United

States

10,000,000

11,719,044

f

Diamond

Sports

Group

LLC

/

Diamond

Sports

Finance

Co.

,

Senior

Secured

Note

,

144A,

5.375

%

,

8/15/26

....................

United

States

3,200,000

1,814,416

Fox

Corp.

,

Senior

Bond

,

5.476

%

,

1/25/39

...................

United

States

3,000,000

3,883,743

f

Univision

Communications,

Inc.

,

Senior

Secured

Note,

144A,

5.125%,

2/15/25

..............

United

States

3,000,000

3,048,750

Senior

Secured

Note,

144A,

4.5%,

5/01/29

................

United

States

400,000

405,180

38,985,711

Metals

&

Mining

0.1%

f

Novelis

Corp.

,

Senior

Bond

,

144A,

4.75

%

,

1/30/30

............

United

States

2,500,000

2,603,125

Multiline

Retail

0.0%

b,f,h

K2016470219

South

Africa

Ltd.

,

Senior

Secured

Note

,

144A,

PIK,

3

%

,

12/31/22

.......................................

South

Africa

2,419,520

—

b,f,h

K2016470260

South

Africa

Ltd.

,

Senior

Secured

Note

,

144A,

PIK,

25

%

,

12/31/22

......................................

South

Africa

867,575

—

—

Multi-Utilities

0.2%

Berkshire

Hathaway

Energy

Co.

,

Senior

Bond

,

6.125

%

,

4/01/36

..

United

States

2,700,000

3,715,807

Dominion

Energy,

Inc.

,

C

,

Senior

Note

,

3.375

%

,

4/01/30

........

United

States

4,351,000

4,682,231

8,398,038

Oil,

Gas

&

Consumable

Fuels

2.0%

f

Aker

BP

ASA

,

Senior

Bond

,

144A,

4

%

,

1/15/31

...............

Norway

10,400,000

11,308,080

Cenovus

Energy,

Inc.

,

Senior

Bond

,

6.75

%

,

11/15/39

...........

Canada

1,500,000

2,058,819

Cheniere

Corpus

Christi

Holdings

LLC

,

Senior

Secured

Note

,

5.875

%

,

3/31/25

.....................................

United

States

1,600,000

1,791,562

f

Cheniere

Energy

Partners

LP

,

Senior

Bond

,

144A,

3.25

%

,

1/31/32

.

United

States

1,200,000

1,190,940

Cheniere

Energy,

Inc.

,

Senior

Secured

Note

,

4.625

%

,

10/15/28

...

United

States

1,700,000

1,784,915

f

Continental

Resources,

Inc.

,

Senior

Bond

,

144A,

5.75

%

,

1/15/31

..

United

States

15,500,000

18,580,625

f

Crestwood

Midstream

Partners

LP

/

Crestwood

Midstream

Finance

Corp.

,

Senior

Note

,

144A,

6

%

,

2/01/29

....................

United

States

3,500,000

3,631,827

Enable

Midstream

Partners

LP

,

Senior

Bond,

5.25%,

5/15/44

...........................

United

States

1,200,000

1,303,189

Senior

Note,

4.15%,

5/15/24

...........................

United

States

3,600,000

3,795,300

Energy

Transfer

LP

,

Senior

Bond,

4.75%,

1/15/26

...........................

United

States

4,500,000

4,983,864

Senior

Bond,

5.15%,

2/01/43

...........................

United

States

6,000,000

6,785,558

EnLink

Midstream

LLC

,

Senior

Bond

,

5.375

%

,

6/01/29

.........

United

States

400,000

414,500

Enterprise

Products

Operating

LLC

,

Senior

Bond

,

3.125

%

,

7/31/29

United

States

2,000,000

2,134,004

Exxon

Mobil

Corp.

,

Senior

Bond,

2.61%,

10/15/30

..........................

United

States

6,100,000

6,355,676

Senior

Bond,

3.452%,

4/15/51

..........................

United

States

2,000,000

2,220,971

f

Harvest

Operations

Corp.

,

Senior

Note

,

144A,

4.2

%

,

6/01/23

.....

South

Korea

3,800,000

3,989,606

f

Martin

Midstream

Partners

LP

/

Martin

Midstream

Finance

Corp.

,

Secured

Note,

144A,

10%,

2/29/24

......................

United

States

151,936

156,122

Secured

Note,

144A,

11.5%,

2/28/25

.....................

United

States

689,984

718,839

MPLX

LP

,

Senior

Bond,

4.7%,

4/15/48

............................

United

States

2,000,000

2,354,627

Senior

Note,

4.875%,

6/01/25

..........................

United

States

4,500,000

4,971,520

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

Annual

Report

93

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Oil,

Gas

&

Consumable

Fuels

(continued)

Occidental

Petroleum

Corp.

,

Senior

Bond

,

6.125

%

,

1/01/31

......

United

States

1,800,000

$

2,157,750

f

Rattler

Midstream

LP

,

Senior

Note

,

144A,

5.625

%

,

7/15/25

......

United

States

900,000

941,625

Sunoco

LP

/

Sunoco

Finance

Corp.

,

Senior

Note

,

4.5

%

,

5/15/29

..

United

States

1,400,000

1,417,500

TotalEnergies

Capital

International

SA

,

Senior

Bond

,

3.455

%

,

2/19/29

...........................................

France

1,800,000

1,984,841

TransCanada

PipeLines

Ltd.

,

Senior

Bond

,

4.25

%

,

5/15/28

......

Canada

3,400,000

3,838,989

f

Tullow

Oil

plc

,

Senior

Note

,

144A,

7

%

,

3/01/25

...............

Ghana

600,000

525,933

f

Venture

Global

Calcasieu

Pass

LLC

,

Senior

Secured

Bond,

144A,

4.125%,

8/15/31

..............

United

States

1,000,000

1,036,200

Senior

Secured

Note,

144A,

3.875%,

8/15/29

..............

United

States

1,000,000

1,018,750

Williams

Cos.,

Inc.

(The)

,

Senior

Bond

,

3.5

%

,

11/15/30

.........

United

States

3,200,000

3,439,687

96,891,819

Paper

&

Forest

Products

0.2%

Suzano

Austria

GmbH

,

Senior

Bond,

3.75%,

1/15/31

...........................

Brazil

5,000,000

5,013,550

DM3N,

Senior

Bond,

3.125%,

1/15/32

....................

Brazil

7,300,000

6,906,786

11,920,336

Personal

Products

0.2%

Avon

Products,

Inc.

,

Senior

Bond

,

6.75

%

,

3/15/23

.............

United

Kingdom

8,800,000

9,284,000

f

Oriflame

Investment

Holding

plc

,

Senior

Secured

Note

,

144A,

5.125

%

,

5/04/26

.....................................

Switzerland

2,600,000

2,581,410

11,865,410

Pharmaceuticals

0.0%

†

Royalty

Pharma

plc

,

Senior

Bond

,

2.15

%

,

9/02/31

.............

United

States

1,800,000

1,713,452

Real

Estate

Management

&

Development

0.2%

f

Country

Garden

Holdings

Co.

Ltd.

,

Senior

Secured

Note

,

Reg

S,

7.25

%

,

4/08/26

.....................................

China

5,300,000

5,510,266

f

Five

Point

Operating

Co.

LP

/

Five

Point

Capital

Corp.

,

Senior

Note

,

144A,

7.875

%

,

11/15/25

...............................

United

States

600,000

625,050

f

Vivion

Investments

SARL

,

Senior

Note

,

Reg

S,

3

%

,

8/08/24

.....

Luxembourg

1,700,000

EUR

1,897,551

8,032,867

Road

&

Rail

0.4%

Burlington

Northern

Santa

Fe

LLC

,

Senior

Bond,

4.9%,

4/01/44

............................

United

States

1,600,000

2,111,321

Senior

Bond,

3.9%,

8/01/46

............................

United

States

5,000,000

5,958,227

f

First

Student

Bidco

,

Inc.

/

First

Transit

Parent,

Inc.

,

Senior

Secured

Note

,

144A,

4

%

,

7/31/29

..............................

United

States

3,100,000

3,034,125

f

Kazakhstan

Temir

Zholy

Finance

BV

,

Senior

Bond

,

144A,

6.95

%

,

7/10/42

...........................................

Kazakhstan

7,500,000

10,176,900

21,280,573

Semiconductors

&

Semiconductor

Equipment

0.3%

f

SK

Hynix,

Inc.

,

Senior

Bond

,

144A,

2.375

%

,

1/19/31

...........

South

Korea

14,800,000

14,230,568

Software

0.0%

†

Anagram,

Inc.

,

Secured

Note

,

10

%

,

8/15/26

.................

United

States

631,671

651,519

Specialty

Retail

0.1%

AutoNation,

Inc.

,

Senior

Bond

,

4.75

%

,

6/01/30

...............

United

States

2,400,000

2,789,985

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

94

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

Corporate

Bonds

(continued)

Thrifts

&

Mortgage

Finance

0.4%

Radian

Group,

Inc.

,

Senior

Note

,

4.875

%

,

3/15/27

.............

United

States

16,800,000

$

18,354,756

Tobacco

0.3%

Altria

Group,

Inc.

,

Senior

Bond

,

3.4

%

,

5/06/30

................

United

States

15,100,000

15,820,344

Trading

Companies

&

Distributors

0.0%

†

f

Ahern

Rentals,

Inc.

,

Secured

Note

,

144A,

7.375

%

,

5/15/23

......

United

States

400,000

384,000

f

WESCO

Distribution,

Inc.

,

Senior

Note

,

144A,

7.25

%

,

6/15/28

....

United

States

1,900,000

2,097,904

2,481,904

Wireless

Telecommunication

Services

1.1%

America

Movil

SAB

de

CV

,

Senior

Bond

,

2.875

%

,

5/07/30

.......

Mexico

12,200,000

12,669,539

T-Mobile

USA,

Inc.

,

Senior

Secured

Bond,

4.375%,

4/15/40

...................

United

States

3,400,000

3,888,723

Senior

Secured

Bond,

3.3%,

2/15/51

.....................

United

States

5,700,000

5,600,744

Senior

Secured

Note,

3.875%,

4/15/30

...................

United

States

10,000,000

10,941,307

Vodafone

Group

plc

,

Senior

Bond

,

6.15

%

,

2/27/37

.............

United

Kingdom

16,000,000

21,959,468

55,059,781

Total

Corporate

Bonds

(Cost

$842,609,686)

.....................................

860,735,038

a

i,j

Senior

Floating

Rate

Interests

1.3%

Aerospace

&

Defense

0.2%

Dynasty

Acquisition

Co.,

Inc.

,

2020

Term

Loan,

B1,

3.632%,

(3-month

USD

LIBOR

+

3.5%),

4/06/26

...........................................

United

States

5,138,658

5,028,126

2020

Term

Loan,

B2,

3.632%,

(3-month

USD

LIBOR

+

3.5%),

4/06/26

...........................................

United

States

2,762,720

2,703,294

7,731,420

a

a

a

a

a

a

Airlines

0.3%

k

Air

Canada

,

Term

Loan

,

4.25

%

,

(

3-month

USD

LIBOR

+

3.5

%

),

8/11/28

...........................................

Canada

13,000,000

13,154,375

Kestrel

Bidco

,

Inc.

,

Term

Loan

,

4

%

,

(

3-month

USD

LIBOR

+

3

%

),

12/11/26

..........................................

Canada

4,258,826

4,197,946

17,352,321

a

a

a

a

a

a

Diversified

Consumer

Services

0.1%

KUEHG

Corp.

,

Term

Loan,

B3

,

4.75

%

,

(

3-month

USD

LIBOR

+

3.75

%

),

2/21/25

.....................................

United

States

6,575,692

6,526,802

Entertainment

0.2%

Diamond

Sports

Group

LLC

,

Term

Loan

,

3.34

%

,

(

1-month

USD

LIBOR

+

3.25

%

),

8/24/26

..............................

United

States

4,790,028

2,550,690

William

Morris

Endeavor

Entertainment

LLC

(IMG

Worldwide

Holdings

LLC)

,

First

Lien,

Term

Loan,

B1

,

2.84

%

,

(

1-month

USD

LIBOR

+

2.75

%

),

5/18/25

..............................

United

States

6,450,958

6,341,647

8,892,337

a

a

a

a

a

a

Leisure

Products

0.3%

Hercules

Achievement,

Inc.

(Varsity

Brands

Holding

Co.,

Inc.)

,

First

Lien,

Initial

Term

Loan

,

4.5

%

,

(

1-month

USD

LIBOR

+

3.5

%

),

12/16/24

..........................................

United

States

7,551,337

7,468,763

Motion

Acquisition

Ltd.

,

Term

Loan,

B1,

3.382%,

(3-month

USD

LIBOR

+

3.25%),

11/12/26

United

Kingdom

4,539,797

4,432,318

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

Annual

Report

95

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

i,j

Senior

Floating

Rate

Interests

(continued)

Leisure

Products

(continued)

Motion

Acquisition

Ltd.,

(continued)

Term

Loan,

B2,

3.382%,

(3-month

USD

LIBOR

+

3.25%),

11/12/26

United

Kingdom

647,203

$

631,880

12,532,961

a

a

a

a

a

a

Media

0.1%

Cengage

Learning,

Inc.

,

First

Lien,

Term

Loan,

B

,

5.75

%

,

(

3-month

USD

LIBOR

+

4.75

%

),

7/14/26

..........................

United

States

6,074,401

6,113,308

Personal

Products

0.1%

Coty,

Inc.

,

USD

Term

Loan,

B

,

2.337

%

,

(

1-month

USD

LIBOR

+

2.25

%

),

4/07/25

.....................................

United

States

6,082,722

6,006,688

Total

Senior

Floating

Rate

Interests

(Cost

$66,095,525)

..........................

65,155,837

l

Marketplace

Loans

1.2%

Diversified

Financial

Services

1.2%

b

Freedom

Financial

Asset

Management

LLC,

5.99%

-

26.99%,

3/20/23

-

12/15/26

...................................

United

States

27,361,658

27,520,380

b

LendingClub

Corp.

-

LCX

PM,

6.49%

-

28.99%,

10/07/23

-

10/20/26

United

States

4,620,965

4,474,609

b

LendingClub

Corp.

-

LCX,

6.46%

-

25.65%,

7/30/22

-

4/14/25

....

United

States

2,400,370

2,225,168

b

Prosper

Funding

LLC,

10.4%

-

29.74%,

8/11/24

-

10/28/26

......

United

States

3,465,316

3,805,921

b

Square

Loans,

Zero

Cpn

.,

3/29/23

-

4/26/23

.................

United

States

8,214,325

7,585,492

b

Upgrade,

Inc.,

13.64%

-

30.51%,

10/11/22

-

1/20/25

...........

United

States

1,331,776

1,258,377

b

Upstart

Network,

Inc.,

5.63%

-

33.77%,

7/09/24

-

9/13/28

.......

United

States

10,385,751

10,341,383

57,211,330

a

a

a

a

a

a

Total

Marketplace

Loans

(Cost

$58,140,812)

....................................

57,211,330

Foreign

Government

and

Agency

Securities

6.0%

f

African

Export-Import

Bank

(The),

Senior

Bond,

144A,

3.994%,

9/21/29

.....................

Supranational

m

1,400,000

1,463,000

Senior

Bond,

144A,

3.798%,

5/17/31

.....................

Supranational

m

11,600,000

11,902,876

f

Banque

Centrale

de

Tunisie

,

Senior

Bond,

144A,

5.75%,

1/30/25

..

Tunisia

8,000,000

6,431,216

f

Banque

Ouest

Africaine

de

Developpement

,

Senior

Bond,

144A,

5%,

7/27/27

...........................................

Supranational

m

10,700,000

11,891,103

f

Belarus

Government

Bond,

Senior

Bond,

144A,

7.625%,

6/29/27

..

Belarus

13,300,000

12,978,140

Brazil

Government

Bond,

Senior

Bond,

5.625%,

2/21/47

........

Brazil

6,500,000

6,272,565

Colombia

Government

Bond,

Senior

Bond,

5%,

6/15/45

........

Colombia

8,800,000

8,699,064

f

Comision

Federal

de

Electricidad

,

Senior

Bond,

144A,

3.348%,

2/09/31

...........................................

Mexico

12,200,000

11,773,366

f

Corp.

Nacional

del

Cobre

de

Chile,

Senior

Bond,

144A,

3.75%,

1/15/31

...........................................

Chile

12,200,000

12,945,218

f

Dominican

Republic

Government

Bond,

Senior

Note,

144A,

8.9%,

2/15/23

...........................................

Dominican

Republic

610,400,000

DOP

11,515,347

Ecopetrol

SA,

Senior

Bond,

5.375%,

6/26/26

..........................

Colombia

6,200,000

6,712,120

k

Senior

Bond,

4.625%,

11/02/31

.........................

Colombia

7,000,000

6,957,265

f

Egypt

Government

Bond,

Senior

Bond,

144A,

7.625%,

5/29/32

.....................

Egypt

5,000,000

4,848,705

Senior

Bond,

144A,

8.875%,

5/29/50

.....................

Egypt

4,500,000

4,253,422

f,g

Electricite

de

France

SA,

Junior

Sub.

Bond,

144A,

5.25%

to

1/29/23,

FRN

thereafter,

Perpetual

.............................

France

24,000,000

24,882,000

f

Gabon

Government

Bond,

Senior

Bond,

144A,

6.625%,

2/06/31

..

Gabon

5,000,000

5,001,550

f

Indonesia

Government

Bond,

Senior

Bond,

144A,

4.35%,

1/08/27

.

Indonesia

9,100,000

10,194,127

f

Iraq

Government

Bond,

Senior

Bond,

144A,

5.8%,

1/15/28

......

Iraq

13,243,750

12,914,312

f

Israel

Electric

Corp.

Ltd.,

Senior

Secured

Bond,

144A,

Reg

S,

4.25%,

8/14/28

...........................................

Israel

6,700,000

7,487,250

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

96

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Foreign

Government

and

Agency

Securities

(continued)

Mexico

Government

Bond,

Senior

Bond,

4.5%,

4/22/29

.........

Mexico

9,500,000

$

10,648,218

f

Nigeria

Government

Bond,

Senior

Bond,

144A,

9.248%,

1/21/49

..

Nigeria

3,600,000

3,840,732

f

Panama

Government

Bond,

Senior

Note,

144A,

3.75%,

4/17/26

..

Panama

5,700,000

6,065,541

Peru

Government

Bond,

Senior

Bond,

2.783%,

1/23/31

..........................

Peru

8,000,000

7,976,000

Senior

Bond,

6.55%,

3/14/37

...........................

Peru

2,900,000

3,958,456

Petroleos

Mexicanos

,

Senior

Bond,

6.625%,

6/15/35

...........

Mexico

6,000,000

5,823,510

f

Romania

Government

Bond,

Senior

Bond,

144A,

6.125%,

1/22/44

.

Romania

9,500,000

12,405,366

f

Russia

Government

Bond,

Senior

Bond,

144A,

4.875%,

9/16/23

..

Russia

11,600,000

12,459,572

e

South

Africa

Government

Bond,

Senior

Bond,

5.875%,

6/22/30

...

South

Africa

9,500,000

10,449,905

Turkey

Government

Bond,

Senior

Bond,

5.25%,

3/13/30

........

Turkey

16,000,000

14,585,184

f

Ukraine

Government

Bond,

Senior

Bond,

144A,

7.75%,

9/01/26

......................

Ukraine

229,000

247,355

Senior

Bond,

144A,

7.75%,

9/01/27

......................

Ukraine

229,000

247,296

Senior

Bond,

144A,

7.375%,

9/25/32

.....................

Ukraine

12,400,000

12,787,128

Senior

Note,

144A,

7.75%,

9/01/22

.......................

Ukraine

229,000

237,845

Senior

Note,

144A,

7.75%,

9/01/23

.......................

Ukraine

229,000

244,409

Senior

Note,

144A,

7.75%,

9/01/24

.......................

Ukraine

229,000

247,438

Senior

Note,

144A,

7.75%,

9/01/25

.......................

Ukraine

229,000

247,651

n

VRI,

GDP

Linked

Security,

Senior

Bond,

144A,

5/31/40

.......

Ukraine

474,000

500,677

o

Uruguay

Government

Bond,

Index

Linked,

Senior

Bond,

3.7%,

6/26/37

...........................................

Uruguay

458,250,231

UYU

11,500,549

Total

Foreign

Government

and

Agency

Securities

(Cost

$299,974,737)

............

293,595,478

U.S.

Government

and

Agency

Securities

23.9%

U.S.

Treasury

Bonds

,

1.125%,

5/15/40

.....................................

United

States

25,000,000

21,655,273

1.125%,

8/15/40

.....................................

United

States

5,800,000

5,015,641

1.75%,

8/15/41

.....................................

United

States

14,700,000

14,155,641

3.125%,

11/15/41

....................................

United

States

14,500,000

17,311,641

2.5%,

5/15/46

......................................

United

States

9,000,000

9,928,828

2.25%,

8/15/46

.....................................

United

States

28,800,000

30,387,375

2.75%,

11/15/47

.....................................

United

States

25,500,000

29,684,092

3.125%,

5/15/48

.....................................

United

States

16,500,000

20,578,271

3%,

8/15/48

........................................

United

States

17,000,000

20,760,254

2.875%,

5/15/49

.....................................

United

States

14,000,000

16,815,039

2.25%,

8/15/49

.....................................

United

States

39,000,000

41,604,316

1.25%,

5/15/50

.....................................

United

States

6,500,000

5,501,260

2.375%,

5/15/51

.....................................

United

States

16,400,000

18,029,750

U.S.

Treasury

Notes

,

0.125%,

1/31/23

.....................................

United

States

75,000,000

74,884,277

1.125%,

2/28/25

.....................................

United

States

50,000,000

50,431,641

0.25%,

6/30/25

.....................................

United

States

145,000,000

141,295,702

0.25%,

7/31/25

.....................................

United

States

90,000,000

87,598,828

0.25%,

8/31/25

.....................................

United

States

74,000,000

71,898,515

0.25%,

9/30/25

.....................................

United

States

150,000,000

145,617,187

0.375%,

11/30/25

....................................

United

States

128,000,000

124,480,000

0.375%,

12/31/25

....................................

United

States

124,000,000

120,454,375

0.75%,

5/31/26

.....................................

United

States

96,000,000

94,323,750

Total

U.S.

Government

and

Agency

Securities

(Cost

$1,172,453,827)

..............

1,162,411,656

Asset-Backed

Securities

12.0%

Airlines

0.0%

†

United

Airlines

Pass-Through

Trust

,

2020-1

,

B

,

4.875

%

,

7/15/27

..

United

States

1,347,000

1,425,507

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

Annual

Report

97

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Asset-Backed

Securities

(continued)

Commercial

Services

&

Supplies

0.2%

f,p

Armada

Euro

CLO

IV

DAC

,

4A

,

B

,

144A,

FRN

,

1.7

%

,

7/15/33

....

Ireland

5,100,000

EUR

$

5,904,181

f,q

LCM

XXII

Ltd.

,

22A,

A2R,

144A,

FRN,

1.582%,

(3-month

USD

LIBOR

+

1.45%),

10/20/28

..........................................

United

States

1,000,000

1,002,019

22A,

CR,

144A,

FRN,

2.932%,

(3-month

USD

LIBOR

+

2.8%),

10/20/28

..........................................

United

States

1,000,000

990,000

7,896,200

a

a

a

a

a

a

Diversified

Financial

Services

11.8%

f,q

Adagio

CLO

VIII

DAC

,

VIII-A

,

B1

,

144A,

FRN

,

1.65

%

,

(

3-month

EURIBOR

+

1.65

%

),

4/15/32

...........................

Ireland

2,050,000

EUR

2,370,930

f,q

AMMC

CLO

15

Ltd.

,

2014-15A

,

BRR

,

144A,

FRN

,

1.924

%

,

(

3-month

USD

LIBOR

+

1.8

%

),

1/15/32

...........................

United

States

922,984

921,089

f,q

AMMC

CLO

21

Ltd.

,

2017-21A

,

C

,

144A,

FRN

,

2.226

%

,

(

3-month

USD

LIBOR

+

2.1

%

),

11/02/30

..........................

United

States

1,000,000

997,329

f,q

AMMC

CLO

XI

Ltd.

,

2012-11A,

BR2,

144A,

FRN,

1.729%,

(3-month

USD

LIBOR

+

1.6%),

4/30/31

......................................

United

States

5,050,000

5,058,836

2012-11A,

CR2,

144A,

FRN,

2.028%,

(3-month

USD

LIBOR

+

1.9%),

4/30/31

......................................

United

States

2,750,000

2,741,570

f,q

Antares

CLO

Ltd.

,

2018-1A

,

B

,

144A,

FRN

,

1.781

%

,

(

3-month

USD

LIBOR

+

1.65

%

),

4/20/31

..............................

United

States

12,900,000

12,885,941

f,q

Ares

European

CLO

VIII

DAC

,

8A

,

BR

,

144A,

FRN

,

1.6

%

,

(

3-month

EURIBOR

+

1.6

%

),

4/17/32

............................

Ireland

2,900,000

EUR

3,303,354

f,q

Ares

XLVIII

CLO

Ltd.

,

2018-48A

,

D

,

144A,

FRN

,

2.832

%

,

(

3-month

USD

LIBOR

+

2.7

%

),

7/20/30

...........................

United

States

2,000,000

1,974,981

f,q

Bain

Capital

Credit

CLO

Ltd.

,

2018-1A,

A1,

144A,

FRN,

1.084%,

(3-month

USD

LIBOR

+

0.96%),

4/23/31

.....................................

United

States

12,000,000

11,999,400

2018-1A,

A2,

144A,

FRN,

1.274%,

(3-month

USD

LIBOR

+

1.15%),

4/23/31

.....................................

United

States

5,100,000

5,102,546

2020-4A,

B,

144A,

FRN,

2.081%,

(3-month

USD

LIBOR

+

1.95%),

10/20/33

..........................................

United

States

8,350,000

8,364,296

f,q

BCC

Middle

Market

CLO

LLC

,

2018-1A

,

A2

,

144A,

FRN

,

2.282

%

,

(

3-month

USD

LIBOR

+

2.15

%

),

10/20/30

.................

United

States

5,100,000

5,088,585

f,q

Blackrock

European

CLO

IX

DAC

,

9A

,

A

,

144A,

FRN

,

0.9

%

,

(

3-month

EURIBOR

+

0.9

%

),

12/15/32

....................

Ireland

17,350,000

EUR

20,070,081

f,q

BlueMountain

CLO

Ltd.

,

2012-2A,

DR2,

144A,

FRN,

3.031%,

(3-month

USD

LIBOR

+

2.9%),

11/20/28

.....................................

United

States

1,753,000

1,736,943

2014-2A,

CR2,

144A,

FRN,

2.332%,

(3-month

USD

LIBOR

+

2.2%),

10/20/30

.....................................

United

States

4,700,000

4,711,304

2016-3A,

CR,

144A,

FRN,

2.325%,

(3-month

USD

LIBOR

+

2.2%),

11/15/30

..........................................

United

States

500,000

498,798

2018-1A,

B,

144A,

FRN,

1.829%,

(3-month

USD

LIBOR

+

1.7%),

7/30/30

...........................................

United

States

272,725

273,196

2018-3A,

C,

144A,

FRN,

2.324%,

(3-month

USD

LIBOR

+

2.2%),

10/25/30

..........................................

United

States

1,071,430

1,071,493

f,q

BlueMountain

Fuji

EUR

CLO

V

DAC

,

5A

,

B

,

144A,

FRN

,

1.55

%

,

(

3-month

EURIBOR

+

1.55

%

),

1/15/33

....................

Ireland

6,250,000

EUR

7,232,797

f,q

BlueMountain

Fuji

US

CLO

III

Ltd.

,

2017-3A,

C,

144A,

FRN,

1.824%,

(3-month

USD

LIBOR

+

1.7%),

1/15/30

...........................................

United

States

2,300,000

2,281,279

2017-3A,

D,

144A,

FRN,

2.524%,

(3-month

USD

LIBOR

+

2.4%),

1/15/30

...........................................

United

States

1,600,000

1,572,195

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

98

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Asset-Backed

Securities

(continued)

Diversified

Financial

Services

(continued)

f,q

Burnham

Park

CLO

Ltd.

,

2016-1A

,

BR

,

144A,

FRN

,

1.631

%

,

(

3-month

USD

LIBOR

+

1.5

%

),

10/20/29

..................

United

States

1,488,189

$

1,484,254

f,q

Buttermilk

Park

CLO

Ltd.

,

2018-1A

,

C

,

144A,

FRN

,

2.224

%

,

(

3-month

USD

LIBOR

+

2.1

%

),

10/15/31

..................

United

States

1,452,380

1,454,289

f,q

Carlyle

Global

Market

Strategies

CLO

Ltd.

,

2014-1A,

A1R2,

144A,

FRN,

1.092%,

(3-month

USD

LIBOR

+

0.97%),

4/17/31

.....................................

United

States

722,802

723,710

2014-1A,

A2R2,

144A,

FRN,

1.252%,

(3-month

USD

LIBOR

+

1.13%),

4/17/31

.....................................

United

States

6,300,000

6,310,684

2014-1A,

DR,

144A,

FRN,

2.722%,

(3-month

USD

LIBOR

+

2.6%),

4/17/31

...........................................

United

States

3,175,000

3,049,574

f,q

Carlyle

GMS

Finance

MM

CLO

LLC

,

2015-1A

,

A2R

,

144A,

FRN

,

2.324

%

,

(

3-month

USD

LIBOR

+

2.2

%

),

10/15/31

............

United

States

10,000,000

9,937,675

f,q

Carlyle

US

CLO

Ltd.

,

2017-4A,

C,

144A,

FRN,

2.924%,

(3-month

USD

LIBOR

+

2.8%),

1/15/30

...........................................

United

States

545,000

522,794

2017-5A,

A2,

144A,

FRN,

1.532%,

(3-month

USD

LIBOR

+

1.4%),

1/20/30

...........................................

United

States

2,740,000

2,736,977

2017-5A,

B,

144A,

FRN,

1.932%,

(3-month

USD

LIBOR

+

1.8%),

1/20/30

...........................................

United

States

7,000,000

6,978,028

f,q

Cent

CLO

21

Ltd.

,

2014-21A

,

CR2

,

144A,

FRN

,

3.335

%

,

(

3-month

USD

LIBOR

+

3.2

%

),

7/27/30

...........................

United

States

3,123,000

3,062,525

f,p

Consumer

Loan

Underlying

Bond

Certificate

Issuer

Trust

I

,

2018-14,

PT,

144A,

FRN,

9.77%,

9/16/41

..................

United

States

26,022

25,192

2018-29,

PT,

144A,

FRN,

26%,

12/15/43

..................

United

States

462,093

459,795

2019-26,

PT,

144A,

FRN,

19.146%,

8/15/44

................

United

States

2,183,829

2,178,675

2019-31,

PT,

144A,

FRN,

17.761%,

9/15/44

................

United

States

2,028,153

2,007,508

2019-37,

PT,

144A,

FRN,

19.281%,

10/17/44

...............

United

States

2,211,650

2,181,305

2019-42,

PT,

144A,

FRN,

17.966%,

11/15/44

...............

United

States

2,683,323

2,675,073

2019-51,

PT,

144A,

FRN,

16.243%,

1/15/45

................

United

States

3,380,625

3,372,364

2019-52,

PT,

144A,

FRN,

16.466%,

1/15/45

................

United

States

3,419,768

3,437,223

2019-S1,

PT,

144A,

FRN,

15.633%,

4/15/44

................

United

States

1,026,666

1,006,537

2019-S2,

PT,

144A,

FRN,

14.1%,

5/16/44

..................

United

States

828,441

818,968

2019-S3,

PT,

144A,

FRN,

14.113%,

6/15/44

................

United

States

1,333,184

1,324,096

2019-S4,

PT,

144A,

FRN,

11.884%,

8/15/44

................

United

States

1,629,926

1,627,820

2019-S5,

PT,

144A,

FRN,

12.928%,

9/15/44

................

United

States

1,749,209

1,745,162

2019-S6,

PT,

144A,

FRN,

11.237%,

10/17/44

...............

United

States

1,685,730

1,652,961

2019-S7,

PT,

144A,

FRN,

11.038%,

12/15/44

...............

United

States

1,806,620

1,782,463

2019-S8,

PT,

144A,

FRN,

10.143%,

1/15/45

................

United

States

2,419,929

2,379,694

2020-2,

PT,

144A,

FRN,

15.906%,

3/15/45

.................

United

States

3,446,991

3,450,650

2020-7,

PT,

144A,

FRN,

15.76%,

4/17/45

..................

United

States

2,143,628

2,119,093

f,q

Cook

Park

CLO

Ltd.

,

2018-1A

,

A2

,

144A,

FRN

,

1.242

%

,

(

3-month

USD

LIBOR

+

1.12

%

),

4/17/30

..........................

United

States

6,000,000

6,007,177

q

CWABS,

Inc.

,

2004-1

,

M1

,

FRN

,

0.839

%

,

(

1-month

USD

LIBOR

+

0.75

%

),

3/25/34

.....................................

United

States

194,866

194,806

f,q

Dryden

45

Senior

Loan

Fund

,

2016-45A

,

CR

,

144A,

FRN

,

2.324

%

,

(

3-month

USD

LIBOR

+

2.2

%

),

10/15/30

..................

United

States

1,250,000

1,252,755

f,q

Dryden

55

CLO

Ltd.

,

2018-55A

,

D

,

144A,

FRN

,

2.974

%

,

(

3-month

USD

LIBOR

+

2.85

%

),

4/15/31

..........................

United

States

2,000,000

1,977,696

f,q

Ellington

CLO

III

Ltd.

,

2018-3A,

A1,

144A,

FRN,

1.781%,

(3-month

USD

LIBOR

+

1.65%),

7/20/30

.....................................

United

States

5,123,962

5,107,133

2018-3A,

A2R,

144A,

FRN,

1.882%,

(3-month

USD

LIBOR

+

1.75%),

7/20/30

.....................................

United

States

9,488,818

9,493,580

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

Annual

Report

99

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Asset-Backed

Securities

(continued)

Diversified

Financial

Services

(continued)

f

FirstKey

Homes

Trust

,

2020-SFR2

,

A

,

144A,

1.266

%

,

10/19/37

...

United

States

11,576,974

$

11,427,714

f,q

Galaxy

XXVII

CLO

Ltd.

,

2018-27A,

A,

144A,

FRN,

1.145%,

(3-month

USD

LIBOR

+

1.02%),

5/16/31

.....................................

United

States

1,000,000

1,001,248

2018-27A,

C,

144A,

FRN,

1.925%,

(3-month

USD

LIBOR

+

1.8%),

5/16/31

...........................................

United

States

4,000,000

3,998,185

f,q

Gilbert

Park

CLO

Ltd.

,

2017-1A

,

B

,

144A,

FRN

,

1.724

%

,

(

3-month

USD

LIBOR

+

1.6

%

),

10/15/30

..........................

United

States

1,000,000

1,001,542

f,q

Halcyon

Loan

Advisors

Funding

Ltd.

,

2018-1A

,

A2

,

144A,

FRN

,

1.932

%

,

(

3-month

USD

LIBOR

+

1.8

%

),

7/21/31

.............

United

States

4,500,000

4,495,479

f,q

Hayfin

US

XII

Ltd.

,

2018-9A

,

BR

,

144A,

FRN

,

1.936

%

,

(

3-month

USD

LIBOR

+

1.8

%

),

4/28/31

...........................

United

States

14,500,000

14,500,191

f,q

Highbridge

Loan

Management

Ltd.

,

2013-2A

,

BR

,

144A,

FRN

,

2.032

%

,

(

3-month

USD

LIBOR

+

1.9

%

),

10/20/29

............

United

States

700,000

699,351

f,q

Holland

Park

CLO

DAC

,

1A

,

A1RR

,

144A,

FRN

,

0.92

%

,

(

3-month

EURIBOR

+

0.92

%

),

11/14/32

..........................

Ireland

50,450,000

EUR

58,359,035

f

Home

Partners

of

America

Trust

,

2021-2

,

B

,

144A,

2.302

%

,

12/17/26

United

States

15,868,000

15,867,844

f,q

HPS

Loan

Management

Ltd.

,

13A-18

,

C

,

144A,

FRN

,

2.274

%

,

(

3-month

USD

LIBOR

+

2.15

%

),

10/15/30

.................

United

States

3,000,000

3,002,553

f,q

LCM

26

Ltd.

,

26A,

B,

144A,

FRN,

1.532%,

(3-month

USD

LIBOR

+

1.4%),

1/20/31

...........................................

United

States

2,000,000

1,995,699

26A,

C,

144A,

FRN,

1.932%,

(3-month

USD

LIBOR

+

1.8%),

1/20/31

...........................................

United

States

9,600,000

9,563,673

26A,

D,

144A,

FRN,

2.631%,

(3-month

USD

LIBOR

+

2.5%),

1/20/31

...........................................

United

States

600,000

559,932

f,q

LCM

XVIII

LP

,

18A,

BR,

144A,

FRN,

1.731%,

(3-month

USD

LIBOR

+

1.6%),

4/20/31

...........................................

United

States

1,090,000

1,084,906

18A,

CR,

144A,

FRN,

1.982%,

(3-month

USD

LIBOR

+

1.85%),

4/20/31

...........................................

United

States

2,000,000

1,982,514

f,q

Logan

CLO

I

Ltd.

,

2021-1A

,

A

,

144A,

FRN

,

1.312

%

,

(

3-month

USD

LIBOR

+

1.16

%

),

7/20/34

..............................

United

States

4,750,000

4,752,931

f,q

Long

Point

Park

CLO

Ltd.

,

2017-1A,

A2,

144A,

FRN,

1.497%,

(3-month

USD

LIBOR

+

1.375%),

1/17/30

....................................

United

States

5,800,000

5,799,247

2017-1A,

B,

144A,

FRN,

1.822%,

(3-month

USD

LIBOR

+

1.7%),

1/17/30

...........................................

United

States

2,700,000

2,680,415

2017-1A,

C,

144A,

FRN,

2.522%,

(3-month

USD

LIBOR

+

2.4%),

1/17/30

...........................................

United

States

3,100,000

3,036,498

f,q

Madison

Park

Euro

Funding

VIII

DAC

,

8A

,

ARN

,

144A,

FRN

,

0.95

%

,

(

3-month

EURIBOR

+

0.95

%

),

4/15/32

....................

Ireland

33,550,000

EUR

38,868,672

f,q

Madison

Park

Funding

XIII

Ltd.

,

2014-13A

,

DR2

,

144A,

FRN

,

2.974

%

,

(

3-month

USD

LIBOR

+

2.85

%

),

4/19/30

............

United

States

1,973,000

1,960,491

f,q

Madison

Park

Funding

XLII

Ltd.

,

13A,

B,

144A,

FRN,

1.624%,

(3-month

USD

LIBOR

+

1.5%),

11/21/30

..........................................

United

States

2,700,000

2,697,306

13A,

C,

144A,

FRN,

1.924%,

(3-month

USD

LIBOR

+

1.8%),

11/21/30

..........................................

United

States

3,753,500

3,720,520

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

100

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Asset-Backed

Securities

(continued)

Diversified

Financial

Services

(continued)

f,q

Madison

Park

Funding

XXII

Ltd.

,

2016-22A

,

CR

,

144A,

FRN

,

2.124

%

,

(

3-month

USD

LIBOR

+

2

%

),

1/15/33

..............

United

States

7,790,000

$

7,791,988

f,q

Madison

Park

Funding

XXIX

Ltd.

,

2018-29A

,

C

,

144A,

FRN

,

2.322

%

,

(

3-month

USD

LIBOR

+

2.2

%

),

10/18/30

..................

United

States

1,072,581

1,074,035

f,q

Madison

Park

Funding

XXVII

Ltd.

,

2018-27A

,

C

,

144A,

FRN

,

2.732

%

,

(

3-month

USD

LIBOR

+

2.6

%

),

4/20/30

.............

United

States

2,125,000

2,095,781

f,q

Madison

Park

Funding

XXXI

Ltd.

,

2018-31A,

B,

144A,

FRN,

1.824%,

(3-month

USD

LIBOR

+

1.7%),

1/23/31

...........................................

United

States

1,500,000

1,501,139

2018-31A,

C,

144A,

FRN,

2.274%,

(3-month

USD

LIBOR

+

2.15%),

1/23/31

.....................................

United

States

650,000

651,938

f,q

Magnetite

VII

Ltd.

,

2012-7A

,

CR2

,

144A,

FRN

,

2.174

%

,

(

3-month

USD

LIBOR

+

2.05

%

),

1/15/28

..........................

United

States

2,000,000

1,992,938

f,p

Mill

City

Mortgage

Loan

Trust

,

2018-4

,

A1B

,

144A,

FRN

,

3.5

%

,

4/25/66

...........................................

United

States

9,404,454

9,665,579

f,q

Neuberger

Berman

CLO

XVIII

Ltd.

,

2014-18A

,

A1BR

,

144A,

FRN

,

1.529

%

,

(

3-month

USD

LIBOR

+

1.4

%

),

10/21/30

............

United

States

1,700,000

1,703,137

f,q

Neuberger

Berman

CLO

XVI-S

Ltd.

,

2017-16SA,

CR,

144A,

FRN,

2.024%,

(3-month

USD

LIBOR

+

1.9%),

4/15/34

......................................

United

States

2,350,000

2,350,374

2017-16SA,

DR,

144A,

FRN,

3.024%,

(3-month

USD

LIBOR

+

2.9%),

4/15/34

......................................

United

States

650,000

650,122

f,q

Neuberger

Berman

Loan

Advisers

CLO

27

Ltd.

,

2018-27A

,

C

,

144A,

FRN

,

1.824

%

,

(

3-month

USD

LIBOR

+

1.7

%

),

1/15/30

........

United

States

4,900,000

4,886,627

f

New

Economy

Assets

Phase

1

Sponsor

LLC

,

2021-1

,

A1

,

144A,

1.91

%

,

10/20/61

.....................................

United

States

19,400,000

19,048,276

f,q

Octagon

Investment

Partners

18-R

Ltd.

,

2018-18A

,

C

,

144A,

FRN

,

2.822

%

,

(

3-month

USD

LIBOR

+

2.7

%

),

4/16/31

.............

United

States

9,050,000

8,897,627

f,q

Octagon

Investment

Partners

33

Ltd.

,

2017-1A,

A2,

144A,

FRN,

1.631%,

(3-month

USD

LIBOR

+

1.5%),

1/20/31

...........................................

United

States

400,000

400,699

2017-1A,

C,

144A,

FRN,

2.882%,

(3-month

USD

LIBOR

+

2.75%),

1/20/31

...........................................

United

States

2,800,000

2,776,924

f,q

Octagon

Investment

Partners

35

Ltd.

,

2018-1A,

A1B,

144A,

FRN,

1.231%,

(3-month

USD

LIBOR

+

1.1%),

1/20/31

......................................

United

States

3,325,000

3,298,966

2018-1A,

B,

144A,

FRN,

1.832%,

(3-month

USD

LIBOR

+

1.7%),

1/20/31

...........................................

United

States

450,000

446,140

f,q

Octagon

Investment

Partners

36

Ltd.

,

2018-1A,

A1,

144A,

FRN,

1.094%,

(3-month

USD

LIBOR

+

0.97%),

4/15/31

.....................................

United

States

18,000,000

17,997,276

2018-1A,

A2,

144A,

FRN,

1.324%,

(3-month

USD

LIBOR

+

1.2%),

4/15/31

...........................................

United

States

8,500,000

8,444,696

f,q

Octagon

Investment

Partners

37

Ltd.

,

2018-2A

,

C

,

144A,

FRN

,

2.974

%

,

(

3-month

USD

LIBOR

+

2.85

%

),

7/25/30

............

United

States

2,000,000

1,985,920

f,q

Octagon

Investment

Partners

38

Ltd.

,

2018-1A

,

C

,

144A,

FRN

,

3.081

%

,

(

3-month

USD

LIBOR

+

2.95

%

),

7/20/30

............

United

States

4,000,000

3,950,000

f,q

Octagon

Investment

Partners

XVII

Ltd.

,

2013-1A,

BR2,

144A,

FRN,

1.524%,

(3-month

USD

LIBOR

+

1.4%),

1/25/31

......................................

United

States

4,020,000

4,017,322

2013-1A,

CR2,

144A,

FRN,

1.824%,

(3-month

USD

LIBOR

+

1.7%),

1/25/31

......................................

United

States

5,250,000

5,200,886

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

Annual

Report

101

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Asset-Backed

Securities

(continued)

Diversified

Financial

Services

(continued)

f,q

Octagon

Loan

Funding

Ltd.

,

2014-1A

,

CRR

,

144A,

FRN

,

2.324

%

,

(

3-month

USD

LIBOR

+

2.2

%

),

11/18/31

..................

United

States

750,000

$

747,188

f,q

Palmer

Square

CLO

Ltd.

,

2021-2A

,

A

,

144A,

FRN

,

1.274

%

,

(

3-month

USD

LIBOR

+

1.15

%

),

7/15/34

..........................

United

States

1,000,000

1,000,757

f,q

Pikes

Peak

CLO

6

,

2020-6A

,

AR2

,

144A,

FRN

,

1.294

%

,

(

3-month

USD

LIBOR

+

1.17

%

),

5/18/34

..........................

United

States

4,500,000

4,509,081

f,p

Prosper

Pass-Thru

Trust

III

,

2020-PT1,

A,

144A,

FRN,

8.796%,

3/15/26

.................

United

States

2,080,913

2,100,671

2020-PT2,

A,

144A,

FRN,

9.444%,

4/15/26

.................

United

States

2,448,260

2,407,728

2020-PT3,

A,

144A,

FRN,

7.183%,

5/15/26

.................

United

States

848,197

852,620

f,q

Race

Point

X

CLO

Ltd.

,

2016-10A

,

B1R

,

144A,

FRN

,

1.774

%

,

(

3-month

USD

LIBOR

+

1.65

%

),

7/25/31

..................

United

States

3,600,000

3,601,028

f,q

Sound

Point

CLO

V-R

Ltd.

,

2014-1RA

,

D

,

144A,

FRN

,

3.222

%

,

(

3-month

USD

LIBOR

+

3.1

%

),

7/18/31

...................

United

States

5,780,000

5,569,442

f,q

Strata

CLO

I

Ltd.

,

2018-1A

,

B

,

144A,

FRN

,

2.324

%

,

(

3-month

USD

LIBOR

+

2.2

%

),

1/15/31

...............................

United

States

11,000,000

10,984,927

f,q

TCI-Flatiron

CLO

Ltd.

,

2017-1A,

B,

144A,

FRN,

1.684%,

(3-month

USD

LIBOR

+

1.56%),

11/18/30

..........................................

United

States

3,500,000

3,506,116

2017-1A,

C,

144A,

FRN,

1.974%,

(3-month

USD

LIBOR

+

1.85%),

11/18/30

..........................................

United

States

2,800,000

2,800,907

f,q

TICP

CLO

VI

Ltd.

,

2016-6A

,

AR2

,

144A,

FRN

,

1.244

%

,

(

3-month

USD

LIBOR

+

1.12

%

),

1/15/34

..........................

United

States

9,200,000

9,202,692

f,p

Towd

Point

Mortgage

Trust

,

2017-1,

A1,

144A,

FRN,

2.75%,

10/25/56

..................

United

States

2,817,980

2,854,796

2017-1,

A2,

144A,

FRN,

3.5%,

10/25/56

...................

United

States

8,862,000

9,201,002

2017-2,

A1,

144A,

FRN,

2.75%,

4/25/57

...................

United

States

1,334,495

1,351,113

f,p

Upgrade

Master

Pass-Thru

Trust

,

2019-PT1,

A,

144A,

FRN,

13.317%,

6/15/25

................

United

States

714,793

673,137

2019-PT2,

A,

144A,

FRN,

14.028%,

2/15/26

................

United

States

1,840,037

1,866,458

f,q

Voya

CLO

Ltd.

,

2013-2A,

CR,

144A,

FRN,

2.874%,

(3-month

USD

LIBOR

+

2.75%),

4/25/31

.....................................

United

States

1,650,000

1,570,956

2014-1A,

BR2,

144A,

FRN,

2.022%,

(3-month

USD

LIBOR

+

1.9%),

4/18/31

......................................

United

States

1,000,000

991,660

2014-1A,

CR2,

144A,

FRN,

2.922%,

(3-month

USD

LIBOR

+

2.8%),

4/18/31

......................................

United

States

3,750,000

3,651,983

2016-3A,

CR,

144A,

FRN,

3.372%,

(3-month

USD

LIBOR

+

3.25%),

10/18/31

....................................

United

States

2,547,170

2,467,794

2018-2A,

A2,

144A,

FRN,

1.374%,

(3-month

USD

LIBOR

+

1.25%),

7/15/31

.....................................

United

States

1,500,000

1,495,875

2018-2A,

C1,

144A,

FRN,

1.974%,

(3-month

USD

LIBOR

+

1.85%),

7/15/31

.....................................

United

States

700,000

699,912

f,q

Webster

Park

CLO

Ltd.

,

2015-1A

,

BR

,

144A,

FRN

,

1.932

%

,

(

3-month

USD

LIBOR

+

1.8

%

),

7/20/30

...........................

United

States

2,000,000

2,001,000

574,788,358

a

a

a

a

a

a

Road

&

Rail

0.0%

†

Union

Pacific

Railroad

Co.

Pass-Through

Trust

,

2005-1

,

5.082

%

,

1/02/29

...........................................

United

States

69,358

76,274

Total

Asset-Backed

Securities

(Cost

$575,899,129)

..............................

584,186,339

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

102

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Commercial

Mortgage-Backed

Securities

0.7%

Diversified

Financial

Services

0.7%

f,q

BX

Commercial

Mortgage

Trust

,

2021-VOLT

,

B

,

144A,

FRN

,

1.04

%

,

(

1-month

USD

LIBOR

+

0.95

%

),

9/15/36

..................

United

States

9,840,000

$

9,864,883

f,k,q

BX

Mortgage

Trust

,

2021-PAC

,

B

,

144A,

FRN

,

0.989

%

,

(

1-month

USD

LIBOR

+

0.899

%

),

10/15/36

........................

United

States

9,220,000

9,280,104

p

Commercial

Mortgage

Trust

,

2006-GG7

,

AJ

,

FRN

,

6.012

%

,

7/10/38

United

States

1,576,925

1,327,240

f,q

DBCG

Mortgage

Trust

,

2017-BBG

,

A

,

144A,

FRN

,

0.79

%

,

(

1-month

USD

LIBOR

+

0.7

%

),

6/15/34

...........................

United

States

9,840,000

9,825,936

f,p

Eleven

Madison

Mortgage

Trust

,

2015-11MD

,

A

,

144A,

FRN

,

3.555

%

,

9/10/35

.....................................

United

States

3,255,000

3,481,864

33,780,027

a

a

a

a

a

a

Thrifts

&

Mortgage

Finance

0.0%

†

q

FNMA

,

2005-122

,

FN

,

FRN

,

0.439

%

,

(

1-month

USD

LIBOR

+

0.35

%

),

1/25/36

.....................................

United

States

380,188

368,521

b

Weyerhaeuser

Mortgage

Co.

of

Texas

,

1984-A

,

7.43

%

,

1/01/24

...

United

States

5,379

5,379

373,900

a

a

a

a

a

a

Total

Commercial

Mortgage-Backed

Securities

(Cost

$34,072,261)

................

34,153,927

Mortgage-Backed

Securities

14.5%

r

Federal

Home

Loan

Mortgage

Corp.

(FHLMC)

Adjustable

Rate

0.0%

†

FHLMC,

1.513%,

(COFI

11th

District

+/-

MBS

Margin),

11/01/27

..

United

States

708,530

711,424

Federal

Home

Loan

Mortgage

Corp.

(FHLMC)

Fixed

Rate

0.3%

FHLMC

Gold

Pools,

15

Year,

5.5%,

11/01/22

.................

United

States

9,255

9,312

FHLMC

Gold

Pools,

15

Year,

6%,

11/01/21

-

9/01/22

...........

United

States

9,535

9,592

FHLMC

Gold

Pools,

30

Year,

4.5%,

3/01/39

..................

United

States

759,449

849,622

FHLMC

Gold

Pools,

30

Year,

5%,

8/01/33

-

2/01/39

............

United

States

4,739,819

5,422,229

FHLMC

Gold

Pools,

30

Year,

5.5%,

1/01/35

-

12/01/37

.........

United

States

400,887

467,111

FHLMC

Gold

Pools,

30

Year,

6%,

5/01/33

-

4/01/38

............

United

States

564,806

664,433

FHLMC

Gold

Pools,

30

Year,

6.5%,

8/01/25

-

3/01/39

..........

United

States

493,730

560,356

FHLMC

Gold

Pools,

30

Year,

7%,

1/01/28

-

7/01/32

............

United

States

36,386

40,573

FHLMC

Gold

Pools,

30

Year,

7.5%,

3/01/32

..................

United

States

7,840

9,217

FHLMC

Gold

Pools,

30

Year,

8%,

2/01/30

...................

United

States

10,130

11,447

FHLMC

Gold

Pools,

30

Year,

8.5%,

10/01/24

-

8/01/30

.........

United

States

2,382

2,621

FHLMC

Pool,

15

Year,

2.5%,

6/01/36

.......................

United

States

2,498,832

2,599,905

FHLMC

Pool,

30

Year,

2.5%,

5/01/51

.......................

United

States

2,655,265

2,730,731

13,377,149

r

Federal

National

Mortgage

Association

(FNMA)

Adjustable

Rate

0.0%

†

FNMA,

1.506%,

(6-month

USD

LIBOR

+/-

MBS

Margin),

10/01/32

.

United

States

58,250

58,646

FNMA,

1.605%

-

4.105%,

(COFI

11th

District

+/-

MBS

Margin),

12/01/27

-

9/01/34

...................................

United

States

1,513,961

1,606,065

FNMA,

1.72%

-

2.054%,

(12-month

USD

LIBOR

+/-

MBS

Margin),

2/01/34

-

3/01/37

....................................

United

States

416,272

425,562

FNMA,

2.115%

-

2.969%,

(1-year

CMT

T-Note

+/-

MBS

Margin),

5/01/25

-

10/01/36

...................................

United

States

97,090

98,646

FNMA,

2.624%,

(3-year

CMT

T-Note

+/-

MBS

Margin),

12/01/24

..

United

States

3,417

3,420

2,192,339

Federal

National

Mortgage

Association

(FNMA)

Fixed

Rate

12.7%

FNMA,

15

Year,

2.5%,

10/01/31

-

12/01/35

..................

United

States

1,562,170

1,625,998

FNMA,

15

Year,

3%,

1/01/31

-

2/01/35

......................

United

States

9,115,749

9,596,545

FNMA,

15

Year,

5.5%,

12/01/22

-

12/01/23

..................

United

States

15,505

15,791

FNMA,

15

Year,

6%,

9/01/22

.............................

United

States

9,765

9,827

FNMA,

30

Year,

2%,

9/01/51

.............................

United

States

997,289

998,167

FNMA,

30

Year,

2.5%,

2/01/51

-

10/01/51

...................

United

States

17,224,248

17,722,324

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

Annual

Report

103

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Mortgage-Backed

Securities

(continued)

Federal

National

Mortgage

Association

(FNMA)

Fixed

Rate

(continued)

FNMA,

30

Year,

3%,

9/01/48

.............................

United

States

16,193,012

$

17,123,276

FNMA,

30

Year,

3%,

11/01/48

............................

United

States

39,773,676

42,079,134

FNMA,

30

Year,

5%,

6/01/36

-

5/01/39

......................

United

States

1,013,036

1,156,468

FNMA,

30

Year,

5.5%,

6/01/33

-

8/01/37

....................

United

States

3,190,005

3,653,176

FNMA,

30

Year,

6%,

9/01/32

-

9/01/38

......................

United

States

3,460,290

4,072,967

FNMA,

30

Year,

6.5%,

8/01/28

-

5/01/37

....................

United

States

114,992

130,637

FNMA,

30

Year,

7%,

11/01/25

............................

United

States

1,933

1,940

FNMA,

30

Year,

7.5%,

1/01/30

...........................

United

States

6,763

7,889

FNMA,

30

Year,

8.5%,

4/01/30

-

5/01/32

....................

United

States

31,556

36,759

FNMA,

30

Year,

9%,

5/01/27

.............................

United

States

5,062

5,081

s

FNMA,

Single-family,

15

Year,

2%,

11/25/36

.................

United

States

145,190,000

148,998,400

s

FNMA,

Single-family,

30

Year,

2.5%,

11/25/51

................

United

States

357,349,000

367,029,531

614,263,910

r

Government

National

Mortgage

Association

(GNMA)

Adjustable

Rate

0.0%

†

GNMA

II,

2%

-

2.125%,

(1-year

CMT

T-Note

+/-

MBS

Margin),

1/20/23

-

10/20/26

...................................

United

States

12,872

13,191

13,191

Government

National

Mortgage

Association

(GNMA)

Fixed

Rate

1.5%

GNMA

I,

30

Year,

7%,

10/15/27

-

6/15/31

....................

United

States

11,881

13,865

GNMA

I,

Single-family,

30

Year,

6%,

1/15/39

.................

United

States

69,865

81,883

GNMA

I,

Single-family,

30

Year,

6.5%,

10/15/31

-

7/15/38

........

United

States

14,269

15,970

GNMA

I,

Single-family,

30

Year,

7%,

3/15/28

-

4/15/28

..........

United

States

5,546

5,688

GNMA

I,

Single-family,

30

Year,

7.5%,

2/15/22

-

2/15/26

........

United

States

8,413

8,640

GNMA

I,

Single-family,

30

Year,

9%,

9/15/25

.................

United

States

25

25

GNMA

II,

Single-family,

30

Year,

2%,

1/20/51

-

11/15/51

.........

United

States

18,684,444

18,929,453

GNMA

II,

Single-family,

30

Year,

2.5%,

3/20/51

-

9/20/51

........

United

States

10,135,738

10,429,118

s

GNMA

II,

Single-family,

30

Year,

2.5%,

11/15/51

..............

United

States

42,200,000

43,382,754

GNMA

II,

Single-family,

30

Year,

6%,

5/20/31

.................

United

States

1,818

2,063

GNMA

II,

Single-family,

30

Year,

6.5%,

3/20/28

-

7/20/38

........

United

States

203,399

241,844

GNMA

II,

Single-family,

30

Year,

7.5%,

8/20/30

-

1/20/33

........

United

States

25,049

28,235

73,139,538

Total

Mortgage-Backed

Securities

(Cost

$697,006,109)

...........................

703,697,551

Municipal

Bonds

5.1%

California

2.0%

California

Health

Facilities

Financing

Authority

,

State

of

California

Personal

Income

Tax,

Revenue,

Senior

Lien,

2019,

2.934%,

6/01/32

..............................

United

States

6,810,000

7,190,477

State

of

California

Personal

Income

Tax,

Revenue,

Senior

Lien,

2019,

2.984%,

6/01/33

..............................

United

States

5,870,000

6,175,826

State

of

California

Personal

Income

Tax,

Revenue,

Senior

Lien,

2019,

3.034%,

6/01/34

..............................

United

States

4,445,000

4,669,948

California

Municipal

Finance

Authority

,

United

States

General

Services

Administration

,

Revenue

,

2020

,

2.519

%

,

10/01/35

....

United

States

9,905,000

9,519,321

California

State

University

,

Revenue

,

2021

B

,

Refunding

,

2.719

%

,

11/01/52

..........................................

United

States

7,185,000

7,206,069

Foothill-Eastern

Transportation

Corridor

Agency

,

Revenue

,

2019

A

,

Refunding

,

4.094

%

,

1/15/49

............................

United

States

3,470,000

3,653,527

Gilroy

Unified

School

District

,

GO

,

2019

,

Refunding

,

3.364

%

,

8/01/47

United

States

7,220,000

7,552,515

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

104

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Municipal

Bonds

(continued)

California

(continued)

San

Bernardino

Community

College

District

,

GO,

2021,

Refunding,

2.686%,

8/01/41

...................

United

States

19,690,000

$

19,701,623

GO,

2021,

Refunding,

2.856%,

8/01/49

...................

United

States

11,465,000

11,470,218

San

Jose

Redevelopment

Agency

Successor

Agency

,

Tax

Allocation,

Senior

Lien

,

2017

A-T

,

Refunding

,

3.226

%

,

8/01/27

..........

United

States

6,150,000

6,695,714

University

of

California

,

Revenue

,

2015

J

,

Refunding

,

4.131

%

,

5/15/45

...........................................

United

States

10,750,000

12,829,866

96,665,104

Florida

0.2%

County

of

Broward

,

Airport

System

,

Revenue

,

2019

C

,

Refunding

,

3.477

%

,

10/01/43

....................................

United

States

7,145,000

7,564,887

Illinois

0.2%

Chicago

Transit

Authority

Sales

&

Transfer

Tax

Receipts

,

Revenue

,

2008

A

,

6.899

%

,

12/01/40

.............................

United

States

800,000

1,132,201

State

of

Illinois

,

GO

,

2003

,

5.1

%

,

6/01/33

...................

United

States

8,900,000

10,385,659

11,517,860

Louisiana

0.0%

†

City

of

New

Orleans

,

Sewerage

Service,

Revenue,

2021,

Refunding,

AGMC

Insured,

1.791%,

6/01/30

...................................

United

States

1,300,000

1,254,126

Water

System,

Revenue,

2021,

Refunding,

AGMC

Insured,

1.841%,

12/01/30

..................................

United

States

1,400,000

1,350,510

2,604,636

Massachusetts

0.3%

Massachusetts

School

Building

Authority

,

Revenue

,

2019

B

,

Refunding

,

3.395

%

,

10/15/40

...........................

United

States

6,760,000

7,152,217

Massachusetts

State

College

Building

Authority

,

Revenue

,

2019

C

,

Refunding

,

3.373

%

,

5/01/43

............................

United

States

5,900,000

6,211,201

13,363,418

Minnesota

0.1%

State

of

Minnesota

,

GO

,

2013

F

,

Refunding

,

4

%

,

10/01/24

.......

United

States

5,760,000

6,166,151

New

Jersey

0.1%

New

Jersey

Transportation

Trust

Fund

Authority

,

Revenue

,

2019

B

,

Refunding

,

4.131

%

,

6/15/42

............................

United

States

4,060,000

4,643,042

New

York

0.5%

Metropolitan

Transportation

Authority

,

Revenue

,

2020

E

,

Refunding

,

4

%

,

11/15/45

.......................................

United

States

6,715,000

7,484,632

New

York

State

Dormitory

Authority

,

State

University

of

New

York

,

Revenue

,

2019

B

,

Refunding

,

3.142

%

,

7/01/43

..............

United

States

3,605,000

3,776,834

Port

Authority

of

New

York

&

New

Jersey

,

Revenue,

191,

4.823%,

6/01/45

.........................

United

States

4,570,000

5,063,094

Revenue,

192,

4.81%,

10/15/65

.........................

United

States

5,000,000

7,131,187

23,455,747

Ohio

0.4%

Greenville

City

School

District

,

GO

,

2019

,

Refunding

,

3.541

%

,

1/01/51

...........................................

United

States

16,585,000

17,302,046

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

Annual

Report

105

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Municipal

Bonds

(continued)

Ohio

(continued)

State

of

Ohio

,

Cleveland

Clinic

Health

System

Obligated

Group

,

Revenue

,

2019

G

,

Refunding

,

3.276

%

,

1/01/42

.............

United

States

2,265,000

$

2,448,160

19,750,206

Pennsylvania

0.7%

Commonwealth

Financing

Authority

,

Revenue

,

2021

A

,

2.991

%

,

6/01/42

...........................................

United

States

25,050,000

25,920,372

University

of

Pittsburgh-of

the

Commonwealth

System

of

Higher

Education

,

Revenue

,

2017

C

,

Refunding

,

3.005

%

,

9/15/41

.....

United

States

6,315,000

6,649,806

32,570,178

Texas

0.4%

City

of

Austin

,

Electric

Utility

,

Revenue

,

2008

,

Refunding

,

AGMC

Insured

,

6.262

%

,

11/15/32

.............................

United

States

12,790,000

16,191,931

Texas

State

University

System

,

Revenue,

2019

B,

Refunding,

2.938%,

3/15/33

..............

United

States

2,655,000

2,810,682

Revenue,

2019

B,

Refunding,

3.289%,

3/15/40

..............

United

States

2,255,000

2,347,665

21,350,278

Utah

0.2%

Salt

Lake

City

Corp.

,

Revenue

,

2019

B

,

Refunding

,

3.102

%

,

4/01/38

United

States

3,155,000

3,301,912

Utah

Transit

Authority

,

Revenue,

Senior

Lien

,

2019

B

,

Refunding

,

3.443

%

,

12/15/42

....................................

United

States

4,510,000

4,742,986

8,044,898

Total

Municipal

Bonds

(Cost

$234,540,846)

.....................................

247,696,405

Residential

Mortgage-Backed

Securities

7.2%

Capital

Markets

0.0%

†

q

Merrill

Lynch

Mortgage

Investors

Trust

,

2003-A

,

1A

,

FRN

,

0.829

%

,

(

1-month

USD

LIBOR

+

0.74

%

),

3/25/28

..................

United

States

345,198

347,052

Diversified

Financial

Services

1.9%

f

BRAVO

Residential

Funding

Trust

,

2019-1,

A1C,

144A,

3.5%,

3/25/58

.......................

United

States

5,322,040

5,428,816

p

2019-2,

A3,

144A,

FRN,

3.5%,

10/25/44

...................

United

States

6,779,564

7,014,449

f,p

CIM

Trust

,

2018-INV1,

A4,

144A,

FRN,

4%,

8/25/48

..................

United

States

2,479,534

2,534,785

2019-INV1,

A1,

144A,

FRN,

4%,

2/25/49

..................

United

States

1,966,765

1,991,577

2019-INV2,

A3,

144A,

FRN,

4%,

5/25/49

..................

United

States

4,099,740

4,182,182

f,p

Citigroup

Mortgage

Loan

Trust

,

2013-A

,

A

,

144A,

FRN

,

3

%

,

5/25/42

United

States

228,748

229,600

Credit

Suisse

First

Boston

Mortgage

Securities

Corp.

,

2004-6

,

3A1

,

5

%

,

9/25/19

........................................

Switzerland

110,923

94,794

f,q

FHLMC

STACR

REMIC

Trust

,

2020-DNA1

,

M2

,

144A,

FRN

,

1.789

%

,

(

1-month

USD

LIBOR

+

1.7

%

),

1/25/50

...................

United

States

4,939,913

4,956,187

f,p

J.P.

Morgan

Mortgage

Trust

,

2021-13

,

A4

,

144A,

FRN

,

2.5

%

,

4/25/52

United

States

20,550,000

20,848,617

f,p

OBX

Trust

,

2021-J3

,

A4

,

144A,

FRN

,

2.5

%

,

10/25/51

...........

United

States

4,061,362

4,127,691

f,p

Provident

Funding

Associates

LLP

,

2021-J1

,

A3

,

144A,

FRN

,

2.5

%

,

2/20/49

...........................................

United

States

12,296,689

12,497,517

f,p

Provident

Funding

Mortgage

Trust

,

2019-1,

A2,

144A,

FRN,

3%,

12/25/49

....................

United

States

2,450,071

2,464,760

2020-1,

A3,

144A,

FRN,

3%,

2/25/50

.....................

United

States

364,792

365,086

f,p

PSMC

Trust

,

2021-3

,

A3

,

144A,

FRN

,

2.5

%

,

8/25/51

...........

United

States

23,824,675

24,245,047

90,981,108

a

a

a

a

a

a

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

106

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Residential

Mortgage-Backed

Securities

(continued)

Thrifts

&

Mortgage

Finance

5.3%

q

FHLMC

Structured

Agency

Credit

Risk

Debt

Notes

,

2014-DN3,

M3,

FRN,

4.089%,

(1-month

USD

LIBOR

+

4%),

8/25/24

...........................................

United

States

4,623,442

$

4,739,522

2014-DN4,

M3,

FRN,

4.639%,

(1-month

USD

LIBOR

+

4.55%),

10/25/24

..........................................

United

States

2,243,391

2,312,334

2014-HQ1,

M3,

FRN,

4.189%,

(1-month

USD

LIBOR

+

4.1%),

8/25/24

...........................................

United

States

291,156

294,145

2015-DNA2,

M3,

FRN,

3.989%,

(1-month

USD

LIBOR

+

3.9%),

12/25/27

..........................................

United

States

8,758,594

8,833,886

2015-DNA3,

M3,

FRN,

4.789%,

(1-month

USD

LIBOR

+

4.7%),

4/25/28

...........................................

United

States

2,211,607

2,291,951

2015-HQ2,

M3,

FRN,

3.339%,

(1-month

USD

LIBOR

+

3.25%),

5/25/25

...........................................

United

States

1,900,002

1,929,222

2016-DNA1,

M3,

FRN,

5.639%,

(1-month

USD

LIBOR

+

5.55%),

7/25/28

...........................................

United

States

13,732,021

14,402,261

2016-DNA2,

M3,

FRN,

4.739%,

(1-month

USD

LIBOR

+

4.65%),

10/25/28

..........................................

United

States

18,071,404

18,760,579

2016-DNA4,

M3,

FRN,

3.889%,

(1-month

USD

LIBOR

+

3.8%),

3/25/29

...........................................

United

States

7,911,115

8,188,004

2016-HQA2,

M3,

FRN,

5.239%,

(1-month

USD

LIBOR

+

5.15%),

11/25/28

..........................................

United

States

19,577,614

20,346,521

2017-DNA2,

M2,

FRN,

3.539%,

(1-month

USD

LIBOR

+

3.45%),

10/25/29

..........................................

United

States

26,327,007

27,203,422

2017-DNA3,

M2,

FRN,

2.589%,

(1-month

USD

LIBOR

+

2.5%),

3/25/30

...........................................

United

States

13,500,000

13,803,159

q

FNMA

Connecticut

Avenue

Securities

,

2013-C01,

M2,

FRN,

5.339%,

(1-month

USD

LIBOR

+

5.25%),

10/25/23

..........................................

United

States

4,031,463

4,197,806

2014-C02,

2M2,

FRN,

2.689%,

(1-month

USD

LIBOR

+

2.6%),

5/25/24

...........................................

United

States

2,911,939

2,961,490

2014-C03,

2M2,

FRN,

2.989%,

(1-month

USD

LIBOR

+

2.9%),

7/25/24

...........................................

United

States

964,827

983,169

2014-C04,

1M2,

FRN,

4.989%,

(1-month

USD

LIBOR

+

4.9%),

11/25/24

..........................................

United

States

9,048,962

9,422,010

2014-C04,

2M2,

FRN,

5.089%,

(1-month

USD

LIBOR

+

5%),

11/25/24

..........................................

United

States

822,601

837,574

2015-C02,

2M2,

FRN,

4.089%,

(1-month

USD

LIBOR

+

4%),

5/25/25

...........................................

United

States

333,467

334,851

2015-C03,

2M2,

FRN,

5.089%,

(1-month

USD

LIBOR

+

5%),

7/25/25

...........................................

United

States

383,280

386,453

2016-C02,

1M2,

FRN,

6.089%,

(1-month

USD

LIBOR

+

6%),

9/25/28

...........................................

United

States

11,121,122

11,644,427

2016-C03,

1M2,

FRN,

5.389%,

(1-month

USD

LIBOR

+

5.3%),

10/25/28

..........................................

United

States

4,559,402

4,792,501

2016-C04,

1M2,

FRN,

4.339%,

(1-month

USD

LIBOR

+

4.25%),

1/25/29

...........................................

United

States

24,548,101

25,431,273

2016-C05,

2M2,

FRN,

4.539%,

(1-month

USD

LIBOR

+

4.45%),

1/25/29

...........................................

United

States

10,564,438

11,006,617

2016-C07,

2M2,

FRN,

4.439%,

(1-month

USD

LIBOR

+

4.35%),

5/25/29

...........................................

United

States

7,607,361

7,940,050

2017-C01,

1M2,

FRN,

3.639%,

(1-month

USD

LIBOR

+

3.55%),

7/25/29

...........................................

United

States

11,138,787

11,505,567

2017-C03,

1M2,

FRN,

3.089%,

(1-month

USD

LIBOR

+

3%),

10/25/29

..........................................

United

States

24,328,492

25,086,933

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

Annual

Report

107

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Residential

Mortgage-Backed

Securities

(continued)

Thrifts

&

Mortgage

Finance

(continued)

q

FNMA

Connecticut

Avenue

Securities,

(continued)

2017-C05,

1M2,

FRN,

2.289%,

(1-month

USD

LIBOR

+

2.2%),

1/25/30

...........................................

United

States

20,015,575

$

20,392,546

260,028,273

a

a

a

a

a

a

Total

Residential

Mortgage-Backed

Securities

(Cost

$361,043,626)

................

351,356,433

Shares

Escrows

and

Litigation

Trusts

0.0%

†

a,b

K2016470219

South

Africa

Ltd.,

Escrow

Account

..............

South

Africa

141,599

ZAR

—

a

Mesquite

Energy,

Inc.,

Escrow

Account

.....................

United

States

3,000,000

97,500

a,b

Millennium

Corporate

Claim

Trust,

Escrow

Account

............

United

States

73,753

—

a,b

Millennium

Lender

Claim

Trust,

Escrow

Account

..............

United

States

73,753

—

Total

Escrows

and

Litigation

Trusts

(Cost

$2,814,454)

...........................

97,500

Total

Long

Term

Investments

(Cost

$5,244,406,228)

.............................

5,282,119,103

a

Number

of

Contracts

Notional

Amount

#

a

a

aa

Options

Purchased

0.0%

†

Calls

-

Over-the-Counter

Interest

Rate

Swaptions

0.0%

†

Receive

Fixed

1.08%,

Pay

Floating

3-month

USD

LIBOR,

Counterparty

DBAB,

Expires

3/28/22

.....................

1

171,400,000

701,581

Puts

-

Over-the-Counter

Currency

Options

Foreign

Exchange

EUR/NOK,

Counterparty

GSCO,

October

Strike

Price

9.37

NOK,

Expires

10/20/22

.......................

1

16,723,000

EUR

206,491

Foreign

Exchange

EUR/RUB,

Counterparty

GSCO,

October

Strike

Price

83.32

RUB,

Expires

10/20/22

......................

1

25,085,000

EUR

440,333

646,824

Total

Options

Purchased

(Cost

$1,592,731)

.....................................

1,348,405

Short

Term

Investments

2.8%

a

a

Country

Shares

a

Value

a

Money

Market

Funds

2.7%

d,t

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

130,579,435

130,579,435

Total

Money

Market

Funds

(Cost

$130,579,435)

.................................

130,579,435

u

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

0.1%

a

a

a

a

a

Money

Market

Funds

0.1%

d,t

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.....

United

States

5,174,000

5,174,000

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

108

Short

Term

Investments

(continued)

a

a

Country

Principal

Amount

*

a

Value

a

a

a

a

a

a

Repurchase

Agreements

0.0%

†

v

Joint

Repurchase

Agreement,

BNP

Paribas

SA,

0.05%,

11/01/21

(Maturity

Value

$1,293,893)

Collateralized

by

U.S.

Treasury

Bond,

6.25%,

8/15/23;

U.S.

Treasury

Bond,

Strip,

11/15/22;

U.S.

Treasury

Notes,

0.125%

-

2.625%,

9/30/22

-

5/31/26;

and

U.S.

Treasury

Bills,

Discount

Notes,

2/24/22

-

9/08/22

(valued

at

$1,319,766)

.............

1,293,888

$

1,293,888

Total

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

(Cost

$6,467,888)

............................................................

6,467,888

Total

Short

Term

Investments

(Cost

$137,047,323

)

...............................

137,047,323

a

Total

Investments

(Cost

$5,383,046,282)

111.4%

.................................

$5,420,514,831

Options

Written

(0.0)%

†

......................................................

(1,324,372)

Other

Assets,

less

Liabilities

(11.4)%

..........................................

(555,462,949)

Net

Assets

100.0%

...........................................................

$4,863,727,510

Number

of

Contracts

Notional

Amount

#

w

Options

Written

(0.0)%

†

Puts

-

Over-the-Counter

Interest

Rate

Swaptions

(0.0)%

†

Receive

Floating

3-month

USD

LIBOR,

Pay

Fixed

1.48%,

Counterparty

DBAB,

Expires

3/28/22

.....................

1

(171,400,000)

(1,324,372)

(1,324,372)

Total

Options

Written

(Premiums

received

$903,278)

............................

$

(1,324,372)

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

Annual

Report

109

At

October

31,

2021,

the

Fund

had

the

following futures

contracts

outstanding.

See

Note

1(e). 

#

Notional

amount

is

the

number

of

units

specified

in

the

contract,

and

can

include

currency

units,

bushels,

shares,

pounds,

barrels

or

other

units.

Currency

units

are

stated

in

U.S.

dollars

unless

otherwise

indicated.

*

The

principal

amount

is

stated

in

U.S.

dollars

unless

otherwise

indicated.

†

Rounds

to

less

than

0.1%

of

net

assets.

a

Non-income

producing.

b

Fair

valued

using

significant

unobservable

inputs.

See

Note

14

regarding

fair

value

measurements.

c

See

Note

9

regarding

restricted

securities.

d

See

Note

3(f)

regarding

investments

in

affiliated

management

investment

companies.

e

A

portion

or

all

of

the

security

is

on

loan

at

October

31,

2021.

See

Note

1(g).

f

Security

was

purchased

pursuant

to

Rule

144A

or

Regulation

S

under

the

Securities

Act

of

1933.

144A

securities

may

be

sold

in

transactions

exempt

from

registration

only

to

qualified

institutional

buyers

or

in

a

public

offering

registered

under

the

Securities

Act

of

1933.

Regulation

S

securities

cannot

be

sold

in

the

United

States

without

either

an

effective

registration

statement

filed

pursuant

to

the

Securities

Act

of

1933,

or

pursuant

to

an

exemption

from

registration.

At

October

31,

2021,

the

aggregate

value

of

these

securities

was

$1,241,086,161,

representing

25.5%

of

net

assets.

g

Perpetual

security

with

no

stated

maturity

date.

h

Income

may

be

received

in

additional

securities

and/or

cash.

i

See

Note

1(j)

regarding

senior

floating

rate

interests.

j

The

coupon

rate

shown

represents

the

rate

at

period

end.

k

A

portion

or

all

of

the

security

purchased

on

a

delayed

delivery

basis.

See

Note

1(d).

l

See

Note

1(k)

regarding

Marketplace

Lending.

m

A

supranational

organization

is

an

entity

formed

by

two

or

more

central

governments

through

international

treaties.

n

The

principal

represents

the

notional

amount.

See

Note

1(e)

regarding

value

recovery

instruments.

o

Principal

amount

of

security

is

adjusted

for

inflation.

See

Note

1(m).

p

Adjustable

rate

security

with

an

interest

rate

that

is

not

based

on

a

published

reference

index

and

spread.  The

rate

is

based

on

the

structure

of

the

agreement

and

current

market

conditions.

The

coupon

rate

shown

represents

the

rate

at

period

end.

q

The

coupon

rate

shown

represents

the

rate

inclusive

of

any

caps

or

floors,

if

applicable,

in

effect

at

period

end.

r

Adjustable

Rate

Mortgage-Backed

Security

(ARM);

the

rate

shown

is

the

effective

rate

at

period

end.

ARM

rates

are

not

based

on

a

published

reference

rate

and

spread,

but

instead

pass-through

weighted

average

interest

income

inclusive

of

any

caps

or

floors,

if

applicable,

from

the

underlying

mortgage

loans

in

which

the

majority

of

mortgages

pay

interest

based

on

the

index

shown

at

their

designated

reset

dates

plus

a

spread,

less

the

applicable

servicing

and

guaranty

fee

(MBS

margin).

s

Security

purchased

on

a

to-be-announced

(TBA)

basis.

See

Note

1(d).

t

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

u

See

Note

1(g)

regarding

securities

on

loan.

v

See

Note

1(c)

regarding

joint

repurchase

agreement.

w

See

Note

1(e)

regarding

written

options.

Futures

Contracts

Description

Type

Number

of

Contracts

Notional

Amount

*

Expiration

Date

Value/

Unrealized

Appreciation

(Depreciation)

Interest

rate

contracts

U.S.

Treasury

10

Year

Notes

....................

Short

962

$

125,736,406

12/21/21

$

2,122,998

U.S.

Treasury

10

Year

Ultra

Notes

................

Short

253

36,692,906

12/21/21

560,403

U.S.

Treasury

2

Year

Notes

.....................

Long

620

135,935,000

12/31/21

(586,850)

U.S.

Treasury

5

Year

Notes

.....................

Long

1,888

229,864,000

12/31/21

(3,168,491)

U.S.

Treasury

Long

Bonds

.....................

Short

395

63,533,281

12/21/21

667,218

U.S.

Treasury

Ultra

Bonds

......................

Long

1,005

197,388,281

12/21/21

1,795,318

Total

Futures

Contracts

......................................................................

$1,390,596

*

As

of

year

end

.

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

110

At

October

31,

2021,

the

Fund

had

the

following

forward

exchange

contracts

outstanding.

See

Note

1

(

e

). 

At

October

31,

2021,

the

Fund

had

the

following credit

default

swap

contracts outstanding.

See

Note

1

(

e

). 

Forward

Exchange

Contracts

Currency

Counter-

party

a

Type

Quantity

Contract

Amount

*

Settlement

Date

Unrealized

Appreciation

Unrealized

Depreciation

a

a

a

a

a

a

a

a

OTC

Forward

Exchange

Contracts

Indonesian

Rupiah

..

DBAB

Buy

97,144,100,000

6,660,548

11/17/21

$

170,916

$

—

Indonesian

Rupiah

..

JPHQ

Buy

92,000,000,000

6,309,581

11/17/21

160,135

—

Euro

.............

JPHQ

Buy

18,000,000

20,897,100

12/14/21

—

(69,462)

Euro

.............

JPHQ

Sell

19,940,000

23,482,162

12/14/21

427,393

(17,624)

Canadian

Dollar

....

JPHQ

Buy

16,300,000

13,179,855

12/16/21

—

(9,241)

Canadian

Dollar

....

JPHQ

Sell

16,300,000

13,233,259

12/16/21

62,644

—

Japanese

Yen

......

JPHQ

Buy

1,981,000,000

17,865,920

12/29/21

—

(471,155)

Australian

Dollar

....

JPHQ

Buy

17,000,000

12,547,972

1/19/22

243,372

—

Singapore

Dollar

....

JPHQ

Buy

17,500,000

12,869,255

1/19/22

104,143

—

South

Korean

Won

..

JPHQ

Buy

14,600,000,000

12,630,195

1/19/22

—

(221,494)

Australian

Dollar

....

JPHQ

Buy

18,100,000

13,364,823

3/01/22

252,527

—

New

Zealand

Dollar

.

JPHQ

Sell

18,700,000

13,191,945

3/01/22

—

(173,264)

Turkish

Lira

........

JPHQ

Buy

76,280,000

7,871,221

3/22/22

—

(482,592)

Total

Forward

Exchange

Contracts

...................................................

$1,421,130

$(1,444,832)

Net

unrealized

appreciation

(depreciation)

............................................

$(23,702)

*

In

U.S.

dollars

unless

otherwise

indicated.

a

May

be

comprised

of

multiple

contracts

with

the

same

counterparty,

currency

and

settlement

date.

Credit

Default

Swap

Contracts

Description

Periodic

Payment

Rate

Received

(Paid)

Payment

Frequency

Counter-

party

Maturity

Date

Notional

Amount

(a)

Value

Unamortized

Upfront

Payments

(Receipts)

Unrealized

Appreciation

(Depreciation)

Rating

(b)

Centrally

Cleared

Swap

Contracts

Contracts

to

Sell

Protection

(c)(d)

Traded

Index

ITRAXX

EUROPE

CROSSOVER

36

........

5.00%

Quarterly

12/20/26

10,500,000

EUR

$

1,426,492

$

1,289,636

$

136,856

Non-

Investment

Grade

Total

Centrally

Cleared

Swap

Contracts

.....................................

$1,426,492

$1,289,636

$136,856

OTC

Swap

Contracts

Contracts

to

Buy

Protection

(c)

Single

Name

Avon

Products,

Inc.

.......

(5.00)%

Quarterly

CITI

3/20/23

8,800,000

(534,484)

(353,771)

(180,713)

Nabors

Industries,

Inc.

.......

(1.00)%

Quarterly

CITI

12/20/21

10,225,000

101,701

19,994

81,707

Contracts

to

Sell

Protection

(c)(d)

Single

Name

Air

France-KLM

.

5.00%

Quarterly

BOFA

6/20/26

1,170,000

EUR

64,670

21,810

42,860

NR

Air

France-KLM

.

5.00%

Quarterly

JPHQ

6/20/26

2,780,000

EUR

153,660

45,269

108,391

NR

Air

France-KLM

.

5.00%

Quarterly

MSCO

12/20/25

6,430,000

EUR

373,090

6,383

366,707

NR

American

Airlines

Group,

Inc.

..

5.00%

Quarterly

CITI

12/20/21

7,800,000

51,751

(70,221)

121,972

CCC

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

Annual

Report

111

Credit

Default

Swap

Contracts

(continued)

Description

Periodic

Payment

Rate

Received

(Paid)

Payment

Frequency

Counter-

party

Maturity

Date

Notional

Amount

(a)

Value

Unamortized

Upfront

Payments

(Receipts)

Unrealized

Appreciation

(Depreciation)

Rating

(b)

OTC

Swap

Contracts

(continued)

Contracts

to

Sell

Protection

(c)(d)

(continued)

Single

Name

(continued)

American

Airlines

Group,

Inc.

..

5.00%

Quarterly

GSCO

6/20/22

5,200,000

$

66,809

$

(30,923)

$

97,732

CCC

Carnival

Corp.

..

1.00%

Quarterly

CITI

12/20/26

9,460,000

(1,275,425)

(1,196,398)

(79,027)

B-

Nabors

Industries,

Inc.

.......

1.00%

Quarterly

CITI

12/20/23

10,225,000

(697,031)

(653,256)

(43,775)

CCC-

Nordstrom,

Inc.

.

1.00%

Quarterly

JPHQ

12/20/26

12,600,000

(987,753)

(1,104,829)

117,076

BB+

United

Airlines

Holdings,

Inc.

.

5.00%

Quarterly

JPHQ

12/20/26

7,300,000

264,265

229,925

34,340

B

Traded

Index

(e)

BNP

Paribas

Haverhill

Index,

Tranche

5-10%

4.10%

Quarterly

BNDP

12/20/23

4,250,000

EUR

43,627

—

43,627

Non-

Investment

Grade

(e)

Citibank

Bespoke

Kenai

Index,

Equity

Tranche

0-5%

—%

Quarterly

CITI

12/20/23

10,500,000

(

3,846,294

)

(

3,416,437

)

(

429,857

)

Non-

Investment

Grade

(e)

Citibank

Bespoke

K

ona

Index,

Equity

Tranche

0-5%

—%

Quarterly

CITI

12/20/22

12,600,000

(

2,360,973

)

(

1,975,391

)

(

385,582

)

Non-

Investment

Grade

(e)

Citibank

Bespoke

Kona

Index,

Mezzanine

Tranche

5-10%

2.42%

Quarterly

CITI

12/20/22

10,500,000

107,253

—

107,253

Non-

Investment

Grade

(e)

Citibank

Bespoke

Palm

Beach

Index,

Mezzanine

Tranche

5-10%

1.97%

Quarterly

CITI

12/20/22

14,000,000

159,161

—

159,161

Non-

Investment

Grade

(e)

Citibank

Bespoke

Phoenix

Index,

Mezzanine

Tranche

5

-

7

%

3.35%

Quarterly

CITI

12/20/21

1,100,000

8,618

—

8,618

Non-

Investment

Grade

(e)

Citibank

Bespoke

Phoenix

Index,

Mezzanine

Tranche

5-7%

2.90%

Quarterly

CITI

12/20/21

7,800,000

52,194

—

52,194

Non-

Investment

Grade

(e)

Citibank

Bespoke

Portsmouth,

Mezzanine

Tranche

5-10%

2.15%

Quarterly

CITI

6/20/22

30,00

0,000

402,386

—

402,386

Non-

Investment

Grade

MCDX.

NA.MAIN.31

.

1.00%

Quarterly

CITI

12/20/23

2,325,000

24,677

10,046

14,631

Investment

Grade

Franklin

Investors

Securities

Trust

Statement

of

Investments

Franklin

Total

Return

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements

112

At

October

31,

2021,

the

Fund

had

the

following cross-currency

swap

contracts outstanding.

See

Note

1

(

e

). 

See

Note

11

regarding

other

derivative

information.

See

Abbreviations

on

page

156

Credit

Default

Swap

Contracts

(continued)

Description

Periodic

Payment

Rate

Received

(Paid)

Payment

Frequency

Counter-

party

Maturity

Date

Notional

Amount

(a)

Value

Unamortized

Upfront

Payments

(Receipts)

Unrealized

Appreciation

(Depreciation)

Rating

(b)

OTC

Swap

Contracts

(continued)

Contracts

to

Sell

Protection

(c)(d)

(continued)

Traded

Index

(continued)

(e)

Morgan

Stanley

Bespoke

Pecan

Index,

Mezzanine

Tranche

0-5%

—%

Quarterly

MSCO

12/20/21

8,250,000

$

7,632,588

$

1,696,406

$

5,936,182

Non-

Investment

Grade

(e)

Morgan

Stanley

Bespoke

Pecan

Index,

Mezzanine

Tranche

5-10%

4.10%

Quarterly

MSCO

12/20/21

8,300,000

28,313

—

28,313

Non-

Investment

Grade

(e)

Morgan

Stanley

Bespoke

Pecan

Index,

Mezzanine

Tranche

5-10%

3.98%

Quarterly

MSCO

12/20/21

8,300,000

25,773

—

25,773

Non-

Investment

Grade

Total

OTC

Swap

Contracts

..............................................

$(141,424)

$(6,771,393)

$6,629,969

Total

Credit

Default

Swap

Contracts

....................................

$1,285,068

$

(5,481,757)

$6,766,825

(a)

In

U.S.

dollars

unless

otherwise

indicated.

For

contracts

to

sell

protection,

the

notional

amount

is

equal

to

the

maximum

potential

amount

of

the

future

payments

and

no

recourse

provisions

have

been

entered

into

in

association

with

the

contracts.

(b)

Based

on

Standard

and

Poor's

(S&P)

Rating

for

single

name

swaps

and

internal

ratings

for

index

swaps.

Internal

ratings

based

on

mapping

into

equivalent

ratings

from

external

vendors.

(c)

Performance

triggers

for

settlement

of

contract

include

default,

bankruptcy

or

restructuring

for

single

name

swaps,

and

failure

to

pay

or

bankruptcy

of

the

underlying

securities

for

traded

index

swaps.

(d)

The

fund

enters

contracts

to

sell

protection

to

create

a

long

credit

position.

(e)

Represents

a

custom

index

comprised

of

a

basket

of

underlying

instruments.

Cross-Currency

Swap

Contracts

Description

Payment

Frequency

Counter-

party

Maturity

Date

Notional

Amount

Value/

Unrealized

Appreciation

(Depreciation)

aA

aaa

aaa

aaa

OTC

Swap

Contracts

Receive

Floating

3-month

USD

LIBOR

+

1.175%

.....

Quarterly

55,747,250

USD

Pay

Floating

3-month

EURIBOR

+

1.05%

.........

Quarterly

CITI

11/22/21

50,450,000

EUR

$

(2,489,300)

Receive

Floating

3-month

USD

LIBOR

+

1.174%

.....

Quarterly

51,115,500

USD

Pay

Floating

3-month

EURIBOR

+

1.05%

.........

Quarterly

CITI

12/10/21

46,050,000

EUR

(2,068,692)

Receive

Floating

3-month

USD

LIBOR

+

1.318%

.....

Quarterly

26,862,000

USD

Pay

Floating

3-month

EURIBOR

+

1.2%

..........

Quarterly

CITI

12/12/21

24,200,000

EUR

(1,091,033)

Total

Cross

Currency

Swap

Contracts

...........................................................

$(5,649,025)

Franklin

Investors

Securities

Trust

Financial

Statements

Statements

of

Assets

and

Liabilities

October

31,

2021

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

113

Franklin

Adjustable

U.S.

Government

Securities

Fund

Franklin

Floating

Rate

Daily

Access

Fund

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

................

$645,436,762

$1,229,128,209

$2,590,189,792

$4,429,400,445

Cost

-

Controlled

affiliates

(Note

3

f

and

12

)

...

—

—

—

772,935,285

Cost

-

Non-controlled

affiliates

(Note

3

f

and

12

)

14,899,131

187,337,654

189,916,725

179,416,664

Cost

-

Unaffiliated

repurchase

agreements

...

—

45,676,096

85,945,491

1,293,888

Value

-

Unaffiliated

issuers

(Includes

securities

loaned

of

$—,

$274,062,

$—

and

$6,307,637

respectively)

..........................

$646,109,501

$1,184,796,522

$2,582,492,317

$4,444,460,473

Value

-

Controlled

affiliates

(Note

3

f

and

12

)

..

—

—

—

795,615,470

Value

-

Non-controlled

affiliates

(Note

3

f

and

12

)

14,899,131

205,855,195

183,846,716

179,145,000

Value

-

Unaffiliated

repurchase

agreements

...

—

45,676,096

85,945,491

1,293,888

Cash

.................................

5,008

995,863

3,283,711

18,405,381

Restricted

cash

for

OTC

derivative

contracts

(Note

1

f

)

...................................

—

—

1,730,000

7,770,000

Foreign

currency,

at

value

(cost

$–,

$–,

$1,947,538

and

$113,917

respectively)

.................

—

—

1,908,905

113,218

Receivables:

Investment

securities

sold

................

3,454,667

18,770,912

1,607,289

9,759,420

Capital

shares

sold

.....................

591,040

4,827,199

6,954,621

4,079,354

Dividends

and

interest

..................

1,108,710

4,139,010

15,768,351

22,383,211

Deposits

with

brokers

for:

OTC

derivative

contracts

...............

—

—

6,396,173

14,253,950

TBA

transactions

.....................

—

—

30,000

348,841

Futures

contracts

.....................

—

—

1,817,907

5,877,688

Centrally

cleared

swap

contracts

.........

—

—

4,192,384

6,135,380

Variation

margin

on

futures

contracts

........

—

—

74,381

793,805

OTC

swap

contracts

(upfront

payments

$–,

$–,

$651,650

and

$2,029,871,

respectively)

.......

—

—

651,628

2,029,833

Unrealized

appreciation

on

OTC

forward

exchange

contracts

..............................

—

—

243,068

1,421,130

Unrealized

appreciation

on

OTC

swap

contracts

.

—

—

3,047,415

7,748,923

Unrealized

appreciation

on

unfunded

loan

commitments

(Note

10)

...................

—

26,359

—

—

Deferred

tax

benefit

(Note

1h)

..............

—

—

—

245,257

Other

assets

...........................

—

—

2,446

24

Total

assets

.......................

666,168,057

1,465,087,156

2,899,992,803

5,521,880,246

Liabilities:

Payables:

Investment

securities

purchased

...........

—

86,040,597

68,672,673

614,146,327

Capital

shares

redeemed

................

1,071,318

13,162,782

5,629,741

5,636,042

Management

fees

......................

248,133

632,703

415,585

1,398,862

Distribution

fees

.......................

118,881

224,919

461,019

905,509

Transfer

agent

fees

.....................

122,790

248,756

447,555

1,077,548

Pricing

fees

..........................

155,112

—

9,282

23,431

Distributions

to

shareholders

..............

48,005

900,616

234,446

425,870

Variation

margin

on

centrally

cleared

swap

contracts

............................

—

—

3,338,148

1,453,708

Deposits

from

brokers

for:

OTC

derivative

contracts

...............

—

—

1,730,000

7,770,000

OTC

swap

contracts

(upfront

receipts

$–,

$–,

$4,117,261

and

$8,801,251)

................

—

—

4,117,249

8,801,226

Unrealized

depreciation

on

OTC

swap

contracts

.

—

—

3,634,745

6,767,979

Options

written,

at

value

(premiums

received

$–,

$–,

$–

and

$903,278

respectively)

...........

—

—

—

1,324,372

Franklin

Investors

Securities

Trust

Financial

Statements

Statements

of

Assets

and

Liabilities

(continued)

October

31,

2021

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

114

Franklin

Adjustable

U.S.

Government

Securities

Fund

Franklin

Floating

Rate

Daily

Access

Fund

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

Unrealized

depreciation

on

OTC

forward

exchange

contracts

..............................

—

—

385,529

1,444,832

Payable

upon

return

of

securities

loaned

(Note

1g)

—

7

—

6,467,888

Accrued

expenses

and

other

liabilities

........

169,642

330,840

404,939

509,142

Total

liabilities

......................

1,933,881

101,541,220

89,480,911

658,152,736

Net

assets,

at

value

..............

$664,234,176

$1,363,545,936

$2,810,511,892

$4,863,727,510

Net

assets

consist

of:

Paid-in

capital

..........................

$804,804,433

$1,895,247,633

$3,000,442,730

$4,921,194,944

Total

distributable

earnings

(losses)

..........

(140,570,257)

(531,701,697)

(189,930,838)

(57,467,434)

Net

assets,

at

value

..............

$664,234,176

$1,363,545,936

$2,810,511,892

$4,863,727,510

Franklin

Investors

Securities

Trust

Financial

Statements

Statements

of

Assets

and

Liabilities

(continued)

October

31,

2021

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

115

Franklin

Adjustable

U.S.

Government

Securities

Fund

Franklin

Floating

Rate

Daily

Access

Fund

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

Class

A:

Net

assets,

at

value

....................

$432,446,515

$803,541,876

$1,915,410,459

$3,876,155,516

Shares

outstanding

.....................

54,842,867

101,888,769

200,557,920

388,341,600

Net

asset

value

per

share

a

...............

$7.89

$7.89

$9.55

$9.98

Maximum

offering

price

per

share

(net

asset

value

per

share

÷

97.75%,

97.75%,

97.75%

and

96.25%,

respectively)

...................

$8.07

$8.07

$9.77

$10.37

Class

A1:

Net

assets,

at

value

....................

$66,941,906

$—

$—

$—

Shares

outstanding

.....................

8,491,713

—

—

—

Net

asset

value

per

share

a

...............

$7.88

$—

$—

$—

Maximum

offering

price

per

share

(net

asset

value

per

share

÷

97.75%,

—%,

—%

and

—%)

$8.06

$—

$—

$—

Class

C:

Net

assets,

at

value

....................

$36,318,314

$100,316,661

$99,990,104

$141,308,736

Shares

outstanding

.....................

4,609,904

12,716,330

10,518,966

14,267,899

Net

asset

value

and

maximum

offering

price

per

share

a

...............................

$7.88

$7.89

$9.51

$9.90

Class

R:

Net

assets,

at

value

....................

$—

$—

$197,702

$12,623,036

Shares

outstanding

.....................

—

—

20,708

1,270,203

Net

asset

value

and

maximum

offering

price

per

share

...............................

$—

$—

$9.55

$9.94

Class

R6:

Net

assets,

at

value

....................

$41,912,555

$24,999,431

$543,484,595

$601,624,131

Shares

outstanding

.....................

5,305,591

3,163,858

56,537,748

59,843,806

Net

asset

value

and

maximum

offering

price

per

share

...............................

$7.90

$7.90

$9.61

$10.05

Advisor

Class:

Net

assets,

at

value

....................

$86,614,886

$434,687,968

$251,429,032

$232,016,091

Shares

outstanding

.....................

10,973,815

55,100,586

26,182,130

23,106,579

Net

asset

value

and

maximum

offering

price

per

share

...............................

$7.89

$7.89

$9.60

$10.04

a

Redemption

price

is

equal

to

net

asset

value

less

contingent

deferred

sales

charges,

if

applicable.

Franklin

Investors

Securities

Trust

Financial

Statements

Statements

of

Operations

for

the

year

ended

October

31,

2021

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

116

Franklin

Adjustable

U.S.

Government

Securities

Fund

Franklin

Floating

Rate

Daily

Access

Fund

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

a

Investment

income:

Dividends:

Unaffiliated

issuers

.....................

$—

$583,819

$185,778

$2,005,501

Controlled

affiliates

(Note

3

f

and

12

)

........

—

—

—

25,328,835

Non-controlled

affiliates

(Note

3

f

and

12

)

.....

2,283

1,590,430

3,123,410

1,233,114

Interest:

(net

of

foreign

taxes

of

$—,

$—,

$1,253

and

$—

respectively)

Unaffiliated

issuers:

Paydown

gain

(loss)

..................

(7,199,063)

4,054,079

(11,051,486)

(13,893,043)

Paid

in

cash

b

........................

13,086,861

52,578,372

55,666,226

119,262,627

Non-controlled

affiliates

(Note

3

f

and

12

)

.....

—

1,087,418

—

—

Income

from

securities

loaned:

Unaffiliated

entities

(net

of

fees

and

rebates)

..

—

1,856

6,260

43,071

Non-controlled

affiliates

(Note

3

f

)

..........

—

48

8

284

Total

investment

income

................

5,890,081

59,896,022

47,930,196

133,980,389

Expenses:

Management

fees

(Note

3

a

)

................

3,492,867

7,191,004

13,463,092

24,176,079

Distribution

fees:

(Note

3c

)

    Class

A

.............................

1,107,759

1,823,237

4,674,666

10,367,102

    Class

A1

............................

72,876

—

—

—

    Class

C

.............................

349,941

876,000

736,382

1,198,219

    Class

R

.............................

—

—

825

77,468

Transfer

agent

fees:

(Note

3e

)

    Class

A

.............................

620,359

932,029

2,429,516

5,906,606

    Class

A1

............................

102,205

—

—

—

    Class

C

.............................

75,918

172,122

147,187

262,720

    Class

R

.............................

—

—

216

22,070

    Class

R6

............................

20,185

15,554

136,478

164,301

    Advisor

Class

.........................

128,703

457,847

316,400

362,443

Custodian

fees

(Note

4

)

...................

5,084

7,477

25,513

57,459

Reports

to

shareholders

fees

...............

96,904

231,009

276,958

497,558

Registration

and

filing

fees

.................

124,201

115,641

209,183

234,052

Professional

fees

........................

71,019

147,477

159,850

165,373

Trustees'

fees

and

expenses

...............

7,607

12,627

25,356

47,693

Marketplace

lending

fees

(Note

1k)

..........

—

—

793,056

367,895

Other

.................................

247,506

40,315

253,091

259,294

Total

expenses

......................

6,523,134

12,022,339

23,647,769

44,166,332

Expense

reductions

(Note

4

)

............

—

(3,825)

(15,205)

—

Expenses

waived/paid

by

affiliates

(Note

3

f

and

3

g

)

...........................

(387,554)

(279,035)

(7,364,220)

(3,028,364)

Net

expenses

......................

6,135,580

11,739,479

16,268,344

41,137,968

Net

investment

income

(loss)

.........

(245,499)

48,156,543

31,661,852

92,842,421

Franklin

Investors

Securities

Trust

Financial

Statements

Statements

of

Operations

(continued)

for

the

year

ended

October

31,

2021

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

117

Franklin

Adjustable

U.S.

Government

Securities

Fund

Franklin

Floating

Rate

Daily

Access

Fund

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

a

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

Unaffiliated

issuers

...................

(439,373)

(50,922,282)

21,545,204

58,548,121

Controlled

affiliates

(Note

3

f

)

............

—

—

—

536,597

Non-controlled

affiliates

(Note

3

f

and

12

)

...

—

(68,159,569)

—

—

Written

options

........................

—

—

—

1,997,032

Foreign

currency

transactions

.............

—

—

670,129

572,593

Forward

exchange

contracts

..............

—

—

(3,331,598)

(11,676,508)

Futures

contracts

......................

—

—

7,474,788

(20,226,167)

TBA

sale

commitments

..................

—

—

10,076

582,179

Swap

contracts

........................

—

—

2,441,867

8,570,337

Capital

gain

distributions

from

management

investment

companies:

Controlled

affiliates

(Note

3

f

)

............

—

—

—

4,235,752

Non-controlled

affiliates

(Note

3

f

)

.........

—

289,347

—

—

Net

realized

gain

(loss)

...............

(439,373)

(118,792,504)

28,810,466

43,139,936

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

...................

1,737,053

107,200,204

10,158,118

(48,083,067)

Controlled

affiliates

(Note

3

f

)

............

—

—

—

1,560,193

Non-controlled

affiliates

(Note

3

f

and

12

)

...

—

99,785,244

(129,979)

880,292

Translation

of

other

assets

and

liabilities

denominated

in

foreign

currencies

........

—

—

(1,775,055)

(4,322,514)

Written

options

........................

—

—

—

(421,094)

Forward

exchange

contracts

..............

—

—

112,652

196,370

Futures

contracts

......................

—

—

(1,109,282)

7,118,972

Swap

contracts

........................

—

—

10,394,831

19,380,468

Change

in

deferred

tax

benefit

(Note

1h)

.....

—

—

—

143,623

Change

in

deferred

taxes

on

unrealized

appreciation

..........................

—

—

10,693

25,553

Net

change

in

unrealized

appreciation

(depreciation)

......................

1,737,053

206,985,448

17,661,978

(23,521,204)

Net

realized

and

unrealized

gain

(loss)

.........

1,297,680

88,192,944

46,472,444

19,618,732

Net

increase

(decrease)

in

net

assets

resulting

from

operations

...............................

$1,052,181

$136,349,487

$78,134,296

$112,461,153

a

Includes

the

consolidated

operations

of

FT

Holdings

Corporation

I

from

November

1,

2020

through

April

27,

2021.

See

Note

1(h).

b

Includes

amortization

of

premium

and

accretion

of

discount.

Franklin

Investors

Securities

Trust

Financial

Statements

Statements

of

Changes

in

Net

Assets

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

118

Franklin

Adjustable

U.S.

Government

Securities

Fund

Franklin

Floating

Rate

Daily

Access

Fund

Year

Ended

October

31,

2021

Year

Ended

October

31,

2020

Year

Ended

October

31,

2021

Year

Ended

October

31,

2020

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

(loss)

.......

$(245,499)

$11,582,257

$48,156,543

$71,688,245

Net

realized

gain

(loss)

............

(439,373)

(1,630,151)

(118,792,504)

(117,211,319)

Net

change

in

unrealized

appreciation

(depreciation)

.................

1,737,053

(754,301)

206,985,448

(68,532,307)

Net

increase

(decrease)

in

net

assets

resulting

from

operations

.

1,052,181

9,197,805

136,349,487

(114,055,381)

Distributions

to

shareholders:

Class

A

........................

(4,289,833)

(8,897,340)

(28,553,470)

(39,489,904)

Class

A1

.......................

(818,318)

(1,864,934)

—

—

Class

C

........................

(321,292)

(1,350,734)

(4,867,765)

(9,486,664)

Class

R6

.......................

(484,011)

(788,720)

(651,613)

(677,256)

Advisor

Class

...................

(1,118,305)

(2,630,546)

(14,965,563)

(27,632,187)

Total

distributions

to

shareholders

.....

(7,031,759)

(15,532,274)

(49,038,411)

(77,286,011)

Capital

share

transactions:

(Note

2

)

Class

A

........................

(24,329,986)

70,494,497

35,345,225

(233,315,055)

Class

A1

.......................

(10,360,446)

(7,859,324)

—

—

Class

C

........................

(34,489,349)

(12,754,011)

(69,550,991)

(109,798,686)

Class

R6

.......................

8,714,228

1,855,199

14,411,403

(7,604,281)

Advisor

Class

...................

(11,444,536)

(3,762,005)

32,249,117

(416,487,193)

Total

capital

share

transactions

.......

(71,910,089)

47,974,356

12,454,754

(767,205,215)

Net

increase

(decrease)

in

net

assets

.....................

(77,889,667)

41,639,887

99,765,830

(958,546,607)

Net

assets:

Beginning

of

year

..................

742,123,843

700,483,956

1,263,780,106

2,222,326,713

End

of

year

......................

$664,234,176

$742,123,843

$1,363,545,936

$1,263,780,106

Franklin

Investors

Securities

Trust

Financial

Statements

Statements

of

Changes

in

Net

Assets

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

119

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

a

Year

Ended

October

31,

2021

Year

Ended

October

31,

2020

Year

Ended

October

31,

2021

Year

Ended

October

31,

2020

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

............

$31,661,852

$81,129,500

$92,842,421

$133,781,601

Net

realized

gain

(loss)

............

28,810,466

(38,737,091)

43,139,936

49,502,352

Net

change

in

unrealized

appreciation

(depreciation)

.................

17,661,978

(8,389,225)

(23,521,204)

22,324,451

Net

increase

(decrease)

in

net

assets

resulting

from

operations

.

78,134,296

34,003,184

112,461,153

205,608,404

Distributions

to

shareholders:

Class

A

........................

(51,089,287)

(48,969,878)

(112,132,917)

(112,806,584)

Class

C

........................

(2,716,063)

(3,380,036)

(4,403,717)

(6,432,576)

Class

R

........................

(3,794)

(2,772)

(396,184)

(545,953)

Class

R6

.......................

(15,510,781)

(32,873,199)

(17,621,706)

(17,343,719)

Advisor

Class

...................

(7,211,747)

(7,090,816)

(7,609,630)

(22,371,427)

Total

distributions

to

shareholders

.....

(76,531,672)

(92,316,701)

(142,164,154)

(159,500,259)

Capital

share

transactions:

(Note

2

)

Class

A

........................

136,415,541

168,718,534

(131,052,395)

569,003,350

Class

C

........................

(18,057,613)

(15,065,931)

(66,745,709)

(30,617,403)

Class

R

........................

103,631

74,287

(4,539,535)

(4,067,761)

Class

R6

.......................

(11,218,442)

(418,721,668)

58,486,085

59,823,951

Advisor

Class

...................

22,175,928

(21,237,380)

(60,336,439)

(568,354,934)

Total

capital

share

transactions

.......

129,419,045

(286,232,158)

(204,187,993)

25,787,203

Net

increase

(decrease)

in

net

assets

.....................

131,021,669

(344,545,675)

(233,890,994)

71,895,348

Net

assets:

Beginning

of

year

..................

2,679,490,223

3,024,035,898

5,097,618,504

5,025,723,156

End

of

year

......................

$2,810,511,892

$2,679,490,223

$4,863,727,510

$5,097,618,504

a

Includes

the

consolidated

operations

of

FT

Holdings

Corporation

I

from

November

1,

2020

through

April

27,

2021.

See

Note

1(h).

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

120

franklintempleton.com

Annual

Report

1.

Organization

and

Significant

Accounting

Policies

Franklin

Investors

Securities

Trust (Trust)

is

registered

under

the

Investment

Company

Act

of

1940

(1940

Act)

as

an

open-end

management

investment

company,

consisting

of

seven

separate

funds,

four

of

which

are

included

in

this

report

(Funds)

and

applies

the

specialized

accounting

and

reporting

guidance

in

U.S.

Generally

Accepted

Accounting

Principles

(U.S.

GAAP).

The

classes

of

shares

offered

within

each

of

the

Funds

are

indicated

below.

Class

C

shares

automatically

convert

to

Class

A

shares

after

they

have

been

held

for

10

years.

Effective

August

2,

2021,

Class

C

shares

automatically

convert

to

Class

A

shares

on

a

monthly

basis,

after

they

have

been

held

for

8

years.

Prior

to

August

2,

2021,

Class

C

shares

converted

to

Class

A

shares

after

a

10-year

holding

period.

Each

class

of

shares

may

differ

by

its initial

sales

load,

contingent

deferred

sales

charges,

voting

rights

on

matters

affecting

a

single

class,

its

exchange

privilege

and

fees

due

to

differing

arrangements

for

distribution

and

transfer

agent

fees.

Class

A,

Class

A1,

Class

C,

Class

R6

&

Advisor

Class

Franklin

Adjustable

U.S.

Government

Securities

Fund

Class

A,

Class

C,

Class

R6

&

Advisor

Class

Franklin

Floating

Rate

Daily

Access

Fund

Class

A,

Class

C,

Class

R,

Class

R6

&

Advisor

Class

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

The

following

summarizes

the Funds'

significant

accounting

policies

. 

a.

Financial

Instrument

Valuation 

The Funds'

investments

in

financial

instruments

are

carried

at

fair

value

daily.

Fair

value

is

the

price

that

would

be

received

to

sell

an

asset

or

paid

to

transfer

a

liability

in

an

orderly

transaction

between

market

participants

on

the

measurement

date.

The Funds calculate the

net

asset

value

(NAV)

per

share

each

business

day

as

of

4

p.m.

Eastern

time

or

the

regularly

scheduled

close

of

the

New

York

Stock

Exchange

(NYSE),

whichever

is

earlier.

Under

compliance

policies

and

procedures

approved

by

the

Trust’s

Board

of

Trustees

(the

Board),

the

Funds' administrator

has

responsibility

for

oversight

of

valuation,

including

leading

the

cross-functional

Valuation

Committee

(VC).

The

Funds

may

utilize

independent

pricing

services,

quotations

from

securities

and

financial

instrument

dealers,

and

other

market

sources

to

determine

fair

value. 

Equity

securities,

exchange

traded

funds

and

derivative

financial

instruments

listed

on

an

exchange

or

on

the

NASDAQ

National

Market

System

are

valued

at

the

last

quoted

sale

price

or

the

official

closing

price of

the

day,

respectively.

Foreign

equity

securities

are

valued

as

of

the

close

of

trading

on

the

foreign

stock

exchange

on

which

the

security

is

primarily

traded,

or

as

of

4

p.m.

Eastern

time.

The

value

is

then

converted

into

its

U.S.

dollar

equivalent

at

the

foreign

exchange

rate

in

effect

at

4

p.m.

Eastern

time

on

the

day

that

the

value

of

the

security

is

determined.

Over-the-

counter

(OTC)

securities

are

valued

within

the

range

of

the

most

recent

quoted

bid

and

ask

prices.

Securities

that

trade

in

multiple

markets

or

on

multiple

exchanges

are

valued

according

to

the

broadest

and

most

representative

market.

Certain

equity

securities

are

valued

based

upon

fundamental

characteristics

or

relationships

to

similar

securities. 

Debt

securities

generally

trade

in

the

OTC

market

rather

than

on

a

securities

exchange.

The

Funds'

pricing

services

use

multiple

valuation

techniques

to

determine

fair

value.

In

instances

where

sufficient

market

activity

exists,

the

pricing

services

may

utilize

a

market-based

approach

through

which

quotes

from

market

makers

are

used

to

determine

fair

value.

In

instances

where

sufficient

market

activity

may

not

exist

or

is

limited,

the

pricing

services

also

utilize

proprietary

valuation

models

which

may

consider

market

characteristics

such

as

benchmark

yield

curves,

credit

spreads,

estimated

default

rates,

anticipated

market

interest

rate

volatility,

coupon

rates,

anticipated

timing

of

principal

repayments,

underlying

collateral,

and

other

unique

security

features

in

order

to

estimate

the

relevant

cash

flows,

which

are

then

discounted

to

calculate

the

fair

value.

Securities

denominated

in

a

foreign

currency

are

converted

into

their

U.S.

dollar

equivalent

at

the

foreign

exchange

rate

in

effect

at

4

p.m.

Eastern

time

on

the

date

that

the

values

of

the

foreign

debt

securities

are

determined.

Investments

in open-end mutual

funds

are

valued

at

the

closing

NAV.

Investments

in

repurchase

agreements

are

valued

at

cost,

which

approximates

fair

value.

Certain

derivative

financial

instruments

are

centrally

cleared

or

trade

in

the

OTC

market.

The

Funds' pricing

services

use

various

techniques

including

industry

standard

option

pricing

models

and

proprietary

discounted

cash

flow

models

to

determine

the

fair

value

of

those

instruments.

The

Funds' net

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

121

franklintempleton.com

Annual

Report

benefit

or

obligation

under

the

derivative

contract,

as

measured

by

the

fair

value

of

the

contract,

is

included

in

net

assets.

The

Funds

have

procedures

to

determine

the

fair

value

of

financial

instruments

for

which

market

prices

are

not

reliable

or

readily

available.

Under

these

procedures,

the

Funds

primarily

employ

a

market-based

approach

which

may

use

related

or

comparable

assets

or

liabilities,

recent

transactions,

market

multiples,

book

values,

and

other

relevant

information

for

the

investment

to

determine

the

fair

value

of

the

investment.

An

income-based

valuation

approach

may

also

be

used

in

which

the

anticipated

future

cash

flows

of

the

investment

are

discounted

to

calculate

fair

value.

Discounts

may

also

be

applied

due

to

the

nature

or

duration

of

any

restrictions

on

the

disposition

of

the

investments.

Due

to

the

inherent

uncertainty

of

valuations

of

such

investments,

the

fair

values

may

differ

significantly

from

the

values

that

would

have

been

used

had

an

active

market

existed.

Trading

in

securities

on

foreign

securities

stock

exchanges

and

OTC

markets

may

be

completed

before

4

p.m.

Eastern

time.

In

addition,

trading

in

certain

foreign

markets

may

not

take

place

on

every

Funds'

business

day.

Events

can occur

between

the

time

at

which

trading

in

a

foreign

security

is

completed

and

4

p.m.

Eastern

time

that

might

call

into

question

the

reliability

of

the

value

of

a

portfolio

security

held

by

the

Fund.

As

a

result,

differences

may

arise

between

the

value

of

the

Funds'

portfolio

securities

as

determined

at

the

foreign

market

close

and

the

latest

indications

of

value

at

4

p.m.

Eastern

time.

In

order

to

minimize

the

potential

for

these

differences,

an

independent

pricing

service

may

be

used

to

adjust

the

value

of

the

Funds'

portfolio

securities

to

the

latest

indications

of

fair

value

at

4

p.m.

Eastern

time.

At

October

31,

2021,

certain

securities

may

have

been

fair

valued

using

these

procedures,

in

which

case

the

securities

were

categorized

as

Level

2

inputs

within

the

fair

value

hierarchy

(referred

to

as

“market

level

fair

value”).

See

the

Fair

Value

Measurements

note

for

more

information.

When

the

last

day

of

the

reporting

period

is

a

non-business

day,

certain

foreign

markets

may

be

open

on

those

days

that

the

Funds'

NAV

is

not

calculated,

which

could

result

in

differences

between

the

value

of

the

Funds'

portfolio

securities

on

the

last

business

day

and

the

last

calendar

day

of

the

reporting

period.

Any

security

valuation

changes

due

to

an

open

foreign

market

are

adjusted

and

reflected

by

the

Funds

for

financial

reporting

purposes.

b.

Foreign

Currency

Translation 

Portfolio

securities

and

other

assets

and

liabilities

denominated

in

foreign

currencies

are

translated

into

U.S.

dollars

based

on

the

exchange

rate

of

such

currencies

against

U.S.

dollars

on

the

date

of

valuation.

The

Funds

may

enter

into

foreign

currency

exchange

contracts

to

facilitate

transactions

denominated

in

a

foreign

currency.

Purchases

and

sales

of

securities,

income

and

expense

items

denominated

in

foreign

currencies

are

translated

into

U.S.

dollars

at

the

exchange

rate

in

effect

on

the

transaction

date.

Portfolio

securities

and

assets

and

liabilities

denominated

in

foreign

currencies

contain

risks

that

those

currencies

will

decline

in

value

relative

to

the

U.S.

dollar.

Occasionally,

events

may

impact

the

availability

or

reliability

of

foreign

exchange

rates

used

to

convert

the

U.S.

dollar

equivalent

value.

If

such

an

event

occurs,

the

foreign

exchange

rate

will

be

valued

at

fair

value

using

procedures

established

and

approved

by

the

Board.

The

Funds

do

not

separately

report

the

effect

of

changes

in

foreign

exchange

rates

from

changes

in

market

prices

on

securities

held.

Such

changes

are

included

in

net

realized

and

unrealized

gain

or

loss

from

investments

in

the

Statements

of

Operations.

Realized

foreign

exchange

gains

or

losses

arise

from

sales

of

foreign

currencies,

currency

gains

or

losses

realized

between

the

trade

and

settlement

dates

on

securities

transactions

and

the

difference

between

the

recorded

amounts

of

dividends,

interest,

and

foreign

withholding

taxes

and

the

U.S.

dollar

equivalent

of

the

amounts

actually

received

or

paid.

Net

unrealized

foreign

exchange

gains

and

losses

arise

from

changes

in

foreign

exchange

rates

on

foreign

denominated

assets

and

liabilities

other

than

investments

in

securities

held

at

the

end

of

the

reporting

period.

c.

Joint

Repurchase

Agreement

Certain

or

all

Funds

enter

into

a

joint

repurchase

agreement

whereby

their

uninvested

cash

balance

is

deposited

into

a

joint

cash

account

with

other

funds

managed

by

the

investment

manager

or

an

affiliate

of

the

investment

manager

and

is

used

to

invest

in

one

or

more

repurchase

1.

Organization

and

Significant

Accounting

Policies

(continued)

a.

Financial

Instrument

Valuation 

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

122

franklintempleton.com

Annual

Report

agreements.

The

value

and

face

amount

of

the

joint

repurchase

agreement

are

allocated

to

the

funds

based

on

their

pro-rata

interest.

A

repurchase

agreement

is

accounted

for

as

a

loan

by

the

Fund

to

the

seller,

collateralized

by

securities

which

are

delivered

to

the

Funds'

custodian.

The

fair

value,

including

accrued

interest,

of

the

initial

collateralization

is

required

to

be

at

least

102%

of

the

dollar

amount

invested

by

the

funds,

with

the

value

of

the

underlying

securities

marked

to

market

daily

to

maintain

coverage

of

at

least

100%.

Repurchase

agreements

are

subject

to

the

terms

of

Master

Repurchase

Agreements

(MRAs)

with

approved

counterparties

(sellers).

The

MRAs

contain

various

provisions,

including

but

not

limited

to

events

of

default

and

maintenance

of

collateral

for

repurchase

agreements.

In

the

event

of

default

by

either

the

seller

or

the

Funds,

certain

MRAs

may

permit

the

non-defaulting

party

to

net

and

close-out

all

transactions,

if

any,

traded

under

such

agreements.

The

Funds

may

sell

securities

it

holds

as

collateral

and

apply

the

proceeds

towards

the

repurchase

price

and

any

other

amounts

owed

by

the

seller

to

the

Funds

in

the

event

of

default

by

the

seller.

This

could

involve

costs

or

delays

in

addition

to

a

loss

on

the

securities

if

their

value

falls

below

the

repurchase

price

owed

by

the

seller.

The

joint

repurchase

agreement

held

by

the

Funds

at

year

end,

as

indicated

in

the

Statements

of

Investments,

had

been

entered

into

on

October

29,

2021.

d.

Securities

Purchased

on

a

When-Issued

or

Delayed

Delivery

and

TBA

Basis

Certain

or

all

Funds

purchase

securities

on

a

when-issued

or

delayed

delivery

and

to-be-announced

(TBA)

basis,

with

payment

and

delivery

scheduled

for

a

future

date.

These

transactions

are

subject

to

market

fluctuations

and

are

subject

to

the

risk

that

the

value

at

delivery

may

be

more

or

less

than

the

trade

date

purchase

price.

Although

the

Funds

will

generally

purchase

these

securities

with

the

intention

of

holding

the

securities,

they

may

sell

the

securities

before

the

settlement

date.

e.

Derivative

Financial

Instruments

Certain

or

all

Funds

invested

in

derivative

financial

instruments

in

order

to

manage

risk

or

gain

exposure

to

various

other

investments

or

markets.

Derivatives

are

financial

contracts

based

on

an

underlying

or

notional

amount,

require

no

initial

investment

or

an

initial

net

investment

that

is

smaller

than

would

normally

be

required

to

have

a

similar

response

to

changes

in

market

factors,

and

require

or

permit

net

settlement.

Derivatives

contain

various

risks

including

the

potential

inability

of

the

counterparty

to

fulfill

their

obligations

under

the

terms

of

the

contract,

the

potential

for

an

illiquid

secondary

market,

and/or

the

potential

for

market

movements

which

expose

the

Fund

to

gains

or

losses

in

excess

of

the

amounts

shown

in

the

Statements

of

Assets

and

Liabilities.

Realized

gain

and

loss

and

unrealized

appreciation

and

depreciation

on

these

contracts

for

the

period

are

included

in

the

Statements

of

Operations.

Derivative

counterparty

credit

risk

is

managed

through

a

formal

evaluation

of

the

creditworthiness

of

all

potential

counterparties.

Certain

or

all

Funds

attempt

to

reduce

their exposure

to

counterparty

credit

risk

on

OTC

derivatives,

whenever

possible,

by

entering

into

International

Swaps

and

Derivatives

Association

(ISDA)

master

agreements

with

certain

counterparties.

These

agreements

contain

various

provisions,

including

but

not

limited

to

collateral

requirements,

events

of

default,

or

early

termination.

Termination

events

applicable

to

the

counterparty

include

certain

deteriorations

in

the

credit

quality

of

the

counterparty.

Termination

events

applicable

to

the

Funds

include

failure

of

the

Funds

to

maintain

certain

net

asset

levels

and/

or

limit

the

decline

in

net

assets

over

various

periods

of

time.

In

the

event

of

default

or

early

termination,

the

ISDA

master

agreement

gives

the

non-defaulting

party

the

right

to

net

and

close-out

all

transactions

traded,

whether

or

not

arising

under

the

ISDA

agreement,

to

one

net

amount

payable

by

one

counterparty

to

the

other.

However,

absent

an

event

of

default

or

early

termination,

OTC

derivative

assets

and

liabilities

are

presented

gross

and

not

offset

in

the

Statements

of

Assets

and

Liabilities.

Early

termination

by

the

counterparty

may

result

in

an

immediate

payment

by

the Funds

of

any

net

liability

owed

to

that

counterparty

under

the

ISDA

agreement. 

Collateral

requirements

differ

by

type

of

derivative.

Collateral

or

initial

margin

requirements

are

set

by

the

broker

or

exchange

clearing

house

for

exchange

traded

and

centrally

cleared

derivatives.

Initial

margin

deposited

is

held

at

the

exchange

and

can

be

in

the

form

of

cash

and/or

securities.

For

OTC

derivatives

traded

under

an

ISDA

master

agreement,

posting

of

collateral

is

required

by

either

the

Fund

or

the

applicable

counterparty

if

the

total

net

exposure

of

all

OTC

derivatives

with

the

applicable

counterparty

exceeds

the

minimum

transfer

amount,

which

typically

1.

Organization

and

Significant

Accounting

Policies

(continued)

c.

Joint

Repurchase

Agreement

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

123

franklintempleton.com

Annual

Report

ranges

from

$100,000

to

$250,000,

and

can

vary

depending

on

the

counterparty

and

the

type

of

agreement.

Generally,

collateral

is

determined

at

the

close

of

Fund

business

each

day

and

any

additional

collateral

required

due

to

changes

in

derivative

values

may

be

delivered

by

the

Fund

or

the

counterparty

the

next

business

day,

or

within

a

few

business

days.

Collateral

pledged

and/or

received

by

the

Fund

for

OTC

derivatives,

if

any,

is

held

in

segregated

accounts

with

the

Fund's

custodian/counterparty

broker

and

can

be

in

the

form

of

cash

and/or

securities.

Unrestricted

cash

may

be

invested

according

to

the

Funds'

investment

objectives.

To

the

extent

that

the

amounts

due

to

the

Fund

from

its

counterparties

are

not

subject

to

collateralization

or

are

not

fully

collateralized,

the

Fund

bears

the

risk

of

loss

from

counterparty

non-performance.

Certain

or

all

Funds

entered

into

exchange

traded

futures

contracts

primarily

to

manage

and/or

gain

exposure

to

interest

rate

risk.

A

futures

contract

is

an

agreement

between

the

Fund

and

a

counterparty

to

buy

or

sell

an

asset

at

a

specified

price

on

a

future

date.

Required

initial

margins

are

pledged

by

the

Fund,

and

the

daily

change

in

fair

value

is

accounted

for

as

a

variation

margin

payable

or

receivable

in

the

Statements

of

Assets

and

Liabilities.

Certain

or

all

Funds

entered

into

OTC

forward

exchange

contracts

primarily

to

manage

and/or

gain

exposure

to

certain

foreign

currencies.

A

forward

exchange

contract

is

an

agreement

between

the

Fund

and

a

counterparty

to

buy

or

sell

a

foreign

currency at

a

specific

exchange

rate

on

a

future

date. 

Certain

or

all

Funds

entered

into

credit

default

swap

contracts

primarily

to

manage

and/or

gain

exposure

to

credit

risk.

A

credit

default

swap

is

an

agreement

between

the

Fund

and

a

counterparty

whereby

the

buyer

of

the

contract

receives

credit

protection

and

the

seller

of

the

contract

guarantees

the

credit

worthiness

of

a

referenced

debt

obligation.

These

agreements

may

be

privately

negotiated

in

the

over-the-counter

market

(OTC

credit

default

swaps)

or

may

be

executed

in

a

multilateral

trade

facility

platform,

such

as

a

registered

exchange

(centrally

cleared

credit

default

swaps).

The

underlying

referenced

debt

obligation

may

be

a

single

issuer

of

corporate

or

sovereign

debt,

a

credit

index,

a

basket

of

issuers

or

indices,

or

a

tranche

of

a

credit

index

or

basket

of

issuers

or

indices.

In

the

event

of

a

default

of

the

underlying

referenced

debt

obligation,

the

buyer

is

entitled

to

receive

the

notional

amount

of

the

credit

default

swap

contract

from

the

seller

in

exchange

for

the

referenced

debt

obligation,

a

net

settlement

amount

equal

to

the

notional

amount

of

the

credit

default

swap

less

the

recovery

value

of

the

referenced

debt

obligation,

or

other

agreed

upon

amount.

For

centrally

cleared

credit

default

swaps,

required

initial

margins

are

pledged

by

the

Fund,

and

the

daily

change

in

fair

value

is

accounted

for

as

a

variation

margin

payable

or

receivable

in

the

Statements

of

Assets

and

Liabilities.

Over

the

term

of

the

contract,

the

buyer

pays

the

seller

a

periodic

stream

of

payments,

provided

that

no

event

of

default

has

occurred.

Such

periodic

payments

are

accrued

daily

as

an

unrealized

appreciation

or

depreciation

until

the

payments

are

made,

at

which

time

they

are

realized.

Upfront

payments

and

receipts

are

reflected

in

the Statements

of

Assets

and

Liabilities

and

represent

compensating

factors

between

stated

terms

of

the

credit

default

swap

agreement

and

prevailing

market

conditions

(credit

spreads

and

other

relevant

factors).

These

upfront

payments

and

receipts

are

amortized

over

the

term

of

the

contract

as

a

realized

gain

or

loss

in

the

Statements

of

Operations.

Certain

or

all

Funds entered

into

OTC

cross

currency

swap

contracts

primarily

to

manage

and/or

gain

exposure

to

certain

foreign

currencies.

A

cross

currency

swap

is

an

agreement

between

the

Fund

and

a

counterparty

to

exchange

cash

flows

(determined

using

either

a

fixed

or

floating

rate)

based

on

the

notional

amounts

of

two

different

currencies.

The

notional

amounts

are

typically

determined

based

on

the

spot

exchange

rates

at

the

opening

of

the

contract.

Cross

currency

swaps

may

require

the

exchange

of

notional

amounts

at

the

opening

and/or

closing

of

the

contract.

Over

the

term

of

the

contract,

contractually

required

payments

to

be

paid

and

to

be

received

are

accrued

daily

and

recorded

as

unrealized

depreciation

and

appreciation

until

the

payments

are

made,

at

which

time

they

are

realized.

Upfront

payments

and

receipts

are

reflected

in

the

Statements

of

Assets

and

Liabilities

and

represent

compensating

factors

between

stated

terms

of

the

cross

currency

swap

contract

and

prevailing

market

conditions

(interest

rate

spreads

and

other

relevant

factors).

These

upfront

payments

and

receipts

are

amortized

over

the

term

of

the

contract

as

a

realized

gain

or

loss

in

the

Statements

of

Operations.

1.

Organization

and

Significant

Accounting

Policies

(continued)

e.

Derivative

Financial

Instruments

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

124

franklintempleton.com

Annual

Report

Certain

or

all

Funds

entered

into

inflation

index

swap

contracts

primarily

to

manage

and/or

gain

exposure

to

inflation

risk.

An

inflation

index

swap

is

an

agreement

between

the

Fund

and

a

counterparty

to

exchange

cash

flows

whereby

one

party

makes

payments

based

on

the

percentage

change

in

an

index

that

serves

as

a

measure

of

inflation

and

the

other

party

makes

a

regular

payment

based

on

a

compounded

fixed

rate,

applied

to

a

notional

amount.

These

agreements

may

be

privately

negotiated

in

the

over-the-counter

market

(OTC

inflation

index

swap)

or

may

be

executed

on

a

registered

exchange

(centrally

cleared

inflation

index

swap).

For

centrally

cleared

inflation

index

swaps,

required

initial

margins

are

pledged

by

the

Fund,

and

the

daily

change

in

fair

value

is

accounted

for

as

a

variation

margin

payable

or

receivable.

Over

the

term

of

the

contract,

contractually

required

payments

to

be

paid

and

to

be

received

are

accrued

daily

and

recorded

as

unrealized

depreciation

and

appreciation

until

the

payments

are

made,

at

which

time

they

are

realized.

Typically,

an

inflation

index

swap

has

payment

obligations

netted

and

exchanged

upon

maturity.

Certain

or

all

Funds

entered

into

OTC

total

return

swap

contracts

primarily

to

manage

and/or

gain

exposure

to

credit

and

other

market

risk

of

an

underlying

instrument

such

as

a

stock,

bond,

index

or

basket

of

securities

or

indices.

A

total

return

swap

is

an

agreement

between

the

Fund

and

a

counterparty

to

exchange

a

return

linked

to

an

underlying

instrument

for

a

floating

or

fixed

rate

payment,

both

based

upon

a

notional

amount.

Over

the

term

of

the

contract,

contractually

required

payments

to

be

paid

or

received

are

accrued

daily

and

recorded

as

unrealized

appreciation

or

depreciation

until

the

payments

are

made,

at

which

time

they

are

recognized

as

realized

gain

or

loss.

Certain

or

all

Funds

purchased

or

wrote

exchange

traded

and/or

OTC

option

contracts

primarily

to

manage

and/or

gain

exposure

to

interest

rate

risk.

An

option

is

a

contract

entitling

the

holder

to

purchase

or

sell

a

specific

amount

of

shares

or

units

of

an

asset

or

notional

amount

of

a

swap

(swaption),

at

a

specified

price.

When

an

option

is

purchased

or

written,

an

amount

equal

to

the

premium

paid

or

received

is

recorded

as

an

asset

or

liability,

respectively.

Upon

exercise

of

an

option,

the

acquisition

cost

or

sales

proceeds

of

the

underlying

investment

is

adjusted

by

any

premium

received

or

paid.

Upon

expiration

of

an

option,

any

premium

received

or

paid

is

recorded

as

a

realized

gain

or

loss.

Upon

closing

an

option

other

than

through

expiration

or

exercise,

the

difference

between

the

premium

received

or

paid

and

the

cost

to

close

the

position

is

recorded

as

a

realized

gain

or

loss.

Certain

or

all

Funds

invest

in

value

recovery

instruments

(VRI)

primarily

to

gain

exposure

to

economic

growth.

Periodic

payments

from

VRI

are

dependent

on

established

benchmarks

for

underlying

variables.

VRI

has

a

notional

amount,

which

is

used

to

calculate

amounts

of

payments

to

holders.

Payments

are

recorded

upon

receipt

as

realized

gains

in

the

Statements

of

Operations.

The

risks

of

investing

in

VRI

include

growth

risk,

liquidity,

and

the

potential

loss

of

investment.

See

Note

11

regarding

other

derivative

information.

f.

Restricted

Cash

At

October

31,

2021,

certain

or

all

Funds

held

restricted

cash

in

connection

with

investments

in

certain

derivative

securities.

Restricted

cash

is

held

in

a

segregated

account

with

the

Fund’s

custodian

and

is

reflected

in

the

Statements

of

Assets

and

Liabilities.

g.

Securities

Lending

Certain

or

all

Funds

participate

in

an

agency

based

securities

lending

program

to

earn

additional

income.

The

Fund

receives

collateral

in

the

form

of

cash

and/or

U.S.

Government

and

Agency

securities

against

the

loaned

securities

in

an

amount

equal

to

at

least

102%

of

the

fair

value

of

the

loaned

securities.

Collateral

is

maintained

over

the

life

of

the

loan

in

an

amount

not

less

than

100%

of

the

fair

value

of

loaned

securities,

as

determined

at

the

close

of

Fund

business

each

day;

any

additional

collateral

required

due

to

changes

in

security

values

is

delivered

to

the

Fund

on

the

next

business

day.

Any

cash

collateral

received

is

deposited

into

a

joint

cash

account

with

other

funds

and

is

used

to

invest

in

a

money

market

fund

managed

by

Franklin

Advisers,

Inc.,

an

affiliate

of

the

Funds,

and/or

a

joint

repurchase

agreement

as

included

in

the

Statements

of

Assets

and

Liabilities.

Additionally,

at

October

31,

2021

the

Franklin

Floating

Rate

Daily

Access

Fund

held

$279,945

in

U.S.

Government

and

Agency

securities

as

collateral.

These

securities

are

held

as

collateral

in

segregated

accounts

with

the

Fund’s

custodian.

The

Fund

cannot

repledge

or

resell

these

securities

held

as

collateral.

As

such,

the

noncash

collateral

is

excluded

from

the

Statements

of

Assets

1.

Organization

and

Significant

Accounting

Policies

(continued)

e.

Derivative

Financial

Instruments

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

125

franklintempleton.com

Annual

Report

and

Liabilities.

The

Fund

may

receive

income

from

the

investment

of

cash

collateral,

in

addition

to

lending

fees

and

rebates

paid

by

the

borrower.

Income

from

securities

loaned,

net

of

fees

paid

to

the

securities

lending

agent

and/or

third-

party

vendor,

is

reported

separately

in

the

Statements

of

Operations.

The

Fund

bears

the

market

risk

with

respect

to any

cash collateral

investment,

securities

loaned,

and

the

risk

that

the

agent

may

default

on

its

obligations

to

the

Fund.

If

the

borrower

defaults

on

its

obligation

to

return

the

securities

loaned,

the

Fund

has

the

right

to

repurchase

the

securities

in

the

open

market

using

the

collateral

received.

The

securities

lending

agent

has

agreed

to

indemnify

the

Fund

in

the

event

of

default

by

a

third

party

borrower.

h.

Investments

in

FT

Holdings

Corporation

I

(FT

Subsidiary)

Prior

to

April

27,

2021,

the

Franklin

Total

Return

Fund

invested

in

FT

Subsidiary.

FT

Subsidiary

was

a

Delaware

Corporation,

was

a

wholly-owned

subsidiary

of

the

Fund,

and

was

able

to

invest

in

certain

financial

instruments

consistent

with

the

investment

objective

of

the

Fund.

In

December

2020,

FT

Subsidiary’s

sole

investment,

Turtle

Bay

Resort,

liquidated

and

paid

a

final

distribution.

FT

Subsidiary,

which

is

a

tax

paying

entity,

recognized

a

realized

loss

on

its

Turtle

Bay

investment.

An

estimated

deferred

tax

asset

based

on

such

realized

loss

was

recorded.

The

estimated

benefit

was

calculated

using

the

federal

rates

applicable

at

the

time

the

tax

was

paid.

The

losses

will

be

carried-back

to

offset

prior

year

gains,

resulting

in

a

tax

refund

which

will

relieve

the

estimated

deferred

tax

asset

once

the

final

tax

filings

are

completed.

On

April

27,

2021,

the

Fund

redeemed

out

of

FT

Subsidiary.

FT

Subsidiary

ceased

operations

and

simultaneously

transferred

its

assets

and

liabilities

to

the

Fund

(including

the

deferred

tax

asset).

The

results

of

operations

of

the

FT

Subsidiary

through

April

27,

2021

have

been

consolidated

into

the

Consolidated

Statement

of

Operations,

Consolidated

Statements

of

Changes

in

Net

Assets

and

Consolidated

Financial

Highlights.

i.

Mortgage

Dollar

Rolls

Certain

or

all

Funds

enter

into

mortgage

dollar

rolls,

typically

on

a

TBA

basis.

Mortgage

dollar

rolls

are

agreements

between

the

Fund

and

a

financial

institution

where

the

Fund

sells

(or

buys)

mortgage-backed

securities

for

delivery

on

a

specified

date

and

simultaneously

contracts

to

repurchase

(or

sell)

substantially

similar

(same

type,

coupon,

and

maturity)

securities

at

a

future

date

and

at

a

predetermined

price.

Gains

or

losses

are

realized

on

the

initial

sale,

and

the

difference

between

the

repurchase

price

and

the

sale

price

is

recorded

as

an

unrealized

gain

or

loss

to

the

Fund

upon

entering

into

the

mortgage

dollar

roll.

In

addition,

the

Fund

may

invest

the

cash

proceeds

that

are

received

from

the

initial

sale.

During

the

period

between

the

sale

and

repurchase,

the

Fund

is

not

entitled

to

principal

and

interest

paid

on

the

mortgage

backed

securities.

Transactions

in

mortgage

dollar

rolls

are

accounted

for

as

purchases

and

sales

and

may

result

in

an

increase

to

the

Fund's

portfolio

turnover

rate.

The

risks

of

mortgage

dollar

roll

transactions

include

the

potential

inability

of

the

counterparty

to

fulfill

its

obligations.

j.

Senior

Floating

Rate

Interests

Certain

or

all

Funds

invest

in

senior

secured

corporate

loans

that

pay

interest

at

rates

which

are

periodically

reset

by

reference

to

a

base

lending

rate

plus

a

spread.

These

base

lending

rates

are

generally

the

prime

rate

offered

by

a

designated

U.S.

bank

or

the

London

InterBank

Offered

Rate

(LIBOR).

Senior

secured

corporate

loans

often

require

prepayment

of

principal

from

excess

cash

flows

or

at

the

discretion

of

the

borrower.

As

a

result,

actual

maturity

may

be

substantially

less

than

the

stated

maturity.

Senior

secured

corporate

loans

in

which

the

Funds

invest

are

generally

readily

marketable,

but

may

be

subject

to

certain

restrictions

on

resale.

k.

Marketplace

Lending

Certain

or

all

Funds

invest in

loans

obtained

through

marketplace

lending.

Marketplace

lending,

sometimes

referred

to

as

peer-to-peer

lending,

is

a

method

of

financing

in

which

a

platform

facilitates

the

borrowing

and

lending

of

money.

It

is

considered

an

alternative

to

more

traditional

forms

of

debt

financing.

Prospective

borrowers

are

required

to

provide

certain

financial

information

to

the

platform,

including,

but

not

limited

to,

the

intended

purpose

of

the

loan,

income,

employment

information,

credit

score,

debt-

to-income

ratio,

credit

history

(including

defaults

and

1.

Organization

and

Significant

Accounting

Policies

(continued)

g.

Securities

Lending

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

126

franklintempleton.com

Annual

Report

delinquencies)

and

home

ownership

status.

Based

on

this

and

other

information,

the

platform

assigns

its

own

credit

rating

to

the

borrower

and

sets

the

interest

rate

for

the

requested

loan.

The

platform

then

posts

the

borrowing

requests

online,

giving

investors

the

opportunity

to

purchase

the

loans

based

on

factors

such

as

the

interest

rates

and

expected

yields

of

the

loans,

the

borrower

background

data,

and

the

credit

rating

assigned

by

the

platform.

When

the

Funds

invest

in

these

loans,

they

usually

purchase

all

rights,

title

and

interest

in

the

loans

pursuant

to

a

loan

purchase

agreement

directly

from

the

platform.

The

platform

or

a

third-party

servicer

typically

continues

to

service

the

loans,

collecting

payments

and

distributing

them

to

the

Funds,

less

any

servicing

fees

assessed.

The

servicer

is

typically

responsible

for

taking

actions

against

a

borrower

in

the

event

of

a

default

on

the

loan.

Servicing

fees,

along

with

other

administration

fees,

are

included

in

marketplace

lending

fees

in

the

Statements

of

Operations.

The

Funds,

as

investors

in

a

loan,

would

be

entitled

to

receive

payment

only

from

the

borrower

and

would

not

be

able

to

recover

any

deficiency

from

the

platform,

except

under

very

narrow

circumstances.

The

loans

in

which

the

Funds

may

invest

are

unsecured.

l.

Income

and

Deferred

Taxes

It

is each

Fund's

policy

to

qualify

as

a

regulated

investment

company

under

the

Internal

Revenue

Code. Each

Fund

intends

to

distribute

to

shareholders

substantially

all

of

its

taxable

income

and

net

realized

gains

to

relieve

it

from

federal

income

and

excise

taxes.

As

a

result,

no

provision

for

U.S.

federal

income

taxes

is

required.

The

Funds

may

be

subject

to

foreign

taxation

related

to

income

received,

capital

gains

on

the

sale

of

securities

and

certain

foreign

currency

transactions

in

the

foreign

jurisdictions

in

which

the

Funds

invest.

Foreign

taxes,

if

any,

are

recorded

based

on

the

tax

regulations

and

rates

that

exist

in

the

foreign

markets

in

which

the

Funds

invest.

When

a

capital

gain

tax

is

determined

to

apply,

certain

or

all

Funds

record

an

estimated

deferred

tax

liability

in

an

amount

that

would

be

payable

if

the

securities

were

disposed

of

on

the

valuation

date.

Each

Fund

may

recognize

an

income

tax

liability

related

to

its

uncertain

tax

positions

under

U.S.

GAAP

when

the

uncertain

tax

position

has

a

less

than

50%

probability

that

it

will

be

sustained

upon

examination

by

the

tax

authorities

based

on

its

technical

merits.

As

of

October

31,

2021, each

Fund

has

determined

that

no

tax

liability

is

required

in

its

financial

statements

related

to

uncertain

tax

positions

for

any

open

tax

years

(or

expected

to

be

taken

in

future

tax

years).

Open

tax

years

are

those

that

remain

subject

to

examination

and

are

based

on

the

statute

of

limitations

in

each

jurisdiction

in

which

the

Fund

invests. 

m.

Security

Transactions,

Investment

Income,

Expenses

and

Distributions

Security

transactions

are

accounted

for

on

trade

date.

Realized

gains

and

losses

on

security

transactions

are

determined

on

a

specific

identification

basis.

Interest

income

and

estimated

expenses

are

accrued

daily.

Amortization

of

premium

and

accretion

of

discount

on

debt

securities

are

included

in

interest

income.

Paydown

gains

and

losses

are

recorded

as

an

adjustment

to

interest

income/separately

on

the

Statements

of

Operations.

Facility

fees

are

recognized

as

income

over

the

expected

term

of

the

loan.

Dividend

income

and

realized

gain

distributions

are

recorded

on

the

ex-dividend

date

except

for

certain

dividends

from

securities

where

the

dividend

rate

is

not

available.

In

such

cases,

the

dividend

is

recorded

as

soon

as

the

information

is

received

by

the

Funds.

Dividends

from

net

investment

income

are

normally

declared

daily;

these

dividends

may

be

reinvested

or

paid

monthly

to

shareholders.

Distributions

from

realized

capital

gains

and

other

distributions,

if

any,

are

recorded

on

the

ex-dividend

date.

Distributable

earnings

are

determined

according

to

income

tax

regulations

(tax

basis)

and

may

differ

from

earnings

recorded

in

accordance

with

U.S.

GAAP.

These

differences

may

be

permanent

or

temporary.

Permanent

differences

are

reclassified

among

capital

accounts

to

reflect

their

tax

character.

These

reclassifications

have

no

impact

on

net

assets

or

the

results

of

operations.

Temporary

differences

are

not

reclassified,

as

they

may

reverse

in

subsequent

periods.

Common

expenses

incurred

by

the

Trust

are

allocated

among

the

Funds

based

on

the

ratio

of

net

assets

of

each

Fund

to

the

combined

net

assets

of

the

Trust

or

based

on

the

ratio

of

number

of

shareholders

of

each

Fund

to

the

combined

number

of

shareholders

of

the

Trust.

Fund

specific

expenses

are

charged

directly

to

the

Fund

that

incurred

the

expense.

1.

Organization

and

Significant

Accounting

Policies

(continued)

k.

Marketplace

Lending

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

127

franklintempleton.com

Annual

Report

Net

investment

income,

excluding

class

specific

expenses,

is

allocated

daily

to

each

class

of

shares

based

upon

the

relative

value

of

the

settled

shares

of

each

class.

Realized

and

unrealized

gains

and

losses

are

allocated

daily

to

each

class

of

shares

based

upon

the

relative

proportion

of

net

assets

of

each

class.

Differences

in

per

share

distributions

by

class

are

generally

due

to

differences

in

class

specific

expenses.

Inflation-indexed

bonds

are

adjusted

for

inflation

through

periodic

increases

or

decreases

in

the

security's

interest

accruals,

face

amount,

or

principal

redemption

value,

by

amounts

corresponding

to

the

rate

of

inflation

as

measured

by

an

index.

Any

increase

or

decrease

in

the

face

amount

or

principal

redemption

value

will

be

included

as

interest

income

in

the

Statements

of

Operations.

n.

Accounting

Estimates

The

preparation

of

financial

statements

in

accordance

with

U.S.

GAAP

requires

management

to

make

estimates

and

assumptions

that

affect

the

reported

amounts

of

assets

and

liabilities

at

the

date

of

the

financial

statements

and

the

amounts

of

income

and

expenses

during

the

reporting

period.

Actual

results

could

differ

from

those

estimates.

o.

Guarantees

and

Indemnifications

Under

the

Trust's

organizational

documents,

its

officers

and

trustees

are

indemnified

by

the

Trust

against

certain

liabilities

arising

out

of

the

performance

of

their

duties

to

the

Trust.

Additionally,

in

the

normal

course

of

business,

the

Trust,

on

behalf

of

the

Funds,

enters

into

contracts

with

service

providers

that

contain

general

indemnification

clauses.

The

Trust's

maximum

exposure

under

these

arrangements

is

unknown

as

this

would

involve

future

claims

that

may

be

made

against

the

Trust

that

have

not

yet

occurred.

Currently,

the

Trust

expects

the

risk

of

loss

to

be

remote.

2.

Shares

of

Beneficial

Interest

At

October

31,

2021,

there

were

an

unlimited

number

of

shares

authorized

(without

par

value).

Transactions

in

the

Funds'

shares

were

as

follows:

Franklin

Adjustable

U.S.

Government

Securities

Fund

Franklin

Floating

Rate

Daily

Access

Fund

Shares

Amount

Shares

Amount

Class

A

Class

A

Shares:

Year

ended

October

31,

2021

Shares

sold

a

...................................

16,710,359

$132,615,373

26,194,727

$202,271,161

Shares

issued

in

reinvestment

of

distributions

..........

509,053

4,039,098

3,415,677

26,200,737

Shares

redeemed

...............................

(20,288,810)

(160,984,457)

(25,254,558)

(193,126,673)

Net

increase

(decrease)

..........................

(3,069,398)

$(24,329,986)

4,355,846

$35,345,225

Year

ended

October

31,

2020

Shares

sold

a

...................................

29,319,870

$233,754,345

14,261,908

$109,784,278

Shares

issued

in

reinvestment

of

distributions

..........

1,060,012

8,448,342

4,774,925

36,575,361

Shares

redeemed

...............................

(21,555,825)

(171,708,190)

(49,816,612)

(379,674,694)

Net

increase

(decrease)

..........................

8,824,057

$70,494,497

(30,779,779)

$(233,315,055)

Class

A1

1.

Organization

and

Significant

Accounting

Policies

(continued)

m.

Security

Transactions,

Investment

Income,

Expenses

and

Distributions

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

128

franklintempleton.com

Annual

Report

Franklin

Adjustable

U.S.

Government

Securities

Fund

Franklin

Floating

Rate

Daily

Access

Fund

Shares

Amount

Shares

Amount

Class

A1

Shares:

Year

ended

October

31,

2021

Shares

sold

...................................

499,679

$3,966,282

—

$—

Shares

issued

in

reinvestment

of

distributions

..........

96,732

767,283

—

—

Shares

redeemed

...............................

(1,902,502)

(15,094,011)

—

—

Net

increase

(decrease)

..........................

(1,306,091)

$(10,360,446)

—

$—

Year

ended

October

31,

2020

Shares

sold

...................................

630,558

$5,032,029

—

$—

Shares

issued

in

reinvestment

of

distributions

..........

219,982

1,753,217

—

—

Shares

redeemed

...............................

(1,836,277)

(14,644,570)

—

—

Net

increase

(decrease)

..........................

(985,737)

$(7,859,324)

—

$—

Class

C

Class

C

Shares:

Year

ended

October

31,

2021

Shares

sold

...................................

1,462,582

$11,596,476

2,717,641

$21,008,739

Shares

issued

in

reinvestment

of

distributions

..........

40,027

317,508

610,841

4,672,627

Shares

redeemed

a

..............................

(5,851,654)

(46,403,333)

(12,387,853)

(95,232,357)

Net

increase

(decrease)

..........................

(4,349,045)

$(34,489,349)

(9,059,371)

$(69,550,991)

Year

ended

October

31,

2020

Shares

sold

...................................

6,685,112

$53,248,452

1,855,251

$14,370,413

Shares

issued

in

reinvestment

of

distributions

..........

161,318

1,284,855

1,147,597

8,815,655

Shares

redeemed

a

..............................

(8,452,569)

(67,287,318)

(17,431,322)

(132,984,754)

Net

increase

(decrease)

..........................

(1,606,139)

$(12,754,011)

(14,428,474)

$(109,798,686)

Class

R6

Class

R6

Shares:

Year

ended

October

31,

2021

Shares

sold

...................................

2,869,452

$22,796,999

2,411,774

$18,591,234

Shares

issued

in

reinvestment

of

distributions

..........

60,329

479,364

81,195

628,327

Shares

redeemed

...............................

(1,832,040)

(14,562,135)

(627,495)

(4,808,158)

Net

increase

(decrease)

..........................

1,097,741

$8,714,228

1,865,474

$14,411,403

Year

ended

October

31,

2020

Shares

sold

...................................

1,651,869

$13,195,653

379,211

$2,925,166

Shares

issued

in

reinvestment

of

distributions

..........

98,718

788,182

79,724

613,123

Shares

redeemed

...............................

(1,519,520)

(12,128,636)

(1,450,536)

(11,142,570)

Net

increase

(decrease)

..........................

231,067

$1,855,199

(991,601)

$(7,604,281)

Advisor

Class

2.

Shares

of

Beneficial

Interest

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

129

franklintempleton.com

Annual

Report

Franklin

Adjustable

U.S.

Government

Securities

Fund

Franklin

Floating

Rate

Daily

Access

Fund

Shares

Amount

Shares

Amount

Advisor

Class

Shares:

Year

ended

October

31,

2021

Shares

sold

...................................

3,516,040

$27,952,735

30,695,289

$237,114,679

Shares

issued

in

reinvestment

of

distributions

..........

129,459

1,028,085

1,142,702

8,760,506

Shares

redeemed

...............................

(5,087,651)

(40,425,356)

(27,968,927)

(213,626,068)

Net

increase

(decrease)

..........................

(1,442,152)

$(11,444,536)

3,869,064

$32,249,117

Year

ended

October

31,

2020

Shares

sold

...................................

15,132,077

$120,880,680

19,953,277

$151,517,101

Shares

issued

in

reinvestment

of

distributions

..........

298,147

2,378,608

2,394,865

18,413,377

Shares

redeemed

...............................

(15,921,572)

(127,021,293)

(75,991,098)

(586,417,671)

Net

increase

(decrease)

..........................

(491,348)

$(3,762,005)

(53,642,956)

$(416,487,193)

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

Shares

Amount

Shares

Amount

Class

A

Class

A

Shares:

Year

ended

October

31,

2021

Shares

sold

a

...................................

72,775,561

$699,385,962

83,107,554

$837,179,403

Shares

issued

in

reinvestment

of

distributions

..........

4,936,285

47,457,409

10,183,656

102,627,879

Shares

redeemed

...............................

(63,519,520)

(610,427,830)

(106,374,175)

(1,070,859,677)

Net

increase

(decrease)

..........................

14,192,326

$136,415,541

(13,082,965)

$(131,052,395)

Year

ended

October

31,

2020

Shares

sold

a

...................................

74,248,622

$702,878,333

107,109,340

$1,064,630,931

Shares

issued

in

reinvestment

of

distributions

..........

4,752,298

44,996,700

10,315,985

102,130,026

Shares

issued

on

reorganization

....................

186,443

1,803,150

10,674,554

105,907,423

Shares

redeemed

...............................

(61,905,583)

(580,959,649)

(71,745,647)

(703,665,030)

Net

increase

(decrease)

..........................

17,281,780

$168,718,534

56,354,232

$569,003,350

Class

C

Class

C

Shares:

Year

ended

October

31,

2021

Shares

sold

...................................

3,778,269

$36,148,934

4,181,948

$41,907,188

Shares

issued

in

reinvestment

of

distributions

..........

275,435

2,636,324

435,026

4,355,227

Shares

redeemed

a

..............................

(5,944,220)

(56,842,871)

(11,314,465)

(113,008,124)

Net

increase

(decrease)

..........................

(1,890,516)

$(18,057,613)

(6,697,491)

$(66,745,709)

Year

ended

October

31,

2020

Shares

sold

...................................

6,965,271

$65,452,033

7,126,989

$69,953,158

Shares

issued

in

reinvestment

of

distributions

..........

321,028

3,026,044

624,127

6,125,237

Shares

issued

on

reorganization

....................

38,777

373,470

1,574,396

15,495,570

Shares

redeemed

a

..............................

(9,007,037)

(83,917,478)

(12,412,817)

(122,191,368)

Net

increase

(decrease)

..........................

(1,681,961)

$(15,065,931)

(3,087,305)

$(30,617,403)

Class

R

2.

Shares

of

Beneficial

Interest

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

130

franklintempleton.com

Annual

Report

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

Shares

Amount

Shares

Amount

Class

R

Shares:

Year

ended

October

31,

2021

Shares

sold

...................................

10,542

$101,517

286,854

$2,882,748

Shares

issued

in

reinvestment

of

distributions

..........

395

3,790

39,164

393,517

Shares

redeemed

...............................

(174)

(1,676)

(783,530)

(7,815,800)

Net

increase

(decrease)

..........................

10,763

$103,631

(457,512)

$(4,539,535)

Year

ended

October

31,

2020

Shares

sold

...................................

8,591

$77,725

443,366

$4,387,783

Shares

issued

in

reinvestment

of

distributions

..........

282

2,666

53,260

524,757

Shares

issued

on

reorganization

....................

8,625

83,506

—

—

Shares

redeemed

...............................

(9,450)

(89,610)

(917,555)

(8,980,301)

Net

increase

(decrease)

..........................

8,048

$74,287

(420,929)

$(4,067,761)

Class

R6

Class

R6

Shares:

Year

ended

October

31,

2021

Shares

sold

...................................

24,158,754

$233,633,788

15,940,528

$161,336,780

Shares

issued

in

reinvestment

of

distributions

..........

1,599,426

15,480,925

1,598,934

16,222,029

Shares

redeemed

...............................

(26,855,814)

(260,333,155)

(11,783,488)

(119,072,724)

Net

increase

(decrease)

..........................

(1,097,634)

$(11,218,442)

5,755,974

$58,486,085

Year

ended

October

31,

2020

Shares

sold

...................................

16,043,261

$150,613,959

16,602,479

$165,691,686

Shares

issued

in

reinvestment

of

distributions

..........

2,409,232

22,969,432

1,578,248

15,737,331

Shares

issued

on

reorganization

....................

41,091,087

399,882,794

387,849

3,874,914

Shares

redeemed

...............................

(105,259,843)

(992,187,853)

(12,681,525)

(125,479,980)

Net

increase

(decrease)

..........................

(45,716,263)

$(418,721,668)

5,887,051

$59,823,951

Advisor

Class

Advisor

Class

Shares:

Year

ended

October

31,

2021

Shares

sold

...................................

21,319,365

$206,037,274

41,574,916

$422,641,095

Shares

issued

in

reinvestment

of

distributions

..........

689,230

6,663,496

682,974

6,925,568

Shares

redeemed

...............................

(19,714,209)

(190,524,842)

(48,160,777)

(489,903,102)

Net

increase

(decrease)

..........................

2,294,386

$22,175,928

(5,902,887)

$(60,336,439)

Year

ended

October

31,

2020

Shares

sold

...................................

13,568,900

$128,810,324

18,484,714

$184,926,398

Shares

issued

in

reinvestment

of

distributions

..........

655,249

6,243,259

2,114,517

20,943,629

Shares

issued

on

reorganization

....................

41,394

402,833

878,914

8,772,333

Shares

redeemed

...............................

(16,601,709)

(156,693,796)

(78,998,259)

(782,997,294)

Net

increase

(decrease)

..........................

(2,336,166)

$(21,237,380)

(57,520,114)

$(568,354,934)

a

May

include

a

portion

of

Class

C

shares

that

were

automatically

converted

to

Class

A.

2.

Shares

of

Beneficial

Interest

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

131

franklintempleton.com

Annual

Report

3.

Transactions

with

Affiliates

Franklin

Resources,

Inc.

is

the

holding

company

for

various

subsidiaries

that

together

are

referred

to

as

Franklin

Templeton.

Certain

officers

and

trustees

of

the

Trust

are

also

officers

and/or

directors

of

the

following

subsidiaries:

a.

Management

Fees

Franklin

Adjustable

U.S.

Government

Securities

Fund

pays

an

investment

management

fee

to

Advisers

based

on

the

average

daily

net

assets

of

the

Fund

as

follows:

Franklin

Floating

Rate

Daily

Access

Fund

pays

an

investment

management

fee

to

Advisers

based

on

the

average

daily

net

assets

of

the

Fund

as

follows:

Subsidiary

Affiliation

Franklin

Advisers,

Inc.

(Advisers)

Investment

manager

Franklin

Templeton

Services,

LLC

(FT

Services)

Administrative

manager

Franklin

Distributors,

LLC

(Distributors)

(formerly

Franklin

Templeton

Distributors,

Inc.)

Principal

underwriter

Franklin

Templeton

Investor

Services,

LLC

(Investor

Services)

Transfer

agent

Annualized

Fee

Rate

Net

Assets

0.500%

Up

to

and

including

$5

billion

0.440%

Over

$5

billion,

up

to

and

including

$10

billion

0.410%

Over

$10

billion,

up

to

and

including

$15

billion

0.380%

In

excess

of

$15

billion

Annualized

Fee

Rate

Net

Assets

0.650%

Up

to

and

including

$500

million

0.550%

Over

$500

million,

up

to

and

including

$1

billion

0.500%

Over

$1

billion,

up

to

and

including

$1.5

billion

0.450%

Over

$1.5

billion,

up

to

and

including

$6.5

billion

0.425%

Over

$6.5

billion,

up

to

and

including

$11.5

billion

0.400%

Over

$11.5

billion,

up

to

and

including

$16.5

billion

0.390%

Over

$16.5

billion,

up

to

and

including

$19

billion

0.380%

Over

$19

billion,

up

to

and

including

$21.5

billion

0.370%

In

excess

of

$21.5

billion

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

132

franklintempleton.com

Annual

Report

Franklin

Low

Duration

Total

Return

Fund

and

Franklin

Total

Return

Fund

pay

an

investment

management

fee

to

Advisers

based

on

the

average

daily

net

assets

of

each

of

the

Funds

as

follows:

For

the

year

ended

October

31,

2021,

each

Fund's

gross

effective

investment

management

fee

rate

based

on

average

daily

net

assets

was

as

follows:

b.

Administrative

Fees

Under

an

agreement

with

Advisers,

FT

Services

provides

administrative

services

to

the

Funds.

The

fee

is

paid

by

Advisers

based

on

each

of

the

Funds’

average

daily

net

assets,

and

is

not

an

additional

expense

of

the

Funds.

c.

Distribution

Fees

The

Board

has

adopted

distribution

plans

for

each

share

class,

with

the

exception

of

Class

R6

and

Advisor

Class

shares,

pursuant

to

Rule

12b-1

under

the

1940

Act.

Under

the

Funds’

Class

A

and

A1

reimbursement

distribution

plans,

the

Funds reimburse

Distributors

for

costs

incurred

in

connection

with

the

servicing,

sale

and

distribution

of each

Fund's

shares

up

to

the

maximum

annual

plan

rate

for

each

class.

Under

the

Class

A

and

A1

reimbursement

distribution

plans,

costs

exceeding

the

maximum

for

the

current

plan

year

cannot

be

reimbursed

in

subsequent

periods.

In

addition,

under

the

Funds’

Class

C

and

R

compensation

distribution

plans,

the

Funds

pay

Distributors

for

costs

incurred

in

connection

with

the

servicing,

sale

and

distribution

of

each

Fund's

shares

up

to

the

maximum

annual

plan

rate

for

each

class.

The

plan

year,

for

purposes

of

monitoring

compliance

with

the

maximum

annual

plan

rates,

is

February

1

through

January

31

for

each

Fund.

The

maximum

annual

plan

rates,

based

on

the

average

daily

net

assets,

for

each

class,

are

as

follows:

Annualized

Fee

Rate

Net

Assets

0.625%

Up

to

and

including

$500

million

0.525%

Over

$500

million,

up

to

and

including

$1

billion

0.480%

Over

$1

billion,

up

to

and

including

$1.5

billion

0.435%

Over

$1.5

billion,

up

to

and

including

$6.5

billion

0.415%

Over

$6.5

billion,

up

to

and

including

$11.5

billion

0.400%

Over

$11.5

billion,

up

to

and

including

$16.5

billion

0.390%

Over

$16.5

billion,

up

to

and

including

$19

billion

0.380%

Over

$19

billion,

up

to

and

including

$21.5

billion

0.370%

In

excess

of

$21.5

billion

Franklin

Adjustable

U.S.

Government

Securities

Fund

Franklin

Floating

Rate

Daily

Access

Fund

Franklin

Low

Duration

Total

Return

Fund

Gross

effective

investment

management

fee

rate

........

0.500%

0.581%

0.495%

Franklin

Total

Return

Fund

Gross

effective

investment

management

fee

rate

........

0.467%

3.

Transactions

with

Affiliates

(continued)

a.

Management

Fees

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

133

franklintempleton.com

Annual

Report

d.

Sales

Charges/Underwriting

Agreements

Front-end

sales

charges

and

contingent

deferred

sales

charges

(CDSC)

do

not

represent

expenses

of

the

Funds.

These

charges

are

deducted

from

the

proceeds

of

sales

of

fund

shares

prior

to

investment

or

from

redemption

proceeds

prior

to

remittance,

as

applicable.

Distributors

has

advised

the

Funds

of

the

following

commission

transactions

related

to

the

sales

and

redemptions

of

the

Funds'

shares

for

the

year:

e.

Transfer

Agent

Fees

Each

class

of

shares

pays

transfer

agent

fees

to

Investor

Services

for

its

performance

of

shareholder

servicing

obligations.

The

fees

are

based

on

an

annualized

asset

based

fee

of

0.02%

plus

a

transaction

based

fee.

In

addition,

each

class

reimburses

Investor

Services

for

out

of

pocket

expenses

incurred

and,

except

for

Class

R6,

reimburses

shareholder

servicing

fees

paid

to

third

parties.

These

fees

are

allocated

daily

based

upon

their

relative

proportion

of

such

classes'

aggregate

net

assets.

Class

R6

pays

Investor

Services

transfer

agent

fees

specific

to

that

class.

For

the

year

ended

October

31,

2021,

the

Funds

paid

transfer

agent

fees

as

noted

in

the

Statements

of

Operations

of

which

the

following

amounts

were

retained

by

Investor

Services:

f.

Investments

in

Affiliated

Management

Investment

Companies

Certain

or

all

Funds

invest

in

one

or

more

affiliated

management

investment

companies.

As

defined

in

the

1940

Act,

an

investment

is

deemed

to

be

a

“Controlled

Affiliate”

of

a

fund

when

a

fund

owns,

either

directly

or

indirectly,

25%

or

more

of

the

affiliated

fund’s

outstanding

shares

or

has

the

power

to

exercise

control

over

management

or

policies

of

such

fund.

The

Funds

do

not

invest

for

purposes

of

exercising

a

controlling

influence

over

the

management

or

policies.

Management

fees

paid

by

Franklin

Adjustable

U.S.

Government

Securities

Fund

Franklin

Floating

Rate

Daily

Access

Fund

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

Reimbursement

Plans:

Class

A

...............................

0.25%

0.25%

0.25%

0.25%

Class

A1

..............................

0.10%

—%

—%

—%

Compensation

Plans:

Class

C

...............................

0.65%

0.65%

0.65%

0.65%

Class

R

...............................

—%

—%

0.50%

0.50%

Franklin

Adjustable

U.S.

Government

Securities

Fund

Franklin

Floating

Rate

Daily

Access

Fund

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

Sales

charges

retained

net

of

commissions

paid

to

unaffiliated

brokers/dealers

..................

$8,135

$18,578

$52,337

$234,902

CDSC

retained

...........................

$26,717

$16,357

$88,184

$87,584

Franklin

Adjustable

U.S.

Government

Securities

Fund

Franklin

Floating

Rate

Daily

Access

Fund

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

Transfer

agent

fees

........................

$488,903

$749,482

$1,050,524

$2,035,374

3.

Transactions

with

Affiliates

(continued)

c.

Distribution

Fees

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

134

franklintempleton.com

Annual

Report

the

Funds

are

waived

on

assets

invested

in

the

affiliated

management

investment

companies,

as

noted

in

the

Statements

of

Operations,

in

an

amount

not

to

exceed

the

management

and

administrative

fees

paid

directly

or

indirectly

by

each

affiliate.

During

the

year

ended

October

31,

2021,

investments

in

affiliated

management

investment

companies

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

Adjustable

U.S.

Government

Securities

Fund

Non-Controlled

Affiliates

Dividends

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.

$37,053,731

$9,148,504

$(31,303,104)

$—

$—

$14,899,131

14,899,131

$2,283

Total

Affiliated

Securities

...

$37,053,731

$9,148,504

$(31,303,104)

$—

$—

$14,899,131

$2,283

Franklin

Floating

Rate

Daily

Access

Fund

Non-Controlled

Affiliates

Dividends

Franklin

Floating

Rate

Income

Fund

..................

$37,437,554

$—

$(4,000,003)

$(1,176,106)

$5,473,983

$37,735,428

4,630,114

$1,586,257

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.

69,832,875

103,395,916

(104,767,521)

—

—

68,461,270

68,461,270

4,173

Total

Non-Controlled

Affiliates

$107,270,429

$103,395,916

$(108,767,524)

$

(1,176,106)

$

5,473,983

$106,196,698

$

1,590,430

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.

—

22,982,000

(22,982,000)

—

—

—

—

48

Total

Affiliated

Securities

...

$107,270,429

$126,377,916

$(131,749,524)

$(1,176,106)

$5,473,983

$106,196,698

$1,590,478

Franklin

Low

Duration

Total

Return

Fund

Non-Controlled

Affiliates

Dividends

Franklin

Floating

Rate

Income

Fund

..................

$17,370,266

$103,558,466

$—

$—

$(18,837)

$120,909,895

14,835,570

$2,823,378

Franklin

Liberty

High

Yield

Corporate

ETF

...........

—

6,912,430

—

—

(111,142)

6,801,288

259,500

295,314

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.

197,465,127

244,722,342

(386,051,936)

—

—

56,135,533

56,135,533

4,718

Total

Non-Controlled

Affiliates

$214,835,393

$355,193,238

$(386,051,936)

$

—

$(129,979)

$183,846,716

$3,123,410

3.

Transactions

with

Affiliates

(continued)

f.

Investments

in

Affiliated

Management

Investment

Companies

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

135

franklintempleton.com

Annual

Report

a

Dividend

income

includes

capital

gain

distributions

received,

if

any,

from

underlying

funds,

and

are

presented

in

corresponding

line

item

in

the

Statements

of

Operations.

g.

Waiver

and

Expense

Reimbursements

Effective

March

1,

2021,

Advisers

and

Investor

Services

have

contractually

agreed

in

advance

to

waive

or

limit

their

respective

fees

and

to

assume

as

their

own

expense

certain

expenses

otherwise

payable

by

Franklin

Adjustable

U.S.

Government

Securities

Fund

so

that

the

operating

expenses

(excluding

distribution

fees

and

acquired

fund

fees

and

expenses

and

certain

non-routine

expenses

or

costs,

including

those

relating

to

litigation,

indemnification,

reorganizations,

and

liquidations)

for

Class

    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

Franklin

Low

Duration

Total

Return

Fund

(continued)

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.

$—

$5,508,000

$(5,508,000)

$

—

$

—

$—

—

$8

Total

Affiliated

Securities

...

$214,835,393

$360,701,238

$(391,559,936)

$—

$(129,979)

$183,846,716

$3,123,418

Franklin

Total

Return

Fund

Controlled

Affiliates

Dividends

Franklin

Floating

Rate

Income

Fund

..................

$11,263,485

$177,203,646

$—

$

—

$

8,080,174

$

196,547,305

24,116,234

$

4,531,917

Franklin

Liberty

High

Yield

Corporate

ETF

...........

147,928,671

—

(30,038,072)

536,597

4,756,044

123,183,240

4,700,000

7,297,701

Franklin

Liberty

Investment

Grade

Corporate

ETF

.......

487,160,950

—

—

—

(11,276,025)

475,884,925

18,335,000

17,734,969

a

Total

Controlled

Affiliates

...

$646,353,106

$177,203,646

$(30,038,072)

$

536,597

$

1,560,193

$795,615,470

$

29,564,587

Non-Controlled

Affiliates

Dividends

Franklin

Liberty

Senior

Loan

ETF

$21,950,830

$20,560,443

$—

$—

$880,292

$43,391,565

1,737,400

$1,226,297

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.

226,741,557

1,662,970,441

(1,759,132,563)

—

—

130,579,435

130,579,435

6,817

Total

Non-Controlled

Affiliates

$248,692,387

$1,683,530,884

$(1,759,132,563)

$

—

$

880,292

$173,971,000

$

1,233,114

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.

—

66,405,000

(61,231,000)

—

—

5,174,000

5,174,000

284

Total

Affiliated

Securities

...

$895,045,493

$1,927,139,530

$(1,850,401,635)

$536,597

$2,440,485

$974,760,470

$30,797,985

3.

Transactions

with

Affiliates

(continued)

f.

Investments

in

Affiliated

Management

Investment

Companies

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

136

franklintempleton.com

Annual

Report

A,

Class

A1,

Class

C,

and

Advisor

Class

of

the

Fund

do

not

exceed

0.65%

and

for

Class

R6

do

not

exceed

0.53%

based

on

the

average

net

assets

of

each

class

until

February

28,

2022.

Total

expenses

waived

or

paid

are

not

subject

to

recapture

subsequent

to

the

Fund’s

fiscal

year

end.

Prior

to

March

1,

2021,

for

Franklin

Adjustable

U.S.

Government

Securities,

Investor

Services

had

contractually

agreed

in

advance

to

waive

or

limit

its

fees

so

that

the

Class

R6

transfer

agent

fees

did

not

exceed

0.03%

based

on

the

average

net

assets

of

the

class.

For

Franklin

Floating

Rate

Daily

Access

Fund,

Investor

Services

has

contractually

agreed

in

advance

to

waive

or

limit

its

fees

so

that

the

Class

R6

transfer

agent

fees

do

not

exceed

0.03%

based

on

the

average

net

assets

of

the

class

until

February

28,

2022.

Advisers

and

Investor

Services

have

contractually

agreed

in

advance

to

waive

or

limit

their

respective

fees

and

to

assume

as

their

own

expense

certain

expenses

otherwise

payable

by

Franklin

Low

Duration

Total

Return

Fund

so

that

the

operating

expenses

(excluding

distribution

fees

and

acquired

fund

fees

and

expenses

and

certain

non-routine

expenses

or

costs,

including

those

relating

to

litigation,

indemnification,

reorganizations,

and

liquidations)

for

Class

A,

Class

C,

Class

R,

and

Advisor

Class

of

the

Fund

does

not

exceed

0.44%

and

for

Class

R6

do

not

exceed

0.30%

based

on

the

average

net

assets

of

each

class

until

February

28,

2022.

Total

expenses

waived

or

paid

are

not

subject

to

recapture

subsequent

to

the

Fund’s

fiscal

year

end.

Effective

March

1,

2021,

Advisers

and

Investor

Services

have

contractually

agreed

in

advance

to

waive

or

limit

their

respective

fees

and

to

assume

as

their

own

expense

certain

expenses

otherwise

payable

by

Franklin

Total

Return

Fund

so

that

the

operating

expenses

(excluding

distribution

fees

and

acquired

fund

fees

and

expenses

and

certain

non-routine

expenses

or

costs,

including

those

relating

to

litigation,

indemnification,

reorganizations,

and

liquidations)

for

Class

A,

Class

C,

Class

R,

and

Advisor

Class

of

the

Fund

do

not

exceed

0.58%

and

for

Class

R6

do

not

exceed

0.47%

based

on

the

average

net

assets

of

each

class

until

February

28,

2022.

Total

expenses

waived

or

paid

are

not

subject

to

recapture

subsequent

to

the

Fund’s

fiscal

year

end.

Prior

to

March

1,

2021,

expenses

(excluding

certain

fees

and

expenses

as

previously

disclosed)

for

Franklin

Total

Return

Fund

for

Class

A,

Class

C,

Class

R,

and

Advisor

were

limited

to

0.60%

and

expenses

for

Class

R6

were

limited

to

0.48%

based

on

the

average

net

assets

of

each

class.

h.

Other

Affiliated

Transactions

On

March

5,

2021,

the

Franklin

Low

Duration

Total

Return

Fund

and

Franklin

Total

Return

Fund

completed

a

non-taxable

exchange

of

securities

with

a

value

of

$75,206,407

and

$115,539,642,

respectively,

(which

included

$7,285,561

and

$3,613,684,

respectively,

of

net

unrealized

depreciation)

for

9,779,767

and

15,024,661

shares,

respectively

(each

then

valued

at

$7.69

per

share)

of

Franklin

Floating

Rate

Income

Fund,

an

affiliated

entity.

This

is

considered

a

non-taxable

exchange

for

federal

income

tax

purposes,

with

no

gain

or

loss

recognized

by

the

Funds

or

their

shareholders.

4.

Expense

Offset

Arrangement

The

Funds

have entered

into

an

arrangement

with

their

custodian

whereby

credits

realized

as

a

result

of

uninvested

cash

balances

are

used

to

reduce

a

portion

of

the

Funds'

custodian

expenses.

During

the year

ended

October

31,

2021 the

custodian

fees

were

reduced

as

noted

in

the

Statements

of

Operations.

3.

Transactions

with

Affiliates

(continued)

g.

Waiver

and

Expense

Reimbursements

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

137

franklintempleton.com

Annual

Report

5.

Income

Taxes

For

tax

purposes,

capital

losses

may

be

carried

over

to

offset

future

capital

gains.

At

October

31,

2021,

the

capital

loss

carryforwards

were

as

follows:

During

the

year

ended

October

31,

2021,

the

following

Funds

utilized

capital

loss

carryforwards

as

follows:

The

tax

character

of

distributions

paid

during

the

years

ended

October

31,

2021

and

October

31,

2020,

was

as

follows:

At

October

31,

2021,

the

cost

of

investments,

net

unrealized

appreciation

(depreciation)

and

undistributed

ordinary

income

for

income

tax

purposes

were

as

follows:

Franklin

Adjustable

U.S.

Government

Securities

Fund

Franklin

Floating

Rate

Daily

Access

Fund

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

1

1

1

1

1

Capital

loss

carryforwards

not

subject

to

expiration:

Short

term

.............................

$

24,134,180

$

22,839,006

$

56,632,862

$

16,777,742

Long

term

.............................

117,158,696

474,060,698

106,471,488

68,681,477

Total

capital

loss

carryforwards

............

$141,292,876

$496,899,704

$163,104,350

$85,459,219

Franklin

Adjustable

U.S.

Government

Securities

Fund

Franklin

Floating

Rate

Daily

Access

Fund

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

Capital

loss

utilized

carryforwards

....

$—

$—

$9,380,713

$28,531,188

Franklin

Adjustable

U.S.

Government

Securities

Fund

Franklin

Floating

Rate

Daily

Access

Fund

2021

2020

2021

2020

Distributions

paid

from:

Ordinary

income

........................

$7,031,759

$15,532,274

$49,038,411

$77,286,011

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

2021

2020

2021

2020

Distributions

paid

from:

Ordinary

income

........................

$76,531,672

$92,316,701

$142,164,154

$159,500,259

Franklin

Adjustable

U.S.

Government

Securities

Fund

Franklin

Floating

Rate

Daily

Access

Fund

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

a

a

a

a

a

Cost

of

investments

.......................

$660,335,893

$1,472,095,646

$2,880,229,303

$5,384,505,866

Unrealized

appreciation

.....................

$4,031,011

$51,806,825

$38,662,515

$134,118,220

Unrealized

depreciation

.....................

(3,358,272)

(87,574,658)

(66,761,870)

(102,430,685)

Net

unrealized

appreciation

(depreciation)

.......

$672,739

$(35,767,833)

$(28,099,355)

$31,687,535

Distributable

earnings:

Undistributed

ordinary

income

................

$97,885

$2,019,110

$1,536,747

$1,727,960

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

138

franklintempleton.com

Annual

Report

Differences

between

income

and/or

capital

gains

as

determined

on

a

book

basis

and

a

tax

basis

are

primarily

due

to

differing

treatments

of

defaulted

securities,

foreign

currency

transactions,

paydown

losses,

bond

discounts

and

premiums,

wash

sales

and

swaps.

6.

Investment

Transactions

Purchases

and

sales

of

investments

(excluding

short

term

securities

and

in-kind

transactions)

for

the

year

ended

October

31,

2021,

were

as

follows:

At

October

31,

2021,

in

connection

with

securities

lending

transactions,

certain

or

all

Funds

loaned

investments

and

received

cash

collateral

as

follows:

7.

Credit Risk

and

Defaulted

Securities

At

October

31,

2021,

Franklin

Floating

Rate

Daily

Access

Fund,

Franklin

Low

Duration

Total

Return

Fund

and

Franklin

Total

Return

Fund

had

80.4%,

7.9%

and

8.5%,

respectively,

of

their

portfolio

invested

in

high

yield

securities,

senior

secured

floating

rate

loans,

or

other

securities

rated

below

investment

grade and

unrated

securities.

These

securities

may

be

more

sensitive

to

economic

conditions

causing

greater

price

volatility

and

are

potentially

subject

to

a

greater

risk

of

loss

due

to

default

than

higher

rated

securities.

Franklin

Floating

Rate

Daily

Access

Fund

held

a

defaulted

security

and/or

other

securities

for

which

the

income

has

been

deemed

uncollectible.

At

October31,

2021,

the

aggregate

value

of

this

security

was

$5,172,303,

representing

0.4%

of

the

Fund's

net

assets.

The

Fund

discontinues

accruing

income

on

securities

for

which

income

has

been

deemed

uncollectible

and

provides

an

estimate

for

losses

on

interest

receivable.

The

security

has

been

identified

in

the

accompanying

Statement

of

Investments.

8.

Novel

Coronavirus

Pandemic 

The

global

outbreak

of

the

novel

coronavirus

disease,

known

as

COVID-19, has

caused

adverse

effects

on

many

companies,

sectors,

nations,

regions

and

the

markets

in

general, and

may

continue for

an unpredictable duration.

The

effects

of

this

pandemic

may

materially

impact

the

value

and

performance

of

the

Funds, their ability

to

buy

and

sell

fund

investments

at

appropriate

valuations

and their ability

to

achieve their investment

objectives.

Franklin

Adjustable

U.S.

Government

Securities

Fund

Franklin

Floating

Rate

Daily

Access

Fund

Franklin

Low

Duration

Total

Return

Fund

a

Franklin

Total

Return

Fund

b

Purchases

..............................

$442,955,160

$820,967,662

$2,264,633,733

$10,339,198,551

Sales

..................................

$445,484,268

$793,192,840

$2,176,838,513

$10,765,848,036

a

Purchases

and

sales

of

investments

excludes

in-kind

transactions

of

$75,206,407.

See

Note

3(h).

b

Purchases

and

sales

of

investments

excludes

in-kind

transactions

of

$115,539,642.

See

Note

3(h).

Franklin

Floating

Rate

Daily

Access

Fund

Franklin

Total

Return

Fund

Securities

lending

transactions:

Equity

investments

........................

$7

$6,467,888

5.

Income

Taxes

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

139

franklintempleton.com

Annual

Report

9.

Restricted

Securities

Certain

or

all

Funds

invest

in

securities

that

are

restricted

under

the

Securities

Act

of

1933

(1933

Act).

Restricted

securities

are

often

purchased

in

private

placement

transactions,

and

cannot

be

sold

without

prior

registration

unless

the

sale

is

pursuant

to

an

exemption

under

the

1933

Act.

Disposal

of

these

securities

may

require

greater

effort

and

expense,

and

prompt

sale

at

an

acceptable

price

may

be

difficult.

The

Funds

may

have

registration

rights

for

restricted

securities.

The

issuer

generally

incurs

all

registration

costs.

At

October

31,

2021,

investments

in

restricted

securities,

excluding

securities

exempt

from

registration

under

the

1933

Act,

were

as

follows:

10.

Unfunded

Loan

Commitments

Certain

or

all

Funds

enter

into

certain

credit

agreements,

all

or

a

portion

of

which

may

be

unfunded.

The

Funds

are

obligated

to

fund

these

loan

commitments

at

the

borrowers’

discretion.

Unfunded

loan

commitments

and

funded

portions

of

credit

agreements

are

marked

to

market

daily

and

any

unrealized

appreciation

or

depreciation

is

included

in

the

Statements

of

Assets

and

Liabilities

and

the Statements

of

Operations.

Funded

portions

of

credit

agreements

are

presented

in

the

Statements

of

Investments.

At

October

31,

2021,

unfunded

commitments

were

as

follows:

Shares

Issuer

Acquisition

Date

Cost

Value

Franklin

Floating

Rate

Daily

Access

Fund

1,219,956

Appvion

Operations,

Inc.

......................

6/14/18

-

4/12/19

$

12,791,766

$

31,283,822

Total

Restricted

Securities

(Value

is

2.3%

of

Net

Assets)

..............

$12,791,766

$31,283,822

Shares

Issuer

Acquisition

Date

Cost

Value

Franklin

Low

Duration

Total

Return

Fund

12,326,925

a

K2016470219

South

Africa

Ltd.,

A

...............

4/15/13

-

2/01/17

$

92,077

$

—

1,226,701

a

K2016470219

South

Africa

Ltd.,

B

...............

2/01/17

911

—

Total

Restricted

Securities

(Value

is

—%

of

Net

Assets)

..............

$92,988

$—

Shares

Issuer

Acquisition

Date

Cost

Value

Franklin

Total

Return

Fund

28,762,824

a

K2016470219

South

Africa

Ltd.,

A

...............

4/15/13

-

2/01/17

$

221,469

$

—

2,862,311

a

K2016470219

South

Africa

Ltd.,

B

...............

2/01/17

2,125

—

Total

Restricted

Securities

(Value

is

—%

of

Net

Assets)

..............

$223,594

$—

a

The

Fund

also

invests

in

unrestricted

securities

of

the

issuer,

valued

at

$0

as

of

October

31,

2021.

Borrower

Unfunded

Commitment

Franklin

Floating

Rate

Daily

Access

Fund

Aveanna

Healthcare,

LLC

$591,974

DexKo

Global,

Inc.

846,441

Medical

Solutions,

LLC

452,128

National

Mentor

Holdings,

Inc.

450,842

Osmosis

Buyer

Ltd.

598,152

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

140

franklintempleton.com

Annual

Report

11.

Other

Derivative

Information

At

October

31,

2021,

investments

in

derivative

contracts

are

reflected

in

the

Statements

of

Assets

and

Liabilities

as

follows:

Sovos

Compliance,

LLC

218,444

Thrasio,

LLC

2,500,000

$5,657,981

Asset

Derivatives

Liability

Derivatives

Derivative

Contracts

Not

Accounted

for

as

Hedging

Instruments

Statement

of

Assets

and

Liabilities

Location

Fair

Value

Statement

of

Assets

and

Liabilities

Location

Fair

Value

Franklin

Low

Duration

Total

Return

Fund

Interest

rate

contracts

.......

Variation

margin

on

futures

contracts

$

3,831,290

a

Variation

margin

on

futures

contracts

$

3,067,991

a

Foreign

exchange

contracts

..

Investments

in

securities,

at

value

149,066

b

Options

written,

at

value

—

Unrealized

appreciation

on

OTC

forward

exchange

contracts

243,068

Unrealized

depreciation

on

OTC

forward

exchange

contracts

385,529

Unrealized

appreciation

on

OTC

swap

contracts

914,732

Unrealized

depreciation

on

OTC

swap

contracts

3,138,346

Credit

contracts

............

Variation

margin

on

centrally

cleared

swap

contracts

216,000

c

Variation

margin

on

centrally

cleared

swap

contracts

—

OTC

swap

contracts

(upfront

payments)

651,628

OTC

swap

contracts

(upfront

receipts)

4,117,249

Unrealized

appreciation

on

OTC

swap

contracts

2,132,683

Unrealized

depreciation

on

OTC

swap

contracts

496,399

Total

....................

$8,138,467

$11,205,514

Franklin

Total

Return

Fund

Interest

rate

contracts

.......

Investments

in

securities,

at

value

701,581

b

Options

written,

at

value

1,324,372

Variation

margin

on

futures

contracts

5,145,937

a

Variation

margin

on

futures

contracts

3,755,341

a

Foreign

exchange

contracts

..

Investments

in

securities,

at

value

646,824

b

Options

written,

at

value

—

Unrealized

appreciation

on

OTC

forward

exchange

contracts

1,421,130

Unrealized

depreciation

on

OTC

forward

exchange

contracts

1,444,832

Unrealized

appreciation

on

OTC

swap

contracts

—

Unrealized

depreciation

on

OTC

swap

contracts

5,649,025

Credit

contracts

............

Variation

margin

on

centrally

cleared

swap

contracts

136,856

c

Variation

margin

on

centrally

cleared

swap

contracts

—

OTC

swap

contracts

(upfront

payments)

2,029,833

OTC

swap

contracts

(upfront

receipts)

8,801,226

Unrealized

appreciation

on

OTC

swap

contracts

7,748,923

Unrealized

depreciation

on

OTC

swap

contracts

1,118,954

Value

recovery

instruments

...

10.

Unfunded

Loan

Commitments

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

141

franklintempleton.com

Annual

Report

Asset

Derivatives

Liability

Derivatives

Derivative

Contracts

Not

Accounted

for

as

Hedging

Instruments

Statement

of

Assets

and

Liabilities

Location

Fair

Value

Statement

of

Assets

and

Liabilities

Location

Fair

Value

Franklin

Total

Return

Fund

(continued)

Investments

in

securities,

at

value

$

500,677

d

Options

written,

at

value

$

—

Total

....................

$18,331,761

$22,093,750

a

This

amount

reflects

the

cumulative

appreciation

(depreciation)

of

futures

contracts

as

reported

in

the

Statements

of

Investments.

Only

the

variation

margin

receivable/payable

at

year

end

is

separately

reported

within

the

Statements

of

Assets

and

Liabilities.

Prior

variation

margin

movements

were

recorded

to

cash

upon

receipt

or

payment.

b

Purchased

option

contracts

are

included

in

investments

in

securities,

at

value

in

the

Statements

of

Assets

and

Liabilities.

c

This

amount

reflects

the

cumulative

appreciation

(depreciation)

of

centrally

cleared

swap

contracts

as

reported

in

the

Statements

of

Investments.

Only

the

variation

margin

receivable/payable

at

year

end

is

separately

reported

within

the

Statements

of

Assets

and

Liabilities.

Prior

variation

margin

movements

were

recorded

to

cash

upon

receipt

or

payment.

d

VRI

are

included

in

investments

in

securities,

at

value

in

the

Statements

of

Assets

and

Liabilities.

11.

Other

Derivative

Information

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

142

franklintempleton.com

Annual

Report

For

the

year

ended

October

31,

2021,

the

effect

of

derivative

contracts

in

the

Statements

of

Operations

was

as

follows:

Derivative

Contracts

Not

Accounted

for

as

Hedging

Instruments

Statement

of

Operations

Location

Net

Realized

Gain

(Loss)

for

the

Year

Statement

of

Operations

Location

Net

Change

in

Unrealized

Appreciation

(Depreciation)

for

the

Year

Net

realized

gain

(loss)

from:

Net

change

in

unrealized

  appreciation

(depreciation)

on:

Franklin

Low

Duration

Total

Return

Fund

Interest

rate

contracts

..........

Futures

contracts

$7,474,788

Futures

contracts

$(1,109,282)

Swap

contracts

2,405,355

Swap

contracts

1,112,898

Foreign

exchange

contracts

.....

Investments

—

Investments

(10,219)

a

Swap

contracts

(1,130,911)

Swap

contracts

1,980,453

Forward

exchange

contracts

(3,331,598)

Forward

exchange

contracts

112,652

Credit

contracts

...............

Swap

contracts

1,167,423

Swap

contracts

7,301,480

Total

.......................

$6,585,057

$9,387,982

Franklin

Total

Return

Fund

Interest

rate

contracts

..........

Investments

3,323,319

a

Investments

(1,649,553)

a

Written

options

1,997,032

Written

options

(421,094)

Futures

contracts

(20,226,167)

Futures

contracts

7,118,972

Swap

contracts

7,736,674

Swap

contracts

1,525,147

Foreign

exchange

contracts

.....

Investments

—

Investments

(44,343)

a

Swap

contracts

(881,509)

Swap

contracts

2,444,753

Forward

exchange

contracts

(11,676,508)

Forward

exchange

contracts

196,370

Credit

contracts

...............

Swap

contracts

1,715,172

Swap

contracts

15,410,568

Value

recovery

instruments

Investments

—

Investments

$88,567

b

Total

.......................

$(18,011,987)

$24,669,387

a

Purchased

option

contracts

are

included

in

net

realized

gain

(loss)

from

investments

and

net

change

in

unrealized

appreciation

(depreciation)

on

investments

in

the

Statements

of

Operations.

b

VRI

are

included

in

net

realized

gain

(loss)

from

investments

and

net

change

in

unrealized

appreciation

(depreciation)

on

investments

in

the

Statements

of

Operations.

.

11.

Other

Derivative

Information

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

143

franklintempleton.com

Annual

Report

For

the year

ended

October

31,

2021,

the

average

month

end

notional

amount

of

futures

contracts,

options

and

swap

contracts,

and

the

average

month

end

contract

value

for

forward

exchange

contracts,

and

average

month

end

fair

value

of

VRI,

were

as

follows:

At

October

31,

2021,

the

Funds'

OTC

derivative

assets

and

liabilities

are

as

follows:

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

Futures

contracts

........................................................

$1,089,391,757

$1,368,966,854

Swap

Contracts

..........................................................

275,311,672

424,842,222

Forward

exchange

contracts

......................................

82,882,722

318,846,758

Options

.......................................................................

856,700

426,671,220

VRI

..............................................................................

—

509,967

Gross

Amounts

of

Assets

and

Liabilities

Presented

in

the

Statement

of

Assets

and

Liabilities

Assets

a

Liabilities

a

Franklin

Low

Duration

Total

Return

Fund

Derivatives

Forward

exchange

contracts

.............................

$

243,068

$

385,529

Options

purchased

.....................................

149,066

—

Swap

contracts

.......................................

3,699,04

3

7,751,99

4

Total

.............................................

$4,091,177

$8,137,523

Franklin

Total

Return

Fund

Forward

exchange

contracts

.............................

1,421,130

1,444,832

Options

purchased

.....................................

1,348,405

—

Options

written

........................................

—

1,324,372

Swap

contracts

.......................................

9,778,756

15,569,205

Total

.............................................

$12,548,291

$18,338,409

a

Absent

an

event

of

default

or

early

termination,

OTC

derivative

assets

and

liabilities

are

presented

gross

and

not

offset

in

the

Statements

of

Assets

and

Liabilities.

11.

Other

Derivative

Information

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

144

franklintempleton.com

Annual

Report

At

October

31,

2021,

OTC

derivative

assets,

which

may

be

offset

against

OTC

derivative

liabilities

and

collateral

received

from

the

counterparty,

are

as

follows:

Amounts

Not

Offset

in

the

Statement

of

Assets

and

Liabilities

Gross

Amounts

of

Assets

Presented

in

the

Statement

of

Assets

and

Liabilities

Financial

Instruments

Available

for

Offset

Financial

Instruments

Collateral

Received

a,b

Cash

Collateral

Received

Net

Amount

(Not

less

than

zero)

Franklin

Low

Duration

Total

Return

Fund

Counterparty

BNDP

...................

$23,610

$—

$—

$—

$23,610

BOFA

....................

33,164

—

—

—

33,164

CITI

.....................

1,152,008

(1,152,008)

—

—

—

DBAB

...................

224,141

—

(224,141)

—

—

FBCO

...................

—

—

—

—

—

GSCO

...................

197,041

(5,947)

—

—

191,094

JPHQ

...................

524,064

(524,064)

—

—

—

MSCO

...................

1,937,149

—

—

(1,730,000)

207,149

Total

...................

$4,091,177

$(1,682,019)

$

(224,14

1

)

$(1,730,000)

$455,017

Franklin

Total

Return

Fund

Counterparty

BNDP

...................

43,627

—

—

—

43,627

BOFA

....................

64,670

—

—

—

64,670

CITI

.....................

977,962

(977,962)

—

—

—

DBAB

...................

872,497

(872,497)

—

—

—

GSCO

...................

744,556

(30,923)

—

—

713,633

JPHQ

...................

1,785,215

(1,785,215)

—

—

—

MSCO

...................

8,059,764

—

—

(7,770,000)

289,764

Total

...................

$12,548,291

$(3,666,597)

—

$(7,770,000)

$1,111,694

2

11.

Other

Derivative

Information

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

145

franklintempleton.com

Annual

Report

At

October

31,

2021,

OTC

derivative

liabilities,

which

may

be

offset

against

OTC

derivative

assets

and

collateral

pledged

to

the

counterparty,

are

as

follows:

See

Note

1(e)

regarding

derivative

financial

instruments. 

See

Abbreviations

on

page

156.

12.

Holdings

of

5%

Voting

Securities

of

Portfolio

Companies

The

1940

Act

defines

"affiliated

companies"

to

include

investments

in

portfolio

companies

in

which

a

fund

owns

5%

or

more

of

the

outstanding

voting

securities.

Additionally,

as

defined

in

the

1940

Act,

an

investment

is

deemed

to

be

a

“Controlled

Affiliate”

of

a

fund

when

a

fund

owns,

either

directly

or

indirectly,

25%

or

more

of

the

affiliated

companies’

outstanding

shares

or

has

the

power

to

exercise

control

over

management

or

policies

of

such

company.

During

the

year

ended

October

31,

2021,

investments

in

“affiliated

companies”

were

as

follows:

Amounts

Not

Offset

in

the

Statement

of

Assets

and

Liabilities

Gross

Amounts

of

Liabilities

Presented

in

the

Statement

of

Assets

and

Liabilities

Financial

Instruments

Available

for

Offset

Financial

Instruments

Collateral

Pledged

Cash

Collateral

Pledged

a

Net

Amount

(Not

less

than

zero)

Franklin

Low

Duration

Total

Return

Fund

Counterparty

BNDP

...................

$—

$—

$—

$—

$—

BOFA

....................

—

—

—

—

—

CITI

.....................

7,117,135

(1,152,008)

—

(5,965,127)

—

DBAB

...................

—

—

—

—

—

FBCO

...................

50,191

—

—

(30,000)

20,191

GSCO

...................

5,947

(5,947)

—

—

—

JPHQ

...................

964,250

(524,064)

—

(250,000)

190,186

MSCO

...................

—

—

—

—

—

Total

...................

$8,137,523

$(1,682,019)

$—

$(6,245,127)

$210,377

Franklin

Total

Return

Fund

Counterparty

BNDP

...................

—

—

—

—

—

BOFA

....................

—

—

—

—

—

CITI

.....................

14,433,453

(977,962)

—

(13,455,491)

—

DBAB

...................

1,324,372

(872,497)

—

(440,608)

11,267

GSCO

...................

30,923

(30,923)

—

—

—

JPHQ

...................

2,549,661

(1,785,215)

—

(764,446)

—

MSCO

...................

—

—

—

—

—

Total

...................

$18,338,409

$(3,666,597)

$—

$(14,660,545)

$11,267

a

In

some

instances,

the

collateral

amounts

disclosed

in

the

table

above

were

adjusted

due

to

the

requirement

to

limit

collateral

amounts

to

avoid

of

over

collateralization. Actual

collateral

received

and/or

pledged

may

be

more

than

the

amounts

disclosed

herein.

b

At

October

31,

2021,

the

Fund

received

U.S

Treasury

Bonds

and

Notes

as

collateral

for

derivatives.

11.

Other

Derivative

Information

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

146

franklintempleton.com

Annual

Report

13.

Credit

Facility

The

Funds,

together

with

other

U.S.

registered

and

foreign

investment

funds

(collectively,

Borrowers),

managed

by

Franklin

Templeton,

are

borrowers

in

a

joint

syndicated

senior

unsecured

credit

facility

totaling

$2.675

billion

(Global

Credit

Facility)

which

matures

on

February

4,

2022.

This

Global

Credit

Facility

provides

a

source

of

funds

to

the

Borrowers

for

temporary

and

emergency

purposes,

including

the

ability

to

meet

future

unanticipated

or

unusually

large

redemption

requests.

Under

the

terms

of

the

Global

Credit

Facility,

the

Funds

shall,

in

addition

to

interest

charged

on

any

borrowings

made

by

the

Funds

and

other

costs

incurred

by

the

Funds,

pay

their

share

of

fees

and

expenses

incurred

in

connection

with

the

implementation

and

maintenance

of

the

Global

Credit

Facility,

based

upon

their

relative

share

of

the

aggregate

net

assets

of

all

of

the

Borrowers,

including

an

annual

commitment

fee

of

0.15%

based

upon

the

unused

portion

of

the

Global

Credit

Facility.

These

fees

are

reflected

in

other

expenses

in

the

Statements

of

Operations.

During

the

year ended

October

31,

2021,

the

Funds

did

not

use

the

Global

Credit

Facility.

Value

at

Beginning

of

Year

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Year

Number

of

Shares/Principal

Amount

Held

at

End

of

Year

Investment

Income

Franklin

Floating

Rate

Daily

Access

Fund

Non-Controlled

Affiliates

Dividends

Appvion

Operations,

Inc.

$

18,106,975

$

—

$

—

$

—

$

13,176,847

$

31,283,822

1,219,956

$

—

Quarternorth

Energy

Holding,

Inc.

......

—

43,239,574

—

—

(4,541,029)

38,698,545

370,321

—

Quarternorth

Energy

Holding,

Inc.,

2/01/49

—

17,531,18

4

—

—

(1,673,10

1

)

15,858,083

145,487

—

Remington

Outdoor

Co

.,

Inc.,

Litigation

Units

.

—

—

—

—

—

—

a

170,300

289,347

Remington

Outdoor

Co.,

Inc.

............

—

—

—

(73,081,001)

73,081,001

—

b

—

—

Interest

Appvion

Operations,

Inc.,

Term

Loan,

7%,

(3-month

USD

LIBOR

+

6%),

6/12/26

......

28,599,539

—

(29,108,946)

59,911

449,496

—

b

—

888,285

c

QuarterNorth

Energy

Holding,

Inc.,

Second

Lien,

Initial

New

Term

Loan,

9%,

(3-month

USD

LIBOR

+

8%),

8/27/26

..........

—

—

(6,037,627)

d

6,037,627

13,818,047

13,818,047

13,723,697

199,133

c

Total

Affiliated

Securities

(Value

is

7.3%

of

Net

Assets)

..........

$46,706,514

$60,770,758

$(35,146,573)

(66,983,463)

94,311,26

1

$99,658,497

$1,376,765

a

As

of

October

31,

2021,

no

longer

an

affiliate.

b

As

of

October

31,

2021,

no

longer

held

by

the

fund.

c

Includes

non-cash

dividend/interest

received.

d

May

include

accretion,

amortization,

partnership

adjustments,

and/or

corporate

actions.

12.

Holdings

of

5%

Voting

Securities

of

Portfolio

Companies

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

147

franklintempleton.com

Annual

Report

14.

Fair

Value

Measurements

The Funds

follow

a

fair

value

hierarchy

that

distinguishes

between

market

data

obtained

from

independent

sources

(observable

inputs)

and

the Funds'

own

market

assumptions

(unobservable

inputs).

These

inputs

are

used

in

determining

the

value

of

the Funds' financial

instruments

and

are

summarized

in

the

following

fair

value

hierarchy:

Level

1

–

quoted

prices

in

active

markets

for

identical

financial

instruments

Level

2

–

other

significant

observable

inputs

(including

quoted

prices

for

similar

financial

instruments,

interest

rates,

prepayment

speed,

credit

risk,

etc.)

Level

3

–

significant

unobservable

inputs

(including

the Funds'

own

assumptions

in

determining

the

fair

value

of

financial

instruments)

The

input

levels

are

not

necessarily

an

indication

of

the

risk

or

liquidity

associated

with

financial

instruments

at

that

level.

A

summary

of

inputs

used

as

of

October

31,

2021,

in

valuing

the

Funds’

assets

and

liabilities

carried

at

fair

value,

is

as

follows:

Level

1

Level

2

Level

3

Total

Franklin

Adjustable

U.S.

Government

Securities

Fund

Assets:

Investments

in

Securities:

a

Commercial

Mortgage-Backed

Securities

......

$

—

$

113,496,342

$

—

$

113,496,342

Mortgage-Backed

Securities

................

—

532,613,159

—

532,613,159

Short

Term

Investments

...................

14,899,131

—

—

14,899,131

Total

Investments

in

Securities

...........

$14,899,131

$646,109,501

$—

$661,008,632

Franklin

Floating

Rate

Daily

Access

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Hotels,

Restaurants

&

Leisure

.............

—

599,694

—

599,694

Machinery

............................

—

13,067,000

—

13,067,000

Oil,

Gas

&

Consumable

Fuels

.............

—

38,698,545

—

38,698,545

Paper

&

Forest

Products

.................

—

—

31,283,822

31,283,822

Road

&

Rail

..........................

—

—

1,380,592

1,380,592

Management

Investment

Companies

.........

43,927,013

—

—

43,927,013

Preferred

Stocks

........................

—

2,045,055

—

2,045,055

Warrants

:

Machinery

............................

—

—

1,351

1,351

Oil,

Gas

&

Consumable

Fuels

.............

—

15,858,083

—

15,858,083

Corporate

Bonds

:

Airlines

..............................

—

13,100,561

—

13,100,561

Chemicals

...........................

—

5,750,106

—

5,750,106

Communications

Equipment

..............

—

1,983,763

—

1,983,763

Construction

Materials

..................

—

4,200,655

—

4,200,655

Containers

&

Packaging

.................

—

3,560,312

—

3,560,312

Diversified

Consumer

Services

............

—

3,355,625

—

3,355,625

Diversified

Financial

Services

.............

—

1,326,373

—

1,326,373

Diversified

Telecommunication

Services

.....

—

5,611,243

—

5,611,243

Energy

Equipment

&

Services

.............

—

755,372

—

755,372

Hotels,

Restaurants

&

Leisure

.............

—

526,250

—

526,250

Independent

Power

and

Renewable

Electricity

Producers

..........................

—

1,473,244

—

1,473,244

Insurance

............................

—

1,420,967

—

1,420,967

Media

...............................

—

4,585,960

—

4,585,960

Oil,

Gas

&

Consumable

Fuels

.............

—

2,519,880

—

2,519,880

Road

&

Rail

..........................

—

489,375

21,606,300

22,095,675

Specialty

Retail

........................

—

2,253,888

—

2,253,888

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

148

franklintempleton.com

Annual

Report

Level

1

Level

2

Level

3

Total

Franklin

Floating

Rate

Daily

Access

Fund

(continued)

Assets:

(continued)

Investments

in

Securities:

Corporate

Bonds:

Wireless

Telecommunication

Services

.......

$

—

$

1,394,186

$

—

$

1,394,186

Senior

Floating

Rate

Interests

...............

—

1,084,729,534

5,172,303

1,089,901,837

Asset-Backed

Securities

..................

—

9,513,395

—

9,513,395

Escrows

and

Litigation

Trusts

...............

—

—

—

b

—

Short

Term

Investments

...................

68,461,270

45,676,096

—

114,137,366

Total

Investments

in

Securities

...........

$112,388,283

$1,264,495,162

$59,444,368

$1,436,327,813

Other

Financial

Instruments:

Unfunded

Loan

Commitments

..............

$

—

$

26,362

$

—

$

26,362

Total

Other

Financial

Instruments

.........

$—

$26,362

$—

$26,362

Franklin

Low

Duration

Total

Return

Fund

Assets:

Investments

in

Securities:

Common

Stocks

........................

—

—

733

b

733

Management

Investment

Companies

.........

127,711,183

—

—

127,711,183

Warrants

:

Oil,

Gas

&

Consumable

Fuels

.............

—

—

—

b

—

Paper

&

Forest

Products

.................

803

—

—

803

Corporate

Bonds

:

Aerospace

&

Defense

...................

—

16,248,828

—

16,248,828

Air

Freight

&

Logistics

...................

—

1,679,175

—

1,679,175

Airlines

..............................

—

8,792,797

—

8,792,797

Auto

Components

......................

—

960,660

—

960,660

Banks

...............................

—

98,813,208

—

98,813,208

Beverages

...........................

—

13,049,721

—

13,049,721

Biotechnology

.........................

—

6,012,627

—

6,012,627

Capital

Markets

........................

—

30,001,813

—

30,001,813

Chemicals

...........................

—

16,570,577

—

16,570,577

Commercial

Services

&

Supplies

...........

—

1,380,561

—

1,380,561

Communications

Equipment

..............

—

1,487,423

—

1,487,423

Consumer

Finance

.....................

—

18,055,461

—

18,055,461

Containers

&

Packaging

.................

—

2,048,162

—

2,048,162

Diversified

Financial

Services

.............

—

8,018,088

—

8,018,088

Diversified

Telecommunication

Services

.....

—

27,156,518

—

27,156,518

Electric

Utilities

........................

—

28,446,270

—

28,446,270

Energy

Equipment

&

Services

.............

—

8,999,582

—

8,999,582

Entertainment

.........................

—

19,041,026

—

19,041,026

Equity

Real

Estate

Investment

Trusts

(REITs)

.

—

3,056,250

—

3,056,250

Food

&

Staples

Retailing

.................

—

3,086,325

—

3,086,325

Health

Care

Equipment

&

Supplies

.........

—

343,429

—

343,429

Health

Care

Providers

&

Services

..........

—

15,589,353

—

15,589,353

Hotels,

Restaurants

&

Leisure

.............

—

26,876,618

—

26,876,618

Independent

Power

and

Renewable

Electricity

Producers

..........................

—

2,374,054

—

2,374,054

Interactive

Media

&

Services

..............

—

19,386,457

—

19,386,457

Internet

&

Direct

Marketing

Retail

..........

—

15,450,046

—

15,450,046

IT

Services

...........................

—

5,289,636

—

5,289,636

Machinery

............................

—

1,279,224

—

1,279,224

Media

...............................

—

18,884,373

—

18,884,373

Metals

&

Mining

.......................

—

998,750

—

998,750

Multiline

Retail

........................

—

—

—

b

—

Multi-Utilities

..........................

—

1,370,316

—

1,370,316

Oil,

Gas

&

Consumable

Fuels

.............

—

63,286,891

—

63,286,891

14.

Fair

Value

Measurements

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

149

franklintempleton.com

Annual

Report

Level

1

Level

2

Level

3

Total

Franklin

Low

Duration

Total

Return

Fund

(continued)

Assets:

(continued)

Investments

in

Securities:

Corporate

Bonds:

Personal

Products

.....................

$

—

$

6,751,635

$

—

$

6,751,635

Pharmaceuticals

.......................

—

20,666,176

—

20,666,176

Real

Estate

Management

&

Development

....

—

3,068,625

—

3,068,625

Semiconductors

&

Semiconductor

Equipment

.

—

10,582,509

—

10,582,509

Specialty

Retail

........................

—

527,308

—

527,308

Thrifts

&

Mortgage

Finance

...............

—

10,520,148

—

10,520,148

Tobacco

.............................

—

9,060,330

—

9,060,330

Wireless

Telecommunication

Services

.......

—

3,758,125

—

3,758,125

Senior

Floating

Rate

Interests

...............

—

28,825,044

—

28,825,044

Marketplace

Loans

......................

—

—

37,897,592

37,897,592

Foreign

Government

and

Agency

Securities

....

—

161,975,186

—

161,975,186

U.S.

Government

and

Agency

Securities

.......

—

1,037,121,571

—

1,037,121,571

Asset-Backed

Securities

..................

—

397,360,452

—

397,360,452

Commercial

Mortgage-Backed

Securities

......

—

63,983,761

—

63,983,761

Mortgage-Backed

Securities

................

—

71,063,842

—

71,063,842

Municipal

Bonds

.........................

—

43,774,282

—

43,774,282

Residential

Mortgage-Backed

Securities

......

—

191,309,160

—

191,309,160

Escrows

and

Litigation

Trusts

...............

—

61,750

—

b

61,750

Options

purchased

.......................

—

149,066

—

149,066

Short

Term

Investments

...................

56,135,533

85,945,491

—

142,081,024

Total

Investments

in

Securities

...........

$183,847,519

$2,630,538,680

$37,898,325

$2,852,284,524

Other

Financial

Instruments:

Forward

exchange

contracts

...............

—

243,068

—

243,068

Futures

contracts

........................

3,831,290

—

—

3,831,290

Swap

contracts

.........................

—

3,272,80

4

—

3,272,80

4

Total

Other

Financial

Instruments

.........

$3,831,290

$3,515,872

$—

$7,347,162

Liabilities:

Other

Financial

Instruments:

Forward

exchange

contracts

................

$

—

$

385,529

$

—

$

385,529

Futures

contracts

........................

3,067,991

—

—

3,067,991

Swap

contracts

..........................

—

3,644,134

—

3,644,134

Total

Other

Financial

Instruments

.........

$3,067,991

$4,029,663

$—

$7,097,654

Franklin

Total

Return

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Energy

Equipment

&

Services

.............

1,076,941

—

—

1,076,941

Multiline

Retail

........................

—

—

—

b

—

Oil,

Gas

&

Consumable

Fuels

.............

—

—

3,256

3,256

Management

Investment

Companies

.........

918,184,535

—

—

918,184,535

Preferred

Stocks

........................

2,552,850

—

—

2,552,850

Warrants

:

Oil,

Gas

&

Consumable

Fuels

.............

—

—

1

1

Paper

&

Forest

Products

.................

4,026

—

—

4,026

Corporate

Bonds

:

Aerospace

&

Defense

...................

—

14,506,516

—

14,506,516

Air

Freight

&

Logistics

...................

—

5,543,828

—

5,543,828

Airlines

..............................

—

29,110,959

—

29,110,959

Auto

Components

......................

—

2,693,750

—

2,693,750

Banks

...............................

—

67,780,395

—

67,780,395

Beverages

...........................

—

6,521,783

—

6,521,783

Biotechnology

.........................

—

4,019,876

—

4,019,876

14.

Fair

Value

Measurements

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

150

franklintempleton.com

Annual

Report

Level

1

Level

2

Level

3

Total

Franklin

Total

Return

Fund

(continued)

Assets:

(continued)

Investments

in

Securities:

Corporate

Bonds:

Capital

Markets

........................

$

—

$

7,630,624

$

—

$

7,630,624

Chemicals

...........................

—

56,343,486

—

56,343,486

Commercial

Services

&

Supplies

...........

—

2,646,075

—

2,646,075

Communications

Equipment

..............

—

2,789,563

—

2,789,563

Consumer

Finance

.....................

—

6,317,857

—

6,317,857

Containers

&

Packaging

.................

—

13,795,969

—

13,795,969

Diversified

Financial

Services

.............

—

7,417,916

—

7,417,916

Diversified

Telecommunication

Services

.....

—

12,839,490

—

12,839,490

Electric

Utilities

........................

—

62,176,363

—

62,176,363

Electronic

Equipment,

Instruments

&

Components

........................

—

19,160,313

—

19,160,313

Energy

Equipment

&

Services

.............

—

1,502,534

—

1,502,534

Equity

Real

Estate

Investment

Trusts

(REITs)

.

—

3,689,811

—

3,689,811

Food

&

Staples

Retailing

.................

—

10,323,225

—

10,323,225

Food

Products

........................

—

10,402,700

—

10,402,700

Health

Care

Equipment

&

Supplies

.........

—

4,380,323

—

4,380,323

Health

Care

Providers

&

Services

..........

—

50,452,380

—

50,452,380

Hotels,

Restaurants

&

Leisure

.............

—

67,821,135

—

67,821,135

Household

Durables

....................

—

14,238,322

—

14,238,322

Independent

Power

and

Renewable

Electricity

Producers

..........................

—

13,046,398

—

13,046,398

Interactive

Media

&

Services

..............

—

14,643,683

—

14,643,683

Internet

&

Direct

Marketing

Retail

..........

—

23,983,533

—

23,983,533

IT

Services

...........................

—

11,938,043

—

11,938,043

Machinery

............................

—

1,938,000

—

1,938,000

Media

...............................

—

38,985,711

—

38,985,711

Metals

&

Mining

.......................

—

2,603,125

—

2,603,125

Multiline

Retail

........................

—

—

—

b

—

Multi-Utilities

..........................

—

8,398,038

—

8,398,038

Oil,

Gas

&

Consumable

Fuels

.............

—

96,891,819

—

96,891,819

Paper

&

Forest

Products

.................

—

11,920,336

—

11,920,336

Personal

Products

.....................

—

11,865,410

—

11,865,410

Pharmaceuticals

.......................

—

1,713,452

—

1,713,452

Real

Estate

Management

&

Development

....

—

8,032,867

—

8,032,867

Road

&

Rail

..........................

—

21,280,573

—

21,280,573

Semiconductors

&

Semiconductor

Equipment

.

—

14,230,568

—

14,230,568

Software

.............................

—

651,519

—

651,519

Specialty

Retail

........................

—

2,789,985

—

2,789,985

Thrifts

&

Mortgage

Finance

...............

—

18,354,756

—

18,354,756

Tobacco

.............................

—

15,820,344

—

15,820,344

Trading

Companies

&

Distributors

..........

—

2,481,904

—

2,481,904

Wireless

Telecommunication

Services

.......

—

55,059,781

—

55,059,781

Senior

Floating

Rate

Interests

...............

—

65,155,837

—

65,155,837

Marketplace

Loans

......................

—

—

57,211,330

57,211,330

Foreign

Government

and

Agency

Securities

....

—

293,595,478

—

293,595,478

U.S.

Government

and

Agency

Securities

.......

—

1,162,411,656

—

1,162,411,656

Asset-Backed

Securities

..................

—

584,186,339

—

584,186,339

Commercial

Mortgage-Backed

Securities

:

Diversified

Financial

Services

.............

—

33,780,027

—

33,780,027

Thrifts

&

Mortgage

Finance

...............

—

368,521

5,379

373,900

Mortgage-Backed

Securities

................

—

703,697,551

—

703,697,551

Municipal

Bonds

.........................

—

247,696,405

—

247,696,405

Residential

Mortgage-Backed

Securities

......

—

351,356,433

—

351,356,433

Escrows

and

Litigation

Trusts

...............

—

97,500

—

b

97,500

14.

Fair

Value

Measurements

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

151

franklintempleton.com

Annual

Report

A

reconciliation

in

which

Level

3

inputs

are

used

in

determining

fair

value

is

presented

when

there

are

significant

Level

3

assets

and/or

liabilities

at

the

beginning

and/or

end

of

the year.

At

October

31,

2021,

the

reconciliation is

as follows:

Level

1

Level

2

Level

3

Total

Franklin

Total

Return

Fund

(continued)

Assets:

(continued)

Investments

in

Securities:

Commercial

Mortgage-Backed

Securities:

Options

purchased

.......................

—

$

1,348,405

—

$

1,348,405

Short

Term

Investments

...................

$

135,753,435

1,293,888

—

137,047,323

Total

Investments

in

Securities

...........

$1,057,571,787

$4,305,723,078

$57,219,966

$5,420,514,831

Other

Financial

Instruments:

Forward

exchange

contracts

...............

—

1,421,130

$

—

1,421,130

Futures

contracts

........................

5,145,937

—

—

5,145,937

Swap

contracts

.........................

—

7,901,264

—

7,901,264

Total

Other

Financial

Instruments

.........

$5,145,937

$9,322,394

$—

$14,468,331

Liabilities:

Other

Financial

Instruments:

Options

written

..........................

$

—

$

1,324,372

$

—

$

1,324,372

Forward

exchange

contracts

................

—

1,444,832

—

1,444,832

Futures

contracts

........................

3,755,341

—

—

3,755,341

Swap

contracts

..........................

—

6,783,464

—

6,783,464

Total

Other

Financial

Instruments

.........

$3,755,341

$9,552,668

$—

$13,308,009

a

For

detailed

categories,

see

the

accompanying

Statement

of

Investments.

b

Includes

securities

determined

to

have

no

value

at

October

31,

2021.

Balance

at

Beginning

of

Year

Purchases

a

Sales

b

Transfer

Into

Level

3

c

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

Floating

Rate

Daily

Access

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Aerospace

&

Defense

.

$

—

d

$

—

$

—

$

—

$

—

$

—

$

(73,081,001)

$

73,081,001

$

—

$

—

Oil,

Gas

&

Consumable

Fuels

..........

1,460,626

—

(2,592,340)

—

—

—

731,395

400,319

—

—

Paper

&

Forest

Products

18,106,975

—

—

—

—

—

—

13,176,847

31,283,822

13,176,847

Road

&

Rail

.......

—

d

—

—

—

—

—

—

1,380,592

1,380,592

1,380,592

Warrants

:

Machinery

.........

—

—

d

—

—

—

—

—

1,351

1,351

1,351

Corporate

Bonds

:

Road

&

Rail

.......

18,585,180

—

—

—

—

1,945,590

—

1,075,530

21,606,300

1,075,530

Senior

Floating

Rate

Interests

:

Household

Products

..

45,517,441

—

(24,377,581)

—

—

8,862

99,845

(16,076,264)

5,172,303

(19,800,060)

Road

&

Rail

.......

14,180,644

—

(15,430,072)

—

—

(166,143)

(509,085)

1,924,656

—

—

Escrows

and

Litigation

Trusts

...........

—

d

—

(289,347)

—

—

—

289,347

—

—

d

—

Total

Investments

in

Securities

............

$97,850,866

$—

$(42,689,340)

$—

$—

$1,788,309

$(72,469,499)

$74,964,032

$59,444,368

$(4,165,740)

14.

Fair

Value

Measurements

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

152

franklintempleton.com

Annual

Report

Balance

at

Beginning

of

Year

Purchases

a

Sales

b

Transfer

Into

Level

3

c

Transfer

Out

of

Level

3

Net

Accretion

(Amortiza-

tion)

Net

Realized

Gain

(Loss)

Net

Unrealized

Appreciation

(Depreciation)

Balance

at

End

of

Year

Net

Change

in

Unrealized

Appreciation

(Depreciation)

on

Assets

Held

at

Year

End

a

a

a

a

a

a

a

a

a

a

a

Franklin

Low

Duration

Total

Return

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Aerospace

&

Defense

.

$

—

d

$

—

$

(3,690,418)

e

$

—

$

—

$

—

$

—

3,690,418

$

—

$

—

Multiline

Retail

......

—

d

—

—

—

—

—

—

$

—

—

d

—

Oil,

Gas

&

Consumable

Fuels

..........

—

—

(3,826)

863

—

—

—

3,696

733

3,696

Paper

&

Forest

Products

367,190

—

(334,607)

e

—

—

—

—

(32,583)

—

—

Road

&

Rail

.......

—

d

—

—

e

—

—

—

—

—

—

—

Warrants

:

Oil,

Gas

&

Consumable

Fuels

..........

15

—

—

—

—

—

—

(15)

—

d

(15)

Corporate

Bonds

:

Multiline

Retail

......

1,469

183

—

—

—

(32,224)

—

30,572

—

d

30,572

Road

&

Rail

.......

306,219

—

(341,063)

e

—

—

13,291

432

21,121

—

—

Senior

Floating

Rate

Interests

:

Household

Products

..

2,874,048

—

(3,243,528)

e

—

—

475

6,810

362,195

—

—

Road

&

Rail

.......

233,647

—

(252,634)

e

—

—

326

(37)

18,698

—

—

Marketplace

Loans

:

Diversified

Financial

Services

........

27,612,358

32,627,893

(23,355,872)

—

—

—

(1,402,117)

2,415,330

37,897,592

139,104

Escrows

and

Litigation

Trusts

...........

—

d

—

d

(1,292)

e

—

—

—

1,292

—

—

d

—

Total

Investments

in

Securities

............

$31,394,946

$32,628,076

$(31,223,240)

$863

$—

$(18,132)

$(1,393,620)

$6,509,432

$37,898,325

$173,357

Franklin

Total

Return

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Aerospace

&

Defense

.

—

d

—

(66,324)

e

—

—

—

—

66,324

—

—

Hotels,

Restaurants

&

Leisure

.........

34,112

—

(14,951)

—

—

—

(

1,702,722

)

1,683,561

—

—

Multiline

Retail

......

—

d

—

—

—

—

—

—

—

—

d

—

Oil,

Gas

&

Consumable

Fuels

..........

—

—

(17,016)

3,838

—

—

—

16,434

3,256

16,434

Paper

&

Forest

Products

193,437

—

(176,272)

e

—

—

—

—

(17,165)

—

—

Road

&

Rail

.......

—

d

—

—

e

—

—

—

—

—

—

—

Warrants

:

Oil,

Gas

&

Consumable

Fuels

..........

35

—

—

—

—

—

—

(34

)

1

d

(34

)

Corporate

Bonds

:

Multiline

Retail

......

3,427

d

428

—

—

—

(65,671)

—

61,816

—

d

61,816

Road

&

Rail

.......

161,317

—

(180,692)

e

—

—

7,483

(7)

11,899

—

—

Senior

Floating

Rate

Interests

:

Household

Products

..

1,514,060

—

(1,709,156)

e

—

—

233

3,495

191,368

—

—

Road

&

Rail

.......

123,086

—

(133,097)

e

—

—

173

(4)

9,842

—

—

Marketplace

Loans

:

Diversified

Financial

Services

........

8,121,179

58,528,279

(9,011,497)

—

—

—

(358,140)

(68,491)

57,211,330

(556,802)

14.

Fair

Value

Measurements

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

153

franklintempleton.com

Annual

Report

Balance

at

Beginning

of

Year

Purchases

a

Sales

b

Transfer

Into

Level

3

c

Transfer

Out

of

Level

3

Net

Accretion

(Amortiza-

tion)

Net

Realized

Gain

(Loss)

Net

Unrealized

Appreciation

(Depreciation)

Balance

at

End

of

Year

Net

Change

in

Unrealized

Appreciation

(Depreciation)

on

Assets

Held

at

Year

End

a

a

a

a

a

a

a

a

a

a

a

Franklin

Total

Return

Fund

(continued)

Assets:

Investments

in

Securities:

Commercial

Mortgage-

Backed

Securities

:

Thrifts

&

Mortgage

Finance

........

$

7,781

$

—

$

(2,402)

$

—

$

—

$

—

$

109

$

(109)

$

5,379

$

—

Escrows

and

Litigation

Trusts

...........

—

d

—

d

(3,170)

e

—

—

—

3,170

—

—

d

—

Total

Investments

in

Securities

............

$10,158,434

$58,528,707

$(11,314,577)

$3,838

$—

$(57,782)

$(2,054,099)

$1,955,445

$57,219,966

$(478,586)

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

Transferred

into

level

3

as

a

result

of

the

unavailability

of

a

quoted

market

price

in

an

active

market

for

identical

securities

or

as

a

result

of

the

unreliability

of

the

foreign

exchange

rate

and

other

significant

observable

valuation

inputs.

May

include

amounts

related

to

a

corporate

action.

d

Includes

securities

determined

to

have

no

value.

e

Includes

securities

delivered

as

a

result

of

an

in-kind

transfer.

14.

Fair

Value

Measurements

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

154

franklintempleton.com

Annual

Report

Significant

unobservable

valuation

inputs

for

material

Level

3

assets

and/or

liabilities

and

impact

to

fair

value

as

a

result

of

changes

in

unobservable

valuation

inputs

as

of

October

31,

2021,

are

as

follows:

Description

Fair

Value

at

End

of

Year

Valuation

Technique

Unobservable

Inputs

Amount

/

Range

(Weighted

Average)

a

Impact

to

Fair

Value

if

Input

Increases

b

Franklin

Floating

Rate

Daily

Access

Fund

Assets:

Investments

in

Securities:

Common

Stocks:

Paper

&

Forest

Products

.

.

.

.

.

.

.

$31,283,822

Discounted

cash

flow

Weighted

average

cost

of

capital

21.5%

Decrease

c

Free

cash

flow

$136.7

mil

Increase

c

Discount

for

lack

of

marketability

5.1%

Decrease

c

Long

term

growth

2.5%

Increase

Road

&

Rail

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

1,380,592

Market

comparables

Discount

for

lack

of

marketability

6.9%

Decrease

d

EV

/

EBITDA

multiple

5.6x

–

5.9x

(5.8x)

Increase

c

Corporate

Bonds:

Road

&

Rail

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

21,606,300

Discounted

cash

flow

Discount

rate

15.6%

Decrease

c

Free

cash

flow

$22.3

mil

Increase

Senior

Floating

Rate

Interests:

Household

Products

.

.

.

.

.

.

.

.

.

.

.

5,172,303

Recovery

value

Asset

value

estimate

$11.6

mil

Increase

c

All

other

Investments

..........

1,351

e,f

Total

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

$59,444,368

Franklin

Low

Duration

Total

Return

Fund

Assets:

Investments

in

Securities:

Marketplace

Loans:

Diversified

Financial

Services

.

$31,687,660

Discounted

cash

flow

Loss-Adjusted

Discount

rate

6.7%

–

9.8%

(8.6%)

Decrease

c

Projected

Loss

rate

5.2%

–

16.8%

(9.2%)

Decrease

c

All

other

Investments.

.

........

6,210,665

e,f

Total.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.........

$37,898,325

14.

Fair

Value

Measurements

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

155

franklintempleton.com

Annual

Report

Abbreviations

List

EBITDA

-

Earnings

before

interest,

taxes,

depreciation

and

amortization

EV

-

Enterprise

value

15.

New

Accounting

Pronouncements

In

March

2020,

the

Financial

Accounting

Standards

Board

(FASB)

issued

Accounting

Standards

Update

(ASU)

No.

2020-04,

Reference

Rate

Reform

(Topic

848)

–

Facilitation

of

the

Effects

of

Reference

Rate

Reform

on

Financial

Reporting.

In

January

2021,

the

FASB

issued

ASU

No.

2021-01,

with

further

amendments

to

Topic

848.

The

amendments

in

the

ASUs

provide

optional

temporary

accounting

recognition

and financial

reporting

relief

from

the

effect

of

certain

types

of

contract

modifications

due

to

the

planned

discontinuation

of

the

London

Interbank

Offered

Rate

(LIBOR)

and

other

interbank-offered

based

reference

rates

as

of

the

end

of

2021

and

2023. The

ASUs

are

effective

for

certain

reference

rate-related

contract

modifications

that

occur

during

the

period

March

12,

2020

through

December

31,

2022.

Management

has

reviewed

the

requirements

and

believes

the

adoption

of

these

ASUs

will

not

have

a

material

impact

on

the

financial

statements. 

Description

Fair

Value

at

End

of

Year

Valuation

Technique

Unobservable

Inputs

Amount

/

Range

(Weighted

Average)

a

Impact

to

Fair

Value

if

Input

Increases

b

Franklin

Total

Return

Fund

Assets:

Investments

in

Securities:

Marketplace

Loans:

Diversified

Financial

Services.

$45,447,255

Discounted

cash

flow

Loss-Adjusted

Discount

rate

7.7%

–

11.1%

(8.7%)

Decrease

c

Projected

Loss

rate

3.2%

–

18.0%

(13.0%)

Increase

c

All

other

Investments

.

.

.

.

.

.

.

11,772,711

e,f

Total

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.........

$57,219,966

a

Weighted

based

on

the

relative

fair

value

of

the

financial

instruments.

b

Represents

the

directional

change

in

the

fair

value

that

would

result

from

a

significant

and

reasonable

increase

in

the

corresponding

input.

A

significant

and

reasonable

decrease

in

the

input

would

have

the

opposite

effect.

Significant

impacts,

if

any,

to

fair

value

and/or

net

assets

have

been

indicated.

c

Represents

a

significant

impact

to

fair

value

and

net

assets.

d

Represents

a

significant

impact

to

fair

value

but

not

net

assets.

e

Includes

fair

value

of

immaterial

assets

and/or

liabilities

developed

using

various

valuation

techniques

and

unobservable

inputs.

May

also

include

values

derived

using

private

transaction

prices

or

non-public

third

party

pricing

information

which

is

unobservable.

f

Includes

securities

determined

to

have

no

value

at

October

31,

2021.

14.

Fair

Value

Measurements

(continued)

Franklin

Investors

Securities

Trust

Notes

to

Financial

Statements

156

franklintempleton.com

Annual

Report

16.

Subsequent

Events

The

Funds

have

evaluated

subsequent

events

through

the

issuance

of

the

financial

statements

and

determined

that

no

events

have

occurred

that

require

disclosure.

Abbreviations

Counterparty

BNDP

BNP

Paribas

SA

BOFA

Bank

of

America,

N.A.

CITI

Citibank

NA

DBAB

Deutsche

Bank

AG

FBCO

Credit

Suisse

Group

AG

GSCO

Goldman

Sachs

Group,

Inc.

JPHQ

JPMorgan

Chase

Bank

NA

MSCO

Morgan

Stanley

Cu

r

rency

AUD

Australian

Dollar

BRL

Brazilian

Real

DOP

Dominican

Peso

EUR

Euro

JPY

Japanese

Yen

NOK

Norwegian

Krone

RUB

Russian

Ruble

USD

United

States

Dollar

UYU

Uruguayan

Peso

ZAR

South

African

Rand

Index

MCDX.

NA.Series

number

MCDX

North

America

Index

Selected

Portfolio

AGMC

Assured

Guaranty

Municipal

Corp.

BZDIOVRA

Brazil

Inter-Bank

Deposit

Rate

CLO

Collateralized

Loan

Obligation

CMT

Constant

Monthly

U.S.

Treasury

Securities

Yield

Curve

Rate

Index

COFI

Cost

of

Funds

Index

ETF

Exchange-Traded

Fund

EURIBOR

Euro

Inter-Bank

Offer

Rate

FHLMC

Federal

Home

Loan

Mortgage

Corp.

FNMA

Federal

National

Mortgage

Association

FRN

Floating

Rate

Note

GDP

Gross

Domestic

Product

GNMA

Government

National

Mortgage

Association

GO

General

Obligation

H15BDI

U.S.

Treasury

Bill

Auction

High

Discount

Rate

LIBOR

London

Inter-Bank

Offered

Rate

MBS

Mortgage-Backed

Security

PIK

Payment-In-Kind

REIT

Real

Estate

Investment

Trust

SOFR

Secured

Overnight

Financing

Rate

TBA

To-Be-Announced

TBD

To

Be

Determined

T-Note

Treasury

Note

VRI

Value

Recovery

Instrument

Franklin

Investors

Securities

Trust

Report

of

Independent

Registered

Public

Accounting

Firm

157

franklintempleton.com

Annual

Report

To

the

Board

of

Trustees

of

Franklin

Investors

Securities

Trust

and

Shareholders

of

Franklin

Adjustable

U.S.

Government

Securities

Fund,

Franklin

Floating

Rate

Daily

Access

Fund,

Franklin

Low

Duration

Total

Return

Fund,

and

Franklin

Total

Return

Fund.

Opinions

on

the

Financial

Statements

We

have

audited

the

accompanying

statements

of

assets

and

liabilities,

including

the

statements

of

investments,

of

Franklin

Adjustable

U.S.

Government

Securities

Fund,

Franklin

Floating

Rate

Daily

Access

Fund,

Franklin

Low

Duration

Total

Return

Fund,

and

Franklin

Total

Return

Fund

(four

of

the

funds

constituting

Franklin

Investors

Securities

Trust,

hereafter

collectively

referred

to

as

the

"Funds")

as

of

October

31,

2021,

the

related

statements

of

operations

for

the

year

ended

October

31,

2021,

the

statements

of

changes

in

net

assets

for

each

of

the

two

years

in

the

period

ended

October

31,

2021,

including

the

related

notes,

and

the

financial

highlights

for

each

of

the

periods

indicated

therein

(collectively

referred

to

as

the

“financial

statements”).

In

our

opinion,

the

financial

statements

present

fairly,

in

all

material

respects,

the

financial

position

of

each

of

the

Funds

as

of

October

31,

2021,

the

results

of

each

of

their

operations

for

the

year

then

ended,

the

changes

in

each

of

their

net

assets

for

each

of

the

two

years

in

the

period

ended

October

31,

2021

and

each

of

the

financial

highlights

for

each

of

the

periods

indicated

therein

in

conformity

with

accounting

principles

generally

accepted

in

the

United

States

of

America.

Basis

for

Opinions

These

financial

statements

are

the

responsibility

of

the

Funds’

management.

Our

responsibility

is

to

express

an

opinion

on

the

Funds’

financial

statements

based

on

our

audits.

We

are

a

public

accounting

firm

registered

with

the

Public

Company

Accounting

Oversight

Board

(United

States)

(PCAOB)

and

are

required

to

be

independent

with

respect

to

the

Funds

in

accordance

with

the

U.S.

federal

securities

laws

and

the

applicable

rules

and

regulations

of

the

Securities

and

Exchange

Commission

and

the

PCAOB.

We

conducted

our

audits

of

these

financial

statements

in

accordance

with

the

standards

of

the

PCAOB.

Those

standards

require

that

we

plan

and

perform

the

audit

to

obtain

reasonable

assurance

about

whether

the

financial

statements

are

free

of

material

misstatement,

whether

due

to

error

or

fraud.

Our

audits

included

performing

procedures

to

assess

the

risks

of

material

misstatement

of

the

financial

statements,

whether

due

to

error

or

fraud,

and

performing

procedures

that

respond

to

those

risks.

Such

procedures

included

examining,

on

a

test

basis,

evidence

regarding

the

amounts

and

disclosures

in

the

financial

statements.

Our

audits

also

included

evaluating

the

accounting

principles

used

and

significant

estimates

made

by

management,

as

well

as

evaluating

the

overall

presentation

of

the

financial

statements.

Our

procedures

included

confirmation

of

securities

owned

as

of

October

31,

2021

by

correspondence

with

the

custodian,

transfer

agent

and

brokers;

when

replies

were

not

received

from

brokers,

we

performed

other

auditing

procedures.

We

believe

that

our

audits

provide

a

reasonable

basis

for

our

opinions.

PricewaterhouseCoopers

LLP

San

Francisco,

California

December

17,

2021

We

have

served

as

the

auditor

of

one

or

more

investment

companies

in

the

Franklin

Templeton

Group

of

Funds

since

1948.

Franklin

Investors

Securities

Trust

Tax

Information

(unaudited)

158

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

its

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

October

31,

2021:

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

Adjustable

U.S.

Government

Securities

Fund

Franklin

Floating

Rate

Daily

Access

Fund

Income

Eligible

for

Dividends

Received

Deduction

(DRD)

§854(b)(1)(A)

$

—

$422,697

Qualified

Dividend

Income

Earned

(QDI)

§854(b)(1)(B)

$

—

$422,697

Qualified

Net

Interest

Income

(QII)

§871(k)(1)(C)

$6,981,375

$35,814,917

Pursuant

to:

Franklin

Low

Duration

Total

Return

Fund

Franklin

Total

Return

Fund

Income

Eligible

for

Dividends

Received

Deduction

(DRD)

§854(b)(1)(A)

$277

$56,269

Qualified

Dividend

Income

Earned

(QDI)

§854(b)(1)(B)

$277

$56,269

Qualified

Net

Interest

Income

(QII)

§871(k)(1)(C)

$48,744,376

$70,532,278

Interest

Earned

from

Federal

Obligations

Note

(1)

$16,299,972

$9,314,464

Franklin

Investors

Securities

Trust

Board

Members

and

Officers

159

franklintempleton.com

Annual

Report

The

name,

year

of

birth

and

address

of

the

officers

and

board

members,

as

well

as

their

affiliations,

positions

held

with

the

Trust,

principal

occupations

during

at

least

the

past

five

years

and

number

of

U.S.

registered

portfolios

overseen

in

the

Franklin

Templeton/Legg

Mason

fund

complex,

are

shown

below.

Generally,

each

board

member

serves

until

that

person’s

successor

is

elected

and

qualified.

Independent

Board

Members

Name,

Year

of

Birth

and

Address

Position

Length

of

Time

Served

Number

of

Portfolios

in

Fund

Complex

Overseen

by

Board

Member*

Other

Directorships

Held

During

at

Least

the

Past

5

Years

Harris

J.

Ashton

(1932)

Trustee

Since

1986

123

Bar-S

Foods

(meat

packing

company)

(1981-2010).

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Director

of

various

companies;

and

formerly

,

Director,

RBC

Holdings,

Inc.

(bank

holding

company)

(until

2002);

and

President,

Chief

Executive

Officer

and

Chairman

of

the

Board,

General

Host

Corporation

(nursery

and

craft

centers)

(until

1998).

Terrence

J.

Checki

(1945)

Trustee

Since

2017

104

Hess

Corporation

(exploration

of

oil

and

gas)

(2014-present).

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Member

of

the

Council

on

Foreign

Relations

(1996-present);

Member

of

the

National

Committee

on

U.S.-China

Relations

(1999-present);

member

of

the

board

of

trustees

of

the

Economic

Club

of

New

York

(2013-present);

member

of

the

board

of

trustees

of

the

Foreign

Policy

Association

(2005-present);

member

of

the

board

of

directors

of

Council

of

the

Americas

(2007-present)

and

the

Tallberg

Foundation

(2018–

present);

and

formerly

,

Executive

Vice

President

of

the

Federal

Reserve

Bank

of

New

York

and

Head

of

its

Emerging

Markets

and

Internal

Affairs

Group

and

Member

of

Management

Committee

(1995-2014);

and

Visiting

Fellow

at

the

Council

on

Foreign

Relations

(2014).

Mary

C.

Choksi

(1950)

Trustee

Since

2014

124

Omnicom

Group

Inc.

(advertising

and

marketing

communications

services)

(2011-present)

and

White

Mountains

Insurance

Group,

Ltd.

(holding

company)

(2017-present);

and

formerly

,

Avis

Budget

Group

Inc.

(car

rental)

(2007-2020).

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Director

of

various

companies;

and

formerly

,

Founder

and

Senior

Advisor,

Strategic

Investment

Group

(investment

management

group)

(2015-2017);

Founding

Partner

and

Senior

Managing

Director,

Strategic

Investment

Group

(1987–2015);

Founding

Partner

and

Managing

Director,

Emerging

Markets

Management

LLC

(investment

management

firm)

(1987-2011);

and

Loan

Officer/Senior

Loan

Officer/Senior

Pension

Investment

Officer,

World

Bank

Group

(international

financial

institution)

(1977-1987).

Franklin

Investors

Securities

Trust

160

franklintempleton.com

Annual

Report

Name,

Year

of

Birth

and

Address

Position

Length

of

Time

Served

Number

of

Portfolios

in

Fund

Complex

Overseen

by

Board

Member*

Other

Directorships

Held

During

at

Least

the

Past

5

Years

Edith

E.

Holiday

(1952)

Lead

Independent

Trustee

Trustee

since

1998

and

Lead

Independent

Trustee

since

2019

124

Hess

Corporation

(exploration

of

oil

and

gas)

(1993-present),

Santander

Consumer

USA

Holdings,

Inc.

(consumer

finance)

(2016-present);

Santander

Holdings

USA

(holding

company)

(2019-present);

and

formerly

,

Canadian

National

Railway

(railroad)

(2001-April

2021),

White

Mountains

Insurance

Group,

Ltd.

(holding

company)

(2004-May

2021),

RTI

International

Metals,

Inc.

(manufacture

and

distribution

of

titanium)

(1999-2015)

and

H.J.

Heinz

Company

(processed

foods

and

allied

products)

(1994-2013).

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Director

or

Trustee

of

various

companies

and

trusts;

and

formerly

,

Assistant

to

the

President

of

the

United

States

and

Secretary

of

the

Cabinet

(1990-1993);

General

Counsel

to

the

United

States

Treasury

Department

(1989-1990);

and

Counselor

to

the

Secretary

and

Assistant

Secretary

for

Public

Affairs

and

Public

Liaison-United

States

Treasury

Department

(1988-1989).

J.

Michael

Luttig

(1954)

Trustee

Since

2009

124

Boeing

Capital

Corporation

(aircraft

financing)

(2006-2010).

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Private

investor;

and

formerly

,

Counselor

and

Senior

Advisor

to

the

Chairman,

CEO,

and

Board

of

Directors,

of

The

Boeing

Company

(aerospace

company),

and

member

of

the

Executive

Council

(May

2019-January

1,

2020);

Executive

Vice

President,

General

Counsel

and

member

of

the

Executive

Council,

The

Boeing

Company

(2006-2019);

and

Federal

Appeals

Court

Judge,

United

States

Court

of

Appeals

for

the

Fourth

Circuit

(1991-2006).

Larry

D.

Thompson

(1945)

Trustee

Since

2007

124

Graham

Holdings

Company

(education

and

media

organization)

(2011-May

2021);

The

Southern

Company

(energy

company)

(2014-2020;

previously

2010-

2012)

and

Cbeyond,

Inc.

(business

communications

provider)

(2010-

2012).

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Director

of

various

companies;

Counsel,

Finch

McCranie,

LLP

(law

firm)

(2015-present);

John

A.

Sibley

Professor

of

Corporate

and

Business

Law,

University

of

Georgia

School

of

Law

(2015-present;

previously

2011-2012);

and

formerly

,

Independent

Compliance

Monitor

and

Auditor,

Volkswagen

AG

(manufacturer

of

automobiles

and

commercial

vehicles)

(2017-2020);

Executive

Vice

President

-

Government

Affairs,

General

Counsel

and

Corporate

Secretary,

PepsiCo,

Inc.

(consumer

products)

(2012-2014);

Senior

Vice

President

-

Government

Affairs,

General

Counsel

and

Secretary,

PepsiCo,

Inc.

(2004-2011);

Senior

Fellow

of

The

Brookings

Institution

(2003-2004);

Visiting

Professor,

University

of

Georgia

School

of

Law

(2004);

and

Deputy

Attorney

General,

U.S.

Department

of

Justice

(2001-2003).

Independent

Board

Members

(continued)

Franklin

Investors

Securities

Trust

161

franklintempleton.com

Annual

Report

Interested

Board

Members

and

Officers

Name,

Year

of

Birth

and

Address

Position

Length

of

Time

Served

Number

of

Portfolios

in

Fund

Complex

Overseen

by

Board

Member*

Other

Directorships

Held

During

at

Least

the

Past

5

Years

Valerie

M.

Williams

(1956)

Trustee

Since

May

2021

104

Omnicom

Group,

Inc.

(advertising

and

marketing

communications

services)

(2016-present),

DTE

Energy

Co.

(gas

and

electric

utility)

(2018-present),

Devon

Energy

Corporation

(exploration

and

production

of

oil

and

gas)

(January

2021-present);

and

formerly

,

WPX

Energy,

Inc.

(exploration

and

production

of

oil

and

gas)

(2018-January

2021).

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Director

of

various

companies;

and

formerly

,

Regional

Assurance

Managing

Partner,

Ernst

&

Young

LLP

(public

accounting)

(2005-2016),

various

roles

of

increasing

responsibility

at

Ernst

&

Young

(1981-2005).

Name,

Year

of

Birth

and

Address

Position

Length

of

Time

Served

Number

of

Portfolios

in

Fund

Complex

Overseen

by

Board

Member*

Other

Directorships

Held

During

at

Least

the

Past

5

Years

**Gregory

E.

Johnson

(1961)

Trustee

Since

2013

135

None

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Executive

Chairman,

Chairman

of

the

Board

and

Director,

Franklin

Resources,

Inc.;

officer

and/or

director

or

trustee,

as

the

case

may

be,

of

some

of

the

other

subsidiaries

of

Franklin

Resources,

Inc.

and

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex;

Vice

Chairman,

Investment

Company

Institute;

and

formerly

,

Chief

Executive

Officer

(2013-2020)

and

President

(1994-2015)

Franklin

Resources,

Inc.

**Rupert

H.

Johnson,

Jr.

(1940)

Chairman

of

the

Board,

Trustee

and

Vice

President

Chairman

of

the

Board

since

2013,

Trustee

since

1987

and

Vice

President

since

1986

124

None

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Director

(Vice

Chairman),

Franklin

Resources,

Inc.;

Director,

Franklin

Advisers,

Inc.;

and

officer

and/or

director

or

trustee,

as

the

case

may

be,

of

some

of

the

other

subsidiaries

of

Franklin

Resources,

Inc.

and

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Reema

Agarwal

(1974)

Vice

President

Since

2019

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Senior

Vice

President,

Franklin

Advisers,

Inc.;

and

officer

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Alison

E.

Baur

(1964)

Vice

President

Since

2012

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Deputy

General

Counsel,

Franklin

Templeton;

and

officer

of

some

of

the

other

subsidiaries

of

Franklin

Resources,

Inc.

and

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Independent

Board

Members

(continued)

Franklin

Investors

Securities

Trust

162

franklintempleton.com

Annual

Report

Name,

Year

of

Birth

and

Address

Position

Length

of

Time

Served

Number

of

Portfolios

in

Fund

Complex

Overseen

by

Board

Member*

Other

Directorships

Held

During

at

Least

the

Past

5

Years

Breda

M.

Beckerle

(1958)

Chief

Compliance

Officer

Since

2020

Not

Applicable

Not

Applicable

280

Park

Avenue

New

York,

NY

10017

Principal

Occupation

During

at

Least

the

Past

5

Years:

Chief

Compliance

Officer,

Fiduciary

Investment

Management

International,

Inc.,

Franklin

Advisers,

Inc.,

Franklin

Mutual

Advisers,

LLC,

Franklin

Templeton

Institutional,

LLC;

and

officer

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Steven

J.

Gray

(1955)

Vice

President

and

Co-Secretary

Vice

President

since

2009

and

Co-Secretary

since

2019

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Senior

Associate

General

Counsel,

Franklin

Templeton;

Vice

President,

FASA,

LLC;

Assistant

Secretary,

Franklin

Distributors,

LLC;

and

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Matthew

T.

Hinkle

(1971)

Chief

Executive

Officer

–

Finance

and

Administration

Since

2017

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Senior

Vice

President,

Franklin

Templeton

Services,

LLC;

officer

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex;

and

formerly

,

Vice

President,

Global

Tax

(2012-April

2017)

and

Treasurer/Assistant

Treasurer,

Franklin

Templeton

(2009-2017).

Susan

Kerr

(1949)

Vice

President

–

AML

Compliance

Since

July

2021

Not

Applicable

Not

Applicable

620

Eighth

Avenue

New

York,

NY

10018

Principal

Occupation

During

at

Least

the

Past

5

Years:

Senior

Compliance

Analyst,

Franklin

Templeton;

Chief

Anti-Money

Laundering

Compliance

Officer,

Legg

Mason

&

Co.,

or

its

affiliates;

Anti

Money

Laundering

Compliance

Officer;

Senior

Compliance

Officer,

LMIS;

and

officer

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Edward

D.

Perks

(1970)

President

and

Chief

Executive

Officer

–

Investment

Management

Since

2018

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

President

and

Director,

Franklin

Advisers,

Inc.;

and

officer

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Navid

J.

Tofigh

(1972)

Vice

President

Since

2015

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Associate

General

Counsel,

Franklin

Templeton;

and

officer

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Interested

Board

Members

and

Officers

(continued)

Franklin

Investors

Securities

Trust

163

franklintempleton.com

Annual

Report

*We

base

the

number

of

portfolios

on

each

separate

series

of

the

U.S.

registered

investment

companies

within

the

Franklin

Templeton/Legg

Mason

fund

complex.

These

portfolios

have

a

common

investment

manager

or

affiliated

investment

managers.

**Gregory

E.

Johnson

is

considered

to

be

an

interested

person

of

the

Fund

under

the

federal

securities

laws

due

to

his

position

as

an

officer

and

director

of

Franklin

Resources,

Inc.

(Resources),

which

is

the

parent

company

of

the

Fund’s

investment

manager

and

distributor.

Rupert

H.

Johnson,

Jr.

is

considered

to

be

an

interested

person

of

the

Fund

under

the

federal

securities

laws

due

to

his

position

as

an

officer

and

director

and

major

shareholder

of

Resources.

Note

1:

Rupert

H.

Johnson,

Jr.

is

the

uncle

of

Gregory

E.

Johnson.

Note

2:

Officer

information

is

current

as

of

the

date

of

this

report.

It

is

possible

that

after

this

date,

information

about

officers

may

change.

The

Sarbanes-Oxley

Act

of

2002

and

Rules

adopted

by

the

Securities

and

Exchange

Commission

require

the

Fund

to

disclose

whether

the

Fund’s

Audit

Committee

includes

at

least

one

member

who

is

an

audit

committee

financial

expert

within

the

meaning

of

such

Act

and

Rules.

The

Fund’s

Board

has

determined

that

there

is

at

least

one

such

financial

expert

on

the

Audit

Committee

and

has

designated

Mary

C.

Choksi

as

its

audit

committee

financial

expert.

The

Board

believes

that

Ms.

Choksi

qualifies

as

such

an

expert

in

view

of

her

extensive

business

background

and

experience.

She

served

as

a

director

of

Avis

Budget

Group,

Inc.

(2007

to

2020)

and

formerly,

Founder

and

Senior

Advisor,

Strategic

Investment

Group

(1987

to

2017).

Ms.

Choksi

has

been

a

Member

of

the

Fund’s

Audit

Committee

since

2014.

As

a

result

of

such

background

and

experience,

the

Board

believes

that

Ms.

Choksi

has

acquired

an

understanding

of

generally

accepted

accounting

principles

and

financial

statements,

the

general

application

of

such

principles

in

connection

with

the

accounting

estimates,

accruals

and

reserves,

and

analyzing

and

evaluating

financial

statements

that

present

a

breadth

and

level

of

complexity

of

accounting

issues

generally

comparable

to

those

of

the

Fund,

as

well

as

an

understanding

of

internal

controls

and

procedures

for

financial

reporting

and

an

understanding

of

audit

committee

functions.

Ms.

Choksi

is

an

independent

Board

member

as

that

term

is

defined

under

the

relevant

Securities

and

Exchange

Commission

Rules

and

Releases.

The

Statement

of

Additional

Information

(SAI)

includes

additional

information

about

the

board

members

and

is

available,

without

charge,

upon

request.

Shareholders

may

call

(800)

DIAL

BEN/342-5236

to

request

the

SAI.

Name,

Year

of

Birth

and

Address

Position

Length

of

Time

Served

Number

of

Portfolios

in

Fund

Complex

Overseen

by

Board

Member*

Other

Directorships

Held

During

at

Least

the

Past

5

Years

Craig

S.

Tyle

(1960)

Vice

President

Since

2005

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

General

Counsel

and

Executive

Vice

President,

Franklin

Resources,

Inc.;

and

officer

of

some

of

the

other

subsidiaries

of

Franklin

Resources,

Inc.

and

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Lori

A.

Weber

(1964)

Vice

President

and

Co-Secretary

Vice

President

since

2011

and

Co-Secretary

since

2019

Not

Applicable

Not

Applicable

300

S.E.

2nd

Street

Fort

Lauderdale,

FL

33301-

1923

Principal

Occupation

During

at

Least

the

Past

5

Years:

Senior

Associate

General

Counsel,

Franklin

Templeton;

Assistant

Secretary,

Franklin

Resources,

Inc.;

Vice

President

and

Secretary,

Templeton

Investment

Counsel,

LLC;

and

officer

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Jeffrey

W.

White

(1971)

Interim

Chief

Financial

Officer,

Chief

Accounting

Officer

and

Treasurer

Since

October

2021

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Director,

Fund

Administration

&

Reporting;

officer

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex;

and

formerly

,

Manager,

Fund

Administration

&

Reporting

(2009-2017).

Interested

Board

Members

and

Officers

(continued)

Franklin

Investors

Securities

Trust

Shareholder

Information

164

franklintempleton.com

Annual

Report

Liquidity

Risk

Management

Program-

Funds

no

HLIM

Each

Fund

has

adopted

and

implemented

a

written

Liquidity

Risk

Management

Program

(the

“LRMP”)

as

required

by

Rule

22e-4

under

the

Investment

Company

Act

of

1940

(the

“Liquidity

Rule”).

The

LRMP

is

designed

to

assess

and

manage

each

Fund’s

liquidity

risk,

which

is

defined

as

the

risk

that

the

Fund

could

not

meet

requests

to

redeem

shares

issued

by

the

Fund

without

significant

dilution

of

remaining

investors’

interests

in

the

Fund.

In

accordance

with

the

Liquidity

Rule,

the

LRMP

includes

policies

and

procedures

that

provide

for:

(1)

assessment,

management,

and

review

(no

less

frequently

than

annually)

of

each

Fund’s

liquidity

risk;

(2)

classification

of

each

Fund’s

portfolio

holdings

into

one

of

four

liquidity

categories

(Highly

Liquid,

Moderately

Liquid,

Less

Liquid,

and

Illiquid);

(3)

for

Funds

that

do

not

primarily

hold

assets

that

are

Highly

Liquid,

establishing

and

maintaining

a

minimum

percentage

of

the

Fund’s

net

assets

in

Highly

Liquid

investments

(called

a

“Highly

Liquid

Investment

Minimum”

or

“HLIM”);

and

(4)

prohibiting

the

Fund’s

acquisition

of

Illiquid

investments

that

would

result

in

the

Fund

holding

more

than

15%

of

its

net

assets

in

Illiquid

assets.

The

LRMP

also

requires

reporting

to

the

Securities

and

Exchange

Commission

(“SEC”)

(on

a

non-public

basis)

and

to

the

Board

if

the

Fund’s

holdings

of

Illiquid

assets

exceed

15%

of

the

Fund’s

net

assets.

Funds

with

HLIMs

must

have

procedures

for

addressing

HLIM

shortfalls,

including

reporting

to

the

Board

and,

with

respect

to

HLIM

shortfalls

lasting

more

than

seven

consecutive

calendar

days,

reporting

to

the

SEC

(on

a

non-public

basis).

The

Director

of

Liquidity

Risk

within

the

Investment

Risk

Management

Group

(the

“IRMG”)

is

the

appointed

Administrator

of

the

LRMP.

The

IRMG

maintains

the

Investment

Liquidity

Committee

(the

“ILC”)

to

provide

oversight

and

administration

of

policies

and

procedures

governing

liquidity

risk

management

for

FT

products

and

portfolios.

The

ILC

includes

representatives

from

Franklin

Templeton’s

Risk,

Trading,

Global

Compliance,

Investment

Compliance,

Investment

Operations,

Valuation

Committee,

Product

Management

and

Global

Product

Strategy.

In

assessing

and

managing

each

Fund’s

liquidity

risk,

the

ILC

considers,

as

relevant,

a

variety

of

factors,

including

the

Fund’s

investment

strategy

and

the

liquidity

of

its

portfolio

investments

during

both

normal

and

reasonably

foreseeable

stressed

conditions;

its

short

and

long-term

cash

flow

projections;

and

its

cash

holdings

and

access

to

other

funding

sources

including

the

Funds’

interfund

lending

facility

and

line

of

credit.

Classification

of

the

Fund’s

portfolio

holdings

in

the

four

liquidity

categories

is

based

on

the

number

of

days

it

is

reasonably

expected

to

take

to

convert

the

investment

to

cash

(for

Highly

Liquid

and

Moderately

Liquid

holdings)

or

sell

or

dispose

of

the

investment

(for

Less

Liquid

and

Illiquid

investments),

in

current

market

conditions

without

significantly

changing

the

investment’s

market

value.

Each

Fund

primarily

holds

liquid

assets

that

are

defined

under

the

Liquidity

Rule

as

"Highly

Liquid

Investments,"

and

therefore

is

not

required

to

establish

an

HLIM.

Highly

Liquid

Investments

are

defined

as

cash

and

any

investment

reasonably

expected

to

be

convertible

to

cash

in

current

market

conditions

in

three

business

days

or

less

without

the

conversion

to

cash

significantly

changing

the

market

value

of

the

investment.

At

meetings

of

the

Funds’

Board

of

Trustees

held

in

May

2021,

the

Program

Administrator

provided

a

written

report

to

the

Board

addressing

the

adequacy

and

effectiveness

of

the

program

for

the

year

ended

December

31,

2020.

The

Program

Administrator

report

concluded

that

(i.)

the

LRMP,

as

adopted

and

implemented,

remains

reasonably

designed

to

assess

and

manage

each

Fund’s

liquidity

risk;

(ii.)

the

LRMP,

including

the

Highly

Liquid

Investment

Minimum

(“HLIM”)

where

applicable,

was

implemented

and

operated

effectively

to

achieve

the

goal

of

assessing

and

managing

each

Fund’s

liquidity

risk;

and

(iii.)

each

Fund

was

able

to

meet

requests

for

redemption

without

significant

dilution

of

remaining

investors’

interests

in

the

Fund.

Liquidity

Risk

Management

Program-

Funds

with

HLIM

Each

Fund

has

adopted

and

implemented

a

written

Liquidity

Risk

Management

Program

(the

“LRMP”)

as

required

by

Rule

22e-4

under

the

Investment

Company

Act

of

1940

(the

“Liquidity

Rule”).

The

LRMP

is

designed

to

assess

and

manage

each

Fund’s

liquidity

risk,

which

is

defined

as

the

risk

that

the

Fund

could

not

meet

requests

to

redeem

shares

issued

by

the

Fund

without

significant

dilution

of

remaining

investors’

interests

in

the

Fund.

In

accordance

with

the

Liquidity

Rule,

the

LRMP

includes

policies

and

procedures

that

provide

for:

(1)

assessment,

management,

and

review

(no

less

frequently

than

annually)

of

each

Fund’s

liquidity

risk;

(2)

classification

of

each

Fund’s

portfolio

holdings

into

one

of

four

liquidity

categories

(Highly

Liquid,

Moderately

Liquid,

Less

Liquid,

and

Illiquid);

(3)

for

Funds

that

do

not

primarily

hold

assets

that

are

Highly

Liquid,

establishing

and

maintaining

a

minimum

percentage

of

the

Fund’s

net

Franklin

Investors

Securities

Trust

Shareholder

Information

165

franklintempleton.com

Annual

Report

assets

in

Highly

Liquid

investments

(called

a

“Highly

Liquid

Investment

Minimum”

or

“HLIM”);

and

(4)

prohibiting

the

Fund’s

acquisition

of

Illiquid

investments

that

would

result

in

the

Fund

holding

more

than

15%

of

its

net

assets

in

Illiquid

assets.

The

LRMP

also

requires

reporting

to

the

Securities

and

Exchange

Commission

(“SEC”)

(on

a

non-public

basis)

and

to

the

Board

if

the

Fund’s

holdings

of

Illiquid

assets

exceed

15%

of

the

Fund’s

net

assets.

Funds

with

HLIMs

must

have

procedures

for

addressing

HLIM

shortfalls,

including

reporting

to

the

Board

and,

with

respect

to

HLIM

shortfalls

lasting

more

than

seven

consecutive

calendar

days,

reporting

to

the

SEC

(on

a

non-public

basis).

The

Director

of

Liquidity

Risk

within

the

Investment

Risk

Management

Group

(the

“IRMG”)

is

the

appointed

Administrator

of

the

LRMP.

The

IRMG

maintains

the

Investment

Liquidity

Committee

(the

“ILC”)

to

provide

oversight

and

administration

of

policies

and

procedures

governing

liquidity

risk

management

for

FT

products

and

portfolios.

The

ILC

includes

representatives

from

Franklin

Templeton’s

Risk,

Trading,

Global

Compliance,

Investment

Compliance,

Investment

Operations,

Valuation

Committee,

Product

Management

and

Global

Product

Strategy.

In

assessing

and

managing

each

Fund’s

liquidity

risk,

the

ILC

considers,

as

relevant,

a

variety

of

factors,

including

the

Fund’s

investment

strategy

and

the

liquidity

of

its

portfolio

investments

during

both

normal

and

reasonably

foreseeable

stressed

conditions;

its

short

and

long-term

cash

flow

projections;

and

its

cash

holdings

and

access

to

other

funding

sources

including

the

Funds’

interfund

lending

facility

and

line

of

credit.

Classification

of

the

Fund’s

portfolio

holdings

in

the

four

liquidity

categories

is

based

on

the

number

of

days

it

is

reasonably

expected

to

take

to

convert

the

investment

to

cash

(for

Highly

Liquid

and

Moderately

Liquid

holdings)

or

sell

or

dispose

of

the

investment

(for

Less

Liquid

and

Illiquid

investments),

in

current

market

conditions

without

significantly

changing

the

investment’s

market

value.

The

Fund

primarily

holds

investments

where

the

time

required

to

settle

a

sale

of

the

investment

may

exceed

7

calendar

days

and

are

classified

as

“Less

Liquid

Investments”.

Less

liquid

Investments

are

defined

as

any

investment

reasonably

expected

to

be

sold

or

disposed

of

in

current

market

conditions

in

seven

calendar

days

or

less

without

the

sale

or

disposition

significantly

changing

the

market

value

of

the

investment,

but

where

the

sale

or

disposition

is

reasonably

expected

to

settle

in

more

than

seven

calendar

days.

The

Fund

established

and

maintained

a

HLIM.

During

the

reporting

period,

the

Fund

maintained

the

necessary

level

of

Highly

Liquid

Investments

and

did

not

experience

any

HLIM

shortfalls.

At

meetings

of

the

Funds’

Board

of

Trustees

held

in

May

2021,

the

Program

Administrator

provided

a

written

report

to

the

Board

addressing

the

adequacy

and

effectiveness

of

the

program

for

the

year

ended

December

31,

2020.

The

Program

Administrator

report

concluded

that

(i.)

the

LRMP,

as

adopted

and

implemented,

remains

reasonably

designed

to

assess

and

manage

each

Fund’s

liquidity

risk;

(ii.)

the

LRMP,

including

the

Highly

Liquid

Investment

Minimum

(“HLIM”)

where

applicable,

was

implemented

and

operated

effectively

to

achieve

the

goal

of

assessing

and

managing

each

Fund’s

liquidity

risk;

and

(iii.)

each

Fund

was

able

to

meet

requests

for

redemption

without

significant

dilution

of

remaining

investors’

interests

in

the

Fund.

Proxy

Voting

Policies

and

Procedures

The

Trust’s

investment

manager

has

established

Proxy

Voting

Policies

and

Procedures

(Policies)

that

the

Trust

uses

to

determine

how

to

vote

proxies

relating

to

portfolio

securities.

Shareholders

may

view

the

Trust’s

complete

Policies

online

at

franklintempleton.com.

Alternatively,

shareholders

may

request

copies

of

the

Policies

free

of

charge

by

calling

the

Proxy

Group

collect

at

(954)

527-

7678

or

by

sending

a

written

request

to:

Franklin

Templeton

Companies,

LLC,

300

S.E.

2nd

Street,

Fort

Lauderdale,

FL

33301,

Attention:

Proxy

Group.

Copies

of

the

Trust’s

proxy

voting

records

are

also

made

available

online

at

franklintempleton.com

and

posted

on

the

U.S.

Securities

and

Exchange

Commission’s

website

at

sec.gov

and

reflect

the

most

recent

12-month

period

ended

June

30.

Quarterly

Statement

of

Investments

The

Trust

files

a

complete

statement

of

investments

with

the

U.S.

Securities

and

Exchange

Commission

for

the

first

and

third

quarters

for

each

fiscal

year

as

an

exhibit

to

its

report

on

Form

N-PORT.

Shareholders

may

view

the

filed

Form

N-PORT

by

visiting

the

Commission’s

website

at

sec.

gov.

The

filed

form

may

also

be

viewed

and

copied

at

the

Commission’s

Public

Reference

Room

in

Washington,

DC.

Information

regarding

the

operations

of

the

Public

Reference

Room

may

be

obtained

by

calling

(800)

SEC-0330.

Householding

of

Reports

and

Prospectuses

You

will

receive,

or

receive

notice

of

availability

of,

each

Fund’s

financial

reports

every

six

months.

In

addition,

you

will

receive

an

annual

updated

summary

prospectus

(detail

prospectus

available

upon

request).

To

reduce

Fund

expenses,

we

try

to

identify

related

shareholders

in

a

household

and

send

only

one

copy

of

the

financial

reports

Franklin

Investors

Securities

Trust

Shareholder

Information

166

franklintempleton.com

Annual

Report

(to

the

extent

received

by

mail)

and

summary

prospectus.

This

process,

called

“householding,”

will

continue

indefinitely

unless

you

instruct

us

otherwise.

If

you

prefer

not

to

have

these

documents

householded,

please

call

us

at

(800)

632-2301.

At

any

time

you

may

view

current

prospectuses/

summary

prospectuses

and

financial

reports

on

our

website.

If

you

choose,

you

may

receive

these

documents

through

electronic

delivery.

FIST2

A

12/21

©

2021

Franklin

Templeton

Investments.

All

rights

reserved.

Authorized

for

distribution

only

when

accompanied

or

preceded

by

a

summary

prospectus

and/or

prospectus.

Investors

should

carefully

consider

a

fund’s

investment

goals,

risks,

charges

and

expenses

before

investing.

A

prospectus

contains

this

and

other

information;

please

read

it

carefully

before

investing.

To

help

ensure

we

provide

you

with

quality

service,

all

calls

to

and

from

our

service

areas

are

monitored

and/or

recorded.

Annual

Report

and

Shareholder

Letter

Franklin

Investors

Securities

Trust

Investment

Manager

Distributor

Shareholder

Services

Franklin

Advisers,

Inc.

Franklin

Distributors,

LLC

(800)

DIAL

BEN

®

/

342-5236

franklintempleton.com

(800)

632-2301

Item 2. Code of Ethics.

(a) The Registrant has adopted a code of ethics that applies to its principal executive officers and principal financial and accounting officer. 

(c) N/A

(d) N/A

(f) Pursuant to Item 13(a)(1), the Registrant is attaching as an exhibit a copy of its code of ethics that applies to its principal executive officers and principal financial and accounting officer.

Item 3. Audit Committee Financial Expert.

(a)(1) The Registrant has an audit committee financial expert serving on its audit committee.

(2) The audit committee financial expert is Mary C. Choksi and she is "independent" as defined under the relevant Securities and Exchange Commission Rules and Releases.

Item 4. Principal Accountant Fees and Services.

(a)      Audit Fees

The aggregate fees paid to the principal accountant for professional services rendered by the principal accountant for the audit of the registrant’s annual financial statements or for services that are normally provided by the principal accountant in connection with statutory and regulatory filings or engagements were $452,569 for the fiscal year ended October 31, 2021 and $648,029 for the fiscal year ended October 31, 2020.

(b)      Audit-Related Fees

There were no fees paid to the principal accountant for assurance and related services rendered by the principal accountant to the registrant that are reasonably related to the performance of the audit of the registrant's financial statements and are not reported under paragraph (a) of Item 4.

There were no fees paid to the principal accountant for assurance and related services rendered by the principal accountant to the registrant's investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant that are reasonably related to the performance of the audit of their financial statements.  

(c)      Tax Fees

There were no fees paid to the principal accountant for professional services rendered by the principal accountant to the registrant for tax compliance, tax advice and tax planning.   

There were no fees paid to the principal accountant for professional services rendered by the principal accountant to the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant for tax compliance, tax advice and tax planning.

(d)      All Other Fees

The aggregate fees paid to the principal accountant for products and services rendered by the principal accountant to the registrant not reported in paragraphs (a)-(c) of Item 4 were $8,703 for the fiscal year ended October 31, 2021 and $0 for the fiscal year ended October 31, 2020. The services for which these fees were paid included review of materials provided to the fund Board in connection with the investment management contract renewal process.

The aggregate fees paid to the principal accountant for products and services rendered by the principal accountant to the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant not reported in paragraphs (a)-(c) of Item 4 were $37,812 for the fiscal year ended October 31, 2021 and $37,800 for the fiscal year ended October 31, 2020. The services for which these fees were paid included the issuance of an Auditors’ Certificate for South Korean regulatory shareholder disclosures, benchmarking services in connection with the ICI TA survey, professional fees in connection with determining the feasibility of a U.S. direct lending structure, assets under management certification, and professional fees in connection with SOC 1 Reports.

(e) (1) The registrant’s audit committee is directly responsible for approving the services to be provided by the auditors, including:

      (i)   pre-approval of all audit and audit related services;

      (ii)  pre-approval of all non-audit related services to be provided to the Fund by the auditors;

      (iii) pre-approval of all non-audit related services to be provided to the registrant by the auditors to the registrant’s investment adviser or to any entity that controls, is controlled by or is under common control with the registrant’s investment adviser and that provides ongoing services to the registrant where the non-audit services relate directly to the operations or financial reporting of the registrant; and

      (iv)  establishment by the audit committee, if deemed necessary or appropriate, as an alternative to committee pre-approval of services to be provided by the auditors, as required by paragraphs (ii) and (iii) above, of policies and procedures to permit such services to be pre-approved by other means, such as through establishment of guidelines or by action of a designated member or members of the committee; provided the policies and procedures are detailed as to the particular service and the committee is informed of each service and such policies and procedures do not include delegation of audit committee responsibilities, as contemplated under the Securities Exchange Act of 1934, to management; subject, in the case of (ii) through (iv), to any waivers, exceptions or exemptions that may be available under applicable law or rules.

(e) (2) None of the services provided to the registrant described in paragraphs (b)-(d) of Item 4 were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of regulation S-X.

(f) No disclosures are required by this Item 4(f).

(g) The aggregate non-audit fees paid to the principal accountant for services rendered by the principal accountant to the registrant and the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant were $46,515 for the fiscal year ended October 31, 2021 and $37,800 for the fiscal year ended October 31, 2020.

(h) The registrant’s audit committee of the board has considered whether the provision of non-audit services that were rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.

Item 5.  Audit Committee

 

of Listed Registrants. N/A

Item 6.  Schedule of Investments. N/A

Item 7.  Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. N/A

Item 8.  Portfolio Managers of Closed-End Management Investment Companies. N/A

Item 9.  Purchases of Equity Securities by Closed-End Management Investment Company and

Affiliated Purchasers. N/A

Item 10. Submission of Matters to a Vote of Security Holders.

There have been no changes to the procedures by which shareholders may recommend nominees to the Registrant's Board of Trustees that would require disclosure herein.

Item 11. Controls and Procedures.

(a)

 Evaluation of Disclosure Controls and Procedures. The Registrant maintains disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in the Registrant’s filings under the Securities Exchange Act of 1934, as amended, and the Investment Company Act of 1940 is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. Such information is accumulated and communicated to the Registrant’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Registrant’s management, including the principal executive officer and the principal financial officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

Within 90 days prior to the filing date of this Shareholder Report on Form N-CSR, the Registrant had carried out an evaluation, under the supervision and with the participation of the Registrant’s management, including the Registrant’s principal executive officer and the Registrant’s principal financial officer, of the effectiveness of the design and operation of the Registrant’s disclosure controls and procedures. Based on such evaluation, the Registrant’s principal executive officer and principal financial officer concluded that the Registrant’s disclosure controls and procedures are effective.

(b)

 Changes in Internal Controls. There have been no changes in the Registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect the internal control over financial reporting.

Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Company.                             N/A

Item 13. Exhibits.

(a) (1) Code of Ethics

codeofethics

(a) (2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer - Finance and Administration, and Jeffrey W. White, Interim Chief Financial Officer, Chief Accounting Officer and Treasurer

section302

(b)   Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer - Finance and Administration, and Jeffrey W. White, Interim Chief Financial Officer, Chief Accounting Officer and Treasurer

section906

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

FRANKLIN

INVESTORS SECURITIES TRUST

By S\MATTHEW T. HINKLE______________________

      Matthew T. Hinkle

      Chief Executive Officer – Finance and Administration

Date December 23, 2021

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By S\MATTHEW T. HINKLE______________________

      Matthew T. Hinkle

      Chief Executive Officer – Finance and Administration

Date December 23, 2021

By S\Jeffrey W. White________________________

     Jeffrey W. White

     Interim Chief Financial Officer, Chief Accounting Officer and Treasurer

Date December 23, 2021