Franklin Templeton Investments Announces Formation of $50 Billion Fran

Franklin Templeton Investments Announces Formation of $50 Billion Franklin Value Group

    Business Editors

    SAN MATEO, Calif.--(BUSINESS WIRE)--April 19, 2005--Franklin Templeton Investments today announced the formation of Franklin Value Group, a $50 billion umbrella for the firm's Franklin and Mutual Series value investment products to be led by Bill Lippman and Peter Langerman. The distinct investment styles, portfolio management and research teams of the Franklin and Mutual Series value funds will remain separate and unchanged.
    "Bill and Peter are industry veterans with investment expertise in very distinct but complementary value strategies, and we can't imagine a better team to strategically grow our domestic value business," said Greg Johnson, co-CEO of Franklin Resources, Inc. "The formation of this new group gives financial advisors a clear picture of Franklin and Mutual Series' distinct lines of value offerings."
    Franklin Value Group includes 13, largely domestic, U.S. retail funds from the Franklin and Mutual Series product lines, which complement one another with minimal investment overlap. Franklin's value strategy focuses on out of favor companies with fundamental value, and includes small- and large-cap specific mandates, while Mutual Series employs a deep value approach focused primarily on undervalued stocks, as well as opportunities in distressed securities and arbitrage. The U.S. retail funds in the group have historically produced consistently strong performance, with over 80% of fund assets ranking in the top two Lipper quartiles for the one-year period and more than 90% of fund assets ranked in the top two quartiles for the three-, five- and 10-year periods ended 3/31/05.(1)
    Notably, Mutual Shares Fund, the group's oldest and largest fund with over $12 billion in total assets as of 3/31/05, was rated 4 stars overall by Morningstar among 796 Large Value funds as of 3/31/05.(2) The fund, founded in 1949, ranked in the top quartile of the Lipper Multi-Cap Value Funds peer group for total return among 365, 248 and 89 funds for the three-, five- and 10-year periods ended 3/31/05, and in the top two quartiles among 478 funds for the one-year period.(3) The fund is managed by David Winters, CFA, president and chief investment officer of Mutual Series, who has been with the organization for over 18 years.
    "David Winters has done a great job carrying on the unique value strategy at Mutual Series, and the funds' performance underscores that success," said Martin Flanagan co-CEO of Franklin Resources, Inc. "We expect that Peter's return to Mutual Series will add strength to a group that has, under David's leadership, delivered strong and consistent returns to our Mutual Series shareholders."
    Franklin Rising Dividends Fund, managed by Don Taylor, CPA, from Bill Lippman's group based in Ft. Lee, NJ, is an example of how the two teams complement each other. The fund, introduced in 1987, was one of the first to focus on investing in equity securities that have paid consistently rising dividends. Franklin Rising Dividends Fund outperformed its benchmark, the S&P 500, for the three-, five- and 10-year periods ended 3/31/05.(4) The fund also received a Lipper Leader award for Preservation as of 3/31/05.(5)
    "Bill Lippman has one of the most experienced value teams in the business," remarked Flanagan. "The Franklin portfolio management group based in Ft. Lee, NJ, has an average of 24 years of investment experience. The strategy and performance of Mutual Shares and Franklin Rising Dividends funds are excellent examples of the strength and variety of investment styles that exist within the new Franklin Value Group."
    In his new role with Franklin Value Group, Langerman will be rejoining Mutual Series, where he has 16 years of previous experience and will serve as chief executive officer (CEO) and chairman of Franklin Mutual Advisers, LLC (Mutual Series), based in Short Hills, NJ, which will include investment management. Bill Lippman, in addition to his new role, will continue in his current senior executive and portfolio management roles at Franklin Advisory Services, LLC., based in Ft. Lee, NJ.
    Langerman originally joined Heine Securities Corporation (predecessor of Franklin Mutual Advisers, LLC) in 1986. He served as CEO of Franklin Mutual Advisers beginning in 1998 and chairman of the fund boards beginning in 2001, before leaving in 2002 and serving as director of New Jersey's Division of Investment, overseeing employee pension funds. Prior to 1986, Langerman was employed by Weil, Gotshal & Manges, one of the country's foremost specialists in large corporate bankruptcies and reorganizations. Langerman graduated magna cum laude with a bachelor's degree in Russian studies from Yale University and earned a master's degree in accounting from New York University Graduate School of Business. He received his juris doctor from Stanford University Law School.
    Lippman is president of Franklin Advisory Services, LLC, based in Fort Lee, NJ, and president of Franklin Rising Dividends Fund, Franklin Balance Sheet Investment Fund, Franklin MicroCap Value Fund, Franklin Small Cap Value Fund and Franklin Large Cap Value Fund, and is on the portfolio management team of a number of variable insurance products. Prior to joining Franklin, Lippman was president of L.F. Rothschild Fund Management, Inc. From 1960 to 1986, he was president of Pilgrim Group, Inc., a firm which he founded. He is a former member of the Board of Governors of the Investment Company Institute. Lippman graduated cum laude with a bachelor's degree in business administration from City College of New York and holds an MBA from New York University.

    Investors should carefully consider a fund's investment goals, risks, charges and expenses before investing. A fund's prospectus contains this and other information. Investors interested in the Franklin value or Mutual Series funds, may obtain a prospectus from securities dealers or by calling Franklin Templeton at 1-800/DIAL BEN(R) (1-800/342-5236). Investors should read the prospectuses carefully before investing or sending money. Of course, past performance does not guarantee future results. Franklin Templeton Distributors, Inc. is the principal underwriter for the Franklin value and Mutual Series funds.

    Franklin Resources, Inc. (NYSE:BEN) is a global investment management organization operating as Franklin Templeton Investments. Franklin Templeton Investments provides global and domestic investment management solutions with its Franklin, Templeton, Mutual Series and Fiduciary Trust teams. The San Mateo, CA-based company has over 50 years of investment experience and over $412 billion in assets under management as of March 31, 2005. For more information, please call 1-800/DIAL BEN(R) or visit franklintempleton.com.

    Forward-Looking Statements:

    Statements in this press release regarding Franklin Resources, Inc.'s business, which are not historical facts, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve a number of risks, uncertainties and other important factors, some of which are listed below, that could cause the actual results and outcomes to differ materially from any future results or outcomes expressed or implied by such forward-looking statements. These and other risks, uncertainties and other important factors are described in more detail in Franklin's recent filings with the U.S. Securities and Exchange Commission, including, without limitation, the "Risk Factors" section of the Management's Discussion and Analysis of Financial Condition and Results of Operations in Franklin's Annual Report on Form 10-K for the fiscal year ended September 30, 2004, and Franklin's most recent Form 10-Q.

--	Regulatory investigations, settlements of such investigations, ongoing and proposed regulatory actions, and regulatory examinations of the company and certain of its subsidiaries and its business activities, as described in more detail in the company's press releases and regulatory filings, as well as civil litigation arising out of or related to such matters, could adversely impact our assets under management, increase costs and negatively impact the profitability of the company and future financial results.
--	Regulatory or legislative actions and reforms, particularly those specifically focused on the mutual fund industry, could adversely impact our assets under management, increase costs and negatively impact the profitability of the company and future financial results.
--	We face strong competition from numerous and sometimes larger companies with competing offerings and products.
--	Changes in the distribution channels on which we depend could reduce our revenues and hinder our growth.
--	We have become subject to an increased risk of volatility of the assets we manage caused by changes in the financial and equity markets.
--	The levels of our assets under management, which impact revenues, are subject to significant fluctuations.
--	Our future results are dependent upon maintaining an appropriate level of expenses, which are subject to fluctuation.
--	We face risks associated with conducting operations in numerous foreign countries.
--	Our ability to successfully integrate widely varied business lines can be impeded by systems and other technological limitations.
--	Our ability to meet cash needs depends upon certain factors, including our asset value, credit worthiness and the market value of our stock.
--	Certain of the portfolios we manage, including our emerging market portfolios, and related revenues, are vulnerable to market-specific political or economic risks.
--	Our revenues could be adversely affected if the terms of our investment management agreements are significantly altered or these agreements are terminated by the funds we advise.
--	Diverse and strong competition limits the interest rates that we can charge on consumer loans.
--	We are subject to extensive regulation domestically and abroad.
--	Technology and operating risk and limitations could constrain our operations.

    (1)Source: Lipper, Inc., 3/31/05. Lipper rankings for Franklin U.S.-based funds are based on Class A shares and Mutual Series fund rankings are based on Class Z/Advisor Class shares as applicable. Class Z and Advisor class shares are offered to qualified investors only and have no sales charges nor Rule 12b-1 fees. All Franklin Templeton Class A (Class Z/Advisor Class) asset data is based on 2/28/05 figures unless noted otherwise. Lipper calculates averages by taking all the funds and share classes in a peer group and averaging their total returns for the periods indicated. Lipper tracks 143 peer groups of U.S. retail mutual funds, and the groups vary in size from 4 to 966 funds. Lipper total return calculations include reinvested dividends and capital gains, but do not include sales charges or expense subsidization by the manager. Results may have been different if these or other factors had been considered. Of the eligible Franklin and Mutual Series long-term mutual funds tracked by Lipper, 7, 7, 9 and 5 funds ranked in the top quartile and 1, 3, 2 and 1 funds ranked in the second quartile, for the one-, three-, five- and 10-year periods, respectively, for their respective Lipper peer groups. Past performance does not guarantee future results.
    (2)Source: (Morningstar)(C) 3/31/05. For each fund with at least a three-year history, Morningstar calculates a Morningstar Rating based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund's monthly performance (including the effects of sales charges, loads and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. (Each share class is counted as a fraction of one fund within this scale and rated separately, which may cause slight variations in the distribution percentages.) The Overall Morningstar Rating for a fund is derived from a weighted-average of the performance figures associated with its three-, five- and 10-year (if applicable) Morningstar Rating metrics. Past performance does not guarantee future results. Morningstar Rating is for the A share class only; other classes may have different performance characteristics. The following fund was rated against 796; 562; N/A Large Value funds for the respective three-, five- and 10-year periods ended 3/31/05, as applicable. For the three-, five- and 10-year periods ended 3/31/05, the Morningstar ratings were: Mutual Shares Fund 4, 4, N/A.
    (3)Source: Lipper(R) Inc., 3/31/05. Mutual Shares Fund Class Z ranked 205 in a universe of 478 funds in Lipper's "Multi-Cap Value Funds" group for the one-year period, 71 of 365 for the three-year period, 48 of 248 for the five-year period, and 18 of 89 for the 10-year period.
    (4) Source: S&P Micropal.

Franklin Rising Dividends Fund - Class A For the periods ended 3/31/05

1-year 3-year 5-year 10-year Since Inception ---------------------------------------------------------------------- With 5.75% Sales Charge -0.76% 3.79% 9.97% 12.00% 10.16% ---------------------------------------------------------------------- Without Sales Charge 5.30% 5.85% 11.28% 12.67% 10.52% ----------------------------------------------------------------------

Performance data quoted represents past performance, which does not guarantee future results. Ongoing market volatility can dramatically impact the Fund's short-term returns; current performance may differ from figures shown. Investment return and principal value will fluctuate with market conditions, and you may have a gain or loss when you sell your shares. Please call Franklin Templeton Investments at 1-800/DIAL BEN(R) for most recent month-end performance.

    (5)Source: Lipper(R) Inc., 3/31/05. A Lipper Leaders distinction does not imply that a fund named as a Lipper Leader had the best performance in its category. Lipper Leaders Awards are based on Class A shares. Lipper ratings for Consistent Return reflect funds' historical risk-adjusted returns, adjusted for volatility, relative to peers. Lipper ratings for Total Return reflect funds' historical total return performance relative to peers. Lipper ratings for Preservation reflect funds' historical loss avoidance relative to other funds within the same asset class. Preservation ratings are relative, rather than absolute, measures, and funds named Lipper Leaders for Preservation may still experience losses periodically; those losses may be larger for equity and mixed equity funds than for fixed income funds. The Lipper ratings are subject to change every month and are based on an equal-weighted average of percentile ranks for the Consistent Return, Total Return, Preservation and Tax-Efficiency metrics over three-, five- and 10-year periods (if applicable). 20% of funds in each peer group are named Lipper Leaders, the next 20% receive a score of 2, the middle 20% are scored 3, the next 20% are scored 4, and the lowest 20% are scored 5. Franklin Rising Dividends Fund, in Lipper's Equity asset class, received the following ratings for the three-, five- and 10-year periods respectively: Preservation: Lipper Leader (7624), Lipper Leader (5442), Lipper Leader (1838). Lipper ratings are not intended to predict future results, and Lipper does not guarantee the accuracy of this information. More information is available at www.lipperleaders.com. Lipper Leader, Copyright 2003, Reuters, All Rights Reserved.

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CONTACT: Franklin Templeton Investments Lisa Gallegos, 650-312-3395 franklintempleton.com

KEYWORD: CALIFORNIA INDUSTRY KEYWORD: BANKING PRODUCT SOURCE: Franklin Templeton Investments

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