Templeton Global Smaller Companies Fund 年报：截至2026年8月31日年度回报低于全球小盘指数

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-03143

Templeton Global Smaller Companies Fund

(Exact name of registrant as specified in charter)

300 S.E. 2^nd Street, Fort Lauderdale, FL 33301-1923

(Address of principal executive offices) (Zip code)

Alison Baur

Franklin Templeton

One Franklin Parkway

San Mateo, CA 94403-1906

(Name and address of agent for service)

Registrant’s telephone number, including area code: (650) 312-2000

Date of fiscal year end: August 31

Date of reporting period: August 31, 2026

(a) The Report to Shareholders is filed herewith

This annual shareholder report contains important information about Templeton Global Smaller Companies Fund for the period September 1, 2025, to August 31, 2026.
You can find additional information about the Fund at https://www.franklintempleton.com/regulatory-fund-documents. You can also request this information by contacting us at (800) DIAL BEN/342-5236.  

This report describes changes to the Fund that occurred during the reporting period.

WHAT WERE THE FUND COSTS FOR THE LAST YEAR? (based on a hypothetical $10,000 investment)

HOW DID THE FUND PERFORM LAST YEAR AND WHAT AFFECTED ITS PERFORMANCE?

For the twelve months ended August 31, 2026, Class A shares of Templeton Global Smaller Companies Fund returned 10.85%. The Fund compares its performance to the MSCI All Country World Small Cap Index-NR, which returned 22.39% for the same period.

PERFORMANCE HIGHLIGHTS

HOW DID THE FUND PERFORM OVER THE LAST 10 YEARS?

The Fund’s past performance is not necessarily an indication of how the Fund will perform in the future. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares.

VALUE OF A $10,000 INVESTMENT ($9,450 AFTER MAXIMUM APPLICABLE SALES CHARGE) –
Class A 8/31/2016 — 8/31/2026

AVERAGE ANNUAL TOTAL RETURNS (%) Period Ended August 31, 2026

Fund performance figures may reflect fee waivers and/or expense reimbursements, without which the performance would have been lower.

Performance for periods prior to September 10, 2018, has been restated to reflect the current maximum sales charge, which is lower than the maximum sales charge prior to that date.

For current month-end performance, please call Franklin Templeton at (800) DIAL BEN/342-5236 or visit
https://www.franklintempleton.com/investments/options/mutual-funds.

Important data provider notices and terms available at www.franklintempletondatasources.com.

KEY FUND STATISTICS (as of August 31, 2026)

WHAT DID THE FUND INVEST IN? (as of August 31, 2026)

Portfolio Composition^* (% of Total Investments)

HOW HAS THE FUND CHANGED?

Effective January 1, 2026, the Fund’s definition of smaller companies was changed to companies with market capitalizations not exceeding the highest float-adjusted market capitalization in the Fund’s benchmark from companies with market capitalizations not exceeding the lesser of (1) the highest float-adjusted market capitalization in the Fund’s benchmark, or (2) $10 billion, at the time of purchase.

Effective October 31, 2025, Harlan B. Hodes no longer serves as a portfolio manager of the Fund.

This is a summary of certain changes to the Fund since September 1, 2025. For more complete information, you may review the Fund’s current prospectus and any applicable supplements and the Fund’s next prospectus, which we expect to be available by January 1, 2027, at https://www.franklintempleton.com/regulatory-fund-documents or upon request at (800) DIAL BEN/342-5236 or [email protected].

HOUSEHOLDING

You will receive the Fund’s shareholder 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 shareholder reports 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) DIAL BEN/342-5236. At any time, you may view current prospectuses/summary prospectuses and shareholder reports on our website. If you choose, you may receive these documents through electronic delivery.

9450109361194610888117681670012063134081569515877175991000011711130481301115161195041640618694230762672132693100001168913362121811310818595151131642419076215532637942.427.121.92.91.70.43.6

This annual shareholder report contains important information about Templeton Global Smaller Companies Fund for the period September 1, 2025, to August 31, 2026.
You can find additional information about the Fund at https://www.franklintempleton.com/regulatory-fund-documents. You can also request this information by contacting us at (800) DIAL BEN/342-5236.  

This report describes changes to the Fund that occurred during the reporting period.

WHAT WERE THE FUND COSTS FOR THE LAST YEAR? (based on a hypothetical $10,000 investment)

HOW DID THE FUND PERFORM LAST YEAR AND WHAT AFFECTED ITS PERFORMANCE?

For the twelve months ended August 31, 2026, Class C shares of Templeton Global Smaller Companies Fund returned 10.01%. The Fund compares its performance to the MSCI All Country World Small Cap Index-NR, which returned 22.39% for the same period.

PERFORMANCE HIGHLIGHTS

HOW DID THE FUND PERFORM OVER THE LAST 10 YEARS?

The Fund’s past performance is not necessarily an indication of how the Fund will perform in the future. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares.

VALUE OF A $10,000 INVESTMENT – Class C 8/31/2016 — 8/31/2026

AVERAGE ANNUAL TOTAL RETURNS (%) Period Ended August 31, 2026

Fund performance figures may reflect fee waivers and/or expense reimbursements, without which the performance would have been lower.

For current month-end performance, please call Franklin Templeton at (800) DIAL BEN/342-5236 or visit
https://www.franklintempleton.com/investments/options/mutual-funds.

Important data provider notices and terms available at www.franklintempletondatasources.com.

KEY FUND STATISTICS (as of August 31, 2026)

WHAT DID THE FUND INVEST IN? (as of August 31, 2026)

Portfolio Composition^* (% of Total Investments)

HOW HAS THE FUND CHANGED?

Effective January 1, 2026, the Fund’s definition of smaller companies was changed to companies with market capitalizations not exceeding the highest float-adjusted market capitalization in the Fund’s benchmark from companies with market capitalizations not exceeding the lesser of (1) the highest float-adjusted market capitalization in the Fund’s benchmark, or (2) $10 billion, at the time of purchase.

Effective October 31, 2025, Harlan B. Hodes no longer serves as a portfolio manager of the Fund.

This is a summary of certain changes to the Fund since September 1, 2025. For more complete information, you may review the Fund’s current prospectus and any applicable supplements and the Fund’s next prospectus, which we expect to be available by January 1, 2027, at https://www.franklintempleton.com/regulatory-fund-documents or upon request at (800) DIAL BEN/342-5236 or [email protected].

HOUSEHOLDING

You will receive the Fund’s shareholder 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 shareholder reports 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) DIAL BEN/342-5236. At any time, you may view current prospectuses/summary prospectuses and shareholder reports on our website. If you choose, you may receive these documents through electronic delivery.

10000114881245211257120731700312200134501562215696172671000011711130481301115161195041640618694230762672132693100001168913362121811310818595151131642419076215532637942.427.121.92.91.70.43.6

This annual shareholder report contains important information about Templeton Global Smaller Companies Fund for the period September 1, 2025, to August 31, 2026.
You can find additional information about the Fund at https://www.franklintempleton.com/regulatory-fund-documents. You can also request this information by contacting us at (800) DIAL BEN/342-5236.  

This report describes changes to the Fund that occurred during the reporting period.

WHAT WERE THE FUND COSTS FOR THE LAST YEAR? (based on a hypothetical $10,000 investment)

HOW DID THE FUND PERFORM LAST YEAR AND WHAT AFFECTED ITS PERFORMANCE?

For the twelve months ended August 31, 2026, Class R6 shares of Templeton Global Smaller Companies Fund returned 11.26%. The Fund compares its performance to the MSCI All Country World Small Cap Index-NR, which returned 22.39% for the same period.

PERFORMANCE HIGHLIGHTS

HOW DID THE FUND PERFORM OVER THE LAST 10 YEARS?

The Fund’s past performance is not necessarily an indication of how the Fund will perform in the future. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares.

VALUE OF A $10,000 INVESTMENT – Class R6 8/31/2016 — 8/31/2026

AVERAGE ANNUAL TOTAL RETURNS (%) Period Ended August 31, 2026

Fund performance figures may reflect fee waivers and/or expense reimbursements, without which the performance would have been lower.

For current month-end performance, please call Franklin Templeton at (800) DIAL BEN/342-5236 or visit
https://www.franklintempleton.com/investments/options/mutual-funds.

Important data provider notices and terms available at www.franklintempletondatasources.com.

KEY FUND STATISTICS (as of August 31, 2026)

WHAT DID THE FUND INVEST IN? (as of August 31, 2026)

Portfolio Composition^* (% of Total Investments)

HOW HAS THE FUND CHANGED?

Effective January 1, 2026, the Fund’s definition of smaller companies was changed to companies with market capitalizations not exceeding the highest float-adjusted market capitalization in the Fund’s benchmark from companies with market capitalizations not exceeding the lesser of (1) the highest float-adjusted market capitalization in the Fund’s benchmark, or (2) $10 billion, at the time of purchase.

Effective October 31, 2025, Harlan B. Hodes no longer serves as a portfolio manager of the Fund.

This is a summary of certain changes to the Fund since September 1, 2025. For more complete information, you may review the Fund’s current prospectus and any applicable supplements and the Fund’s next prospectus, which we expect to be available by January 1, 2027, at https://www.franklintempleton.com/regulatory-fund-documents or upon request at (800) DIAL BEN/342-5236 or [email protected].

HOUSEHOLDING

You will receive the Fund’s shareholder 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 shareholder reports 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) DIAL BEN/342-5236. At any time, you may view current prospectuses/summary prospectuses and shareholder reports on our website. If you choose, you may receive these documents through electronic delivery.

10000116181273811647126431799913051145631710717369193251000011711130481301115161195041640618694230762672132693100001168913362121811310818595151131642419076215532637942.427.121.92.91.70.43.6

This annual shareholder report contains important information about Templeton Global Smaller Companies Fund for the period September 1, 2025, to August 31, 2026.
You can find additional information about the Fund at https://www.franklintempleton.com/regulatory-fund-documents. You can also request this information by contacting us at (800) DIAL BEN/342-5236.  

This report describes changes to the Fund that occurred during the reporting period.

WHAT WERE THE FUND COSTS FOR THE LAST YEAR? (based on a hypothetical $10,000 investment)

HOW DID THE FUND PERFORM LAST YEAR AND WHAT AFFECTED ITS PERFORMANCE?

For the twelve months ended August 31, 2026, Advisor Class shares of Templeton Global Smaller Companies Fund returned 11.02%. The Fund compares its performance to the MSCI All Country World Small Cap Index-NR, which returned 22.39% for the same period.

PERFORMANCE HIGHLIGHTS

HOW DID THE FUND PERFORM OVER THE LAST 10 YEARS?

The Fund’s past performance is not necessarily an indication of how the Fund will perform in the future. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares.

VALUE OF A $10,000 INVESTMENT – Advisor Class 8/31/2016 — 8/31/2026

AVERAGE ANNUAL TOTAL RETURNS (%) Period Ended August 31, 2026

Fund performance figures may reflect fee waivers and/or expense reimbursements, without which the performance would have been lower.

For current month-end performance, please call Franklin Templeton at (800) DIAL BEN/342-5236 or visit
https://www.franklintempleton.com/investments/options/mutual-funds.

Important data provider notices and terms available at www.franklintempletondatasources.com.

KEY FUND STATISTICS (as of August 31, 2026)

WHAT DID THE FUND INVEST IN? (as of August 31, 2026)

Portfolio Composition^* (% of Total Investments)

HOW HAS THE FUND CHANGED?

Effective January 1, 2026, the Fund’s definition of smaller companies was changed to companies with market capitalizations not exceeding the highest float-adjusted market capitalization in the Fund’s benchmark from companies with market capitalizations not exceeding the lesser of (1) the highest float-adjusted market capitalization in the Fund’s benchmark, or (2) $10 billion, at the time of purchase.

Effective October 31, 2025, Harlan B. Hodes no longer serves as a portfolio manager of the Fund.

This is a summary of certain changes to the Fund since September 1, 2025. For more complete information, you may review the Fund’s current prospectus and any applicable supplements and the Fund’s next prospectus, which we expect to be available by January 1, 2027, at https://www.franklintempleton.com/regulatory-fund-documents or upon request at (800) DIAL BEN/342-5236 or [email protected].

HOUSEHOLDING

You will receive the Fund’s shareholder 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 shareholder reports 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) DIAL BEN/342-5236. At any time, you may view current prospectuses/summary prospectuses and shareholder reports on our website. If you choose, you may receive these documents through electronic delivery.

10000116021270511611125771789412956144331694917192190861000011711130481301115161195041640618694230762672132693100001168913362121811310818595151131642419076215532637942.427.121.92.91.70.43.6

(b) Not applicable

(a) The Registrant has adopted a code of ethics that applies to its principal executive officers and principal financial and accounting officer. 

(c) N/A 

(d) N/A 

(f) Pursuant to Item 19(a) (1), the Registrant is attaching as an exhibit a copy of its code of ethics that applies to its principal executive officers and principal financial and accounting officer.

The Board of Trustees of the Registrant has determined that Ann Torre Bates and David W. Niemiec possess the technical attributes identified in Item 3 to Form N-CSR to qualify as “audit committee financial experts,” and has designated Ann Torre Bates and David W. Niemiec as the Audit Committee’s financial experts. Ann Torre Bates and David W. Niemiec are “independent” Trustees pursuant to paragraph (a)(2) of Item 3 to Form N-CSR.

Under applicable securities laws, a person determined to be an audit committee financial expert will not be deemed an “expert” for any purpose, including without limitation for the purposes of Section 11 of the Securities Act of 1933, as a result of being designated or identified as an audit committee financial expert. The designation or identification of a person as an audit committee financial expert does not impose on such person any duties, obligations, or liabilities greater than the duties, obligations, and liabilities imposed on such person as a member of the audit committee and board of directors in the absence of such designation or identification. The designation or identification of a person as an audit committee financial expert does not affect the duties, obligations, or liability of any other member of the audit committee or board of directors.

a) Audit Fees. The aggregate fees billed in the last two fiscal years ending August 31, 2025 and August 31, 2026 (the “Reporting Periods”) for professional services rendered by the Registrant’s principal accountant (the “Auditor”) for the audit of the Registrant's annual financial statements, or services that are normally provided by the Auditor in connection with the statutory and regulatory filings or engagements for the Reporting Periods, were $49,367 in August 31, 2025 and $49,665 in August 31, 2026.

b) Audit-Related Fees. The aggregate fees billed in the Reporting Periods for assurance and related services by the Auditor that are reasonably related to the performance of the Registrant’s financial statements were $0 in August 31, 2025 and $0 in August 31, 2026.

(c) Tax Fees. The aggregate fees billed in the Reporting Periods for professional services rendered by the Auditor for tax compliance, tax advice and tax planning (“Tax Services”) were $11,000 in August 31, 2025 and $11,000 in August 31, 2026. These services consisted of (i) review or preparation of U.S. federal, state, local and excise tax returns; (ii) U.S. federal, state and local tax planning, advice and assistance regarding statutory, regulatory or administrative developments, and (iii) tax advice regarding tax qualification matters and/or treatment of various financial instruments held or proposed to be acquired or held.

There were no fees billed for tax services by the 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 (“Service Affiliates”) during the Reporting Periods that required pre-approval by the Audit Committee.

(d) All Other Fees. The aggregate fees billed in the Reporting Periods for products and services provided by the Auditor to the Registrant, other than the services reported in paragraphs (a) through (c) of this item, were $0 in August 31, 2025 and $0 in August 31, 2026.

There were no other non-audit services rendered by the Auditor to the Service Affiliates requiring pre-approval by the Audit Committee in the Reporting Periods.

(e) Audit Committee’s pre–approval policies and procedures described in paragraph (c) (7) of Rule 2-01 of Regulation S-X.

(1) The Registrant’s Audit Committee is directly responsible for approving the services to be provided by the Auditors, including:

(i) pre-approval of all audit and audit related services;

(ii) pre-approval of all non-audit related services to be provided to the Registrant by the Auditors;

(iii) pre-approval of all non-audit related services to be provided by the Auditors to the Registrant and the Service Affiliates where the non-audit services relate directly to the operations or financial reporting of the Registrant; and

(iv) establishment by the Audit Committee, if deemed necessary or appropriate, as an alternative to committee pre-approval of services to be provided by the Auditors, as required by paragraphs (ii) and (iii) above, of policies and procedures to permit such services to be pre-approved by other means, such as through establishment of guidelines or by action of a designated member or members of the committee; provided the policies and procedures are detailed as to the particular service and the committee is informed of each service and such policies and procedures do not include delegation of Audit Committee responsibilities, as contemplated under the Securities Exchange Act of 1934, to management; subject, in the case of (ii) through (iv), to any waivers, exceptions or exemptions that may be available under applicable law or rules.

(2) None of the services described in paragraphs (b) through (d) of this Item were performed in reliance on paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

(f) Not applicable.

(g) Non-audit fees billed by the Auditor for services rendered to the Registrant and the Service Affiliates during the reporting period were $248,876 in August 31, 2025 and $462,330 in August 31, 2026.

(h) Yes. The Registrant’s Audit Committee has considered whether the provision of non-audit services that were rendered to Service Affiliates, which were not pre-approved (not requiring pre-approval), is compatible with maintaining the Auditor's independence. All services provided by the Auditor to the Registrant or to the Service Affiliates, which were required to be pre-approved, were pre-approved as required.

(i) Not applicable.

(j) Not applicable.

Not applicable.

Templeton

Global

Smaller

Companies

Fund

Financial

Statements

and

Other

Important

Information

Annual

|

August

31, 

 2026

If

you

need

assistance

accessing

this

content,

please

reach

out

to

your

sales

representative

or

send

an

email

to

[email protected]

.

Table

of

Contents

franklintempleton.com

Financial

Statements

and

Other

Important

Information—Annual

1

Financial

Highlights

and

Schedule

of

Investments

2

Financial

Statements

9

Notes

to

Financial

Statements

13

Report

of

Independent

Registered

Public

Accounting

Firm

23

Tax

Information

24

Changes

In

and

Disagreements

with

Accountants

25

Results

of

Meeting(s)

of

Shareholders

25

Remuneration

Paid

to

Directors,

Officers

and

Others

25

Board

Approval

of

Management

and

Subadvisory

Agreements

25

Templeton

Global

Smaller

Companies

Fund

Financial

Highlights

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

2

a

Year

Ended

August

31,

2026

2025

2024

2023

2022

Class

A

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

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

$10.10

$10.28

$8.88

$8.24

$12.67

Income

from

investment

operations

a

:

Net

investment

income

b

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

0.03

0.09

0.07

0.09

0.05

Net

realized

and

unrealized

gains

(losses)

...........

1.02

0.01

1.43

0.81

(3.30)

Total

from

investment

operations

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

1.05

0.10

1.50

0.90

(3.25)

Less

distributions

from:

Net

investment

income

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

(0.13)

(0.11)

(0.10)

(0.06)

(0.03)

Net

realized

gains

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

(0.32)

(0.17)

—

(0.20)

(1.15)

Total

distributions

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

(0.45)

(0.28)

(0.10)

(0.26)

(1.18)

Net

asset

value,

end

of

year

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

$10.70

$10.10

$10.28

$8.88

$8.24

Total

return

c

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

10.85%

1.16%

17.05%

11.15%

(27.76)%

Ratios

to

average

net

assets

Expenses

d

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

1.34%

1.34%

1.31%

1.30%

1.31%

Net

investment

income

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

0.29%

0.99%

0.81%

1.06%

0.51%

Supplemental

data

Net

assets

,

end

of

year

(000’s)

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

$716,457

$731,951

$824,075

$794,020

$799,689

Portfolio

turnover

rate

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

92.13%

15.75%

11.95%

12.85%

13.80%

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

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

Templeton

Global

Smaller

Companies

Fund

Financial

Highlights

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

3

a

Year

Ended

August

31,

2026

2025

2024

2023

2022

Class

C

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

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

$9.33

$9.51

$8.21

$7.64

$11.88

Income

from

investment

operations

a

:

Net

investment

income

(loss)

b

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

(0.04)

0.02

0.01

0.02

(0.03)

Net

realized

and

unrealized

gains

(losses)

...........

0.94

0.01

1.31

0.75

(3.06)

Total

from

investment

operations

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

0.90

0.03

1.32

0.77

(3.09)

Less

distributions

from:

Net

investment

income

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

(0.06)

(0.04)

(0.02)

—

—

Net

realized

gains

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

(0.32)

(0.17)

—

(0.20)

(1.15)

Total

distributions

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

(0.38)

(0.21)

(0.02)

(0.20)

(1.15)

Net

asset

value,

end

of

year

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

$9.85

$9.33

$9.51

$8.21

$7.64

Total

return

c

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

10.01%

0.47%

16.15%

10.25%

(28.25)%

Ratios

to

average

net

assets

Expenses

d

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

2.09%

2.08%

2.06%

2.06%

2.06%

Net

investment

income

(loss)

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

(0.46)%

0.17%

0.06%

0.27%

(0.28)%

Supplemental

data

Net

assets

,

end

of

year

(000’s)

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

$2,492

$3,222

$4,559

$4,875

$6,116

Portfolio

turnover

rate

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

92.13%

15.75%

11.95%

12.85%

13.80%

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

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

Templeton

Global

Smaller

Companies

Fund

Financial

Highlights

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

4

a

Year

Ended

August

31,

2026

2025

2024

2023

2022

Class

R6

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

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

$10.17

$10.35

$8.94

$8.30

$12.74

Income

from

investment

operations

a

:

Net

investment

income

b

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

0.07

0.12

0.11

0.12

0.09

Net

realized

and

unrealized

gains

(losses)

...........

1.02

0.01

1.44

0.82

(3.32)

Total

from

investment

operations

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

1.09

0.13

1.55

0.94

(3.23)

Less

distributions

from:

Net

investment

income

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

(0.16)

(0.14)

(0.14)

(0.10)

(0.06)

Net

realized

gains

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

(0.32)

(0.17)

—

(0.20)

(1.15)

Total

distributions

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

(0.48)

(0.31)

(0.14)

(0.30)

(1.21)

Net

asset

value,

end

of

year

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

$10.78

$10.17

$10.35

$8.94

$8.30

Total

return

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

11.26%

1.53%

17.47%

11.59%

(27.49)%

Ratios

to

average

net

assets

Expenses

before

waiver

and

payments

by

affiliates

......

0.99%

0.98%

0.96%

0.94%

0.96%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

0.98%

0.98%

c

0.96%

c

0.93%

0.95%

Net

investment

income

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

0.64%

1.36%

1.17%

1.43%

0.88%

Supplemental

data

Net

assets

,

end

of

year

(000’s)

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

$53,023

$53,819

$59,890

$75,063

$73,802

Portfolio

turnover

rate

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

92.13%

15.75%

11.95%

12.85%

13.80%

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

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

Templeton

Global

Smaller

Companies

Fund

Financial

Highlights

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

5

a

Year

Ended

August

31,

2026

2025

2024

2023

2022

Advisor

Class

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

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

$10.19

$10.37

$8.95

$8.31

$12.76

Income

from

investment

operations

a

:

Net

investment

income

b

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

0.05

0.12

0.10

0.11

0.08

Net

realized

and

unrealized

gains

(losses)

...........

1.02

—

c

1.45

0.81

(3.33)

Total

from

investment

operations

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

1.07

0.12

1.55

0.92

(3.25)

Less

distributions

from:

Net

investment

income

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

(0.15)

(0.13)

(0.13)

(0.08)

(0.05)

Net

realized

gains

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

(0.32)

(0.17)

—

(0.20)

(1.15)

Total

distributions

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

(0.47)

(0.30)

(0.13)

(0.28)

(1.20)

Net

asset

value,

end

of

year

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

$10.79

$10.19

$10.37

$8.95

$8.31

Total

return

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

11.02%

1.43%

17.43%

11.40%

(27.59)%

Ratios

to

average

net

assets

Expenses

d

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

1.09%

1.09%

1.06%

1.05%

1.06%

Net

investment

income

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

0.54%

1.25%

1.07%

1.31%

0.76%

Supplemental

data

Net

assets

,

end

of

year

(000’s)

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

$39,750

$42,164

$44,421

$39,007

$40,999

Portfolio

turnover

rate

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

92.13%

15.75%

11.95%

12.85%

13.80%

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Amount

rounds

to

less

than

$0.01

per

share.

d

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

Templeton

Global

Smaller

Companies

Fund

Schedule

of

Investments,

August

31,

2026

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

6

a

a

Industry

Shares

a

Value

a

Common

Stocks

97.5%

Australia

1.8%

Orica

Ltd.

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

Chemicals

903,420

$

14,366,530

Austria

1.3%

DO

&

CO

AG

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

Commercial

Services

&

Supplies

42,799

10,079,962

Bahamas

1.8%

a

OneSpaWorld

Holdings

Ltd.

........

Diversified

Consumer

Services

272,299

6,761,184

OneSpaWorld

Holdings

Ltd.

........

Diversified

Consumer

Services

314,014

7,796,968

14,558,152

Brazil

1.1%

XP,

Inc.

,

A

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

Capital

Markets

499,879

9,112,794

Canada

3.0%

b

Athabasca

Oil

Corp.

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

Oil,

Gas

&

Consumable

Fuels

1,419,000

10,883,488

Canaccord

Genuity

Group,

Inc.

......

Capital

Markets

1,271,000

13,324,889

24,208,377

China

4.1%

Sunresin

New

Materials

Co.

Ltd.

,

A

...

Chemicals

1,393,336

13,047,716

b,c

Wuxi

Biologics

Cayman,

Inc.

,

144A

,

Reg

S

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

Life

Sciences

Tools

&

Services

3,300,000

20,466,779

33,514,495

Denmark

2.4%

FLSmidth

&

Co.

A/S

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

Machinery

213,586

19,555,617

France

0.5%

Coface

SA

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

Insurance

223,279

4,106,358

Germany

2.5%

Jenoptik

AG

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

Electronic

Equipment,

Instruments

&

Components

238,413

11,015,710

Vonovia

SE

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

Real

Estate

Management

&

Development

411,780

9,171,795

20,187,505

Hong

Kong

2.3%

Techtronic

Industries

Co.

Ltd.

.......

Machinery

1,101,290

18,940,426

India

1.0%

CESC

Ltd.

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

Electric

Utilities

5,129,677

7,870,887

Israel

0.4%

b

Nayax

Ltd.

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

Electronic

Equipment,

Instruments

&

Components

59,455

3,106,526

Italy

4.5%

a

Brunello

Cucinelli

SpA

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

Textiles,

Apparel

&

Luxury

Goods

77,738

7,928,113

c

Carel

Industries

SpA

,

144A

,

Reg

S

...

Building

Products

264,022

8,234,217

De'

Longhi

SpA

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

Household

Durables

192,024

9,442,331

a

Sanlorenzo

SpA

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

Leisure

Products

250,993

11,061,050

36,665,711

Japan

11.1%

Aica

Kogyo

Co.

Ltd.

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

Chemicals

439,300

11,395,285

Asics

Corp.

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

Textiles,

Apparel

&

Luxury

Goods

473,800

13,286,741

Azbil

Corp.

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

Electronic

Equipment,

Instruments

&

Components

1,179,900

11,241,710

GMO

Payment

Gateway,

Inc.

.......

Financial

Services

233,300

13,789,899

Kaneka

Corp.

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

Chemicals

220,300

8,573,219

Templeton

Global

Smaller

Companies

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The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

7

a

a

Industry

Shares

a

Value

a

Common

Stocks

(continued)

Japan

(continued)

Maruwa

Co.

Ltd.

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

Electronic

Equipment,

Instruments

&

Components

33,400

$

11,015,173

Miura

Co.

Ltd.

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

Machinery

201,900

4,043,644

Nihon

M&A

Center

Holdings,

Inc.

....

Capital

Markets

2,035,700

8,721,219

Sugi

Holdings

Co.

Ltd.

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

Consumer

Staples

Distribution

&

Retail

989,200

8,176,767

90,243,657

Netherlands

2.0%

c

Euronext

NV

,

144A

,

Reg

S

.........

Capital

Markets

85,428

16,172,957

Norway

1.3%

Norsk

Hydro

ASA

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

Metals

&

Mining

1,036,563

10,465,169

Portugal

1.0%

Galp

Energia

SGPS

SA

,

B

.........

Oil,

Gas

&

Consumable

Fuels

337,182

8,438,699

South

Korea

4.3%

Classys,

Inc.

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

Health

Care

Equipment

&

Supplies

457,589

11,297,719

ISC

Co.

Ltd.

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

Semiconductors

&

Semiconductor

Equipment

121,187

14,926,958

Soulbrain

Co.

Ltd.

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

Chemicals

35,455

8,836,713

35,061,390

Switzerland

1.4%

c

Medacta

Group

SA

,

144A

,

Reg

S

....

Health

Care

Equipment

&

Supplies

74,700

11,661,976

Taiwan

4.5%

Tripod

Technology

Corp.

...........

Electronic

Equipment,

Instruments

&

Components

839,000

13,125,454

Wiwynn

Corp.

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

Technology

Hardware,

Storage

&

Peripherals

105,000

23,462,929

36,588,383

United

Kingdom

5.3%

Derwent

London

plc

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

Office

REITs

485,701

13,478,397

Fevertree

Drinks

plc

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

Beverages

976,847

11,297,162

Oxford

Instruments

plc

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

Electronic

Equipment,

Instruments

&

Components

108,688

4,182,532

b,c

Watches

of

Switzerland

Group

plc

,

144A

Specialty

Retail

1,434,195

13,751,172

42,709,263

United

States

39.9%

Advanced

Drainage

Systems,

Inc.

....

Building

Products

97,597

13,246,841

a

Alamo

Group,

Inc.

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

Machinery

58,499

9,627,765

b

Ambiq

Micro,

Inc.

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

Semiconductors

&

Semiconductor

Equipment

194,660

11,350,625

a,b

Atlas

Energy

Solutions,

Inc.

,

A

.......

Energy

Equipment

&

Services

1,206,246

15,801,823

b

Charles

River

Laboratories

International,

Inc.

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

Life

Sciences

Tools

&

Services

29,324

8,452,350

CNH

Industrial

NV

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

Machinery

729,386

8,628,636

CubeSmart

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

Specialized

REITs

295,745

11,746,991

a,b

Freshpet,

Inc.

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

Food

Products

215,396

15,047,565

b

Guardian

Pharmacy

Services,

Inc.

,

A

..

Health

Care

Providers

&

Services

233,377

8,655,953

b

Healthcare

Services

Group,

Inc.

.....

Commercial

Services

&

Supplies

896,219

19,707,856

Huntington

Bancshares,

Inc.

........

Banks

941,339

15,706,241

b

Illumina,

Inc.

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

Life

Sciences

Tools

&

Services

127,101

27,152,587

b

Ingevity

Corp.

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

Chemicals

129,454

8,969,868

a

JBT

Marel

Corp.

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

Machinery

100,655

11,763,550

b

Jones

Lang

LaSalle,

Inc.

...........

Real

Estate

Management

&

Development

50,549

18,494,363

a,b

Knowles

Corp.

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

Electronic

Equipment,

Instruments

&

Components

297,796

10,178,667

Leonardo

DRS,

Inc.

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

Aerospace

&

Defense

216,198

8,215,524

Templeton

Global

Smaller

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Schedule

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franklintempleton.com

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The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

8

See

Abbreviations

on

page

22.

a

a

Industry

Shares

a

Value

a

Common

Stocks

(continued)

United

States

(continued)

Levi

Strauss

&

Co.

,

A

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

Textiles,

Apparel

&

Luxury

Goods

570,100

$

11,835,276

a

Ryan

Specialty

Holdings,

Inc.

,

A

.....

Insurance

285,976

12,062,468

Seacoast

Banking

Corp.

of

Florida

...

Banks

442,721

15,032,591

a,b

SharkNinja,

Inc.

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

Household

Durables

75,496

14,532,225

a

Smurfit

Westrock

plc

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

Containers

&

Packaging

207,500

9,731,750

Texas

Capital

Bancshares,

Inc.

......

Banks

125,197

12,166,644

Timken

Co.

(The)

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

Machinery

88,727

10,687,167

a,b

Vita

Coco

Co.,

Inc.

(The)

...........

Beverages

254,231

14,927,173

323,722,499

Total

Common

Stocks

(Cost

$

600,601,601

)

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

791,337,333

Short

Term

Investments

3.7%

a

a

Industry

Principal

Amount

*

a

Value

a

a

a

a

a

a

Time

Deposits

2.7%

Canada

2.7%

Bank

of

Montreal

,

3.62

%

,

9/01/26

....

2,500,000

2,500,000

Royal

Bank

of

Canada

,

3.58

%

,

9/01/26

19,400,000

19,400,000

21,900,000

Total

Time

Deposits

(Cost

$

21,900,000

)

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

21,900,000

Shares

d

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

1.0%

Money

Market

Funds

1.0%

e,f

Franklin

Institutional

U.S.

Government

Money

Market

Fund

,

3.629

%

......

7,912,950

7,912,950

Total

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

(Cost

$

7,912,950

)

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

7,912,950

a

a

a

a

a

Total

Short

Term

Investments

(Cost

$

29,812,950

)

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

29,812,950

a

a

a

Total

Investments

(Cost

$

630,414,551

)

101.2

%

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

$821,150,283

Other

Assets,

less

Liabilities

(

1.2

)

%

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

(9,428,397)

Net

Assets

100.0%

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

$811,721,886

a

a

a

*

The

principal

amount

is

stated

in

U.S.

dollars

unless

otherwise

indicated.

a

A

portion

or

all

of

the

security

is

on

loan

at

August

31,

2026.

See

Note

1(c).

b

Non-income

producing.

c

Security

was

purchased

pursuant

to

Rule

144A

or

Regulation

S

under

the

Securities

Act

of

1933.

144A

securities

may

be

sold

in

transactions

exempt

from

registration

only

to

qualified

institutional

buyers

or

in

a

public

offering

registered

under

the

Securities

Act

of

1933.

Regulation

S

securities

cannot

be

sold

in

the

United

States

without

either

an

effective

registration

statement

filed

pursuant

to

the

Securities

Act

of

1933,

or

pursuant

to

an

exemption

from

registration.

At

August

31,

2026,

the

aggregate

value

of

these

securities

was

$70,287,101,

representing

8.7%

of

net

assets.

d

See

Note

1(c)

regarding

securities

on

loan.

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.

Templeton

Global

Smaller

Companies

Fund

Financial

Statements

Statement

of

Assets

and

Liabilities

August

31,

2026

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

9

Templeton

Global

Smaller

Companies

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

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

$622,501,601

Cost

-

Non-controlled

affiliates

(Note

3

f

)

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

7,912,950

Value

-

Unaffiliated

issuers

(Includes

securities

loaned

of

$

63,109,262

)

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

$813,237,333

Value

-

Non-controlled

affiliates

(Note

3

f

)

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

7,912,950

Cash

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

37,034

Receivables:

Investment

securities

sold

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

3,564

Capital

shares

sold

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

80,407

Dividends

and

interest

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

1,028,563

European

Union

tax

reclaims

(Note

1

d

)

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

595,737

Total

assets

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

822,895,588

Liabilities:

Payables:

Investment

securities

purchased

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

1,741,168

Capital

shares

redeemed

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

290,453

Management

fees

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

614,600

Distribution

fees

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

155,793

Transfer

agent

fees

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

293,226

Trustees'

fees

and

expenses

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

2,844

Payable

upon

return

of

securities

loaned

(Note

1

c

)

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

7,912,950

Accrued

expenses

and

other

liabilities

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

162,668

Total

liabilities

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

11,173,702

Net

assets,

at

value

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

$811,721,886

Net

assets

consist

of:

Paid-in

capital

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

$464,351,111

Total

distributable

earnings

(losses)

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

347,370,775

Net

assets,

at

value

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

$811,721,886

Templeton

Global

Smaller

Companies

Fund

Financial

Statements

Statement

of

Assets

and

Liabilities

(continued)

August

31,

2026

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

10

Templeton

Global

Smaller

Companies

Fund

Class

A:

Net

assets,

at

value

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

$716,457,057

Shares

outstanding

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

66,975,925

Net

asset

value

per

share

a

,b

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

$10.70

Maximum

offering

price

per

share

(net

asset

value

per

share

÷

94

.50

%

)

b

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

$11.32

Class

C:

Net

assets,

at

value

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

$2,492,065

Shares

outstanding

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

253,107

Net

asset

value

and

maximum

offering

price

per

share

a

,b

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

$9.85

Class

R6:

Net

assets,

at

value

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

$53,022,580

Shares

outstanding

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

4,920,219

Net

asset

value

and

maximum

offering

price

per

share

b

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

$10.78

Advisor

Class:

Net

assets,

at

value

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

$39,750,184

Shares

outstanding

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

3,682,737

Net

asset

value

and

maximum

offering

price

per

share

b

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

$10.79

a

Redemption

price

is

equal

to

net

asset

value

less

contingent

deferred

sales

charges,

if

applicable.

b

Net

asset

value

per

share

may

not

recalculate

due

to

rounding.

Templeton

Global

Smaller

Companies

Fund

Financial

Statements

Statement

of

Operations

for

the

year

ended

August

31,

2026

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

11

Templeton

Global

Smaller

Companies

Fund

Investment

income:

Dividends:

(net

of

foreign

taxes

of

$1,039,321)

Unaffiliated

issuers

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

$11,288,002

Interest:

Unaffiliated

issuers

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

1,021,861

Income

from

securities

loaned:

Unaffiliated

entities

(net

of

fees

and

rebates)

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

(156,462)

Non-controlled

affiliates

(Note

3

f

)

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

315,228

Other

income

(Note

1

d

)

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

564,142

Total

investment

income

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

13,032,771

Expenses:

Management

fees

(Note

3

a

)

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

7,082,210

Distribution

fees:

(Note

3c

)

Class

A

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

1,764,508

Class

C

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

27,652

Transfer

agent

fees:

(Note

3e

)

Class

A

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

949,940

Class

C

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

3,728

Class

R6

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

19,974

Advisor

Class

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

54,045

Custodian

fees

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

58,933

Reports

to

shareholders

fees

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

88,791

Registration

and

filing

fees

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

55,473

Professional

fees

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

144,411

Trustees'

fees

and

expenses

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

94,642

Other

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

118,895

Total

expenses

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

10,463,202

Expenses

waived/paid

by

affiliates

(Note

3

f

and

3

g

)

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

(13,885)

Net

expenses

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

10,449,317

Net

investment

income

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

2,583,454

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

Unaffiliated

issuers

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

179,852,505

Foreign

currency

transactions

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

19,580

Net

realized

gain

(loss)

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

179,872,085

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

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

(100,993,535)

Translation

of

other

assets

and

liabilities

denominated

in

foreign

currencies

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

(56,644)

Change

in

deferred

taxes

on

unrealized

appreciation

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

242,185

Net

change

in

unrealized

appreciation

(depreciation)

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

(100,807,994)

Net

realized

and

unrealized

gain

(loss)

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

79,064,091

Net

increase

(decrease)

in

net

assets

resulting

from

operations

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

$81,647,545

Templeton

Global

Smaller

Companies

Fund

Financial

Statements

Statements

of

Changes

in

Net

Assets

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

12

Templeton

Global

Smaller

Companies

Fund

Year

Ended

August

31,

2026

Year

Ended

August

31,

2025

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

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

$2,583,454

$8,522,878

Net

realized

gain

(loss)

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

179,872,085

25,466,036

Net

change

in

unrealized

appreciation

(depreciation)

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

(100,807,994)

(30,198,813)

Net

increase

(decrease)

in

net

assets

resulting

from

operations

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

81,647,545

3,790,101

Distributions

to

shareholders:

Class

A

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

(31,076,093)

(21,661,895)

Class

C

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

(121,180)

(100,288)

Class

R6

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

(2,462,279)

(1,759,562)

Advisor

Class

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

(1,907,037)

(1,339,095)

Total

distributions

to

shareholders

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

(35,566,589)

(24,860,840)

Capital

share

transactions:

(Note

2

)

Class

A

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

(56,165,609)

(73,509,261)

Class

C

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

(852,063)

(1,162,823)

Class

R6

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

(3,859,080)

(4,822,746)

Advisor

Class

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

(4,637,968)

(1,223,801)

Total

capital

share

transactions

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

(65,514,720)

(80,718,631)

Net

increase

(decrease)

in

net

assets

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

(19,433,764)

(101,789,370)

Net

assets:

Beginning

of

year

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

831,155,650

932,945,020

End

of

year

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

$811,721,886

$831,155,650

Templeton

Global

Smaller

Companies

Fund

13

franklintempleton.com

Annual

Report

Notes

to

Financial

Statements

1.

Organization

and

Significant

Accounting

Policies

Templeton

Global

Smaller

Companies

Fund (Fund)

is

registered

under

the

Investment

Company

Act

of

1940

(1940

Act)

as

an

open-end

management

investment

company.

The Fund

follows

the

accounting

and

reporting

guidance

in

Financial

Accounting

Standards

Board

(FASB)

Accounting

Standards

Codification

Topic

946,

Financial

Services

–

Investment

Companies

(ASC

946)

and

applies

the

specialized

accounting

and

reporting

guidance

in

U.S.

Generally

Accepted

Accounting

Principles

(U.S.

GAAP),

including,

but

not

limited

to,

ASC

946.

The

Fund

offers

four classes

of

shares:

Class

A,

Class

C,

Class

R6

and

Advisor

Class.

Class

C

shares

automatically

convert

to

Class

A

shares

on

a

monthly

basis,

after

they

have

been

held

for

8

years.

Each

class

of

shares

may

differ

by

its

initial

sales

load,

contingent

deferred

sales

charges,

voting

rights

on

matters

affecting

a

single

class,

its

exchange

privilege

and

fees

due

to

differing

arrangements

for

distribution

and

transfer

agent

fees.

The

following

summarizes

the Fund's

significant

accounting

policies.

a.

Financial

Instrument

Valuation

The

Fund's

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

Fund

calculates

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 Fund's

Board

of

Trustees

(the

Board),

the

Board

has

designated

the

Fund’s

investment

manager

as

the

valuation

designee

and

has

responsibility

for

oversight

of

valuation.

The

investment

manager

is

assisted

by

the

Fund’s

administrator

in

performing

this

responsibility,

including

leading

the

cross-

functional

Valuation

Committee

(VC).

The

Fund

may

utilize

independent

pricing

services,

quotations

from

securities

and

financial

instrument

dealers,

and

other

market

sources

to

determine

fair

value.

Equity

securities

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

Fund's

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 time

deposits are

valued

at

cost,

which

approximates

fair

value.

The

Fund

has

procedures

to

determine

the

fair

value

of

financial

instruments

for

which

market

prices

are

not

reliable

or

readily

available.

Under

these

procedures,

the Fund

primarily

employs

a

market-based

approach

which

may

use

related

or

comparable

assets

or

liabilities,

recent

transactions,

market

multiples,

and

other

relevant

information

for

the

investment

to

determine

the

fair

value

of

the

investment.

An

income-based

valuation

approach

may

also

be

used

in

which

the

anticipated

future

cash

flows

of

the

investment

are

discounted

to

calculate

fair

value.

Discounts

may

also

be

applied

due

to

the

nature

or

duration

of

any

restrictions

on

the

disposition

of

the

investments.

Due

to

the

inherent

uncertainty

of

valuations

of

such

investments,

the

fair

values

may

differ

significantly

from

the

values

that

would

have

been

used

had

an

active

market

existed.

Trading

in

securities

on

foreign

securities

stock

exchanges

and

OTC

markets

may

be

completed

before

4

p.m.

Eastern

time.

In

addition,

trading

in

certain

foreign

markets

may

not

Templeton

Global

Smaller

Companies

Fund

Notes

to

Financial

Statements

14

franklintempleton.com

Annual

Report

take

place

on

every

Fund's

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

Fund's

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

Fund's

portfolio

securities

to

the

latest

indications

of

fair

value

at

4

p.m.

Eastern

time.

At

August

31,

2026,

certain

securities

may

have

been

fair

valued

using

these

procedures,

in

which

case

the

securities

were

categorized

as

Level

2

within

the

fair

value

hierarchy

(referred

to

as

“market

level

fair

value”).

See

the

Fair

Value

Measurements

note

for

more

information.

When

the

last

day

of

the

reporting

period

is

a

non-business

day,

certain

foreign

markets

may

be

open

on

those

days

that

the

Fund's

NAV

is

not

calculated,

which

could

result

in

differences

between

the

value

of

the

Fund's

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

Fund

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

Fund

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

Fund

does

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

Statement of

Operations.

Realized

foreign

exchange

gains

or

losses

arise

from

sales

of

foreign

currencies,

currency

gains

or

losses

realized

between

the

trade

and

settlement

dates

on

securities

transactions

and

the

difference

between

the

recorded

amounts

of

dividends,

interest,

and

foreign

withholding

taxes

and

the

U.S.

dollar

equivalent

of

the

amounts

actually

received

or

paid.

Net

unrealized

foreign

exchange

gains

and

losses

arise

from

changes

in

foreign

exchange

rates

on

foreign

denominated

assets

and

liabilities

other

than

investments

in

securities

held

at

the

end

of

the

reporting

period.

c.

Securities

Lending

The

Fund

participates

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

Fund.

Additionally,

at

August

31,

2026,

the

Fund

held

$57,819,334

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

non-cash

collateral

is

excluded

from

the

Statement

of

Assets

and

Liabilities. The

Fund

may

receive

income

from

the

investment

of

cash

collateral,

in

addition

to

lending

fees 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 Statement 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

1.

Organization

and

Significant

Accounting

Policies

(continued)

a.

Financial

Instrument

Valuation

(continued)

Templeton

Global

Smaller

Companies

Fund

Notes

to

Financial

Statements

15

franklintempleton.com

Annual

Report

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.

Securities

on

loan

outstanding

at

period

end,

if

any,

are

listed

in

the

Fund's

Schedule

of

Investments.

d.

Income

and

Deferred

Taxes

It

is the Fund's

policy

to

qualify

as

a

regulated

investment

company

under

the

Internal

Revenue

Code. The 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

Fund

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 it

invests.

Foreign

taxes,

if

any,

are

recorded

based

on

the

tax

regulations

and

rates

that

exist

in

the

foreign

markets

in

which

the

Fund

invests.

In

some

cases,

the

Fund

may

be

entitled

to

reclaim

all

or

a

portion

of

such

taxes,

and

such

reclaim

amounts,

if

any,

are

reflected

as

a

dividend

receivable

in

the

Statement

of

Assets

and

Liabilities

and

dividend

income

in

the

Statement

of

Operations.

In

many

cases,

however,

the

Fund

may

not

receive

such

amounts

for

an

extended

period

of

time,

depending

on

the

country

of

investment.

When

a

capital

gain

tax

is

determined

to

apply,

the

Fund

records

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, the

Fund

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

Statement

of

Operations

and

any

related

receivable,

if

any,

is

reflected

as

European

Union

tax

reclaims

in

the

Statement

of

Assets

and

Liabilities.

Any

fees

associated

with

these

filings

are

reflected

in

other

expenses

in

the

Statement

of

Operations.

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

Fund,

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 Fund

during a

fiscal

year

exceed

foreign

withholding

taxes

paid

by

the

Fund,

and

the

Fund previously

passed

through to

its

shareholders

foreign

taxes

incurred

by

the

Fund

to

be

used

as

a

credit

or

deduction

on

a

shareholder’s

income

tax

return,

the Fund

will enter

into

a

closing

agreement

with

the

Internal

Revenue

Service

(IRS)

in

order

to

pay

the

associated

tax

liability

on

behalf

of

the Fund's

shareholders.

The Fund

may

recognize

an

income

tax

liability

related

to

its

uncertain

tax

positions

under

U.S.

GAAP

when

the

uncertain

tax

position

has

a

less

than

50%

probability

that

it

will

be

sustained

upon

examination

by

the

tax

authorities

based

on

its

technical

merits.

As

of

August

31,

2026, the Fund

has

determined

that

no

tax

liability

is

required

in

its

financial

statements

related

to

uncertain

tax

positions

for

any

open

tax

years

(or

expected

to

be

taken

in

future

tax

years).

The

Fund's federal

and

state

income

and

federal

excise

tax

returns

for

the

prior

three

fiscal

years

are

subject

to

examination

by

the

Internal

Revenue

Service

and

state

departments

of

revenue.

e.

Security

Transactions,

Investment

Income,

Expenses

and

Distributions

Security

transactions

are

accounted

for

on

trade

date.

Realized

gains

and

losses

on

security

transactions

are

determined

on

a

specific

identification basis.

Interest

income

(including

interest

income

from

payment-in-kind

securities,

if

any)

and

estimated

expenses

are

accrued

daily.

Dividend

income

is recorded

on

the

ex-dividend

date

except

for

certain

dividends

from

securities

where

the

dividend

rate

is

not available.

In

such

cases,

the

dividend

is

recorded

as

soon

as

the

information

is

received

by

the Fund.

Distributions

to

shareholders

are

recorded

on

the

ex-dividend

date.

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.

1.

Organization

and

Significant

Accounting

Policies

(continued)

c.

Securities

Lending

(continued)

Templeton

Global

Smaller

Companies

Fund

Notes

to

Financial

Statements

16

franklintempleton.com

Annual

Report

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.

f.

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.

g.

Guarantees

and

Indemnifications

Under

the Fund's

organizational

documents,

its

officers

and trustees

are

indemnified

by

the

Fund against

certain

liabilities

arising

out

of

the

performance

of

their

duties

to

the

Fund.

Additionally,

in

the

normal

course

of

business,

the

Fund

enters

into

contracts

with

service

providers

that

contain

general

indemnification

clauses.

The Fund's

maximum

exposure

under

these

arrangements

is

unknown

as

this

would

involve

future

claims

that

may

be

made

against

the Fund

that

have

not

yet

occurred.

Currently,

the Fund

expects

the

risk

of

loss

to

be

remote.

2.

Shares

of

Beneficial

Interest

At

August

31,

2026,

there

were

an

unlimited

number

of

shares

authorized

(without

par

value).

Transactions

in

the

Fund's

shares

were

as

follows:

Year

Ended

August

31,

2026

Year

Ended

August

31,

2025

Shares

Amount

Shares

Amount

Class

A

Shares:

13197217

–

Shares

sold

a

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

2,427,845

$24,360,777

2,262,173

$21,498,657

Shares

issued

in

reinvestment

of

distributions

..........

3,082,546

29,654,089

2,192,514

20,741,178

Shares

redeemed

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

(11,018,465)

(110,180,475)

(12,143,830)

(115,749,096)

Net

increase

(decrease)

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

(5,508,074)

$(56,165,609)

(7,689,143)

$(73,509,261)

Class

C

Shares:

226114

–

Shares

sold

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

35,678

$329,816

57,726

$500,805

Shares

issued

in

reinvestment

of

distributions

..........

13,575

120,821

11,344

99,603

Shares

redeemed

a

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

(141,671)

(1,302,700)

(202,766)

(1,763,231)

Net

increase

(decrease)

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

(92,418)

$(852,063)

(133,696)

$(1,162,823)

Class

R6

Shares:

865954

–

Shares

sold

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

723,591

$7,321,988

823,236

$7,795,343

Shares

issued

in

reinvestment

of

distributions

..........

252,676

2,443,376

184,039

1,748,371

Shares

redeemed

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

(1,348,232)

(13,624,444)

(1,501,264)

(14,366,460)

Net

increase

(decrease)

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

(371,965)

$(3,859,080)

(493,989)

$(4,822,746)

Advisor

Class

Shares:

602002

–

Shares

sold

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

577,851

$5,852,922

785,788

$7,597,099

Shares

issued

in

reinvestment

of

distributions

..........

192,316

1,863,544

135,528

1,290,225

Shares

redeemed

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

(1,227,187)

(12,354,434)

(1,066,298)

(10,111,125)

Net

increase

(decrease)

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

(457,020)

$(4,637,968)

(144,982)

$(1,223,801)

a

May

include

a

portion

of

Class

C

shares

that

were

automatically

converted

to

Class

A.

1.

Organization

and

Significant

Accounting

Policies

(continued)

e.

Security

Transactions,

Investment

Income,

Expenses

and

Distributions

(continued)

Templeton

Global