Fund Description

The fund was incepted in October 1987 and is managed by Franklin Advisers. The objective of this fund is to seek a high level of current income, while providing lower volatility of principal than a fund that invests in fixed-rate securities. The fund invests at least 80% of its net assets in adjustable-rate mortgage securities (ARMS) and other mortgage securities with interest rates that adjust periodically to reflect prevailing market interest rates, which are issued or guaranteed by the U.S. government, its agencies or instrumentalities. The individual loans are packaged or 'pooled' together for sale to investors. The fund offers dividends monthly. Capital gains, if any, are distributed annually.