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Morningstar® Investment Profile™

Franklin Strategic Income VIP 1

Release date as of 2025-09-30. Data on page is subject to change.


	Snapshot		Ratings & Risk		Portfolio		Nuts & Bolts

Morningstar Report

Overall Morningstar Rating™
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As of 2025-09-30

Out of 360 Multisector Bond Funds

Morningstar®
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As of 2025-08-31

Total Fund Assets ($ Mil)
274.56

View Historical Morningstar Star Ratings and Definitions

Investment Objective & Strategy

The investment seeks a high level of current income; long-term capital appreciation is the secondary objective.

The fund invests its assets primarily to predominantly in U.S. and foreign debt securities, including those in emerging markets. It may invest up to 100% of its assets in high yield, lower-quality debt securities (also known as "junk bonds"). The fund may invest in many different securities issued or guaranteed by the U.S. government or by non-U.S. governments, or their respective agencies or instrumentalities, including mortgage-backed securities and inflation-indexed securities issued by the U.S. Treasury.

Morningstar Category: Multisector Bond

Multisector-bond portfolios seek income by diversifying their assets among several fixed-income sectors, usually U.S. government obligations, U.S. corporate bonds, foreign bonds, and high-yield U.S. debt securities. These portfolios typically hold 35% to 65% of bond assets in securities that are not rated or are rated by a major agency such as Standard & Poor's or Moody's at the level of BB (considered speculative for taxable bonds) and below.

Investment Risks

There are no additional fund specific investment risks (e.g. liquidity risk, currency risk, foreign investment risk, etc.) associated with this fund beyond the normal risks generally associated with investing in a mutual fund.

Portfolio Profile

Asset Allocation

	% of Net Assets
U.S. Stocks	0.0
Non-U.S. Stocks	0.0
Bonds	114.4
Cash	-11.3
Other	-3.2

Total	100.0

Data through 2025-09-30

Morningstar Fixed-Income Sectors

% Fund
	Government	29.43
	Corporate	42.79
	Securitized	18.30
	Municipal	0.00
	Cash & Equivalents	4.91
	Derivative	4.58


Data through 2025-09-30

Credit Analysis

	% Bonds
AAA	6.07
AA	25.40
A	8.13
BBB	19.88
BB	18.25
B	12.88
Below B	2.27
Not Rated	7.14

Data through 2025-08-31

Holding Status

Total Number of Stock Holdings	3
Total Number of Bond Holdings	695
% of Net Assets in Top 10 Holdings	32.63

Turnover %	(as of 2023-12-31)	59.05
30 Day SEC Yield %		---

Top Holdings

	Maturity Date	Shares	Value $000	% of Net Assets

5 Year Treasury Note Future Dec 25	2025-12-31	---	35,963	13.08
Franklin Instl U.S. Govt Mny Mkt Fund	---	16,008	16,008	5.82
United States Treasury Notes 4%	2026-02-15	11,200	11,260	4.10
BNP PARIBAS SA TRS RCV MARKIT IBOXX US PAY 12/20/25	---	5,525	-5,382	1.96
United States Treasury Notes 3.875%	2027-11-30	4,000	4,074	1.48

United States Treasury Notes 2.75%	2027-07-31	3,850	3,808	1.38
United States Treasury Notes 4.125%	2032-11-15	3,500	3,596	1.31
BANK OF AMERICA NA TRS PAY UNITED STATES T RCV +4.2% 12/11/25	---	3,500	-3,421	1.24
Federal National Mortgage Association 5%	2055-10-01	3,160	3,134	1.14
United States Treasury Notes 3.875%	2026-01-15	3,050	3,074	1.12

Data through 2025-09-30

Principal Risks

Lending, Credit and Counterparty, Inflation/Deflation, Currency, Emerging Markets, Foreign Securities, Loss of Money, Not FDIC Insured, Active Management, Income, Interest Rate, Market/Market Volatility, High-Yield Securities, Mortgage-Backed and Asset-Backed Securities, Other, Restricted/Illiquid Securities, Derivatives, Sovereign Debt, Management, Portfolio Diversification, Structured Products, Variable-Rate Securities

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Other Information

Inception Date: 1999-07-01

Portfolio Manager(s)

Michael V. Salm (2024-09-30)

Mr. Salm is a Co-Head of Fixed Income, specializing in liquid markets and securitized strategies. In this role, he oversees investment strategies related to mortgage and securitized products, interest-rate and volatility derivatives, and money markets. In addition, he manages trading operations and Putnam's Fixed Income quantitative teams. He is a portfolio manager of core global, core plus, global government, fixed income global alpha, and dedicated mortgage strategies, as well as fixed income hedge funds. Mr. Salm joined Putnam in 1997 and has been in the investment industry since 1989. Previously at Putnam, he served as a Portfolio Manager responsible for mortgage strategies in fixed income portfolios. Prior to joining Putnam, Mr. Salm was a Mortgage Specialist at BlackRock Financal Management from 1996 to 1997, a Vice President and Trader at Nomura Securities from 1994 to 1996, a Vice President and Structurer at Nikko Securities from 1993 to 1994, and an Analyst at Fitch Investor Services from 1991 to 1992. Mr. Salm earned a B.S. from Cornell University.

Patrick Klein (2022-08-01)

Patrick Klein is a senior vice president and portfolio manager for Franklin Templeton Fixed Income - Multi-Sector in San Mateo, California, United States. Dr. Klein is responsible for leading a team managing multisector fixed income strategies, with a focus on portfolio construction and quantitative modeling. Dr. Klein has over 18 years of experience in the financial services industry. Prior to his current role, Dr. Klein was a research analyst for Franklin Templeton Fixed Income. He joined Franklin Templeton in 2005, specializing in mortgage-backed securities. Previously, he was a researcher at Sandia National Laboratories, developing models for the computer simulation of material behavior. Dr. Klein holds a bachelor of arts in mechanical engineering and materials science from Cornell University, and a PhD in mechanical engineering from Stanford University.

Sonal Desai (2018-12-31)

Sonal Desai, PhD, EVP, is Franklin Templeton Fixed Income Group’s Chief Investment Officer, a portfolio manager for several fixed income funds and a member of the firm's executive committee. Dr. Desai started her career in 1994 as a university academic, followed by six years at the International Monetary Fund after which she joined the private sector. She started working at Franklin Templeton in 2009. She holds a PhD(Econ) from Northwestern Univ. and a BA(Econ) from Delhi Univ.

Albert Chan (2025-09-30)

Albert Chan, CFA, Head of Portfolio Construction & Analytics, has served as portfolio manager of the Fund since 2024 and joined Franklin Advisers in 2024. Prior to joining Franklin Advisers, Mr. Chan was Head of Portfolio Construction and a portfolio manager at Putnam Investment Management, LLC.

Patricia O'Connor (2016-02-01)

Patricia O'Connor, CFA, VP, is a vice president and portfolio manager for the Franklin Templeton Fixed Income Group. Prior to joining Franklin Templeton in 1997, Ms. O'Connor worked for Morgan Stanley Asset Management. She holds a B.S. (Accounting, Lehigh Univ.) and an MBA (Univ. of Chicago). Ms. O'Connor holds a B.S. in accounting from Lehigh University and an M.B.A. in finance and economics from the University of Chicago. She is a Chartered Financial Analyst (CFA) charterholder, as well as a member of the CFA Society of San Francisco and CFA Institute.

Investment Advisor(s)

Franklin Advisers, Inc.

Issuer

Franklin Templeton Investments

Subadvisor(s)

---

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