Templeton Dragon Fund, Inc. (“TDF” or the “Fund”) Announces Notification of Sources of Distributions

Key Terms

return of capital financial

Return of capital is when an investor receives money from their investment that is not considered profit or earnings but rather a portion of the original amount they invested. It’s similar to getting back part of your initial savings rather than gains from it. This matters because it can affect how much money an investor still has in the investment and may have tax implications.

net asset value (NAV) financial

Net asset value (NAV) is the per-share value of an investment fund calculated by totaling the fund’s assets, subtracting its liabilities, and dividing the remainder by the number of outstanding shares. Think of it like a price tag on each share of a collective piggy bank: investors use NAV to see what each share is worth, to compare funds, and, for many funds, it’s the price at which shares are bought or redeemed.

managed distribution plan financial

A managed distribution plan is a company’s program to pay regular, predictable cash amounts to shareholders by setting a fixed schedule and target payout, often funded from operating cash, reserves, or return of capital. Think of it like a household budget that guarantees a monthly allowance: it provides steady income for investors but can mask when distributions exceed sustainable earnings, which may reduce the company’s capital over time and affect long‑term value.

short-term capital gains financial

Profit from selling an investment held for a short period that is taxed at ordinary income rates rather than the lower long-term rates. Think of it like flipping a gadget quickly for a gain: because you didn’t hold it long, the taxman treats the profit like regular pay, which can reduce the after-tax return and influence decisions about how long investors keep assets.

long-term capital gains financial

Profit realized when an investor sells an asset they have owned longer than the legally specified holding period; these gains are taxed under “long-term” rules that typically carry lower tax rates than gains on assets sold quickly. It matters to investors because lower tax rates increase the amount of money they keep after a sale, so holding an investment longer can be like letting a high-interest coupon compound before withdrawing the cash, affecting decisions about when to sell and overall portfolio returns.

capital loss carryovers financial

Capital loss carryovers are tax rules that let an investor use a past investment loss to reduce taxable gains or income in future years, like saving a coupon that lowers future tax bills. They matter because they can lower how much tax an investor pays when selling other assets or earning capital gains, improving after‑tax returns and affecting decisions about when to sell investments or realize gains.

Form 1099-DIV regulatory

Form 1099-DIV is a U.S. tax document brokers, mutual funds and other financial institutions send to investors showing dividends and other distributions paid during the year. Investors use it like an annual receipt to report taxable income — including regular dividends, dividends that may qualify for lower tax rates, and capital gains distributions — so it directly affects tax liability and helps reconcile brokerage records with a tax return.

assets under management financial

Assets under management (AUM) is the total value of all the investments that a financial company or fund is responsible for overseeing on behalf of its clients. It’s like a big bucket that shows how much money the firm is managing for people or organizations. A higher AUM often indicates a larger, more trusted company, and it can influence how much money they earn and the services they can offer.

FORT LAUDERDALE, Fla.--(BUSINESS WIRE)-- Templeton Dragon Fund [NYSE: TDF]:

Notification of Sources of Distributions Pursuant to Section 19(a) of the Investment Company Act of 1940

The Fund’s estimated sources of the distribution to be paid on December 31, 2025, and for the fiscal year 2025 year-to-date are as follows:

Estimated Allocations for December Quarterly Distribution:

Distribution Per Share	Net Investment Income	Net Realized Short-Term Capital Gains	Net Realized Long-Term Capital Gains	Return of Capital
$0.1000	$0.00 (0%)	$0.1000 (100%)	$0.00 (0%)	$0.00 (0%)

Cumulative Estimated Allocations fiscal year-to-date as of September 30, 2025, and for the fiscal year ending December 31, 2025:

Distribution Per Share	Net Investment Income	Net Realized Short-Term Capital Gains	Net Realized Long-Term Capital Gains		Return of Capital
$0.3000	$0.1469 (49%)	$0.1231 (41%)	$0.00 (0%)		$0.0300 (10%)

Shareholders should not draw any conclusions about the Fund’s investment performance from the amount of this distribution or from the terms of the Plan. TDF estimates that it has distributed more than its income and net realized capital gains; therefore, a portion of the TDF distribution to shareholders may be a return of capital. A return of capital may occur, for example, when some or all of the money that a shareholder invested in a Fund is paid back to them. A return of capital distribution does not necessarily reflect TDF’s investment performance and should not be confused with ‘yield’ or ‘income’. The amounts and sources of distributions reported herein are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Fund’s investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The Fund will send a Form 1099-DIV to shareholders for the calendar year that will describe how to report the Fund’s distributions for federal income tax purposes.

Average Annual Total Return (in relation to the change in net asset value (NAV) for the 5-year period ended on 11/30/2025)1	Annualized Distribution Rate (as a percentage of NAV for the current fiscal period through 11/30/2025)2	Cumulative Total Return (in relation to the change in NAV for the fiscal period through 11/30/2025)3	Cumulative Fiscal Year-To-Date Distribution Rate (as a percentage of NAV as of 11/30/2025)4
-6.34%	3.06%	29.28%	2.29%

Fund Performance and Distribution Rate Information:

1. Average Annual Total Return in relation to NAV represents the compound average of the Annual NAV Total Returns of the Fund for the five-year period ended through November 30, 2025. Annual NAV Total Return is the percentage change in the Fund’s NAV over a year, assuming reinvestment of distributions paid.
2. The Annualized Distribution Rate is the current fiscal period’s distribution rate annualized as a percentage of the Fund’s NAV through November 30, 2025.
3. Cumulative Total Return is the percentage change in the Fund’s NAV from December 31, 2024 through November 30, 2025, assuming reinvestment of distributions paid.
4. The Cumulative Fiscal Year-To-Date Distribution Rate is the dollar value of distributions for the fiscal period December 31, 2024 through November 30, 2025, as a percentage of the Fund’s NAV as of November 30, 2025.

The Fund’s Board of Trustees (the “Board”) has authorized a Managed Distribution Plan (the “Plan”), under which the Fund will make quarterly distributions to shareholders at a fixed rate of $0.10 per share. The Plan aims to provide shareholders with consistent quarterly distributions derived from ordinary income and short-term capital gains generated by the Fund’s investment portfolio. Additionally, the Plan seeks to narrow the discount between the market price and the net asset value (“NAV”) of the Fund’s common shares, although success in this regard cannot be guaranteed.

In the event that sufficient distributable income is not available on a quarterly basis, the Fund will distribute long-term capital gains and/or return of capital to maintain its managed distribution rate. A return of capital may occur when some or all of the invested capital is paid back to shareholders. It is important to note that a return of capital distribution does not necessarily reflect the Fund’s investment performance and should not be confused with “yield” or “income.” Even if the Fund realizes capital gains in the current year, such gains may be offset, in whole or in part, by the Fund’s capital loss carryovers from prior years.

The Board may amend the terms of the Plan or terminate the Plan at any time without prior notice to the Fund’s shareholders. The amendment or termination of the Plan could have an adverse effect on the market price of the Fund’s common shares. The Plan will be subject to periodic review by the Board, including a yearly review of the fixed rate to determine if an adjustment should be made.

For further information on Templeton Dragon Fund, Inc. please visit our web site at: www.franklintempleton.com

Franklin Resources, Inc. is a global investment management organization with subsidiaries operating as Franklin Templeton and serving clients in over 150 countries. Franklin Templeton’s mission is to help clients achieve better outcomes through investment management expertise, wealth management and technology solutions. Through its specialist investment managers, the company offers specialization on a global scale, bringing extensive capabilities in fixed income, equity, alternatives and multi-asset solutions. With more than 1,500 investment professionals, and offices in major financial markets around the world, the California-based company has over 75 years of investment experience and $1.67 trillion in assets under management as of November 30, 2025. For more information, please visit franklintempleton.com.

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For more information, please contact Franklin Templeton at 1-800-342-5236.

Source: Franklin Templeton