SUPPLEMENT DATED OCTOBER 31, 1995
TO THE PROSPECTUS OF
FRANKLIN PREMIER RETURN FUND
DATED MAY 1, 1995
I. The following is a substitute for the Expense Table included in the
Prospectus.
EXPENSE TABLE
The purpose of this table is to assist an investor in understanding the various
costs and expenses that a shareholder will bear directly or indirectly in
connection with an investment in the Fund. These figures are based on aggregate
operating expenses of the Fund for the fiscal year ended December 31, 1994.
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES
<S> <C> <C>
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price) 4.50%
Deferred Sales Charge NONE*
Exchange Fee (per transaction) $5.00**
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fees 0.63%
12b-1 Fees 0.12%+
Other Expenses:
Professional Fees 0.11%
Reports to Shareholders 0.19%
Other 0.22%
-----
Total Other Expenses 0.52%
-----
Total Fund Operating Expenses 1.27%
=====
</TABLE>
*Investments of $1 million or more are not subject to a front-end sales charge;
however, a contingent deferred sales charge of 1% is imposed on certain
redemptions within 12 months of the calendar month of such investments. See "How
to Sell Shares of the Fund - Contingent Deferred Sales Charge."
**$5.00 fee imposed only on Timing Accounts as described under "Exchange
Privilege." All other exchanges are processed without a fee.
+The maximum amount of Rule 12b-1 fees allowed pursuant to the Fund's
distribution plan is 0.25%. Consistent with National Association of Securities
Dealers, Inc.'s rules, it is possible that the combination of front-end sales
charges and Rule 12b-1 fees could cause long-term shareholders to pay more than
the economic equivalent of the maximum front-end sales charges permitted under
those same rules. See "Management of the Fund - Plan of Distribution."
II. The section "Purchases at Net Asset Value" under "How to Buy Shares of the
Fund" is modified in the following respects:
i. The period in which investors may reinvest at net asset value, as
discussed in paragraph two of the section, is extended from 120 days to 365
days.
ii. The following is a substitute for paragraphs three and four of the
section:
Shares of the Fund may be purchased at net asset value and without a contingent
deferred sales charge in the following additional situations:
a) by shareholders who have received dividends and capital gain distributions in
cash from the Fund or another of the Franklin Templeton Funds within 365 days of
the payment date of such distribution. To exercise this privilege, the purchase
order should be accompanied by a written explanation that a distribution is
being reinvested. Additional information may be obtained from Shareholder
Services at 1-800/632-2301. See "Distributions in Cash" under "Distributions to
Shareholders."
b) by investors who have, within the past 60 days, redeemed an investment in a
mutual fund which is not part of the Franklin Templeton Funds and which was
subject to a front-end sales charge or a contingent deferred sales charge and
which has investment objectives similar to those of the Fund.
