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SIGNATURE DIOMEDES LOO-TAM
TITLE TREASURER & C.A.O.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FRANKLIN PREMIER RETURN FUND DECEMBER 31, 1994 ANNUAL REPORT AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 21,440,499
<INVESTMENTS-AT-VALUE> 18,169,086
<RECEIVABLES> 7,531,286
<ASSETS-OTHER> 15,158
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 25,715,530
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 84,797
<TOTAL-LIABILITIES> 84,797
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 29,582,624
<SHARES-COMMON-STOCK> 4,193,484
<SHARES-COMMON-PRIOR> 3,680,434
<ACCUMULATED-NII-CURRENT> 34,261
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (711,713)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (3,274,439)
<NET-ASSETS> 25,630,733
<DIVIDEND-INCOME> 428,132
<INTEREST-INCOME> 453,742
<OTHER-INCOME> 0
<EXPENSES-NET> (313,805)
<NET-INVESTMENT-INCOME> 568,069
<REALIZED-GAINS-CURRENT> (114,361)
<APPREC-INCREASE-CURRENT> (355,103)
<NET-CHANGE-FROM-OPS> 98,605
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (564,467)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,169,075
<NUMBER-OF-SHARES-REDEEMED> (720,711)
<SHARES-REINVESTED> 64,686
<NET-CHANGE-IN-ASSETS> 2,753,492
<ACCUMULATED-NII-PRIOR> 30,659
<ACCUMULATED-GAINS-PRIOR> (597,352)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (155,985)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (313,805)
<AVERAGE-NET-ASSETS> 24,794,751
<PER-SHARE-NAV-BEGIN> 6.220
<PER-SHARE-NII> 0.140
<PER-SHARE-GAIN-APPREC> (0.110)
<PER-SHARE-DIVIDEND> (0.140)
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 6.110
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</TABLE>
REPORT OF INDEPENDENT AUDITORS
To the Shareholders and Board of Directors
of Franklin Premier Return Fund:
In planning and performing our audit of the financial statements
and financial highlights of Franklin Premier return Fund
for the year ended December 31, 1994, we considered its
internal control structure, including procedures for
safeguarding securities, in order to determine our auditing
procedures for the purpose of expressing our opinion on the
financial statements and financial highlights and to comply with
the requirements of Form N-SAR, not to provide assurance on the
internal control structure.
The management of the Franklin Premier Return Fund is
responsible for establishing and maintaining an internal control
structure. In fulfilling this responsibility, estimates and
judgements by management are required to assess the expected
benefits and related costs of internal control structure policies
and procedures. Two of the objectives of an internal control
structure are to provide management with reasonable, but not
absolute, assurance that assets are safeguarded against loss from
unauthorized use or disposition and that transactions are executed
in accordance with management's authorization and recorded properly
to permit preparation of financial statements in conformity with
generally accepted accounting principles.
Because of inherent limitations in any internal control structure,
errors or irregularities may occur and not be detected. Also,
projection of any evaluation of the structure to future periods
is subject to the risk that it may become inadequate because of
changes in conditions or that the effectiveness of the design and
operation may deteriorate.
Our consideration of the internal control structure would not
necessarily disclose all matters in the internal control structure
that might be material weaknesses under standards established by
the American Institute of Certified Public Accountants. A material
weakness is a condition in which the design or operation of the
specific internal control structure elements does not reduce to a
relatively low level the risk that errors or irregularities in
amounts that would be material in relation to the financial
statements and financial highlights being audited may occur and
not be detected within a timely period by employees in the normal
course of performing their assigned functions. However, we noted
no matters involving the internal control structure, including
procedures for safeguarding securities, that we consider to be
material weaknesses, as defined above, as of December 31, 1994.
This report is intended solely for the information and use of
management of the Franklin Premier Return Fund and the
Securities and Exchange Commission.
S\COOPERS & LYBRAND L.L.P.
Coopers & Lybrand
San Francisco, California
February 1, 1995
