<PAGE> PAGE 1
000 A000000 06/30/98
000 C000000 0000014698
000 D000000 N
000 E000000 NF
000 F000000 Y
000 G000000 N
000 H000000 N
000 I000000 3.0.a
000 J000000 U
001 A000000 FRANKLIN ASSET ALLOCATION FUND
001 B000000 811-730
001 C000000 6503122000
002 A000000 777 MARINERS ISLAND BOULEVARD
002 B000000 SAN MATEO
002 C000000 CA
002 D010000 94404
002 D020000 1585
003 000000 N
004 000000 N
005 000000 N
006 000000 N
007 A000000 Y
007 B000000 1
007 C010100 1
007 C020100 FRANKLIN ASSET ALLOCATION FUND
007 C030100 N
007 C010200 2
007 C010300 3
007 C010400 4
007 C010500 5
007 C010600 6
007 C010700 7
007 C010800 8
007 C010900 9
007 C011000 10
020 A000001 EDWARDS (A.G.) & SONS, INC.
020 B000001 43-0895447
020 C000001 12
020 A000002 EVEREN SEC., INC.
020 B000002 36-2693816
020 C000002 9
020 A000003 ABN AMRO CHICAGO CORP.
020 B000003 36-2549961
020 C000003 7
020 A000004 MERRIL LYNCH PIERCE FENNER
020 B000004 13-5674085
020 C000004 4
020 A000005 PAINEWEBBER, INC.
020 B000005 13-2638166
020 C000005 4
020 A000006 LIPPER ANALYTICAL SECS CORP.
<PAGE> PAGE 2
020 B000006 13-2792478
020 C000006 4
020 A000007 INSTINET CORP.
020 B000007 13-3443395
020 C000007 1
020 A000008 DEAN WITTER REYNOLDS, INC.
020 B000008 94-1671384
020 C000008 1
020 A000009 ISI GROUP (IFG)
020 B000009 13-3599877
020 C000009 1
020 A000010 MORGAN (J.P.) SECURITIES, INC.
020 B000010 13-3224016
020 C000010 1
021 000000 46
022 A000001 SBCI SWISS BANK CORP.INV. BANK
022 B000001 13-2639550
022 C000001 107729
022 D000001 0
022 A000002 PARIBAS CORP.
022 B000002 13-3235334
022 C000002 103958
022 D000002 0
022 A000003 DONALDSON LUFKIN & JENRETTE
022 B000003 13-2741729
022 C000003 103744
022 D000003 0
022 A000004 BARCLAYS CAPITAL, INC.
022 B000004 13-3551367
022 C000004 103242
022 D000004 0
022 A000005 BT ALEX BROWN
022 B000005 13-3311934
022 C000005 102716
022 D000005 701
022 A000006 LEHMAN BROTHERS, INC.
022 B000006 13-2518466
022 C000006 100209
022 D000006 1080
022 A000007 CIBC WOOD GUNDY SECURITY
022 B000007 13-3639028
022 C000007 98716
022 D000007 0
022 A000008 GREENWICH CAPITAL MARKETS, INC.
022 B000008 13-3122275
022 C000008 95227
022 D000008 0
022 A000009 UBS SECURITIES, L.L.C.
022 B000009 13-2932996
022 C000009 93742
022 D000009 0
<PAGE> PAGE 3
022 A000010 DRESDNER U.S. FINANCE, INC.
022 B000010 04-2442748
022 C000010 92968
022 D000010 0
023 C000000 1268990
023 D000000 6552
026 A000000 Y
026 B000000 Y
026 C000000 Y
026 D000000 Y
026 E000000 N
026 F000000 N
026 G010000 N
026 G020000 N
026 H000000 N
027 000000 Y
077 A000000 Y
077 Q010000 Y
078 000000 N
086 A010000 0
086 A020000 0
086 B010000 0
086 B020000 0
086 C010000 0
086 C020000 0
086 D010000 0
086 D020000 0
086 E010000 0
086 E020000 0
086 F010000 0
086 F020000 0
086 A01AA00 0
086 A02AA00 0
086 B01AA00 0
086 B02AA00 0
086 C01AA00 0
086 C02AA00 0
086 D01AA00 0
086 D02AA00 0
086 E01AA00 0
086 E02AA00 0
086 F01AA00 0
086 F02AA00 0
008 A000101 FRANKLIN ADVISERS, INC.
008 B000101 A
008 C000101 801-26292
008 D010101 SAN MATEO
008 D020101 CA
008 D030101 94404
008 D040101 1585
010 A000101 FRANKLIN TEMPLETON SERVICES, INC.
<PAGE> PAGE 4
010 C010101 SAN MATEO
010 C020101 CA
010 C030101 94404
010 C040101 1585
011 A000101 FRANKLIN/TEMPLETON DISTRIBUTORS, INC.
011 B000101 8-5889
011 C010101 SAN MATEO
011 C020101 CA
011 C030101 94404
011 C040101 1585
012 A000101 FRANKLIN/TEMPLETON INVESTOR SERVICES, INC.
012 B000101 84-1036
012 C010101 SAN MATEO
012 C020101 CA
012 C030101 94404
012 C040101 1585
013 A000101 PRICEWATERHOUSECOOPERS LLP
013 B010101 SAN FRANCISCO
013 B020101 CA
013 B030101 94105
013 B040101 2119
014 A000101 FRANKLIN/TEMPLETON DISTRIBUTORS, INC.
014 B000101 8-5889
015 A000101 THE BANK OF NEW YORK
015 B000101 C
015 C010101 NEW YORK
015 C020101 NY
015 C030101 10286
015 E010101 X
015 A000102 DELETE
015 A000103 DELETE
015 A000104 BANKBOSTON, N.A.
015 B000104 S
015 C010104 BUENOS AIRES
015 D010104 ARGENTINA
015 E040104 X
015 A000105 NATIONAL AUSTRALIA BANK LIMITED
015 B000105 S
015 C010105 MELBOURNE
015 D010105 AUSTRALIA
015 E040105 X
015 A000106 CREDITANSTALT BANKVEREIN
015 B000106 S
015 C010106 VIENNA
015 D010106 AUSTRIA
015 E040106 X
015 A000107 DELETE
015 A000108 BANQUE BRUXELLES LAMBERT (BBL)
015 B000108 S
015 C010108 BRUSSELS
015 D010108 BELGIUM
<PAGE> PAGE 5
015 E040108 X
015 A000109 EUROCLEAR
015 B000109 S
015 C010109 BRUSSELS
015 D010109 BELGIUM
015 E040109 X
015 A000110 ROYAL BANK OF CANADA
015 B000110 S
015 C010110 MONTREAL
015 D010110 CANADA
015 E040110 X
015 A000111 DELETE
015 A000112 DELETE
015 A000113 DELETE
015 A000114 DELETE
015 A000115 DELETE
015 A000116 DELETE
015 A000117 DEN DANSKE BANK
015 B000117 S
015 C010117 COPENHAGEN
015 D010117 DENMARK
015 E040117 X
015 A000118 DELETE
015 A000119 DELETE
015 A000120 MERITA BANK PLC
015 B000120 S
015 C010120 HELSINKI
015 D010120 FINLAND
015 E040120 X
015 A000121 BANQUE PARIBAS
015 B000121 S
015 C010121 PARIS
015 D010121 FRANCE
015 E040121 X
015 A000122 DRESDNER BANK AG
015 B000122 S
015 C010122 FRANKFURT/MAIN
015 D010122 GERMANY
015 E040122 X
015 A000123 DELETE
015 A000124 THE HONGKONG AND SHANGHAI BANKING CORP LTD
015 B000124 S
015 C010124 HONG KONG
015 D010124 CHINA
015 E040124 X
015 A000125 DELETE
015 A000126 DELETE
015 A000127 THE HONGKONG AND SHANGHAI BANKING CORP LTD
015 B000127 S
015 C010127 JAKARTA
015 D010127 INDONESIA
<PAGE> PAGE 6
015 E040127 X
015 A000128 ALLIED IRISH BANKS, PLC (AIB)
015 B000128 S
015 C010128 DUBLIN
015 D010128 IRELAND
015 E040128 X
015 A000129 BANQUE INTERNATIONALE A LUXEMBOURG
015 B000129 S
015 C010129 LUXEMBOURG CITY
015 D010129 LUXEMBOURG
015 E040129 X
015 A000130 CEDEL (DEPOSITORY)
015 B000130 S
015 C010130 LUXEMBOURG CITY
015 D010130 LUXEMBOURG
015 E040130 X
015 A000131 BANK OF TOKYO MITSUBISHI (BTM)
015 B000131 S
015 C010131 TOKYO
015 D010131 JAPAN
015 E040131 X
015 A000132 THE HONGKONG BANK MALAYSIA BERHAD (HBMB)
015 B000132 S
015 C010132 KUALA LUMPUR
015 D010132 MALAYSIA
015 E040132 X
015 A000133 BANCO NACIONAL DE MEXICO
015 B000133 S
015 C010133 MEXICO CITY
015 D010133 MEXICO
015 E040133 X
015 A000134 DELETE
015 A000135 MEESPIERSON
015 B000135 S
015 C010135 AMSTERDAM
015 D010135 NETHERLANDS
015 E040135 X
015 A000136 AUSTRALIA AND NEW ZEALAND BANKING GROUP LTD
015 B000136 S
015 C010136 WELLINGTON
015 D010136 NEW ZEALAND
015 E040136 X
015 A000137 DEN NORSKE BANK ASA
015 B000137 S
015 C010137 OSLO
015 D010137 NORWAY
015 E040137 X
015 A000138 STANDARD CHARTERED BANK (SCB)
015 B000138 S
015 C010138 KARACHI
015 D010138 PAKISTAN
<PAGE> PAGE 7
015 E040138 X
015 A000139 DELETE
015 A000140 THE HONGKONG AND SHANGHAI BANKING CORP LTD
015 B000140 S
015 C010140 MANILA
015 D010140 PHILIPPINES
015 E040140 X
015 A000141 DELETE
015 A000142 BANCO COMERCIAL PORTUGUES S.A. (BCP)
015 B000142 S
015 C010142 LISBON
015 D010142 PORTUGAL
015 E040142 X
015 A000143 UNITED OVERSEAS BANK LIMITED (UOB)
015 B000143 S
015 C010143 SINGAPORE
015 D010143 SINGAPORE
015 E040143 X
015 A000144 STANDARD CORPORATE AND MERCHANT BANK (SCMB)
015 B000144 S
015 C010144 JOHANNESBURG
015 D010144 SOUTH AFRICA
015 E040144 X
015 A000145 DELETE
015 A000146 BANCO BILBAO VIZCAYA (BBV)
015 B000146 S
015 C010146 MADRID
015 D010146 SPAIN
015 E040146 X
015 A000147 STANDARD CHARTERED BANK (SCB)
015 B000147 S
015 C010147 COLOMBO
015 D010147 SRI LANKA
015 E040147 X
015 A000148 SKANDINAVISKA ENSKILDA BANKEN (SEB)
015 B000148 S
015 C010148 STOCKHOLM
015 D010148 SWEDEN
015 E040148 X
015 A000149 UNION BANK OF SWITZERLAND
015 B000149 S
015 C010149 ZURICH
015 D010149 SWITZERLAND
015 E040149 X
015 A000150 DELETE
015 A000151 THE SIAM COMMERCIAL BANK PUBLIC CO LTD (SCB)
015 B000151 S
015 C010151 BANGKOK
015 D010151 THAILAND
015 E040151 X
015 A000152 OSMANLI BANKASI A.S. (OTTOMAN BANK)
<PAGE> PAGE 8
015 B000152 S
015 C010152 ISTANBUL
015 D010152 TURKEY
015 E040152 X
015 A000153 THE BANK OF NEW YORK
015 B000153 S
015 C010153 LONDON
015 D010153 UNITED KINGDOM
015 E040153 X
015 A000154 FIRST CHICAGO CLEARING CENTRE (FCCC)
015 B000154 S
015 C010154 LONDON
015 D010154 UNITED KINGDOM
015 E040154 X
015 A000155 DELETE
015 A000156 DELETE
015 A000157 DELETE
015 A000158 DELETE
015 A000159 DELETE
015 A000160 DELETE
015 A000161 DELETE
015 A000162 DELETE
015 A000163 DELETE
015 A000164 DELETE
015 A000165 DELETE
015 A000166 DELETE
015 A000167 DELETE
015 A000168 DELETE
015 A000169 DELETE
015 A000170 DELETE
015 A000171 DELETE
015 A000172 DELETE
015 A000173 DELETE
015 A000174 STANBIC BANK ZAMBIA LIMITED (STANBIC)
015 B000174 S
015 C010174 LUSAKA
015 D010174 ZAMBIA
015 E040174 X
015 A000175 STANBIC BANK ZIMBABWE LIMITED (STANBIC)
015 B000175 S
015 C010175 HARARE
015 D010175 ZIMBABWE
015 E040175 X
018 000100 Y
019 A000100 Y
019 B000100 205
019 C000100 FRNKTEMGRP
024 000100 Y
025 A000101 BANKAMERICA CORP.
025 B000101 95-4035346
025 C000101 E
<PAGE> PAGE 9
025 D000101 1729
025 D000102 0
025 D000103 0
025 D000104 0
025 D000105 0
025 D000106 0
025 D000107 0
025 D000108 0
028 A010100 5940
028 A020100 0
028 A030100 0
028 A040100 1748
028 B010100 7174
028 B020100 1
028 B030100 0
028 B040100 3408
028 C010100 2310
028 C020100 384
028 C030100 0
028 C040100 2681
028 D010100 3013
028 D020100 1
028 D030100 0
028 D040100 5014
028 E010100 2109
028 E020100 0
028 E030100 0
028 E040100 1618
028 F010100 2426
028 F020100 815
028 F030100 0
028 F040100 2167
028 G010100 22972
028 G020100 1201
028 G030100 0
028 G040100 16636
028 H000100 18099
029 000100 Y
030 A000100 241
030 B000100 4.50
030 C000100 0.00
031 A000100 28
031 B000100 0
032 000100 213
033 000100 0
034 000100 Y
035 000100 0
036 A000100 N
036 B000100 0
037 000100 N
038 000100 0
<PAGE> PAGE 10
039 000100 Y
040 000100 Y
041 000100 Y
042 A000100 0
042 B000100 0
042 C000100 100
042 D000100 0
042 E000100 0
042 F000100 0
042 G000100 0
042 H000100 0
043 000100 114
044 000100 85
045 000100 Y
046 000100 N
047 000100 Y
048 000100 0.000
048 A010100 100000
048 A020100 0.625
048 B010100 150000
048 B020100 0.500
048 C010100 0
048 C020100 0.000
048 D010100 0
048 D020100 0.000
048 E010100 0
048 E020100 0.000
048 F010100 0
048 F020100 0.000
048 G010100 0
048 G020100 0.000
048 H010100 0
048 H020100 0.000
048 I010100 0
048 I020100 0.000
048 J010100 0
048 J020100 0.000
048 K010100 250000
048 K020100 0.450
049 000100 N
050 000100 N
051 000100 N
052 000100 N
053 A000100 N
054 A000100 Y
054 B000100 Y
054 C000100 Y
054 D000100 N
054 E000100 N
054 F000100 N
054 G000100 Y
<PAGE> PAGE 11
054 H000100 Y
054 I000100 N
054 J000100 Y
054 K000100 N
054 L000100 Y
054 M000100 Y
054 N000100 N
054 O000100 Y
055 A000100 N
055 B000100 N
056 000100 N
057 000100 N
058 A000100 N
059 000100 Y
060 A000100 Y
060 B000100 Y
061 000100 100
062 A000100 N
062 B000100 0.0
062 C000100 0.0
062 D000100 0.0
062 E000100 0.0
062 F000100 0.0
062 G000100 0.0
062 H000100 0.0
062 I000100 0.0
062 J000100 0.0
062 K000100 0.0
062 L000100 0.0
062 M000100 0.0
062 N000100 0.0
062 O000100 0.0
062 P000100 0.0
062 Q000100 0.0
062 R000100 0.0
063 A000100 0
063 B000100 0.0
066 A000100 Y
066 B000100 N
066 C000100 N
066 D000100 N
066 E000100 N
066 F000100 N
066 G000100 Y
067 000100 N
068 A000100 N
068 B000100 N
069 000100 N
070 A010100 Y
070 A020100 Y
070 B010100 Y
<PAGE> PAGE 12
070 B020100 Y
070 C010100 Y
070 C020100 N
070 D010100 Y
070 D020100 Y
070 E010100 Y
070 E020100 N
070 F010100 Y
070 F020100 N
070 G010100 Y
070 G020100 N
070 H010100 Y
070 H020100 N
070 I010100 N
070 I020100 N
070 J010100 Y
070 J020100 N
070 K010100 Y
070 K020100 N
070 L010100 Y
070 L020100 Y
070 M010100 Y
070 M020100 Y
070 N010100 N
070 N020100 N
070 O010100 Y
070 O020100 N
070 P010100 Y
070 P020100 N
070 Q010100 N
070 Q020100 N
070 R010100 N
070 R020100 N
071 A000100 25350
071 B000100 15162
071 C000100 81321
071 D000100 19
072 A000100 6
072 B000100 1070
072 C000100 491
072 D000100 0
072 E000100 0
072 F000100 312
072 G000100 0
072 H000100 0
072 I000100 52
072 J000100 2
072 K000100 11
072 L000100 6
072 M000100 3
072 N000100 16
<PAGE> PAGE 13
072 O000100 0
072 P000100 0
072 Q000100 0
072 R000100 9
072 S000100 1
072 T000100 114
072 U000100 0
072 V000100 0
072 W000100 1
072 X000100 527
072 Y000100 0
072 Z000100 1034
072AA000100 2477
072BB000100 750
072CC010100 3394
072CC020100 0
072DD010100 855
072DD020100 0
072EE000100 480
073 A010100 0.0800
073 A020100 0.0000
073 B000100 0.0500
073 C000100 0.0000
074 A000100 222
074 B000100 6771
074 C000100 8981
074 D000100 20469
074 E000100 1834
074 F000100 64525
074 G000100 0
074 H000100 0
074 I000100 0
074 J000100 332
074 K000100 0
074 L000100 595
074 M000100 0
074 N000100 103729
074 O000100 856
074 P000100 92
074 Q000100 0
074 R010100 0
074 R020100 0
074 R030100 318
074 R040100 477
074 S000100 0
074 T000100 101986
074 U010100 10723
074 U020100 0
074 V010100 9.51
074 V020100 0.00
074 W000100 0.0000
<PAGE> PAGE 14
074 X000100 6862
074 Y000100 2971
075 A000100 0
075 B000100 99464
076 000100 0.00
080 C000100 0
081 B000100 0
082 B000100 0
083 B000100 0
084 B000100 0
SIGNATURE KIMBERLEY MONASTERIO
TITLE ASSISTANT TREASURER
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FRANKLIN ASSET ALLOCATION FUND JUNE 30, 1998 SEMI-ANNUAL REPORT AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<INVESTMENTS-AT-COST> 80,080,473
<INVESTMENTS-AT-VALUE> 95,808,707
<RECEIVABLES> 7,697,486
<ASSETS-OTHER> 222,414
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 103,728,607
<PAYABLE-FOR-SECURITIES> 855,500
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 886,929
<TOTAL-LIABILITIES> 1,742,429
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 84,404,550
<SHARES-COMMON-STOCK> 10,722,805
<SHARES-COMMON-PRIOR> 9,902,204
<ACCUMULATED-NII-CURRENT> 258,000
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1,686,624
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 15,637,004
<NET-ASSETS> 101,986,178
<DIVIDEND-INCOME> 490,328
<INTEREST-INCOME> 1,070,274
<OTHER-INCOME> 0
<EXPENSES-NET> (526,851)
<NET-INVESTMENT-INCOME> 1,033,751
<REALIZED-GAINS-CURRENT> 1,727,459
<APPREC-INCREASE-CURRENT> 3,393,735
<NET-CHANGE-FROM-OPS> 6,154,945
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (855,057)
<DISTRIBUTIONS-OF-GAINS> (479,894)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,462,938
<NUMBER-OF-SHARES-REDEEMED> (1,768,421)
<SHARES-REINVESTED> 126,084
<NET-CHANGE-IN-ASSETS> 12,355,994
<ACCUMULATED-NII-PRIOR> 79,306
<ACCUMULATED-GAINS-PRIOR> 439,059
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (312,001)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (526,851)
<AVERAGE-NET-ASSETS> 99,464,189
<PER-SHARE-NAV-BEGIN> 9.050
<PER-SHARE-NII> .100
<PER-SHARE-GAIN-APPREC> .490
<PER-SHARE-DIVIDEND> (.080)
<PER-SHARE-DISTRIBUTIONS> (.050)
<RETURNS-OF-CAPITAL> .000
<PER-SHARE-NAV-END> 9.510
<EXPENSE-RATIO> 1.060<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> .000
<FN>
<F1> ANNUALIZED
</FN>
</TABLE>
