O133 P-2
SUPPLEMENT DATED JANUARY 31, 2000
TO THE PROSPECTUS OF
FRANKLIN ASSET ALLOCATION FUND
DATED MAY 1, 1999
The prospectus is amended as follows:
I. The "Management" section on page 10 is replaced with the following:
Franklin Advisers, Inc. (Advisers), 777 Mariners Island Blvd., San Mateo, CA
94404, is the fund's investment manager. Together, Advisers and its
affiliates manage over $224 billion in assets.
The team responsible for the fund's management is:
R. MARTIN WISKEMANN, Senior Vice President of Advisers
Mr. Wiskemann has been a manager of the fund since 1972 and has more than 30
years' experience in the securities industry.
MATTHEW W. WARD, PORTFOLIO MANAGER OF ADVISERS
Mr. Ward has been a manager of the fund since January 2000. He joined the
Franklin Templeton Group in 1995.
The fund pays Advisers a fee for managing the fund's assets.
For the fiscal year ended December 31, 1998, the fund paid 0.63% of its
average monthly net assets to the manager for its services.
II. The following sentence is added after the minimum investments table on
page 20:
Please note that you may only buy shares of a fund eligible for sale in your
state or jurisdiction.
III. In the Selling Shares table on page 26 the section "By Wire" is replaced
with the following:
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[Insert graphic of You can call or write to have redemption
three lightning proceeds sent to a bank account. See the
bolts] policies above for selling shares by mail or
phone.
BY ELECTRONIC FUNDS
TRANSFER (ACH) Before requesting to have redemption
proceeds sent to a bank account, please make
sure we have your bank account information
on file. If we do not have this information,
you will need to send written instructions
with your bank's name and address, a voided
check or savings account deposit slip, and a
signature guarantee if the ownership of the
bank and fund accounts is different.
If we receive your request in proper form by
1:00 p.m. Pacific time, proceeds sent by ACH
generally will be available within two to
three business days.
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IV. The sections "Waivers for investments from certain payments," "Waivers
for certain investors," "CDSC waivers" and "Retirement plans," on pages 17
through 19, are replaced with the following:
SALES CHARGE WAIVERS Class A shares may be purchased without an initial sales
charge or CDSC by various individuals, institutions and retirement plans or
by investors who reinvest certain distributions and proceeds within 365 days.
Certain investors also may buy Class C shares without an initial sales
charge. The CDSC for each class may be waived for certain redemptions and
distributions. If you would like information about available sales charge
waivers, call your investment representative or call Shareholder Services at
1-800/632-2301. For information about retirement plans, you may call
Retirement Plan Services at 1-800/527-2020. A list of available sales charge
waivers also may be found in the Statement of Additional Information (SAI).
V. The section "Dealer compensation" on page 29 is replaced with the
following:
DEALER COMPENSATION Qualifying dealers who sell fund shares may receive sales
commissions and other payments. These are paid by Franklin Templeton
Distributors, Inc. (Distributors) from sales charges, distribution and
service (12b-1) fees and its other resources.
CLASS A CLASS C
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COMMISSION (%) - 2.00
Investment under $50,000 5.00 -
$50,000 but under $100,000 3.75 -
$100,000 but under $250,000 2.80 -
$250,000 but under $500,000 2.00 -
$500,000 but under $1 million 1.60 -
$1 million or more up to 1.001 -
12B-1 FEE TO DEALER 0.25 1.002
A dealer commission of up to 1% may be paid on Class A NAV purchases by
certain retirement plans1 and on Class C NAV purchases. A dealer commission
of up to 0.25% may be paid on Class A NAV purchases by certain trust
companies and bank trust departments, eligible governmental authorities, and
broker-dealers or others on behalf of clients participating in comprehensive
fee programs.
1. During the first year after purchase, dealers may not be eligible to
receive the 12b-1 fee.
2. Dealers may be eligible to receive up to 0.25% during the first year after
purchase and may be eligible to receive the full 12b-1 fee starting in the
13th month.
VI. The section "Statements and reports" on page 27 is replaced with the
following:
STATEMENTS AND REPORTS You will receive quarterly account statements that
show all your account transactions during the quarter. You also will receive
written notification after each transaction affecting your account (except
for distributions and transactions made through automatic investment or
withdrawal programs, which will be reported on your quarterly statement). You
also will receive the fund's financial reports every six months. To reduce
fund expenses, we try to identify related shareholders in a household and
send only one copy of the financial reports. If you need additional copies,
please call 1-800/DIAL BEN.
If there is a dealer or other investment representative of record on your
account, he or she also will receive copies of all notifications and
statements and other information about your account directly from the fund.
Please keep this supplement for future reference.
