<PAGE>
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Templeton Quarterly Shareholder Update May 31, 1995
Foreign
Fund The Templeton Foreign Fund seeks long-term capital growth
through a flexible policy of investing in stocks and debt
obligations of companies and governments outside the United
States.
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Performance The chart to the right illustrates the cumulative total return
of an assumed $10,000 investment in Class I shares of Templeton
Foreign Fund at its inception on October 5, 1982, with income
dividends and capital gains reinvested through May 31, 1995./1/
Templeton Foreign Fund Class I
Total Returns on 5/31/95
[MOUNTAIN CHART APPEARS HERE SHOWING AN INITIAL INVESTMENT OF $10,000 MADE ON
10/5/82 (INITIAL NET ASSET VALUE OF $9,425) WOULD BE VALUED AT $72,010 ON
5/31/95
Cumulative/1/ $10,000
One- Five- Cost of
Year Year investment
-1.21% 46.14% 10/5/82
Ten- Since Initial net
Year Inception (10/5/82) asset value
375.10% 620.10% $9,425
Average Annual/2/
One- Five
Year Year
-1.21% 7.88%
Ten- Since
Year Inception (10/5/82)
16.87% 16.89%
1. Cumulative total return shows the change in value of an
investment over the periods indicated.
2. Average annual total return represents the average annual
change in value of an investment over the stated periods.
All total return quotations and performance results reflect the
deduction of the maximum 5.75% initial sales charge and a
proportional share of the fund's expenses on an annual basis;
they also assume that all dividends and capital gains
distributions were reinvested when paid. Prior to July 1, 1992,
fund shares were offered at a higher sales charge. Thus, actual
total return for purchasers of shares during that period would
have been somewhat lower than noted above.
The performance shown represents past performance and is not an
indication of future results. This was a period of generally
rising securities prices.
The historical performance data shown above pertain only to
Class I shares of the fund. Class II shares, which the fund
began offering on May 1, 1995, are subject to different fees and
expenses, which will affect their performance. Please see the
prospectus for more details regarding Class I and Class II
shares.
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Portfolio Templeton Foreign Fund's portfolio is diversified across 37
countries and more than 30 different industries. The chart to
the right shows how the fund's assets were invested
internationally on May 31, 1995.
For more current information about the fund's holdings, call
Franklin Templeton Fund Information, toll free, at
1-800/DIAL BEN (1-800/342-5236).
Geographic Distribution on 5/31/95
Based on Total Net Assets
[PIE CHART APPEARS HERE SHOWING GEOGRAPHIC DISTRIBUTION OF THE FUND]
<TABLE>
<CAPTION>
Description Account
-------------------- -----------------
<S> <C>
European Stocks 43.2%
Short - term & Cash
Equivalents 19.9%
Asian Stocks 11.6%
Fixed Income Securities 7.9%
Australian New Zealand
Stocks 7.5%
Latin American Stocks 6.7%
Other Stocks 3.2%
</TABLE>
<PAGE>
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Index The chart to the right compares the cumulative total return of
Comparison the fund's Class I shares with the return of the unmanaged
Morgan Stanley Capital International Europe, Australia, Far East
(EAFE) Index for the five-year period ended 5/31/95./3,4/
MSCI EAFE Indes/3/ 28.74%
Templeton Foreign Fund /4/ 46.14%
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Top Ten Percentage of
Equity Total Net Assets
Holdings/5/ Societe Elf Aquitane SA 1.4%
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HSBC Holdings PLC 1.2%
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Asea AB, A 1.1%
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National Australia Bank Ltd. 1.1%
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Telefonica de Espana SA 1.1%
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DSM NV 1.0%
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Alcan Aluminum Ltd. 1.0%
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Alcatel Alsthom SA 1.0%
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Australia & New Zealand Banking Group Ltd. 1.0%
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Telebras-Telecommunicacoes Brasileiras SA 1.0%
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A Few Words The fund's share price and returns will fluctuate with market
About Risk conditions, currencies, and the economic and political climates
where investments are made, and you may have a gain or loss when
you sell your shares. These special considerations are discussed
in the prospectus.
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Questions -------------------------------------------------------
About Upcoming Communications Mailing Date
Your Account? -------------------------------------------------------
Annual Report October 1995
Franklin Templeton Quarterly Shareholder Update January 1996
Account Services Semi-Annual Report April 1996
1-800/393-3001 -------------------------------------------------------
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Principal 3. The MSCI EAFE Index does not contain cash (the fund generally
Underwriter carries a certain percentage of cash at any given time), and
does not include sales charges or management fees. One cannot
Franklin invest directly in an index. Total return includes reinvested
Templeton dividends.
Distributors,
Inc. 4. Cumulative total return shows the change in value of an
700 Central investment over the specified periods. These calculations
Avenue include the deduction of the fund's 5.75% maximum initial sales
St. Petersburg, charge and assume reinvestment of dividends and capital gains at
Florida net asset value. Prior to July 1, 1992, fund shares were offered
33701-3628 at a higher sales charge. Thus, actual total returns for
purchasers of shares during that period would have been somewhat
lower than noted above.
5. For more current information about the fund's holdings, call
Franklin Templeton Fund Information, toll free, at
1-800/342-5236.
The historical performance data shown above pertain only to
Class I shares of the fund. Class II shares, which the fund
began offering on May 1, 1995, are subject to different fees and
expenses, which will affect their performance. Please see the
prospectus for more details regarding Class I and Class II
shares.
This report must be preceded or accompanied by a prospectus of
Templeton Foreign Fund, which contains more information about
the sales charge and expenses. For information about the other
Templeton Funds, request a prospectus from your securities
dealer or from Franklin Templeton Distributors, Inc. Please read
the prospectus carefully before investing or sending money.
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Mutual funds, annuities, and other investment products:
. are not FDIC insured;
. are not deposits or obligations of, or guaranteed by, any
financial institution;
. are subject to investment risks, including possible loss of
the principal amount invested.
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NASDAQ: TEMFX Templeton Fund #104
CUSIP: 880 196 209 TL104 QU 7/95
