Contents
Franklin's IFT Money Market Portfolio Page 4
Seeks high current income, consistent with capital
preservation and liquidity.
Franklin Late Day Money Market Portfolio Page 6
Seeks capital preservation and
liquidity, while seeking high current income
consistent with capital
preservation and liquidity.
Franklin U.S. Government Securities
Money Market Portfolio Page 8
Seeks capital preservation and liquidity while
seeking high current income consistent
with capital preservation and liquidity.
Franklin U.S. Treasury Money Market Portfolio Page 10
Seeks as high a level of
current income as is consistent with capital
preservation and liquidity.
Franklin U.S. Government Agency Money Market Fund Page 12
Seeks capital preservation and liquidity, while seeking
high current income consistent with
capital preservation and liquidity.
For a prospectus on one or more Franklin or Templeton funds, please contact a
Franklin Templeton Institutional Services Representative, toll free, at
1-800/632-2000. A prospectus contains more complete information about a fund,
including fees, charges and expenses. Please be sure to read it carefully before
investing or sending money.
To ensure the highest quality of service, telephone calls to or from our service
departments may be monitored, recorded and accessed. These calls can be
determined by the presence of a regular beeping tone.
July 6, 1995
Dear Shareholder,
Welcome to the eleventh annual report for Franklin's Institutional Fiduciary
Trust (the Trust), covering the fiscal year ended June 30, 1995.
The Trust was developed specifically to meet the needs of institutional
investors. Part of the $125 billion Franklin Templeton Group, the Trust consists
of eight separate and distinct series. This annual report pertains to the
following money market funds: Franklin's IFT Money Market Portfolio, Franklin
Late Day Money Market Portfolio, Franklin U.S. Government Securities Money
Market Portfolio, Franklin U.S. Treasury Money Market Portfolio and the Franklin
U.S. Government Agency Money Market Fund. Each portfolio in the Trust has a
unique composition designed to meet specific investors' needs.
The Trust's money market funds benefited from Federal Reserve interest rate
increases over the course of the reporting period. As short-term interest rates
rose, our portfolio managers held relatively short, average weighted maturities
for the funds and underlying portfolios, generally enabling them to reinvest
quickly into instruments offering higher current yields. Going forward, our
managers will continue to monitor the economy and carefully evaluate its effects
on short-term interest rates.
Our money managers' approach employs discipline and quality. Adherence to
traditional, time-proven strategies has been a central part of our money fund
philosophy for nearly twenty years, and our managers emphasize quality in their
selection of instruments for the portfolios. As such, the Trust's money market
funds do not invest in exotic derivatives or other potentially volatile
instruments that we believe involve undue risk. We seek to protect the interests
of our shareholders and offer them a conservative, high-quality investment
vehicle.
We thank you for your ongoing support of Franklin's Institutional Fiduciary
Trust, and we look forward to continuing our relationship and serving your
investment needs into the future.
Sincerely,
Charles B. Johnson
Chairman of the Board
Overview of
the Economy
Over the past twelve months, the economy's rapid expansion slowed to a more
sustainable pace. During the final two quarters of 1994, U.S. Gross Domestic
Product (GDP) grew at an annualized rate of 4.55%. In response to this high
growth rate and the potential for higher inflation, the Federal Reserve Board
raised the federal funds rate -- the interest rate banks charge each other for
overnight loans -- by 50 basis points in August 1994 and another 75 basis points
in November 1994.
These actions resulted in a slower economy for the first few months of 1995.
Weak home and auto sales, and a decline in the National Association of
Purchasing Managers (NAPM) index contributed to a moderate first quarter 1995
annualized GDP of 2.7%. Despite the slowdown in growth, robust labor markets,
higher corporate earnings and continued tight conditions in the manufacturing
sector continued to warrant caution for potential inflation. With this in mind,
the Federal Reserve raised its target for the federal funds rate another 50
basis points at its Federal Open Market Committee (FOMC) meeting in February
1995. Continued slow growth through the first half of 1995 caused the Federal
Reserve to cease making additional rate changes until its July FOMC meeting.
As of this writing, the Federal Reserve announced at the conclusion of its July
FOMC meeting that it had reduced its target for the federal funds rate by 25
basis points, to 5.75%. This cut in short-term interest rates was the first in
nearly three years and reverses a trend that began in February 1994, when the
Federal Reserve moved on seven occasions to raise the federal funds rate by a
total of three percentage points.
Looking forward, although many economic indicators have been mixed, slower
manufacturing activity and a decline in the number of jobs in the economy led
some to expect that the Federal Reserve would further ease monetary policy. It
is unclear whether the July reduction will be a one-time action or whether
additional cuts will be forthcoming. Clearly, this will depend on how the
economy responds in the months ahead. If reports suggest the economy is
weakening, additional rate cuts will be likely. If the economy picks up,
however, it may be some time before another rate cut occurs.
Tom Runkel is a portfolio manager for Franklin's taxable money market funds. He
joined Franklin in 1983 and served as an equity and money market trader from
1985 to 1989.
Mr. Runkel received a Bachelor of Science degree in Political Science from the
University of California at Davis and a Master of Business Administration degree
from Santa Clara University. He is a Chartered Financial Analyst (CFA).
Thomas J. Runkel, CFA
Portfolio Manager
Franklin's IFT Money
Market Portfolio
The investment objective for Franklin's IFT Money Market Portfolio (the Fund) is
high current income consistent with capital preservation and liquidity. It
pursues this objective by investing all of its assets in The Money Market
Portfolio (the Portfolio), whose investment objective is the same as the Fund's.
The Portfolio, in turn, invests in various money market instruments, such as:
o U.S. government and federal agency obligations1
o Certificates of deposit
o Bankers' acceptances
o High grade commercial paper
o High grade short-term corporate obligations
o Repurchase agreements collateralized by U.S.
government securities1
The chart below illustrates the Portfolio's composition on June 30, 1995.
GRAPHIC MATERIAL 1 OMMITTED - SEE APPENDIX AT END OF DOCUMENT
The securities in which the Portfolio invests are among the highest quality
available to money market portfolios. As such, the Portfolio does not invest in
exotic derivatives or other potentially volatile securities that we think
involve undue risk. Instead, we seek to provide shareholders with a
high-quality, conservative investment. In addition, the Portfolio invests 100%
of its assets in securities with remaining maturities of 397 days or less. Such
relatively short maturities allow the Portfolio to adjust quickly to changes in
interest rates.
Through investing in a portfolio of high-quality, short-term securities,
Franklin's IFT Money Market Portfolio can provide a high level of credit safety
combined with a stable net asset value.2 As a result, investors often use the
Fund for assets held in fiduciary, advisory and custodial capacities.3 The
Fund's competitive yield has also made it an attractive alternative cash
management tool for corporations, banks, savings and loan associations and trust
companies.
The Money Market Portfolio
Portfolio Composition on June 30, 1995
Performance Summary
The overall increase in short-term interest rates during the reporting period
helped raise the yield of Franklin's IFT Money Market Portfolio. The 7-day
current yield for the Fund increased from 4.04% on June 30, 1994, to 5.97% on
June 30, 1995.4 The Portfolio maintained a relatively short, average weighted
maturity, which allowed us to adapt quickly to changes in interest rates. As
interest rates began to fall during the latter half of fiscal year 1995, we
began lengthening the average maturity to lock in higher rates. On June 30,
1995, the Fund's underlying portfolio held a relatively short average weighted
maturity of 60 days, an increase from the 48 day average maturity on June 30,
1994.
The graph to the right illustrates how the 7-day current yield for Franklin's
IFT Money Market Portfolio has performed versus IBC/Donoghue's Money Fund
Averages/First Tier Institutional-Only for the one-year period ended June 27,
1995.5 Of course, past performance cannot guarantee future results.
GRAPHIC MATERIAL 2 OMMITTED - SEE APPENDIX AT END OF DOCUMENT
Franklin's IFT Money Market Portfolio
Weekly 7-Day Yields vs. IBC/Donoghue's First Tier Institutional-Only4,5 June 28,
1994 to June 27, 1995 Performance Figures Period ended June 30, 1995
7-Day Current Yield:4 5.97%
7-Day Effective Yield:4 6.14%
Average Weighted Maturity: 60 days
1. U.S. government securities owned by the Portfolio or held under repurchase
agreement, but not shares of the Fund, are guaranteed by the U.S. government as
to the timely payment of principal and interest.
2. An investment in Franklin's IFT Money Market Portfolio is neither insured nor
guaranteed by the U.S. government or by another entity or institution. There is
no assurance that the $1.00 share price will be maintained.
3. Regulated investors should review their applicable investment restrictions to
determine whether the Fund is a permissible investment.
4. Annualized yields are for the 7-day period shown and
reflect fluctuations in interest rates on portfolio investments, and Fund
expenses. Past performance does not guarantee future results.
The Fund's manager has agreed in advance to waive a portion of its management
fees and make payments of certain other expenses to limit total operating
expenses to no more than 0.15% per annum of average net assets. Without these
reductions, the Fund's weekly yields would have been lower, and its current and
effective 7-day yields for the period ended June 30, 1995 would have been 5.89%
and 6.07%, respectively. The Fund's manager may discontinue these arrangements
at any time, upon notice to the Fund's Board of Trustees.
5. Source: Money Fund Report(R), IBC/Donoghue's Money Fund Averages/First Tier
Institutional-Only. As of June 27, 1995, there were 109 funds in this category.
Franklin Late Day
Money Market Portfolio
The Franklin Late Day Money Market Portfolio is managed for capital preservation
and liquidity, while seeking high current income consistent with capital
preservation and liquidity. It pursues this objective through investments in
repurchase agreements collateralized by U.S. government securities, and in
marketable securities issued or guaranteed by the U.S. government, its agencies
and instrumentalities.1 The chart below illustrates the fund's portfolio
composition on June 30, 1995.
GRAPHIC MATERIAL 3 OMMITTED - SEE APPENDIX AT END OF DOCUMENT
The Franklin Late Day Money Market Portfolio allows investors to purchase and
redeem shares each business day, up to 4:30 p.m. Eastern time/1:30 p.m. Pacific
time. This feature gives our shareholders the opportunity to invest monies
received late in the day and earn same-day dividends, rather than allow that
money to sit idle overnight or over a weekend. When purchasing shares of the
fund, investors may also request next-day settlement exchanges to any of the
other money market funds in the Trust.2
More importantly, the fund offers investors this late-day convenience through a
portfolio which emphasizes high credit quality. In fact, the Franklin Late Day
Money Market Portfolio has earned the highest possible rating, "AAAm," by
Standard & Poor's Corporation (S&P), an independent rating service.3
Performance Summary
The overall increase in short-term interest rates during the reporting period
helped raise the yield of the Franklin Late Day Money Market Portfolio. The
7-day current yield for the fund increased from 3.95% on June 30, 1994, to 5.71%
on June 30, 1995.4 The fund's relatively short, average weighted maturity
allowed us to adapt quickly to changes in interest rates. As interest rates
began to fall during the latter half of fiscal year 1995, we began lengthening
the average maturity to lock in higher rates. On June 30, 1995, the fund held a
relatively short average weighted maturity of 17 days, an increase from the
4-day average maturity on June 30, 1994.
The graph to the right illustrates how the 7-day current yield for the Franklin
Late Day Money Market Portfolio has performed versus IBC/Donoghue's Money Fund
Averages/Government-Only, Institutional-Only for the one-year period ended June
27, 1995.5 Of course, past performance
cannot guarantee future results.
GRAPHIC MATERIAL 4 OMMITTED - SEE APPENDIX AT END OF DOCUMENT
Franklin Late Day Money Market Portfolio
Weekly 7-Day Yields vs. IBC/Donoghue's Government-Only, Institutional-Only4,5
June 28, 1994 to June 27, 1995 Performance Figures Period ended June 30, 1995
7-Day Current Yield:4 5.71%
7-Day Effective Yield:4 5.87%
Average Weighted Maturity: 17 days
1. U.S. government securities owned by the fund or held under repurchase
agreement, but not shares of the fund, are guaranteed by the U.S. government as
to the timely payment of principal and interest.
2. The exchange program may be modified or discontinued by the fund(s).
Shareholders using timing services will be charged a $5 fee for each exchange.
Certain funds do not permit timing accounts or there may be certain
restrictions, as detailed in each fund's prospectus.
3. The rating reflects Standard & Poor's assessment of the overall credit
quality of the fund's portfolio, based primarily on the fund's stated investment
objectives and policies. It considers, for example, the credit quality of
portfolio investments and management. The rating does not reflect the yield or
the market price of the fund's share nor approval by Standard & Poor's. The
rating is subject to change.
4. Annualized yields are for the 7-day period
shown and reflect fluctuations in interest rates on portfolio investments and
fund expenses. Past performance does not guarantee future results.
The fund's manager has agreed in advance to waive a portion of its management
fees and make payments of certain other expenses to limit total operating
expenses to no more than 0.15% per annum of average net assets. Without these
reductions, the fund's weekly yields would have been lower, and its current and
effective 7-day yields for the period ended June 30, 1995 would have been 5.20%
and 5.33%, respectively. The fund's manager may discontinue these arrangements
at any time, upon notice to the fund's Board of Trustees.
5. Source: Money Fund Report(R), IBC Donoghue's Money Fund
Average(TM)/Government-Only, Institutional-Only. As of June 27, 1995, there were
148 funds in this category.
An investment in the Franklin Late Day Money Market Portfolio is neither insured
nor guaranteed by the U.S. government or by another entity or institution. There
is no assurance that the $1.00 share price will be maintained.
Franklin
U.S. Government
Securities Money
Market Portfolio
The investment objective of the Franklin U.S. Government Securities Money Market
Portfolio (the Fund) is to earn high current income consistent with capital
preservation and liquidity. It pursues this objective by investing all of its
assets in shares of the U.S. Government Securities Money Market Portfolio (the
Portfolio) whose investment objective is the same as the Fund's. The Portfolio,
in turn, invests primarily in repurchase agreements collateralized by U.S.
government securities, and in marketable securities issued or guaranteed by the
U.S. government, its agencies and instrumentalities.1 The chart below
illustrates the Portfolio's composition as of June 30, 1995.
GRAPHIC MATERIAL 5 OMMITTED - SEE APPENDIX AT END OF DOCUMENT
The Fund was created to comply with the investment criteria of many state,
county and city governments. It may be an appropriate investment choice for
government investors, corporations, banks, and savings and loan associations
because of its history of principal stability and high degree of credit safety.2
In fact, its emphasis on high credit quality has helped the Fund earn the
highest possible ratings: "AAAm" by Standard & Poor's Corporation and "Aaa" by
Moody's Investors Service, two independent rating services.3
Performance Summary
The overall increase in short-term interest rates during the reporting period
helped raise the yield of the Franklin U.S. Government Securities Money Market
Portfolio. The 7-day current yield for the Fund increased from 3.95% on June 30,
1994, to 5.79% on June 30, 1995.4 The Fund's underlying portfolio maintains a
relatively short, average weighted maturity, which allowed us to adapt quickly
to changes in interest rates. As interest rates began to fall during the latter
half of fiscal year 1995, we began lengthening the average maturity to lock in
higher rates. On June 30, 1995, the fund's underlying portfolio held a
relatively short average weighted maturity of 31 days, an increase from the 13
day average maturity on June 30, 1994.
The graph to the right illustrates how the 7-day current yield for the Franklin
U.S. Government Securities Money Market Portfolio has performed versus
IBC/Donoghue's Money Fund Averages/Government-Only, Institutional-Only for the
one-year period ended June 27, 1995.5 Of course, past performance cannot
guarantee future results.
GRAPHIC MATERIAL 6 OMMITTED - SEE APPENDIX AT END OF DOCUMENT
Franklin U.S. Government Securities
Money Market Portfolio Weekly 7-Day Yields vs. IBC Donoghue's Government-Only,
Institutional-Only4,5 June 28, 1994 to June 27, 1995 Performance Figures Period
ended June 30, 1995
7-Day Current Yield:4 5.79%
7-Day Effective Yield:4 5.96%
Average Weighted Maturity: 31 days
1. U.S. government securities owned by the Portfolio or held under repurchase
agreement, but not shares of the Fund, are guaranteed by the U.S. government as
to the timely payment of principal and interest.
2. Regulated investors should review their applicable investment restrictions to
determine whether the Fund is a permissible investment.
3. The "AAAm" rating reflects Standard & Poor's assessment of the overall credit
quality of the Portfolio, based primarily on the Portfolio's stated investment
objectives and policies. It considers, for example, the credit quality of
Portfolio investments and management. The rating does not reflect the yield or
the market price of the fund's shares nor approval by Standard & Poor's. The
"Aaa" rating reflects Moody's assessment of the investment quality of shares in
the Portfolio and factors in the Portfolio's investment objectives and policies,
creditworthiness of the Portfolio's investments and management. Funds rated
"Aaa" are judged to be of an investment quality similar to Aaa-rated
fixed-income obligations, which indicates best quality. The rating does not
consider the prospective performance of a fund with respect to appreciation, the
volatility of net asset value, or yield and does not reflect approval by
Moody's. Both ratings are subject to change.
4. Annualized yields are for the 7-day period shown and reflect fluctuations in
interest rates on Portfolio investments and Fund expenses. Past performance does
not guarantee future results.
The Fund's manager has agreed in advance to waive a portion of its
management fees and make payments of certain other expenses to limit total
operating expenses to no more than 0.15% per annum of average net assets.
Without these reductions, the Fund's weekly yields would have been lower, and
its current and effective 7-day yields for the period ended June 30, 1995 would
have been 5.72% and 5.88%, respectively. The Fund's manager may discontinue
these arrangements at any time, upon notice to the Fund's Board of Trustees.
5. Source: Money Fund Report(R), IBC Donoghue's Money Fund
Average(TM)/Government-Only, Institutional-Only. As of June 27, 1995, there were
148 funds in this category.
An investment in the Franklin U.S. Government Securities Money Market Portfolio
is neither insured nor guaranteed by the U.S. government or by another entity or
institution. There is no assurance that the $1.00 share price will be
maintained.
Franklin
U.S. Treasury
Money Market Portfolio
The Franklin U.S. Treasury Money Market Portfolio seeks to earn a high level of
current income, consistent with capital preservation and liquidity, by investing
exclusively in U.S. Treasury securities, such as bills, notes and bonds.1 The
Franklin U.S. Treasury Money Market Portfolio does not invest in repurchase
agreements, securities issued by agencies or instrumentalities of the federal
government, or any other type of money market instrument. The chart below
illustrates the fund's portfolio composition on June 30, 1995.
GRAPHIC MATERIAL 7 OMMITTED - SEE APPENDIX AT END OF DOCUMENT
The Franklin U.S. Treasury Money Market Portfolio provides institutional
investors an opportunity to take advantage of high current yields, combined with
the high degree of credit safety available from U.S. Treasury securities. Most
investment experts consider U.S. Treasuries to be among the safest investments
available in the marketplace.1 The high credit quality of these securities has
earned the Franklin U.S. Treasury Money Market Portfolio the highest possible
ratings: "AAAm-G" from Standard & Poor's Corporation and "Aaa" from Moody's
Investors Service.2
In addition, the Franklin U.S. Treasury Money Market Portfolio may offer a tax
advantage, since income from U.S. Treasuries, and therefore from the fund, may
be free of state and local income taxes for most investors. Investors may
therefore earn a higher after-tax return from the fund than is available in a
fully-taxable money market fund.3 Of course, all income paid out of U.S.
government obligation interest is fully taxable for federal income tax purposes.
Investors should consult with their own tax advisors for further information on
specific state tax rules.
The Franklin U.S. Treasury Money Market Portfolio should be attractive to
institutional investors seeking an economical and convenient means of investing
in a professionally managed portfolio of high-quality, short-term government
securities allowing them easy access to their money.
Performance Summary
The increase in short-term interest rates during the reporting period helped
raise the yield of the Franklin U.S. Treasury Money Market Portfolio. The 7-day
current yield for the fund increased from 3.94% on June 30, 1994, to 5.52% on
June 30, 1995.4 The fund maintains a relatively short, average weighted
maturity, which allowed us to adapt quickly to changes in interest rates. As
interest rates began to fall during the latter half of fiscal year 1995, we
began lengthening the average maturity to lock in higher rates. On June 30,
1995, the fund held a relatively short average weighted maturity of 51 days,
returning to the same average maturity as on June 30, 1994.
The chart to the right illustrates how the 7-day current yield for the Franklin
U.S. Treasury Money Market Portfolio has performed versus IBC/Donoghue's Money
Fund Averages/Government-Only, Institutional-Only for the one-year period ended
June 27, 1995.5 Of course, past performance cannot guarantee future results.
GRAPHIC MATERIAL 8 OMMITTED - SEE APPENDIX AT END OF DOCUMENT
Franklin U.S. Treasury Money Market Portfolio
Weekly 7-Day Yields vs. IBC/Donoghue's
Government-Only, Institutional-Only4,5
June 28, 1994 to June 27, 1995
Performance Figures
Period ended June 30, 1995
7-Day Current Yield:4 5.52%
7-Day Effective Yield:4 5.67%
Average Weighted Maturity: 51 days
1. U.S. Treasury securities owned by the fund, but not shares of the fund, are
guaranteed by the U.S. government as to the timely payment of principal and
interest.
2. The "AAAm" grading reflects Standard & Poor's assessment of the overall
credit quality of the fund's portfolio, based primarily on the fund's stated
investment objectives and policies. It considers, for example, the credit
quality of portfolio investments and management. The rating does not reflect the
yield or the market price of the fund's shares nor approval by Standard &
Poor's. The "Aaa" rating reflects the fund's investment objectives and policies,
creditworthiness of the fund's investments and management. Funds rated Aaa are
judged to be of an investment quality similar to Aaa-rated fixed-income
obligations, which indicates best quality. The rating does not consider the
prospective performance of a fund with respect to appreciation, the volatility
of net asset value, or yield and does not reflect approval by Moody's. Both
ratings are subject to change.
3. Income is subject to federal income tax. Shareholders should consult their
tax advisors regarding the applicability of state and local intangible property
or income taxes to their shares in the fund and to distributions received from
the fund.
4. Annualized yields are for the 7-day period shown and reflect fluctuations in
interest rates on portfolio investments, and fund expenses. Past performance
does not guarantee future results.
The fund's manager has agreed in advance to waive a portion of its management
fees and make payments of certain other expenses to limit total operating
expenses to no more than 0.15% per annum of average net assets. Without these
reductions, the fund's weekly yields would have been lower, and its current and
effective 7-day yields for the period ended June 30, 1995 would have been 5.37%
and 5.52%, respectively. The fund's manager may discontinue these arrangements
at any time, upon notice to the fund's Board of Trustees.
5. Source: Money Fund Report(R), IBC Donoghue's Money Fund
Average(TM)/Government-Only, Institutional-Only. As of June 27, 1995, there were
148 funds in this category.
An investment in the Franklin U.S. Treasury Money Market Portfolio is neither
insured nor guaranteed by the U.S. government or by another entity or
institution. There is no assurance that the $1.00 share price will be
maintained. Regulated investors should review their applicable investment
restrictions to determine whether the fund is a permissible investment.
Franklin U.S.
Government Agency Money Market Fund
The Franklin U.S. Government Agency Money Market Fund commenced operations on
February 8, 1994, and its investment objective is to seek capital preservation
and liquidity.
The Franklin U.S. Government Agency Money Market Fund invests only in U.S.
government securities, which consist of marketable fixed, floating, and
variable-rate securities issued or guaranteed by the U.S. government, its
agencies, or by various instrumentalities which have been established or
sponsored by the U.S. government, such as:1
o Federal Farm Credit System
o Federal Home Loan Banks
o Student Loan Marketing Association
o Tennessee Valley Authority
o Federal Deposit Insurance Corporation
o Federal Intermediate Credit Bank
o Government Securities Administration
In addition, the Franklin U.S. Government Agency Money Market Fund may invest in
direct obligations of the U.S. Treasury, which include U.S. Treasury bills,
notes and bonds.1 The fund does not invest in repurchase agreements or any other
type of money market instruments. The chart below illustrates the fund's
portfolio composition on June 30, 1995.
GRAPHIC MATERIAL 9 OMMITTED - SEE APPENDIX AT END OF DOCUMENT
The fund is designed for investors who want the credit safety of a government
securities money market fund, but seek the higher yield potential of agency
instruments. In certain states, income paid to shareholders from direct U.S.
government obligations may also be exempt from state personal income tax. Of
course, all income paid out of U.S. government obligation interest is fully
taxable for federal income tax purposes. Investors should consult with their tax
advisors for further information on specific state tax rules.
Performance Summary
The increase in short-term interest rates during the reporting period helped
raise the yield of the Franklin U.S. Government Agency Money Market Fund. The
7-day current yield for the fund increased from 3.90% on June 30, 1994, to 5.62%
on June 30, 1995.2 The fund maintains a relatively short, average weighted
maturity, which allowed us to adapt quickly to changes in interest rates. As
interest rates began to fall during the latter half of fiscal year 1995, we
began lengthening the average maturity to lock in higher rates. On June 30,
1995, the fund held a relatively short average weighted maturity of 49 days, an
increase from the 36 day average maturity on June 30, 1994.
The chart to the right illustrates how the 7-day current yield for the Franklin
U.S. Government Agency Money Market Fund has performed versus IBC/Donoghue's
Money Fund Averages/Government-Only, Institutional-Only for the one-year period
ended June 27, 1995.3 Of course, past performance cannot guarantee future
results.
GRAPHIC MATERIAL 10 OMMITTED - SEE APPENDIX AT END OF DOCUMENT
Franklin U.S. Government Agency
Money Market Fund
Weekly 7-Day Yields vs. IBC/Donoghue's Government-Only, Institutional-Only2,3
June 28, 1994 to June 27, 1995 Performance Figures Period ended June 30, 1995
7-Day Current Yield:2 5.62%
7-Day Effective Yield:2 5.78%
Average Weighted Maturity: 49 days
1. Certain U.S. government Securities owned by the fund, but not shares of the
fund, are guaranteed by the U.S. government as to the timely payment of
principal and interest.
2. Annualized yields are for the 7-day period shown and
reflect fluctuations in interest rates on portfolio investments, and fund
expenses. Past performance does not guarantee future results. The fund's manager
has agreed in advance to waive a portion of its management fees and make
payments of certain other expenses to limit total operating expenses to no more
than 0.30% per annum of average net assets. Without these reductions, the fund's
weekly yields would have been lower, and its current and effective 7-day yields
for the year ended June 30, 1995 would have been 5.26% and 5.40%, respectively.
The fund's manager may discontinue these arrangements at any time, upon notice
to the fund's Board of Trustees.
3. Source: Money Fund Report(R), IBC Donoghue's Money Fund
Average(TM)/Government-Only, Institutional-Only. As of June 27, 1995, there were
148 funds in this category.
An investment in the Franklin U.S. Government Agency Money Market Fund is
neither insured nor guaranteed by the U.S. government or by another entity or
institution. There is no assurance that the $1.00 share price will be
maintained. Regulated investors should review their applicable investment
restrictions to determine whether the fund is a permissible investment.
INSTITUTIONAL FIDUCIARY TRUST
<TABLE>
<CAPTION>
Statement of Investments in Securities and Net Assets, June 30, 1995
Value
Shares Money Market Portfolio (Note 1)
Mutual Funds 100.0%
<S> <C> <C>
272,146,783 The Money Market Portfolio (Note 1).............................................................. $272,146,783
--------------
Total Investments (Cost $272,146,783)100.0% ..................................................... 272,146,783
Liabilities in Excess of Other Assets ........................................................... (81)
--------------
Net Assets 100.0% ............................................................................... $272,146,702
==============
At June 30, 1995, there was no unrealized appreciation or depreciation for
financial statement or income tax purposes.
The accompanying notes are an integral part of these financial statements.
INSTITUTIONAL FIDUCIARY TRUST
Statement of Investments in Securities and Net Assets, June 30, 1995
Face Value
Amount Franklin Late Day Money Market Portfolio (Note 1)
a Short Term Investments 100.1%..................................................................
Government Securities 13.1%
$ 3,300,000 U.S. Treasury Bills, 5.26% - 6.16%, 07/27/95 - 12/21/95 (Cost $3,245,921)..................... $ 3,245,921
--------------
b Receivables from Repurchase Agreements 87.0%
541,000 Barclays de Zoete Wedd Securities, Inc., New York, 5.90%, 07/03/95 (Maturity Value $600,295)
Collateral: U.S. Treasury Notes, 8.50%, 02/15/00............................................. 600,000
995,000 Chase Securities Inc., 6.125%, 07/03/95 (Maturity Value $1,000,510)
Collateral: U.S. Treasury Notes, 6.625%, 03/31/97............................................ 1,000,000
600,000 Citicorp Securities, Inc., 6.125%, 07/03/95 (Maturity Value $600,306)
Collateral: U.S. Treasury Notes, 6.875%, 03/31/97............................................ 600,000
600,000 Fuji Securities, Inc., 6.10%, 07/03/95 (Maturity Value $600,305)
Collateral: U.S. Treasury Notes, 7.625%, 04/30/96............................................ 600,000
575,000 Lehman Government Securities, Inc., 6.21%, 07/03/95 (Maturity Value $600,311)
Collateral: U.S. Treasury Notes, 7.50%, 10/31/99............................................. 600,000
615,000 Morgan Stanley & Co., Inc., 6.00%, 07/03/95 (Maturity Value $600,300)
Collateral: U.S. Treasury Notes, 5.125%, 02/28/98............................................ 600,000
595,000 Nomura Securities International, Inc., 6.125%, 07/03/95 (Maturity Value $600,306)
Collateral: U.S. Treasury Notes, 6.75%, 02/28/97............................................. 600,000
1,389 c J.P. Morgan Securities, Inc., 5.36%, 07/03/95 (Maturity Value $1,389)......................... 1,389
15,775,000 J.P. Morgan Securities, Inc., 5.70%, 07/03/95 (Maturity Value $15,782,493)
Collateral: U.S. Treasury Bills, 08/17/95.................................................... 15,775,000
610,000 Sanwa Securities (USA) Co., L.P., 5.95%, 07/03/95 (Maturity Value $600,298)
Collateral: U.S. Treasury Notes, 5.875%, 05/31/96............................................ 600,000
565,000 UBS Securities , Inc., 6.10%, 07/03/95 (Maturity Value $600,305)
Collateral: U.S. Treasury Notes, 8.625%, 08/15/97............................................ 600,000
--------------
Total Receivables from Repurchase Agreements (Cost $21,576,389)............................... 21,576,389
--------------
Total Investments (Cost $24,822,310)100.1%.................................................... 24,822,310
Liabilities in Excess of Other Assets, Net (.1)%.............................................. (12,964)
--------------
Net Assets 100.0% ............................................................................ $24,809,346
==============
At June 30, 1995, there was no unrealized appreciation or depreciation for
financial statement or income tax purposes.
aCertain short-term securities are traded on a discount basis; the rates shown
are the discount rates at the time of purchase by the Fund. Other securities
bear interest at the rates shown, payable at fixed dates or upon maturity.
bFace amount for repurchase agreements is for the underlying collateral.
cSee Note 1(f) regarding sweep repurchase agreement.
The accompanying notes are an integral part of these financial statements.
INSTITUTIONAL FIDUCIARY TRUST
Statement of Investments in Securities and Net Assets, June 30, 1995
Value
Shares Franklin U.S. Government Securities Money Market Portfolio (Note 1)
Mutual Funds 100%
334,830,412 The U.S. Government Securities Money Market Portfolio (Note 1).................................. $334,830,412
--------------
Total Investments (Cost $334,830,412)100% ................................................. 334,830,412
Liabilities in Excess of Other Assets, Net ................................................ (103)
Net Assets100.0% .......................................................................... $334,830,309
At June 30, 1995, there was no unrealized appreciation or depreciation for
financial statement or income tax purposes.
The accompanying notes are an integral part of these financial statements.
INSTITUTIONAL FIDUCIARY TRUST
Statement of Investments in Securities and Net Assets, June 30, 1995
Face Value
Amount Franklin U.S. Treasury Money Market Portfolio (Note 1)
a Short Term Investments100.3%..................................................................
$ 10,110,000 U.S. Treasury Bills, 5.80%, 07/06/95........................................................... $ 10,102,228
9,370,000 U.S. Treasury Bills, 5.57%, 07/13/95 .......................................................... 9,352,525
4,770,000 U.S. Treasury Bills, 5.66%, 07/20/95 .......................................................... 4,756,066
18,200,000 U.S. Treasury Bills, 5.26%, 07/27/95 .......................................................... 18,127,364
23,770,000 U.S. Treasury Bills, 6.16%, 08/03/95 .......................................................... 23,651,042
23,350,000 U.S. Treasury Bills, 5.66%, 08/10/95 .......................................................... 23,208,006
23,980,000 U.S. Treasury Bills, 5.82%, 08/17/95 .......................................................... 23,804,222
18,920,000 U.S. Treasury Bills, 5.335%, 08/24/95 ......................................................... 18,759,952
18,700,000 U.S. Treasury Bills, 5.96%, 08/31/95 .......................................................... 18,526,463
23,675,000 U.S. Treasury Bills, 5.505%, 09/07/95 ......................................................... 23,425,414
10,450,000 U.S. Treasury Bills, 5.445%, 09/14/95 ......................................................... 10,334,759
3,840,000 U.S. Treasury Bills, 5.54%, 09/21/95 .......................................................... 3,793,123
860,000 U.S. Treasury Bills, 5.50%, 09/28/95 .......................................................... 848,358
7,000,000 U.S. Treasury Bills, 5.67%, 10/12/95 .......................................................... 6,886,443
6,000,000 U.S. Treasury Bills, 5.625%, 11/24/95 ......................................................... 5,863,125
--------------
Total Investments (Cost $201,439,090)100.3 %................................................... 201,439,090
Liabilities in Excess of Other Assets, Net (.3%)............................................... (503,676)
--------------
Net Assets 100.0%.............................................................................. $200,935,414
==============
At June 30, 1995, there was no unrealized appreciation or depreciation for
financial statement or income tax purposes.
aCertain short-term securities are traded on a discount basis; the rates shown
are the discount rates at the time of purchase by the Fund. Other securities
bear interest at the rates shown, payable at fixed dates or upon maturity.
The accompanying notes are an integral part of these financial statements.
INSTITUTIONAL FIDUCIARY TRUST
Statement of Investments in Securities and Net Assets, June 30, 1995
Face Value
Amount Franklin U.S. Government Agency Money Market Fund (Note 1)
a U.S. Government Agencies 95.2%
$ 500,000 Federal Farm Credit Discount Notes, 5.72%, 07/05/95 ........................................... $499,682
1,700,000 Federal Farm Credit Discount Notes, 5.89%, 07/05/95 ........................................... 1,698,887
1,700,000 Federal Farm Credit Discount Notes, 5.85%, 07/10/95 ........................................... 1,697,514
1,480,000 Federal Farm Credit Discount Notes, 5.86%, 07/17/95 ........................................... 1,476,145
2,000,000 Federal Farm Credit Discount Notes, 5.93%, 07/17/95 ........................................... 1,994,729
1,100,000 Federal Farm Credit Discount Notes, 5.84%, 07/24/95 ........................................... 1,095,896
500,000 Federal Farm Credit Discount Notes, 5.85%, 08/08/95 ........................................... 496,913
750,000 Federal Farm Credit Discount Notes, 5.75%, 09/29/95 ........................................... 739,219
2,000,000 Federal Home Loan Bank Discount Notes, 5.91%, 07/07/95......................................... 1,998,030
1,000,000 Federal Home Loan Bank Discount Notes, 6.05%, 07/10/95......................................... 998,488
1,000,000 Federal Home Loan Bank Discount Notes, 5.90%, 07/11/95 ........................................ 998,361
2,700,000 Federal Home Loan Bank Discount Notes, 5.86%, 07/25/95 ........................................ 2,689,452
2,400,000 Federal Home Loan Bank Discount Notes, 5.82%, 08/04/95 ........................................ 2,386,835
240,000 Federal Home Loan Bank Discount Notes, 5.70%, 08/14/95 ........................................ 238,328
2,000,000 Federal Home Loan Bank Discount Notes, 5.90%, 08/15/95 ........................................ 1,985,250
1,600,000 Federal Home Loan Bank Discount Notes, 5.82%, 08/22/95 ........................................ 1,586,549
850,000 Federal Home Loan Bank Discount Notes, 5.73%, 08/30/95 ........................................ 841,883
3,250,000 Federal Home Loan Bank Discount Notes, 5.65%, 09/20/95 ........................................ 3,208,684
970,000 Federal Home Loan Bank Discount Notes, 5.68%, 09/22/95 ........................................ 957,297
890,000 Federal Home Loan Bank Discount Notes, 5.75%, 09/29/95 ........................................ 877,206
1,250,000 Federal Home Loan Bank Discount Notes, 5.63%, 10/06/95 ........................................ 1,231,038
1,000,000 Federal Home Loan Bank Discount Notes, 5.50%, 11/10/95 ........................................ 979,833
1,000,000 Federal Home Loan Bank Discount Notes, 5.55%, 11/15/95 ........................................ 978,879
1,000,000 Federal Home Loan Bank Discount Notes, 5.57%, 11/15/95 ........................................ 978,803
--------------
Total U.S. Government Agencies (Cost $32,633,901).............................................. 32,633,901
--------------
a Government Securities 4.8%
1,650,000 U.S. Treasury Bills, 5.26% - 5.82%, 07/13/95 - 09/28/95 (Cost $1,633,082) ..................... 1,633,082
--------------
Total Investments (Cost $34,266,983)100.0% .................................................... 34,266,983
Other Assets and Liabilities, Net.............................................................. 17,569
--------------
Net Assets 100.0%.............................................................................. $34,284,552
==============
</TABLE>
At June 30, 1995, there was no unrealized appreciation or depreciation for
financial statement or income tax purposes.
aCertain short-term securities are traded on a discount basis; the rates shown
are the discount rates at the time of purchase by the Fund. Other securities
bear interest at the rates shown, payable at fixed dates or upon maturity.
The accompanying notes are an integral part of these financial statements.
INSTITUTIONAL FIDUCIARY TRUST
Financial Statements
Statements of Assets and Liabilities
June 30, 1995
<TABLE>
<CAPTION>
Franklin Franklin Franklin Franklin
Money Late Day U.S. Government U.S. Treasury U.S. Government
Market Money Market Securities Money Money Market Agency Money
Portfolio Portfolio Market Portfolio Portfolio Market Fund
--------- -------- ---------- --------- ---------
Assets:
<S> <C> <C> <C> <C> <C>
Investments in securities, at value and cost.. $272,146,783 $ 3,245,921 $334,830,412 $201,439,090 $34,266,983
Receivables from repurchase agreements,
at value and cost............................. -- 21,576,389 -- -- --
Cash.......................................... -- 4,213 -- 49,295 21,390
Receivables:
Interest....................................... -- 3,476 -- -- --
From affiliates (Note 6)....................... -- 5,632 10 20,609 5,906
Unamortized organization costs (Note 2)....... -- -- -- -- 4,036
---------- ---------- ------------ ----------- -----------
Total assets................................... 272,146,783 24,835,631 334,830,422 201,508,994 34,298,315
---------- ---------- ------------ ----------- -----------
Liabilities:
Payables:
Management fees................................ -- 5,761 -- 32,032 --
Capital shares repurchased..................... -- 15,774 -- 524,318 --
Distributions to shareholders.................. 81 34 113 89 21
Distribution fees.............................. -- -- -- -- 9,960
Accrued expenses and other liabilities........ -- 4,716 -- 17,141 3,782
---------- ---------- ------------ ----------- -----------
Total liabilities.............................. 81 26,285 113 573,580 13,763
---------- ---------- ------------ ----------- -----------
Net assets, at value........................... $272,146,702 $24,809,346 $334,830,309 $200,935,414 $34,284,552
========== ========== ============ =========== ===========
Shares outstanding............................. 272,146,702 24,809,346 334,830,309 200,935,414 34,284,552
========== ========== ============ =========== ===========
Net asset value per share...................... $1.00 $1.00 $1.00 $1.00 $1.00
========== ========== ============ =========== ===========
The accompanying notes are an integral part of these financial statements.
INSTITUTIONAL FIDUCIARY TRUST
Financial Statements (cont.)
Statements of Operations
for the year ended June 30, 1995
Franklin Franklin Franklin Franklin
Money Late Day U.S. Government U.S. Treasury U.S. Government
Market Money Market Securities Money Money Market Agency Money
Portfolio Portfolio Market Portfolio Portfolio Market Fund
Investment income:
Dividends....................................... $13,288,573 $-- $14,715,535 $-- $--
Interest........................................ -- 1,704,723 -- 11,398,032 806,011
------------ ------------ ------------ ----------- ----------
Total income..................................... 13,288,573 1,704,723 14,715,535 11,398,032 806,011
------------ ------------ ------------ ----------- ----------
Expenses:
Management fees, net (Note 6)................... -- 8,108 -- 127,141 --
Shareholder servicing costs (Note 6)............ 22,978 1,040 11,746 18,976 291
Distribution fees (Note 6)...................... -- -- -- -- 20,717
Professional fees............................... 18,649 6,491 18,989 17,292 3,121
Registration fees............................... 14,710 9,425 14,641 15,921 15,145
Reports to shareholders......................... 3,337 3,370 3,442 9,891 1,689
Custodian fees.................................. -- 3,787 -- 1,734 1,461
Trustees' fees and expenses..................... -- 3,921 -- 23,274 552
Amortization of organization costs (Note 2)..... -- -- -- -- 1,125
Others.......................................... 1,759 13,040 1,473 12,541 1,256
Payments from manager (Note 6).................. (61,433) -- (50,291) -- (2,707)
------------ ------------ ------------ ----------- ----------
Total expenses................................... -- 49,182 -- 226,770 42,650
------------ ------------ ------------ ----------- ----------
Net investment income.......................... 13,288,573 1,655,541 14,715,535 11,171,262 763,361
------------ ------------ ------------ ----------- ----------
Net realized gain on investments................. -- 129 -- 5,063 279
------------ ------------ ------------ ----------- ----------
Net increase in net assets
resulting from operations....................... $13,288,573 $1,655,670 $14,715,535 $11,176,325 $763,640
============ ============ ============ ===========
The accompanying notes are an integral part of these financial statements.
INSTITUTIONAL FIDUCIARY TRUST
Financial Statements (cont.)
Statements of Changes in Net Assets
for the years ended June 30, 1995 and 1994 (except as noted)
Franklin Late Day Franklin U.S. Government
Money Market Portfolio Money Market Portfolio Securities Money Market Portfolio
-------------------- ------------------- --------------------
1995 1994 1995 1994 1995 1994
--------- --------- --------- --------- --------- ---------
Increase (decrease) in net assets:
Operations:
<S> <C> <C> <C> <C> <C> <C>
Net investment income........... $ 13,288,573 $9,985,110 $ 1,655,541 $725,838 $ 14,715,535 $ 7,620,760
Net realized gain from
security transactions.......... -- -- 129 472 -- --
---------- ---------- ---------- --------- ---------- ----------
Net increase in net assets
resulting from operations...... 13,288,573 9,985,110 1,655,670 726,310 14,715,535 7,620,760
Distributions to shareholders
from undistributed
net investment income.......... (13,288,573) (9,985,110) (1,655,670)a (726,310)b (14,715,535) (7,620,760)
Increase (decrease) in net
assets from capital share
transactions (Note 3).......... 53,892,705 (4,027,826) (35,489,308) 37,168,626 116,283,327 (91,834,760)
---------- ---------- ---------- ---------- ---------- ----------
Net increase (decrease)
in net assets.................. 53,892,705 (4,027,826) (35,489,308) 37,168,626 116,283,327 (91,834,760)
Net assets (there is no
undistributed net investment
income at beginning or end
of the year):
Beginning of year............... 218,253,997 222,281,823 60,298,654 23,130,028 218,546,982 310,381,742
---------- ---------- ---------- ---------- ---------- ----------
End of year..................... $272,146,702 $218,253,997 $24,809,346 $60,298,654 $334,830,309 $218,546,982
========== ========== ========== ========== ========== ==========
Franklin U.S. Treasury Franklin U.S. Government Agency
Money Market Portfolio Money Market Fund
--------------------- -------------------
1995 1994 1995 1994*
---------- --------- --------- --------
Increase (decrease) in net assets:
Operations:
<S> <C> <C> <C> <C>
Net investment income............................................ $ 11,171,262 $ 7,648,303 $ 763,361 $ 65,316
Net realized gain (loss) from security transactions.............. 5,063 (7,410) 279 6
---------- ---------- ---------- ---------
Net increase in net assets resulting from operations............ 11,176,325 7,640,893 763,640 65,322
Distributions to shareholders from undistributed net
investment income............................................... (11,176,325)c (7,640,893)d (763,640)e (65,322)f
Increase in net assets from capital share transactions (Note 3).. 5,800,828 15,902,128 29,219,231 5,065,321
---------- ---------- ---------- ---------
Net increase in net assets....................................... 5,800,828 15,902,128 29,219,231 5,065,321
Net assets (there is no undistributed net investment income
at beginning or end of the year):
Beginning of year................................................ 195,134,586 179,232,458 5,065,321 --
---------- ---------- ---------- ---------
End of year...................................................... $200,935,414 $195,134,586 $34,284,552 $5,065,321
========== ========== ========== =========
*For the period February 8, 1994 (effective date) to June 30, 1994.
aDistributions were increased by net realized gain from security transactions of $129.
bDistributions were increased by net realized gain from security transactions of $472.
cDistributions were increased by net realized gain from security transactions of $5,063.
dDistributions were decreased by net realized loss from security transactions of $7,410.
eDistributions were increased by net realized gain from security transactions of $279.
fDistributions were increased by net realized gain from security transactions of $6.
The accompanying notes are an integral part of these financial statements.
</TABLE>
INSTITUTIONAL FIDUCIARY TRUST
Notes to Financial Statements
1. SIGNIFICANT ACCOUNTING POLICIES
Institutional Fiduciary Trust (the Trust) is a diversified, open-end management
investment company (mutual fund), registered under the Investment Company Act of
1940, as amended. The Trust currently consists of eight separate and distinct
Funds. These financial statements pertain only to the five money market
portfolios (the Funds). Each of the Funds issues a separate series of the
Trust's shares and maintains a totally separate and distinct investment
portfolio.
The Institutional Fiduciary Trust's Money Market Portfolio (Money Market Fund)
and Franklin U.S. Government Securities Money Market Portfolio (U.S. Government
Fund) invest substantially all of their assets in The Money Market Portfolio and
The U.S. Government Securities Money Market Portfolio, respectively. Both are
no-load, open-end, diversified management investment companies having the same
investment objective as the Money Market Fund and U.S. Government Fund. The
financial statements of The Money Market Portfolio and The U.S. Government
Securities Money Market Portfolio, including the statements of investments, are
included elsewhere in this report and should be read in conjunction with the
financial statements of the Money Market Fund and U.S. Government Fund.
On June 20, 1995, the Board of Trustees eliminated the AEA Cash Management Fund,
a series of the Trust.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. The
policies are in conformity with generally accepted accounting principles for
investment companies.
a. Security Valuation:Securities in the Franklin Late Day Money Market
Portfolio, the Franklin U.S. Treasury Money Market Portfolio, and the Franklin
U.S. Government Agency Money Market Fund are valued at amortized cost, which
approximates value. Each of these Funds must maintain a dollar weighted average
maturity of 90 days or less and only purchase instruments having remaining
maturities of 397 days or less. If the Fund has a remaining weighted average
maturity of greater than 90 days, the portfolio will be stated at value based on
recorded closing sales on a national securities exchange or, in the absence of a
recorded sale, within the range of the most recent quoted bid and ask prices.
The trustees have established procedures designed to stabilize, to the extent
reasonably possible, each Fund's price per share as computed for the purpose of
sales and redemptions at $1.00.
The values of the Money Market Fund and the U.S. Government Fund reflect the
Funds' proportionate interest in the net assets of The Money Market Portfolio
and The U.S. Government Securities Money Market Portfolio ("Portfolios"),
respectively. At June 30, 1995, the Money Market Fund owns 20.84% of The Money
Market Portfolio and the U.S. Government Fund owns 70.54% of The U.S. Government
Securities Money Market Portfolio. The Portfolios' shares held by the Funds are
valued at the net asset value of the Portfolios.
b. Income Taxes:The Trust intends to continue to qualify for the tax treatment
applicable to regulated investment companies under the Internal Revenue Code and
to make the requisite distributions to its shareholders which will be sufficient
to relieve it from income and excise taxes. Therefore, no income tax provision
is required. Each Fund is treated as a separate entity in the determination of
compliance with the Internal Revenue Code.
c. Security Transactions:Security transactions are accounted for on the date the
securities are purchased or sold (trade date). Realized gains and losses on
security transactions are determined on the basis of specific identification for
both financial statement and income tax purposes.
d. Investment Income, Expenses and Distributions:Net investment income includes
income, calculated on an accrual basis, amortization of original issue and
market discount or premium (if any), and estimated expenses which are accrued
daily. The total available for distributions is computed daily and includes the
net investment income, plus or minus any gains or losses on security
transactions and changes in unrealized portfolio appreciation or depreciation,
if any.
Distributions are normally declared for each day the New York Stock Exchange is
open for business, equal to the total available for distributions (as defined
above), and are payable to shareholders of record as of the close of business
that day. Such distributions are automatically declared daily and reinvested
monthly in additional shares of these Funds at net asset value.
e. Expense Allocation:Common expenses incurred by the Trust are allocated among
the Funds based on the ratio of net assets of each Fund to the combined net
assets. In all other respects, expenses are charged to each Fund as incurred on
a specific identification basis.
f. Repurchase Agreements:The Franklin Late Day Money Market Portfolio may enter
into repurchase agreements with government securities dealers recognized by the
Federal Reserve Board and/or member banks of the Federal Reserve System. In a
repurchase agreement, the Fund purchases a U.S. government security from a
dealer or bank subject to an agreement to resell it at a mutually agreed upon
price and date. Such a transaction is accounted for as a loan by the Fund to the
seller, collateralized by the underlying security. The transaction requires the
initial collateralization of the seller's obligations by U.S. government
securities with market value, including accrued interest, of at least 102% of
the dollar amount invested by the Fund, with the value of the underlying
securities marked to market daily to maintain coverage of at least 100%. The
collateral is delivered to the Fund's custodian and held until resold to the
dealer and bank. At June 30, 1995, all outstanding repurchase agreements held by
the Franklin Late Day Money Market Portfolio had been entered into on that date.
The Franklin Late Day Money Market Portfolio may enter into a sweep agreement
with its custodian bank. In a sweep, the excess cash in the Fund's direct
deposit account at the end of the day is invested overnight in a U.S.
government-backed repurchase agreement with Morgan Guaranty Trust Company of New
York. Funds are returned to the Fund's direct deposit account as the first
transaction of the next business day.
2. UNAMORTIZED ORGANIZATION COSTS
The organization costs of the Franklin U.S. Government Agency Money Market Fund
are amortized on a straight line basis over a period of five years from the
effective date of registration under the Securities Act of 1933. In the event
that Franklin Resources, Inc. (which was the sole shareholder prior to the
effective date) redeems its initial shares within the five-year period, the
pro-rata share of the then-unamortized deferred organization cost will be
deducted from the redemption price paid to Franklin Resources, Inc. New
investors purchasing shares of the fund subsequent to that date bear such costs
during the amortization period only as such charges are accrued daily against
investment income.
3. TRUST SHARES
At June 30, 1995, there was an unlimited number of no par value shares of
beneficial interest authorized, and paid-in capital aggregated as follows:
<TABLE>
<CAPTION>
Franklin Franklin
Money Franklin U.S. Government Franklin U.S. U.S. Government
Market Late Day Money Securities Money Treasury Money Agency Money
Portfolio Market Portfolio Market Portfolio Market Portfolio Market Fund
------------- ---------------- ---------------- --------------- -------------
<S> <C> <C> <C> <C> <C>
Paid-in capital............................... $272,146,702 $24,809,346 $334,830,309 $200,935,414 $34,284,552
============= ================ ================ =============== =============
Transactions in Trust Shares at $1.00 per share for the years ended June 30,
1995 and June 30, 1994 (except as noted) are as follows:
Franklin Franklin
Money Franklin U.S. Government Franklin U.S. U.S. Government
Market Late Day Money Securities Money Treasury Money Agency Money
Portfolio Market Portfolio Market Portfolio Market Portfolio Market Fund
---------- ---------- ----------- ----------- ----------
Years ended June 30, 1995
<S> <C> <C> <C> <C> <C>
Shares sold.......................... $1,892,917,249 $1,675,115,437 $2,601,828,262 $1,003,107,737 $51,859,383
Shares issued in reinvestment
of distributions...................... 7,436,624 1,149,078 9,481,867 5,715,958 758,682
Shares redeemed...................... (1,855,231,466) (1,711,309,313) (2,517,268,666) (1,007,980,367) (24,014,554)
Changes from exercise of
exchange privilege:
Shares sold.......................... 68,208,550 21,909 280,037,259 5,822,818 671,351
Shares redeemed...................... (59,438,252) (466,419) (257,795,395) (865,318) (55,631)
------------ ------------ -------------- ------------- ------------
Net increase (decrease)............... $ 53,892,705 $ (35,489,308) $ 116,283,327 $ 5,800,828 $29,219,231
============ ============ ============== ============= ============
Year ended June 30, 1994
Shares sold.......................... $1,673,748,837 $ 642,283,921 $2,415,120,421 $ 784,342,304 $ 5,000,000
Shares issued in reinvestment
of distributions...................... 6,467,679 636,667 4,569,396 4,415,936 65,321
Shares redeemed...................... (1,631,495,417) (605,751,962) (2,522,963,784) (776,951,434) --
Changes from exercise of
exchange privilege:
Shares sold.......................... 24,704,626 -- 61,490,967 12,131,306 --
Shares redeemed...................... (77,453,551) -- (50,051,760) (8,035,984) --
------------ ------------ ------------- ------------ -----------
Net increase (decrease)............... $ (4,027,826) $ 37,168,626 $ (91,834,760) $ 15,902,128 $ 5,065,321*
============ ============ ============= ============ ===========
*For the period February 8, 1994 (effective date) to June 30, 1994.
4. CAPITAL LOSS CARRYOVERS
At June 30, 1995, for tax purposes, the Funds had accumulated net capital loss
carryovers expiring in 2003 as follows:
Franklin Franklin U.S.
Late Day Money Treasury Money
Market Portfolio Market Portfolio
---------- ----------
<S> <C>
$9,025 $7,410
========== ==========
For tax purposes, the aggregate cost of securities are the same for financial
statement purposes at June 30, 1995.
5. PURCHASES AND SALES OF SECURITIES
Franklin Franklin
Money Franklin U.S. Government Franklin U.S. U.S. Government
Market Late Day Money Securities Money Treasury Money Agency Money
Portfolio Market Portfolio Market Portfolio Market Portfolio Market Fund
---------- ---------- ---------- ---------- ---------
Aggregate purchases and sales/maturities
of securities, including repurchase
agreements, for the year ended
June 30, 1995 were as follows:
<S> <C> <C> <C> <C> <C>
Purchases.............................. $1,139,737,199 $7,398,844,855 $1,901,775,072 $1,463,247,108 $114,083,789
---------- ---------- ---------- ---------- ---------
Sales.................................... $1,085,844,035 $7,434,331,326 $1,785,492,725 $1,457,455,158 $ 85,046,449
========== ========== ========== ========== ==========
</TABLE>
6. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
The Money Market Fund and the U.S. Government Fund have entered into separate
administration agreements with Franklin Advisers, Inc. ("Advisers"). Under the
terms of the administration agreement, Advisers provides various administrative,
statistical, and other services, and receives fees computed monthly on the last
day of the month at an annualized rate of 5/100 of 1% of the average daily net
assets of the Funds.
Advisers serves as the manager for the Franklin Late Day Money Market Portfolio,
and receives fees computed daily on the net assets of the Fund at 1/584 of 1%
(approximately 5/8 of 1% per year) of the net assets. The daily rate is reduced
to 1/730 of 1% (approximately 1/2 of 1% per year) of the Fund's net assets over
$100 million and up to $250 million, and 1/811 of 1% (approximately 45/100 of 1%
per year) of net assets over $250 million. Advisers also serves as the manager
for the Franklin U.S. Treasury Money Market Portfolio and the Franklin U.S.
Government Agency Money Market Fund and receives a daily fee computed at an
annual rate of 1/4 of 1% and 15/100 of 1%, respectively, based on the average
daily net assets of the Funds.
The terms of the Agreements provide that aggregate annual expenses of the Funds
be limited to the extent necessary to comply with the limitations set forth in
the laws, regulations and administrative interpretations of the states in which
the Funds' shares are registered. The Funds' expenses did not exceed these
limitations; however, for the year ended June 30, 1995, Franklin Advisers, Inc.
paid other expenses in the aggregate amount of $114,431 and agreed in advance to
waive management and administration fees for the Funds as indicated below:
<TABLE>
<CAPTION>
Franklin Franklin
Money Franklin U.S. Government Franklin U.S. U.S. Government
Market Late Day Money Securities Money Treasury Money Agency Money
Portfolio Market Portfolio Market Portfolio Market Portfolio Market Fund
----------- ---------------- ---------------- ---------------- -------------
<S> <C> <C> <C> <C> <C>
Fees waived....................................... $123,118 $197,123 $139,800 $427,055 $21,314
=========== ================ ================ ================ =============
</TABLE>
Under the terms of a distribution plan pursuant to Rule 12b-1 of the Investment
Company Act of 1940, the Franklin U.S. Government Agency Money Market Fund will
reimburse Franklin/Templeton Distributors, Inc. in an amount up to .30% per
annum of the costs incurred in the furnishing and promotion, offering and
marketing of the Fund's shares. Fees incurred by the Franklin U.S. Government
Agency Money Market Fund amounted to $20,717 for the year ended June 30, 1995.
Franklin Advisers, Inc., under terms of a distribution plan, may also be
reimbursed for the above mentioned costs at an approximate annual rate of .15%
of the average daily net assets of the remaining Funds of the Trust (excluding
the Franklin U.S. Government Agency Money Market Fund). There were no payments
under this plan for these funds for the year ended June 30, 1995.
At June 30, 1995, Franklin Resources, Inc. owned 39% of the Money Market
Portfolio, 12% of the Franklin Late Day Money Market Portfolio, and 16% of the
Franklin U.S. Government Agency Money Market Fund.
Under the terms of a shareholder servicing agreement with Franklin/Templeton
Investor Services, Inc., the Funds pay costs on a per shareholder account basis.
Shareholder servicing costs incurred for the year ended June 30, 1995 aggregated
$55,031 of which $14,427 was paid to Franklin/Templeton Investor Services, Inc.
Certain officers and trustees of the Trust are also officers and/or directors of
Franklin/Templeton Distributors, Inc., Franklin Advisers, Inc., and
Franklin/Templeton Investor Services, Inc., all wholly-owned subsidiaries of
Franklin Resources, Inc.
7. FINANCIAL HIGHLIGHTS
Selected data for each share of beneficial interest outstanding throughout the
period are as follows:
<TABLE>
<CAPTION>
Per Share Operating Performance Ratios/Supplemental Data
-------------------------------------- ----------------------------
Net Asset Distributions Net Ratio of Ratio of
Year Values at Net From Net Net Asset Assets at Expenses Net Income
Ended Beginning Investment Investment Values at Total End of Year to Average to Average
June 30 of Year Income Income End of Year Return+ (in 000's) Net Assets4 Net Assets
---------------------------------------------------------------------------------------------------------------------------------
Money Market Portfolio:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1991 $1.00 $.071 $(.071) $1.00 7.28% $231,655 0.25% 7.11%
1992 1.00 .046 (.046) 1.00 4.72 188,846 0.25 4.69
1993 1.00 .033 (.033) 1.00 3.30 222,282 0.203 3.25
1994 1.00 .033 (.033) 1.00 3.35 218,254 0.153 3.24
1995 1.00 .053 (.053) 1.00 5.46 272,147 0.153 5.40
Franklin Late Day Money Market Portfolio:
1991 1.00 .070 (.070) 1.00 7.19 167,704 0.25 7.01
1992 1.00 .045 (.045) 1.00 4.58 43,300 0.25 4.58
1993 1.00 .031 (.031) 1.00 3.15 23,130 0.15 3.12
1994 1.00 .032 (.032) 1.00 3.20 60,299 0.15 3.17
1995 1.00 .051 (.051) 1.00 5.26 24,809 0.15 5.05
Franklin U.S. Government Securities Money Market Portfolio:
1991 $1.00 $.070 $(.070) $1.00 7.13% $373,371 0.25% 6.79%
1992 1.00 .045 (.045) 1.00 4.55 195,286 0.25 4.59
1993 1.00 .031 (.031) 1.00 3.18 310,382 0.193 3.12
1994 1.00 .032 (.032) 1.00 3.25 218,547 0.153 3.20
1995 1.00 .052 (.052) 1.00 5.32 334,830 0.153 5.26
Franklin U.S. Treasury Money Market Portfolio:
19921 1.00 .035 (.035) 1.00 3.59 194,223 0.02* 4.38*
1993 1.00 .031 (.031) 1.00 3.14 179,232 0.05 3.12
1994 1.00 .032 (.032) 1.00 3.23 195,135 0.05 3.17
1995 1.00 .051 (.051) 1.00 5.17 200,935 0.10 5.05
Franklin U.S. Government Agency Money Market Fund:
19942 1.00 .013 (.013) 1.00 1.312 5,065 0.40* 3.32*
1995 1.00 .051 (.051) 1.00 5.22 34,285 0.30 5.39
1For the period August 2, 1991 (effective date) to June 30, 1992.
2For the period February 8, 1994 (effective date) to June 30, 1994.
*Annualized
+Total return measures the change in value of an investment over the periods
indicated. It assumes reinvestment of dividends and capital gains,if any, at net
asset value and is not annualized.
3Includes the Funds' share of the Portfolios' allocated expenses.
4During the periods indicated, Advisers, the investment manager of the
Funds and Portfolios, agreed in advance to waive a portion of its
administration and management fees and made payments of other expenses
incurred by the Funds. Had such action not been taken, the ratios of
expenses to average net assets would have been as follows:
</TABLE>
Ratio of Expenses to
Average Net Assets
Money Market Portfolio:
1991...................................... 0.71%
1992...................................... 0.74
1993...................................... 0.49
1994...................................... 0.25
1995...................................... 0.24
Franklin Late Day Money Market Portfolio:
1991...................................... 0.63
1992...................................... 0.67
1993...................................... 0.77
1994...................................... 0.81
1995...................................... 0.75
Ratio of Expenses to
Average Net Assets
Franklin U.S. Government Securities
Money Market Portfolio:
1991...................................... 0.56%
1992...................................... 0.59
1993...................................... 0.45
1994...................................... 0.25
1995...................................... 0.23
Franklin U.S. Treasury Money Market Portfolio:
19921..................................... 0.31*
1993...................................... 0.35
1994...................................... 0.30
1995...................................... 0.30
Franklin U.S. Government Agency Money Market Fund:
19942..................................... 1.43*
1995...................................... 0.47
INSTITUTIONAL FIDUCIARY TRUST
Report of Independent Accountants
To the Shareholders and Board of Trustees
of Institutional Fiduciary Trust:
We have audited the accompanying statements of assets and liabilities of the
various funds comprising the Institutional Fiduciary Trust, including each
Fund's statements of investments in securities and net assets, as of June 30,
1995, the related statements of operations for the year then ended, and the
statements of changes in net assets and the financial highlights for each of the
periods indicated thereon. These financial statements and financial highlights
are the responsibility of the Trust's management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments held by the
custodian as of June 30, 1995. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
various funds comprising the Institutional Fiduciary Trust as of June 30, 1995,
the results of their operations for the year then ended, and the changes in
their net assets and the financial highlights for each of the periods indicated
thereon, in conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
San Francisco, California
August 4, 1995
THE MONEY MARKET PORTFOLIOS
Statement of Investments in Securities and Net Assets, June 30, 1995
<TABLE>
<CAPTION>
Face Value
Amount The Money Market Portfolio (Note 1)
a Short Term Investments 99.9%
Bank Notes6.1%
<S> <C> <C>
$ 40,000,000 Abbey National Treasury Services, 6.063%, 11/24/95 .......................... $ 40,000,000
10,000,000 NBD Bank, 6.20%, 10/16/95.................................................... 9,999,372
20,000,000 Wachovia Bank, North Carolina Branch, 5.80%, 08/30/95........................ 20,000,000
10,000,000 Westdeutsche Landesbank, New York Branch, 6.14%, 09/01/95.................... 10,000,169
-------------
Total Bank Notes (Cost $79,999,541) ......................................... 79,999,541
-------------
Certificates of Deposit15.3%
10,000,000 Banque Nationale de Paris, New York Branch, 6.11%, 08/03/95 ................. 10,000,053
35,000,000 Commerzbank AG, New York Branch, 5.78% - 6.19%, 09/06/95 - 09/26/95 ......... 34,999,371
10,000,000 Lloyds Bank Plc, New York Branch, 5.94%, 09/18/95 ........................... 10,001,452
60,000,000 National Westminster Bank, New York Branch, 6.09% - 6.22%, 09/22/95 - 11/08/95 60,004,040
10,000,000 Rabobank Nederland NV, New York Branch, 6.28%, 10/10/95 ..................... 10,002,228
55,000,000 Societe Generale, New York Branch, 5.94% - 6.03%, 08/01/95 - 09/05/95 ....... 55,000,369
20,000,000 Swiss Bank Corp, 5.80%, 08/07/95 ............................................ 19,997,926
-------------
Total Certificates of Deposit (Cost $200,005,439)............................ 200,005,439
-------------
Commercial Paper 60.7%
20,000,000 ANZ (DE), Inc., 5.86%, 09/13/95 ............................................. 19,759,089
40,000,000 American Express Credit Corp., 5.85% - 5.93%, 08/15/95 - 08/28/95 ........... 39,663,250
25,000,000 Ameritech Corp., 5.70%, 02/26/95 ............................................ 24,050,000
55,000,000 Associates Corp. of North America, 5.96% - 6.07%, 07/26/95 - 08/10/95 ....... 54,671,511
60,000,000 AT&T Corp., 5.77% - 6.20%, 07/11/95 - 09/25/95 .............................. 59,497,800
20,000,000 Bank of Nova Scotia., 5.78%, 09/27/95 ....................................... 19,717,422
20,000,000 Campbell Soup Co., 5.92%, 02/02/96 .......................................... 19,289,600
20,000,000 Canadian Imperial Holdings, Inc., 5.96%, 07/20/95 ........................... 19,937,089
15,000,000 Cargill, Inc., 5.86%, 09/11/95 .............................................. 14,824,200
20,000,000 Cheltenham & Gloucester Building Society, 5.80%, 09/29/95 ................... 19,710,000
13,200,000 CIESCO L.P., 5.77%, 10/06/95 ................................................ 12,994,780
20,000,000 Commerzbank U.S. Finance Inc., 5.77%, 10/02/95 .............................. 19,701,883
55,000,000 Den Danske Corp. Inc., 5.78% - 6.06%, 08/14/95 - 09/28/95 ................... 54,435,661
60,000,000 General Electric Capital Corp., 5.70% - 6.21%, 07/07/95 - 08/31/95 .......... 59,753,389
25,000,000 Halifax Building Society, 5.85%, 09/15/95 ................................... 24,691,250
40,000,000 Kingdom of Sweden, 6.02% - 6.26%, 08/04/95 - 09/18/95 ....................... 39,617,544
20,000,000 MetLife Funding, Inc., 5.90%, 08/24/95 ...................................... 19,823,000
45,000,000 National Rural Utilities Cooperative Finance Corp., 5.69% - 5.94%,
08/16/95 - 10/26/95 ....................................................... 44,419,140
20,000,000 Pepsico Inc., 5.93%, 07/28/95 ............................................... 19,911,050
15,000,000 Province of Alberta, 6.29%, 08/02/95 ........................................ 14,916,134
40,000,000 Prudential Funding Corp., 6.06% - 6.21%, 07/12/95 - 10/16/95 ................ 39,601,817
20,000,000 Smithkline Beecham Corp., 5.75%, 02/02/96 ................................... 19,310,000
Commercial Paper (cont.)
$ 58,000,000 Svenska Handelsbanken, Inc., 5.71% - 6.30%, 07/27/95 - 09/14/95 ............. $ 57,552,377
20,000,000 Treasury Corp. of New South Wales, 5.95%, 07/21/95 .......................... 19,933,889
55,000,000 Westpac Capital Corp., 5.60% - 6.30%, 07/06/95 - 10/05/95 .................. 54,649,472
-------------
Total Commercial Paper (Cost $792,431,347)................................... 792,431,347
-------------
Medium Term Notes1.6%
20,000,000 Merrill Lynch & Co., Inc., variable rate note, 6.28%, 10/11/95 (Cost $20,000,000) 20,000,000
-------------
Total Investments before Repurchase Agreements
(Cost $1,092,436,327)........................................................ 1,092,436,327
-------------
b Receivables from Repurchase Agreements16.2%
89,980,000 Chase Securities, Inc., 6.125%, 07/03/95 (Maturity Value $90,045,938)
Collateral: U.S. Treasury Notes, 7.50%, 12/31/96 ............................ 90,000,000
6,391 c J.P. Morgan Securities, Inc., 6.61%, 07/03/95 (Maturity Value $6,394)........ 6,391
121,570,000 J.P. Morgan Securities, Inc., 5.80%, 07/03/95 (Maturity Value $121,628,759)
Collateral: U.S. Treasury Bills, 07/06/95 - 05/30/96
U.S. Treasury Notes, 5.63%, 06/30/97 ............................. 121,570,000
-------------
Total Receivables from Repurchase Agreements (Cost $211,576,391 ) ............ 211,576,391
-------------
Total Investments (Cost $1,304,012,718)99.9% ........................... 1,304,012,718
Others Assets and Liabilities, Net.1%............................ ...... 1,561,695
-------------
Net Assets 100.0% ............................................................ $1,305,574,413
=============
At June 30, 1995, there was no unrealized appreciation or depreciation for
financial statement or income tax purposes.
aCertain short-term securities are traded on a discount basis; the rates shown
are the discount rates at the time of purchase by the Fund. Other securities
bear interest at the rates shown, payable at fixed dates or upon maturity.
bFace amount for repurchase agreements is for the underlying collateral.
cSee Note 1(f) regarding sweep repurchase agreement.
The accompanying notes are an integral part of these financial statements.
THE MONEY MARKET PORTFOLIOS
Statement of Investments in Securities and Net Assets, June 30, 1995
Face Value
Amount The U.S. Government Securities Money Market Portfolio (Note 1)
a Short Term Government Securities100%...........................................
Government Securities24.0%
$116,000,000 U.S. Treasury Bills, 5.26% - 6.16%, 07/27/95 - 12/21/95 (Cost $ 113,909,415) .. $113,909,415
--------------
b Receivables from Repurchase Agreements76.1%
19,563,000 Barclays de Zoete Wedd Securities, Inc., New York, 5.90%, 07/03/95
(Maturity Value $20,009,833) Collateral: U.S. Treasury Notes, 7.875%, 02/15/96 ................ 20,000,000
99,370,000 Chase Securities, Inc., 6.125%, 07/03/95 (Maturity Value $100,051,042)
Collateral: U.S. Treasury Notes, 6.625%, 03/31/97.............................................. 100,000,000
19,760,000 Citicorp Securities, Inc., 6.125%, 07/03/95 (Maturity Value $20,010,208)
Collateral: U.S. Treasury Notes, 6.875%, 03/31/97.............................................. 20,000,000
19,880,000 Fuji Securities, Inc., 6.10%, 07/03/95 (Maturity Value $20,010,167)
Collateral: U.S. Treasury Notes, 7.625%, 04/30/96 ............................................. 20,000,000
18,990,000 Lehman Government Securities, Inc., 6.21%, 07/03/95 (Maturity Value $20,010,350)
Collateral: U.S. Treasury Notes, 8.875%, 11/15/97.............................................. 20,000,000
101,200,000 J.P. Morgan Securities, Inc., 5.80%, 07/03/95 (Maturity Value $101,248,913)
Collateral: U.S. Treasury Notes, 6.125%, 05/31/97.............................................. 101,200,000
8,121 c J.P. Morgan Securities, Inc., 5.36%, 07/03/95 (Maturity Value $8,124)........................... 8,121
20,195,000 Morgan Stanley & Co., Inc., 6.00%, 07/03/95 (Maturity Value $20,010,000)
Collateral: U.S. Treasury Notes, 6.00%, 10/15/99............................................... 20,000,000
19,690,000 Nomura Securities International, Inc., 6.125%, 07/03/95 (Maturity Value $20,010,208)
Collateral: U.S. Treasury Notes, 6.75%, 02/28/97............................................... 20,000,000
21,202,000 Sanwa Securities (USA) Co., L.P., 5.95%, 07/03/95 (Maturity Value $20,009,917)
Collateral: U.S. Treasury Notes, 03/07/96...................................................... 20,000,000
20,000,000 UBS Securities, Inc., 6.10%, 07/03/95 (Maturity Value $20,010,167)
Collateral: U.S. Treasury Notes, 6.50%, 04/30/97............................................... 20,000,000
Total Receivables from Repurchase Agreements (Cost $361,208,121)............................... 361,208,121
-------------
Total Investments (Cost $475,117,536)100.1%..................................................... 475,117,536
Liabilities in Excess of Other Assets, Net(.1)%................................................. (463,150)
-------------
Net Assets100.0%................................................................................ $474,654,386
=============
</TABLE>
At June 30, 1995, there was no unrealized appreciation or depreciation for
financial statement or income tax purposes.
aCertain short-term securities are traded on a discount basis; the rates shown
are the discount rates at the time of purchase by the Fund. Other securities
bear interest at the rates shown, payable at fixed dates or upon maturity.
bFace amount for repurchase agreements is for the underlying collateral.
cSee Note 1(f) regarding sweep repurchase agreement.
The accompanying notes are an integral part of these financial statements.
THE MONEY MARKET PORTFOLIOS
Financial Statements
Statements of Assets and Liabilities
June 30, 1995
The The U.S.
Money Government
Market Securities Money
Portfolio Market Portfolio
----------- -----------
Assets:
Investments in
securities, at value
and cost $1,092,436,327 $113,909,415
Receivables from
repurchase agree-
ments, at value and
cost 211,576,391 361,208,121
Receivables:
Interest 2,434,443 60,545
From affiliates 7,934 9,645
----------- -----------
Total assets 1,306,455,095 475,187,726
----------- -----------
Liabilities:
Payables:
Capital shares
repurchased 554,979 461,622
Management fees 308,405 64,872
Distributions to
shareholders 9,133 410
Accrued expenses and
other liabilities 8,165 6,436
----------- -----------
Total liabilities 880,682 533,340
----------- -----------
Net assets, at value $1,305,574,413 $474,654,386
=========== ===========
Shares outstanding 1,305,574,413 474,654,386
=========== ===========
Net asset value
per share $1.00 $1.00
=========== ===========
Statements of Operations
for the year ended June 30, 1995
The The U.S.
Money Government
Market Securities Money
Portfolio Market Portfolio
--------- -----------
Investment income:
Interest $67,765,165 $22,867,808
--------- -----------
Expenses:
Management fees, net
(Note 5) 1,730,028 581,495
Reports to shareholders 33,892 12,653
Custodian fees 32,238 25,590
Professional fees 11,920 6,084
Trustees' fees and
expenses 7,224 2,953
Other 8,786 4,419
--------- -----------
Total expenses 1,824,088 633,194
--------- -----------
Net investment
income 65,941,077 22,234,614
--------- -----------
Net realized gain
on investments 1,356 392
--------- -----------
Net increase in net assets
resulting from operations $65,942,433 $22,235,006
========= ===========
The accompanying notes are an integral part of these financial statements.
THE MONEY MARKET PORTFOLIOS
Financial Statements (cont.)
Statements of Changes in Net Assets
for the years ended June 30, 1995 and 1994
<TABLE>
<CAPTION>
The U.S. Government Securities
The Money Market Portfolio Money Market Portfolio
------------------------ -----------------------
1995 1994 1995 1994
------------ ----------- ----------- -----------
Increase (decrease) in net assets:
Operations:
<S> <C> <C> <C> <C>
Net investment income.......................... $ 65,941,077 $ 9,998,562 $ 22,234,614 $ 7,622,616
Net realized gain (loss) from security
transactions................................... 1,356 (5,146) 392 350
------------ ----------- ----------- -----------
Net increase in net assets resulting from
operations..................................... 65,942,433 9,993,416 22,235,006 7,622,966
Distributions to shareholders from undistributed
net investment income.......................... (65,942,433)d (9,993,416)c (22,235,006)b (7,622,966)a
Increase (decrease) in net assets from capital
share transactions (Notes 2 and 5)............. 1,086,385,190 (3,168,832) 256,106,321 (91,771,434)
------------ ----------- ----------- -----------
Net increase (decrease) in net assets........... 1,086,385,190 (3,168,832) 256,106,321 (91,771,434)
Net assets (there is no undistributed net invest-
ment income at beginning or end of the year):
Beginning of year............................... 219,189,223 222,358,055 218,548,065 310,319,499
------------ ----------- ----------- -----------
End of year..................................... $1,305,574,413 $219,189,223 $474,654,386 $218,548,065
============ =========== =========== ===========
aDistributions were increased by net realized gain from security transactions of $350.
bDistributions were increased by net realized gain from security transactions of $392.
cDistributions were decreased by net realized loss from security transactions of $5,146.
dDistributions were increased by net realized gain from security transactions of $1,356.
</TABLE>
The accompanying notes are an integral part of these financial statements.
THE MONEY MARKET PORTFOLIOS
Notes to Financial Statements
1. SIGNIFICANT ACCOUNTING POLICIES
The Money Market Portfolios (the Money Market) is a no load, open-end
diversified management investment company (mutual fund), registered under the
Investment Company Act of 1940, as amended. The Money Market has two portfolios
(the Portfolios) consisting of The Money Market Portfolio and The U.S.
Government Securities Money Market Portfolio. Each of the Portfolios issues a
separate series of shares and maintains a totally separate and distinct
investment portfolio. The shares of the Money Market are issued in private
placements and are thus exempt from registration under the Securities Act of
1933.
The following is a summary of significant accounting policies consistently
followed by the Portfolios in the preparation of their financial statements. The
policies are in conformity with generally accepted accounting principles for
investment companies.
a. Security Valuation:
Portfolio securities are valued at amortized cost, which approximates value.
Each of the Portfolios must maintain a dollar weighted average maturity of 90
days or less and only purchase instruments having remaining maturities of 397
days or less. If a Portfolio has a remaining weighted average maturity of
greater than 90 days, the Portfolio will be stated at value based on recorded
closing sales on a national securities exchange or, in the absence of a recorded
sale, within the range of the most recent quoted bid and ask prices. The
trustees have established procedures designed to stabilize, to the extent
reasonably possible, each Portfolio's price per share as computed for the
purpose of sales and redemptions at $1.00.
b. Income Taxes:
The Money Market intends to continue to qualify for the tax treatment applicable
to regulated investment companies under the Internal Revenue Code and to make
the requisite distributions to its shareholders which will be sufficient to
relieve it from income and excise taxes. Therefore, no income tax provision is
required.
Each Portfolio is treated as a separate entity in the determination of
compliance with the Internal Revenue Code.
c. Security Transactions:
Security transactions are accounted for on the date the securities are purchased
or sold (trade date). Realized gains and losses on security transactions are
determined on the basis of specific identification for both financial statement
and income tax purposes.
d. Investment Income, Expenses and Distributions:
Net investment income includes income, calculated on an accrual basis,
amortization of original issue and market discount or premium (if any), and
estimated expenses which are accrued daily. The total available for
distributions is computed daily and includes the net investment income, plus or
minus any gains or losses on security transactions and changes in unrealized
portfolio appreciation or depreciation, (if any).
Distributions are normally declared for each day the New York Stock Exchange is
open for business, equal to the total available for distributions (as defined
above), and are payable to shareholders of record as of the close of business
that day. Such distributions are automatically reinvested monthly in additional
shares of the Portfolio at net asset value.
e. Expense Allocation:
Common expenses incurred by the Money Market are allocated among the Portfolios
based on the ratio of net assets of each Portfolio to the combined net assets.
In all other respects, expenses are charged to each Portfolio as incurred on a
specific identification basis.
1. SIGNIFICANT ACCOUNTING POLICIES (cont.)
f. Repurchase Agreements:
The Portfolios may enter into repurchase agreements with government securities
dealers recognized by the Federal Reserve Board and/or member banks of the
Federal Reserve System. In a repurchase agreement, the Portfolios purchase a
U.S. government security from a dealer or bank subject to an agreement to resell
it at a mutually agreed upon price and date. Such a transaction is accounted for
as a loan by the Portfolio to the seller, collateralized by the underlying
security. The transaction requires the initial collateralization of the seller's
obligation by U.S. government securities with market value, including accrued
interest, of at least 102% of the dollar amount invested by the Portfolio, with
the value of the underlying security marked to market daily to maintain coverage
of at least 100%. The collateral is delivered to the Portfolios' custodian and
held until resold to the dealer or bank. At June 30, 1995, all outstanding
repurchase agreements held by the Portfolios had been entered into on that date.
The Portfolios may enter into a sweep agreement with their custodian bank. In a
sweep, the excess cash in the Portfolios' direct deposit accounts at the end of
the day is invested overnight. The Money Market Portfolio's excess cash is
invested in a AAA rated time deposit of Morgan Guaranty Trust Company's Nassau
branch. The U.S. Government Securities Money Market Portfolio's excess cash is
invested in a U.S. government-backed repurchase agreement with Morgan Guaranty
of New York. Funds are returned to the Portfolios' direct deposit accounts as
the first transaction of the next business day.
2. TRUST SHARES
At June 30, 1995, there was an unlimited number of $.01 par value shares of
beneficial interest authorized, and paid-in capital aggregated as follows:
<TABLE>
<CAPTION>
The U.S. Government
The Money Securities Money
Market Portfolio Market Portfolio
----------- -------------
<S> <C> <C>
Paid-in capital............................................................... $1,305,574,413 $474,654,386
=========== =============
Transactions in the Portfolios' shares at $1.00 per share for the years ended June 30, 1995 and June 30, 1994 were as
follows:
The U.S. Government
The Money Securities Money
Market Portfolio Market Portfolio
------------ -------------
Year ended June 30, 1995
Shares sold................................................................. $ 2,811,245,134 $ 2,270,754,653
Shares issued in reinvestment of distributions.............................. 65,932,187 22,235,271
Shares redeemed............................................................. (2,923,489,920) (2,175,508,395)
Shares issued in connection with assets transfer (Note 5)................... 1,132,697,789 138,624,792
------------ -------------
Net increase................................................................ $ 1,086,385,190 $ 256,106,321
============ =============
Year ended June 30, 1994
Shares sold................................................................. $ 1,699,503,699 $ 2,476,681,838
Shares issued in reinvestment of distributions.............................. 9,993,345 7,620,764
Shares redeemed............................................................. (1,712,665,876) (2,576,074,036)
------------ -------------
Net decrease................................................................ $ (3,168,832) $ (91,771,434)
============ =============
3. CAPITAL LOSS CARRYOVERS
At June 30, 1995, for tax purposes, The Money Market Portfolio had an
accumulated net realized loss of $5,146. For tax purposes, the aggregate cost of
securities are the same for financial statement purposes at June 30, 1995.
4. PURCHASES AND SALES OF SECURITIES
Aggregate purchases and sales/maturities of securities, including repurchase
agreements, for the year ended June 30, 1995 were as follows:
The U.S. Government
The Money Securities Money
Market Portfolio Market Portfolio
------------ -------------
Purchases................................................................... $83,142,429,080 $90,292,725,226
============ =============
Sales....................................................................... $83,111,797,358 $90,036,843,956
============ =============
</TABLE>
5. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Franklin Advisers, Inc., under the terms of a management agreement, provides
investment advice, administrative services, office space and facilities to the
Portfolios, and receives fees computed monthly on the average daily net assets
of the Portfolios during the month. The Money Market Portfolio and The U.S.
Government Securities Money Market Portfolio pay fees equal to an annualized
rate of 15/100 of 1% of their average daily net assets.
The terms of the agreement provide that annual aggregate expenses of the
Portfolios be limited to the extent necessary to comply with the limitations set
forth in the laws, regulations and administrative interpretations of the states
in which the Portfolios' shares are registered. The Portfolios' expenses did not
exceed these limitations; however, for the year ended June 30, 1995, Franklin
Advisers, Inc. agreed in advance to waive $93,609 and $53,499 of the management
fees for The Money Market Portfolio and The U.S. Government Securities Money
Market Portfolio, respectively.
Certain officers and trustees of the Portfolios are also officers and/or
directors of Franklin Advisers, Inc. and Franklin/Templeton Investor Services,
Inc., all wholly-owned subsidiaries of Franklin Resources, Inc.
6. ASSETS TRANSFER
On August 1, 1994, the Franklin Money Fund and the Franklin Federal Money Fund
transferred substantially all of their net assets, respectively, into The Money
Market Portfolio and The U.S. Government Securities Money Market Portfolio. The
transfers were accompanied by a tax-free exchange of 1,132,697,789 capital
shares of The Money Market Portfolio for net assets valued at $1,132,697,789 of
the Franklin Money Fund and 138,624,792 capital shares of The U.S. Government
Securities Money Market Portfolio for net assets valued at $138,624,792 of the
Franklin Federal Money Fund.
As of June 30, 1995, the shares of The Money Market Portfolio were owned by the
following funds:
<TABLE>
<CAPTION>
Percentage of
Shares Outstanding Shares
---------- ------------
<S> <C> <C>
Franklin Money Fund............................................................. 1,018,691,315 78.03%
Institutional Fiduciary Trust - Money Market Portfolio.......................... 272,146,783 20.84%
Institutional Fiduciary Trust - Franklin Cash Reserves Fund..................... 14,585,078 1.12%
Franklin Templeton Money Fund Trust - Franklin Templeton Money Fund II.......... 151,237 .01%
6. ASSETS TRANSFER (cont.)
As of June 30, 1995, the shares of The U.S. Government Securities Money Market
Portfolio were owned by the following funds:
Percentage of
Shares Outstanding Shares
--------- ------------
Institutional Fiduciary Trust-Franklin U.S. Government Securities Money Market Portfolio 334,830,412 70.54%
Franklin Federal Money Fund.............................................................. 139,823,974 29.46%
7. FINANCIAL HIGHLIGHTS
Selected data for each share of beneficial interest outstanding throughout the
period are as follows:
Per Share Operating Performance Ratios/Supplemental Data
------------------------------------ ---------------------------
Net Asset Distributions Net Assets Ratio of Ratio of
Values at Net From Net Net Asset at End Expenses Net Income
Year Ended Beginning Investment Investment Values at Total of Period to Average to Average
June 30 of Year Income Income End of Year Return++ (in 000's) Net Assets+ Net Assets
The Money Market Portfolio
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1993* $1.00 $0.027 $(0.027) $1.00 2.92%** $ 222,358 0.15%** 3.18%**
1994 1.00 0.033 (0.033) 1.00 3.33 219,189 0.15 3.25
1995 1.00 0.053 (0.053) 1.00 5.46 1,305,574 0.15 5.42
The U.S. Government Securities Money Market Portfolio
1993* 1.00 0.021 (0.021) 1.00 2.27** 310,319 0.15** 3.05**
1994 1.00 0.032 (0.032) 1.00 3.25 218,548 0.15 3.20
1995 1.00 0.052 (0.052) 1.00 5.32 474,654 0.15 5.25
*July 28, 1992 (Effective date of registration) to June 30, 1993.
**Annualized
++Total return measures the change in value of an investment over the periods
indicated. It assumes reinvestment of dividends and capital gains, if any, at
net asset value and is not annualized.
+During the period indicated, the Manager agreed to waive in advance a portion
of its management fees of the Portfolios. Had such action not been taken, the
ratios of expenses to average net assets would have been as follows.
Ratio of Expenses to
Average Net Assets
-----------
The Money Market Portfolio
<S> <C>
1993*...................................... .17%**
1994....................................... .17
1995....................................... .16
The U.S. Government Securities
Money Market Portfolio
1993*...................................... .18%**
1994....................................... .17
1995....................................... .16
</TABLE>
THE MONEY MARKET PORTFOLIOS
Report of Independent Accountants
To the Shareholders and Board of Trustees
The Money Market Portfolios
We have audited the accompanying statements of assets and liabilities of the two
portfolios comprising The Money Market Portfolios, including each Portfolio's
statement of investments in securities and net assets, as of June 30, 1995, and
the related statements of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended, and
the financial highlights for each of the three years in the period then ended.
These financial statements and financial highlights are the responsibility of
the Portfolios' management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of June
30, 1995 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
two Portfolios comprising The Money Market Portfolios as of June 30, 1995, the
results of their operations for the year then ended, the changes in their net
assets for each of the two years in the period then ended and the financial
highlights for the period then ended in conformity with generally accepted
accounting principles.
COOPERS & LYBRAND L.L.P.
San Francisco, California
August 4, 1995
To ensure the highest quality of service, telephone calls to or from our service
departments may be monitored, recorded and accessed. These calls can be
determined by the presence of a regular beeping tone.
IFT Money Market Funds
APPENDIX
DESCRIPTION OF GRAPHIC MATERIAL OMITTED FROM EDGAR FILING
(PURSUANT TO ITEM 304 (a) of REGULATION S-T)
GRAPHIC MATERIAL (1)
This chart shows in pie chart format the fund's securities breakdown by security
type as a percentage of the fund's total net assets.
<TABLE>
<CAPTION>
Portfolio Composition on 6/30/95
<S> <C>
Bank Notes 6.1%
Repurchase Agreements 16.2%
Medium Term Notes 1.6%
Certificates of Deposit 15.3%
Other .1%
Commercial Paper 60.7%
</TABLE>
GRAPHIC MATERIAL(2)
The following line graph hypothetically compares the 7-day yields of Franklin's
IFT Money Market Portfolio to that of Donoghue's First Tier Institutional-Only,
from 6/30/94 to 6/30/95.
<TABLE>
<CAPTION>
Date Franklin Donoghue's
<S> <C> <C>
6/28/94 4.04% 3.95%
7/5/94 4.06% 4.01%
7/12/94 4.07% 4.05%
7/19/94 4.11% 4.07%
7/26/94 4.19% 4.11%
8/2/94 4.23% 4.14%
8/9/94 4.33% 4.14%
8/16/94 4.34% 4.17%
8/23/94 4.43% 4.33%
8/30/94 4.48% 4.39%
9/6/94 4.51% 4.43%
9/13/94 4.56% 4.45%
9/20/94 4.60% 4.48%
9/27/94 4.61% 4.52%
10/4/94 4.63% 4.58%
10/11/94 4.71% 4.60%
10/18/94 4.75% 4.62%
10/25/94 4.79% 4.65%
11/1/94 4.83% 4.70%
11/8/94 4.85% 4.70%
11/15/94 4.94% 4.80%
11/22/94 5.26% 5.06%
11/29/94 5.33% 5.15%
12/6/94 5.33% 5.22%
12/13/94 5.37% 5.30%
12/20/94 5.42% 5.37%
12/27/94 5.52% 5.43%
1/3/95 5.68% 5.52%
1/10/95 5.61% 5.50%
1/17/95 5.57% 5.50%
1/24/95 5.62% 5.50%
1/31/95 5.65% 5.56%
2/7/95 5.87% 5.70%
2/14/95 5.96% 5.75%
2/21/95 5.99% 5.81%
2/28/95 6.02% 5.81%
3/7/95 6.02% 5.80%
3/14/95 6.05% 5.81%
3/21/95 6.04% 5.82%
3/28/95 6.02% 5.85%
4/4/95 6.09% 5.88%
4/11/95 6.01% 5.82%
4/18/95 6.01% 5.83%
4/25/95 5.94% 5.81%
5/2/95 6.03% 5.83%
5/9/95 6.04% 5.81%
5/16/95 6.05% 5.81%
5/23/95 6.04% 5.79%
5/30/95 6.02% 5.80%
6/6/95 6.03% 5.78%
6/13/95 5.93% 5.77%
6/20/95 5.98% 5.77%
6/27/95 5.97% 5.75%
</TABLE>
GRAPHIC MATERIAL (3)
This chart shows in pie chart format the fund's securities breakdown by security
type as a percentage of the fund's total net assets.
<TABLE>
<CAPTION>
Portfolio Composition on 6/30/95
<S> <C>
Treasuries 13.0%
Repurchase Agreements 87.0%
</TABLE>
GRAPHIC MATERIAL(4)
The following line graph hypothetically compares the 7-day yields of Franklin
Late Day Money Market Portfolio to that of Donoghue's Government-Only
Institutional-Only, from 6/30/94 to 6/30/95.
<TABLE>
<CAPTION>
Date Franklin Donoghue's
<S> <C> <C>
6/28/94 3.93% 3.79%
7/5/94 4.01% 3.85%
7/12/94 4.16% 3.91%
7/19/94 3.98% 3.92%
7/26/94 4.00% 3.94%
8/2/94 4.07% 3.97%
8/9/94 4.04% 4.00%
8/16/94 4.09% 4.04%
8/23/94 4.46% 4.22%
8/30/94 4.53% 4.26%
9/6/94 4.45% 4.29%
9/13/94 4.57% 4.31%
9/20/94 4.52% 4.33%
9/27/94 4.48% 4.37%
10/4/94 4.56% 4.43%
10/11/94 4.52% 4.45%
10/18/94 4.48% 4.44%
10/25/94 4.50% 4.48%
11/1/94 4.52% 4.53%
11/8/94 4.51% 4.52%
11/15/94 4.68% 4.62%
11/22/94 5.28% 4.95%
11/29/94 5.37% 5.01%
12/6/94 5.35% 5.06%
12/13/94 5.24% 5.09%
12/20/94 5.27% 5.15%
12/27/94 5.40% 5.23%
1/3/95 5.35% 5.28%
1/10/95 5.36% 5.28%
1/17/95 5.19% 5.24%
1/24/95 5.18% 5.24%
1/31/95 5.26% 5.31%
2/7/95 5.57% 5.49%
2/14/95 5.76% 5.54%
2/21/95 5.78% 5.60%
2/28/95 5.79% 5.61%
3/7/95 5.79% 5.61%
3/14/95 5.77% 5.62%
3/21/95 5.71% 5.64%
3/28/95 5.76% 5.67%
4/4/95 5.91% 5.73%
4/11/95 5.79% 5.66%
4/18/95 5.85% 5.67%
4/25/95 5.76% 5.62%
5/2/95 5.82% 5.66%
5/9/95 5.75% 5.64%
5/16/95 5.81% 5.66%
5/23/95 5.76% 5.64%
5/30/95 5.80% 5.64%
6/6/95 5.80% 5.64%
6/13/95 5.81% 5.64%
6/20/95 5.82% 5.64%
6/27/95 5.75% 5.60%
</TABLE>
GRAPHIC MATERIAL (5)
This chart shows in pie chart format the fund's securities breakdown by
security type as a percentage of the fund's total net assets.
<TABLE>
<CAPTION>
Portfolio Composition on 6/30/95
<S> <C>
Treasuries 24.0%
Repurchase Agreements 76.0%
</TABLE>
GRAPHIC MATERIAL(6)
The following line graph hypothetically compares the 7-day yields of Franklin
U.S. Government Securities Money Market Portfolio to that of Donoghue's
Government-Only Institutional-Only, from 6/30/94 to 6/30/95.
<TABLE>
<CAPTION>
Date Franklin Donoghue's
<S> <C> <C>
6/28/94 3.90% 3.79%
7/5/94 4.04% 3.85%
7/12/94 4.04% 3.91%
7/19/94 3.96% 3.92%
7/26/94 4.04% 3.94%
8/2/94 4.07% 3.97%
8/9/94 4.07% 4.00%
8/16/94 4.07% 4.04%
8/23/94 4.46% 4.22%
8/30/94 4.52% 4.26%
9/6/94 4.52% 4.29%
9/13/94 4.54% 4.31%
9/20/94 4.55% 4.33%
9/27/94 4.53% 4.37%
10/4/94 4.57% 4.43%
10/11/94 4.57% 4.45%
10/18/94 4.49% 4.44%
10/25/94 4.57% 4.48%
11/1/94 4.62% 4.53%
11/8/94 4.60% 4.52%
11/15/94 4.74% 4.62%
11/22/94 5.31% 4.95%
11/29/94 5.38% 5.01%
12/6/94 5.39% 5.06%
12/13/94 5.29% 5.09%
12/20/94 5.31% 5.15%
12/27/94 5.46% 5.23%
1/3/95 5.52% 5.28%
1/10/95 5.45% 5.28%
1/17/95 5.28% 5.24%
1/24/95 5.33% 5.24%
1/31/95 5.40% 5.31%
2/7/95 5.81% 5.49%
2/14/95 5.75% 5.54%
2/21/95 5.84% 5.60%
2/28/95 5.82% 5.61%
3/7/95 5.82% 5.61%
3/14/95 5.81% 5.62%
3/21/95 5.84% 5.64%
3/28/95 5.86% 5.67%
4/4/95 6.01% 5.73%
4/11/95 5.85% 5.66%
4/18/95 5.87% 5.67%
4/25/95 5.80% 5.62%
5/2/95 5.90% 5.66%
5/9/95 5.88% 5.64%
5/16/95 5.87% 5.66%
5/23/95 5.85% 5.64%
5/30/95 5.88% 5.64%
6/6/95 5.90% 5.64%
6/13/95 5.91% 5.64%
6/20/95 5.88% 5.64%
6/27/95 5.81% 5.60%
</TABLE>
GRAPHIC MATERIAL (7)
This chart shows in pie chart format the fund's securities breakdown by security
type as a percentage of the fund's total net assets.
<TABLE>
<CAPTION>
Portfolio Composition on 6/30/95
<S> <C>
Treasuries 100%
</TABLE>
GRAPHIC MATERIAL(8)
The following line graph hypothetically compares the 7-day yields of Franklin
U.S. Treasury Money Market Portfolio to that of Donoghue's Government-Only
Institutional-Only, from 6/30/94 to 6/30/95.
<TABLE>
<CAPTION>
Date Franklin Donoghue's
<S> <C> <C>
6/28/94 3.93% 3.79%
7/5/94 3.98% 3.85%
7/12/94 4.02% 3.91%
7/19/94 4.06% 3.92%
7/26/94 4.09% 3.94%
8/2/94 4.11% 3.97%
8/9/94 4.16% 4.00%
8/16/94 4.18% 4.04%
8/23/94 4.19% 4.22%
8/30/94 4.25% 4.26%
9/6/94 4.28% 4.29%
9/13/94 4.31% 4.31%
9/20/94 4.36% 4.33%
9/27/94 4.43% 4.37%
10/4/94 4.49% 4.43%
10/11/94 4.54% 4.45%
10/18/94 4.61% 4.44%
10/25/94 4.70% 4.48%
11/1/94 4.75% 4.53%
11/8/94 4.78% 4.52%
11/15/94 4.85% 4.62%
11/22/94 4.95% 4.95%
11/29/94 5.02% 5.01%
12/6/94 5.02% 5.06%
12/13/94 5.06% 5.09%
12/20/94 5.12% 5.15%
12/27/94 5.22% 5.23%
1/3/95 5.23% 5.28%
1/10/95 5.20% 5.28%
1/17/95 5.30% 5.24%
1/24/95 5.30% 5.24%
1/31/95 5.34% 5.31%
2/7/95 5.39% 5.49%
2/14/95 5.46% 5.54%
2/21/95 5.51% 5.60%
2/28/95 5.57% 5.61%
3/7/95 5.58% 5.61%
3/14/95 5.66% 5.62%
3/21/95 5.71% 5.64%
3/28/95 5.71% 5.67%
4/4/95 5.70% 5.73%
4/11/95 5.73% 5.66%
4/18/95 5.73% 5.67%
4/25/95 5.70% 5.62%
5/2/95 5.70% 5.66%
5/9/95 5.66% 5.64%
5/16/95 5.65% 5.66%
5/23/95 5.65% 5.64%
5/30/95 5.67% 5.64%
6/6/95 5.63% 5.64%
6/13/95 5.62% 5.64%
6/20/95 5.59% 5.64%
6/27/95 5.53% 5.60%
</TABLE>
GRAPHIC MATERIAL (9)
This chart shows in pie chart format the fund's securities breakdown by security
as a percentage of the fund's total net assets.
<TABLE>
<CAPTION>
Portfolio Composition on 6/30/95
<S> <C>
Federal Home Loan Bank 66.9%
Federal Farm Credit Bank 28.3%
Treasuries 4.8%
</TABLE>
GRAPHIC MATERIAL(10)
The following line graph hypothetically compares the 7-day yields of Franklin
U.S. U.S. Government Agency Money Market Fund to that of Donoghue's
Government-Only Institutional-Only, from 6/30/94 to 6/30/95.
<TABLE>
<CAPTION>
Date Franklin Donoghue's
<S> <C> <C>
6/28/94 3.90% 3.79%
7/5/94 3.89% 3.85%
7/12/94 4.06% 3.91%
7/19/94 4.07% 3.92%
7/26/94 4.07% 3.94%
8/2/94 4.07% 3.97%
8/9/94 3.99% 4.00%
8/16/94 4.06% 4.04%
8/23/94 4.19% 4.22%
8/30/94 4.31% 4.26%
9/6/94 4.33% 4.29%
9/13/94 4.33% 4.31%
9/20/94 4.34% 4.33%
9/27/94 4.40% 4.37%
10/4/94 4.45% 4.43%
10/11/94 4.49% 4.45%
10/18/94 4.61% 4.44%
10/25/94 4.64% 4.48%
11/1/94 4.68% 4.53%
11/8/94 4.79% 4.52%
11/15/94 4.80% 4.62%
11/22/94 4.94% 4.95%
11/29/94 5.02% 5.01%
12/6/94 5.02% 5.06%
12/13/94 5.03% 5.09%
12/20/94 5.16% 5.15%
12/27/94 5.29% 5.23%
1/3/95 5.39% 5.28%
1/10/95 5.47% 5.28%
1/17/95 5.51% 5.24%
1/24/95 5.50% 5.24%
1/31/95 5.53% 5.31%
2/7/95 5.65% 5.49%
2/14/95 5.70% 5.54%
2/21/95 5.74% 5.60%
2/28/95 5.74% 5.61%
3/7/95 5.74% 5.61%
3/14/95 5.77% 5.62%
3/21/95 5.76% 5.64%
3/28/95 5.78% 5.67%
4/4/95 5.75% 5.73%
4/11/95 5.76% 5.66%
4/18/95 5.75% 5.67%
4/25/95 5.76% 5.62%
5/2/95 5.74% 5.66%
5/9/95 5.73% 5.64%
5/16/95 5.71% 5.66%
5/23/95 5.71% 5.64%
5/30/95 5.70% 5.64%
6/6/95 5.69% 5.64%
6/13/95 5.67% 5.64%
6/20/95 5.65% 5.64%
6/27/95 5.64% 5.60%
</TABLE>
