INSTITUTIONAL
FIDUCIARY
TRUST
Semi-Annual Report
December 31, 1995
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
Franklin U.S. Government Agency
Money Market Fund
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. 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.
January 26, 1995
Dear Shareholder:
We are pleased to bring you the semi-annual report for Franklin's Institutional
Fiduciary Trust (the Trust), covering the period ended December 31, 1995.
The Trust was developed specifically to meet the needs of institutional
investors. Part of the $135 billion Franklin Templeton Group, the Trust consists
of eight separate and distinct series. This 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 Franklin U.S.
Government Agency Money Market Fund. Each portfolio in the Trust has a unique
composition designed to meet specific investor preferences.
After February 1995, the Federal Reserve Board increasingly relaxed monetary
policy, which led to a slight decline in short-term interest rates. Continued
sluggish economic growth only served to raise expectations of additional cuts,
and consequently, money market fund yields trended slightly lower during the
reporting period. Despite the changes in interest rates, our managers have
steadfastly adhered to a disciplined investment strategy, which enables them to
seek out attractive opportunities through a variety of market conditions. We
believe this approach benefits our shareholders in the long run, and we will
continue to employ this strategy going forward.
Thank you for your continued support of Franklin's Institutional Fiduciary
Trust. We look forward to serving your investment needs in the months and years
to come.
Sincerely,
Charles B. Johnson
Chairman of the Board
Overview of
the Economy
After seeing the slow growth of the first half of 1995, many feared that credit
was too restrictive and that the economy was headed for a recession. The Federal
Reserve Board appeared to concur, cutting the federal funds rate - the interest
rate banks charge each other for overnight loans - by 25 basis points during its
Federal Open Market Committee meeting in July. The economy's response was
stronger than expected, with U.S. Gross Domestic Product (GDP) rising to a 4.2%
annual growth rate in the third quarter. Not since 1994 had the economy achieved
such solid growth; however, it proved to be unsustainable.
Signs that the economy was losing steam accumulated in the fourth quarter. The
index of leading indicators declined steadily, while retail, home, and auto
sales were sluggish, consumer spending was weak, inventory levels remained high,
and manufacturing activity slowed. The Consumer Price Index and Producer Price
Index-two primary indicators of inflation - suggested that there was little
short-term threat from inflation. In response to the sluggish growth and
lower-than-anticipated inflation, the Federal Reserve once again cut the federal
funds rate by 25 basis points in December. Yet the easing surprised many veteran
observers of monetary policy who believed that the Federal Reserve would await a
federal budget compromise before lowering rates.
The economy continued to show signs of slowing as we entered the new year.
Retail sales during the holiday period, for example, were anemic at best. Fear
of unemployment as many corporations restructured, as well as residual credit
card debt, apparently played an important role in restraining consumer spending.
In addition to the stagnating economy, the political nature of the upcoming
presidential election year led some observers to predict that the Federal
Reserve would cut interest rates further, but there may be no action until the
battle over the budget is resolved.
Note: On January 31, 1996, the Federal Reserve moved to cut interest rates
following its Federal Open Market Committee meeting. The target federal funds
rate was lowered 25 basis points to 5.25%, and the discount rate - the interest
rate the district Federal Reserve banks charge member banks for short-term
liquidity needs was also lowered 25 basis points to 5.00%.
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
Funds at a Glance
December 31, 1995
<TABLE>
<CAPTION>
Franklin Franklin U.S. Franklin Franklin U.S.
Franklin Late Day Government U.S. Treasury Government
Money Market Money Market Securities Money Money Market Agency Money
Portfolio Portfolio Market Portfolio Portfolio Market Portfolio
Portfolios/Characteristics (#0140) (#0141) (#0142) (#0146)
<S> <C> <C> <C> <C> <C>
7-Day Current Yield1 5.59% 5.56% 5.52% 5.17% 5.20%
Avg. Maturity 46 days 4 days 6 days 56 days 39 days
Agencies X
Principal
Holdings2
Bas X
Cds X
CP X
Rps X X X
Treasuries X X X X X
</TABLE>
1. Yield reflects the interest income per share earned by the fund's investments
for the 7-day period, calculated as an annual percentage rate.
2. Each of the fund's or underlying portfolio's holdings will fluctuate as to
the mix of approved investments or maturities. U.S. government securities owned
by the funds or their underlying portfolios, or held under repurchase
agreements, but not shares of the funds, are guaranteed by the U.S. government,
its agencies or instrumentalities, as to the timely payment of principal and
interest.
Shares of the funds are not deposits or obligations of any bank or financial
institution. They are not insured or guaranteed by any such institution, the
FDIC, the U.S. government or any government agency, and involve investment
risks, including possible loss of the principal amount invested.
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), which has an investment objective identical to 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 Money Market Portfolio
Portfolio Composition as of December 31, 1995
GRAPHIC MATERIAL 1 OMITTED - SEE APPENDIX AT END OF DOCUMENT
The money market securities in which the Portfolio invests are among the highest
quality available. 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 maintains an average weighted maturity of
90 days or less, which is relatively short and allows the Portfolio to adjust
quickly to changing interest rates.
Through investing in a portfolio of high-quality, short-term securities, the
Fund can provide a high level of credit safety combined with a stable net asset
value.2 As a result, investors often use Franklin's IFT Money Market Portfolio
for assets held in fiduciary, advisory and custodial capacities. 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.3
Performance Summary
Falling interest rates were the primary reason for the decline in the 7-day
current yield of Franklin's IFT Money Market Portfolio, from 5.97% on June 30,
1995, to 5.59% on December 31, 1995.4 In the first half of 1995, as interest
rates began to drop, we lengthened the average maturity to lock in higher rates
for as long as possible. When interest rates declined further in the second half
of the year, we continued to invest in longer maturity money market securities
with attractive yields relative to the overnight federal funds rate. We
maintained a relatively long, 46-day weighted average maturity for the Fund on
December 31, 1995, as compared with 27 days on December 31, 1994, when interest
rates were higher.
Weekly 7-day yields for the reporting period are shown to the right. As you can
see from the chart, Franklin's IFT Money Market Portfolio outperformed the
IBC/Donoghue's Money Fund Averages/First-Tier Institutional-Only, yielding an
average of 17 basis points above the benchmark.5 Of course, past performance
cannot guarantee future results.
Franklin's IFT Money Market Porfolio
Weekly 7-Day Yields vs. IBC/Donoghue's
First-Tier Institutional-Only4,5
June 27, 1995 to December 26, 1995
GRAPHIC MATERIAL 2 OMITTED - SEE APPENDIX AT END OF DOCUMENT
Performance Figures
Period ended December 31, 1995
7-Day Current Yield:4 5.59%
7-Day Effective Yield:4 5.75%
Average Weighted Maturity: 46 days
1. U.S. government securities owned by the Portfolio or held under repurchase
agreement, but not shares of Franklin's IFT Money Market Portfolio, 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 any other 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 and effective 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.
Franklin Advisers, Inc., the Fund's administrator and manager of the underlying
portfolio, 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 0.20% per annum of average net assets. Without these reductions, the
Fund's current and effective 7-day yields for the period would have been 5.56%
and 5.71%, respectively. Franklin Advisers, Inc. may discontinue these
arrangements at any time, upon notice to the Fund's Board of Trustees.
5. Source: Money Fund Report(R), December 29,
1995, #1046. As of December 26, 1995, there were 118 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 Fund's portfolio composition as of December 31, 1995
is shown below.
GRAPHIC MATERIAL 3 OMITTED - 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 remain idle overnight or over a weekend. Wen 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 lateday convenience through a
portfolio emphasizing 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
Despite Federal Reserve action during the period, the Franklin Late Day Money
Market Portfolio's yield remained relatively stable. The Fund's 7-day current
yield on December 31, 1995 was 5.56%, which represented a 15 basis point decline
from its 5.71% yield on June 30, 1995.4
In the first half of 1995, as interest rates began to drop, we lengthened the
Fund's average maturity slightly when Treasury bills were attractive compared
with the overnight federal funds rate. During the second half of the year,
however, T-Bill rates declined significantly to the point where we felt that
they were relatively unattractive. With overnight rates remaining near the
federal funds rate of 5.75% during most of the reporting period, we found it
advantageous to reinvest a larger percentage of the Fund's assets in overnight
repurchase agreements, which have recently outperformed all segments of the
T-Bill yield curve. Owing to this asset reallocation, the Fund's average
maturity fell from 17 days on June 30, 1995, to 4 days on December 31, 1995.
Weekly 7-day yields for the reporting period are shown to the right. As you can
see from the chart, Franklin's Late Day Money Market Portfolio outperformed the
IBC/Donoghue's Money Fund Averages/Government-Only Institutional-Only, yielding
an average of 15 basis points above the benchmark.5 Of course, past performance
cannot guarantee future results.
Franklin Late Day Money Market Portfolio
Weekly 7-Day Yields vs. IBC/Donoghue's Government-Only, Institutional-Only4,5
June 27, 1995 to December 26, 1995
GRAPHIC MATERIAL 4 OMITTED - SEE APPENDIX AT END OF DOCUMENT
Performance Figures
Period ended December 31, 1995
7-Day Current Yield:4 5.56%
7-Day Effective Yield:4 5.72%
Average Weighted Maturity: 4 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 shares nor approval by Standard & Poor's. The
rating is subject to change.
4. Annualized and effective 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 0.20% per annum of average net assets. Without these
reductions, the Fund's current and effective 7-day yields for the period would
have been 4.80% and 4.91%, 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), December 29, 1995, #1046. As of December 26,
1995, there were 152 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 any other 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
Securities Money
Market Portfolio
The Franklin U.S. Government Securities Money Market Portfolio's investment
objective 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),
which has an investment objective identical to 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 Portfolio's
composition as of December 31, 1995 is shown below.
GRAPHIC MATERIAL 5 OMITTED - 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
Despite Federal Reserve action during the reporting period, the yield of the
Franklin U.S. Government Securities Money Market Portfolio remained relatively
stable. The Fund's 7-day current yield on December 31, 1995 was 5.52%, which
represents a 27 basis point decline from its 5.79% yield on June 30, 1995.4
In the first half of 1995, as interest rates began to drop, we lengthened the
Fund's average maturity slightly when Treasury bills were attractive compared
with the overnight federal funds rate. During the second half of the year,
however, Treasury bill rates declined significantly to the point where we felt
that they were relatively unattractive. With overnight rates remaining near the
federal funds rate of 5.75% during most of the reporting period, we found it
advantageous to reinvest a larger percentage of the Fund's assets in overnight
repurchase agreements, which have recently outperformed all segments of the
Treasury bill yield curve. Owing to this asset reallocation, the Fund's average
maturity fell from 31 days on June 30, 1995, to 6 days on December 31, 1995.4
Weekly 7-day yields for the reporting period are shown to the right. As you can
see form the chart, Franklin's U.S. Government Securities Money Market Portfolio
outperformed the IBC/Donogue's Money Market Fund Averages/Government-Only
Instituional-Only, yielding an average of 20 basis points above the benchmark5.
Of course, past performance cannot guarantee future results.
Franklin U.S. Government Securities
Money Market Portfolio
Weekly 7-Day Yields vs. IBC Donoghue's Government-Only,
Institutional-Only4,5 June 27, 1995 to December 26, 1995
GRAPHIC MATERIAL 6 OMITTED - SEE APPENDIX AT END OF DOCUMENT
Performance Figures
Period ended December 31, 1995
7-Day Current Yield:4 5.52%
7-Day Effective Yield:4 5.67%
Average Weighted Maturity: 6 days
1. U.S. government securities owned by the underlying Portfolio or held under
repurchase agreement, but not shares of the Franklin U.S. Government Securities
Money Market Portfolio, 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 and effective 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.
Franklin Advisers, Inc., the Fund's administrator and manager of the underlying
portfolio, 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 0.20% per annum of average net assets. Without these reductions, the
Fund's current and effective 7-day yields for the period would have been 5.48%
and 5.63%, respectively. Franklin Advisers, Inc. may discontinue these
arrangements at any time, upon notice to the Fund's Board of Trustees.
5. Source: Money Fund Report(R), December 29, 1995, #1046, IBC/Donoghue's Money
Fund Averages(TM)/Government-Only, Institutional-Only. As of December 26, 1995,
there were 152 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 any other 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 Fund's composition
as of December 31, 1995 is shown below.
GRAPHIC MATERIAL 7 OMITTED - 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 portfolio than is available in
a fully taxable money market account.3 Of course, all dividends paid out of U.S.
government obligation interest are 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
Falling interest rates were the primary reason for the decline in the 7-day
current yield of the Franklin U.S. Treasury Money Market Portfolio, from 5.52%
on June 30, 1995, to 5.17% on December 31, 1995.4 In the first half of 1995, as
interest rates began to drop, we lengthened the average maturity to lock in
higher rates for as long as possible. When interest rates declined further in
the second half of the year, we continued to invest in relatively longer
maturity Treasury securities with attractive yields relative to the overnight
federal funds rate. We maintained a relatively long, 56-day weighted average
maturity for the Fund on December 31, 1995.
The graph to the right illustrates how the 7-day current yield for Franklin's
U.S. Treasury Money Market Portfolio has performed versus IBC/Donoghue's Money
Fund Averages/Government-Only, Institutional-Only for the six-month period ended
December 26, 1995.5 Of course, past performance cannot guarantee future results.
Franklin U.S. Treasury Money Market Portfolio
Weekly 7-Day Yields vs. IBC/Donoghue's Government-Only, Institutional-Only4,5
June 27, 1995 to December 26, 1995
GRAPHIC MATERIAL 8 OMITTED - SEE APPENDIX AT END OF DOCUMENT
Performance Figures
Period ended December 31, 1995
7-Day Current Yield:4 5.17%
7-Day Effective Yield:4 5.31%
Average Weighted Maturity: 56 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-G 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 shares nor approval by Standard & Poor's. The Aaa
rating reflects Moody's assessment of the investment quality of shares in the
Fund, and factors in 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 perform-ance 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 and effective 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 0.20% per annum of average net assets. Without these
reductions, the Fund's current and effective 7-day yields for the period would
have been 5.06% and 5.19%, 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), December 29, 1995, #1046, IBC/Donoghue's Money
Fund Averages(TM)/Government-Only, Institutional-Only. As of December 26, 1995,
there were 152 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 any other 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 investment objective of the Franklin U.S. Government Agency Money Market
Fund is to seek capital preservation and liquidity, while seeking high current
income consistent with 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. Its composition as of December 31, 1995
is shown below.
GRAPHIC MATERIAL 9 OMITTED - 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 own
tax advisors for further information on specific state tax rules.
Performance Summary
Falling interest rates were the primary reason for the decline in the 7-day
current yield of the Franklin U.S. Government Agency Money Market Fund, from
5.62% on June 30, 1995, to 5.20% on December 31, 1995.4 In the first half of
1995, as interest rates began to drop, we lengthened the average maturity to
lock in higher rates for as long as possible. When interest rates declined
further in the second half of the year, we continued to invest in longer
maturity agency instruments with attractive yields relative to the overnight
federal funds rate. We maintained a relatively long, 39-day weighted average
maturity for the Fund on December 31, 1995.
The graph to the right illustrates how the 7-day current yield for Franklin's
U.S. Government Agency Money Market Fund has performed versus IBC/Donoghue's
Money Fund Averages/Government-Only, Institutional-Only for the six-month period
ended December 26, 1995.5 Of course, past performance cannot guarantee future
results.
Franklin U.S. Government Agency
Money Market Fund
Weekly 7-Day Yields vs. IBC/Donoghue's
Government-Only, Institutional-Only2,3
June 27, 1995 to December 26, 1995
GRAPHIC MATERIAL 10 OMITTED - SEE APPENDIX AT END OF DOCUMENT
Performance Figures
Period ended December 31, 1995
7-Day Current Yield:2 5.20%
7-Day Effective Yield:2 5.33%
Average Weighted Maturity: 39 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 and effective 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 0.45% per annum of average net assets. Without these
reductions, the Fund's current and effective 7-day yields for the period would
have been 5.16% and 5.29%, 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), December 29, 1995, #1046, IBC/Donoghue's Money
Fund Averages(TM)/Government-Only, Institutional-Only. As of December 26, 1995,
there were 152 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 any other 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.
<TABLE>
<CAPTION>
INSTITUTIONAL FIDUCIARY TRUST
Statement of Investments in Securities and Net Assets, December 31, 1995 (unaudited)
Value
Shares Money Market Portfolio (Note 1)
Mutual Funds100.0%
<S> <C> <C>
258,982,647 The Money Market Portfolio (Note 1) ............................................................. $258,982,647
---------------
Total Investments (Cost $258,982,647) 100.0% ......................................... 258,982,647
Liabilities in Excess of Other Assets, Net ............................................ (26,339)
---------------
Net Assets 100.0% .................................................................... $258,956,308
===============
At December 31, 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, December 31, 1995 (unaudited)
Face Value
Amount Franklin Late Day Money Market Portfolio (Note 1)
aShort Term Investments101.9%
Government Securities 3.0%
<S> <C> <C>
$600,000 U.S. Treasury Bills, 6.27%, 01/11/96 (Cost $599,116) ............................................ $ 599,116
---------------
bReceivables from Repurchase Agreements 98.9%
680,000 BA Securities, Inc., 5.75%, 01/02/96, (Maturity Value $700,447)
Collateral: U.S. Treasury Notes, 7.50%, 12/31/96 ............................................... 700,000
663,000 Barclays de Zoete Wedd Securities, Inc., New York, 5.50%, 01/02/96, (Maturity Value $700,428)
Collateral: U.S. Treasury Notes, 7.125%, 09/30/99 .............................................. 700,000
3,480,000 Bear Stearns & Co., Inc., 5.80%, 01/02/96, (Maturity Value $3,502,256)
Collateral: U.S. Treasury Notes, 6.50%, 04/30/97 ............................................... 3,500,000
675,000 Chase Securities, Inc., 5.55%, 01/02/96, (Maturity Value $700,432)
Collateral: U.S. Treasury Notes, 7.125%, 10/15/98 .............................................. 700,000
680,000 Citicorp Securities, Inc., 5.85%, 01/02/96, (Maturity Value $700,455)
Collateral: U.S. Treasury Notes, 6.125%, 07/31/00 .............................................. 700,000
685,000 Fuji Securities, Inc., 5.90%, 01/02/96, (Maturity Value $700,459)
Collateral: U.S. Treasury Notes, 6.50%, 08/15/97 ............................................... 700,000
640,000 Lehman Brothers, Inc., 5.85%, 01/02/96, (Maturity Value $700,455)
Collateral: U.S. Treasury Notes, 7.75%, 01/31/00 ............................................... 700,000
705,000 Merrill Lynch Government Securities, Inc., 5.50%, 01/02/96, (Maturity Value $700,428)
Collateral: U.S. Treasury Notes, 5.625%, 10/31/97 .............................................. 700,000
7,129 cJ.P. Morgan Securities, Inc., 3.98%, 01/02/96, (Maturity Value $7,126) ......................... 7,123
8,380,000 J.P. Morgan Securities, Inc., 5.70%, 01/02/96, (Maturity Value $8,385,307)
Collateral: U.S. Treasury Bills, 08/22/96 ...................................................... 8,380,000
675,000 Morgan Stanley & Co., Inc., 5.87%, 01/02/96, (Maturity Value $700,457)
Collateral: U.S. Treasury Notes, 7.125%, 10/15/98 .............................................. 700,000
695,000 Nomura Securities International, Inc., 5.85%, 01/02/96, (Maturity Value $700,455)
Collateral: U.S. Treasury Notes, 5.50%, 07/31/97 ............................................... 700,000
645,000 SBC Capital Markets, Inc., 5.85%, 01/02/96, (Maturity Value $700,455)
Collateral: U.S. Treasury Notes, 8.00%, 01/15/99 ............................................... 700,000
695,000 UBS Securities, Inc., 5.80%, 01/02/96, (Maturity Value $700,451)
Collateral: U.S. Treasury Notes, 5.625%, 01/31/98 .............................................. 700,000
---------------
Total Receivables from Repurchase Agreements (Cost $19,587,123) ........................... 19,587,123
---------------
Total Investments (Cost $20,186,239) 101.9% .......................................... 20,186,239
Liabilities in Excess of Other Assets, Net (1.9)% .................................... (381,603)
---------------
Net Assets 100.0% .................................................................... $19,804,636
===============
At December 31, 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, December 31, 1995 (unaudited)
Value
Shares Franklin U.S. Government Securities Money Market Portfolio (Note 1)
Mutual Funds100.0%
<S> <C> <C>
208,508,416 The U.S. Government Securities Money Market Portfolio (Note 1) ................................. $208,508,416
---------------
Total Investments (Cost $208,508,416) 100.0% ........................................ 208,508,416
Liabilities in Excess of Other Assets, Net ........................................... (3,865)
---------------
Net Assets 100.0% .................................................................... $208,504,551
===============
At December 31, 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, December 31, 1995 (unaudited)
Face Value
Amount Franklin U.S. Treasury Money Market Portfolio (Note 1)
aShort Term Investments100.3%
<S> <C> <C>
$ 9,070,000 U.S. Treasury Bills, 5.275%, 01/04/96 ......................................................... $ 9,066,013
20,425,000 U.S. Treasury Bills, 6.27%, 01/11/96 .......................................................... 20,395,000
14,540,000 U.S. Treasury Bills, 5.365%, 01/18/96 ......................................................... 14,503,861
14,700,000 U.S. Treasury Bills, 5.225%, 01/25/96 ......................................................... 14,647,227
9,000,000 U.S. Treasury Bills, 5.415%, 02/01/96 ......................................................... 8,958,602
18,500,000 U.S. Treasury Bills, 6.21%, 02/08/96 .......................................................... 18,396,972
19,620,000 U.S. Treasury Bills, 5.47%, 02/15/96 .......................................................... 19,488,976
12,770,000 U.S. Treasury Bills, 5.34%, 02/22/96 .......................................................... 12,674,148
17,130,000 U.S. Treasury Bills, 5.28%, 02/29/96 .......................................................... 16,984,552
18,970,000 U.S. Treasury Bills, 5.945%, 03/07/96 ......................................................... 18,791,132
10,950,000 U.S. Treasury Bills, 5.295%, 03/14/96 ......................................................... 10,836,862
10,000,000 U.S. Treasury Bills, 5.095%, 03/21/96 ......................................................... 9,886,778
6,540,000 U.S. Treasury Bills, 5.375%, 03/28/96 ......................................................... 6,460,837
3,000,000 U.S. Treasury Bills, 5.30%, 04/18/96 .......................................................... 2,952,300
3,000,000 U.S. Treasury Bills, 5.20%, 05/02/96 .......................................................... 2,947,133
3,000,000 U.S. Treasury Bills, 5.25%, 05/16/96 .......................................................... 2,940,500
3,000,000 U.S. Treasury Bills, 5.205%, 05/30/96 ......................................................... 2,934,875
3,000,000 U.S. Treasury Bills, 5.20%, 06/06/96 .......................................................... 2,931,966
3,000,000 U.S. Treasury Bills, 5.65%, 06/20/96 .......................................................... 2,927,825
3,000,000 U.S. Treasury Bills, 4.90%, 06/27/96 .......................................................... 2,927,317
---------------
Total Investments (Cost $201,652,876) 100.3% ....................................... 201,652,876
Liabilities in Excess of Other Assets, Net (.3)% ................................... (591,588)
---------------
Net Assets 100.0% .................................................................. $201,061,288
===============
At December 31, 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, December 31, 1995 (unaudited)
Face Value
Amount Franklin U.S. Government Agency Money Market Fund (Note 1)
aU.S. Government Agencies 94.9%
<S> <C> <C>
$2,000,000 Federal Farm Credit Discount Notes, 5.64%, 01/02/96 ............................................. $ 1,999,687
3,000,000 Federal Farm Credit Discount Notes, 5.58%, 01/03/96 ............................................. 2,999,070
3,500,000 Federal Farm Credit Discount Notes, 5.60%, 01/03/96 ............................................. 3,498,911
2,000,000 Federal Farm Credit Discount Notes, 5.57%, 01/04/96 ............................................. 1,999,072
7,500,000 Federal Farm Credit Discount Notes, 5.60%, 01/04/96 ............................................. 7,496,500
2,000,000 Federal Farm Credit Discount Notes, 5.61%, 01/05/96 ............................................. 1,998,753
1,250,000 Federal Farm Credit Discount Notes, 5.55%, 01/08/96 ............................................. 1,248,651
480,000 Federal Farm Credit Discount Notes, 5.56%, 01/08/96 ............................................. 479,481
1,125,000 Federal Farm Credit Discount Notes, 5.59%, 01/08/96 ............................................. 1,123,777
2,000,000 Federal Farm Credit Discount Notes, 5.63%, 01/12/96 ............................................. 1,996,560
4,500,000 Federal Farm Credit Discount Notes, 5.62%, 01/18/96 ............................................. 4,488,057
4,000,000 Federal Farm Credit Discount Notes, 5.40%, 02/20/96 ............................................. 3,970,000
1,000,000 Federal Home Loan Bank Discount Notes, 5.67%, 01/08/96 .......................................... 998,897
2,000,000 Federal Home Loan Bank Discount Notes, 5.58%, 01/09/96 .......................................... 1,997,520
1,000,000 Federal Home Loan Bank Discount Notes, 5.56%, 01/10/96 .......................................... 998,610
1,000,000 Federal Home Loan Bank Discount Notes, 5.50%, 01/12/96 .......................................... 998,320
3,000,000 Federal Home Loan Bank Discount Notes, 5.57%, 01/17/96 .......................................... 2,992,573
945,000 Federal Home Loan Bank Discount Notes, 5.58%, 01/19/96 .......................................... 942,364
2,800,000 Federal Home Loan Bank Discount Notes, 5.54%, 01/22/96 .......................................... 2,790,951
1,000,000 Federal Home Loan Bank Discount Notes, 5.54%, 01/25/96 .......................................... 996,307
2,000,000 Federal Home Loan Bank Discount Notes, 5.58%, 01/25/96 .......................................... 1,992,560
1,500,000 Federal Home Loan Bank Discount Notes, 5.57%, 01/29/96 .......................................... 1,493,502
2,275,000 Federal Home Loan Bank Discount Notes, 5.55%, 02/01/96 .......................................... 2,264,128
3,220,000 Federal Home Loan Bank Discount Notes, 5.54%, 02/05/96 .......................................... 3,202,657
1,000,000 Federal Home Loan Bank Discount Notes, 5.56%, 02/05/96 .......................................... 994,594
2,000,000 Federal Home Loan Bank Discount Notes, 5.52%, 02/12/96 .......................................... 1,987,120
3,500,000 Federal Home Loan Bank Discount Notes, 5.54%, 02/16/96 .......................................... 3,475,224
1,000,000 Federal Home Loan Bank Discount Notes, 5.40%, 02/22/96 .......................................... 992,200
2,500,000 Federal Home Loan Bank Discount Notes, 5.51%, 02/22/96 .......................................... 2,480,103
3,700,000 Federal Home Loan Bank Discount Notes, 5.53%, 02/28/96 .......................................... 3,667,035
2,000,000 Federal Home Loan Bank Discount Notes, 5.33%, 03/20/96 .......................................... 1,976,607
8,000,000 Federal Home Loan Bank Discount Notes, 5.32%, 03/22/96 .......................................... 7,904,240
5,000,000 Federal Home Loan Bank Discount Notes, 5.23%, 04/23/96 .......................................... 4,917,918
---------------
Total U.S. Government Agencies (Cost $83,361,948) ......................................... 83,361,948
---------------
aGovernment Securities 5.2%
4,565,000 U.S. Treasury Bills, 5.225% - 5.945%, 01/04/96 - 06/20/96 (Cost $4,526,023) ..................... 4,526,023
---------------
Total Investments (Cost $87,887,971) 100.1% .......................................... 87,887,971
Liabilities in Excess of Other Assets, Net (.1)% ..................................... (44,840)
---------------
Net Assets 100.0% .................................................................... $87,843,131
===============
At December 31, 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
December 31, 1995 (unaudited)
Franklin Franklin Franklin Franklin
Money Late Day U.S. Government U.S. Treasury U.S. Government
Market Money MarketSecurities 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.......... $258,982,647 $ 599,116 $208,508,416 $201,652,876 $87,887,971
Receivables from repurchase agreements, at value and
cost.................................................. -- 19,587,123 -- -- --
Cash.................................................. -- -- -- 31,831 9,548
Receivables:
Capital shares sold.................................. -- -- -- 505 --
Interest............................................. -- 9,363 -- -- --
From affiliates (Notes 6)............................ -- 15,574 1,900 28,465 --
Unamortized organization costs (Note 2)............... -- -- -- -- 3,472
---------- --------- ----------- ---------- ----------
Total assets..................................... 258,982,647 20,211,176 208,510,316 201,713,677 87,900,991
---------- --------- ----------- ---------- ----------
Liabilities:
Payables:
Management fees...................................... -- 5,761 -- 26,344 10,453
Administration fees.................................. 3,664 -- -- -- --
Capital shares repurchased........................... -- 128,475 -- 617,497 --
Distribution fees.................................... -- -- -- -- 19,347
Shareholder servicing costs.......................... 17,872 159 5,612 7,179 --
Distributions to shareholders........................ 111 -- 153 192 5
Accrued expenses and other liabilities................ 4,692 -- -- 1,177 28,055
Bank overdraft........................................ -- 272,145 -- -- --
---------- --------- ----------- ---------- ----------
Total liabilities................................ 26,339 406,540 5,765 652,389 57,860
---------- --------- ----------- ---------- ----------
Net assets, at value................................... $258,956,308 $19,804,636 $208,504,551 $201,061,288 $87,843,131
========== ========= =========== ========== ==========
Shares outstanding..................................... 258,956,308 19,804,636 208,504,551 201,061,288 87,843,131
========== ========= =========== ========== ==========
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.
Statements of Operations
for the six months ended December 31, 1995 (unaudited)
Franklin Franklin Franklin Franklin
Money Late Day U.S. Government U.S. TreasuryU.S. Government
Market Money MarketSecurities Money Money Market Agency Money
Portfolio Portfolio Market Portfolio Portfolio Market Fund
--------- --------- ----------- --------- ----------
Investment income:
<S> <C> <C> <C> <C> <C>
Dividends................................................ $8,373,983 $ -- $6,966,557 $ -- $ --
Interest................................................. -- 596,546 -- 5,210,665 1,628,607
--------- --------- ----------- --------- ----------
Total income........................................ 8,373,983 596,546 6,966,557 5,210,665 1,628,607
--------- --------- ----------- --------- ----------
Expenses:
Management fees (Note 6)................................. -- 65,044 -- 235,504 42,754
Administration fees (Note 6)............................. 73,035 -- 61,901 -- --
Distribution fees (Note 6)............................... -- -- -- -- 59,802
Shareholder servicing costs (Note 6)..................... 15,000 366 5,985 8,748 330
Professional fees........................................ 14,368 1,380 10,462 7,532 4,311
Registration fees........................................ 12,066 3,528 11,125 8,248 19,268
Reports to shareholders.................................. 4,936 895 2,981 5,191 2,942
Custodian fees........................................... -- 2,765 -- 1,798 3,921
Trustees' fees and expenses.............................. 3,803 574 2,918 7,337 1,788
Amortization of organization costs (Note 2).............. -- -- -- -- 564
Others................................................... 2,147 11,467 3,548 10,768 1,965
Expenses waived/assumed by Manager (Note 6).............. (75,407) (66,972) (61,550) (112,514) (19,112)
--------- --------- ----------- --------- ----------
Total expenses...................................... 49,948 19,047 37,370 172,612 118,533
--------- --------- ----------- --------- ----------
Net investment income.............................. 8,324,035 577,499 6,929,187 5,038,053 1,510,074
--------- --------- ----------- --------- ----------
Net realized gain (loss) on investments................... -- (10) -- 1,577 226
--------- --------- ----------- --------- ----------
Net increase in net assets resulting from operations...... $8,324,035 $577,489 $6,929,187 $5,039,630 $1,510,300
========= ========= =========== ========= ==========
The accompanying notes are an integral part of these financial statements.
Statements of Changes in Net Assets
for the six months ended December 31, 1995 (unaudited)
and the year ended June 30, 1995
Franklin Late Day Franklin U.S. Government
Money Market Portfolio Money Market Portfolio Securities Money Market Portfolio
--------------------- ---------------------- ----------------------
Six months Year Six months Year Six months Year
ended 12/31/95 ended 06/30/95 ended 12/31/95 ended 06/30/95 ended 12/31/95 ended 06/30/95
---------- ---------- ---------- ----------- ----------- ----------
Increase (decrease) in net assets:
Operations:
<S> <C> <C> <C> <C> <C> <C>
Net investment income............... $ 8,324,035 $ 13,288,573 $ 577,499 $ 1,655,541 $ 6,929,187 $ 14,715,535
Net realized gain (loss) from
securities transactions............. -- -- (10) 129 -- --
---------- ---------- ---------- ----------- ----------- ----------
Net increase in net assets
resulting from operations........... 8,324,035 13,288,573 577,489 1,655,670 6,929,187 14,715,535
Distributions to shareholders from
undistributed net investment income. (8,324,035) (13,288,573) (577,489)a (1,655,670)b (6,929,187) (14,715,535)
Increase (decrease) in net assets from
capital share transactions (Note 3). (13,190,394) 53,892,705 (5,004,710) (35,489,308) (126,325,758) 116,283,327
---------- ---------- ---------- ----------- ----------- ----------
Net increase (decrease) in net
assets.............................. (13,190,394) 53,892,705 (5,004,710) (35,489,308) (126,325,758) 116,283,327
Net assets (there is no undistributed
net investment income at beginning
or end of the period):
Beginning of period................ 272,146,702 218,253,997 24,809,346 60,298,654 334,830,309 218,546,982
---------- ---------- ---------- ----------- ----------- ----------
End of period...................... $258,956,308 $272,146,702 $19,804,636 $24,809,346 $208,504,551 $334,830,309
========== ========== ========== =========== =========== ==========
Franklin
Franklin U.S. Treasury U.S. Government Agency
Money Market Portfolio Money Market Fund
---------------------- --------------------
Six months Year Six months Year
ended 12/31/95 ended 06/30/95 ended 12/31/95 ended 06/30/95
----------- ----------- ---------- ----------
Increase (decrease) in net assets:
Operations:
<S> <C> <C> <C> <C>
Net investment income.............................................. $ 5,038,053 $ 11,171,262 $ 1,510,074 $ 763,361
Net realized gain from securities transactions..................... 1,577 5,063 226 279
----------- ----------- ---------- ----------
Net increase in net assets resulting from operations.......... 5,039,630 11,176,325 1,510,300 763,640
Distributions to shareholders from undistributed net investment income (5,039,630)c (11,176,325)d (1,510,300)e (763,640)f
Increase in net assets from capital share transactions (Note 3)..... 125,874 5,800,828 53,558,579 29,219,231
----------- ----------- ---------- ----------
Net increase in net assets.................................... 125,874 5,800,828 53,558,579 29,219,231
Net assets (there is no undistributed net investment income at beginning
or end of the period):
Beginning of period............................................... 200,935,414 195,134,586 34,284,552 5,065,321
----------- ----------- ---------- ----------
End of period..................................................... $201,061,288 $200,935,414 $87,843,131 $34,284,552
=========== =========== ========== ==========
aDistributions were decreased by a net realized loss from security transactions of $10.
bDistributions were increased by a net realized gain from security transactions of $129.
cDistributions were increased by a net realized gain from security transactions of $1,577.
dDistributions were increased by a net realized gain from security transactions of $5,063.
eDistributions were increased by a net realized gain from security transactions of $226.
fDistributions were increased by a net realized gain from security transactions of $279.
The accompanying notes are an integral part of these financial statements.
</TABLE>
Notes to Financial Statements (unaudited)
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 in Securities and Net Assets, 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.
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their 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 asked 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 Money Market Fund and the U.S. Government Fund hold Portfolio shares that
are valued at their proportionate interest in the net asset value of The Money
Market Portfolio and The U.S. Government Securities Money Market Portfolio (the
Portfolios), respectively. As of December 31, 1995, the Money Market Fund owns
19.20% of The Money Market Portfolio and the U.S. Government Fund owns 64.07% of
The U.S. Government Securities Money Market Portfolio.
b. Income Taxes:
The Funds intend 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 shareholders which will be sufficient to relieve the
Funds from income and excise taxes. 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.
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 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
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.
1. SIGNIFICANT ACCOUNTING POLICIES (cont.)
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. A repurchase agreement
is accounted for as a loan by the Fund to the seller, collateralized by
underlying U.S. government securities, which are delivered to the Fund's
custodian. The market value, including accrued interest, of the initial
collateralization is required to be 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%. At December 31, 1995, all outstanding
repurchase agreements held by the Franklin Late Day Money Market Portfolio had
been entered into on December 29, 1995.
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 demand
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 demand deposit account as the first
transaction of the next business day.
2. 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. (Resources), 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 Resources. 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. Transactions in the Funds at $1.00 per share for
the six months ended December 31, 1995 and the year ended June 30, 1995 were 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
------------ ------------ ------------ ------------ -----------
Six months ended December 31, 1995
<S> <C> <C> <C> <C> <C>
Shares sold............................... $ 1,303,574,069 $ 410,570,929 $ 596,772,521 $ 254,888,309 $124,860,307
Shares issued in reinvestment of distributions 3,479,655 312,720 4,437,088 1,569,269 1,499,529
Shares redeemed........................... (1,315,088,828) (414,248,177) (681,595,397) (256,821,991) (72,801,257)
Changes from exercise of exchange privilege:
Shares sold.............................. 1,930,419 18,177 46,081,278 1,018,464 --
Shares redeemed.......................... (7,085,709) (1,658,359) (92,021,248) (528,177) --
------------ ------------ ------------ ------------ -----------
Net increase (decrease).................... $ (13,190,394) $ (5,004,710) $ (126,325,758) $ 125,874 $53,558,579
============ ============ ============ ============ ===========
Year ended June 30, 1995
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
============ ============ ============ ============ ===========
4. CAPITAL LOSS CARRYOVERS
At June 30, 1995, for tax purposes, the Funds had accumulated net capital loss carryovers as follows:
Franklin Franklin U.S.
Late Day Money Treasury Money
Market PortfolioMarket Portfolio
---------- ----------
Capital loss carryovers
<S> <C> <C>
Expiring in: 2000................................. $6,834 $ --
2001................................. 2,062 --
2002................................. -- 2,347
---------- ----------
$8,896 $2,347
========== ==========
For tax purposes, the aggregate cost of securities are the same as for financial statement purposes at December 31, 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 MoneyTreasury Money Agency Money
Portfolio Market PortfolioMarket PortfolioMarket Portfolio Market Fund
---------- ---------- ----------- ---------- -----------
Aggregate purchases and sales/maturities of securities
for the six months ended December 31, 1995 were
as follows:
<S> <C> <C> <C> <C> <C>
Purchases......................................... $754,280,801 $2,414,755,513 $428,420,555 $591,176,701 $227,962,654
========== ========== =========== ========== ===========
Sales............................................. $767,441,273 $2,419,370,627 $554,902,342 $591,254,769 $174,724,425
========== ========== =========== ========== ===========
</TABLE>
6. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Under the terms of the administration agreement with the Money Market Fund and
the U.S. Government Fund, Franklin Advisers, Inc. (Advisers) provides various
administrative, statistical, and other services, and receives fees computed
monthly based on each Fund's average daily net assets at an annualized rate of
0.050 of 1%.
Advisers serves as the manager for the Franklin Late Day Money Market Portfolio,
and receives fees computed daily based on an annualized rate of 0.625 of 1% of
the first $100 million of net assets, 0.050 of 1% of net assets in excess of
$100 million up to and including $250 million and 0.450 of 1% 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 0.250 of 1% and 0.150 of
1%, respectively, based on the average daily net assets of each Fund.
The terms of the administration and management agreements provide that aggregate
annual expenses of each Fund 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 each Fund's shares are registered. The
Funds' expenses did not exceed these limitations; however, for the six months
ended December 31, 1995, Advisers agreed in advance to pay other expenses in the
aggregate amount of $23,952 and to waive management and administration fees for
the Funds as follows:
<TABLE>
<CAPTION>
Franklin Franklin
Money Franklin U.S. Government Franklin U.S. U.S. Government
Market Late Day MoneySecurities MoneyTreasury Money Agency Money
PortfolioMarket PortfolioMarket PortfolioMarket PortfolioMarket Fund
------ ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Fees waived................................................ $64,405 $57,114 $58,458 $112,514 $19,112
====== ========== =========== ========== ===========
</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
reimburses Franklin/Templeton Distributors, Inc. (Distributors), in an amount up
to .30% per annum of the average daily net assets of the Fund for costs incurred
in the furnishing and promotion, offering and marketing of the Fund's shares.
The plan does not permit nor require payments of excess costs after plan
termination. Fees incurred by the Franklin U.S. Government Agency Money Market
Fund amounted to $59,802 for the period ended December 31,1995.
Under terms of distribution plans, Advisers 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 (excluding the Franklin U.S. Government Agency
Money Market Fund). The plans do not permit nor require payments of excess costs
after plan termination. There were no payments under this plan for these funds
for the period ended December 31,1995.
At December 31,1995, Resources owned 14% of the Money Market Portfolio, 23% of
the Franklin Late Day Money Market Portfolio, and 6% of the Franklin U.S.
Government Agency Money Market Fund.
6. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (cont.)
Under the terms of a shareholder services agreement with Franklin/Templeton
Investor Services, Inc. (Investor Services), the Funds pay costs on a per
shareholder account basis. Such costs incurred for the period ended December
31,1995 aggregated $30,429, of which $6,509 was paid to Investor Services.
Certain officers and trustees of the Trust are also officers and/or directors of
Distributors, Advisers, and Investor Services, which are wholly-owned
subsidiaries of Resources, and The Money Market Portfolio and The U.S.
Government Securities Money Market Portfolio.
7. FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout the
period by Fund are as follows:
<TABLE>
<CAPTION>
Per Share Operating Performance Ratios/Supplemental Data
-------------------------------------- ----------------------------
Ratio of Net
Net Asset Distributions Net Ratio of Investment
Period Values at Net From Net Net Asset Assets at Expenses Income
Ended Beginning Investment Investment Values at Total End of Period to Average to Average
June 30 of Period Income Income End of Period Return+ (in 000's) Net Assets4 Net Assets
Money Market Portfolio:
<C> <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 3.3 222,282 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
1995** 1.00 .029 (.029) 1.00 2.91 258,956 0.183* 5.75*
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 3.2 60,299 0.15 3.17
1995 1.00 .051 (.051) 1.00 5.26 24,809 0.15 5.05
1995** 1.00 .028 (.028) 1.00 2.83 19,805 0.18* 5.55*
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
1995** 1.00 .028 (.028) 1.00 2.85 208,505 0.183* 5.64*
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
1995** 1.00 .027 (.027) 1.00 2.73 201,061 0.18* 5.35*
Franklin U.S. Government Agency Money Market Fund:
19942 1.00 .013 (.013) 1.00 1.31 5,065 0.40* 3.32*
1995 1.00 .051 (.051) 1.00 5.22 34,285 0.30 5.39
1995** 1.00 .027 (.027) 1.00 2.72 87,843 0.42* 5.30*
</TABLE>
*Annualized
**For the six months ended December 31, 1995.
+Total return measures the change in value of an investment over the periods
indicated. It is not annualized. It assumes
reinvestment of dividends and capital gains, if any, at net asset value.
1For the period August 2, 1991 (effective date) to June 30, 1992.
2For the period February 8, 1994 (effective date) to June 30, 1994.
3Includes the Funds' share of the Portfolios' allocated expenses.
7. FINANCIAL HIGHLIGHTS (cont.)
4During the periods indicated, Advisers agreed in advance to waive a portion of
administration and management fees and made payments of other expenses incurred
by the Funds. Had such action not been taken, the ratio of expenses to average
net assets would have been as follows:
Ratio of Expenses to
Average Net Assets
------------------
Money Market Portfolio:
1991.......................................... 0.71%
1992.......................................... 0.74
1993.......................................... 0.493
1994.......................................... 0.253
1995.......................................... 0.243
1995**........................................ 0.253*
Franklin Late Day Money Market Portfolio:
1991.......................................... 0.63
1992.......................................... 0.67
1993.......................................... 0.77
1994.......................................... 0.81
1995.......................................... 0.75
1995**........................................ 0.83*
Ratio of Expenses to
Average Net Assets
------------------
Franklin U.S. Government Securities Money Market Portfolio:
1991.......................................... 0.56%
1992.......................................... 0.59
1993.......................................... 0.453
1994.......................................... 0.253
1995.......................................... 0.233
1995**........................................ 0.253*
Franklin U.S. Treasury Money Market Portfolio:
19921......................................... 0.31*
1993.......................................... 0.35
1994.......................................... 0.30
1995.......................................... 0.30
1995**........................................ 0.30*
Franklin U.S. Government Agency Money Market Fund:
19942......................................... 1.43*
1995.......................................... 0.47
1995**........................................ 0.48*
<TABLE>
<CAPTION>
THE MONEY MARKET PORTFOLIOS
Statement of Investments in Securities and Net Assets, December 31, 1995 (unaudited)
Face Value
Amount The Money Market Portfolio (Note 1)
---------------------------------------------------------------------------------------------------------------
a Short Term Investments 86.6%
Certificates of Deposit 31.1%
<S> <C> <C>
$ 40,000,000 Australia & New Zealand Banking Group, Ltd., New York Branch, 5.73% - 5.75%,
01/19/96 - 02/09/96 ........................................................ $ 40,000,098
40,000,000 Bank of Nova Scotia, Portland Branch, 5.72% - 5.78%, 01/24/96 - 02/27/96 .... 40,000,438
60,000,000 Banque Nationale de Paris, New York Branch, 5.73% - 5.80%,
01/16/96 - 02/28/96 ........................................................ 60,002,171
20,000,000 Bayerische Landesbank, New York Branch, 5.80%, 01/08/96 ..................... 20,000,076
45,000,000 Bayerische Vereinsbank, New York Branch, 5.73% - 5.78%, 01/11/96 - 02/08/96 . 45,000,000
30,000,000 Commerzbank AG, New York Branch, 5.78% - 5.80%, 01/10/96 - 01/25/96 ......... 30,000,066
20,000,000 Credit Suisse, New York Branch, 5.73%, 01/09/96 ............................. 19,999,956
20,000,000 Deutsche Bank, New York Branch, 5.76%, 01/26/96 ............................. 20,000,137
25,000,000 Generale Bank, New York Branch, 5.75%, 03/04/96 ............................. 25,001,293
40,000,000 Lloyds Bank Plc., New York Branch, 5.70% - 5.80%, 01/30/96 - 09/11/96 ....... 40,001,492
20,000,000 National Westminster Bank, New York Branch, 5.81%, 01/30/96 - 01/31/96 ...... 20,000,000
40,000,000 Societe Generale, New York Branch, 5.72% - 5.90%, 05/13/96 - 06/07/96 ....... 40,000,000
20,000,000 Svenska Handelsbanken, New York Branch, 5.82%, 02/01/96 ..................... 20,000,170
------------
Total Certificates of Deposit (Cost $420,005,897) ..................... 420,005,897
------------
Commercial Paper 55.5%
23,000,000 Abbey National North America, 5.45%, 03/14/96 ............................... 22,745,818
60,000,000 American Express Credit Corp., 5.66% - 5.68%, 01/18/96 - 02/21/96 ........... 59,667,750
25,000,000 Ameritech Corp., 5.70%, 02/26/96 ............................................ 24,778,333
55,000,000 Associates Corp. of North America, 5.66% - 5.71%, 01/17/96 - 02/20/96 ....... 54,722,581
60,000,000 AT&T Corp., 5.52% - 5.68%, 01/12/96 - 03/11/96 .............................. 59,700,562
20,000,000 Campbell Soup Co., 5.92%, 02/02/96 .......................................... 19,894,757
20,000,000 CIESCO L.P., 5.50%, 03/08/96 ................................................ 19,795,278
10,000,000 Commerzbank U.S. Finance, Inc., 5.70%, 01/12/96 ............................. 9,982,583
60,000,000 Den Danske Corp., Inc., 5.64% - 5.67%, 01/23/96 - 02/16/96 .................. 59,673,367
25,000,000 Generale Bank, Inc., 5.65%, 02/07/96 ........................................ 24,854,826
60,000,000 General Electric Capital Corp., 5.45% - 5.48%, 03/22/96 - 05/02/96 .......... 58,962,777
25,000,000 Halifax Building Society, 5.65%, 02/05/96 ................................... 24,862,673
30,000,000 Kingdom of Sweden, 5.70%, 01/16/96 - 01/31/96 ............................... 29,881,250
40,000,000 National Australian Funding (DE), Inc., 5.65% - 5.67%, 01/22/96 - 02/12/96 .. 39,802,016
55,000,000 National Rural Utilities Cooperative Finance Corp., 5.63% - 5.66%,
02/13/96 - 02/23/96 ........................................................ 54,569,881
20,000,000 PepsiCo, Inc., 5.61%, 01/29/96 .............................................. 19,912,733
10,000,000 Province of Alberta, 5.69%, 01/25/96 ........................................ 9,962,067
16,000,000 Province of British Columbia, 5.50%, 05/21/96 ............................... 15,655,334
20,000,000 Royal Bank of Canada, 5.70%, 01/22/96 - 01/29/96 ............................ 19,922,417
20,000,000 Smithkline Beecham Corp., 5.75%, 02/02/96 ................................... 19,897,778
20,000,000 Societe Generale, N.A. Inc., 5.66%, 02/14/96................................. 19,861,644
Commercial Paper (cont.)
$ 40,000,000 Svenska Handelsbanken, Inc., 5.68% - 5.71%, 01/16/96 - 02/15/96 ............. $ 39,810,415
20,000,000 Westpac Capital Corp., 5.58%, 03/20/96 ...................................... 19,755,100
20,000,000 Wool International, 5.61%, 04/12/96 ......................................... 19,682,100
------------
Total Commercial Paper (Cost $748,354,040) ............................ 748,354,040
------------
Total Investments before Repurchase Agreements
(Cost $1,168,359,937) ................................................ 1,168,359,937
------------
b Receivables from Repurchase Agreements 13.1%
25,000,000 Bear Stearns & Co. Inc., 5.75%, 01/02/96, (Maturity Value $25,015,972)
Collateral: U.S. Treasury Notes, 6.50%, 04/30/97 ........................... 25,000,000
24,985,000 Fuji Securities, Inc., 5.85%, 01/02/96, (Maturity Value $25,016,250)
Collateral: U.S. Treasury Notes, 5.125%, 06/30/98........................... 25,000,000
19,745 c J.P. Morgan Securities, Inc., 4.23%, 01/02/96, (Maturity Value $19,754) ..... 19,745
101,310,000 J.P. Morgan Securities, Inc., 5.80%, 01/02/96, (Maturity Value $101,375,289)
Collateral: U.S. Treasury Bills, 10/17/96 .................................. 101,310,000
25,200,000 SBC Capital Markets, Inc., 5.70%, 01/02/96, (Maturity Value $25,015,833)
Collateral: U.S. Treasury Notes, 4.75%, 02/15/97............................ 25,000,000
------------
Total Receivables from Repurchase Agreements (Cost $176,329,745) ...... 176,329,745
------------
Total Investments (Cost $1,344,689,682) 99.7% .................... 1,344,689,682
Other Assets and Liabilities, Net .3% ............................ 4,011,515
------------
Net Assets 100.0% ................................................ $1,348,701,197
============
At December 31, 1995, there was no unrealized appreciation or depreciation for financial statements or income tax purposes.
PORTFOLIOABBREVIATIONS:
L.P. - Limited Partnership
aCertain short-term securities are traded on a discount basis; the rate 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.
</TABLE>
<TABLE>
<CAPTION>
THE MONEY MARKET PORTFOLIOS
Statement of Investments in Securities and Net Assets, December 31, 1995 (unaudited)
Face Value
Amount The U.S. Government Securities Money Market Portfolio (Note 1)
--------------------------------------------------------------------------------------------------------------
aShort Term Government Securities 100.1%
Government Securities 12.3%
<S> <C> <C>
$40,000,000 U.S. Treasury Bills, 5.415% - 6.27%, 01/11/96 - 02/01/96 (Cost $39,876,150) .... $ 39,876,150
------------
bReceivables from Repurchase Agreements 87.8%
13,510,000 Bank of America Securities, Inc., 5.75%, 01/02/96, (Maturity Value $14,008,944)
Collateral: U.S. Treasury Notes, 7.50%, 12/31/96 .............................. 14,000,000
13,258,000 Barclays de Zoete Wedd Securities, Inc., New York, 5.50%, 01/02/96
(Maturity Value $14,008,556)
Collateral: U.S. Treasury Notes, 7.125%, 09/30/99 ............................. 14,000,000
50,000,000 Bear Stearns & Co., Inc., 5.80%, 01/02/96, (Maturity Value $50,119,278)
Collateral: U.S. Treasury Notes, 5.75%, 09/30/97 .............................. 50,087,000
19,895,000 Bear Stearns & Co., Inc., 5.80%, 01/02/96, (Maturity Value $19,925,833)
Collateral: U.S. Treasury Notes, 5.75%, 10/31/00 .............................. 19,913,000
13,470,000 Chase Securities, Inc., 5.55%, 01/02/96, (Maturity Value $14,008,633)
Collateral: U.S. Treasury Notes, 7.125%, 10/15/98 ............................. 14,000,000
13,570,000 Citicorp Securities, Inc., 5.85%, 01/02/96, (Maturity Value $14,009,100)
Collateral: U.S. Treasury Notes, 6.125%, 07/31/00 ............................. 14,000,000
13,155,000 Fuji Securities, Inc., 5.90%, 01/02/96, (Maturity Value $14,009,178)
Collateral: U.S. Treasury Notes, 8.125%, 02/15/98 ............................. 14,000,000
13,765,000 Lehman Brothers Securities, Inc., 5.85%, 01/02/96, (Maturity Value $14,009,100)
Collateral: U.S. Treasury Notes, 6.25%, 05/31/00 .............................. 14,000,000
14,055,000 Merrill Lynch, Pierce, Fenner & Smith, Inc., 5.50%, 01/02/96,
(Maturity Value $14,008,556)
Collateral: U.S. Treasury Notes, 5.625%, 10/31/97 ............................. 14,000,000
7,274 cJ.P. Morgan Securities, Inc., 3.98%, 01/02/96, (Maturity Value $7,277) ......... 7,274
61,725,000 J.P. Morgan Securities, Inc., 5.80%, 01/02/96, (Maturity Value $61,764,778)
Collateral: U.S. Treasury Bills, 08/24/95 ..................................... 61,725,000
13,470,000 Morgan Stanley & Co., Inc., 5.87%, 01/02/96, (Maturity Value $14,009,131)
Collateral: U.S. Treasury Notes, 7.125%, 10/15/98 ............................. 14,000,000
13,920,000 Nomura Securities International, Inc., 5.85%, 01/02/96, (Maturity Value $14,009,100)
Collateral: U.S. Treasury Notes, 6.50%, 04/30/97 .............................. 14,000,000
13,130,000 Swiss Bank Corp., Inc., 5.85%, 01/02/96, (Maturity Value $14,009,100)
Collateral: U.S. Treasury Notes, 7.75%, 11/30/99 .............................. 14,000,000
$13,965,000 UBS Securities, Inc., 5.80%, 01/02/96, (Maturity Value $14,009,022)
Collateral: U.S. Treasury Notes, 7.25%, 11/30/96 .............................. $ 14,000,000
------------
Total Receivables from Repurchase Agreements (Cost $285,732,274) ......... 285,732,274
------------
Total Investments (Cost $325,608,424) 100.1% ........................ $325,608,424
Liabilities in Excess of Other Assets, Net (.1)% .................... (187,636)
------------
Net Assets 100.0% ................................................... $325,420,788
============
At December 31, 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.
</TABLE>
THE MONEY MARKET PORTFOLIOS
Financial Statements
Statements of Assets and Liabilities
December 31, 1995 (unaudited)
The U.S.
Government
The Money Securities Money
Market Portfolio Market Portfolio
----------- -----------
Assets:
Investment in
securities, at value
and cost $1,168,359,937 $ 39,876,150
Receivables from
repurchase agree-
ments, at value
and cost 176,329,745 285,732,274
Receivables:
Capital shares sold 4,776,914 --
Interest 5,006,429 137,554
From affiliates 7,945 28,587
----------- -----------
Total assets 1,354,480,970 325,774,565
----------- -----------
Liabilities:
Payables:
Capital shares
repurchased 5,607,684 301,833
Management fees 158,010 50,774
Distributions to
shareholders 1,139 601
Accrued expenses
and other liabilities 12,940 569
----------- -----------
Total liabilities 5,779,773 353,777
----------- -----------
Net assets, at value $1,348,701,197 $325,420,788
=========== ===========
Shares outstanding 1,348,701,197 325,420,788
=========== ===========
Net asset value
per share $1.00 $1.00
=========== ===========
Statements of Operations
for the six months ended December 31, 1995 (unaudited)
The The U.S.
Money Government
Market Securities Money
Portfolio Market Portfolio
----------- -----------
Investment income:
Interest $40,338,781 $10,736,757
----------- -----------
Expenses:
Management fees
(Note 5) 1,028,226 278,704
Custodian fees 18,033 14,114
Reports to shareholders 16,695 4,690
Professional fees 13,191 2,356
Trustee' fees and
expenses 5,003 1,145
Other 11,711 11,819
Expenses waived by
manager (Note 5) (64,463) (27,448)
----------- -----------
Total expenses 1,028,396 285,380
----------- -----------
Net investment
income 39,310,385 10,451,377
----------- -----------
Net realized loss on
investments -- (328)
----------- -----------
Net increase in net assets
resulting from operations $39,310,385 $10,451,049
=========== ===========
The accompanying notes are an integral part of these financial statements.
<TABLE>
<CAPTION>
THE MONEY MARKET PORTFOLIOS
Financial Statements (cont.)
Statements of Changes in Net Assets for the six months ended December 31, 1995 (unaudited)
and the year ended June 30, 1995
The U.S. Government Securities
The Money Market Portfolio Money Market Portfolio
------------------------ -----------------------
Six Months Year Six Months Year
ended 12/31/95 ended 6/30/95 ended 12/31/95 ended 6/30/95
----------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income ....................... $ 39,310,385 $ 65,941,077 $ 10,451,377 $ 22,234,614
Net realized gain (loss) from security
transactions ............................... -- 1,356 (328) 392
----------- ------------ ----------- -----------
Net increase in net assets resulting from
operations ................................. 39,310,385 65,942,433 10,451,049 22,235,006
Distributions to shareholders from undistributed
net investment income ....................... (39,310,385) (65,942,433)c (10,451,049)b (22,235,006)a
Increase (decrease) in net assets from capital
share transactions (Notes 2 and 6) .......... 43,126,784 1,086,385,190 (149,233,598) 256,106,321
----------- ------------ ----------- -----------
Net increase (decrease) in net assets ........ 43,126,784 1,086,385,190 (149,233,598) 256,106,321
Net assets (there is no undistributed net invest-
ment income at beginning or end of the period):
Beginning of period......................... 1,305,574,413 219,189,223 474,654,386 218,548,065
----------- ------------ ----------- -----------
End of period............................... $1,348,701,197 $1,305,574,413 $325,420,788 $474,654,386
=========== ============ =========== ===========
aDistributions were increased by a net realized gain from security transactions of $392.
bDistributions were decreased by a net realized loss from security transactions of $328.
cDistributions were increased by a net realized gain from security transactions of $1,356.
The accompanying notes are an integral part of these financial statements.
</TABLE>
THE MONEY MARKET PORTFOLIOS
Notes to Financial Statements (unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES
The Money Market Portfolios (the Money Market) is a no load, open-end management
investment company (mutual fund), registered under the Investment Company Act of
1940, as amended. The Money Market has two diversified 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 asked 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 Portfolios intend 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 shareholders which will be sufficient to relieve the
Portfolios from income and excise taxes. 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.
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 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. A repurchase agreement is accounted for as a loan by the
Portfolio to the seller, collateralized by underlying U.S. government
securities, which are delivered to the Portfolio's custodian. The market value,
including accrued interest, of the initial collateralization is required to be
at least 102% of the dollar amount invested by the Portfolio, with the value of
the underlying securities marked to market daily to maintain coverage of at
least 100%. At December 31, 1995, all outstanding repurchase agreements held by
the Portfolios had been entered into on December 29, 1995.
The Portfolios may enter into a sweep agreement with their custodian bank. In a
sweep, the excess cash in the Portfolios' demand deposit account at the end of
the day is invested overnight. The Money Market Portfolio's 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 Trust Company
of New York. Funds are returned to the Portfolios' demand deposit accounts as
the first transaction of the next business day.
2. TRUST SHARES
At December 31, 1995, there was an unlimited number of $.01 par value shares of
beneficial interest authorized. Transactions in the Portfolios' shares at $1.00
per share for the six months ended December 31, 1995 and the year ended June 30,
1995 were as follows:
<TABLE>
<CAPTION>
The U.S. Government
The Money Securities Money
Market Portfolio Market Portfolio
------------ -------------
<S> <C> <C>
Six months ended December 31, 1995
Shares sold................................................................. $ 1,054,612,974 $ 471,576,768
Shares issued in reinvestment of distributions.............................. 39,318,379 10,450,858
Shares redeemed............................................................. (1,050,804,569) (631,261,224)
------------ -------------
Net increase (decrease)..................................................... $ 43,126,784 $ (149,233,598)
============ =============
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 6)................... 1,132,697,789 138,624,792
------------ -------------
Net increase................................................................ $ 1,086,385,190 $ 256,106,321
============ =============
</TABLE>
3. CAPITAL LOSS CARRYOVERS
At June 30, 1995, for tax purposes, The Money Market Portfolio had an
accumulated net realized loss of $3,790. 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 for the six months ended
December 31, 1995 were as follows:
<TABLE>
<CAPTION>
The U.S. Government
The Money Securities Money
Market Portfolio Market Portfolio
------------ -------------
<S> <C> <C>
Purchases................................................................... $29,397,969,723 $33,343,479,654
============ =============
Sales....................................................................... $29,358,186,276 $33,493,137,982
============ =============
</TABLE>
5. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Under the terms of a management agreement, Franklin Advisers, Inc. (Advisers),
provides investment advice, administrative services, office space and facilities
to the Portfolios, and receives fees computed monthly based on the average daily
net assets of the Portfolios during the month. The Portfolios pay fees equal to
an annualized rate of 0.150 of 1% of their average daily net assets. For the six
months ended December 31, 1995, Advisers agreed in advance to waive $64,463 and
$27,448 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 Advisers and Franklin/Templeton Investor Services, Inc. (Investor
Services), which are all wholly-owned subsidiaries of Franklin Resources, Inc.,
and the Franklin Money Fund, Franklin Templeton Money Fund Trust - Franklin
Templeton Money Fund II, Franklin Federal Money Fund, and three funds of the
Institutional Fiduciary Trust, which are the Money Market Portfolio, Franklin
Cash Reserves Fund and Franklin U.S. Government Securities Money Market
Porfolio.
As of December 31, 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............................................................. 1,066,716,166 79.09%
Institutional Fiduciary Trust - Money Market Portfolio.......................... 258,982,647 19.20%
Institutional Fiduciary Trust - Franklin Cash Reserves Fund..................... 20,752,073 1.54%
Franklin Templeton Money Fund Trust - Franklin Templeton Money Fund II.......... 2,250,311 .17%
As of December 31, 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 208,508,416 64.07%
Franklin Federal Money Fund..................................................... 116,912,372 35.93%
</TABLE>
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.
7. FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout the
period by Portfolio are as follows:
<TABLE>
<CAPTION>
Per Share Operating Performance Ratios/Supplemental Data
--------------------------------- --------------------------
Ratio of Net
Net Asset Distributions Net Assets Ratio of Investment
Period Values at Net From Net Net Asset at End Expenses Income
Ended Beginning Investment Investment Values at Total of Period to Average to Average
June 30 of Period Income Income End of Period 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
1995*** 1.00 0.029 (0.029) 1.00 2.93 1,348,701 0.15** 5.73**
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
1995*** 1.00 0.028 (0.028) 1.00 2.87 325,421 0.15** 5.62**
*July 28, 1992 (effective date of registration) to June 30, 1993.
**Annualized
***For the six months ended December 31, 1995.
++Total return measures the change in value of an investment over the periods indicated. It is not annualized. It assumes
reinvestment of dividends and capital gains, if any, at net asset value.
+During the periods indicated, Advisers agreed in advance to waive a portion of management fees of the Portfolios. Had such action
not been taken, the ratio of expenses to average net assets would have been as follows:
</TABLE>
<TABLE>
<CAPTION>
Ratio of Expenses to
Average Net Assets
-----------
<S> <C>
The Money Market Portfolio
1993*...................................... .17%**
1994....................................... .17
1995....................................... .16
1995***.................................... .16**
The U.S. Government Securities
Money Market Portfolio
1993*...................................... .18%**
1994....................................... .17
1995....................................... .16
1995***.................................... .17**
</TABLE>
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 12/31/95
<S> <C>
Repurchase Agreements 13.0%
Certificates of Deposit 31.0%
Commercial Paper 56.0%
</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 6/30/95 to 12/31/95.
<TABLE>
<CAPTION>
Date Franklin Donoghue's
<S> <C> <C>
06/27/95 5.97% 5.75%
07/03/95 5.98% 5.76%
07/11/95 5.85% 5.70%
07/17/95 5.88% 5.63%
07/25/95 5.83% 5.61%
08/01/95 5.88% 5.61%
08/08/95 5.81% 5.57%
08/15/95 5.79% 5.55%
08/22/95 5.77% 5.54%
08/29/95 5.74% 5.54%
09/05/95 5.74% 5.53%
09/12/95 5.67% 5.52%
09/19/95 5.70% 5.53%
09/26/95 5.67% 5.50%
10/03/95 5.70% 5.56%
10/10/95 5.62% 5.49%
10/23/95 5.64% 5.49%
10/31/95 5.65% 5.52%
11/07/95 5.63% 5.49%
11/14/95 5.64% 5.50%
11/21/95 5.64% 5.51%
11/28/95 5.66% 5.53%
12/05/95 5.62% 5.49%
12/12/95 5.59% 5.48%
12/19/95 5.60% 5.50%
12/26/95 5.59% 5.46%
</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 12/31/95
<S> <C>
Treasuries 3.0%
Repurchase Agreements 97.0%
</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 6/30/95 to 12/31/95.
<TABLE>
<CAPTION>
Date Franklin Donoghue's
<S> <C> <C>
06/27/95 5.76% 5.60%
07/03/95 5.71% 5.62%
07/11/95 5.69% 5.54%
07/17/95 5.53% 5.45%
07/25/95 5.57% 5.44%
08/01/95 5.55% 5.45%
08/08/95 5.54% 5.41%
08/15/95 5.55% 5.41%
08/22/95 5.53% 5.41%
08/29/95 5.48% 5.38%
09/05/95 5.51% 5.38%
09/12/95 5.49% 5.37%
09/19/95 5.54% 5.40%
09/26/95 5.43% 5.34%
10/03/95 5.79% 5.48%
10/10/95 5.46% 5.31%
10/23/95 5.48% 5.31%
10/31/95 5.52% 5.36%
11/07/95 5.46% 5.32%
11/14/95 5.52% 5.34%
11/21/95 5.55% 5.38%
11/28/95 5.66% 5.42%
12/05/95 5.56% 5.36%
12/12/95 5.56% 5.36%
12/19/95 5.58% 5.37%
12/26/95 5.49% 5.27%
</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 12/31/95
<S> <C>
Treasuries 12.0%
Repurchase Agreements 88.0%
</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 6/30/95 to 12/31/95.
<TABLE>
<CAPTION>
Date Franklin Donoghue's
<S> <C> <C>
06/27/95 5.83% 5.60%
07/03/95 5.83% 5.62%
07/11/95 5.74% 5.54%
07/17/95 5.57% 5.45%
07/25/95 5.57% 5.44%
08/01/95 5.62% 5.45%
08/08/95 5.59% 5.41%
08/15/95 5.56% 5.41%
08/22/95 5.59% 5.41%
08/29/95 5.56% 5.38%
09/05/95 5.55% 5.38%
09/12/95 5.54% 5.37%
09/19/95 5.57% 5.40%
09/26/95 5.51% 5.34%
10/03/95 5.77% 5.48%
10/10/95 5.49% 5.31%
10/23/95 5.50% 5.31%
10/31/95 5.59% 5.36%
11/07/95 5.56% 5.32%
11/14/95 5.58% 5.34%
11/21/95 5.59% 5.38%
11/28/95 5.72% 5.42%
12/05/95 5.60% 5.36%
12/12/95 5.60% 5.36%
12/19/95 5.64% 5.37%
12/26/95 5.50% 5.27%
</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 12/31/95
<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 6/30/95 to 12/31/95.
<TABLE>
<CAPTION>
Date Franklin Donoghue's
<S> <C> <C>
06/27/95 5.53% 5.60%
07/03/95 5.51% 5.62%
07/11/95 5.51% 5.54%
07/17/95 5.51% 5.45%
07/25/95 5.52% 5.44%
08/01/95 5.51% 5.45%
08/08/95 5.49% 5.41%
08/15/95 5.47% 5.41%
08/22/95 5.45% 5.41%
08/29/95 5.42% 5.38%
09/05/95 5.37% 5.38%
09/12/95 5.34% 5.37%
09/19/95 5.34% 5.40%
09/26/95 5.30% 5.34%
10/03/95 5.30% 5.48%
10/10/95 5.28% 5.31%
10/23/95 5.27% 5.31%
10/31/95 5.27% 5.36%
11/07/95 5.23% 5.32%
11/14/95 5.27% 5.34%
11/21/95 5.30% 5.38%
11/28/95 5.28% 5.42%
12/05/95 5.29% 5.36%
12/12/95 5.28% 5.36%
12/19/95 5.29% 5.37%
12/26/95 5.18% 5.27%
</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 12/31/95
<S> <C>
Federal Home Loan Bank 57.0%
Federal Farm Credit Bank 36.0%
Treasuries 5.0%
Farm Credit Disc Notes 2.0%
</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 6/30/95 to 12/31/95.
<TABLE>
<CAPTION>
Date Franklin Donoghue's
<S> <C> <C>
06/27/95 5.64% 5.60%
07/03/95 5.65% 5.62%
07/11/95 5.57% 5.54%
07/17/95 5.52% 5.45%
07/25/95 5.52% 5.44%
08/01/95 5.48% 5.45%
08/08/95 5.45% 5.41%
08/15/95 5.45% 5.41%
08/22/95 5.43% 5.41%
08/29/95 5.45% 5.38%
09/05/95 5.39% 5.38%
09/12/95 5.28% 5.37%
09/19/95 5.29% 5.40%
09/26/95 5.27% 5.34%
10/03/95 5.25% 5.48%
10/10/95 5.25% 5.31%
10/23/95 5.25% 5.31%
10/31/95 5.25% 5.36%
11/07/95 5.22% 5.32%
11/14/95 5.22% 5.34%
11/21/95 5.24% 5.38%
11/28/95 5.24% 5.42%
12/05/95 5.24% 5.36%
12/12/95 5.24% 5.36%
12/19/95 5.24% 5.37%
12/26/95 5.21% 5.27%
</TABLE>
