FRANKLIN TEMPLETON GLOBAL TRUST, 497, 1997-03-10

FRANKLIN TEMPLETON GLOBAL TRUST
497, 1997-03-10

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PROSPECTUS & APPLICATION

FRANKLIN TEMPLETON
INTERNATIONAL CURRENCY FUNDS

MARCH 1, 1997

FRANKLIN TEMPLETON GLOBAL CURRENCY FUND
FRANKLIN TEMPLETON HARD CURRENCY FUND
FRANKLIN TEMPLETON HIGH INCOME CURRENCY FUND

INVESTMENT STRATEGY

GLOBAL GROWTH

AND INCOME

This prospectus describes Class I shares of the Franklin Templeton Global
Currency Fund (the "Global Currency Fund"), the Franklin Templeton Hard
Currency Fund (the "Hard Currency Fund"), and the Franklin Templeton High
Income Currency Fund (the "High Income Fund") (individually or collectively
the "Fund," "Funds" or the "Currency Funds"). It contains information you
should know before investing in the Fund. Please keep it for future reference.

The Hard Currency Fund currently offers another class of shares with a
different sales charge and expense structure, which affects performance. This
class is described in a separate prospectus. For more information, contact
your investment representative or call 1-800/DIAL BEN.

The Fund has a Statement of Additional Information ("SAI") for its Class I
shares, dated March 1, 1997, which may be amended from time to time. It
includes more information about the Fund's procedures and policies. It has
been filed with the SEC and is incorporated by reference into this
prospectus. For a free copy or a larger print version of this prospectus,
call 1-800/DIAL BEN or write the Fund at the address shown.

SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY OF THE
U.S. GOVERNMENT. SHARES OF THE FUND INVOLVE INVESTMENT RISKS, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL.

LIKE ALL MUTUAL FUNDS, THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SEC OR ANY STATE SECURITIES COMMISSION NOR HAS THE SEC OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

THIS PROSPECTUS IS NOT AN OFFERING OF THE SECURITIES HEREIN DESCRIBED IN ANY
STATE, JURISDICTION OR COUNTRY IN WHICH THE OFFERING IS NOT AUTHORIZED. NO
SALES REPRESENTATIVE, DEALER, OR OTHER PERSON IS AUTHORIZED TO GIVE ANY
INFORMATION OR MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS. FURTHER INFORMATION MAY BE OBTAINED FROM DISTRIBUTORS.

The Currency Funds may invest in money market instruments, both foreign and
domestic. Investments in foreign securities involve certain considerations
that are not normally involved in investments in securities of U.S.
companies. The Currency Funds should not be considered money market funds.
Please see "What are the Fund's Potential Risks?"

FRANKLIN

TEMPLETON INTERNATIONAL CURRENCY FUNDS

MARCH 1, 1997

When reading this prospectus, you will see certain terms beginning with
capital letters. This means the term is explained in our glossary section.

Table of Contents

About the Fund

Expense Summary .................................................. 2
Financial Highlights ............................................. 3
How does the Fund Invest its Assets? ............................. 8
What are the Fund's Potential Risks? ............................. 18
Who Manages the Fund? ............................................ 21
How does the Fund Measure Performance? ........................... 23
How Taxation Affects the Fund and its Shareholders ............... 23
How is the Trust Organized? ...................................... 25
About Your Account
How Do I Buy Shares? ............................................. 26
May I Exchange Shares for Shares of Another Fund? ................ 31
How Do I Sell Shares? ............................................ 33
What Distributions Might I Receive from the Fund? ................ 35
Transaction Procedures and Special Requirements .................. 36
Services to Help You Manage Your Account ......................... 40
What If I Have Questions About My Account? ....................... 43
Glossary
Useful Terms and Definitions ..................................... 43

777 Mariners Island Blvd.
P.O. Box 7777
San Mateo
CA 94403-7777

1-800/DIAL BEN

ABOUT THE FUND

EXPENSE SUMMARY

This table is designed to help you understand the costs of investing in the
Fund. It is based on the Fund's historical expenses for the fiscal year ended
October 31, 1996. The Fund's actual expenses may vary.

GLOBAL HARD HIGH
CURRENCY CURRENCY INCOME
FUND FUND FUND

A. SHAREHOLDER TRANSACTION EXPENSES+
Maximum Sales Charge Imposed on Purchases++
(as a percentage of Offering Price) 3.00% 3.00% 3.00%
Deferred Sales Charge+++ NONE NONE NONE
Exchange Fee (per transaction) $5.00* $5.00* $5.00*

B. ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fees 0.65% 0.65% 0.65%**
Rule 12b-1 Fees*** 0.21% 0.24% 0.20%
Other Expenses 0.13% 0.21% 0.44%
Total Fund Operating Expenses0.99% 1.10% 1.29%**

C.EXAMPLE

Assume the Fund's annual return is 5%, operating expenses are as described
above, and you sell your shares after the number of years shown. These are
the projected expenses for each $1,000 that you invest in the Fund.

GLOBAL HARD HIGH
CURRENCY CURRENCY INCOME
FUND FUND FUND

One Year**** $ 40 $ 41 $ 43
Three Years 61 64 70
Five Years 83 89 99
Ten Years 148 160 181

THIS IS JUST AN EXAMPLE. IT DOES NOT REPRESENT PAST OR FUTURE EXPENSES OR
RETURNS. ACTUAL EXPENSES AND RETURNS MAY BE MORE OR LESS THAN THOSE SHOWN.
The Fund pays its operating expenses. The effects of these expenses are
reflected in its Net Asset Value or dividends and are not directly charged
to your account.

+If your transaction is processed through your Securities Dealer, you may be
charged a fee by your Securities Dealer for this service.

++There is no front-end sales charge if you invest $1 million or more.

+++A Contingent Deferred Sales Charge of 1% may apply to purchases of $1
million or more if you sell the shares within one year. See "How Do I Sell
Shares? - Contingent Deferred Sales Charge" for details.

*$5.00 fee is only for Market Timers. We process all other exchanges without
a fee.

**For the period shown, Advisers had agreed in advance to limit its
management fees and make certain payments to reduce the Fund's expenses. With
this reduction, management fees were 0.61% and total Fund operating expenses
were 1.25%.

***These fees may not exceed 0.45%. The combination of front-end sales
charges and Rule 12b-1 fees could cause long-term shareholders to pay more
than the economic equivalent of the maximum front-end sales charge permitted
under the NASD's rules.

****Assumes a Contingent Deferred Sales Charge will not apply.

FINANCIAL HIGHLIGHTS

This table summarizes the Fund's financial history. The information for the
most recent four periods has been audited by Coopers & Lybrand L.L.P., the
Fund's independent auditors. Their audit report covering each of the most
recent four periods appears in the financial statements in the Trust's Annual
Report to Shareholders for the fiscal year ended October 31, 1996. The
information for the fiscal year ended April 30, 1993 was audited by other
independent auditors whose opinions are not included herein. The Annual
Report to Shareholders also includes more information about the Fund's
performance. For a free copy, please call Fund Information.

Global Currency Fund

SIX-MONTH
PERIOD ENDED
YEAR ENDED OCTOBER 31,OCTOBER 31, YEAR ENDED APRIL 30,
1996 1995 1994 19942 1993 1992 1991 1990 1989 1988
PER SHARE OPERATING PERFORMANCE+
Net Asset Value at
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Beginning of Period $13.67 $14.14 $13.85 $13.96 $14.01 $14.23 $13.66 $13.71 $14.76 $13.86
Net Investment Income .69 1.29 .25 .57 .67 .80 1.07 .97 .85 .52
Net Realized &
Unrealized Gain (Loss) (.54) (.49) .32 (.11) 1.01 (.22) .57 .07 (.54) 1.10
Total From
Investment Operations .15 .80 .57 .46 1.68 .58 1.64 1.04 .31 1.62
Distributions From
Net Investment Income (.71) (1.27) (.28) (.57) (.69) (.80) (1.07) (.99) (.89) (.57)
Distributions From
Capital Gains - - - - (1.04) - - (.10) (.47) (.15)
Distributions From
Return of Capital+++ (.31) - - - - - - - - -
Total Distributions (1.02) (1.27) (.28) (.57) (1.73) (.80) (1.07) (1.09) (1.36) (.72)
Net Asset Value at
End of Period $12.80 $13.67 $14.14 $13.85 $13.96 $14.01 $14.23 $13.66 $13.71 $14.76
Total Return++ 1.27% 6.05% 4.14% 3.41% 13.28% 4.29% 12.21% 8.19% 1.97% 12.12%
RATIOS/SUPPLEMENTAL DATA
Net Assets at
End of Period (in 000's) $50,773 $59,942 $56,098 $51,539 $62,355 $63,589 $72,186 $71,615 $112,009 $138,609
Ratio of Expenses to
Average Net Assets** .99% 0.99% 1.04%* 1.41% 1.67% 1.82% 1.82% 2.09% 2.10% 2.00%
Ratio of Net
Investment Income
to Average Net Assets 4.30% 5.29% 3.55%* 2.78% 4.64% 5.77% 7.36% 7.16% 6.10% 3.70%
Portfolio Turnover Rate - 46.05% 50.82%* 37.16% 10.39% - - - - -

Hard Currency Fund

SIX-MONTH
PERIOD ENDED
YEAR ENDED OCTOBER 31,OCTOBER 31, YEAR ENDED APRIL 30,
1996 1995 1994 19942 1993 1992 1991 19901
PER SHARE OPERATING PERFORMANCE+
Net Asset Value
at Beginning of Period $13.09 $13.95 $12.95 $13.00 $13.12 $12.83 $13.18 $12.50
Net Investment Income .57 1.84 .26 .50 .71 .77 .92 .42
Net Realized
& Unrealized Gain (Loss) (1.34) (1.02) .99 (.05) 1.20 .28 .64 .69
Total From
Investment Operations (.77) .82 1.26 .45 1.91 1.05 1.56 1.11
Distributions From
Net Investment Income (.06) (1.68) (.25) (.13) (.69) (.76) (.95) (.35)
Distributions
From Capital Gains - - - - (1.34) - (.96) (.08)
Distributions From
Return of Capital+++ (0.62) - - (.37) - - - -
Total Distributions (.68) (1.68) (.25) (.50) (2.03) (.76) (1.91) (.43)
Net Asset Value at
End of Period $11.64 $13.09 $13.95 $12.95 $13.00 $13.12 $12.83 $13.18
Total Return++ (5.99)% 6.68% 9.74% 3.62% 17.11% 8.40% 11.04% 8.88%
RATIOS/SUPPLEMENTAL DATA
Net Assets at
End of Period (in 000's) $124,666 $132,089 $61,228 $35,739 $49,569 $31,757 $33,599 $26,280
Ratio of Expenses to
Average Net Assets** 1.10% 1.15% 1.05%* 1.47% 1.75% 1.86% 1.66% 1.65%*
Ratio of Net Investment
Income to Average Net Assets 4.50% 4.68% 3.80%* 3.83% 5.23% 5.85% 6.46% 6.21%*
Portfolio Turnover Rate - 15.72% 55.91%* - 4.88% - - -

High Income Fund

SIX-MONTH
PERIOD ENDED
YEAR ENDED OCTOBER 31,OCTOBER 31, YEAR ENDED APRIL 30,
1996 1995 1994 19942 1993 1992 1991 19901
PER SHARE OPERATING PERFORMANCE+
Net Asset Value at
Beginning of Period $11.56 $11.59 $11.28 $12.13 $12.90 $12.92 $12.84 $12.50
Net Investment Income .58 1.47 .31 .59 .90 1.09 1.34 .73
Net Realized
& Unrealized Gain (Loss) - (.51) .31 (.85) (.40) (.03) .43 .24
Total From
Investment Operations .58 .96 .62 (.26) .50 1.06 1.77 .97
Distributions From
Net Investment Income (1.08) (.99) (.31) - (.94) (1.08) (1.38) (.62)
Distributions From
Capital Gains (0.01) - - - (.33) - (.31) (.01)
Distributions From
Return of Capital+++ (0.03) - - (.59) - - - -
Total Distributions (1.12) (.99) (.31) (.59) (1.27) (1.08) (1.69) (.63)
Net Asset Value at
End of Period $11.02 $11.56 $11.59 $11.28 $12.13 $12.90 $12.92 $12.84
Total Return++ 5.56% 8.90% 5.60% (2.03)% 4.49% 8.51% 14.09% 7.82%
RATIOS/SUPPLEMENTAL DATA
Net Assets at
End of Period (in 000's) $10,113 $10,902 $16,878 $16,706 $32,341 $46,575 $52,364 $11,808
Ratio of Expenses to
Average Net Assets** 1.25% 1.25% 1.04%* 1.59% 1.81% 1.83% 1.59% 1.73%*
Ratio of Net Investment
Income to Average Net Assets 4.83% 5.56% 5.44%* 4.80% 6.86% 8.38% 9.85% 11.01%*
Portfolio Turnover Rate - 115.05% 1,588.38%* - - - - -

</TABLE>

+Selected data for a share of beneficial interest outstanding throughout the
periods indicated.

++Total return measures the change in value of an investment over the periods
indicated and is not annualized. It does not include the maximum front-end sales
charge or Contingent Deferred Sales Charge and assumes reinvestment of dividends
and capital gains at Net Asset Value.

+++Certain distributions have been reclassed to conform with SOP 93-2.

*Annualized

**During the periods indicated Advisers had agreed in advance to waive a
portion of its management fee and to make certain payments to reduce expenses
of the Funds. Had such action not been taken, the ratios of expenses to
average net assets would have been as follows:

Ratio of Expenses
to Average Net Assets
Global Currency Fund
1994 1.61%
19943 1.12*
Hard Currency Fund
1994 1.71%
19943 1.28*
High Income Fund
19901 2.04%
1994 1.82
19943 1.45*
19954 1.45
1996 1.29

1For the period November 17, 1989 (effective date of registration) to April
30, 1990.

2On November 12, 1993, the investment advisor changed to Advisers.

3For the six months ended October 31, 1994, reflecting a change in fiscal
year from April 30.

4For the year ended October 31, 1995.

HOW DOES THE FUND INVEST ITS ASSETS?

The investment objective of the Fund is a fundamental policy and may not be
changed without shareholder approval. Of course there is no assurance that
the Fund's objective will be achieved.

GLOBAL CURRENCY FUND

The investment objective of the Global Currency Fund is to maximize the
investor's total return through a combination of interest income and changes
in the Fund's Net Asset Value due to changes in currency exchange rates. The
Fund seeks to achieve its objective by investing in interest-earning money
market instruments denominated in three or more Major Currencies. Under
normal market conditions, at least 65% of the Fund's total assets will be
invested in instruments denominated in three or more Major Currencies,
including the U.S. dollar.

HARD CURRENCY FUND

The investment objective of the Hard Currency Fund is to protect against
depreciation of the U.S. dollar relative to other currencies. The Fund seeks
to achieve its objective by investing in high-quality money market
instruments (and forward contracts) denominated in foreign Major Currencies
which historically have experienced low rates of inflation and which, in the
view of the Investment Managers, follow economic policies conducive to
continued low rates of inflation and currency appreciation versus the U.S.
dollar over the long-term. These currencies are often referred to as "hard
currencies" and the economic policies are often referred to as "sound money"
policies.

The Fund tries to keep foreign currency (non-U.S. dollar) exposure with
respect to 100% of its net assets. The Fund may invest in U.S.
dollar-denominated money market instruments in combination with forward
contracts (calling for the future purchase of foreign currencies in exchange
for U.S. dollars) to obtain an investment result that is substantially the
same as a direct investment in a foreign currency-denominated instrument.

Under normal market conditions, the Fund will not expose its portfolio in
excess of 50% of its total assets to a single foreign currency.

The Investment Managers actively manage the Hard Currency Fund and will
allocate its investments based on current social, economic, financial and
political developments which, in the Investment Managers' opinion, may affect
the value of the currencies.

HIGH INCOME FUND

The investment objective of the High Income Fund is to achieve high current
income at a level significantly above that available on U.S. dollar money
market funds. Subject to this investment objective, a secondary consideration
of the Fund is preservation of capital. The Fund seeks to achieve its
objective by investing in interest-bearing money market instruments
denominated in Major and Non-Major Currencies.

Under normal market conditions, at least 65% of this Fund's total assets will
be invested in instruments denominated in three or more of the ten highest
yielding Major Currencies (excluding the ECU) and the U.S. dollar (whether or
not the U.S. dollar is one of those ten highest yielding Major Currencies).

As a non-fundamental policy, the Fund intends, under normal market conditions
not to invest (i) more than 25% of its total assets in instruments
denominated in one Major Currency other than the U.S. dollar, (ii) more than
5% of its total assets in instruments denominated in one Non-Major Currency,
or (iii) more than 25% of its total assets in instruments denominated in
Non-Major Currencies. The Fund may, for defensive purposes, or temporarily to
preserve capital, invest up to 100% of its net assets in U.S. dollar
denominated instruments.

The yield of the Major Currencies is determined quarterly from data published
by Datastream, The Wall Street Journal, The Financial Times, Salomon Brothers
International Bond and Money Market Performance and other independent bona
fide publications that, in the opinion of the Investment Managers, routinely
publish reliable yield data on instruments denominated in the Major
Currencies. Subject to the restrictions described above, the Fund's
investments may be denominated in any of the Major Currencies. The yield on a
Major Currency is defined as the yield for the prior calendar quarter on the
highest quality three-month Euro-time deposits denominated in that Major
Currency. The Investment Managers will obtain yield measures as soon as
practicable following the end of each calendar quarter.

The ten highest yielding Major Currencies and their respective average yields
for each year from 1989 through 1995 are listed below:

1996* 1995 1994 1993 1992 1991 1990 1989

Sweden** 6.00% 8.10% 7.64% 8.62% 11.96% - - -
Italy 8.69% 10.29% 8.48% 10.22% 13.86% 11.83% 11.98% 12.41%
Spain 7.49% 9.37% 8.04% 11.77% 13.21% 12.60% - -
Denmark 3.94% 6.22% 6.21% 10.89% 11.12% 9.78% 10.96% 9.65%
France 3.87% 6.60% 5.79% 8.44% 10.22% 9.55% 10.24% 9.33%
United Kingdom 6.02% 6.69% 5.50% 5.92% 9.60% 11.50% 14.76% 13.88%
Germany - - 5.29% 7.21% 9.42% 9.21% - -
Belgium - - 5.65% 8.12% 9.32% 9.32% 9.69% 8.51%
Netherlands - - - 6.81% 9.31% 9.25% 8.59% 7.29%
Switzerland - - - - 7.82% - 8.89% -
Australia** 7.15% 7.76% - - - 9.84% 13.71% 16.59%
New Zealand 9.29% 9.04% 6.41% 6.14% - 9.49% 13.71% 12.64%
Canada** 4.41% 7.08% 5.35% - - - 12.54% 11.79%
U.S. 5.41% 5.99% - - - - - 9.21%

*Average for January - November.

**Domestic interbank rates.

Source: Datastream - 3 month Euro-deposit rates

Subject to specific Fund restrictions, the Fund may invest in money market
instruments denominated in any of the Major Currencies. The currencies of
various countries may be added to or deleted from the list of Major
Currencies when, in the opinion of the Investment Managers, world social,
economic, financial or political conditions justify it, provided that the
list of Major Currencies in the prospectus is revised. The High Income Fund
may also invest in money market instruments of Non-Major Currencies.

DESCRIPTION OF THE INTERNATIONAL MONEY MARKET

The international money market, including spot and forward currency exchange
transactions, is among the largest and most liquid financial markets in the
world. Various estimates place the market's average turnover at approximately
$1 trillion per day. Originally created to facilitate trade between
countries, the international money market has become a major conduit of world
capital flows. It is estimated that capital-related transactions now account
for over 90% of all volume in the international money market.

International money market instruments, like their U.S. counterparts, are
short-term, high-quality debt obligations issued by governments, banks,
corporations and supranational organizations. Because of their high quality
and short maturities or frequent interest rate adjustments (one-year maximum
effective maturity), international money market instruments enable investors
to minimize credit risk and interest rate risk to principal and are
considered to be among the most conservative of international investments.

International money market returns, when expressed in U.S. dollars, are
significantly affected by changes in exchange rates between the U.S. dollar
and the currencies in which they are denominated. Interest income represents
the other primary component of the total return derived from international
money market instruments.

WHY SHOULD YOU CONSIDER INVESTING IN INTERNATIONAL MONEY MARKET INSTRUMENTS?

Global Diversification. One of the main reasons for adding international
securities to a portfolio of U.S. securities is to achieve broader portfolio
diversification. Diversification can reduce the overall volatility of
portfolio returns to the extent that returns on the international securities
are independent of returns on the U.S. portfolio component.

Returns on international money market instruments historically have exhibited
a low degree of correlation with returns on U.S. stocks and bonds and may,
therefore, offer U.S. dollar-based investors a conservative means for
achieving effective global diversification.

Protection of Global Buying Power. Currency exchange rate fluctuations can
have a significant effect on the global buying power of investments
denominated in a single currency. For example, depreciation of the U.S.
dollar relative to other currencies generally increases the cost to U.S.
consumers of most imported goods and many domestically produced goods, and
the cost of traveling abroad. In this case, non-U.S. dollar denominated money
market instruments may provide a degree of global buying power protection
since dollar depreciation will tend to enhance the U.S. dollar return on
these instruments.

Potential for Higher Current Yields and Higher Total Returns. You may
consider international money market instruments for their potentially higher
current yields and/or total returns than those available on similar U.S.
dollar-denominated instruments. If you expect general depreciation of the
U.S. dollar relative to other currencies you may, for example, invest in
non-U.S. dollar denominated instruments so you can participate in currency
gains that may result.

If you expect general exchange rate stability, you might invest in higher
yielding international money market instruments so you can earn a higher rate
of interest than may be available on similar U.S. dollar denominated
instruments.

In either case, the realized total return on international money market
instruments may be higher or lower than that realized on comparable U.S.
dollar denominated instruments.

TYPES OF SECURITIES IN WHICH THE FUNDS MAY INVEST

The Global Currency Fund. This Fund uses the most flexible investment
strategy and is designed for investors seeking the greatest degree of active
management among the Major Currencies. The Fund invests in money market
instruments denominated in any combination of three or more Major Currencies,
including the U.S. dollar, with the objective of maximizing total return. The
Investment Managers may, therefore, vary their emphasis between currency
appreciation and interest income from time to time. The Fund's ability to
achieve its objective may be limited by its restrictive universe of
investments as well as the high quality of the investments. During periods of
actual or anticipated appreciation of the U.S. dollar relative to other
currencies, or for temporary defensive purposes, the Fund may invest up to
100% of its net assets in U.S. dollar-denominated instruments.

The Hard Currency Fund. This Fund invests in high-quality money market
instruments and forward contracts denominated in foreign Major Currencies
which historically have experienced low rates of inflation and which, in the
view of the Investment Managers, are pursuing economic policies favorable to
continued low rates of inflation and currency appreciation versus the U.S.
dollar over the long-term.

The High Income Fund. This Fund invests in Major Currencies and Non-Major
Currencies. Under normal market conditions, the Fund will invest at least 65%
of its total assets in money market instruments denominated in three or more
of the ten highest yielding Major Currencies (excluding the ECU) and the U.S.
dollar (whether or not the U.S. dollar is one of those ten highest yielding
Major Currencies).

As a non-fundamental policy, it is the Fund's intention under normal market
conditions not to invest (i) more than 25% of its total assets in instruments
denominated in one Major Currency, other than the U.S. dollar, (ii) more than
5% of its total assets in instruments denominated in one Non-Major Currency,
or (iii) more than 25% of its total assets in instruments denominated in
Non-Major Currencies.

For defensive purposes or to preserve capital, the Fund may temporarily
invest up to 100% of its net assets in U.S. dollar instruments. The Fund is
designed for investors seeking high current income at a level significantly
above that available on U.S. dollar money market funds. Because the
Investment Managers emphasize interest income rather than currency
appreciation, you should expect income to constitute the primary component of
total return for the Fund.

GENERAL

The Fund seeks to minimize credit risk and interest rate risk to principal by
investing only in high-quality money market instruments, maintaining a
weighted average portfolio maturity of 120 days or less and buying only money
market instruments that have an effective maturity, at the time of purchase,
of one year or less. These securities include floating or variable rate
obligations that may have actual maturities of over one year but that have
interest rates which adjust at periodic intervals. The effective maturity of
each floating or variable rate obligation in the Fund's portfolio will be
based upon these periodic adjustments. Because the Fund invests primarily in
short-term securities which are excluded from the calculation of portfolio
turnover rate, the portfolio turnover rate for the Fund is usually minimal.

The issuers of money market instruments in which the Fund may invest may
include governments of, and financial institutions, corporations or other
entities located in or organized under the laws of, any country. The Fund may
also invest in money market securities issued by supranational organizations
such as the World Bank, chartered to finance development projects in member
countries; the European Economic Community, a twelve-nation organization
engaged in cooperative economic activities; the European Coal and Steel
Community, an economic union of various European nations' steel and coal
industries; and the Asian Development Bank, an international development bank
established to lend funds, promote investment and provide technical
assistance to member nations in the Asian and Pacific regions.

The Fund invests only in instruments which are considered by the Investment
Managers to be of high quality, comparable to those (1) rated within the two
top rating categories by U.S. nationally recognized rating services, such as
S&P or Moody's. The two highest ratings assigned by S&P's are triple A or
double A (A-1 for commercial paper) and by Moody's triple A or double A (P-1
for commercial paper); or (2) issued by companies having an outstanding
unsecured debt issue currently rated within the above rating categories by
S&P or Moody's. The Fund's investments will be reviewed by the Board at least
quarterly.

To hedge (protect) against currency exchange rate fluctuations that might
adversely affect the value of a portfolio position, the Fund may enter into
forward contracts for the future acquisition or delivery of foreign
currencies. To hedge against these fluctuations between the date of purchase
or sale and the settlement date of a transaction, the Fund may enter into
these forward contracts without limitation. Also, the Fund may, solely for
hedging purposes, enter into futures contracts for the purchase or sale of
currencies or purchase options on such futures contracts or on currencies.

Money Market Instruments. Money market instruments include short-term U.S.
government securities (discussed below), CDs, time deposits, bankers'
acceptances, commercial paper, floating and variable rate notes, repurchase
agreements secured by U.S. government securities, and short-term liquid
instruments issued by foreign governments and supranational organizations.

U.S. Government Securities. Securities issued by the U.S. government include
a variety of U.S. Treasury securities, which differ in their interest rates,
maturities and dates of issuance. Some obligations issued or guaranteed by
U.S. government agencies and instrumentalities, such as Treasury bills with
maturities up to one year, are supported by the full faith and credit of the
U.S. government; others, such as those of the Federal Home Loan Banks, by the
right of the issuer to borrow from the U.S. Treasury; others, such as those
issued by the Farmers Home Administration, by discretionary authority of the
U.S. government to purchase certain obligations of the agency or
instrumentality; and others, such as those issued by the Federal Farm Credit
Banks, only by the credit of the instrumentality. While the U.S. government
provides financial support to these U.S. government-sponsored agencies or
instrumentalities, no assurance can be given that it will always do so, since
it is not so obligated by law.

Foreign Government Securities. Securities issued by the governments of
foreign countries may include direct obligations and obligations guaranteed
by the governments of the foreign countries. These obligations may have
fixed, floating or variable rates of interest.

Currency Futures Transactions. The Fund may enter into futures contracts and
purchase options on such contracts in order to hedge against changes in
currency exchange rates. A futures contract on currency is an agreement to
buy or sell a specified amount of currency for a set price on a future date.
When the Fund enters into a futures contract, it must make an initial
deposit, known as "initial margin", as a partial guarantee of its performance
under the contract. As the value of the currency fluctuates, either party to
the contract is required to make additional margin payments, known as
"variation margin," to cover any additional obligation it may have under the
contract.

The Fund sells currency futures contracts in order to offset a possible
decline in the value of the currency in which its securities are denominated.
The value of a futures contract tends to rise when the value of the currency
(and the hedged security) declines and to fall when the value of the currency
(and the hedged security) increases. The Fund buys currency futures contracts
in order to fix a favorable currency exchange rate for securities denominated
in the currency that the Fund intends to buy.

The Fund may also buy put and call options on currency futures contracts for
hedging purposes. A put option gives the Fund the right to sell a futures
contract and a call option gives the Fund the right to buy a futures
contract. The Fund is required to pay a premium for a put or call option on a
futures contract, but is not required to take any actions under the contract.
If the option cannot be profitably exercised before it expires, the Fund's
loss will be limited to the amount of the premium and any transaction costs.

The Fund may enter into closing purchase or sale transactions in order to
terminate a futures contract. The Fund may close out an option which it has
purchased by selling an offsetting option of the same series. There is no
guarantee that closing transactions can be effected. The Fund's ability to
enter into closing transactions depends on the development and maintenance of
a liquid market, which may not be available at all times.

Currency Options Transactions. The Fund may, for hedging purposes, buy put
and call options on any currency in which the Fund's investments are
denominated. The Fund is also authorized to enter into closing sale
transactions in order to realize gains or minimize losses on currency options
purchased by the Fund.

The Fund would normally buy currency call options to fix a favorable currency
exchange rate for securities denominated in that currency which the Fund
intends to buy. The purchase of a call option entitles the Fund, in return
for the premium paid, to buy specified currency at a specified price, upon
exercise of the option, during the option period. The Fund would ordinarily
realize a gain if, during the option period, the value of the currency
exceeds the sum of the exercise price, the premium paid and transaction cost;
otherwise, the Fund would realize a loss on the purchase of the call option.

The Fund will normally buy currency put options to hedge against a decline in
the value of the currency in which its securities are denominated. The
purchase of a put option entitles the Fund, in exchange for the premium paid,
to sell specified currency at a specified price, upon exercise of the option,
during the option period. Gains and losses on the purchase of put options
would be offset by compensating changes in the value of the underlying
currency and the hedged securities. The Fund may realize a gain if, during
the option period, the value of the underlying currency decreases below the
exercise price sufficiently to cover the premium and transaction costs;
otherwise the Fund would realize a loss on the purchase of the put option.

If the Fund is unable to effect a closing sale transaction with respect to
options it has bought, it would have to exercise the options in order to
realize any profit and may incur transaction costs upon the purchase or sale
of underlying currencies.

Options on currencies are traded on exchanges and in the over-the-counter
("OTC") market and will be bought only when the Investment Managers believe a
liquid secondary market exists for the options, although there can be no
assurances that a liquid secondary market will exist for a particular option
at any specific time. In general, over-the-counter options differ from
exchange-traded options in that they are two-party contracts with price and
terms negotiated between buyer and seller, and such options are endorsed
and/or guaranteed by third parties (such as a member of the NYSE). The Fund
will purchase over-the-counter options only from dealers and institutions
that the Investment Managers believe present a minimal credit risk.

OTHER INVESTMENT POLICIES OF THE FUND

Repurchase Agreements. The Fund may engage in repurchase transactions in
which the Fund buys a U.S. government security subject to resale to a bank or
dealer at an agreed-upon price and date. The transaction requires the
collateralization of the seller's obligation by the transfer of securities
with an initial market value, including accrued interest, equal to at least
102% of the dollar amount invested by the Fund in each agreement, with the
value of the underlying security marked-to-market daily to maintain coverage
of at least 100%. A default by the seller might cause the Fund to experience
a loss or delay in the liquidation of the collateral securing the repurchase
agreement. The Fund might also incur disposition costs in liquidating the
collateral. The Fund, however, intends to enter into repurchase agreements
only with financial institutions such as broker-dealers and banks that are
deemed creditworthy by the Investment Managers. A repurchase agreement is
deemed to be a loan by the Fund under the 1940 Act. The U.S. government
security subject to resale (the collateral) will be held on behalf of the
Fund by a custodian bank approved by the Board and will be held pursuant to a
written agreement. At no time will the Fund invest in repurchase agreements
of more than one year duration.

Loans of Portfolio Securities. Consistent with procedures approved by the
Board and subject to the following conditions, the Fund may lend its
portfolio securities to qualified securities dealers or other institutional
investors, provided that such loans do not exceed 30% of the value of the
Fund's total assets at the time of the most recent loan. The borrower must
deposit with the Fund's custodian bank collateral with an initial market
value of at least 102% of the initial market value of the securities loaned,
including any accrued interest, with the value of the collateral and loaned
securities marked-to-market daily to maintain collateral coverage of at least
100%. This collateral shall consist of cash, securities issued by the U.S.
government, its agencies or instrumentalities, or irrevocable letters of
credit. The lending of securities is a common practice in the securities
industry. The Fund may engage in security loan arrangements with the primary
objective of increasing the Fund's income either through investing the cash
collateral in short-term interest bearing obligations or by receiving a loan
premium from the borrower. Under the securities loan agreement, the Fund
continues to be entitled to all dividends or interest on any loaned
securities. As with any extension of credit, there are risks of delay in
recovery and loss of rights in the collateral should the borrower of the
security fail financially.

Currency Exchange Transactions and Forward Contracts. The Fund may use
forward contracts together with money market instruments (including U.S.
dollar denominated instruments) for the purpose of obtaining an investment
result that is substantially equal to a direct investment in a foreign
currency denominated instrument. The Fund may also engage in currency
transactions to hedge (protect) against uncertainty in the level of future
currency exchange rates. Hedging transactions will be limited to either
specific transactions (for example, in respect of settlement of securities
purchased or sold by the Fund) or portfolio positions (for example, in
respect of security positions already held by the Fund). The Hard Currency
Fund, however, tries to maintain foreign currency exposure with respect to
100% of its net assets at all times and, therefore, any portfolio position
hedging activities of the Fund are expected to be consistent with this
policy. The Global Currency Fund and High Income Fund may hedge up to 100% of
their portfolio positions and each Fund may engage in currency exchange
transactions without limitation for hedging purposes in respect of specific
transactions, such as the settlement of securities purchased or sold by the
Fund.

The Fund conducts currency exchange transactions either on a spot (i.e.,
cash) basis at the rate prevailing in the currency market, or by entering
into forward contracts to buy or sell currencies. A forward currency contract
involves an obligation to buy or sell a specific currency at a future date,
which may be any fixed number of days from the date of the contract agreed
upon by the parties, at a price set at the time of the contract. These
contracts are entered into in the interbank market conducted directly between
currency traders (usually large commercial banks) and their customers. When
used for hedging, such contracts tend to minimize the risk of loss due to a
change in the value of the currency; they also tend to limit any potential
currency gain which might result and do not protect against fluctuations in
the value of the underlying security or position.

Non-diversification. Although the Fund is non-diversified under the 1940 Act,
as a non-fundamental policy, the Fund will not invest more than 5% of its
total assets in the securities of a single foreign bank. This limitation does
not apply to other issuers.

Illiquid Investments. The Fund's policy is not to invest more than 10% of its
net assets in illiquid securities, including repurchase agreements, maturing
in more than seven days, time deposits maturing in more than seven days,
over-the-counter options bought by the Fund and investments hedged by
over-the-counter options. Illiquid securities are generally securities that
cannot be sold within seven days in the normal course of business at
approximately the amount at which the Fund has valued them.

Portfolio Turnover. The High Income Fund's portfolio turnover rate for the
fiscal year ended October 31, 1995 was 115.05%. The high portfolio turnover
rate for the fiscal year ended October 31, 1995 was due to certain long-term
securities held by the High Income Fund. Only long-term securities are
considered when calculating the portfolio turnover rate. Although the High
Income Fund generally does not invest in long-term securities, its few
transactions involving such securities resulted in a higher portfolio
turnover rate for the fiscal year ended October 31, 1995 than might otherwise
be expected. High portfolio turnover may increase the Fund's transaction
costs.

Percentage Restrictions. If a percentage restriction noted above is adhered
to at the time of investment, a later increase or decrease in the percentage
resulting from a change in the value or liquidity of portfolio securities or
the amount of net assets will not be considered a violation of any of the
foregoing policies.

Other Policies and Restrictions. The following are fundamental policies of
the Fund that cannot be changed without shareholder approval.

The Fund may not: (1) borrow money, except from banks for temporary or
emergency purposes in amounts not exceeding 331/3% of the value of its total
assets, or pledge, hypothecate, or mortgage more than 331/3% of the value of
its total assets in connection with any such borrowings (no additional
investments may be made while any such borrowings exceed 5% of the Fund's
total assets; the Fund may incur interest charges in connection with such
borrowings); (2) invest more than 25% of its assets in the securities of
issuers in any industry; (3) lend more than 30% of its total assets, except
to the extent that entering into repurchase agreements or purchasing debt
securities may be considered a loan; and (4) invest more than 5% of its total
assets in securities of issuers (including predecessors) with less than three
years' continuous operations. Restrictions (2) and (4) do not apply to
investments in U.S. government securities.

The Fund has a number of additional investment restrictions that limit its
activities to some extent. Some of these restrictions may only be changed
with shareholder approval. For a list of these restrictions and more
information about the Fund's investment policies, please see "How does the
Fund Invest its Assets?" and "Investment Restrictions" in the SAI.

WHAT ARE THE FUND'S POTENTIAL RISKS?

General. An investment in the Fund may not be suitable for all investors and
should not be considered a complete investment program. You should take into
account your investment objectives as well as your other investments when
considering the purchase of shares of the Fund. The value of the Fund's
investments and therefore its Net Asset Value generally will differ inversely
with changes in prevailing interest rates, although this difference will
depend upon the effective maturities of the instruments held. The Fund
intends to invest exclusively in short-term money market instruments to
minimize this effect.

Because the Hard Currency Fund invests in instruments denominated in Major
Currencies issued by countries that have recently experienced, and that are
expected to continue to experience, relatively low inflation, the instruments
in which the Fund invests may pay interest rates that are lower than
instruments denominated in other Major Currencies, including the U.S. dollar.
Due to the economic strength of the countries which issue the currencies in
which such instruments are denominated, or other factors, however, the Major
Currencies in which the Fund's instruments are denominated may appreciate
relative to other Major Currencies, including the U.S. dollar. If the
currency appreciation more than offsets any negative interest rate
differential, the Fund could provide a higher total return to investors than
similar investments denominated in other Major Currencies, including the U.S.
dollar.

Because the High Income Fund invests primarily in instruments denominated in
the Major Currencies that have the highest yield, there is a significant
possibility that the countries represented by the high-yield Major Currencies
may have recently experienced or may be expected to experience relatively
high rates of inflation, which may cause such Major Currencies to depreciate
relative to other Major Currencies, including the U.S. dollar. It is
possible, however, that the higher yields of the instruments in which the
Fund invests will more than offset any such depreciation, in which case the
Fund could provide a higher total return than similar investments denominated
in other Major Currencies, including the U.S. dollar.

The price of the shares of the Fund, expressed in U.S. dollar terms, will
fluctuate and, unlike a money market fund, the Fund does not seek to maintain
a stable Net Asset Value. In addition, the total return on the Fund may be
higher or lower than the total return on a U.S. dollar money market fund.
You, therefore, should not consider the Fund to be a substitute for a U.S.
dollar money market fund.

The value of the investments held by the Fund is calculated in U.S. dollars
on each day that the NYSE is open for business. As a result, to the extent
that the Fund's assets are invested in instruments denominated in currencies
other than the U.S. dollar and the currencies appreciate relative to the U.S.
dollar, the Fund's Net Asset Value per share as expressed in U.S. dollars
(and, therefore, the value of your investment) should increase. If the U.S.
dollar appreciates relative to the other currencies, the opposite should
occur, except to the extent that losses are offset by net investment income
generated by the money market instruments in which the Fund invests.

The currency-related gains and losses experienced by the Fund will be based
on changes in the value of portfolio securities attributable to currency
fluctuations only in relation to the original purchase price of such
securities as stated in U.S. dollars. Your gains or losses on shares of the
Fund will be based on changes attributable to fluctuations in the Net Asset
Value of such shares, expressed in U.S. dollars, in relation to the original
U.S. dollar purchase price of the shares. The amount of appreciation or
depreciation in the Fund's assets also will be affected by changes in the
value of the securities that are unrelated to changes in currency exchange
rates.

Interest rates paid on instruments denominated in foreign currencies may be
higher or lower than those paid on similar U.S. dollar instruments. As a
result, the Fund may have a higher or lower yield than a portfolio which
invests strictly in U.S. dollar-denominated instruments.

Non-U.S. Securities. Investing in non-U.S. money market instruments and other
securities of non-U.S. issuers involves considerations and possible risks and
opportunities not typically associated with investing in U.S. securities.
Such investments may be favorably or unfavorably affected by changes in
interest rates, currency exchange rates and exchange control regulations, and
costs may be incurred in connection with conversions between various
currencies. In addition, investments in countries other than the U.S. could
be affected by other factors not generally thought to be present in the U.S.,
including less liquid and efficient securities markets, greater price
volatility, less publicly available information, the possibility of normal
foreign withholding taxes or heavier taxation, political or social
instability, limitations on the removal of funds or other assets of the Fund,
expropriation of assets, adverse diplomatic developments, higher transaction
and custody costs, delays attendant in settlement procedures, and
difficulties in enforcing contractual obligations.

Non-diversification. As a non-diversified Fund, there is no restriction under
the 1940 Act on the percentage of assets that may be invested at any time in
the securities of any one issuer. The Fund, however, intends to comply with
the diversification requirements applicable to regulated investment companies
under the Code. As of the last day of each fiscal quarter, the Fund intends
that its investments in securities of any one issuer (other than the U.S.
government) will be limited to 25% of its total assets, and that, with
respect to at least 50% of its total assets, the Fund may not have invested
more than 5% of its total assets in the securities of any one issuer or hold
more than 10% of the outstanding voting securities of any one issuer. To the
extent the Fund is not fully diversified under the 1940 Act, it may be more
susceptible to adverse economic, political or regulatory developments
affecting a single issuer than would be the case if it was more broadly
diversified.

Currency Futures and Options Transactions. Although currency futures and
options transactions are intended to enable the Fund to manage currency
exchange risks, unanticipated changes in currency exchange rates could result
in poorer performance than if they had not entered into these transactions.
Even if the Investment Managers correctly predict currency exchange rate
movements, a hedge could be unsuccessful if changes in the value of the
Fund's futures position do not correspond to changes in the value of the
currency in which its investments are denominated. This lack of correlation
between the Fund's futures and currency positions may be caused by
differences between the futures and currency markets.

The Investment Managers will attempt to minimize these risks through careful
selection and monitoring of the Fund's futures and options positions. The
ability to predict the direction of currency exchange rates involves skills
different from those used in selecting securities.

The Fund will not use futures transactions for speculation. The Fund may not
purchase or sell futures contracts or options on futures, except for closing
purchase or sale transactions, if immediately thereafter the sum of margin
deposits on the Fund's outstanding futures positions and premiums paid for
outstanding options on futures would exceed 5% of the market value of the
Fund's total assets. These transactions involve brokerage costs, require
margin deposits and, in the case of contracts obligating the Fund to purchase
securities, require the Fund to segregate assets to cover such contracts.

These transactions also involve risks to the Fund of the possible loss of
margin deposits or collateral in the event of bankruptcy of a broker with
whom the Fund has an open position in a futures or options contract. The
Fund's ability to enter into certain futures, forward contracts and options
is also limited by the requirements of the Code for qualification of the Fund
as a regulated investment company. These securities may also require the
application of complex and special tax rules and elections which may affect
the amount, timing and character of distributions to shareholders. These
investments and transactions are discussed further in the SAI.

The purchase of currency options is a highly specialized activity which
involves investment techniques and risks different from those associated with
ordinary portfolio securities transactions. The Fund pays brokerage
commissions or spreads in connection with its options and any related
currency transactions.

Transactions in options and futures are generally considered "derivative
securities."

WHO MANAGES THE FUND?

The Board. The Board oversees the management of the Fund and elects its
officers. The officers are responsible for the Fund's day-to-day operations.
The Board also monitors the Hard Currency Fund to ensure no material
conflicts exist between the Hard Currency Fund's classes of shares. While
none is expected, the Board will act appropriately to resolve any material
conflict that may arise.

Investment Managers. The Investment Managers manage the Fund's assets and
make its investment decisions. The Investment Managers also perform similar
services for other funds. They are wholly owned by Resources, a publicly
owned company engaged in the financial services industry through its
subsidiaries. Charles B. Johnson and Rupert H. Johnson, Jr. are the principal
shareholders of Resources. Together, the Investment Managers and their
affiliates manage over $179 billion in assets. Please see "Investment
Management and Other Services" and "Miscellaneous Information" in the SAI for
information on securities transactions and a summary of the Fund's Code of
Ethics.

Under an agreement with Advisers, TICI is the sub-advisor of the Fund. TICI
provides Advisers with investment management advice and assistance. TICI also
provides day-to-day portfolio management for the Fund. TICI's activities are
subject to the Board's review and control, as well as Advisers' instruction
and supervision.

Management Team. The team responsible for the day-to-day management of the
Fund's portfolio is: Mr. Neil S. Devlin since 1993 and Mr. Thomas J. Dickson
since 1995.

Neil S. Devlin

Executive Vice President of TICI

Mr. Devlin is a Chartered Financial Analyst and holds a bachelor of arts
degree in economics and philosophy from Brandeis University. Mr. Devlin
joined the Franklin Templeton Group in 1987.

Thomas J. Dickson

Portfolio Manager of TICI

Mr. Dickson received his bachelor of science degree in managerial economics
from the University of California at Davis. Mr. Dickson joined the Franklin
Templeton Group in 1992.

Donald P. Gould, a Portfolio Manager with Advisers, is founder and president
of Franklin Templeton Global Trust (the "Trust"). Mr. Gould supervises the
implementation of the Fund's portfolio investment policies. He holds a Master
of Business Administration degree from the Harvard Business School and a
Bachelor of Arts degree in economics from Pomona College. He joined the
Franklin Templeton Group in November 1993 upon its acquisition of certain
assets of Huntington Advisers, Inc. He has been in the securities industry
since 1981.

Management Fees. During the fiscal year ended October 31, 1996, management
fees and total expenses of the Fund, including fees paid to Advisers were as
follows:

TOTAL
OPERATING
MANAGEMENT FEESEXPENSES

Global Currency Fund 0.65% 0.99%
Hard Currency Fund 0.65% 1.10%
High Income Fund* 0.65% 1.29%

*Under an agreement by Advisers to limit its fees, the High Income Fund paid
management fees totaling 0.61% and total operating expenses totaling 1.25%.
Advisers may end this arrangement at any time upon notice to the Board.

During the same period, Advisers paid TICI a sub-advisory fee totaling 0.25%
of the average daily net assets of the Fund. This fee is not a separate
expense of the Fund but is paid by Advisers from the management fees it
receives from the Fund.

Portfolio Transactions. The Investment Managers try to obtain the best
execution on all transactions. If the Investment Managers believe more than
one broker or dealer can provide the best execution, consistent with internal
policies they may consider research and related services and the sale of Fund
shares, as well as shares of other funds in the Franklin Templeton Group of
Funds, when selecting a broker or dealer. Please see "How does the Fund Buy
Securities for its Portfolio?" in the SAI for more information.

Administrative Services. Under an agreement with Advisers, FT Services
provides certain administrative services and facilities for the Fund. Please
see "Investment Management and Other Services" in the SAI for more
information.

THE RULE 12B-1 PLAN

The Fund has a distribution plan or "Rule 12b-1 Plan" for its Class I shares
under which it may reimburse Distributors or others for activities primarily
intended to sell shares of the class. These expenses may include, among
others, distribution or service fees paid to Securities Dealers or others who
have executed a servicing agreement with the Fund, Distributors or its
affiliates, printing prospectuses and reports used for sales purposes,
preparing and distributing sales literature and advertisements, and a
prorated portion of Distributors' overhead expenses.

Payments by the Fund under the plan may not exceed 0.45% per year of Class
I's average daily net assets. Of this amount, the Fund may reimburse up to
0.25% to Distributors or others and may reimburse an additional 0.20% to
Distributors for distribution expenses. All distribution expenses over this
amount will be borne by those who have incurred them. During the first year
after certain purchases made without a sales charge, Distributors may keep
the Rule 12b-1 fees associated with the purchase. For more information,
please see "The Fund's Underwriter" in the SAI.

HOW DOES THE FUND MEASURE PERFORMANCE?

From time to time, the Fund advertises its performance. The more commonly
used measures of performance are total return, current yield and current
distribution rate. Performance figures are usually calculated using the
maximum sales charge, but certain figures may not include the sales charge.

Total return is the change in value of an investment over a given period. It
assumes any dividends and capital gains are reinvested. Current yield shows
the income per share earned by the Fund. The current distribution rate shows
the dividends or distributions paid to shareholders by the Fund. This rate is
usually computed by annualizing the dividends paid per share during a certain
period and dividing that amount by the current Offering Price. Unlike current
yield, the current distribution rate may include income distributions from
sources other than dividends and interest received by the Fund.

The Fund's investment results will vary. Performance figures are always based
on past performance and do not guarantee future results. For a more detailed
description of how the Fund calculates its performance figures, please see
"How does the Fund Measure Performance?" in the SAI.

The Hard Currency Fund also offers another share class and, from time to
time, will advertise its performance in a manner described in the prospectus
for that class.

HOW TAXATION AFFECTS THE FUND AND ITS SHAREHOLDERS

The following discussion reflects some of the tax considerations that affect
mutual funds and their shareholders. For more information on tax matters
relating to the Fund and its shareholders, see "Additional Information on
Distributions and Taxes" in the SAI.

The Fund has elected and intends to continue to qualify as a regulated
investment company under Subchapter M of the Code. By distributing all of its
income and meeting certain other requirements relating to the sources of its
income and diversification of its assets, the Fund will not be liable for
federal income or excise taxes.

Regular income dividends (which are generally distributed monthly) will be
determined from the Fund's net investment income, excluding any realized net
foreign currency gains and losses. Under U.S. Treasury regulations, net
realized foreign currency gains and losses are required to be reported as
ordinary income or loss to the Fund. Therefore, if in the course of a fiscal
year, the Fund realizes net foreign currency losses, the Fund may be required
to reclassify all or a portion of its income dividend distributions made
during such fiscal year as a return-of-capital for federal income tax
purposes. Net foreign currency gains, if any, will generally be distributed
as a supplemental income dividend once each year in December to reflect any
net foreign currency gain realized by the Fund as of October 31 for the
current fiscal year, and may also reflect any undistributed foreign currency
gains for the prior fiscal year. You will be informed of the tax status of
all distributions shortly after the close of each calendar year.

For federal income tax purposes, any income dividends that you receive from
the Fund, as well as any distributions derived from the excess of net
short-term capital gain over net long-term capital loss, are treated as
ordinary income whether you have elected to receive them in cash or in
additional shares.

Distributions derived from the excess of net long-term capital gain over net
short-term capital loss are treated as long-term capital gain regardless of
the length of time you have owned Fund shares and regardless of whether you
have elected to receive them in cash or in additional shares.

Pursuant to the Code, certain distributions which are declared in October,
November or December but which, for operational reasons, may not be paid to
you until the following January, will be treated for tax purposes as if
received by you on December 31 of the calendar year in which they are
declared.

Redemptions and exchanges of Fund shares are taxable events on which you may
realize a gain or loss. Any loss incurred on sale or exchange of Fund's
shares held for six months or less will be treated as a long-term capital
loss to the extent of capital gain dividends received with respect to the
shares.

The Fund's investments in options, futures contracts and forward contracts
may give rise to taxable income, gain or loss and will be subject to special
tax treatment under certain mark-to-market and straddle rules, the effect of
which may be to accelerate income to the Fund, defer Fund losses and cause
adjustments in the holding periods of Fund securities. These rules could
therefore affect the amount, timing and character of distributions to
shareholders. Certain elections may be available to the Fund to mitigate some
of the unfavorable consequences of the provisions described in this
paragraph. These investments and transactions are discussed in the SAI.

Foreign exchange gains and losses realized by the Fund in connection with
certain transactions involving foreign currencies, foreign currency payables
or receivables, foreign currency-denominated debt securities, foreign
currency forward contracts, and options or futures contracts on foreign
currencies are subject to special tax rules that may cause gains and losses
to be treated as ordinary income and losses rather than capital gains and
losses and may affect the amount and timing of the Fund's income or loss from
such transactions and in turn its distributions to shareholders. These rules
are discussed in the SAI.

The Fund will inform you of the source of its dividends and distributions at
the time they are paid and will, promptly after the close of each calendar
year, advise you of the tax status for federal income tax purposes of such
dividends and distributions.

If you are not deemed a U.S. person for purposes of federal income taxation,
you should consult with your financial or tax advisors regarding the
applicability of U.S. withholding or other taxes to distributions received by
you from the Fund and the application of foreign tax laws to these
distributions.

HOW IS THE TRUST ORGANIZED?

As of January 1, 1997, the Hard Currency Fund began offering a new class of
shares designated Franklin Templeton Hard Currency Fund - Advisor Class. All
shares outstanding before the offering of Advisor Class shares have been
designated Franklin Templeton Hard Currency Fund - Class I. Additional series
and classes of shares may be offered in the future.

Shares of each class of the Hard Currency Fund represent proportionate
interests in the assets of the Fund and have the same voting and other rights
and preferences as any other class of the Hard Currency Fund for matters that
affect the Fund as a whole. For matters that only affect one class, however,
only shareholders of that class may vote. Each class will vote separately on
matters (1) affecting only that class, (2) expressly required to be voted on
separately by state law, or (3) required to be voted on separately by the
1940 Act. Shares of each class of a series have the same voting and other
rights and preferences as the other classes and series of the Trust for
matters that affect the Trust as a whole.

The Trust has noncumulative voting rights. This gives holders of more than
50% of the shares voting the ability to elect all of the members of the
Board. If this happens, holders of the remaining shares voting will not be
able to elect anyone to the Board.

The Trust does not intend to hold annual shareholder meetings. It may hold a
special meeting of a series, however, for matters requiring shareholder
approval under the 1940 Act. A meeting may also be called by the Board in its
discretion or by shareholders holding at least 10% of the outstanding shares.
The 1940 Act requires that we help you communicate with other shareholders in
connection with removing members of the Board.

ABOUT YOUR ACCOUNT

HOW DO I BUY SHARES?

OPENING YOUR ACCOUNT

To open your account, contact your investment representative or complete and
sign the enclosed shareholder application and return it to the Fund with your
check.

MINIMUM
INVESTMENTS*
To Open Your Account $100
To Add to Your Account $ 25

*We may waive these minimums for retirement plans. We may also refuse any
order to buy shares.

SALES CHARGE REDUCTIONS AND WAIVERS

- - If you qualify to buy shares under one of the sales charge reduction or
waiver categories described below, please include a written statement with
each purchase order explaining which privilege applies. If you don't include
this statement, we cannot guarantee that you will receive the sales charge
reduction or waiver.

Quantity Discounts. The sales charge you pay depends on the dollar amount you
invest, as shown in the table below.

TOTAL SALES CHARGE AMOUNT PAID
AS A PERCENTAGE OF TO DEALER AS A
AMOUNT OF PURCHASE OFFERING NET AMOUNT PERCENTAGE OF
AT OFFERING PRICE PRICE INVESTED OFFERING PRICE

Less than $50,000 3.00% 3.09% 2.60%
$50,000 but less than $100,000 2.50% 2.56% 2.25%
$100,000 but less than $250,000 2.00% 2.04% 1.85%
$250,000 but less than $500,000 1.50% 1.52% 1.40%
$500,000 but less than $750,000 1.00% 1.01% 1.00%
$750,000 but less than $1,000,000 0.75% 0.76% 0.75%
$1,000,000 or more* None None None

*If you invest $1 million or more, a Contingent Deferred Sales Charge may be
imposed on an early redemption. Please see "How Do I Sell Shares? -
Contingent Deferred Sales Charge." Please also see "Other Payments to
Securities Dealers" below for a discussion of payments Distributors may make
out of its own resources to Securities Dealers for certain purchases.

Cumulative Quantity Discounts. To determine if you may pay a reduced sales
charge, the amount of your current purchase is added to the cost or current
value, whichever is higher, of your existing shares in the Franklin Templeton
Funds, as well as those of your spouse, children under the age of 21 and
grandchildren under the age of 21. If you are the sole owner of a company,
you may also add any company accounts, including retirement plan accounts.
Companies with one or more retirement plans may add together the total plan
assets invested in the Franklin Templeton Funds to determine the sales charge
that applies.

Letter of Intent. You may buy shares at a reduced sales charge by completing
the Letter of Intent section of the shareholder application. A Letter of
Intent is a commitment by you to invest a specified dollar amount during a 13
month period. The amount you agree to invest determines the sales charge you
pay.

By completing the Letter of Intent section of the shareholder application,
you acknowledge and agree to the following:

o You authorize Distributors to reserve 5% of your total intended purchase in
Fund shares registered in your name until you fulfill your Letter.

o You give Distributors a security interest in the reserved shares and
appoint Distributors as attorney-in-fact.

o Distributors may sell any or all of the reserved shares to cover any
additional sales charge if you do not fulfill the terms of the Letter.

o Although you may exchange your shares, you may not sell reserved shares
until you complete the Letter or pay the higher sales charge.

Your periodic statements will include the reserved shares in the total shares
you own. We will pay or reinvest dividend and capital gain distributions on
the reserved shares as you direct. Our policy of reserving shares does not
apply to certain retirement plans.

If you would like more information about the Letter of Intent privilege,
please see "How Do I Buy, Sell and Exchange Shares? - Letter of Intent" in
the SAI or call Shareholder Services.

Group Purchases. If you are a member of a qualified group, you may buy Fund
shares at a reduced sales charge that applies to the group as a whole. The
sales charge is based on the combined dollar value of the group members'
existing investments, plus the amount of the current purchase.

A qualified group is one that:

o Was formed at least six months ago,

o Has a purpose other than buying Fund shares at a discount,

o Has more than 10 members,

o Can arrange for meetings between our representatives and group members,

o Agrees to include Franklin Templeton Fund sales and other materials in
publications and mailings to its members at reduced or no cost to
Distributors,

o Agrees to arrange for payroll deduction or other bulk transmission of
investments to the Fund, and

o Meets other uniform criteria that allow Distributors to achieve cost
savings in distributing shares.

Sales Charge Waivers. The Fund's sales charges (front-end and contingent
deferred) will not apply to certain purchases. For waiver categories 1, 2 or
3 below: (i) the distributions or payments must be reinvested within 365 days
of their payment date, and (ii) Class II distributions may be reinvested in
either Class I or Class II shares. Class I distributions may only be
reinvested in Class I shares.

The Fund's sales charges will not apply if you are buying shares with money
from the following sources:

1. Dividend and capital gain distributions from any Franklin Templeton Fund
or a REIT sponsored or advised by Franklin Properties, Inc.

2. Distributions from an existing retirement plan invested in the Franklin
Templeton Funds

3. Annuity payments received under either an annuity option or from death
benefit proceeds, only if the annuity contract offers as an investment option
the Franklin Valuemark Funds, the Templeton Variable Annuity Fund, the
Templeton Variable Products Series Fund, or the Franklin Government
Securities Trust. You should contact your tax advisor for information on any
tax consequences that may apply.

4. Redemptions from any Franklin Templeton Fund if you:

o Originally paid a sales charge on the shares,

o Reinvest the money within 365 days of the redemption date, and

o Reinvest the money in the same class of shares.

An exchange is not considered a redemption for this privilege. The Contingent
Deferred Sales Charge will not be waived if the shares were subject to a
Contingent Deferred Sales Charge when sold. We will credit your account in
shares, at the current value, in proportion to the amount reinvested for any
Contingent Deferred Sales Charge paid in connection with the earlier
redemption, but a new Contingency Period will begin.

If you immediately placed your redemption proceeds in a Franklin Bank CD, you
may reinvest them as described above. The proceeds must be reinvested within
365 days from the date the CD matures, including any rollover.

5. Redemptions from other mutual funds

If you sold shares of a fund that is not a Franklin Templeton Fund within
the past 60 days, you may invest the proceeds without any sales charge if (a)
the investment objectives were similar to the Fund's, and (b) your shares in
that fund were subject to any front-end or contingent deferred sales charges
at the time of purchase. You must provide a copy of the statement showing
your redemption.

The Fund's sales charges will also not apply to purchases by:

6. Trust companies and bank trust departments agreeing to invest in Franklin
Templeton Funds over a 13 month period at least $1 million of assets held in
a fiduciary, agency, advisory, custodial or similar capacity and over which
the trust companies and bank trust departments or other plan fiduciaries or
participants, in the case of certain retirement plans, have full or shared
investment discretion. We will accept orders for these accounts by mail
accompanied by a check or by telephone or other means of electronic data
transfer directly from the bank or trust company, with payment by federal
funds received by the close of business on the next business day following
the order.

7. Group annuity separate accounts offered to retirement plans

8. Retirement plans that (i) are sponsored by an employer with at least 100
employees, (ii) have plan assets of $1 million or more, or (iii) agree to
invest at least $500,000 in the Franklin Templeton Funds over a 13 month
period. Retirement plans that are not Qualified Retirement Plans or SEPS,
such as 403(b) or 457 plans, must also meet the requirements described under
"Group Purchases" above.

9. An Eligible Governmental Authority. Please consult your legal and
investment advisors to determine if an investment in the Fund is permissible
and suitable for you and the effect, if any, of payments by the Fund on
arbitrage rebate calculations.

10. Broker-dealers, registered investment advisors or certified financial
planners who have entered into an agreement with Distributors for clients
participating in comprehensive fee programs

11. Registered Securities Dealers and their affiliates, for their
investment accounts only

12. Current employees of Securities Dealers and their affiliates and their
family members, as allowed by the internal policies of their employer

13. Officers, trustees, directors and full-time employees of the Franklin
Templeton Funds or the Franklin Templeton Group, and their family members,
consistent with our then-current policies

14. Investment companies exchanging shares or selling assets pursuant to a
merger, acquisition or exchange offer

15. Accounts managed by the Franklin Templeton Group

16. Certain unit investment trusts and their holders reinvesting
distributions from the trusts

HOW DO I BUY SHARES IN CONNECTION WITH RETIREMENT PLANS?

Your individual or employer-sponsored retirement plan may invest in the Fund.
Plan documents are required for all retirement plans. Trust Company can
provide the plan documents for you and serve as custodian or trustee.

Trust Company can provide you with brochures containing important information
about its plans. To establish a Trust Company retirement plan, you will need
an application other than the one included in this prospectus. For a
retirement plan brochure or application, please call our Retirement Plans
Department.

Please consult your legal, tax or retirement plan specialist before choosing
a retirement plan. Your investment representative or advisor can help you
make investment decisions within your plan.

OTHER PAYMENTS TO SECURITIES DEALERS

The payments described below may be made to Securities Dealers who initiate
and are responsible for certain purchases made without a sales charge. The
payments described below may be made to Securities Dealers who initiate and
are responsible for certain purchases made without a sales charge. The
payments are subject to the sole discretion of Distributors, and are paid by
Distributors or one of its affiliates and not by the Fund or its shareholders.

1. Purchases of $1 million or more - up to 0.75% of the purchase price.

2. Purchases by certain retirement plans - up to 1% of the purchase price.

3. Purchases by trust companies and bank trust departments, Eligible
Governmental Authorities, and broker-dealers or others on behalf of clients
participating in comprehensive fee programs - up to 0.25% of the purchase
price.

A Securities Dealer may only receive one of these payments for each
qualifying purchase. Securities Dealers who receive payments in connection
with investments described in paragraphs 1 or 2 above will be eligible to
receive the Rule 12b-1 fee associated with the purchase starting in the
thirteenth calendar month after the purchase.

FOR BREAKPOINTS THAT MAY APPLY AND INFORMATION ON ADDITIONAL COMPENSATION
PAYABLE TO SECURITIES DEALERS IN CONNECTION WITH THE SALE OF FUND SHARES,
PLEASE SEE "HOW DO I BUY, SELL AND EXCHANGE SHARES? - OTHER PAYMENTS TO
SECURITIES DEALERS" IN THE SAI.

May I Exchange Shares for Shares of Another Fund?

We offer a wide variety of funds. If you would like, you can move your
investment from your Fund account to an existing or new account in another
Franklin Templeton Fund (an "exchange"). Because it is technically a sale and
a purchase of shares, an exchange is a taxable transaction.

Before making an exchange, please read the prospectus of the fund you are
interested in. This will help you learn about the fund, its investment
objective and policies, and its rules and requirements for exchanges. For
example, some Franklin Templeton Funds do not accept exchanges and others may
have different investment minimums.

METHOD STEPS TO FOLLOW

By Mail 1. Send us written instructions signed by all account owners

2. Include any outstanding share certificates for the
shares you're exchanging

By Phone Call Shareholder Services or TeleFACTS(R)

- If you do not want the ability to exchange by phone to
apply to your account, please let us know.

Through Your Dealer Call your investment representative

Please refer to "Transaction Procedures and Special Requirements" for other
important information on how to exchange shares.

WILL SALES CHARGES APPLY TO MY EXCHANGE?

You generally will not pay a front-end sales charge on exchanges. If you have
held your shares less than six months, however, you will pay the percentage
difference between the sales charge you previously paid and the applicable
sales charge of the new fund. If you have never paid a sales charge on your
shares because, for example, they have always been held in a money fund, you
will pay the Fund's applicable sales charge no matter how long you have held
your shares. These charges may not apply if you qualify to buy shares without
a sales charge.

Contingent Deferred Sales Charge. We will not impose a Contingent Deferred
Sales Charge when you exchange shares. Any shares subject to a Contingent
Deferred Sales Charge at the time of exchange, however, will remain so in the
new fund. For accounts with shares subject to a Contingent Deferred Sales
Charge, shares are exchanged into the new fund in the order they were
purchased. If you exchange shares into one of our money funds, the time your
shares are held in that fund will not count towards the completion of any
Contingency Period. For more information about the Contingent Deferred Sales
Charge, please see that section under "How Do I Sell Shares?"

EXCHANGE RESTRICTIONS

Please be aware that the following restrictions apply to exchanges:

o You may only exchange shares within the same class, except as noted below.

o The accounts must be identically registered. You may, however, exchange
shares from a Fund account requiring two or more signatures into an
identically registered money fund account requiring only one signature for
all transactions. Please notify us in writing if you do not want this option
to be available on your account. Additional procedures may apply. Please see
"Transaction Procedures and Special Requirements."

o Trust Company IRA or 403(b) retirement plan accounts may exchange shares as
described above. Restrictions may apply to other types of retirement plans.
Please contact our Retirement Plans Department for information on exchanges
within these plans.

o The fund you are exchanging into must be eligible for sale in your state.

o We may modify or discontinue our exchange policy if we give you 60 days'
written notice.

o Your exchange may be restricted or refused if you: (i) request an exchange
out of the Fund within two weeks of an earlier exchange request, (ii)
exchange shares out of the Fund more than twice in a calendar quarter, or
(iii) exchange shares equal to at least $5 million, or more than 1% of the
Fund's net assets. Shares under common ownership or control are combined for
these limits. If you exchange shares as described in this paragraph, you will
be considered a Market Timer. Each exchange by a Market Timer, if accepted,
will be charged $5.00. Some of our funds do not allow investments by Market
Timers.

Because excessive trading can hurt Fund performance and shareholders, we may
refuse any exchange purchase if (i) we believe the Fund would be harmed or
unable to invest effectively, or (ii) the Fund receives or anticipates
simultaneous orders that may significantly affect the Fund.

LIMITED EXCHANGES BETWEEN DIFFERENT CLASSES OF SHARES

Certain funds in the Franklin Templeton Funds offer classes of shares not
offered by the Global Currency Fund and the High Income Fund, such as
"Advisor Class" or with respect to all the Currency Funds, "Class Z" shares.
Because the Global Currency Fund and the High Income Fund does not currently
offer an Advisor Class, you may exchange Advisor Class shares of any Franklin
Templeton Fund for shares of those Funds at Net Asset Value. If you do so and
you later decide you would like to exchange into a fund that offers an
Advisor Class, you may exchange your Fund shares for Advisor Class shares of
that fund. Beginning on or about May 1, 1997, you may also exchange Class Z
shares of Franklin Mutual Series Fund Inc. for shares of the Fund at Net
Asset Value.

HOW DO I SELL SHARES?

You may sell (redeem) your shares at any time.

METHOD STEPS TO FOLLOW

By Mail 1. Send us written instructions signed by all account owners

2. Include any outstanding share certificates for the
shares you are selling

3. Provide a signature guarantee if required

4. Corporate, partnership and trust accounts may need to
send additional documents. Accounts under court
jurisdiction may have other requirements.

By Phone

(Only available if you have completed and sent to us the telephone redemption
agreement included with this prospectus)

Call Shareholder Services

Telephone requests will be accepted:

o If the request is $50,000 or less. Institutional accounts
may exceed $50,000 by completing a separate agreement. Call
Institutional Services to receive a copy.

o If there are no share certificates issued for the shares
you want to sell or you have already returned them to the
Fund

o Unless you are selling shares in a Trust Company
retirement plan account

o Unless the address on your account was changed by phone
within the last 30 days

Through Your Dealer Call your investment representative

Beginning on or about May 1, 1997, you will automatically be able to redeem
shares by telephone without completing a telephone redemption agreement.
Please notify us in writing if you do not want this option to be available on
your account. If you later decide you would like this option, send us written
instructions signed by all account owners, with a signature guarantee.

We will send your redemption check within seven days after we receive your
request in proper form. If you sell your shares by phone, the check may only
be made payable to all registered owners on the account and sent to the
address of record. We are not able to receive or pay out cash in the form of
currency.

If you sell shares you recently purchased with a check or draft, we may delay
sending you the proceeds for up to 15 days or more to allow the check or
draft to clear. A certified or cashier's check may clear in less time.

Under unusual circumstances, we may suspend redemptions or postpone payment
for more than seven days as permitted by federal securities law.

Please refer to "Transaction Procedures and Special Requirements" for other
important information on how to sell shares.

TRUST COMPANY RETIREMENT PLAN ACCOUNTS

To comply with IRS regulations, you need to complete additional forms before
selling shares in a Trust Company retirement plan account. Tax penalties
generally apply to any distribution from these plans to a participant under
age 59 1/2, unless the distribution meets an exception stated in the Code. To
obtain the necessary forms, please call our Retirement Plans Department.

CONTINGENT DEFERRED SALES CHARGE

If you did not pay a front-end sales charge because you invested $1 million
or more or agreed to invest $1 million or more under a Letter of Intent, a
Contingent Deferred Sales Charge may apply if you sell all or a part of your
investment within the Contingency Period. Once you have invested $1 million
or more, any additional investments you make without a sales charge may also
be subject to a Contingent Deferred Sales Charge if they are sold within the
Contingency Period. The charge is 1% of the value of the shares sold or the
Net Asset Value at the time of purchase, whichever is less.

We will first redeem any shares in your account that are not subject to the
charge. If there are not enough of these to meet your request, we will redeem
shares subject to the charge in the order they were purchased.

Unless otherwise specified, when you request to sell a stated dollar amount,
we will redeem additional shares to cover any Contingent Deferred Sales
Charge. For requests to sell a stated number of shares, we will deduct the
amount of the Contingent Deferred Sales Charge, if any, from the sale
proceeds.

Waivers. We waive the Contingent Deferred Sales Charge for:

o Exchanges

o Account fees

o Sales of shares purchased pursuant to a sales charge waiver

o Redemptions by the Fund when an account falls below the minimum required
account size

o Redemptions following the death of the shareholder or beneficial owner

o Redemptions through a systematic withdrawal plan set up before February 1,
1995

o Redemptions through a systematic withdrawal plan set up on or after
February 1, 1995, up to 1% a month of an account's Net Asset Value (3%
quarterly, 6% semiannually or 12% annually). For example, if you maintain an
annual balance of $1 million, you can withdraw up to $120,000 annually
through a systematic withdrawal plan free of charge.

o Distributions from individual retirement plan accounts due to death or
disability or upon periodic distributions based on life expectancy

o Tax-free returns of excess contributions from employee benefit plans

o Distributions from employee benefit plans, including those due to
termination or plan transfer

WHAT DISTRIBUTIONS MIGHT I RECEIVE FROM THE FUND?

The Fund declares dividends from its net investment income monthly to
shareholders of record on the first business day before the 15th of the month
and pays them on or about the last day of that month. Capital gains, if any,
may be distributed annually, usually in December.

Dividend payments are not guaranteed, are subject to the Board's discretion
and may vary with each payment. The Fund does not pay "interest" or guarantee
any fixed rate of return on an investment in its shares.

If you buy shares shortly before the record date, please keep in mind that
any distribution will lower the value of the Fund's shares by the amount of
the distribution and you will then receive a portion of the price you paid
back in the form of a taxable distribution.

DISTRIBUTION OPTIONS

You may receive your distributions from the Fund in any of these ways:

1. Buy additional shares of the Fund - You may buy additional shares of the
same class of the Fund (without a sales charge or imposition of a Contingent
Deferred Sales Charge) by reinvesting capital gain distributions, or both
dividend and capital gain distributions. This is a convenient way to
accumulate additional shares and maintain or increase your earnings base.

2. Buy shares of other Franklin Templeton Funds - You may direct your
distributions to buy the same class of shares of another Franklin Templeton
Fund (without a sales charge or imposition of a Contingent Deferred Sales
Charge). Many shareholders find this a convenient way to diversify their
investments.

3. Receive distributions in cash - You may receive dividends, or both
dividend and capital gain distributions in cash. If you have the money sent
to another person or to a checking account, you may need a signature
guarantee. If you send the money to a checking account, please see
"Electronic Fund Transfers" under "Services to Help You Manage Your Account."

To select one of these options, please complete sections 6 and 7 of the
shareholder application included with this prospectus or tell your investment
representative which option you prefer. If you do not select an option, we
will automatically reinvest dividend and capital gain distributions in the
same class of the Fund. For Trust Company retirement plans, special forms
are required to receive distributions in cash. You may change your
distribution option at any time by notifying us by mail or phone. Please
allow at least seven days before the record date for us to process the new
option.

TRANSACTION PROCEDURES AND SPECIAL REQUIREMENTS

HOW AND WHEN SHARES ARE PRICED

The Fund is open for business each day the NYSE is open. We determine the Net
Asset Value per share as of the scheduled close of the NYSE, generally 1:00
p.m. Pacific time. You can find the prior day's closing Net Asset Value and
Offering Price of the Fund in many newspapers.

The Net Asset Value of all outstanding shares of each class is calculated on
a pro rata basis. It is based on each class' proportionate participation in
the Fund, determined by the value of the shares of each class. Class I,
however, bears the Rule 12b-1 fees payable under its Rule 12b-1 plan. To
calculate Net Asset Value per share of each class, the assets of each class
are valued and totaled, liabilities are subtracted, and the balance, called
net assets, is divided by the number of shares of the class outstanding. The
Fund's assets are valued as described under "How are Fund Shares Valued?" in
the SAI.

THE PRICE WE USE WHEN YOU BUY OR SELL SHARES

You buy shares at the Offering Price, unless you qualify to buy shares at a
reduced sales charge or with no sales charge. The Offering Price is based on
the Net Asset Value per share and includes the maximum sales charge. We
calculate it to two decimal places using standard rounding criteria. You sell
shares at Net Asset Value.

The Net Asset Value we use when you buy or sell shares is the one next
calculated after we receive your transaction request in proper form. If you
buy or sell shares through your Securities Dealer, however, we will use the
Net Asset Value next calculated after your Securities Dealer receives your
request, which is promptly transmitted to the Fund. Your redemption proceeds
will not earn interest between the time we receive the order from your dealer
and the time we receive any required documents.

PROPER FORM

An order to buy shares is in proper form when we receive your signed
shareholder application and check. Written requests to sell or exchange
shares are in proper form when we receive written instructions signed by all
registered owners, with a signature guarantee if necessary. We must also
receive any outstanding share certificates for those shares.

WRITTEN INSTRUCTIONS

Written instructions must be signed by all registered owners. To avoid any
delay in processing your transaction, they should include:

o Your name,

o The Fund's name,

o The class of shares,

o A description of the request,

o For exchanges, the name of the fund you're exchanging into,

o Your account number,

o The dollar amount or number of shares, and

o A telephone number where we may reach you during the day, or in the evening
if preferred.

SIGNATURE GUARANTEES

For our mutual protection, we require a signature guarantee in the following
situations:

1) You wish to sell over $50,000 worth of shares,

2) You want the proceeds to be paid to someone other than the registered
owners,

3) The proceeds are not being sent to the address of record, preauthorized
bank account, or preauthorized brokerage firm account,

4) We receive instructions from an agent, not the registered owners,

5) We believe a signature guarantee would protect us against potential claims
based on the instructions received.

A signature guarantee verifies the authenticity of your signature and may be
obtained from certain banks, brokers or other eligible guarantors. You should
verify that the institution is an eligible guarantor before signing. A
notarized signature is not sufficient.

SHARE CERTIFICATES

We will credit your shares to your Fund account. We do not issue share
certificates unless you specifically request them. This eliminates the costly
problem of replacing lost, stolen or destroyed certificates. If a certificate
is lost, stolen or destroyed, you may have to pay an insurance premium of up
to 2% of the value of the certificate to replace it.

Any outstanding share certificates must be returned to the Fund if you want
to sell or exchange those shares or if you would like to start a systematic
withdrawal plan. The certificates should be properly endorsed. You can do
this either by signing the back of the certificate or by completing a share
assignment form. For your protection, you may prefer to complete a share
assignment form. In this case, you should send the certificate and assignment
form in separate envelopes.

TELEPHONE TRANSACTIONS

You may initiate many transactions by phone. Please refer to the sections of
this prospectus that discuss the transaction you would like to make or call
Shareholder Services.

When you call, we will request personal or other identifying information to
confirm that instructions are genuine. We will also record calls. We will not
be liable for following instructions communicated by telephone if we
reasonably believe they are genuine. For your protection, we may delay a
transaction or not implement one if we are not reasonably satisfied that the
instructions are genuine. If this occurs, we will not be liable for any loss.

If our lines are busy or you are otherwise unable to reach us by phone, you
may wish to ask your investment representative for assistance or send us
written instructions, as described elsewhere in this prospectus. If you are
unable to execute a transaction by telephone, we will not be liable for any
loss.

Trust Company Retirement Plan Accounts. We cannot accept instructions to sell
shares or change distribution options on Trust Company retirement plans by
phone. While you may exchange shares of Trust Company IRA and 403(b)
retirement accounts by phone, certain restrictions may be imposed on other
retirement plans.

To obtain any required forms or more information about distribution or
transfer procedures, please call our Retirement Plans Department.

ACCOUNT REGISTRATIONS AND REQUIRED DOCUMENTS

When you open an account, we need you to tell us how you want your shares
registered. How you register your account will affect your ownership rights
and ability to make certain transactions. If you have questions about how to
register your account, you should consult your investment representative or
legal advisor. Please keep the following information in mind when registering
your account.

Joint Ownership. If you open an account with two or more owners, we register
the account as "joint tenants with rights of survivorship" unless you tell us
otherwise. An account registered as "joint tenants with rights of
survivorship" is shown as "Jt Ten" on your account statement. For any account
with two or more owners, all owners must sign instructions to process
transactions and changes to the account. Even if the law in your state says
otherwise, we cannot accept instructions to change owners on the account
unless all owners agree in writing. If you would like another person or owner
to sign for you, please send us a current power of attorney.

Gifts and Transfers to Minors. You may set up a custodial account for a minor
under your state's Uniform Gifts/Transfers to Minors Act. Other than this
form of registration, a minor may not be named as an account owner.

Trusts. You should register your account as a trust, only if you have a valid
written trust document. This avoids future disputes or possible court action
over who owns the account.

Required Documents. For corporate, partnership and trust accounts, please
send us the following documents when you open your account. This will help
avoid delays in processing your transactions while we verify who may sign on
the account.

TYPE OF ACCOUNT DOCUMENTS REQUIRED

Corporation Corporate Resolution

Partnership 1. The pages from the partnership agreement that identify
the general partners, or

2. A certification for a partnership agreement

Trust 1. The pages from the trust document that identify the
trustees, or

2. A certification for trust

Street or Nominee Accounts. If you have Fund shares held in a "street" or
"nominee" name account with your Securities Dealer, you may transfer the
shares to the street or nominee name account of another Securities Dealer.
Both dealers must have an agreement with Distributors or we cannot process
the transfer. Contact your Securities Dealer to initiate the transfer. We
will process the transfer after we receive authorization in proper form from
your delivering Securities Dealer. Accounts may be transferred electronically
through the NSCC. For accounts registered in street or nominee name, we may
take instructions directly from the Securities Dealer or your nominee.

Electronic Instructions. If there is a Securities Dealer or other
representative of record on your account, we are authorized to use and
execute electronic instructions. We will accept electronic instructions
directly from your dealer or representative without further inquiry.
Electronic instructions may be processed through the services of the NSCC,
which currently include the NSCC's "Networking," "Fund/SERV," and "ACATS"
systems, or through Franklin/Templeton's PCTrades II(TM) System.

TAX IDENTIFICATION NUMBER

The IRS requires us to have your correct Social Security or tax
identification number on a signed shareholder application or applicable tax
form. Federal law requires us to withhold 31% of your taxable distributions
and sale proceeds if (i) you have not furnished a certified correct taxpayer
identification number, (ii) you have not certified that withholding does not
apply, (iii) the IRS or a Securities Dealer notifies the Fund that the number
you gave us is incorrect, or (iv) you are subject to backup withholding.

We may refuse to open an account if you fail to provide the required tax
identification number and certifications. We may also close your account if
the IRS notifies us that your tax identification number is incorrect. If you
complete an "awaiting TIN" certification, we must receive a correct tax
identification number within 60 days of your initial purchase to keep your
account open.

KEEPING YOUR ACCOUNT OPEN

Due to the relatively high cost of maintaining a small account, we may close
your account if the value of your shares is less than $50. We will only do
this if the value of your account fell below this amount because you
voluntarily sold your shares and your account has been inactive (except for
the reinvestment of distributions) for at least six months. Before we close
your account, we will notify you and give you 30 days to increase the value
of your account to $100.

SERVICES TO HELP YOU MANAGE YOUR ACCOUNT

AUTOMATIC INVESTMENT PLAN

Our automatic investment plan offers a convenient way to invest in the Fund.
Under the plan, you can have money transferred automatically from your
checking account to the Fund each month to buy additional shares. If you are
interested in this program, please refer to the automatic investment plan
application included with this prospectus or contact your investment
representative. The market value of the Fund's shares may fluctuate and a
systematic investment plan such as this will not assure a profit or protect
against a loss. You may discontinue the program at any time by notifying
Investor Services by mail or phone.

AUTOMATIC PAYROLL DEDUCTION

You may have money transferred from your paycheck to the Fund to buy
additional Class I shares. Your investments will continue automatically until
you instruct the Fund and your employer to discontinue the plan. To process
your investment, we must receive both the check and payroll deduction
information in required form. Due to different procedures used by employers
to handle payroll deductions, there may be a delay between the time of the
payroll deduction and the time we receive the money.

SYSTEMATIC WITHDRAWAL PLAN

Our systematic withdrawal plan allows you to sell your shares and receive
regular payments from your account on a monthly, quarterly, semiannual or
annual basis. The value of your account must be at least $5,000 and the
minimum payment amount for each withdrawal must be at least $50. For
retirement plans subject to mandatory distribution requirements, the $50
minimum will not apply.

If you would like to establish a systematic withdrawal plan, please complete
the systematic withdrawal plan section of the shareholder application
included with this prospectus and indicate how you would like to receive your
payments. You may choose to direct your payments to buy the same class of
shares of another Franklin Templeton Fund or have the money sent directly to
you, to another person, or to a checking account. If you choose to have the
money sent to a checking account, please see "Electronic Fund Transfers"
below.

You will generally receive your payment by the end of the month in which a
payment is scheduled. When you sell your shares under a systematic withdrawal
plan, it is a taxable transaction.

To avoid paying sales charges on money you plan to withdraw within a short
period of time, you may not want to set up a systematic withdrawal plan if
you plan to buy shares on a regular basis. Shares sold under the plan may
also be subject to a Contingent Deferred Sales Charge. Please see "Contingent
Deferred Sales Charge" under "How Do I Sell Shares?"

You may discontinue a systematic withdrawal plan, change the amount and
schedule of withdrawal payments, or suspend one payment by notifying us in
writing at least seven business days before the end of the month preceding a
scheduled payment. Please see "How Do I Buy, Sell and Exchange Shares? -
Systematic Withdrawal Plan" in the SAI for more information.

ELECTRONIC FUND TRANSFERS

You may choose to have dividend and capital gain distributions from Class I
shares of the Fund or payments under a systematic withdrawal plan sent
directly to a checking account. If the checking account is with a bank that
is a member of the Automated Clearing House, the payments may be made
automatically by electronic funds transfer. If you choose this option, please
allow at least fifteen days for initial processing. We will send any payments
made during that time to the address of record on your account.

TELEFACTS(R)

From a touch-tone phone, you may call our TeleFACTS system (day or night) at
1-800/247-1753 to:

o obtain information about your account;

o obtain price and performance information about any Franklin Templeton Fund;

o exchange shares between identically registered Franklin accounts; and

o request duplicate statements and deposit slips for Franklin accounts.

You will need the Fund's code number to use TeleFACTS. The Funds' codes are
211 for the Global Currency Fund, 212 for the Hard Currency Fund, and 213 for
the High Income Fund.

STATEMENTS AND REPORTS TO SHAREHOLDERS

We will send you the following statements and reports on a regular basis:

o Confirmation and account statements reflecting transactions in your
account, including additional purchases and dividend reinvestments. Please
verify the accuracy of your statements when you receive them.

o Financial reports of the Fund will be sent every six months. To reduce Fund
expenses, we attempt to identify related shareholders within a household and
send only one copy of a report. Call Fund Information if you would like an
additional free copy of the Fund's financial reports or an interim quarterly
report.

INSTITUTIONAL ACCOUNTS

Additional methods of buying, selling or exchanging shares of the Fund may be
available to institutional accounts. Institutional investors may also be
required to complete an institutional account application. For more
information, call Institutional Services.

AVAILABILITY OF THESE SERVICES

The services above are available to most shareholders. If, however, your
shares are held by a financial institution, in a street name account, or
networked through the NSCC, the Fund may not be able to offer these services
directly to you. Please contact your investment representative.

WHAT IF I HAVE QUESTIONS ABOUT MY ACCOUNT?

If you have any questions about your account, you may write to Investor
Services at 777 Mariners Island Blvd., P.O. Box 7777, San Mateo, California
94403-7777. The Fund, Distributors and Advisers are also located at this
address. TICI is located at 500 E. Broward Blvd., Suite 2100, Fort
Lauderdale, Florida 33394-3091. You may also contact us by phone at one of
the numbers listed below.

HOURS OF OPERATION (PACIFIC TIME)
DEPARTMENT NAME TELEPHONE NO. (MONDAY THROUGH FRIDAY)
Shareholder Services 1-800/632-2301 5:30 a.m. to 5:00 p.m.
Dealer Services 1-800/524-4040 5:30 a.m. to 5:00 p.m.
Fund Information 1-800/DIAL BEN 5:30 a.m. to 8:00 p.m.
(1-800/342-5236) 6:30 a.m. to 2:30 p.m.
(Saturday)
Retirement Plans 1-800/527-2020 5:30 a.m. to 5:00 p.m.
Institutional Services 1-800/321-8563 6:00 a.m. to 5:00 p.m.
TDD (hearing impaired) 1-800/851-0637 5:30 a.m. to 5:00 p.m.

Your phone call may be monitored or recorded to ensure we provide you with
high quality service. You will hear a regular beeping tone if your call is
being recorded.

GLOSSARY

USEFUL TERMS AND DEFINITIONS

1940 Act - Investment Company Act of 1940, as amended

Advisers - Franklin Advisers, Inc., the Fund's investment manager

Board - The Board of Trustees of the Trust

CD - Certificate of deposit

Class I, Class II and Advisor Class - The Hard Currency Fund offers two
classes of shares, designated "Class I" and "Advisor Class." The two classes
have proportionate interests in the Fund's portfolio. They differ, however,
primarily in their sales charge and expense structures. Certain funds in the
Franklin Templeton Funds also offer a share class designated "Class II."

Code - Internal Revenue Code of 1986, as amended

Contingency Period - The 12 month period during which a Contingent Deferred
Sales Charge may apply. Regardless of when during the month you purchased
shares, they will age one month on the last day of that month and each
following month.

Contingent Deferred Sales Charge (CDSC) - A sales charge of 1% that may apply
if you sell your shares within the Contingency Period.

Distributors - Franklin/Templeton Distributors, Inc., the Fund's principal
underwriter. The SAI lists the officers and Board members who are affiliated
with Distributors. See "Officers and Trustees."

Eligible Governmental Authority - Any state or local government or any
instrumentality, department, authority or agency thereof that has determined
the Fund is a legally permissible investment and that can only buy shares of
the Fund without paying sales charges.

Franklin Templeton Funds - The U.S. registered mutual funds in the Franklin
Group of Funds(R) and the Templeton Group of Funds except Franklin Valuemark
Funds, Franklin Government Securities Trust, Templeton Capital Accumulator
Fund, Inc., Templeton Variable Annuity Fund, and Templeton Variable Products
Series Fund

Franklin Templeton Group - Franklin Resources, Inc., a publicly owned holding
company, and its various subsidiaries

Franklin Templeton Group of Funds - All U.S. registered investment companies
in the Franklin Group of Funds(R) and the Templeton Group of Funds

FT Services - Franklin Templeton Services, Inc., the Fund's administrator

Investor Services - Franklin/Templeton Investor Services, Inc., the Fund's
shareholder servicing and transfer agent

Investment Managers - Franklin Advisers, Inc., the Fund's investment manager,
and Templeton Investment Counsel, Inc., the Fund's subadvisor.

IRS - Internal Revenue Service

Letter - Letter of Intent

Major Currencies - As used in this prospectus, Australian dollar, Belgian
franc, British pound sterling, Canadian dollar, Danish krone, Netherlands
guilder, European Currency Unit ("ECU"), French franc, German mark, Italian
lira, Japanese yen, New Zealand dollar, Spanish peseta, Swedish krona, Swiss
franc and U.S. dollar.

Market Timers - Market Timers generally include market timing or allocation
services, accounts administered so as to buy, sell or exchange shares based
on predetermined market indicators, or any person or group whose transactions
seem to follow a timing pattern.

Moody's - Moody's Investors Service, Inc.

NASD - National Association of Securities Dealers, Inc.

Net Asset Value (NAV) - The value of a mutual fund is determined by deducting
the fund's liabilities from the total assets of the portfolio. The net asset
value per share is determined by dividing the net asset value of the fund by
the number of shares outstanding.

Non-Major Currencies - as used in this prospectus, currencies other than the
Major Currencies that are freely convertible into one or more of the Major
Currencies.

NSCC - National Securities Clearing Corporation

NYSE - New York Stock Exchange

Offering Price - The public offering price is based on the Net Asset Value
per share and includes the 3.0% sales charge.

Qualified Retirement Plans - An employer sponsored pension or profit-sharing
plan that qualifies under section 401 of the Code. Examples include 401(k),
money purchase pension, profit sharing and defined benefit plans.

REIT - Real Estate Investment Trust

Resources - Franklin Resources, Inc.

SAI - Statement of Additional Information

S&P - Standard & Poor's Corporation

SEC - U.S. Securities and Exchange Commission

Securities Dealer - A financial institution that, either directly or through
affiliates, has an agreement with Distributors to handle customer orders and
accounts with the Fund. This reference is for convenience only and does not
indicate a legal conclusion of capacity.

SEP - An employer sponsored simplified employee pension plan established
under section 408(k) of the Code

TeleFACTS(R) - Franklin Templeton's automated customer servicing system

TICI - Templeton Investment Counsel, Inc., the Fund's sub-advisor.

Trust Company - Franklin Templeton Trust Company. Trust Company is an
affiliate of Distributors and both are wholly owned subsidiaries of Resources.

U.S. - United States

We/Our/Us - Unless the context indicates a different meaning, these terms
refer to the Fund and/or Investor Services, Distributors, or other wholly
owned subsidiaries of Resources.

PROSPECTUS & APPLICATION

FRANKLIN TEMPLETON
GERMAN GOVERNMENT
BOND FUND

INVESTMENT STRATEGY

GLOBAL GROWTH AND INCOME

MARCH 1, 1997

FRANKLIN TEMPLETON GLOBAL TRUST

This prospectus describes Class I shares of the Franklin Templeton German
Government Bond Fund (the "Fund"). It contains information you should know
before investing in the Fund. Please keep it for future reference.

The Fund currently offers another class of shares with a different sales charge
and expense structure, which affects performance. This class is described in a
separate prospectus. For more information, contact your investment
representative or call 1-800/DIAL BEN.

The Fund has a Statement of Additional Information ("SAI") for its Class I
shares, dated March 1, 1997, which may be amended from time to time. It includes
more information about the Fund's procedures and policies. It has been filed
with the SEC and is incorporated by reference into this prospectus. For a free
copy or a larger print version of this prospectus, call 1-800/DIAL BEN or write
the Fund at the address shown.

SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY OF THE U.S.
GOVERNMENT. SHARES OF THE FUND INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE
LOSS OF PRINCIPAL.

LIKE ALL MUTUAL FUNDS, THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SEC OR ANY STATE SECURITIES COMMISSION NOR HAS THE SEC OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

THIS PROSPECTUS IS NOT AN OFFERING OF THE SECURITIES HEREIN DESCRIBED IN ANY
STATE, JURISDICTION OR COUNTRY IN WHICH THE OFFERING IS NOT AUTHORIZED. NO SALES
REPRESENTATIVE, DEALER, OR OTHER PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR
MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS. FURTHER
INFORMATION MAY BE OBTAINED FROM DISTRIBUTORS.

Franklin Templeton German Government Bond Fund

FRANKLIN TEMPLETON GERMAN
GOVERNMENT BOND FUND

MARCH 1, 1997

When reading this prospectus, you will see certain terms beginning with capital
letters. This means the term is explained in our glossary section.

Table of Contents

About the Fund
Expense Summary................................................... 2
Financial Highlights.............................................. 3
How does the Fund Invest its Assets?.............................. 4
What are the Fund's Potential Risks?.............................. 10
Who Manages the Fund?............................................. 15
How does the Fund Measure Performance?............................ 17
How Taxation Affects the Fund and its Shareholders ............... 17
How is the Trust Organized?....................................... 19
About Your Account
How Do I Buy Shares?.............................................. 20
May I Exchange Shares for Shares of Another Fund?................. 26
How Do I Sell Shares?............................................. 28
What Distributions Might I Receive from the Fund?................. 31
Transaction Procedures and Special Requirements .................. 32
Services to Help You Manage Your Account.......................... 36
What If I Have Questions About My Account?........................ 38
Glossary
Useful Terms and Definitions ..................................... 39

777 Mariners Island Blvd.
P.O. Box 7777
San Mateo
CA 94403-7777

1-800/DIAL BEN

Franklin Templeton German Government Bond Fund

ABOUT THE FUND

EXPENSE SUMMARY

A. SHAREHOLDER TRANSACTION EXPENSES+
Maximum Sales Charge Imposed on Purchases
(as a percentage of Offering Price) 3.00%++
Deferred Sales Charge None+++
Exchange Fee (per transaction) $5.00*
B. ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fees 0.55%
Rule 12b-1 Fees 0.19%**
Other Expenses 0.36%
Total Fund Operating Expenses 1.10%
C. EXAMPLE

Assume the Fund's annual return is 5%, operating expenses are as described
above, and you sell your shares after the number of years shown. These are the
projected expenses for each $1,000 that you invest in the Fund.

1 YEAR 3 YEARS 5 YEARS 10 YEARS
$41*** $64 $89 $160

THIS IS JUST AN EXAMPLE. IT DOES NOT REPRESENT PAST OR FUTURE EXPENSES OR
RETURNS. ACTUAL EXPENSES AND RETURNS MAY BE MORE OR LESS THAN THOSE SHOWN. The
Fund pays its operating expenses. The effects of these expenses are reflected in
its Net Asset Value or dividends and are not directly charged to your account.

+If your transaction is processed through your Securities Dealer, you may be
charged a fee by your Securities Dealer for this service.

++There is no front-end sales charge if you invest $1 million or more.

+++A Contingent Deferred Sales Charge of 1% may apply to purchases of $1 million
or more if you sell the shares within one year. See "How Do I Sell Shares? -
Contingent Deferred Sales Charge" for details.

*$5.00 fee is only for Market Timers. We process all other exchanges without a
fee.

**These fees may not exceed 0.25%. The combination of front-end sales charges
and Rule 12b-1 fees could cause long-term shareholders to pay more than the
economic equivalent of the maximum front-end sales charge permitted under the
NASD's rules.

***Assumes a Contingent Deferred Sales Charge will not apply.

FINANCIAL HIGHLIGHTS

This table summarizes the Fund's financial history. The information for the
fiscal year ended October 31, 1996, 1995, the six-month period ended October 31,
1994 and the fiscal year ended April 30, 1994 has been audited by Coopers &
Lybrand L.L.P., the Fund's independent auditors. Their audit report covering
each of the most recent four periods appears in the financial statements in the
Trust's Annual Report to Shareholders for the fiscal year ended October 31,
1996. The previous periods' information was audited by other independent
auditors whose opinions are not included herein. The Annual Report to
Shareholders also includes more information about the Fund's performance. For a
free copy, please call Fund Information.
<TABLE>
<CAPTION>

FOR THE SIX FOR THE FOR THE FOUR
MONTHS YEAR MONTHS
ENDED ENDED ENDED
FOR THE YEAR ENDED OCTOBER 31, OCTOBER 31, APRIL 30, APRIL 30,

1996 1995 1994 19942 19931
Per Share Operating Performance+
<S> <C> <C> <C> <C> <C>
Net Asset Value at Beginning of Period $14.31 $13.26 $12.29 $13.08 $12.50
Net Investment Income .66 1.53 .41 .78 .27
Net Realized & Unrealized Gain (Loss) (.69) .71 .92 (.72) .56
Total From Investment Operations (.03) 2.24 1.33 .06 .83
Distributions From Net Investment Income(1.00) (1.19) (.36) (.39) (.25)
Distributions from Capital Gains (.06) - - (.06) -
Distributions From Return of Capital (.06) - - (.40) -
Total Distributions (1.12)(1.19) (.36) (.85) (.25)
Net Asset Value at End of Period $13.16$14.31 $13.26 $12.29 $13.08
Total Return++ (.14)%18.28%10.92% .64% 6.15%
Ratios/Supplemental Data
Net Assets at End of Period (in 000's) $17,552 $24,113 $13,236 $13,341 $10,738
Ratio of Expenses to Average Net Assets** 1.10% 1.25% 1.04%* 1.00% .87%*
Ratio of Net Investment Income
to Average Net Assets 5.25% 5.17% 6.37%* 4.74% 6.06%*
Portfolio Turnover Rate 57.59% 67.77%301.60%* 185.66% 190.89%*

</TABLE>
1For the period December 31, 1992 (effective date of registration) to April 30,
1993.

2On November 12, 1993, the investment advisor changed to Advisers.

3Six month period ended October 31, 1994, reflecting a change in fiscal year.

+Selected data for a share of beneficial interest outstanding throughout the
period.

++Total return measures the change in value of an investment over the periods
indicated. It is not annualized, except where indicated. It does not include the
maximum front-end sales charge or Contingent Deferred Sales Charge and assumes
reinvestment of dividends and capital gains, if any, at Net Asset Value.

*Annualized

**During the periods indicated, Advisers agreed in advance to limit its
management fees to reduce expenses of the Fund. Had such action not been taken,
the ratios of expenses to average net assets would have been as follows:

Ratio of Expenses
to Average Net Assets

1993 1.73%*
1994 1.83%
19943 1.77%*
1995 1.29%

HOW DOES THE FUND INVEST ITS ASSETS?

THE FUND'S INVESTMENT OBJECTIVE

The Fund's investment objective is to seek, over the long-term, total return
through investment in a managed portfolio of German government bonds.

The Fund is designed for U.S. investors who wish to invest in German government
bonds for the purpose of seeking one or more of the following potential
benefits:

o Higher current yields than may be available on U.S. government bonds

o Capital appreciation resulting from a decline in German interest rates and a
corresponding increase in German government bond prices

o Currency gains from an increase in the value of the German mark relative to
the U.S. dollar

o Safety of principal due to the high credit quality of German government bonds

o Portfolio diversification outside the U.S. through German currency and
interest rate exposure

o Protection of global purchasing power in the event of higher U.S. inflation
rates and/or depreciation of the U.S. dollar relative to the German mark

The objective is a fundamental policy of the Fund and may not be changed without
shareholder approval. Of course, there is no assurance that the Fund's objective
will be achieved or that any of the potential benefits listed above will be
realized.

TYPES OF SECURITIES IN WHICH THE FUND MAY INVEST

Under normal market conditions, the Fund will invest between 65% and 100% of its
total assets in debt obligations issued or guaranteed by the Federal Republic of
Germany, its agencies, instrumentalities and political subdivisions ("German
government obligations"); and securities backed exclusively by loans to public
sector institutions, known as Offentliche Pfandbriefe or global Pfandbriefe. The
German government obligations or Pfandbriefe in which the Fund invests are
denominated in the German mark and are rated, at the time of purchase, triple A
by a U.S. nationally recognized rating service, such as S&P or Moody's, or, if
unrated, are considered by the Investment Managers to be of comparable quality
to triple A rated instruments, the highest rating given by the rating services.
The Fund currently intends to limit its investments in Pfandbriefe to no more
than 20% of its total assets. For liquidity purposes, the Fund may invest up to
5% of its total assets in U.S. dollar denominated cash and money market
instruments, such as U.S. Treasury bills.

It is possible, although not anticipated, that the Fund may invest up to 35% of
its total assets in (i) German mark-denominated bonds and other debt instruments
issued by sovereign governments other than the Federal Republic of Germany and
by supranational organizations (such as the World Bank) that are rated, at the
time of purchase, triple A by S&P or Moody's, or in securities that are unrated
if, in the opinion of the Investment Managers, they are of comparable quality to
triple A rated instruments; and (ii) cash and money market instruments
denominated in the German mark that are rated at time of purchase A-1+ by S&P
and/or P-1 by Moody's, or that, if unrated, are in the opinion of the Investment
Managers, to be of comparable high quality.

The Fund may occasionally hold significant cash or cash equivalents denominated
in German marks until suitable investment positions are available. You should
understand that in order to preserve its favorable tax status, the Fund may
regularly hold 25% or less of its assets in obligations issued or guaranteed by
the Federal Republic of Germany even while holding 65% or more of its total
assets in German government obligations (as defined above). As a temporary
measure, the Fund may reduce its investment in German government obligations
and/or increase its investment in U.S. government and agency securities from
time to time to preserve its favorable tax status.

The rate of exchange between the U.S. dollar and the German mark fluctuates. As
a result, the Fund generally will experience gains and losses attributable to
those fluctuations. The Fund does not generally position hedge or otherwise
attempt to limit its exposure to German mark currency risk and, therefore, is
designed for investors who are prepared to accept the risk of currency
fluctuations.

Changes in German market interest rates will affect the market value of the
Fund. When German market interest rates rise, the market value of the Fund's
securities generally will decline. Conversely, when German market interest rates
decline, the market value of the Fund's securities generally will rise. The
Fund's Investment Managers will actively manage the Fund's portfolio maturity
structure in an attempt to achieve positive returns for the Fund over time from
changes in interest rates.
See "What are the Fund's Potential Risks?"

Under normal market conditions, the Fund's weighted average portfolio maturity
will be at least five years. For temporary, defensive purposes, however, the
Fund's weighted average portfolio maturity may be less than five years.

The Investment Managers invest the Fund's assets based on a number of factors,
including, (i) the current level of interest rates on German government
obligations of various maturities and (ii) its view of future movements of those
interest rates. In determining the Fund's maturity structure, the Investment
Managers consider many factors pertaining to the German economy, including the
current stage of the economic cycle, government fiscal and monetary policy,
inflation expectations, the relationship of interest rates of varying
maturities, (i.e., the slope of the yield curve), currency market outlook, and
economic growth prospects within Germany and around the world.

German Government Obligations. German government obligations generally are
considered by rating agencies to be among the highest credit quality debt
instruments worldwide. In addition, the Bundesbank (the German central bank)
generally is viewed as among the most disciplined and earnest central banks in
the world in its policies of fighting domestic inflation and protecting the
international value of the German mark.

The German bond market is the third largest in the world and currently also one
of the fastest growing. The fall of the Berlin Wall in 1989 and after the
reunification of what were previously East Germany and West Germany in 1990 have
significantly increased German public sector financing needs and caused
substantial recent growth of the German government bond market.

According to Merrill Lynch, the face amount of German mark-denominated bonds
outstanding as of December 31, 1995, was approximately 4.38 trillion marks (U.S.
$2.82 trillion). Of this total, German government and agency bonds accounted for
1.273 trillion marks (U.S. $821 billion), or about 41% of the total market.
Liquidity in the German government bond market is considered by the Fund's
Investment Managers to be very high.

The table below shows publicly issued German bonds outstanding, by issuer type,
as of December 31, 1995. U.S. bond market statistics are also provided for
comparison purposes.

Comparative Bond Market Statistics
(in U.S. $billions)

ISSUER TYPE GERMANY U.S.

Central government $ 704.5 $2,546.5
Central government agency
& government guaranteed 116.8 2,606.1
State and local 445.7 1,029.6
Corporates 1,038.2 2,485.2
Other, foreign, international and Euros 519.7 956.9
Total $2,824.9 $9,624.3
Source: Merrill Lynch

Certain German government obligations are issued or otherwise guaranteed by the
Federal Republic of Germany. These obligations carry the explicit full faith and
credit backing of the German government and include direct obligations of the
government (Bunds), as well as certain government agency issues, such as the
German Unity Fund (Fonds Deutsche Einheit), established to help pay for the
reconstruction of former East Germany's economy, and the Treuhandanstalt,
established to facilitate the privatization of assets of former East Germany.

Other German government obligations are guaranteed by their issuing agency,
instrumentality or political subdivision, but do not carry the explicit full
faith and credit guarantee of the German government. The Fund will invest only
in obligations that the Investment Managers consider to be of credit quality
substantially equivalent to direct obligations of the German government. Issuers
presently satisfying this standard include the German Federal Railways
(Bundesbahn), the German Post Office (Bundespost), the Kreditanstalt fur
Wiederaufbau ("KFW"), as well as certain of the 16 separate federal states
(Lander) comprising Germany.

Pfandbriefe - These are German non-callable, fixed income securities, known as
Offentliche Pfandbriefe and global Pfandbriefe. Global Pfandbriefe represents a
pool of Offentliche Pfandbriefe which are issued by German privately owned
mortgage banks and collateralized by loans to public sector institutions.

OTHER INVESTMENT POLICIES OF THE FUND

Forwards, Futures and Option Contracts. The Fund may use forward foreign
currency exchange contracts ("forwards"), futures contracts ("futures"), option
contracts on futures and over-the-counter ("OTC") options (collectively,
"options") in the management of its investment portfolio.

A forward is individually negotiated and privately traded by currency traders
(usually large commercial banks) and their customers. There are generally no
deposit requirements, and the contracts are traded at a net price without
commission. A forward involves an obligation to exchange one specific currency
for another specific currency (e.g., an obligation to exchange U.S. dollars for
German marks) at an agreed-upon rate of exchange at a future date, which may be
any fixed number of days from the date of the contract. The market for forwards
involving the exchange of U.S. dollars and German marks is highly liquid.

A bond (or currency) future is an agreement to buy or sell a specified quantity
of bonds (or currency) at an agreed-upon price on a specified date. When the
Fund enters into a futures contract, it must make an initial deposit, known as
"initial margin," as a partial guarantee of its performance under the contract.
As the value of the currency fluctuates, either party to the contract is
required to make additional margin payments, known as "variation margin," to
cover any additional obligation it may have under the contract.

An option gives the holder (buyer) of the option the right, but not the
obligation, to buy (in the case of a call option) or sell (in the case of a put
option) a specified amount of a particular security or currency (such as German
government obligations or German marks), or a specified number of futures on the
security or currency, on a specified date and price. The option buyer pays the
option seller a negotiated premium upon the establishment of the contract.
Options on futures are transacted through established exchanges. Options on
German government obligations and on German marks are transacted in the OTC
market directly between the buyer and seller. The staff of the SEC has taken the
position that purchased OTC options and the assets used as "cover" for written
OTC options are illiquid securities. The Fund may treat the securities it uses
as cover for written OTC options as liquid if it follows certain procedures. The
Fund may sell OTC options only to qualified dealers who agree that the Fund may
repurchase any OTC options it writes for a maximum price to be calculated by a
predetermined formula. The option would then be considered illiquid only to the
extent that the maximum repurchase price under the formula exceeds the intrinsic
value of the option.

When the Fund agrees to buy or sell a security denominated in the German mark,
it may enter into forwards in order to "lock in" the U.S. dollar price of the
security. By entering into a forward calling for the receipt or delivery, for a
fixed amount of U.S. dollars, of the amount of German marks involved in the
underlying security transactions, the Fund will be able to protect itself
against a change in the relationship between the U.S. dollar and the German mark
during the period between the date the security is purchased or sold and the
date on which payment is made or received.

For investment purposes, the Fund may use forwards, futures and options to
establish Fund exposure to the German mark, and futures and options to establish
Fund exposure to German government obligations, in a fast and cost-effective
way. This may be necessary either when the Fund has a substantial U.S. dollar
account receivable for Fund shares sold or when the Fund's Investment Managers
require extra time to invest cash balances in German mark-denominated
securities. In each of these cases, the Fund's use of forwards, futures and
options is temporary and for the purpose of maintaining the Fund's intended
ongoing exposure to the German mark and to German government obligations.

The Fund may from time to time also use forwards calling for the future purchase
of German marks, in conjunction with U.S. dollar-denominated cash or money
market instruments, for the purpose of obtaining an investment result that is
substantially equivalent to a direct investment in a German mark-denominated
money market instrument.

Although permitted to do so, the Fund does not currently intend to enter into
currency futures contracts or options on currency futures.

The Fund may, under extraordinary circumstances and for temporary, defensive
purposes only, employ forwards, futures and options for hedging the Fund's
German bond and currency exposure.

When-Issued and Firm Commitment Agreements. The Fund may invest up to 25% of its
assets in securities on a "when-issued" or "firm commitment" basis, for payment
and delivery at a later date. Under these arrangements, the securities' prices
and yields are fixed on the date of the commitment, but payment and delivery are
scheduled for a future time.

At the time of settlement (normally within 30 to 60 days after the day of the
agreement or purchase), the market value of the security may be more or less
than its purchase or sale price and the Fund, as buyer, assumes the risk of any
decline in value of the security beginning on the date of the agreement or
purchase. There is also a risk that the party with whom the Fund enters into a
transaction may default. Failure of the other party to perform its part of the
commitment could result in a loss of income to the Fund. The Fund will make
commitments to purchase or sell only securities that are eligible for inclusion
in its portfolio.

While the Fund normally enters into these transactions with the intention of
actually receiving or delivering the securities, it may sell the securities
before the settlement date or enter into a new commitment to extend the delivery
date further into the future if the Investment Managers consider it advisable as
a matter of investment strategy.

Between the time of purchase and settlement, no payment is made and no interest
on securities purchased for future delivery is received by the Fund. If the
assets of the Fund were held in cash pending the settlement of a transaction,
the Fund would earn no income. The Fund, however, intends to be fully invested
to the extent possible.

When the Fund enters into a when-issued purchase or a firm commitment to buy
securities, the Fund will maintain, in a segregated account with its custodian
bank, cash or high-grade marketable securities having an aggregate value equal
to the amount of the purchase commitments until payment is made. These
procedures are designed to help insure that the Fund maintains sufficient assets
at all times to cover its obligations under when-issued purchases and firm
commitments.

Illiquid Investments. The Fund's policy is not to invest more than 10% of its
net assets, at the time of purchase, in illiquid securities, including
repurchase agreements maturing in more than seven days, time deposits maturing
in more than seven days, OTC options bought by the Fund and investments hedged
by OTC options. Illiquid securities are generally securities that cannot be sold
within seven days in the normal course of business at approximately the amount
at which the Fund has valued them.

Other. Although permitted to do so, the Fund does not currently intend to enter
into repurchase agreements or lend its portfolio securities. The Fund will not
borrow money, except from banks for temporary or emergency purposes in amounts
not exceeding 331/3% of the total value of its assets (no additional investments
may be made while any borrowings exceed 5% of the Fund's total assets). The Fund
may invest in time deposits of commercial banks having short-term deposit
ratings of A-1+ by S&P and/or P-1 by Moody's.

Percentage Restrictions. If a percentage restriction noted above is adhered to
at the time of investment, a later increase or decrease in the percentage
resulting from a change in the value or liquidity of portfolio securities or the
amount of net assets will not be considered a violation of any of the foregoing
policies.

Other Policies and Restrictions. The Fund has a number of additional investment
restrictions that limit its activities to some extent. Some of these
restrictions may only be changed with shareholder approval. For a list of these
restrictions and more information about the Fund's investment policies, please
see "How does the Fund Invest its Assets?" and "Investment Restrictions" in the
SAI.

WHAT ARE THE FUND'S POTENTIAL RISKS?

The value of your shares will increase as the value of the securities owned by
the Fund increases and will decrease as the value of the Fund's investments
decrease. In this way, you participate in any change in the value of the
securities owned by the Fund. In addition to the factors that affect the value
of any particular security that the Fund owns, the value of Fund shares may also
change with movements in the bond market as a whole.

Under normal market conditions, the Fund invests a significant portion of its
assets in instruments denominated in German marks. Therefore, your gains or
losses on shares of the Fund will in large part be based on changes in the Net
Asset Value of the shares, expressed in U.S. dollars, attributable to
fluctuations in the exchange rate between the U.S. dollar and the German mark.

Changes in Germany's prevailing interest rates will affect the value of the
Fund's portfolio and thus its share price. Increased rates of interest that
frequently accompany higher inflation and/or a growing economy are likely to
have a negative effect on the value of Fund shares.

German interest rates and currency valuations have fluctuated unpredictably in
the past and can be expected to do so in the future.

The primary risk factors associated with investment in German government
obligations arise in connection with market fluctuations in the level of German
interest rates and in the exchange rate between the U.S. dollar and the German
mark. At any given point in time, the impact of interest rate and currency
exchange rate changes on the Fund's share price may be reinforcing or
offsetting. These risks are described in more detail below.

The yield and total return of the Fund may be higher or lower than the yield and
total return of a fund investing in U.S. dollar-denominated bonds of comparable
maturity and quality. In addition, you should recognize that due to periodic
interest rate and exchange rate volatility, the Fund's share price is likely to
experience significant volatility from time to time, and this volatility may be
greater than would be experienced by a comparable U.S. dollar-denominated bond
fund.

The Fund is intended to be only one part of your international and global
diversification program, and holding shares of the Fund should not be considered
a complete investment program.

INTEREST RATE RISK

Bond prices move inversely to the direction of changes in interest rates. When
interest rates rise, bond prices generally decline, and when interest rates
decline, bond prices generally rise. For any given change in market interest
rates, bonds having longer maturities generally will experience greater price
movements.

It is anticipated that under normal market conditions, the Fund's weighted
average portfolio maturity will be at least five years and may be as long as ten
years. Therefore, a significant rise in German bond market interest rates can
generally be expected to cause a significant decline in the Fund's Net Asset
Value per share. Conversely, a large decline in German bond market interest
rates can generally be expected to cause the Fund's share price to rise
significantly.

The Investment Managers actively manage the average maturity of the Fund's
investments, shortening the Fund's maturity when it is expected that German
interest rates will rise and lengthening the maturity when it is expected that
German interest rates will decline. This active management of the Fund's
maturity structure is intended to improve the long-term performance of the Fund
on a total return basis relative to that of an unmanaged portfolio of German
government obligations. Of course, there can be no assurance that active
management will achieve the desired result.

CURRENCY RISK

The value of German government obligations, when expressed in U.S. dollars, will
fluctuate with changes in the exchange rate between the U.S. dollar and the
German mark. A decline in the mark relative to the dollar will generally result
in a decline in the Fund's share price (determined on a U.S. dollar basis). On
the other hand, if the mark appreciates relative to the U.S. dollar (i.e., the
U.S. dollar declines), the Fund's share price generally can be expected to rise.

To give U.S. dollar-based investors the opportunity to achieve more fully the
benefit of German mark currency diversification, the Fund does not engage in
hedging strategies to minimize or eliminate Fund share price fluctuations
arising from changes in the exchange rate between the U.S. dollar and the German
mark. Hedging strategies could reduce the currency risk of investing in German
government obligations, but would also reduce the potential benefits or gains
that can be achieved.

Because of its investment primarily in German mark-denominated obligations and
its policy of not hedging currency risk, the Fund's share price will likely
exhibit greater day-to-day volatility than a fund that diversifies its currency
risk across multiple currencies and/or regularly hedges its currency risk. You
should also recognize that even though interest rates on German government
obligations may from time to time exceed the rates on U.S. dollar-denominated
bonds of comparable maturity and quality, a decline in the German mark relative
to the U.S. dollar over any given period could more than offset any interest
rate advantage, resulting in a negative total return for the Fund over that
period.

In the event of an extraordinary political or world development that, in the
view of the Fund's Investment Managers, threatens the social or political
stability of Germany or the viability of the German government, the Fund may
invest in U.S. government securities and U.S. dollar-denominated cash
equivalents or otherwise hedge its German bond and currency risk, without
limitation, but only for temporary, defensive purposes.

GERMAN ECONOMIC RISK FACTORS

The following information is a brief summary of factors affecting the Fund and
does not purport to be a complete description of the factors. The information is
based primarily upon information derived from public documents relating to
securities offerings of issuers of German government obligations, from
independent credit reports and historically reliable sources, but has not been
independently verified by the Fund.

The Federal Republic of Germany, which comprises what was formerly the nations
of East Germany and West Germany, is considered by the rating agencies and by
the Fund's Investment Managers to be among the world's most creditworthy issuers
of debt obligations. Both S&P and Moody's have assigned their highest ratings,
AAA and Aaa, respectively, to obligations of the Federal Republic of Germany.

The German mark is considered to be the primary reserve currency of Europe and,
along with the Japanese yen, has increasingly been used as a reserve currency
worldwide, sharing the traditional role of the U.S. dollar. Because of Germany's
strong record of economic growth and responsible fiscal and monetary policy, the
mark has been among the strongest of the world's major currencies in the period
dating back to the return of freely floating exchange rates in the early 1970s.
Of course, there can be no assurance that the German mark will perform or be
regarded in the future as it has in the past.

The Bundesbank (the German central bank) operates largely independently of
Germany's political system and is charged with responsibility for protecting the
international value of the German mark. In response to the high levels of
unification-related public and private expenditures and the inflationary
pressures arising from these expenditures, the Bundesbank has maintained a tight
monetary policy in recent years, resulting in interest rates well above those in
the U.S., Japan and other countries outside Europe. In mid-1992, German interest
rates began to decline as continued tight monetary policy created expectations
of economic slowing. This decline in German interest rates continued through the
end of 1993 as the German economy suffered a significant recession and the
Bundesbank accelerated the easing process. During the first quarter of 1994,
German yields began to rise as signs of economic growth emerged in the German
economy.

The unification of East Germany and West Germany and the ensuing efforts to
raise living standards and modernize infrastructure in what was previously East
Germany have been a costly undertaking for Germany. Much of the cost of
unification has been financed through deficit spending, resulting in
significantly increased public-sector borrowing requirements since 1989. The
ongoing high levels of public sector borrowing and spending in Germany resulting
from unification may cause German interest rates and inflation rates to be
higher than would otherwise be the case. This, in turn, may adversely affect the
total returns on German government obligations. Unification has placed great
pressure on the German economy and, although progress has recently been made to
improve German government finances, these pressures may adversely affect
monetary policy as conducted by the Bundesbank as well as the credit quality of
German government obligations.

In addition to unification, the disintegration of the Soviet Union and its
sphere of influence also may have an adverse impact on the German economy. In
particular, Germany may be subject to increased immigration pressures and social
discord. Germany also faces uncertainty with respect to repayment of
government-guaranteed loans made to former eastern bloc countries.

FORWARDS, FUTURES AND OPTIONS

The use of forwards, futures and options by the Fund involves investment risks
to which the Fund would not be subject absent its use of these instruments. The
risks inherent in the use of forwards, futures and options include: (1)
dependence on the ability of the Fund's Investment Managers correctly to predict
movements in the direction of interest rates, securities prices and currency
rates; (2) imperfect correlation between the price of options and futures and in
the prices of the securities or the currencies underlying the options and
futures; (3) the skills needed to use these instruments are different from those
needed to select portfolio securities; (4) the possible absence of a liquid
secondary market for any particular instrument at any particular time; (5) the
possible loss by the Fund of margin deposits or collateral in the event of
bankruptcy of a broker with whom the Fund has an open position in a future or an
option; and (6) the possible need to defer closing out certain hedged positions
to avoid adverse tax consequences. The Fund's ability to enter into certain
futures and options is also limited by the requirements of the Code for
qualification of the Fund as a regulated investment company. These securities
may also require the application of complex and special tax rules and elections
that may affect the amount, timing and character of distributions to
shareholders. Transactions in options, futures and options on futures are
generally considered "derivative securities." These investments and transactions
are discussed further in the tax section included in this prospectus and in the
SAI.

OTHER RISK FACTORS

Foreign taxes can adversely affect the Fund's performance, though it is
anticipated that the Fund will invest only in debt obligations that are not
subject to foreign tax withholding. For more information on tax issues affecting
the Fund, see "How Taxation Affects the Fund and its Shareholders" in this
prospectus and "Additional Information on Distributions and Taxes," in the SAI.

The Fund is a "non-diversified" fund, which means there are no restrictions
under the 1940 Act on the percentage of assets that may be invested at any time
in the securities of any one issuer. However, as a non-diversified fund, and as
a fund that concentrates its investments primarily in German government
obligations denominated in German marks, the Fund may be subject to greater risk
with respect to its portfolio securities than a mutual fund that has a broader
range of investments. Although the Fund is "non-diversified" for purposes of the
1940 Act, it must still meet certain diversification standards to qualify as a
regulated investment company under the Code. If the Fund is unable to meet the
diversification standards, the Fund may be subject to taxation as a corporation.
These diversification standards require the Fund to invest no more than 25% of
its total assets in a single issuer and, with respect to at least 50% of its
total assets, to invest in cash, U.S. government securities, securities of other
regulated investment companies, and other securities as to which the Fund
invests no more than 5% of its assets in the securities of any one issuer or
holds no more than 10% of the outstanding voting securities of any one issuer.
The Investment Managers believe the Fund will be able to meet these
diversification standards following its normal investment policies. As necessary
to satisfy the diversification standards, the Fund may invest a significant
portion of its assets in German government obligations other than those issued
or guaranteed by the Federal Republic of Germany and in German mark-denominated
obligations issued by other sovereign governments and supranational
organizations. To the extent the Fund is not fully diversified, it may be more
susceptible to adverse economic, political or regulatory developments affecting
a single issuer than would be the case if it was more broadly diversified.

A mutual fund can incur significant transaction costs in its purchases and sales
of foreign securities and currencies. Due to the highly liquid nature of the
German government obligation and foreign exchange markets, however, it is
anticipated that Fund transaction costs will be minimal and will not have a
material impact on the Fund's performance.

The Fund's custody and portfolio accounting expenses may be higher than those
experienced by a fund investing solely in U.S. dollar-denominated bonds.

Investing in non-U.S. securities generally may be subject to certain risk
factors not thought to be present in the U.S. These include expropriation of
foreign-owned assets, confiscatory taxation, exchange controls, political and
social instability, and the difficulty of enforcing obligations in other
countries. See "Investing in Foreign Securities" in the SAI for a more detailed
discussion of those risk factors.

WHO MANAGES THE FUND?

The Board. The Board oversees the management of the Fund and elects its
officers. The officers are responsible for the Fund's day-to-day operations. The
Board also monitors the Fund to ensure no material conflicts exist between the
Fund's classes of shares. While none is expected, the Board will act
appropriately to resolve any material conflict that may arise.

Investment Managers. The Investment Managers manage the Fund's assets and make
its investment decisions. The Investment Managers also perform similar services
for other funds. The Investment Managers are wholly owned by Resources, a
publicly owned company engaged in the financial services industry through its
subsidiaries. Charles B. Johnson and Rupert H. Johnson, Jr. are the principal
shareholders of Resources. Together, the Investment Managers and their
affiliates manage over $179 billion in assets. Please see "Investment Management
and Other Services" and "Miscellaneous Information" in the SAI for information
on securities transactions and a summary of the Fund's Code of Ethics.

Under an agreement with Advisers, TICI is the sub-advisor of the Fund. TICI
provides Advisers with investment management advice and assistance. TICI's
activities are subject to the Board's review and control, as well as Advisers'
instruction and supervision.

Management Team. The team responsible for the day-to-day management of the
Fund's portfolio is: Tom Latta and Neil S. Devlin, since November 1993.

Thomas Latta

Portfolio Manager of TICI

Mr. Latta attended the University of Missouri and New York University. Prior to
joining the Franklin Templeton Group in 1991, Mr. Latta worked as a portfolio
manager with Forester and Hairston, a global fixed-income investment management
firm, and prior thereto, he worked for Merrill Lynch as an investment adviser to
a large mid-east central bank and then within the structured products group.

Neil S. Devlin

Executive Vice President of TICI

Mr. Devlin holds a Bachelor of Arts degree in Economics and Philosophy from
Brandeis University. Prior to joining the Franklin Templeton Group in 1987, Mr.
Devlin was a portfolio manager and bond analyst with Constitutional Capital
Management of Boston and a bond trader and research analyst for the Bank of New
England.

Donald P. Gould, a Portfolio Manager with Advisers, is founder and president of
the Franklin Tempelton Global Trust (the "Trust"). Mr. Gould supervises the
implementation of the Fund's portfolio investment policies. He holds a Master of
Business Administration degree from the Harvard Business School and a Bachelor
of Arts degree in economics from Pomona College. He joined the Franklin
Templeton Group in November 1993 upon its acquisition of certain assets of
Huntington Advisers, Inc. He has been in the securities industry since 1981.

Management Fees. During the fiscal year ended October 31, 1996, management fees
totaling 0.55% of the average monthly net assets of the Fund were paid to the
Investment Managers. Total expenses of the Fund, including fees paid to the
Investment Managers, were 1.10%. During the same period, Advisers paid TICI a
sub-advisory fee totaling 0.25% of the average daily net assets of the Fund.
This fee is not a separate expense of the Fund but is paid by Advisers from the
management fees it receives from the Fund.

Portfolio Transactions. The Investment Managers try to obtain the best execution
on all transactions. If the Investment Managers believe more than one broker or
dealer can provide the best execution, consistent with internal policies they
may consider research and related services and the sale of Fund shares, as well
as shares of other funds in the Franklin Templeton Group of Funds, when
selecting a broker or dealer. Please see "How does the Fund Buy Securities for
its Portfolio?" in the SAI for more information.

Administrative Services. Under an agreement with Advisers, FT Services provides
certain administrative services and facilities for the Fund. Please see
"Investment Management and Other Services" in the SAI for more information.

THE RULE 12B-1 PLAN

The Fund has a distribution plan or "Rule 12b-1 Plan" for its Class I shares
under which it may reimburse Distributors or others for activities primarily
intended to sell shares of the class. These expenses may include, among others,
distribution or service fees paid to Securities Dealers or others who have
executed a servicing agreement with the Fund, Distributors or its affiliates,
printing prospectuses and reports used for sales purposes, preparing and
distributing sales literature and advertisements, and a prorated portion of
Distributors' overhead expenses.

Payments by the Fund under the plan may not exceed 0.25% per year of Class I's
average daily net assets. All distribution expenses over this amount will be
borne by those who have incurred them. During the first year after certain
purchases made without a sales charge, Distributors may keep the Rule 12b-1 fees
associated with the purchase. For more information, please see "The Fund's
Underwriter" in the SAI.

HOW DOES THE FUND MEASURE PERFORMANCE?

From time to time, the Fund advertises its performance. The more commonly used
measures of performance are total return, current yield and current distribution
rate. Performance figures are usually calculated using the maximum sales charge,
but certain figures may not include the sales charge.

Total return is the change in value of an investment over a given period. It
assumes any dividends and capital gains are reinvested. Current yield shows the
income per share earned by the Fund. The current distribution rate shows the
dividends or distributions paid to shareholders by the Fund. This rate is
usually computed by annualizing the dividends paid per share during a certain
period and dividing that amount by the current Offering Price. Unlike current
yield, the current distribution rate may include income distributions from
sources other than dividends and interest received by the Fund.

The Fund's investment results will vary. Performance figures are always based on
past performance and do not guarantee future results. For a more detailed
description of how the Fund calculates its performance figures, please see "How
does the Fund Measure Performance?" in the SAI.

The Fund also offers another share class and, from time to time, will advertise
its performance in a manner described in the prospectus for that class.

HOW TAXATION AFFECTS THE FUND AND ITS SHAREHOLDERS

Regular income dividends (which are generally distributed monthly) will be
determined from the Fund's net investment income, excluding any realized net
foreign currency gains and losses. Under U.S. Treasury regulations, net realized
foreign currency gains and losses are required to be reported as ordinary income
or loss to the Fund. Therefore, if in the course of a fiscal year, the Fund
realizes net foreign currency losses, the Fund may be required to reclassify all
or a portion of its income dividend distributions made during the fiscal year as
a return-of-capital for federal income tax purposes. Net foreign currency gains,
if any, will generally be distributed as a supplemental income dividend once
each year in December to reflect any net foreign currency gain realized by the
Fund as of October 31 for the current fiscal year, and may also reflect any
undistributed foreign currency gains for the prior fiscal year. You will be
informed of the tax status of all distributions shortly after the close of each
calendar year.

For federal income tax purposes, any income dividends that you receive from the
Fund, as well as any distributions derived from the excess of net short-term
capital gain over net long-term capital loss, are treated as ordinary income
whether you have elected to receive them in cash or in additional shares.

Distributions derived from the excess of net long-term capital gain over net
short-term capital loss are treated as long-term capital gain regardless of the
length of time you have owned Fund shares and regardless of whether the
distributions are received in cash or in additional shares.

Pursuant to the Code, certain distributions that are declared in October,
November or December but which, for operational reasons, may not be paid to you
until the following January, will be treated for tax purposes as if received by
you on December 31 of the calendar year in which they are declared.

Redemptions and exchanges of Fund shares are taxable events on which you may
realize a gain or loss. Any loss incurred on sale or exchange of the Fund's
shares, held for six months or less, will be treated as a long-term capital loss
to the extent of capital gain dividends received with respect to the shares.

The Fund's investments in options, futures contracts and forward contracts may
give rise to taxable income, gain or loss and will be subject to special tax
treatment under certain mark-to-market and straddle rules, the effect of which
may be to accelerate income to the Fund, defer Fund losses and cause adjustments
in the holding periods of Fund securities. These rules could therefore affect
the amount, timing and character of distributions to shareholders. Certain
elections may be available to the Fund to mitigate some of the unfavorable
consequences of the provisions described in this paragraph. These investments
and transactions are discussed in the SAI.

Foreign exchange gains and losses realized by the Fund in connection with
certain transactions involving foreign currencies, foreign currency payables or
receivables, foreign currency-denominated debt securities, foreign currency
forward contracts, and options or futures contracts on foreign currencies are
subject to special tax rules that may cause gains and losses to be treated as
ordinary income and losses rather than capital gains and losses and may affect
the amount and timing of the Fund's income or loss from the transactions and in
turn its distributions to shareholders. These rules are discussed in the SAI.

The Fund will inform you of the source of your dividends and distributions at
the time they are paid and will, promptly after the close of each calendar year,
advise you of the tax status for federal income tax purposes of the dividends
and distributions.

If you are not considered a U.S. person for purposes of federal income tax
purposes, you should consult with your financial or tax advisor regarding the
applicability of U.S. withholding or other taxes to distributions received by
you from the Fund and the application of foreign tax laws to these
distributions.

HOW IS THE TRUST ORGANIZED?

The Fund is a non-diversified series of the Trust, an open-end management
investment company, commonly called a mutual fund. It was organized as a
Massachusetts business trust in November 1985 and reorganized as a Delaware
business trust in August 1996, and is registered with the SEC under the 1940
Act. Shares of each series of the Trust have equal and exclusive rights to
dividends and distributions declared by that series and the net assets of the
series in the event of liquidation or dissolution. Shares of the Fund are
considered Class I shares for redemption, exchange and other purposes.
Additional series and classes of shares may be offered in the future. As of
January 1, 1997, the Fund began offering a new class of shares designated
Franklin Templeton German Government Bond Fund - Advisor Class. All shares
outstanding before the offering of Advisor Class shares have been designated
Franklin Templeton German Government Bond Fund - Class I. Additional series and
classes of shares may be offered in the future.

Shares of each class represent proportionate interests in the assets of the Fund
and have the same voting and other rights and preferences as any other class of
the Fund for matters that affect the Fund as a whole. For matters that only
affect one class, however, only shareholders of that class may vote. Each class
will vote separately on matters (1) affecting only that class, (2) expressly
required to be voted on separately by state law, or (3) required to be voted on
separately by the 1940 Act. Shares of each class of a series have the same
voting and other rights and preferences as the other classes and series of the
Trust for matters that affect the Trust as a whole.

The Trust has noncumulative voting rights. This gives holders of more than 50%
of the shares voting the ability to elect all of the members of the Board. If
this happens, holders of the remaining shares voting will not be able to elect
anyone to the Board.

The Trust does not intend to hold annual shareholder meetings. It may hold a
special meeting of a series, however, for matters requiring shareholder approval
under the 1940 Act. A meeting may also be called by the Board in its discretion
or by shareholders holding at least 10% of the outstanding shares. The 1940 Act
requires that we help you communicate with other shareholders in connection with
removing members of the Board.

As of February 3, 1997, Franklin Resources, Inc. and Franklin Templeton Fund
Allocator Series - Franklin Templeton Growth Target Fund owned of record and
beneficially more than 25% of the outstanding shares of the Advisor Class of the
Fund.

ABOUT YOUR ACCOUNT

HOW DO I BUY SHARES?

OPENING YOUR ACCOUNT

To open your account, contact your investment representative or complete and
sign the enclosed shareholder application and return it to the Fund with your
check.

MINIMUM
INVESTMENTS*
To Open Your Account $100
To Add to Your Account $ 25

*We may waive these minimums for retirement plans. We may also refuse any order
to buy shares.

SALES CHARGE REDUCTIONS AND WAIVERS

- - If you qualify to buy shares under one of the sales charge reduction or
waiver categories described below, please include a written statement with each
purchase order explaining which privilege applies. If you don't include this
statement, we cannot guarantee that you will receive the sales charge reduction
or waiver.

Quantity Discounts. The sales charge you pay depends on the dollar amount you
invest, as shown in the table below.

TOTAL SALES CHARGE AMOUNT PAID
AS A PERCENTAGE OF TO DEALER AS A
AMOUNT OF PURCHASE OFFERING NET AMOUNT PERCENTAGE OF
AT OFFERING PRICE PRICE INVESTED OFFERING PRICE
Less than $50,000 3.00% 3.09% 2.60%
$50,000 but less than $100,000 2.50% 2.56% 2.25%
$100,000 but less than $250,000 2.00% 2.04% 1.85%
$250,000 but less than $500,000 1.50% 1.52% 1.40%
$500,000 but less than $750,000 1.00% 1.01% 1.00%
$750,000 but less than $1,000,000 0.75% 0.76% 0.75%
$1,000,000 or more* None None None

*If you invest $1 million or more, a Contingent Deferred Sales Charge may be
imposed on an early redemption. Please see "How Do I Sell Shares? - Contingent
Deferred Sales Charge." Please also see "Other Payments to Securities Dealers"
below for a discussion of payments Distributors may make out of its own
resources to Securities Dealers for certain purchases.

Cumulative Quantity Discounts. To determine if you may pay a reduced sales
charge, the amount of your current purchase is added to the cost or current
value, whichever is higher, of your existing shares in the Franklin Templeton
Funds, as well as those of your spouse, children under the age of 21 and
grandchildren under the age of 21. If you are the sole owner of a company, you
may also add any company accounts, including retirement plan accounts. Companies
with one or more retirement plans may add together the total plan assets
invested in the Franklin Templeton Funds to determine the sales charge that
applies.

Letter of Intent. You may buy shares at a reduced sales charge by completing the
Letter of Intent section of the shareholder application. A Letter of Intent is a
commitment by you to invest a specified dollar amount during a 13 month period.
The amount you agree to invest determines the sales charge you pay.

BY COMPLETING THE LETTER OF INTENT SECTION OF THE SHAREHOLDER APPLICATION, YOU
ACKNOWLEDGE AND AGREE TO THE FOLLOWING:

o You authorize Distributors to reserve 5% of your total intended purchase in
Fund shares registered in your name until you fulfill your Letter.

o You give Distributors a security interest in the reserved shares and appoint
Distributors as attorney-in-fact.

o Distributors may sell any or all of the reserved shares to cover any
additional sales charge if you do not fulfill the terms of the Letter.

o Although you may exchange your shares, you may not sell reserved shares until
you complete the Letter or pay the higher sales charge.

Your periodic statements will include the reserved shares in the total shares
you own. We will pay or reinvest dividend and capital gain distributions on the
reserved shares as you direct. Our policy of reserving shares does not apply to
certain retirement plans.

If you would like more information about the Letter of Intent privilege, please
see "How Do I Buy, Sell and Exchange Shares? - Letter of Intent" in the SAI or
call Shareholder Services.

Group Purchases. If you are a member of a qualified group, you may buy Fund
shares at a reduced sales charge that applies to the group as a whole. The sales
charge is based on the combined dollar value of the group members' existing
investments, plus the amount of the current purchase.

A qualified group is one that:

o Was formed at least six months ago,

o Has a purpose other than buying Fund shares at a discount,

o Has more than 10 members,

o Can arrange for meetings between our representatives and group members,

o Agrees to include Franklin Templeton Fund sales and other materials in
publications and mailings to its members at reduced or no cost to Distributors,

o Agrees to arrange for payroll deduction or other bulk transmission of
investments to the Fund, and

o Meets other uniform criteria that allow Distributors to achieve cost savings
in distributing shares.

Sales Charge Waivers. The Fund's sales charges (front-end and contingent
deferred) will not apply to certain purchases. For waiver categories 1, 2 or 3
below: (i) the distributions or payments must be reinvested within 365 days of
their payment date, and (ii) Class II distributions may be reinvested in either
Class I or Class II shares. Class I distributions may only be reinvested in
Class I shares.

The Fund's sales charges will not apply if you are buying shares with money from
the following sources:

1. Dividend and capital gain distributions from any Franklin Templeton Fund or
a REIT sponsored or advised by Franklin Properties, Inc.

2. Distributions from an existing retirement plan invested in the Franklin
Templeton Funds

3. Annuity payments received under either an annuity option or from death
benefit proceeds, only if the annuity contract offers as an investment option
the Franklin Valuemark Funds, the Templeton Variable Annuity Fund, the Templeton
Variable Products Series Fund, or the Franklin Government Securities Trust. You
should contact your tax advisor for information on any tax consequences that may
apply.

4. Redemptions from any Franklin Templeton Fund if you:

o Originally paid a sales charge on the shares,

o Reinvest the money within 365 days of the redemption date, and

o Reinvest the money in the same class of shares.

An exchange is not considered a redemption for this privilege. The Contingent
Deferred Sales Charge will not be waived if the shares were subject to a
Contingent Deferred Sales Charge when sold. We will credit your account in
shares, at the current value, in proportion to the amount reinvested for any
Contingent Deferred Sales Charge paid in connection with the earlier redemption,
but a new Contingency Period will begin.

If you immediately placed your redemption proceeds in a Franklin Bank CD, you
may reinvest them as described above. The proceeds must be reinvested within 365
days from the date the CD matures, including any rollover.

5. Redemptions from other mutual funds

If you sold shares of a fund that is not a Franklin Templeton Fund within the
past 60 days, you may invest the proceeds without any sales charge if (a) the
investment objectives were similar to the Fund's, and (b) your shares in that
fund were subject to any front-end or contingent deferred sales charges at the
time of purchase. You must provide a copy of the statement showing your
redemption.

The Fund's sales charges will also not apply to purchases by:

6. Trust companies and bank trust departments agreeing to invest in Franklin
Templeton Funds over a 13 month period at least $1 million of assets held in a
fiduciary, agency, advisory, custodial or similar capacity and over which the
trust companies and bank trust departments or other plan fiduciaries or
participants, in the case of certain retirement plans, have full or shared
investment discretion. We will accept orders for these accounts by mail
accompanied by a check or by telephone or other means of electronic data
transfer directly from the bank or trust company, with payment by federal funds
received by the close of business on the next business day following the order.

7. Group annuity separate accounts offered to retirement plans

8. Retirement plans that (i) are sponsored by an employer with at least 100
employees, (ii) have plan assets of $1 million or more, or (iii) agree to invest
at least $500,000 in the Franklin Templeton Funds over a 13 month period.
Retirement plans that are not Qualified Retirement Plans or SEPS, such as 403(b)
or 457 plans, must also meet the requirements described under "Group Purchases"
above.

9. An Eligible Governmental Authority. Please consult your legal and investment
advisors to determine if an investment in the Fund is permissible and suitable
for you and the effect, if any, of payments by the Fund on arbitrage rebate
calculations.

10. Broker-dealers, registered investment advisors or certified financial
planners who have entered into an agreement with Distributors for clients
participating in comprehensive fee programs

11. Registered Securities Dealers and their affiliates, for their investment
accounts only

12. Current employees of Securities Dealers and their affiliates and their
family members, as allowed by the internal policies of their employer

13. Officers, trustees, directors and full-time employees of the Franklin
Templeton Funds or the Franklin Templeton Group, and their family members,
consistent with our then-current policies

14. Investment companies exchanging shares or selling assets pursuant to a
merger, acquisition or exchange offer

15. Accounts managed by the Franklin Templeton Group

16. Certain unit investment trusts and their holders reinvesting distributions
from the trusts

MAY I BUY SHARES IN GERMAN MARKS?

o Normally you can add to your existing account in German marks.

o The minimum is 10,000 German marks.

o You cannot use a currency other than U.S. dollars or German marks without our
preapproval.

o You need our preapproval to open a new account.

Provided that we receive timely notice as described below, Fund shares will be
purchased at the public Offering Price in U.S. dollars next determined after the
Fund custodian's correspondent bank in Germany receives the German marks, using
the same exchange rate used to convert the value of the Fund's German
mark-denominated assets into U.S. dollars for portfolio valuation purposes.

The Fund does not charge a fee for receiving investments in this manner. You
should check with your bank for any wire and other fees you may need to pay for
the transaction.

To invest in the Fund with German marks, please follow the directions below:

1. Call us at 1-800/632-2301 (or 1-415/312-3400) or fax the instructions at
1-415/312-4175 by 1:00 p.m., Eastern time, at least two business days prior to
your wiring the money. If the call or fax is made after 1:00 p.m., please allow
three business days. Include the following information:

Date of Wire (Value Date)

Amount of Wire (in German marks)

Name of Bank Wiring Funds

Your Name (as it appears on your account)

Your Account Number

Wire Order Number (a new number will be assigned each time)

2. At least two or three business days after the call or fax, you should request
for your bank to transmit, for value, immediately available funds in German
marks to:

Bank Chase Bank A.G.
Alexanderstrasse 59
Postfach 90-01-09 6000
Frankfurt/Main 90
Frankfurt-Rodelheim, Germany
Account Chase Manhattan Bank,
London 623 120 0079
Further Credit for Franklin Templeton German Government Bond Fund

HOW DO I BUY SHARES IN CONNECTION WITH RETIREMENT PLANS?

Your individual or employer-sponsored retirement plan may invest in the Fund.
Plan documents are required for all retirement plans. Trust Company can provide
the plan documents for you and serve as custodian or trustee.

Trust Company can provide you with brochures containing important information
about its plans. To establish a Trust Company retirement plan, you will need an
application other than the one included in this prospectus. For a retirement
plan brochure or application, please call our Retirement Plans Department.

Please consult your legal, tax or retirement plan specialist before choosing a
retirement plan. Your investment representative or advisor can help you make
investment decisions within your plan.

OTHER PAYMENTS TO SECURITIES DEALERS

The payments described below may be made to Securities Dealers who initiate and
are responsible for certain purchases made without a sales charge. The payments
are subject to the sole discretion of Distributors, and are paid by Distributors
or one of its affiliates and not by the Fund or its shareholders.

1. Purchases of $1 million or more - up to 0.75% of the purchase price.

2. Purchases by certain retirement plans - up to 1% of the purchase price.

A Securities Dealer may only receive one of these payments for each qualifying
purchase. Securities Dealers who receive payments in connection with investments
described in paragraphs 1 or 2 above will be eligible to receive the Rule 12b-1
fee associated with the purchase starting in the thirteenth calendar month after
the purchase.

FOR BREAKPOINTS THAT MAY APPLY AND INFORMATION ON ADDITIONAL COMPENSATION
PAYABLE TO SECURITIES DEALERS IN CONNECTION WITH THE SALE OF FUND SHARES, PLEASE
SEE "HOW DO I BUY, SELL AND EXCHANGE SHARES? - OTHER PAYMENTS TO SECURITIES
DEALERS" IN THE SAI.

MAY I EXCHANGE SHARES FOR SHARES OF ANOTHER FUND?

We offer a wide variety of funds. If you would like, you can move your
investment from your Fund account to an existing or new account in another
Franklin Templeton Fund (an "exchange"). Because it is technically a sale and a
purchase of shares, an exchange is a taxable transaction.

Before making an exchange, please read the prospectus of the fund you are
interested in. This will help you learn about the fund, its investment objective
and policies, and its rules and requirements for exchanges. For example, some
Franklin Templeton Funds do not accept exchanges and others may have different
investment minimums.

METHOD STEPS TO FOLLOW

By Mail 1. Send us written instructions signed by all account owners

2. Include any outstanding share certificates for the shares
you are selling

By Phone Call Shareholder Services or TeleFACTS(R)

- If you do not want the ability to exchange by phone to
apply to your account, please let us know.

Through Your Dealer Call your investment representative

Please refer to "Transaction Procedures and Special Requirements" for other
important information on how to exchange shares.

WILL SALES CHARGES APPLY TO MY EXCHANGE?

You generally will not pay a front-end sales charge on exchanges. If you have
held your shares less than six months, however, you will pay the percentage
difference between the sales charge you previously paid and the applicable sales
charge of the new fund. If you have never paid a sales charge on your shares
because, for example, they have always been held in a money fund, you will pay
the Fund's applicable sales charge no matter how long you have held your shares.
These charges may not apply if you qualify to buy shares without a sales charge.

Contingent Deferred Sales Charge. We will not impose a Contingent Deferred Sales
Charge when you exchange shares. Any shares subject to a Contingent Deferred
Sales Charge at the time of exchange, however, will remain so in the new fund.
For accounts with shares subject to a Contingent Deferred Sales Charge, shares
are exchanged into the new fund in the order they were purchased. If you
exchange shares into one of our money funds, the time your shares are held in
that fund will not count towards the completion of any Contingency Period. For
more information about the Contingent Deferred Sales Charge, please see that
section under "How Do I Sell Shares?"

EXCHANGE RESTRICTIONS

Please be aware that the following restrictions apply to exchanges:

o You may only exchange shares within the same class, except as noted below.

o The accounts must be identically registered. You may, however, exchange shares
from a Fund account requiring two or more signatures into an identically
registered money fund account requiring only one signature for all transactions.
Please notify us in writing if you do not want this option to be available on
your account(s). Additional procedures may apply. Please see "Transaction
Procedures and Special Requirements."

o The fund you are exchanging into must be eligible for sale in your state.

o We may modify or discontinue our exchange policy if we give you 60 days'
written notice.

o Your exchange may be restricted or refused if you: (i) request an exchange out
of the Fund within two weeks of an earlier exchange request, (ii) exchange
shares out of the Fund more than twice in a calendar quarter, or (iii) exchange
shares equal to at least $5 million, or more than 1% of the Fund's net assets.
Shares under common ownership or control are combined for these limits. If you
exchange shares as described in this paragraph, you will be considered a Market
Timer. Each exchange by a Market Timer, if accepted, will be charged $5.00. Some
of our funds do not allow investments by Market Timers.

LIMITED EXCHANGES BETWEEN DIFFERENT CLASSES OF SHARES

Certain funds in the Franklin Templeton Funds offer classes of shares not
offered by the Fund, such as "Class Z" shares. Beginning on or about May 1,
1997, you may exchange Class Z shares of Franklin Mutual Series Fund Inc. for
shares of the Fund at Net Asset Value.

HOW DO I SELL SHARES?

You may sell (redeem) your shares at any time.

METHOD STEPS TO FOLLOW

By Mail 1. Send us written instructions signed by all account owners

2. Include any outstanding share certificates for the shares
you are selling

3. Provide a signature guarantee if required

4. Corporate, partnership and trust accounts may need to send
additional documents. Accounts under court jurisdiction may
have other requirements.

By Phone

(Only available if you have completed and sent to us the telephone redemption
agreement included with this prospectus.) Call Shareholder Services

Telephone requests will be accepted:

o If the request is $50,000 or less. Institutional accounts
may exceed $50,000 by completing a separate agreement. Call
Institutional Services to receive a copy.

o If there are no share certificates issued for the shares you
want to sell or you have already returned them to the Fund

o Unless you are selling shares in a Trust Company retirement
plan account

o Unless the address on your account was changed by phone
within the last 30 days

Through Your Dealer Call your investment representative

Beginning on or about May 1, 1997, you will automatically be able to redeem
shares by telephone without completing a telephone redemption agreement. Please
notify us in writing if you do not want this option to be available on your
account. If you later decide you would like this option, send us written
instructions signed by all account owners, with a signature guarantee.

We will send your redemption check within seven days after we receive your
request in proper form. If you sell your shares by phone, the check may only be
made payable to all registered owners on the account and sent to the address of
record. We are not able to receive or pay out cash in the form of currency.

If you sell shares you recently purchased with a check or draft, we may delay
sending you the proceeds for up to 15 days or more to allow the check or draft
to clear. A certified or cashier's check may clear in less time.

Under unusual circumstances, we may suspend redemptions or postpone payment for
more than seven days as permitted by federal securities law.

MAY I RECEIVE MY REDEMPTION PROCEEDS IN GERMAN MARKS?

To request payment of redemption proceeds in German marks:

o First, you need to have on file a Foreign Currency Redemption Authorization
Form. Please call us for the form at 1-800/632-2301 (or 1-415/312-3400) or fax
your request to 1-415/312-4175.

o You must have established a German mark-denominated bank account

o The redemption proceeds must be for a minimum of U.S. $5,000.

o Your redemption proceeds paid in German marks will be calculated using the Net
Asset Value per share and the U.S. dollar-German mark exchange rate next
determined after receipt of the redemption request in proper form.

Please refer to "Transaction Procedures and Special Requirements" for other
important information on how to sell shares.

TRUST COMPANY RETIREMENT PLAN ACCOUNTS

To comply with IRS regulations, you need to complete additional forms before
selling shares in a Trust Company retirement plan account. Tax penalties
generally apply to any distribution from these plans to a participant under age
59 1/2, unless the distribution meets an exception stated in the Code. To obtain
the necessary forms, please call our Retirement Plans Department.

CONTINGENT DEFERRED SALES CHARGE

If you did not pay a front-end sales charge because you invested $1 million or
more or agreed to invest $1 million or more under a Letter of Intent, a
Contingent Deferred Sales Charge may apply if you sell all or a part of your
investment within the Contingency Period. Once you have invested $1 million or
more, any additional investments you make without a sales charge may also be
subject to a Contingent Deferred Sales Charge if they are sold within the
Contingency Period. The charge is 1% of the value of the shares sold or the Net
Asset Value at the time of purchase, whichever is less.

Unless otherwise specified, when you request to sell a stated dollar amount, we
will redeem additional shares to cover any Contingent Deferred Sales Charge. For
requests to sell a stated number of shares, we will deduct the amount of the
Contingent Deferred Sales Charge, if any, from the sale proceeds.

Waivers. We waive the Contingent Deferred Sales Charge for:

o Exchanges

o Account fees

o Sales of shares purchased pursuant to a sales charge waiver

o Redemptions by the Fund when an account falls below the minimum required
account size

o Redemptions following the death of the shareholder or beneficial owner

o Redemptions through a systematic withdrawal plan set up before February 1,
1995

o Redemptions through a systematic withdrawal plan set up on or after February
1, 1995, up to 1% a month of an account's Net Asset Value (3% quarterly, 6%
semiannually or 12% annually). For example, if you maintain an annual balance of
$1 million, you can withdraw up to $120,000 annually through a systematic
withdrawal plan free of charge.

o Distributions from individual retirement plan accounts due to death or
disability or upon periodic distributions based on life expectancy

o Tax-free returns of excess contributions from employee benefit plans

o Distributions from employee benefit plans, including those due to termination
or plan transfer

WHAT DISTRIBUTIONS MIGHT I RECEIVE FROM THE FUND?

Capital gains, if any, may be distributed annually, usually in December

Dividend payments are not guaranteed, are subject to the Board's discretion and
may vary with each payment. The Fund does not pay "interest" or guarantee any
fixed rate of return on an investment in its shares.

If you buy shares shortly before the record date, please keep in mind that any
distribution will lower the value of the Fund's shares by the amount of the
distribution and you will then receive a portion of the price you paid back in
the form of a taxable distribution.

DISTRIBUTION OPTIONS

You may receive your distributions from the Fund in any of these ways:

1. Buy additional shares of the Fund - You may buy additional shares of the same
class of the Fund (without a sales charge or imposition of a Contingent Deferred
Sales Charge) by reinvesting capital gain distributions, or both dividend and
capital gain distributions. This is a convenient way to accumulate additional
shares and maintain or increase your earnings base.

2. Buy shares of other Franklin Templeton Funds - You may direct your
distributions to buy the same class of shares of another Franklin Templeton Fund
(without a sales charge or imposition of a Contingent Deferred Sales Charge).
Many shareholders find this a convenient way to diversify their investments.

3. Receive distributions in cash - You may receive dividends, or both dividend
and capital gain distributions in cash. If you have the money sent to another
person or to a checking account, you may need a signature guarantee. If you send
the money to a checking account, please see "Electronic Fund Transfers" under
"Services to Help You Manage Your Account."

To select one of these options, please complete sections 6 and 7 of the
shareholder application included with this prospectus or tell your investment
representative which option you prefer. If you do not select an option, we will
automatically reinvest dividend and capital gain distributions in the same class
of the Fund. For Trust Company retirement plans, special forms are required to
receive distributions in cash. You may change your distribution option at any
time by notifying us by mail or phone. Please allow at least seven days before
the record date for us to process the new option.

TRANSACTION PROCEDURES AND SPECIAL REQUIREMENTS

HOW AND WHEN SHARES ARE PRICED

The Fund is open for business each day the NYSE is open. We determine the Net
Asset Value per share as of the scheduled close of the NYSE, generally 1:00 p.m.
Pacific time. You can find the prior day's closing Net Asset Value and Offering
Price of the Fund in many newspapers.

The Net Asset Value of all outstanding shares of each class is calculated on a
pro rata basis. It is based on each class' proportionate participation in the
Fund, determined by the value of the shares of each class. Class I, however,
bears the Rule 12b-1 fees payable under its Rule 12b-1 plan. To calculate Net
Asset Value per share of each class, the assets of each class are valued and
totaled, liabilities are subtracted, and the balance, called net assets, is
divided by the number of shares of the class outstanding. The Fund's assets are
valued as described under "How are Fund Shares Valued?" in the SAI.

THE PRICE WE USE WHEN YOU BUY OR SELL SHARES

You buy shares at the Offering Price, unless you qualify to buy shares at a
reduced sales charge or with no sales charge. The Offering Price is based on the
Net Asset Value per share and includes the maximum sales charge. We calculate it
to two decimal places using standard rounding criteria. You sell shares at Net
Asset Value.

The Net Asset Value we use when you buy or sell shares is the one next
calculated after we receive your transaction request in proper form. If you buy
or sell shares through your Securities Dealer, however, we will use the Net
Asset Value next calculated after your Securities Dealer receives your request,
which is promptly transmitted to the Fund. Your redemption proceeds will not
earn interest between the time we receive the order from your dealer and the
time we receive any required documents.

PROPER FORM

An order to buy shares is in proper form when we receive your signed shareholder
application and check. Written requests to sell or exchange shares are in proper
form when we receive written instructions signed by all registered owners, with
a signature guarantee if necessary. We must also receive any outstanding share
certificates for those shares.

WRITTEN INSTRUCTIONS

Written instructions must be signed by all registered owners. To avoid any delay
in processing your transaction, they should include:

o Your name,

o The Fund's name,

o The class of shares,

o A description of the request,

o For exchanges, the name of the fund you're exchanging into,

o Your account number,

o The dollar amount or number of shares, and

o A telephone number where we may reach you during the day, or in the evening if
preferred.

SIGNATURE GUARANTEES

For our mutual protection, we require a signature guarantee in the following
situations:

1) You wish to sell over $50,000 worth of shares,

2) You want the proceeds to be paid to someone other than the registered owners,

3) The proceeds are not being sent to the address of record, preauthorized bank
account, or preauthorized brokerage firm account,

4) We receive instructions from an agent, not the registered owners,

5) We believe a signature guarantee would protect us against potential claims
based on the instructions received.

SHARE CERTIFICATES

We will credit your shares to your Fund account. We do not issue share
certificates unless you specifically request them. This eliminates the costly
problem of replacing lost, stolen or destroyed certificates. If a certificate is
lost, stolen or destroyed, you may have to pay an insurance premium of up to 2%
of the value of the certificate to replace it.

Any outstanding share certificates must be returned to the Fund if you want to
sell or exchange those shares or if you would like to start a systematic
withdrawal plan. The certificates should be properly endorsed. You can do this
either by signing the back of the certificate or by completing a share
assignment form. For your protection, you may prefer to complete a share
assignment form. In this case, you should send the certificate and assignment
form in separate envelopes.

TELEPHONE TRANSACTIONS

You may initiate many transactions by phone. Please refer to the sections of
this prospectus that discuss the transaction you would like to make or call
Shareholder Services.

When you call, we will request personal or other identifying information to
confirm that instructions are genuine. We will also record calls. We will not be
liable for following instructions communicated by telephone if we reasonably
believe they are genuine. For your protection, we may delay a transaction or not
implement one if we are not reasonably satisfied that the instructions are
genuine. If this occurs, we will not be liable for any loss.

If our lines are busy or you are otherwise unable to reach us by phone, you may
wish to ask your investment representative for assistance or send us written
instructions, as described elsewhere in this prospectus. If you are unable to
execute a transaction by telephone, we will not be liable for any loss.

Trust Company Retirement Plan Accounts. We cannot accept instructions to sell
shares or change distribution options on Trust Company retirement plans by
phone. While you may exchange shares of Trust Company IRA and 403(b) retirement
accounts by phone, certain restrictions may be imposed on other retirement
plans.

To obtain any required forms or more information about distribution or transfer
procedures, please call our Retirement Plans Department.

ACCOUNT REGISTRATIONS AND REQUIRED DOCUMENTS

When you open an account, we need you to tell us how you want your shares
registered. How you register your account will affect your ownership rights and
ability to make certain transactions. If you have questions about how to
register your account, you should consult your investment representative or
legal advisor. Please keep the following information in mind when registering
your account.

Joint Ownership. If you open an account with two or more owners, we register the
account as "joint tenants with rights of survivorship" unless you tell us
otherwise. An account registered as "joint tenants with rights of survivorship"
is shown as "Jt Ten" on your account statement. For any account with two or more
owners, all owners must sign instructions to process transactions and changes to
the account. Even if the law in your state says otherwise, we cannot accept
instructions to change owners on the account unless all owners agree in writing.
If you would like another person or owner to sign for you, please send us a
current power of attorney.

Gifts and Transfers to Minors. You may set up a custodial account for a minor
under your state's Uniform Gifts/Transfers to Minors Act. Other than this form
of registration, a minor may not be named as an account owner.

Trusts. You should register your account as a trust only if you have a valid
written trust document. This avoids future disputes or possible court action
over who owns the account.

Required Documents. For corporate, partnership and trust accounts, please send
us the following documents when you open your account. This will help avoid
delays in processing your transactions while we verify who may sign on the
account.

TYPE OF ACCOUNT DOCUMENTS REQUIRED

Corporation Corporate Resolution

Partnership 1. The pages from the partnership agreement that identify the
general partners, or

2. A certification for a partnership agreement

Trust 1. The pages from the trust document that identify the
trustees, or

2. A certification for trust

Street or Nominee Accounts. If you have Fund shares held in a "street" or
"nominee" name account with your Securities Dealer, you may transfer the shares
to the street or nominee name account of another Securities Dealer. Both dealers
must have an agreement with Distributors or we cannot process the transfer.
Contact your Securities Dealer to initiate the transfer. We will process the
transfer after we receive authorization in proper form from your delivering
Securities Dealer. Accounts may be transferred electronically through the NSCC.
For accounts registered in street or nominee name, we may take instructions
directly from the Securities Dealer or your nominee.

Electronic Instructions. If there is a Securities Dealer or other representative
of record on your account, we are authorized to use and execute electronic
instructions. We will accept electronic instructions directly from your dealer
or representative without further inquiry. Electronic instructions may be
processed through the services of the NSCC, which currently include the NSCC's
"Networking," "Fund/SERV," and "ACATS" systems, or through Franklin/Templeton's
PCTrades II(TM) System.

TAX IDENTIFICATION NUMBER

The IRS requires us to have your correct Social Security or tax identification
number on a signed shareholder application or applicable tax form. Federal law
requires us to withhold 31% of your taxable distributions and sale proceeds if
(i) you have not furnished a certified correct taxpayer identification number,
(ii) you have not certified that withholding does not apply, (iii) the IRS or a
Securities Dealer notifies the Fund that the number you gave us is incorrect, or
(iv) you are subject to backup withholding.

We may refuse to open an account if you fail to provide the required tax
identification number and certifications. We may also close your account if the
IRS notifies us that your tax identification number is incorrect. If you
complete an "awaiting TIN" certification, we must receive a correct tax
identification number within 60 days of your initial purchase to keep your
account open.

KEEPING YOUR ACCOUNT OPEN

Due to the relatively high cost of maintaining a small account, we may close
your account if the value of your shares is less than $50. We will only do this
if the value of your account fell below this amount because you voluntarily sold
your shares and your account has been inactive (except for the reinvestment of
distributions) for at least six months. Before we close your account, we will
notify you and give you 30 days to increase the value of your account to $100.

SERVICES TO HELP YOU MANAGE YOUR ACCOUNT

AUTOMATIC INVESTMENT PLAN

Our automatic investment plan offers a convenient way to invest in the Fund.
Under the plan, you can have money transferred automatically from your checking
account to the Fund each month to buy additional shares. If you are interested
in this program, please refer to the automatic investment plan application
included with this prospectus or contact your investment representative. The
market value of the Fund's shares may fluctuate and a systematic investment plan
such as this will not assure a profit or protect against a loss. You may
discontinue the program at any time by notifying Investor Services by mail or
phone.

AUTOMATIC PAYROLL DEDUCTION

You may have money transferred from your paycheck to the Fund to buy additional
Class I shares. Your investments will continue automatically until you instruct
the Fund and your employer to discontinue the plan. To process your investment,
we must receive both the check and payroll deduction information in required
form. Due to different procedures used by employers to handle payroll
deductions, there may be a delay between the time of the payroll deduction and
the time we receive the money.

SYSTEMATIC WITHDRAWAL PLAN

Our systematic withdrawal plan allows you to sell your shares and receive
regular payments from your account on a monthly, quarterly, semiannual or annual
basis. The value of your account must be at least $5,000 and the minimum payment
amount for each withdrawal must be at least $50. For retirement plans subject to
mandatory distribution requirements, the $50 minimum will not apply.

If you would like to establish a systematic withdrawal plan, please complete the
systematic withdrawal plan section of the shareholder application included with
this prospectus and indicate how you would like to receive your payments. You
may choose to direct your payments to buy the same class of shares of another
Franklin Templeton Fund or have the money sent directly to you, to another
person, or to a checking account. If you choose to have the money sent to a
checking account, please see "Electronic Fund Transfers" below.

You will generally receive your payment by the end of the month in which a
payment is scheduled. When you sell your shares under a systematic withdrawal
plan, it is a taxable transaction.

To avoid paying sales charges on money you plan to withdraw within a short
period of time, you may not want to set up a systematic withdrawal plan if you
plan to buy shares on a regular basis. Shares sold under the plan may also be
subject to a Contingent Deferred Sales Charge. Please see "Contingent Deferred
Sales Charge" under "How Do I Sell Shares?"

You may discontinue a systematic withdrawal plan, change the amount and schedule
of withdrawal payments, or suspend one payment by notifying us in writing at
least seven business days before the end of the month preceding a scheduled
payment. Please see "How Do I Buy, Sell and Exchange Shares? - Systematic
Withdrawal Plan" in the SAI for more information.

ELECTRONIC FUND TRANSFERS

You may choose to have dividend and capital gain distributions from Class I
shares of the Fund or payments under a systematic withdrawal plan sent directly
to a checking account. If the checking account is with a bank that is a member
of the Automated Clearing House, the payments may be made automatically by
electronic funds transfer. If you choose this option, please allow at least
fifteen days for initial processing. We will send any payments made during that
time to the address of record on your account.

TELEFACTS(R)

From a touch-tone phone, you may call our TeleFACTS system (day or night) at
1-800/247-1753 to:

o obtain information about your account;

o obtain price and performance information about any Franklin Templeton Fund;

o exchange shares between identically registered Franklin accounts; and

o request duplicate statements and deposit slips for Franklin accounts.

You will need the Fund's code number to use TeleFACTS. The Fund's code number is
210.

STATEMENTS AND REPORTS TO SHAREHOLDERS

We will send you the following statements and reports on a regular basis:

o Confirmation and account statements reflecting transactions in your account,
including additional purchases and dividend reinvestments. Please verify the
accuracy of your statements when you receive them.

INSTITUTIONAL ACCOUNTS

AVAILABILITY OF THESE SERVICES

The services above are available to most shareholders. If, however, your shares
are held by a financial institution, in a street name account, or networked
through the NSCC, the Fund may not be able to offer these services directly to
you. Please contact your investment representative.

WHAT IF I HAVE QUESTIONS ABOUT MY ACCOUNT?

If you have any questions about your account, you may write to Investor Services
at 777 Mariners Island Blvd., P.O. Box 7777, San Mateo, California 94403-7777.
The Fund, Distributors and Advisers are also located at this address. TICI is
located at 500 E. Broward Blvd. Suite 2100, Fort Lauderdale, Florida 33394-3091.
You may also contact us by phone at one of the numbers listed below.

Your phone call may be monitored or recorded to ensure we provide you with high
quality service. You will hear a regular beeping tone if your call is being
recorded.

GLOSSARY

USEFUL TERMS AND DEFINITIONS

1940 Act - Investment Company Act of 1940, as amended

Advisers - Franklin Advisers, Inc., the Fund's investment manager

Board - The Board of Trustees of the Trust

CD - Certificate of deposit

Class I, Class II and Advisor Class - The Fund offers two classes of shares,
designated "Class I" and "Advisor Class." The two classes have proportionate
interests in the Fund's portfolio. They differ, however, primarily in their
sales charge and expense structures. Certain funds in the Franklin Templeton
Funds also offer a share class designated "Class II."

Code - Internal Revenue Code of 1986, as amended

Contingent Deferred Sales Charge (CDSC) - A sales charge of 1% that may apply if
you sell your shares within the Contingency Period.

Distributors - Franklin/Templeton Distributors, Inc., the Fund's principal
underwriter. The SAI lists the officers and Board members who are affiliated
with Distributors. See "Officers and Trustees."

Eligible Governmental Authority - Any state or local government or any
instrumentality, department, authority or agency thereof that has determined the
Fund is a legally permissible investment and that can only buy shares of the
Fund without paying sales charges.

Franklin Templeton Funds - The U.S. registered mutual funds in the Franklin
Group of Funds(R) and the Templeton Group of Funds except Franklin Valuemark
Funds, Franklin Government Securities Trust, Templeton Capital Accumulator Fund,
Inc., Templeton Variable Annuity Fund, and Templeton Variable Products Series
Fund

Franklin Templeton Group - Franklin Resources, Inc., a publicly owned holding
company, and its various subsidiaries

Franklin Templeton Group of Funds - All U.S. registered investment companies in
the Franklin Group of Funds(R) and the Templeton Group of Funds

FT Services - Franklin Templeton Services, Inc., the Fund's administrator

Investment Managers - Franklin Advisers, Inc., the Fund's investment manager,
and Templeton Investment Counsel, Inc., the Fund's sub-advisor.

Investor Services - Franklin/Templeton Investor Services, Inc., the Fund's
shareholder servicing and transfer agent

IRS - Internal Revenue Service

Letter - Letter of Intent

Market Timers - Market Timers generally include market timing or allocation
services, accounts administered so as to buy, sell or exchange shares based on
predetermined market indicators, or any person or group whose transactions seem
to follow a timing pattern.

Moody's - Moody's Investors Service, Inc.

NASD - National Association of Securities Dealers, Inc.

NSCC - National Securities Clearing Corporation

NYSE - New York Stock Exchange

Offering Price - The public offering price is based on the Net Asset Value per
share and includes the 3.00% sales charge.

REIT - Real Estate Investment Trust

Resources - Franklin Resources, Inc.

SAI - Statement of Additional Information

S&P - Standard & Poor's Corporation

SEC - U.S. Securities and Exchange Commission

SEP - An employer sponsored simplified employee pension plan established under
section 408(k) of the Code

TeleFACTS(R) - Franklin Templeton's automated customer servicing system

Templeton Funds - The U.S. registered mutual funds in the Templeton Group of
Funds except Templeton Capital Accumulator Fund, Inc., Templeton Variable
Annuity Fund, and Templeton Variable Products Series Fund

TICI - Templeton Investment Counsel, Inc., the Fund's sub-advisor.

Trust Company - Franklin Templeton Trust Company. Trust Company is an affiliate
of Distributors and both are wholly owned subsidiaries of Resources.

U.S. - United States

We/Our/Us - Unless the context indicates a different meaning, these terms refer
to the Fund and/or Investor Services, Distributors, or other wholly owned
subsidiaries of Resources.

PROSPECTUS & APPLICATION

FRANKLIN TEMPLETON HARD CURRENCY FUND
ADVISOR CLASS

INVESTMENT STRATEGY: GLOBAL GROWTH & INCOME

ADVISOR CLASS

MARCH 1, 1997

FRANKLIN TEMPLETON GLOBAL TRUST

This prospectus describes the Advisor Class shares of the Franklin Templeton
Hard Currency Fund (the "Fund"). It contains information you should know
before investing in the Fund. Please keep it for future reference.

The Fund currently offers another class of shares with a different sales
charge and expense structure, which affects performance. This class is
described in a separate prospectus. For more information, contact your
investment representative or call 1-800/DIAL BEN.

The Fund has a Statement of Additional Information ("SAI") for its Advisor
Class, dated March 1, 1997, which may be amended from time to time. It
includes more information about the Fund's procedures and policies. It has
been filed with the SEC and is incorporated by reference into this
prospectus. For a free copy or a larger print version of this prospectus,
call 1-800/DIAL BEN or write the Fund at the address shown.

THE FUND MAY INVEST IN MONEY MARKET INSTRUMENTS, BOTH FOREIGN AND DOMESTIC.
INVESTMENTS IN FOREIGN SECURITIES INVOLVE CERTAIN CONSIDERATIONS THAT ARE NOT
NORMALLY INVOLVED IN INVESTMENTS IN SECURITIES OF U.S. COMPANIES. THE
CURRENCY FUNDS SHOULD NOT BE CONSIDERED MONEY MARKET FUNDS. PLEASE SEE "WHAT
ARE THE FUND'S POTENTIAL RISKS?"

FRANKLIN TEMPLETON HARD CURRENCY FUND -
ADVISOR CLASS

MARCH 1, 1997

WHEN READING THIS PROSPECTUS, YOU WILL SEE CERTAIN TERMS BEGINNING WITH
CAPITAL LETTERS. THIS MEANS THE TERM IS EXPLAINED IN OUR GLOSSARY SECTION.

TABLE OF CONTENTS

ABOUT THE FUND
Expense Summary
How does the Fund Invest its Assets?
What are the Fund's Potential Risks?
Who Manages the Fund?
How does the Fund Measure Performance?
How Taxation Affects the Fund and its Shareholders
How is the Trust Organized?

ABOUT YOUR ACCOUNT
How Do I Buy Shares?
May I Exchange Shares for Shares of Another Fund?
How Do I Sell Shares?
What Distributions Might I Receive from the Fund?
Transaction Procedures and Special Requirements
Services to Help You Manage Your Account
What If I Have Questions About My Account?

GLOSSARY
Useful Terms and Definitions

777 Mariners Island Blvd.
P.O. Box 7777
San Mateo
CA 94403-7777
1-800/DIAL BEN

ABOUT THE FUND

EXPENSE SUMMARY

This table is designed to help you understand the costs of investing in the
Fund. Because Advisor Class shares were not offered to the public before
January 1, 1997, the table is based on the historical expenses of the Class I
shares of the Fund for the fiscal year ended October 31, 1996. The Fund's
actual expenses may vary.

A. SHAREHOLDER TRANSACTION EXPENSES+
Maximum Sales Charge Imposed on Purchases None
Exchange Fee (per transaction) $5.00++

B. ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fees 0.65%
Rule 12b-1 Fees None
Other Expenses 0.21%
Total Fund Operating Expenses 0.85%

C. EXAMPLE

Assume the annual return for the class is 5%, operating expenses are as
described above and you sell your shares after the number of years shown.
These are the projected expenses for each $1,000 that you invest in the
Fund.

1 YEAR 3 YEARS 5 YEARS 10 YEARS
$9 $27 $48 $106

THIS IS JUST AN EXAMPLE. IT DOES NOT REPRESENT PAST OR FUTURE EXPENSES OR
RETURNS. ACTUAL EXPENSES AND RETURNS MAY BE MORE OR LESS THAN THOSE SHOWN.
The Fund pays its operating expenses. The effects of these expenses are
reflected in the Net Asset Value or dividends of the class and are not
directly charged to your account.

+If your transaction is processed through your Securities Dealer, you may be
charged a fee by your Securities Dealer for this service.
++$5.00 fee is only for Market Timers. We process all other exchanges without
a fee.

HOW DOES THE FUND INVEST ITS ASSETS?

THE FUND'S INVESTMENT OBJECTIVE

The Fund's investment objective is to protect against depreciation of the
U.S. dollar relative to other currencies. The objective is a fundamental
policy of the Fund and may not be changed without shareholder approval. Of
course, there is no assurance that the Fund's objective will be achieved.

The Fund seeks to achieve its objective by investing in high-quality money
market instruments (and forward contracts) denominated in foreign Major
Currencies which historically have experienced low rates of inflation and
which, in the view of the Investment Managers, follow economic policies
conducive to continued low rates of inflation and currency appreciation
versus the U.S. dollar over the long-term. These currencies are often
referred to as "hard currencies" and the economic policies are often referred
to as "sound money" policies.

Under normal market conditions, the Fund will not expose its portfolio in
excess of 50% of its total assets to a single foreign currency. For temporary
defensive purposes, however, the Fund may invest up to 100% of its net assets
in Swiss franc-denominated instruments.

The Investment Managers actively manage the Fund and will allocate its
investments based on current social, economic, financial and political
developments which, in the Investment Managers' opinion, may affect the value
of the currencies.

The ten highest yielding Major Currencies and their respective average yields
for each year from 1989 through 1995 are listed below:

1995* 1994 1993 1992 1991 1990 1989
- -------------------------------------------------------------------------------

Sweden** 8.81% 7.64% 8.62% 11.96% - - -
Italy 10.29% 8.48% 10.22% 13.86% 11.83% 11.98% 12.41%
Spain 9.37% 8.04% 11.77% 13.21% 12.60% - -
Denmark 6.22% 6.21% 10.89% 11.12% 9.78% 10.96% 9.65%
France 6.60% 5.79% 8.44% 10.22% 9.55% 10.24% 9.33%
United Kingdom 6.69% 5.50% 5.92% 9.60% 11.50% 14.76% 13.88%
Germany - 5.29% 7.21% 9.42% 9.21% - -
Belgium - 5.65% 8.12% 9.32% 9.32% 9.69% 8.51%
Netherlands - - 6.81% 9.31% 9.25% 8.59% 7.29%
Switzerland - - - 7.82% - 8.89% -

1995* 1994 1993 1992 1991 1990 1989
- -------------------------------------------------------------------------------
Australia** 7.76% - - - 9.84% 13.71% 16.59%
New Zealand 9.04% 6.41% 6.14% - 9.49% 13.17% 12.64%
Canada** 7.08% 5.35% - - - 12.54% 11.79%
U.S. 5.99% - - - - - 9.21%

*AVERAGE FOR JANUARY - NOVEMBER.

**DOMESTIC INTERBANK RATES.

SOURCE: DATASTREAM - 3 MONTH EURO-DEPOSIT RATES

DESCRIPTION OF THE INTERNATIONAL MONEY MARKET

WHY SHOULD YOU CONSIDER INVESTING IN INTERNATIONAL MONEY MARKET INSTRUMENTS?

GLOBAL DIVERSIFICATION. One of the main reasons for adding international
securities to a portfolio of U.S. securities is to achieve broader portfolio
diversification. Diversification can reduce the overall volatility of
portfolio returns to the extent that returns on the international securities
are independent of returns on the U.S. portfolio component.

PROTECTION OF GLOBAL BUYING POWER. Currency exchange rate fluctuations can
have a significant effect on the global buying power of investments
denominated in a single currency. For example, depreciation of the U.S.
dollar relative to other currencies generally increases the cost to U.S.
consumers of most imported goods and many domestically produced goods, and
the cost of traveling abroad. In this case, non-U.S. dollar denominated money
market instruments may provide a degree of global buying power protection
since dollar depreciation will tend to enhance the U.S. dollar return on
these instruments.

POTENTIAL FOR HIGHER CURRENT YIELDS AND HIGHER TOTAL RETURNS. You may
consider international money market instruments for their potentially higher
current yields and/or total returns than those available on similar U.S.
dollar-denominated instruments. If you expect general depreciation of the
U.S. dollar relative to other currencies you may, for example, invest in
non-U.S. dollar denominated instruments so you can participate in currency
gains that may result.

In either case, the realized total return on international money market
instruments may be higher or lower than that realized on comparable U.S.
dollar denominated instruments.

TYPES OF SECURITIES IN WHICH THE FUND MAY INVEST

The Fund invests in high-quality money market instruments and forward
contracts denominated in foreign Major Currencies which historically have
experienced low rates of inflation and which, in the view of the Investment
Managers, are pursuing economic policies favorable to continued low rates of
inflation and currency appreciation versus the U.S. dollar over the long-term.

The issuers of money market instruments in which the Fund may invest may
include governments of, and financial institutions, corporations or other
entities located in or organized under the laws of, any country. The Fund may
also invest in money market securities issued by supranational organizations
such as the World Bank, chartered to finance development projects in member
countries; the European Union, a twelve-nation organization engaged in
cooperative economic activities; the European Coal and Steel Community, an
economic union of various European nations' steel and coal industries; and
the Asian Development Bank, an international development bank established to
lend funds, promote investment and provide technical assistance to member
nations in the Asian and Pacific regions.

The Fund invests only in instruments which are considered by the Investment
Managers to be of high quality, comparable to those (1) rated within the two
top rating categories by U.S. nationally recognized rating services, such as
S&P or Moody's. The two highest ratings assigned by S&P are triple A or
double A (A-1 for commercial paper) and by Moody's triple A or double A (P-1
for commercial paper); or (2) issued by companies having an outstanding
unsecured debt issue currently rated within the above rating categories by
S&P or Moody's. Each Fund's investments will be reviewed by the Board at
least quarterly.

MONEY MARKET INSTRUMENTS. Money market instruments include short-term U.S.
government securities (discussed below), bank certificates of deposit, time
deposits, bankers' acceptances, commercial paper, floating and variable rate
notes, repurchase agreements secured by U.S. government securities, and
short-term liquid instruments issued by foreign governments and supranational
organizations.

U.S. GOVERNMENT SECURITIES. Securities issued by the U.S. government include
a variety of U.S. Treasury securities, which differ in their interest rates,
maturities and dates of issuance. Some obligations issued or guaranteed by
U.S. government agencies and instrumentalities, such as Treasury bills with
maturities up to one year, are supported by the full faith and credit of the
U.S. government; others, such as those of the Federal Home Loan Banks, by the
right of the issuer to borrow from the U.S. Treasury; others, such as those
issued by the Farmers Home Administration, by discretionary authority of the
U.S. government to purchase certain obligations of the agency or
instrumentality; and others, such as those issued by the Federal Farm Credit
Banks, only by the credit of the instrumentality. While the U.S. government
provides financial support to these U.S. government-sponsored agencies or
instrumentalities, no assurance can be given that it will always do so, since
it is not so obligated by law.

FOREIGN GOVERNMENT SECURITIES. Securities issued by the governments of
foreign countries may include direct obligations and obligations guaranteed
by the governments of the foreign countries. These obligations may have
fixed, floating or variable rates of interest.

CURRENCY FUTURES TRANSACTIONS. The Fund may enter into futures contracts and
purchase options on such contracts in order to hedge against changes in
currency exchange rates. A futures contract on currency is an agreement to
buy or sell a specified amount of currency for a set price on a future date.
When the Fund enters into a futures contract, it must make an initial
deposit, known as "initial margin", as a partial guarantee of its performance
under the contract. As the value of the currency fluctuates, either party to
the contract is required to make additional margin payments, known as
"variation margin," to cover any additional obligation it may have under the
contract.

CURRENCY OPTIONS TRANSACTIONS. The Fund may, for hedging purposes, buy put
and call options on any currency in which the Fund's investments are
denominated. The Fund is also authorized to enter into closing sale
transactions in order to realize gains or minimize losses on currency options
purchased by the Fund.

Options on currencies are traded on exchanges and in the over-the-counter
("OTC") market and will be bought only when the Investment Managers believe a
liquid secondary market exists for the options, although there can be no
assurances that a liquid secondary market will exist for a particular option
at any specific time. In general, over-the-counter options differ from
exchange-traded options in that they are two-party contracts with price and
terms negotiated between buyer and seller, and such options are endorsed
and/or guaranteed by third parties (such as a member of the Exchange). The
Fund will purchase over-the-counter options only from dealers and
institutions that the Investment Managers believe present a minimal credit
risk.

OTHER INVESTMENT POLICIES OF THE FUND

REPURCHASE AGREEMENTS. The Fund may engage in repurchase transactions in
which the Fund buys a U.S. government security subject to resale to a bank or
dealer at an agreed-upon price and date. The transaction requires the
collateralization of the seller's obligation by the transfer of securities
with an initial market value, including accrued interest, equal to at least
102% of the dollar amount invested by the Fund in each agreement, with the
value of the underlying security marked-to-market daily to maintain coverage
of at least 100%. A default by the seller might cause the Fund to experience
a loss or delay in the liquidation of the collateral securing the repurchase
agreement. The Fund might also incur disposition costs in liquidating the
collateral. The Fund, however, intends to enter into repurchase agreements
only with financial institutions such as broker-dealers and banks which are
deemed creditworthy by the Investment Managers. A repurchase agreement is
deemed to be a loan by the Fund under the 1940 Act. The U.S. government
security subject to resale (the collateral) will be held on behalf of the
Fund by a custodian approved by the Board and will be held pursuant to a
written agreement. At no time will the Fund invest in repurchase agreements
of more than one year duration.

LOANS OF PORTFOLIO SECURITIES. Consistent with procedures approved by the
Board and subject to the following conditions, the Fund may lend its
portfolio securities to qualified securities dealers or other institutional
investors, provided that such loans do not exceed 30% of the value of the
Fund's total assets at the time of the most recent loan. The borrower must
deposit with the Fund's custodian bank collateral with an initial market
value of at least 102% of the initial market value of the securities loaned,
including any accrued interest, with the value of the collateral and loaned
securities marked-to-market daily to maintain collateral coverage of at least
100%. This collateral shall consist of cash, securities issued by the U.S.
government, its agencies or instrumentalities, or irrevocable letters of
credit. The lending of securities is a common practice in the securities
industry. The Fund may engage in security loan arrangements with the primary
objective of increasing the Fund's income either through investing the cash
collateral in short-term interest bearing obligations or by receiving a loan
premium from the borrower. Under the securities loan agreement, the Fund
continues to be entitled to all dividends or interest on any loaned
securities. As with any extension of credit, there are risks of delay in
recovery and loss of rights in the collateral should the borrower of the
security fail financially.

CURRENCY EXCHANGE TRANSACTIONS AND FORWARD CONTRACTS. The Fund may use
forward contracts together with money market instruments (including U.S.
dollar denominated instruments) for the purpose of obtaining an investment
result that is substantially equal to a direct investment in a foreign
currency denominated instrument. The Fund may also engage in currency
transactions to hedge (protect) against uncertainty in the level of future
currency exchange rates. Hedging transactions will be limited to either
specific transactions (for example, in respect of settlement of securities
purchased or sold by the Fund) or portfolio positions (for example, in
respect of security positions already held by the Fund). The Fund, however,
tries to maintain foreign currency exposure with respect to 100% of its net
assets at all times and, therefore, any portfolio position hedging activities
of the Fund are expected to be consistent with this policy. The Fund may
engage in currency exchange transactions without limitation for hedging
purposes in respect of specific transactions, such as the settlement of
securities purchased or sold by the Fund.

NON-DIVERSIFICATION. Although each Fund is non-diversified under the 1940
Act, as a non-fundamental policy, each Fund will not invest more than 5% of
its total assets in the securities of a single foreign bank. This limitation
does not apply to other issuers.

ILLIQUID INVESTMENTS. The Fund's policy is not to invest more than 10% of its
net assets in illiquid securities. Illiquid securities are generally
securities that cannot be sold within seven days in the normal course of
business at approximately the amount at which the Fund has valued them.

PERCENTAGE RESTRICTIONS. If a percentage restriction noted above is adhered
to at the time of investment, a later increase or decrease in the percentage
resulting from a change in the value or liquidity of portfolio securities or
the amount of net assets will not be considered a violation of any of the
foregoing policies.

OTHER POLICIES AND RESTRICTIONS. The following are fundamental policies of
the Fund that cannot be changed without shareholder approval.

The Fund may not: (1) borrow money, except from banks for temporary or
emergency purposes in amounts not exceeding 33 1/3% of the value of its total
assets, or pledge, hypothecate, or mortgage more than
33 1/3% of the value of its total assets in connection with any such
borrowings (no additional investments may be made while any such borrowings
exceed 5% of the Fund's total assets; the Fund may incur interest charges in
connection with such borrowings); (2) invest more than 25% of its assets in
the securities of issuers in any industry; (3) lend more than 30% of its
total assets, except to the extent that entering into repurchase agreements
or purchasing debt securities may be considered a loan; and (4) invest more
than 5% of its total assets in securities of issuers (including predecessors)
with less than three years' continuous operations. Restrictions (2) and (4)
do not apply to investments in U.S. government securities.

WHAT ARE THE FUND'S POTENTIAL RISKS?

An investment in the Fund may not be suitable for all investors and should
not be considered a complete investment program. You should take into account
your investment objectives as well as your other investments when considering
the purchase of shares of the Fund. The value of the Fund's investments and
therefore its Net Asset Value generally will differ inversely with changes in
prevailing interest rates, although this difference will depend upon the
effective maturities of the instruments held. The Fund intends to invest
exclusively in short-term money market instruments to minimize this effect.

Because the Fund invests in instruments denominated in Major Currencies
issued by countries that have recently experienced, and that are expected to
continue to experience, relatively low inflation, the instruments in which
the Fund invests may pay interest rates that are lower than instruments
denominated in other Major Currencies, including the U.S. dollar. Due to the
economic strength of the countries which issue the currencies in which such
instruments are denominated, or other factors, however, the Major Currencies
in which the Fund's instruments are denominated may appreciate relative to
other Major Currencies, including the U.S. dollar. If the currency
appreciation more than offsets any negative interest rate differential, the
Fund could provide a higher total return to investors than similar
investments denominated in other Major Currencies, including the U.S. dollar.

The value of the investments held by the Fund is calculated in U.S. dollars
on each day that the Exchange is open for business. As a result, to the
extent that the Fund's assets are invested in instruments denominated in
currencies other than the U.S. dollar and the currencies appreciate relative
to the U.S. dollar, the Fund's Net Asset Value per share as expressed in U.S.
dollars (and, therefore, the value of your investment) should increase. If
the U.S. dollar appreciates relative to the other currencies, the opposite
should occur, except to the extent that losses are offset by net investment
income generated by the money market instruments in which the Fund invests.

The currency-related gains and losses experienced by the Fund will be based
on changes in the value of portfolio securities attributable to currency
fluctuations only in relation to the original purchase price of such
securities as stated in U.S. dollars. Your gains or losses on shares of the
Fund will be based on changes attributable to fluctuations in the net asset
value of such shares, expressed in U.S. dollars, in relation to the original
U.S. dollar purchase price of the shares. The amount of appreciation or
depreciation in the Fund's assets also will be affected by changes in the
value of the securities that are unrelated to changes in currency exchange
rates.

NON-U.S. SECURITIES. Investing in non-U.S. money market instruments and other
securities of non-U.S. issuers involves considerations and possible risks and
opportunities not typically associated with investing in U.S. securities.
Such investments may be favorably or unfavorably affected by changes in
interest rates, currency exchange rates and exchange control regulations, and
costs may be incurred in connection with conversions between various
currencies. In addition, investments in countries other than the U.S. could
be affected by other factors not generally thought to be present in the U.S.,
including less liquid and efficient securities markets, greater price
volatility, less publicly available information, the possibility of normal
foreign withholding taxes or heavier taxation, political or social
instability, limitations on the removal of funds or other assets of the Fund,
expropriation of assets, adverse diplomatic developments, higher transaction
and custody costs, delays attendant in settlement procedures, and
difficulties in enforcing contractual obligations.

NON-DIVERSIFICATION. As a non-diversified Fund, there is no restriction under
the 1940 Act on the percentage of assets that may be invested at any time in
the securities of any one issuer. The Fund, however, intends to comply with
the diversification requirements applicable to regulated investment companies
under the Code. As of the last day of each fiscal quarter, the Fund intends
that its investments in securities of any one issuer (other than the U.S.
government) will be limited to 25% of its total assets, and that, with
respect to at least 50% of its total assets, the Fund may not have invested
more than 5% of its total assets in the securities of any one issuer or hold
more than 10% of the outstanding voting securities of any one issuer. To the
extent the Fund is not fully diversified under the 1940 Act, it may be more
susceptible to adverse economic, political or regulatory developments
affecting a single issuer than would be the case if it was more broadly
diversified.

CURRENCY FUTURES AND OPTIONS TRANSACTIONS. Although currency futures and
options transactions are intended to enable the Fund to manage currency
exchange risks, unanticipated changes in currency exchange rates could result
in poorer performance than if they had not entered into these transactions.
Even if the Investment Managers correctly predict currency exchange rate
movements, a hedge could be unsuccessful if changes in the value of the
Fund's futures position do not correspond to changes in the value of the
currency in which its investments are denominated. This lack of correlation
between the Fund's futures and currency positions may be caused by
differences between the futures and currency markets.

Transactions in options and futures are generally considered "derivative
securities."

The Fund's investments in options, futures contracts and forward contracts
may give rise to taxable income, gain or loss, and may be subject to special
tax treatment under certain mark-to-market and straddle rules, the effect of
which may be to accelerate income to the Fund, defer Fund losses, cause
adjustments in the holding periods of Fund securities, convert capital gains
and losses into ordinary income and losses, convert long-term capital gains
into short-term capital gains, and convert short-term capital losses into
long-term capital losses. These rules could, therefore, affect the amount,
timing and character of distributions to shareholders. Certain elections may
be available to the Fund to mitigate some of the unfavorable consequences of
the provisions described in this paragraph. These investments and
transactions are discussed in the SAI.

WHO MANAGES THE FUND?

THE BOARD. The Board oversees the management of the Fund and elects its
officers. The officers are responsible for the Fund's day-to-day operations.
The Board also monitors the Fund to ensure no material conflicts exist
between the Fund's classes of shares. While none is expected, the Board will
act appropriately to resolve any material conflict that may arise.

INVESTMENT MANAGERS. Advisers manages the Fund's assets and makes its
investment decisions. The Investment Managers also perform similar services
for other funds. They are wholly owned by Resources, a publicly owned company
engaged in the financial services industry through its subsidiaries. Charles
B. Johnson and Rupert H. Johnson, Jr. are the principal shareholders of
Resources. Together, the Investment Managers and their affiliates manage over
$171 billion in assets. Please see "Investment Management and Other Services"
and "Miscellaneous Information" in the SAI for information on securities
transactions and a summary of the Fund's Code of Ethics.

Under a sub-advisory agreement between Advisers and TICI, TICI provides
Advisers with investment management advice and assistance. TICI's activities
are subject to the Board's review and control, as well as Advisers'
instruction and supervision.

MANAGEMENT TEAM. The team responsible for the day-to-day management of the
Fund's portfolio is: Mr. Neil S. Devlin since 1993 and Mr. Thomas J. Dickson
since 1995.

Neil S. Devlin
Executive Vice President of TICI

Mr. Devlin holds a Bachelor of Arts degree in Economics and Philosophy from
Brandeis University. Prior to joining the Franklin Templeton Group in 1987,
Mr. Devlin was a portfolio manager and bond analyst with Constitutional
Capital Management of Boston and a bond trader and research analyst for the
Bank of New England.

Thomas J. Dickson
Portfolio Manager of TICI

Mr. Dickson received his Bachelor of Science degree in managerial economics
from the University of California at Davis. Mr. Dickson joined the Franklin
Templeton Group in 1992.

Donald P. Gould, a Portfolio Manager with Advisers, is founder and president
of the Trust. Mr. Gould supervises the implementation of the Fund's portfolio
investment policies. He holds a Master of Business Administration degree from
the Harvard Business School and a Bachelor of Arts degree in economics from
Pomona College. He joined the Franklin Templeton Group in November 1993 upon
its acquisition of certain assets of Huntington Advisers, Inc. He has been in
the securities industry since 1981.

MANAGEMENT FEES. During the fiscal year ended October 31, 1996, management
fees totaling 0.65% of the average daily net assets of the Fund were paid to
Advisers. Total expenses of the Fund, including fees paid to Advisors, were
0.80%.

PORTFOLIO TRANSACTIONS. The Investment Managers try to obtain the best
execution on all transactions. If the Investment Managers believe more than
one broker or dealer can provide the best execution, consistent with internal
policies it may consider research and related services and the sale of Fund
shares, as well as shares of other funds in the Franklin Templeton Group of
Funds, when selecting a broker or dealer. Please see "How does the Fund Buy
Securities for its Portfolio?" in the SAI for more information.

ADMINISTRATIVE SERVICES. Under an agreement with Advisers, FT Services
provides certain administrative services and facilities for the Fund. Please
see "Investment Management and Other Services" in the SAI for more
information.

HOW DOES THE FUND MEASURE PERFORMANCE?

From time to time, the Advisor Class of the Fund advertises its performance.
The more commonly used measures of performance are total return, current
yield and current distribution rate.

Total return is the change in value of an investment over a given period. It
assumes any dividends and capital gains are reinvested. Current yield shows
the income per share earned by Advisor Class. The current distribution rate
shows the dividends or distributions paid to shareholders of Advisor Class.
This rate is usually computed by annualizing the dividends paid per share
during a certain period and dividing that amount by the current Net Asset
Value of the class. Unlike current yield, the current distribution rate may
include income distributions from sources other than dividends and interest
received by the Fund.

The investment results of the Advisor Class will vary. Performance figures
are always based on past performance and do not guarantee future results. For
a more detailed description of how the Fund calculates its performance
figures, please see "How does the Fund Measure Performance?" in the SAI.

HOW TAXATION AFFECTS THE FUND AND ITS SHAREHOLDERS

The Fund's investments in options, futures contracts and forward contracts
may give rise to taxable income, gain or loss and will be subject to special
tax treatment under certain market-to-market and straddle rules, the effect
of which may be to accelerate income to the Fund, defer Fund losses and cause
adjustments in the holding periods of Fund securities. These rules could
therefore affect the amount, timing and character of distributions to
shareholders. Certain elections may be available to the Fund to mitigate some
of the unfavorable consequences of the provisions described in this
paragraph. These investments and transactions are discussed in the SAI.

If you are not considered a U.S. person for federal income tax purposes, you
should consult with your financial or tax advisor regarding the applicability
of U.S. withholding or other taxes to distributions received by you from the
Fund and the application of foreign tax laws to these distributions.

HOW IS THE TRUST ORGANIZED?

The Fund is a non-diversified series of Franklin Templeton Global Trust (the
"Trust"), an open-end management investment company, commonly called a mutual
fund. It was organized as a Massachusetts business trust in November 1985 and
reorganized as a Delaware business trust in August 1996. The Trust is
registered with the SEC under the 1940 Act.

As of January 1, 1997, the Fund began offering a new class of shares
designated Franklin Templeton Hard Currency Fund - Advisor Class. All shares
outstanding before the offering of Advisor Class shares have been designated
Franklin Templeton Hard Currency Fund - Class I. Additional classes and
series may be offered in the future.

Shares of each class represent proportionate interests in the assets of the
Fund and have the same voting and other rights and preferences as any other
class of the Fund for matters that affect the Trust as a whole. For matters
that only affect one class, however, only shareholders of that class may
vote. Each class will vote separately on matters (1) affecting only that
class, (2) expressly required to be voted on separately by state law or (3)
required to be voted on separately by the 1940 Act.

Shares of each class of a series have the same voting and other rights and
preferences as the other classes and series of the Trust for matters that
affect the Trust as a whole.

ABOUT YOUR ACCOUNT

HOW DO I BUY SHARES?

OPENING YOUR ACCOUNT

Shares of the Fund may be purchased without a sales charge. To open your
account, contact your investment representative or complete and sign the
enclosed shareholder application and return it to the Fund with your check.

MINIMUM
INVESTMENTS*
To Open Your Account...... $5,000,000
To Add to Your Account.... $ 25
*We waive or lower these minimums for certain investors listed below. We may
also refuse any order to buy shares. [Currently, the Fund does not allow
investments by Market Timers.]

To determine if you meet the minimum investment requirement, the amount of
your current purchase is added to the cost or current value, whichever is
higher, of your existing shares in the Franklin Templeton Funds. At least $1
million of this amount, however, must be invested in Advisor Class or Class Z
shares of any of the Franklin Templeton Funds.

The Fund's minimum initial investment requirement will not apply to purchases
by:

1. Broker-dealers, registered investment advisors or certified financial
planners, who have entered into an agreement with Distributors for
clients participating in comprehensive fee programs

2. Qualified registered investment advisors or certified financial
planners who have clients invested in the Franklin Mutual Series Fund
Inc. on October 31, 1996, or who buy through a broker-dealer or service
agent who has entered into an agreement with Distributors

3. Officers, trustees, directors and full-time employees of the Franklin
Templeton Funds or the Franklin Templeton Group and their immediate
family members, subject to a $100 minimum investment requirement

4. Accounts managed by the Franklin Templeton Group

5. Effective on or about February 1, 1997, the Franklin Templeton Profit
Sharing 401(k) Plan

6. Each series of the Franklin Templeton Fund Allocator Series, subject to
a $1,000 minimum initial and subsequent investment requirement

7. Employer stock, bonus, pension or profit sharing plans that meet the
requirements for qualification under Section 401 of the Code, including
salary reduction plans qualified under Section 401(k) of the Code, and
that (i) are sponsored by an employer with at least 5,000 employees, or
(ii) have plan assets of $50 million or more

8. Trust companies and bank trust departments initially investing in the
Franklin Templeton Funds at least $1 million of assets held in a
fiduciary, agency, advisory, custodial or similar capacity and over
which the trust companies and bank trust departments or other plan
fiduciaries or participants, in the case of certain retirement plans,
have full or shared investment discretion

9. Defined benefit plans or governments, municipalities, and tax-exempt
entities that meet the requirements for qualification under Section 501
of the Code, subject to a $1 million initial investment in Advisor
Class shares

10. Any other investor, including a private investment vehicle such as a
family trust or foundation, who is a member of a qualified group, if
the group as a whole meets the $5 million minimum investment
requirement. A qualified group is one that:

Was formed at least six months ago,
Has a purpose other than buying Fund shares at a discount,
Has more than 10 members,
Can arrange for meetings between our representatives and group
members,
Agrees to include Franklin Templeton Fund sales and other materials
in publications and mailings to its members at reduced or no cost to
Distributors,
Agrees to arrange for payroll deduction or other bulk transmission
of investments to the Fund, and
Meets other uniform criteria that allow Distributors to achieve
cost savings in distributing shares.

If you currently own Class I shares of the Fund and you qualify to buy
Advisor Class shares, you may invest your existing Class I shares into the
Fund's Advisor Class by June 30, 1997. If you would like to do this, please
send us written instructions. Generally, for federal income tax purposes,
there will be no recognition of gain or loss on this transaction. You may
want to consult with your tax advisor to determine the effect of this
transaction, if any, on state income taxes.

HOW DO I BUY SHARES IN CONNECTION WITH RETIREMENT PLANS?

Please consult your legal, tax or retirement plan specialist before choosing
a retirement plan. Your investment representative or advisor can help you
make investment decisions within your plan.

PAYMENTS TO SECURITIES DEALERS

Securities Dealers who initiate and are responsible for purchases of Advisor
Class shares may receive up to 0.25% of the purchase price. The payment is
subject to the sole discretion of Distributors, and is paid by Distributors
or one of its affiliates and not by the Fund or its shareholders.

Securities Dealers may receive additional compensation from Distributors or
an affiliated company in connection with selling shares of the Franklin
Templeton Funds. Compensation may include financial assistance for
conferences, shareholder services, automation, sales or training programs, or
promotional activities. Registered representatives and their families may be
paid for travel expenses, including lodging, in connection with business
meetings or seminars. In some cases, this compensation may only be available
to Securities Dealers whose representatives have sold or are expected to sell
significant amounts of shares. Securities Dealers may not use sales of the
Fund's shares to qualify for this compensation if prohibited by the laws of
any state or self-regulatory agency, such as the NASD.

MAY I EXCHANGE SHARES FOR SHARES OF ANOTHER FUND?

- --------------------------------------------------------------------------------
METHOD STEPS TO FOLLOW
- --------------------------------------------------------------------------------
BY MAIL 1. Send us written instructions signed by all
account owners
2. Include any outstanding share certificates for
the shares you're exchanging
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BY PHONE Call Shareholder Services

If you do not want the ability to exchange by phone
to apply to your account, please let us know.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THROUGH YOUR DEALER Call your investment representative
- --------------------------------------------------------------------------------

Please refer to "Transaction Procedures and Special Requirements" for other
important information on how to exchange shares.

EXCHANGE RESTRICTIONS

Please be aware that the following restrictions apply to exchanges:

You may only exchange shares within the SAME CLASS, except as noted below.

The accounts must be identically registered. You may exchange shares from
a Fund account requiring two or more signatures into an identically
registered money fund account requiring only one signature for all
transactions. Please notify us in writing if you do not want this option
to be available on your account(s). Additional procedures may apply.
Please see "Transaction Procedures and Special Requirements."

Trust Company IRA or 403(b) retirement plan accounts may exchange shares
as described above. Restrictions may apply to other types of retirement
plans. Please contact our Retirement Plans Department for information on
exchanges within these plans.

The fund you are exchanging into must be eligible for sale in your state.

We may modify or discontinue our exchange policy if we give you 60 days'
written notice.

Your exchange may be restricted or refused if you: (i) request an
exchange out of the Fund within two weeks of an earlier exchange request,
(ii) exchange shares out of the Fund more than twice in a calendar
quarter, or (iii) exchange shares equal to at least $5 million, or more
than 1% of the Fund's net assets. Shares under common ownership or control
are combined for these limits. If you exchange shares as described in this
paragraph, you will be considered a Market Timer. Each exchange by a
Market Timer, if accepted, will be charged $5.00. Some of our funds do not
allow investments by Market Timers.

Because excessive trading can hurt Fund performance and shareholders, we may
refuse any exchange purchase if (i) we believe the Fund would be harmed or
unable to invest effectively or (ii) the Fund receives or anticipates
simultaneous orders that may significantly affect the Fund.

LIMITED EXCHANGES BETWEEN DIFFERENT CLASSES OF SHARES

If you want to exchange into a fund that does not currently offer an Advisor
Class, you may exchange your Advisor Class shares for Class I shares of that
fund at Net Asset Value. You may also exchange your Advisor Class shares for
Class Z shares of Franklin Mutual Series Fund Inc. If you do not qualify to
buy Advisor Class shares of Templeton Developing Markets Trust, Templeton
Foreign Fund or Templeton Growth Fund, you may exchange your Advisor Class
shares for Class I shares of those funds or of Templeton Institutional Funds,
Inc. at Net Asset Value.

HOW DO I SELL SHARES?

You may sell (redeem) your shares at any time.

2. Include any outstanding share certificates for
the shares you are selling

3. Provide a signature guarantee if required

4. Corporate, partnership and trust accounts may
need to send additional documents. Accounts under
court jurisdiction may have other requirements.

(Only available if you Telephone requests will be accepted:
have completed and sent
to us the telephone If the request is $50,000 or less. Institutional
redemption agreement accounts may exceed $50,000 by completing a
included with this separate agreement. Call Institutional Services
prospectus) to receive a copy.
If there are no share certificates issued for
the shares you want to sell or you have already
returned them to the Fund
Unless you are selling shares in a Trust Company
retirement plan account
Unless the address on your account was changed
by phone within the last 30 days

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THROUGH YOUR DEALER Call your investment representative
- --------------------------------------------------------------------------------

Beginning on or about May 1, 1997, you will automatically be able to redeem
shares by telephone without completing a telephone redemption agreement.
PLEASE NOTIFY US IN WRITING IF YOU DO NOT WANT THIS OPTION TO BE AVAILABLE ON
YOUR ACCOUNT. If you later decide you would like this option, send us written
instructions signed by all account owners.

Under unusual circumstances, we may suspend redemptions or postpone payment
for more than seven days as permitted by federal securities law.

Please refer to "Transaction Procedures and Special Requirements" for other
important information on how to sell shares.

TRUST COMPANY RETIREMENT PLAN ACCOUNTS

WHAT DISTRIBUTIONS MIGHT I RECEIVE FROM THE FUND?

Capital gains, if any, may be distributed annually, usually in December.

DISTRIBUTION OPTIONS

You may receive your distributions from the Fund in any of these ways:

1. BUY ADDITIONAL SHARES OF THE FUND - You may buy additional shares of the
same class of the Fund by reinvesting capital gain distributions, or both
dividend and capital gain distributions. This is a convenient way to
accumulate additional shares and maintain or increase your earnings base.

2. BUY SHARES OF OTHER FRANKLIN TEMPLETON FUNDS - You may direct your
distributions to buy the same class of shares of another Franklin Templeton
Fund. You may also direct your distributions to buy Class I shares of another
Franklin Templeton Fund. Many shareholders find this a convenient way to
diversify their investments.

3. RECEIVE DISTRIBUTIONS IN CASH - You may receive dividends, or both
dividend and capital gain distributions in cash. If you have the money sent
to another person or to a checking account, you may need a signature
guarantee.

TO SELECT ONE OF THESE OPTIONS, PLEASE COMPLETE SECTIONS 6 AND 7 OF THE
SHAREHOLDER APPLICATION INCLUDED WITH THIS PROSPECTUS OR TELL YOUR INVESTMENT
REPRESENTATIVE WHICH OPTION YOU PREFER. IF YOU DO NOT SELECT AN OPTION, WE
WILL AUTOMATICALLY REINVEST DIVIDEND AND CAPITAL GAIN DISTRIBUTIONS IN THE
SAME CLASS OF THE FUND. For Trust Company retirement plans, special forms are
required to receive distributions in cash. You may change your distribution
option at any time by notifying us by mail or phone. Please allow at least
seven days before the record date for us to process the new option.

TRANSACTION PROCEDURES AND SPECIAL REQUIREMENTS

HOW AND WHEN SHARES ARE PRICED

The Net Asset Value of all outstanding shares of each class is calculated on
a pro rata basis. It is based on each class' proportionate participation in
the Fund, determined by the value of the shares of each class. To calculate
Net Asset Value per share of each class, the assets of each class are valued
and totaled, liabilities are subtracted, and the balance, called net assets,
is divided by the number of shares of the class outstanding. The Fund's
assets are valued as described under "How are Fund Shares Valued?" in the SAI.

THE PRICE WE USE WHEN YOU BUY OR SELL SHARES

You buy and sell Advisor Class shares at the Net Asset Value per share. We
calculate it to two decimal places using standard rounding criteria.

PROPER FORM

WRITTEN INSTRUCTIONS

Written instructions must be signed by all registered owners. To avoid any
delay in processing your transaction, they should include:

o Your name,

o The Fund's name,

o The class of shares,

o A description of the request,

o For exchanges, the name of the fund you're exchanging into,

o Your account number,

o The dollar amount or number of shares, and

o A telephone number where we may reach you during the day, or in the evening
if preferred.

SIGNATURE GUARANTEES

For our mutual protection, we require a signature guarantee in the following
situations:

1) You wish to sell over $50,000 worth of shares,

2) You want the proceeds to be paid to someone other than the registered
owners,

3) The proceeds are not being sent to the address of record, preauthorized
bank account, or preauthorized brokerage firm account,

4) We receive instructions from an agent, not the registered owners,

5) We believe a signature guarantee would protect us against potential claims
based on the instructions received.

A signature guarantee verifies the authenticity of your signature and may be
obtained from certain banks, brokers or other eligible guarantors. YOU SHOULD
VERIFY THAT THE INSTITUTION IS AN ELIGIBLE GUARANTOR BEFORE SIGNING. A
NOTARIZED SIGNATURE IS NOT SUFFICIENT.

SHARE CERTIFICATES

TELEPHONE TRANSACTIONS

You may initiate many transactions by phone. Please refer to the sections of
this prospectus that discuss the transaction you would like to make or call
Shareholder Services.

TRUST COMPANY RETIREMENT PLAN ACCOUNTS. We cannot accept instructions to sell
shares or change distribution options on Trust Company retirement plans by
phone. While you may exchange shares of Trust Company IRA and 403(b)
retirement accounts by phone, certain restrictions may be imposed on other
retirement plans.

To obtain any required forms or more information about distribution or
transfer procedures, please call our Retirement Plans Department.

ACCOUNT REGISTRATIONS AND REQUIRED DOCUMENTS

JOINT OWNERSHIP. If you open an account with two or more owners, we register
the account as "joint tenants with rights of survivorship" unless you tell us
otherwise. An account registered as "joint tenants with rights of
survivorship" is shown as "Jt Ten" on your account statement. For any account
with two or more owners, all owners must sign instructions to process
transactions and changes to the account. Even if the law in your state says
otherwise, we cannot accept instructions to change owners on the account
unless ALL owners agree in writing. If you would like another person or owner
to sign for you, please send us a current power of attorney.

GIFTS AND TRANSFERS TO MINORS. You may set up a custodial account for a minor
under your state's Uniform Gifts/Transfers to Minors Act. Other than this
form of registration, a minor may not be named as an account owner.

TRUSTS. You should register your account as a trust only if you have a valid
written trust document. This avoids future disputes or possible court action
over who owns the account.

REQUIRED DOCUMENTS. For corporate, partnership and trust accounts, please
send us the following documents when you open your account. This will help
avoid delays in processing your transactions while we verify who may sign on
the account.

- --------------------------------------------------------------------------------
TYPE OF ACCOUNT DOCUMENTS REQUIRED
- --------------------------------------------------------------------------------
CORPORATION Corporate Resolution
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PARTNERSHIP 1. The pages from the partnership agreement that identify
the general partners, or
2. A certification for a partnership agreement
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TRUST 1. The pages from the trust document that identify the
trustees, or
2. A certification for trust
- --------------------------------------------------------------------------------

STREET OR NOMINEE ACCOUNTS. If you have Fund shares held in a "street" or
"nominee" name account with your Securities Dealer, you may transfer the
shares to the street or nominee name account of another Securities Dealer.
Both dealers must have an agreement with Distributors or we cannot process
the transfer. Contact your Securities Dealer to initiate the transfer. We
will process the transfer after we receive authorization in proper form from
your delivering Securities Dealer. Accounts may be transferred electronically
through the NSCC. For accounts registered in street or nominee name, we may
take instructions directly from the Securities Dealer or your nominee.

ELECTRONIC INSTRUCTIONS. If there is a Securities Dealer or other
representative of record on your account, we are authorized to use and
execute electronic instructions. We will accept electronic instructions
directly from your dealer or representative without further inquiry.
Electronic instructions may be processed through the services of the NSCC,
which currently include the NSCC's "Networking," "Fund/SERV," and "ACATS"
systems, or through Franklin/Templeton's PCTrades II(TM) System.

TAX IDENTIFICATION NUMBER

KEEPING YOUR ACCOUNT OPEN

SERVICES TO HELP YOU MANAGE YOUR ACCOUNT

AUTOMATIC INVESTMENT PLAN

Our automatic investment plan offers a convenient way to invest in the Fund.
Under the plan, you can have money transferred automatically from your
checking account to the Fund each month to buy additional shares. If you are
interested in this program, please refer to the shareholder application
included with this prospectus or contact your investment representative. The
market value of the Fund's shares may fluctuate and a systematic investment
plan such as this will not assure a profit or protect against a loss. You may
discontinue the program at any time by notifying Investor Services by mail or
phone.

SYSTEMATIC WITHDRAWAL PLAN

You will generally receive your payment by the end of the month in which a
payment is scheduled. When you sell your shares under a systematic withdrawal
plan, it is a taxable transaction.

STATEMENTS AND REPORTS TO SHAREHOLDERS

We will send you the following statements and reports on a regular basis:

o Financial reports of the Fund will be sent every six months. To reduce Fund
expenses, we attempt to identify related shareholders within a household
and send only one copy of a report. Call Fund Information if you would
like an additional free copy of the Fund's financial reports or an interim
quarterly report.

INSTITUTIONAL ACCOUNTS

AVAILABILITY OF THESE SERVICES

WHAT IF I HAVE QUESTIONS ABOUT MY ACCOUNT?

If you have any questions about your account, you may write to Investor
Services at 777 Mariners Island Blvd., P.O. Box 7777, San Mateo, California
94403-7777. The Fund, Distributors and Advisers are also located at this
address. You may also contact us by phone at one of the numbers listed below.

HOURS OF OPERATION
(PACIFIC TIME)
DEPARTMENT NAME TELEPHONE NO. (MONDAY THROUGH FRIDAY)
Shareholder Services 1-800/632-2301 5:30 a.m. to 5:00 p.m.
Dealer Services 1-800/524-4040 5:30 a.m. to 5:00 p.m.
Fund Information 1-800/DIAL BEN 5:30 a.m. to 8:00 p.m.
(1-800/342-5236) 6:30 a.m. to 2:30 p.m.
(Saturday)
Retirement Plans 1-800/527-2020 5:30 a.m. to 5:00 p.m.
Institutional Services 1-800/321-8563 6:00 a.m. to 5:00 p.m.
TDD (hearing impaired) 1-800/851-0637 5:30 a.m. to 5:00 p.m.

Your phone call may be monitored or recorded to ensure we provide you with
high quality service. You will hear a regular beeping tone if your call is
being recorded.

GLOSSARY

USEFUL TERMS AND DEFINITIONS

1940 ACT - Investment Company Act of 1940, as amended

ADVISERS - Franklin Advisers, Inc., the Fund's investment manager

BOARD - The Board of Trustees of the Trust

CD - Certificate of deposit

CLASS I AND ADVISOR CLASS - The Fund offers two classes of shares, designated
"Class I" and "Advisor Class." The two classes have proportionate interests
in the Fund's portfolio. They differ, however, primarily in their sales
charge and expense structures.

CODE - Internal Revenue Code of 1986, as amended

DISTRIBUTORS - Franklin/Templeton Distributors, Inc., the Fund's principal
underwriter. The SAI lists the officers and Board members who are affiliated
with Distributors. See "Officers and Trustees."

FRANKLIN FUNDS - The mutual funds in the Franklin Group of Funds(R) except
Franklin Valuemark Funds and the Franklin Government Securities Trust

FRANKLIN TEMPLETON FUNDS - The Franklin Funds and the Templeton Funds

FRANKLIN TEMPLETON GROUP - Franklin Resources, Inc., a publicly owned holding
company, and its various subsidiaries

FRANKLIN TEMPLETON GROUP OF FUNDS - All U.S. registered investment companies
in the Franklin Group of Funds(R) and the Templeton Group of Funds

FT SERVICES - Franklin Templeton Services, Inc., the Fund's administrator

INVESTMENT MANAGERS - Franklin Advisers, Inc., the Fund's investment manager,
and Templeton Investment Counsel, Inc., the Fund's subadvisor.

INVESTOR SERVICES - Franklin/Templeton Investor Services, Inc., the Fund's
shareholder servicing and transfer agent

IRS - Internal Revenue Service

MAJOR CURRENCIES - As used in this prospectus, Australian dollar, Belgian
franc, British pound sterling, Canadian dollar, Danish krone, Netherlands
guilder, European Currency Unit ("ECU"), French franc, German mark, Italian
lira, Japanese yen, New Zealand dollar, Spanish peseta, Swedish krona, Swiss
franc and U.S. dollar.

MARKET TIMER(S) - Market Timers generally include market timing or allocation
services, accounts administered so as to buy, sell or exchange shares based
on predetermined market indicators, or any person or group whose transactions
seem to follow a timing pattern.

MOODY'S - Moody's Investors Service

MUTUAL SERIES - Franklin Mutual Series Fund Inc., a member of the Franklin
Group of funds, formerly the Mutual Series Fund Inc. Each series of Mutual
Series began offering three classes of shares on November 1, 1996, Class I,
Class II and Class Z. All shares sold before that time are designated Class Z
shares.

NASD - National Association of Securities Dealers, Inc.

NET ASSET VALUE (NAV) - The value of a mutual fund is determined by deducting
the fund's liabilities from the total assets of the portfolio. The net asset
value per share is determined by dividing the net asset value of the fund by
the number of shares outstanding.

NON-MAJOR CURRENCIES - as used in this prospectus, currencies other than the
Major Currencies that are freely convertible into one or more of the Major
Currencies.

NSCC - National Securities Clearing Corporation

NYSE - New York Stock Exchange

RESOURCES - Franklin Resources, Inc.

SAI - Statement of Additional Information

S&P - Standard & Poor's Corporation

SEC - U.S. Securities and Exchange Commission

SECURITIES DEALER - A financial institution that, either directly or through
affiliates, has an agreement with Distributors to handle customer orders and
accounts with the Fund. This reference is for convenience only and does not
indicate a legal conclusion of capacity.

TEMPLETON FUNDS - The U.S. registered mutual funds in the Templeton Group of
Funds except Templeton Capital Accumulator Fund, Inc., Templeton Variable
Annuity Fund, and Templeton Variable Products Series Fund

TICI - Templeton Investment Counsel, Inc., the Fund's subadvisor.

TRUST COMPANY - Franklin Templeton Trust Company. Trust Company is an
affiliate of Distributors and both are wholly owned subsidiaries of Resources.

U.S. - United States

WE/OUR/US - Unless the context indicates a different meaning, these terms
refer to the Fund and/or Investor Services, Distributors, or other wholly
owned subsidiaries of Resources.

PROSPECTUS & APPLICATION

FRANKLIN TEMPLETON
GERMAN GOVERNMENT
BOND FUND

INVESTMENT STRATEGY

GLOBAL GROWTH
AND INCOME

ADVISOR CLASS

Advisor

MARCH 1, 1997

Franklin Templeton Global Trust

This prospectus describes the Advisor Class shares of Franklin Templeton German
Government Bond Fund (the "Fund"). It contains information you should know
before investing in the Fund. Please keep it for future reference.

The Fund has a Statement of Additional Information ("SAI") for its Advisor
Class, dated March 1, 1997, which may be amended from time to time. It includes
more information about the Fund's procedures and policies. It has been filed
with the SEC and is incorporated by reference into this prospectus. For a free
copy or a larger print version of this prospectus, call 1-800/DIAL BEN or write
the Fund at the address shown.

SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY OF THE U.S.
GOVERNMENT. SHARES OF THE FUND INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE
LOSS OF PRINCIPAL.

LIKE ALL MUTUAL FUNDS, THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SEC OR ANY STATE SECURITIES COMMISSION NOR HAS THE SEC OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

THIS PROSPECTUS IS NOT AN OFFERING OF THE SECURITIES HEREIN DESCRIBED IN ANY
STATE, JURISDICTION OR COUNTRY IN WHICH THE OFFERING IS NOT AUTHORIZED. NO SALES
REPRESENTATIVE, DEALER, OR OTHER PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR
MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS. FURTHER
INFORMATION MAY BE OBTAINED FROM DISTRIBUTORS.

FRANKLIN
TEMPLETON GERMAN GOVERNMENT BOND FUND -

ADVISOR CLASS

MARCH 1, 1997

When reading this prospectus, you will see certain terms beginning with capital
letters. This means the term is explained in our glossary section.

Table of Contents

About the Fund

Expense Summary ............................................ 2
How does the Fund Invest its Assets ........................ 3
What are the Fund's Potential Risks? ....................... 9
Who Manages the Fund? ...................................... 14
How does the Fund Measure Performance? ..................... 15
How Taxation Affects the Fund and its Shareholders ......... 16
How is the Trust Organized? ................................ 17
About Your Account
How Do I Buy Shares? ....................................... 18
May I Exchange Shares for Shares of Another Fund? .......... 22
How Do I Sell Shares? ...................................... 24
What Distributions Might I Receive from the Fund? .......... 25
Transaction Procedures and Special Requirements ............ 26
Services to Help You Manage Your Account ................... 31
What If I Have Questions About My Account? ................. 32
Glossary
Useful Terms and Definitions ............................... 33

777 Mariners Island Blvd.
P.O. Box 7777
San Mateo
CA 94403-7777
1-800/DIAL BEN

ABOUT THE FUND

EXPENSE SUMMARY

This table is designed to help you understand the costs of investing in the
Fund. Since Advisor Class shares were not offered until January 1, 1997, the
table is based on the historical expenses of the Fund's Class I shares for the
fiscal year ended October 31, 1996. The Fund's actual expenses may vary.

A.SHAREHOLDER TRANSACTION EXPENSES+
Maximum Sales Charge Imposed on Purchases None
Exchange Fee (per transaction) $5.00*
B.ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fees 0.55%
Rule 12b-1 Fees None
Other Expenses 0.36%
Total Fund Operating Expenses 0.91%
C.EXAMPLE

Assume the annual return for the class is 5%, operating expenses are as
described above, and you sell your shares after the number of years shown. These
are the projected expenses for each $1,000 that you invest in the Fund.

1 YEAR 3 YEARS 5 YEARS 10 YEARS
$9 $29 $50 $112

THIS IS JUST AN EXAMPLE. IT DOES NOT REPRESENT PAST OR FUTURE EXPENSES OR
RETURNS. ACTUAL EXPENSES AND RETURNS MAY BE MORE OR LESS THAN THOSE SHOWN. The
Fund pays its operating expenses. The effects of these expenses are reflected in
the Net Asset Value or dividends of the class and are not directly charged to
your account.