FTGT *P5
SHARE CLASS REDESIGNATION
EFFECTIVE JANUARY 1, 1999
Class A - Formerly Class I
SUPPLEMENT DATED JANUARY 27, 1999
TO THE PROSPECTUS OF
FRANKLIN TEMPLETON GLOBAL TRUST
DATED MARCH 1, 1998
The prospectus is amended as follows:
I. The Hard Currency Fund offers two classes of shares: Class A and Advisor
Class. The Global Currency Fund offers one class of shares, which is
considered Class A. Before January 1, 1999, Class A shares were designated
Class I.
All references in the prospectus to Class I shares are replaced with Class
A, and all references to Class II shares are replaced with Class C.
II. On August 25, 1998, the German Government and High Income Funds liquidated
their assets and distributed the proceeds to shareholders. All references
to these Funds in the prospectus are deleted.
III. The section "Expense Summary" is replaced with the following:
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, 1997. The Fund's actual expenses may vary.
GLOBAL HARD CURRENCY
CURRENCY FUND FUND
-------------------------------
A. SHAREHOLDER TRANSACTION EXPENSES+
Maximum Sales Charge Imposed on 2.25% 2.25%
Purchases++ (as a percentage of
Offering Price)
Deferred Sales Charge+++ None None
Exchange Fee (per transaction) None* None*
B. ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net
assets)
Management Fees 0.65% 0.65%
Rule 12b-1 Fees** 0.24% 0.21%
Other Expenses 0.21% 0.27%
===============================
Total Fund Operating Expenses 1.10% 1.13%
===============================
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
--------------------------------------------
Global Currency Fund $33 $57 $82 $154
Hard Currency Fund $34 $58 $83 $157
THIS IS JUST AN EXAMPLE. IT DOES NOT REPRESENT PAST OR FUTURE 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. A Contingent
Deferred Sales Charge may also apply to purchases by certain retirement
plans that qualify to buy shares without a front-end sales charge. See "How
Do I Sell Shares? - Contingent Deferred Sales Charge" for details.
*There is a $5 fee for exchanges by Market Timers.
**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.
IV. The following replaces the paragraph under "How Does the Fund Invest its
Assets? - Global Currency Fund":
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-bearing money market instruments. 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.
As a non-fundamental policy, the Fund intends, under normal market
conditions, not to invest more than (i) 50% of its total assets in
instruments denominated in one Major Currency, other than the U.S. dollar,
(ii) 5% of its total assets in instruments denominated in one Non-Major
Currency, or (iii) 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.
V. The first sentence under "How Does the Fund Invest its Assets? - Types of
Securities in which the Fund May Invest - Global Currency Fund" is replaced
with the following:
The Fund uses the most flexible investment strategy and is designed for
investors seeking the greatest degree of active management among the Major
Currencies and Non-Major Currencies.
VI. The following is added under "What Are the Risks of Investing in the
Fund?":
YEAR 2000. When evaluating current and potential portfolio positions, Year
2000 is one of the factors Advisers considers.
Advisers will rely upon public filings and other statements made by issuers
about their Year 2000 readiness. Issuers in countries outside the U.S.,
particularly in emerging markets, may not be required to make the same
level of disclosure about Year 2000 readiness as is required in the U.S.
Advisers, of course, cannot audit each company and its major suppliers to
verify their Year 2000 readiness.
If an issuer in which the Fund is invested is adversely affected by Year
2000 problems, it is likely that the price of its security will also be
adversely affected. A decrease in the value of one or more of the Fund's
portfolio holdings will have a similar impact on the price of the Fund's
shares. Please see "Year 2000 Problem" under "Who Manages the Fund?" for
more information.
EURO RISK. On January 1, 1999, the European Monetary Union (EMU) introduced
a new single currency, the euro, which will replace the national currency
for participating member countries. If the Fund holds investments in
countries with currencies replaced by the euro, the investment process,
including trading, foreign exchange, payments, settlements, cash accounts,
custody and accounting will be impacted.
The process to establish the euro may result in market volatility. It is
not possible to predict the impact of the euro on the business or financial
condition of European issuers or on the Fund. The transition and the
elimination of currency risk among EMU countries may change the economic
environment and behavior of investors, particularly in European markets. To
the extent the Fund holds non-U.S. dollar (euro or other) denominated
securities, it will still be exposed to currency risk due to fluctuations
in those currencies versus the U.S. dollar.
Resources has created an interdepartmental team to handle all euro-related
changes to enable the Franklin Templeton Funds to process transactions
accurately and completely with minimal disruption to business activities.
While there can be no assurance that the Fund will not be adversely
affected, Advisers and its affiliated service providers are taking steps
that they believe are reasonably designed to address the euro issue.
VII. The following replaces the second paragraph under "Investment Managers" in
the section "Who Manages the Fund?":
Under an agreement with Advisers, Investment Counsel, through its Templeton
Global Bond Managers division ("Global Bond Managers"), is the sub-advisor
of the Fund. A team of Global Bond Managers provides Advisers with
investment management advice and assistance.
VIII.The following replaces the section "Management Team" under "Who Manages
the Fund?":
The day-to-day portfolio management of the fund is provided by a team from
Global Bond Managers.
Charles E. Johnson, a Vice President of Advisers, supervises the
implementation of the Fund's portfolio investment policies. He holds a BA
in economics from the University of California and a MBA from Harvard. He
joined the Franklin Templeton Group in 1981.
IX. In the section "Who Manages the Fund?", the following is added after the
"Administrative Services" section:
YEAR 2000 PROBLEM. The Fund's business operations depend on a worldwide
network of computer systems that contain date fields, including securities
trading systems, securities transfer agent operations and stock market
links. Many of the systems currently use a two digit date field to
represent the date, and unless these systems are changed or modified, they
may not be able to distinguish the Year 1900 from the Year 2000 (commonly
referred to as the Year 2000 problem). In addition, the fact that the Year
2000 is a non-standard leap year may create difficulties for some systems.
When the Year 2000 arrives, the Fund's operations could be adversely
affected if the computer systems used by Advisers, its service providers
and other third parties it does business with are not Year 2000 ready. For
example, the Fund's portfolio and operational areas could be impacted,
including securities trade processing, interest and dividend payments,
securities pricing, shareholder account services, reporting, custody
functions and others. The Fund could experience difficulties in effecting
transactions if any of its foreign subcustodians, or if foreign
broker-dealers or foreign markets are not ready for Year 2000.
Advisers and its affiliated service providers are making a concerted effort
to take steps they believe are reasonably designed to address their Year
2000 problems. Of course, the Fund's ability to reduce the effects of the
Year 2000 problem is also very much dependent upon the efforts of third
parties over which the Fund and Advisers may have no control.
X. Under "How Do I Buy Shares?",
(a) the second step in the section "Opening Your Account" is replaced with
the following:
2. Determine how much you would like to invest. The Fund's minimum
investments are:
o To open a regular, non-retirement account...$1,000
o To open an IRA, IRA Rollover, Roth IRA, or
Education IRA...............................$ 250*
o To open a custodial account for a minor
(an UGMA/UTMA account)......................$ 100
o To open an account with an automatic
investment plan.............................$ 50**
o To add to an account....................... $ 50***
*For all other retirement accounts, there is no minimum investment
requirement.
**$25 for an Education IRA.
***For all retirement accounts except IRAs, IRA Rollovers, Roth IRAs, or
Education IRAs, there is no minimum to add to an account.
For purchases by broker-dealers, registered investment advisors or
certified financial planners who have entered into an agreement with
Distributors for clients participating in comprehensive fee programs, the
minimum initial investment is $250. The minimum initial investment is $100
for 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.
We reserve the right to change the amount of these minimums from time to
time or to waive or lower these minimums for certain purchases. We also
reserve the right to refuse any order to buy shares.
(b) the section "Quantity Discounts," found under "Sales Charge Reductions
and Waivers," is replaced with the following:
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 TO
AS A PERCENTAGE OF DEALER AS A
---------------------------------
AMOUNT OF PURCHASE OFFERING NET AMOUNT PERCENTAGE OF
AT OFFERING PRICE PRICE INVESTED OFFERING PRICE
------------------------------------------------------------------------
Under $100,000 2.25% 2.30% 2.00%
$100,000 but less 1.75% 1.78% 1.50%
than $250,000
$250,000 but less 1.25% 1.26% 1.00%
than $500,000
$500,000 but less 1.00% 1.01% 0.85%
than $1,000,000
$1,000,000 million None None None
or more*
*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.
(c) the second waiver category in the section "Sales Charge Waivers," found
under "Sales Charge Reductions and Waivers," is replaced with the
following:
2. Redemption proceeds from the sale of shares of any Franklin Templeton
Fund. The proceeds must be reinvested in the same class of shares,
except proceeds from the sale of Class B shares will be reinvested in
Class A shares.
If you paid a Contingent Deferred Sales Charge when you sold your
Class A shares, we will credit your account with the amount of the
Contingent Deferred Sales Charge paid but a new Contingent Deferred
Sales Charge will apply. For Class B shares reinvested in Class A, a
new Contingent Deferred Sales Charge will not apply, although your
account will not be credited with the amount of any Contingent
Deferred Sales Charge paid when you sold your Class B shares.
Proceeds immediately placed in a Franklin Bank CD also may be
reinvested without a front-end sales charge if you reinvest them
within 365 days from the date the CD matures, including any rollover.
This waiver does not apply to shares you buy and sell under our
exchange program. Shares purchased with proceeds from a money fund may
be subject to a sales charge.
(d) the following new categories 6 and 7 are added to the end of the first
list of sales charge waiver categories in the section "Sales Charge
Waivers," found under "Sales Charge Reductions and Waivers":
6. Redemption proceeds from a repurchase of shares of Franklin Floating
Rate Trust, if the shares were continuously held for at least 12
months.
If you immediately placed your redemption proceeds in a Franklin Bank
CD or a Franklin Templeton money fund, you may reinvest them as
described above. The proceeds must be reinvested within 365 days from
the date the CD matures, including any rollover, or the date you
redeem your money fund shares.
7. Redemption proceeds from the sale of Class A shares of any of the
Templeton Global Strategy Funds if you are a qualified investor.
If you paid a contingent deferred sales charge when you redeemed your
Class A shares from a Templeton Global Strategy Fund, a Contingent
Deferred Sales Charge will apply to your purchase of Fund shares and a
new Contingency Period will begin. We will, however, credit your Fund
account with additional shares based on the contingent deferred sales
charge you paid and the amount of the redemption proceeds that you
reinvest.
If you immediately placed your redemption proceeds in a Franklin
Templeton money fund, you may reinvest them as described above. The
proceeds must be reinvested within 365 days from the date they are
redeemed from the money fund.
(e) the following new category 12 is added to the end of the second list
of sales charge waiver categories in the section "Sales Charge Waivers,"
found under "Sales Charge Reductions and Waivers":
12. Qualified registered investment advisors who buy through a
broker-dealer or service agent who has entered into an agreement with
Distributors
(f) the section "How Do I Buy Shares in Connection with Retirement
Plans?" is replaced with the following:
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. These plans require separate applications and
their policies and procedures may be different than those described in this
prospectus. For more information, including a free retirement plan brochure
or application, please call Retirement Plan Services.
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.
(g) and the following paragraph is added at the end of the section:
FOR INVESTORS OUTSIDE THE U.S.
The distribution of this prospectus and the offering of Fund shares may be
limited in many jurisdictions. An investor who wishes to buy shares of the
Fund should determine, or have a broker-dealer determine, the applicable
laws and regulations of the relevant jurisdiction. Investors are
responsible for compliance with tax, currency exchange or other regulations
applicable to redemption and purchase transactions in any jurisdiction to
which they may be subject. Investors should consult appropriate tax and
legal advisors to obtain information on the rules applicable to these
transactions.
XI. Under "May I Exchange Shares for Shares of Another Fund?",
(a) the first paragraph under "Will Sales Charges Apply to My Exchange?" is
replaced with the following:
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 the difference is more than
0.25%. 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.
(b) the second item in the section "Exchange Restrictions" is replaced with
the following:
o Generally exchanges may only be made between identically registered
accounts, unless you send written instructions with a signature
guarantee. 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."
(c) and the following new item is added under "Exchange Restrictions":
o You must meet the applicable minimum investment amount of the fund you
are exchanging into, or exchange 100% of your Fund shares.
XII. In the "By Phone" section of the chart under "How Do I Sell Shares?",
(a) the first bulleted item is replaced with the following:
o If the request is $100,000 or less. Institutional accounts may exceed
$100,000 by completing a separate agreement. Call Institutional
Services to receive a copy.
(b) and the third bulleted item is deleted.
XIII. Under "What Distributions Might I Receive From the Fund?",
(a) the first three paragraphs are replaced with the following:
The Fund intends to pay a dividend quarterly in March, June, September
and December representing its net investment income. Capital gains, if
any, may be distributed annually. The amount of these distributions
will vary and there is no guarantee the Fund will pay dividends. THE
FUND DOES NOT PAY "INTEREST" OR GUARANTEE ANY FIXED RATE OF RETURN ON
AN INVESTMENT IN ITS SHARES.
To receive a dividend, you must be a shareholder on the record date. The
record dates for the Fund's dividends will vary. Please keep in mind that
if you invest a large amount in the Fund shortly before the record date of
a dividend, you will receive some of your investment back in the form of
that dividend and it will be a taxable distribution. If you would like
information on upcoming record dates for the Fund's dividends, please call
1-800/DIAL BEN.
(b) and distribution option 3 in the section "Distribution Options" is
replaced with the following:
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 or savings account, you may need a
signature guarantee. If you send the money to a checking or savings
account, please see "Electronic Fund Transfers" under "Services to Help You
Manage Your Account."
XIV. Under "Transaction Procedures and Special Requirements,"
(a) the section "Joint Accounts" is replaced with the following:
JOINT ACCOUNTS. For accounts with more than one registered owner, the Fund
accepts written instructions signed by only one owner for transactions and
account changes that could otherwise be made by phone. For all other
transactions and changes, all registered owners must sign the instructions.
Please keep in mind that if you have previously told us that you do not
want telephone exchange or redemption privileges on your account, then we
can only accept written instructions to exchange or redeem shares if they
are signed by all registered owners on the account.
(b) the reference to $50,000 in the section "Signature Guarantees" is
replaced with $100,000.
(c) the section "Trust Company Retirement Plan Accounts," found under
"Telephone Transactions," is deleted.
(d) and the section "Keeping Your Account Open" is replaced with the
following:
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 $250, or less
than $50 for employee accounts and custodial accounts for minors. 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 $1,000, or $100 for employee accounts and
custodial accounts for minors. These minimums do not apply to IRAs and
other retirement plan accounts or to accounts managed by the Franklin
Templeton Group.
XV. In the section "Services to Help You Manage Your Account,"
(a) the second sentence under "Automatic Investment Plan" is replaced with
the following:
Under the plan, you can have money transferred automatically from your
checking or savings account to the Fund each month to buy additional
shares.
(b) the second paragraph under "Systematic Withdrawal Plan" is replaced
with the following:
If you would like to establish a systematic withdrawal plan, please
complete the systematic withdrawal plan section of the account 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 or savings account. If
you choose to have the money sent to a checking or savings account, please
see "Electronic Fund Transfers" below. Once you plan is established, any
distributions paid by the Fund will be automatically reinvested in your
account.
(c) the section "Electronic Fund Transfers" is replaced with the following:
ELECTRONIC FUND TRANSFERS
You may choose to have dividend and capital gain distributions or payments
under a systematic withdrawal plan sent directly to a checking or savings
account. If the 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.
(d) under the section "TeleFACTS(R)" the third bulleted item is replaced
with the following:
o exchange shares (within the same class) between identically
registered Franklin Templeton Class A, B or C accounts; and
(e) and the code number table in the section "TeleFACTS(R)" is replaced
with the following:
FUND CODE NUMBER
- --------------------------------------------------------------------------
Global Currency Fund 411
Hard Currency Fund 412
XVI. In the "Useful Terms and Definitions" section,
(a) the definition of "Class I, Class II and Advisor Class" is replaced
with the following:
CLASS A, CLASS B, CLASS C AND ADVISOR CLASS - The Hard Currency Fund offers
two classes of shares, designated "Class A" 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. Because
the Global Currency Fund's sales charge structure and Rule 12b-1 plan are
similar to those of Class A shares, shares of the Fund are considered Class
A shares for redemption, exchange and other purposes. Certain funds in the
Franklin Templeton Funds also offer share classes designated "Class B" and
"Class C."
(b) and the following definitions are revised:
CONTINGENCY PERIOD - The 12 month period during which a Contingent Deferred
Sales Charge may apply. The holding period begins on the day you buy your
shares. For example, if you buy shares on the 18th of the month, they will
age one month on the 18th day of the next month and each following month.
MAJOR CURRENCIES - As used in this prospectus, Australian dollar, Belgian
franc, British pound sterling, Canadian dollar, Danish krone, Netherlands
guilder, the Euro, European Currency Unit ("ECU"), French franc, German
mark, Greek drachma, Irish punt, Italian lira, Japanese yen, New Zealand
dollar, Norwegian krona, Spanish peseta, Swedish krona, Swiss franc and
U.S. dollar.
NON-MAJOR CURRENCIES - As used in this prospectus, all currencies that are
not identified as Major Currencies.
OFFERING PRICE - The public offering price is based on the Net Asset Value
per share and includes the front-end sales charge. The maximum front-end
sales charge is 2.25%. We calculate the offering price to two decimal
places using standard rounding criteria.
Please keep this supplement for future reference.
