406 *P4
SUPPLEMENT DATED DECEMBER 18, 1998
TO THE PROSPECTUS OF
TEMPLETON GLOBAL BOND FUND
dated January 1, 1998
The prospectus is amended as follows:
I. The section "Who Manages the Fund? - Portfolio Management" is revised as
follows:
(a) The Fund's lead portfolio manager since November 1998 is Neil S. Devlin;
(b) Thomas J. Dickson and Dr. Umran Demirors have secondary portfolio
management responsibilities for the Fund;
(c) and the following is added to the end of the second paragraph:
Dr. Demirors is a vice president of Templeton Global Bond Managers, a
division of Investment Counsel. Dr. Demirors holds a Ph.D. and an MA in
economics from New York University, and a BA in economics from Bursa
Academy of Economics and Business Administration in Turkey. Prior
to joining the Templeton organization in 1996, Dr. Demirors was a
principal and portfolio manager for Socimer Advisory Inc. in New York.
Before joining Socimer Advisory Inc., Dr. Demirors was the head of
research and strategy at Vestcor Partners Group in Miami. Currently, Dr.
Demirors co-directs the fixed income process and manages several emerging
markets fixed income portfolios.
II. The minimum investments table in the section "How Do I Buy Shares? -
Opening Your Account" is replaced with the following:
MINIMUM
INVESTMENTS
- -------------------------------------------------------------------------------
To open a regular, non-retirement account $1,000
To open an IRA, IRA Rollover, Roth IRA, or Education IRA $ 250*
To open a custodial account for a minor (an UGMA/UTMA account) $ 100
To open an account with an automatic investment plan $ 50**
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.
III. The following paragraph is added to the end of the section "Group Purchases
- - Class I Only," found under "How Do I Buy Shares? - Sales Charge Reductions and
Waivers":
A qualified group does not include a 403(b) plan that only allows salary
deferral contributions. 403(b) plans that only allow salary deferral
contributions and that purchased Class I shares of the Fund at a reduced
sales charge under the group purchase privilege before February 1, 1998,
however, may continue to do so.
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IV. The following new category 7 is added to the end of the first list of sales
charge waiver categories in the section "Sales Charge Waivers," found under "How
Do I Buy Shares? - Sales Charge Reductions and Waivers":
7. 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.
V. 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 "How
Do I Buy Shares? - 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
VI. The section "Retirement Plans," found under "How Do I Buy Shares? - Sales
Charge Reductions and Waivers," is replaced in its entirety with the following:
RETIREMENT PLANS. Retirement plans sponsored by an employer (i) with at least
100 employees, or (ii) with retirement plan assets of $1 million or more, or
(iii) that agrees to invest at least $500,000 in the Franklin Templeton Funds
over a 13 month period may buy Class I shares without a front-end sales
charge. Retirement plans that are not Qualified Retirement Plans, SIMPLEs or
SEPs must also meet the requirements described under "Group Purchases - Class
I Only" above to be able to buy Class I shares without a front-end sales
charge. We may enter into a special arrangement with a Securities Dealer,
based on criteria established by the Fund, to add together certain small
Qualified Retirement Plan accounts for the purpose of meeting these
requirements.
For retirement plan accounts opened on or after May 1, 1997, a Contingent
Deferred Sales Charge may apply if the retirement plan is transferred out of
the Franklin Templeton Funds or terminated within 365 days of the retirement
plan account's initial purchase in the Franklin Templeton Funds. Please see
"How Do I Sell Shares? - Contingent Deferred Sales Charge" for details.
Any retirement plan that does not meet the requirements to buy Class I shares
without a front-end sales charge and that was a shareholder of the Fund on or
before February 1, 1995, may buy shares of the Fund subject to a maximum sales
charge of 4% of the Offering Price, 3.2% of which will be retained by
Securities Dealers.
VII. The first paragraph under "May I Exchange Shares for Shares of Another
Fund? - 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.
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VIII. The sections "Contingent Deferred Sales Charge - Class I" and "Contingent
Deferred Sales Charge - Class II," found under "May I Exchange Shares for Shares
of Another Fund? - Will Sales Charges Apply to My Exchange?", are replaced with
the following:
CONTINGENT DEFERRED SALES CHARGE. For accounts with shares subject to a
Contingent Deferred Sales Charge, we will first exchange any shares in your
account that are not subject to the charge. If there are not enough of these
to meet your exchange request, we will exchange shares subject to the charge
in the order they were purchased.
If you exchange Class I 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. If you exchange your Class II shares for shares of Money
Fund II, however, the time your shares are held in that fund will count
towards the completion of any Contingency Period.
IX. The following new item is added under "May I Exchange Shares for Shares of
Another Fund? - Exchange Restrictions":
/bullet/ You must meet the applicable minimum investment amount of the fund
you are exchanging into, or exchange 100% ofyour Fund shares.
X.The following replaces the second paragraph under "How Do I Sell Shares? -
Contingent Deferred Sales Charge":
Certain retirement plan accounts opened on or after May 1, 1997, and that
qualify to buy Class I shares without a front-end sales charge may also be
subject to a Contingent Deferred Sales Charge if the retirement plan is
transferred out of the Franklin Templeton Funds or terminated within 365
days of the account's initial purchase in the Franklin Templeton Funds.
XI. Distribution option 3 in the section "What Distributions Might I Receive
From the Fund? - Distribution Options" is replaced with the following:
3. RECEIVE DISTRIBUTIONS IN CASH - You may receive capital gain distributions,
dividend distributions, or both 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."
XII. The section "Keeping Your Account Open," found under "Transaction
Procedures and Special Requirements," is replaced in its entirety 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.
XIII. The second sentence in the section "Services to Help You Manage Your
Account - 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.
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XIV. The second paragraph under "Services to Help You Manage Your Account -
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 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 or savings account. If you choose to have the
money sent to a checking or savings account, please see "Electronic Fund
Transfers" below. Once your plan is established, any distributions paid by the
Fund will be automatically reinvested in your account.
XV. The following new section is added after the section "Services to Help You
Manage Your Account - Systematic Withdrawal Plan":
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.
XVI. The following definitions are revised or added, as applicable, to the
Useful Terms and Definitions" section:
CONTINGENCY PERIOD - For Class I shares, the 12 month period during which a
Contingent Deferred Sales Charge may apply. For Class II shares, the
contingency period is 18 months. 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. SIMPLE (Savings Incentive Match Plan for Employees) - An
employer sponsored salary deferral plan established under section 408(p) of
the Code
XVII. The following paragraphs are added to the end of the section "What Are the
Risks of Investing in the Fund?":
EURO. On January 1, 1999, the European Monetary Union (EMU) plans to
introduce 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. Because this change to a single
currency is new and untested, the establishment of the euro may result in
market volatility. For the same reason, it is not possible to predict the
impact of the euro on th business or financial condition of European
issuers which a fund may hold in its portfolio, and their impact on the
value of fund shares. 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, the investment manager and its affiliated service providers are
taking steps that they believe are reasonably designed to address the euro
issue.
Please keep this supplement for future reference.
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