o460 STKPA
SUPPLEMENT DATED AUGUST 3, 1998
TO THE PROSPECTUS OF
FRANKLIN BOND FUND - ADVISOR CLASS
DATED AUGUST 3, 1998
The prospectus is amended as follows:
I. The section "Expense Summary" is replaced in its entirety 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 estimated expenses for the current fiscal year.
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 0.03%**
Rule 12b-1 Fees None
Other Expenses 0.22%**
Total Fund Operating Expenses 0.25%**
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
--------------------------
$3 $8
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.
*$5.00 fee is only for Market Timers. We process all other exchanges without a
fee.
** Advisers and FT Services have agreed in advance to limit their respective
management and administration fees and to assume as their own expense certain
expenses otherwise payable by the fund so the fund's total operating expenses do
not exceed 0.25% for the current fiscal year. Without this reduction,
contractual and expected management fees would be 0.43%, other expenses would be
0.43%, and total fund operating expenses would be 0.86%. After October 31, 1999,
Advisers and FT Services may end this arrangement at any time.
II. The third paragraph in the section "Management Fees," found under "Who
Manages the Fund?" is replaced with the following:
During the fund's start-up period, Advisers has agreed in advance to limit its
management fees and to assume as its own expense certain expenses otherwise
payable by the fund so the fund's total operating expenses do not exceed 0.25%
for the current fiscal year. After October 31, 1999, Advisers may end this
agreement at any time.
III. The section "Administrative Services," found under "Who Manages the Fund?"
is replaced in its entirety with the following:
ADMINISTRATIVE SERVICES. FT Services provides certain administrative services
and facilities for the fund. Under its administration agreement, the fund pays
FT Services a monthly administration fee equal to an annual rate of 0.20% of the
fund's average daily net assets. During the fund's start-up period, FT Services
has agreed in advance to limit its administration fees so the fund's total
operating expenses do not exceed 0.25% for the current fiscal year. After
October 31, 1999, FT Services may end this agreement at any time. Please see
"Investment Management and Other Services" in the SAI for more information.
IV. The first paragraph in the section "What Distributions Might I Receive From
the Fund?" is replaced with the following:
The fund declares dividends from its net investment income daily and pays them
monthly on or about the last day of the month. The daily allocation of net
investment income begins on the day after we receive your money or settlement of
a wire order trade and continues to accrue through the day we receive your
request to sell your shares or the settlement of a wire order trade. The fund
does not expect to declare or pay any dividends until late 1998.
Please keep this supplement for future reference.
