|
|
|
|
|
|
|
|
|
|
Previous: TEMPLETON VARIABLE PRODUCTS SERIES FUND, N-30D, 1998-09-08 |
Next: COMAIR HOLDINGS INC, 10-Q/A, 1998-09-08 |
TEMPLETON VARIABLE PRODUCTS SERIES FUND
MUTUAL DISCOVERY INVESTMENT FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Period Ended
June 30, 1998
(unaudited)+
-------------------
<S> <C>
Per Share Operating Performance - Class 1
(For a share outstanding throughout the period)
Net asset value, beginning of period $ 10.00
-------------------
Income from investment operations:
Net investment income .02
Net realized and unrealized losses (.43)
-------------------
Total from investment operations (.41)
-------------------
Net asset value, end of period $ 9.59
===================
Total Return * (4.10)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) $ 240
Ratios to average net assets:
Expenses 1.00%**
Expenses, excluding waiver and payments by affiliate 16.63%**
Net investment income 1.28%**
Portfolio turnover rate 7.71%
</TABLE>
*Total return does not include deductions at the contract level for cost of
insurance charges, premium load, administrative charges, mortality and expense
risk charges or other charges that may be incurred under the variable annuity
contract for which the Fund serves as an underlying investment vehicle. Total
return is not annualized.
**Annualized.
+For the period May 1, 1998 (commencement of operations) to June 30, 1998.
See Notes to Financial Statements.
PAGE
TEMPLETON VARIABLE PRODUCTS SERIES FUND
MUTUAL DISCOVERY INVESTMENT FUND
STATEMENT OF INVESTMENTS, JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
Country Shares Value
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS 80.6%
AUTOMOBILES 2.1%
General Motors Corp. United States 75 $ 5,011
-----------
BANKING 9.6%
Australia & New Zealand Banking Group Ltd. Australia 800 5,519
BG Bank AS Denmark 130 8,052
Mercantile Bankshares Corp. United States 130 4,526
Vermont Financial Services Corp. United States 175 4,802
-----------
22,899
-----------
BROADCASTING & PUBLISHING 7.7%
NV Holdingsmij de Telegraaf Netherlands 240 5,781
Pearson Plc. United Kingdom 360 6,607
United News & Media Plc. United Kingdom 440 6,163
-----------
18,551
-----------
BUSINESS & PUBLIC SERVICES 4.6%
IFIL Finanziaria Partecipazioni SpA Italy 1,140 5,293
IFIL Finanziaria Partecipazioni SpA, rts. Italy 1,140 54
Suez Lyonnaise des Eaux SA France 35 5,760
-----------
11,107
-----------
CHEMICALS 10.3%
Bush Boake Allen Inc. United States 175 5,130
Carbide/Graphite Group Inc. United States 155 4,311
DSM NV Netherlands 55 5,645
Inspec Group Plc. United Kingdom 1,170 5,124
Olin Corp. United States 105 4,377
-----------
24,587
-----------
ENERGY SOURCES 7.3%
Electrafina SA Belgium 45 5,805
Shell Transport & Trading Co. Plc. United Kingdom 765 5,393
Societe Elf Aquitaine SA France 45 6,327
-----------
17,525
-----------
FINANCIAL SERVICES 4.1%
Cir Cie Industriali Riunite SpA Italy 4,100 5,116
Peoples Bancorp Inc. United States 465 4,650
-----------
9,766
-----------
HEALTH & PERSONAL CARE 3.0%
Apria Healthcare Group Inc. United States 200 1,338
Vencor Inc. United States 800 5,800
-----------
7,138
-----------
INDUSTRIAL COMPONENTS 4.7%
Charter Plc. United Kingdom 450 4,711
Lucas Varity Plc. United Kingdom 1,650 6,573
-----------
11,284
-----------
INSURANCE 6.6%
Guardian Royal Exchange Plc. United Kingdom 1,048 6,170
PXRE Corp. United States 100 3,000
Royal & Sun Alliance Insurance Group Plc. United Kingdom 650 6,724
-----------
15,894
-----------
MERCHANDISING 4.5%
Hudson's Bay Co. Canada 265 6,073
</TABLE>
PAGE
<TABLE>
<CAPTION>
Country Shares Value
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Nine West Group Inc. United States 180 4,826
-----------
10,899
-----------
MULTI-INDUSTRY 9.6%
Cie Financiere Richemont AG, A Switzerland 4 5,235
Investor AB, A Sweden 100 5,793
Saab AB, B Sweden 25 263
Ste Eurafrance France 10 6,285
Tomkins Plc. United Kingdom 1,000 5,435
-----------
23,011
-----------
TRANSPORTATION 4.5%
Arkansas Best Corp. United States 475 4,453
Deutsche Lufthansa AG Germany 250 6,274
-----------
10,727
-----------
UTILITIES ELECTRICAL & GAS 2.0%
Citizens Utilities Co., B United States 494 4,752
-----------
TOTAL COMMON STOCKS 193,151
-----------
TOTAL INVESTMENTS (COST $204,065) 80.6% 193,151
OTHER ASSETS, LESS LIABILITIES 19.4% 46,547
-----------
TOTAL NET ASSETS 100.0% $239,698
===========
</TABLE>
* Non-income producing.
See Notes to Financial Statements.
PAGE
TEMPLETON VARIABLE PRODUCTS SERIES FUND
MUTUAL DISCOVERY INVESTMENTS FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<S> <C>
Assets:
Investments in securities, at value (cost $204,065) $ 193,151
Cash 49,062
Receivables:
Investment securities sold 4,923
Dividends and interest 391
From affiliates 7,433
Other assets 157
--------------------
Total assets 255,117
--------------------
Liabilities:
Payable for investment securities purchased 7,571
Accrued liabilities 7,848
--------------------
Total liabilities 15,419
--------------------
Net assets, at value $ 239,698
====================
Net assets consist of:
Undistributed net investment income $ 527
Net unrealized depreciation (10,757)
Accumulated net realized loss (72)
Beneficial shares 250,000
--------------------
Net assets, at value $ 239,698
====================
CLASS 1:
Net asset value per share ($239,698/25,000 shares outstanding) $ 9.59
====================
</TABLE>
See Notes to Financial Statements.
PAGE
TEMPLETON VARIABLE PRODUCTS SERIES FUND
MUTUAL DISCOVERY INVESTMENT FUND
FINANCIAL STATEMENTS (CONTINUED)
STATEMENT OF OPERATIONS
FOR THE PERIOD MAY 1, 1998 (COMMENCEMENT OF OPERATIONS) TO JUNE 30, 1998
(UNAUDITED)
<TABLE>
<S> <C> <C>
Investment Income:
(net of foreign taxes of $102)
Dividends $ 912
Interest 30
-------------------
Total investment income $ 942
--------------------
Expenses:
Management fees (Note 3) 330
Administrative fees (Note 3) 40
Custodian fees 1,100
Reports to shareholders 1,300
Registration and filing fees 900
Professional fees 2,600
Trustees' fees and expenses 200
Other 400
-------------------
Total expenses 6,870
Expenses waived / paid by affiliate (Note 3) (6,455)
---------------------
Net expenses 415
---------------------
Net investment income 527
---------------------
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments 93
Foreign currency transactions (165)
-------------------
Net realized loss (72)
Net unrealized appreciation (depreciation) on:
Investments (10,914)
Translation of assets and liabilities
denominated in foreign currencies 157
-------------------
Net unrealized depreciation (10,757)
--------------------
Net realized and unrealized loss (10,829)
--------------------
Net decrease in net assets resulting from operations $ (10,302)
====================
</TABLE>
Dee Notes to Financial Statements.
PAGE
TEMPLETON VARIABLE PRODUCTS SERIES FUND
MUTUAL DISCOVERY INVESTMENT FUND
FINANCIAL STATEMENTS (CONTINUED)
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE PERIOD ENDED
JUNE 30, 1998
(UNAUDITED)+
-----------------------
<S> <C>
Increase (decrease) in net assets:
Operations:
Net investment income $ 527
Net realized loss from investments and
foreign currency transactions (72)
Net unrealized depreciation on
investments and translation of assets and
liabilities denominated in foreign currencies (10,757)
-----------------------
Net decrease in net assets resulting from operations (10,302)
Fund share transactions (Note 2):
Class 1 250,000
-----------------------
Net increase in net assets 239,698
Net assets:
Beginning of period -
-----------------------
End of period $ 239,698
-----------------------
Undistributed net investment income included in net assets:
End of period $ 527
=======================
</TABLE>
+For the period May 1, 1998 (commencement of operations) to June 30, 1998.
See Notes to Financial Statements.
PAGE
TEMPLETON VARIABLE PRODUCTS SERIES FUND
MUTUAL DISCOVERY INVESTMENTS FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Mutual Discovery Investment Fund (the Fund) is a separate, diversified series of
Templeton Variable Products Series Fund (the Trust), which is an open-end
investment company registered under the Investment Company Act of 1940. The Fund
seeks capital appreciation through a policy of investing in domestic and foreign
equity securities as well as debt obligations of any quality. The following
summarizes the Fund's significant accounting policies.
a. SECURITY VALUATION:
Securities listed or traded on a recognized national exchange or NASDAQ are
valued at the latest reported sales price. Over-the-counter securities and
listed securities for which no sale is reported are valued within the range of
the latest quoted bid and asked prices. Securities for which market quotations
are not readily available are valued at fair value as determined by management
in accordance with procedures established by the Board of Trustees.
b. FOREIGN CURRENCY TRANSLATION:
Portfolio securities and other assets and liabilities denominated in foreign
currencies are translated into U.S. dollars based on the exchange rate of such
currencies against U.S. dollars on the date of valuation. Purchases and sales of
securities and income items denominated in foreign currencies are translated
into U.S. dollars at the exchange rate in effect on the transaction date.
The Fund does not separately report the effect of changes in foreign exchange
rates from changes in market prices on securities held. Such changes are
included in net realized and unrealized gain or loss from investments.
Realized foreign exchange gains or losses arise from sales of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on securities transactions and the difference between the recorded amounts
of dividends, interest, and foreign withholding taxes and the U.S. dollar
equivalent of the amounts actually received or paid. Net unrealized foreign
exchange gains and losses arise from changes in foreign exchange rates on
foreign denominated assets and liabilities other than investments in securities
held at the end of the reporting period.
c. INCOME TAXES:
No provision has been made for income taxes because the Fund's policy is to
qualify as a regulated investment company under the Internal Revenue Code and to
distribute all of its taxable income.
d. SECURITY TRANSACTIONS, INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS:
Security transactions are accounted for on trade date. Realized gains and losses
on security transactions are determined on a specific identification basis.
Certain income from foreign securities is recorded as soon as information is
available to the Fund. Interest income and estimated expenses are accrued daily.
Dividend income and distributions to shareholders are recorded on the
ex-dividend date.
Realized and unrealized gains and losses and net investment income, other than
class specific expenses, are allocated daily to each class of shares based upon
the relative proportion of net assets of each class.
Common expenses incurred by the Trust are allocated among the funds based on the
ratio of net assets of each fund to the combined net assets. Other expenses are
charged to each fund on a specific identification basis.
PAGE
TEMPLETON VARIABLE PRODUCTS SERIES FUND
MUTUAL DISCOVERY INVESTMENTS FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (cont.)
e. ACCOUNTING ESTIMATES:
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the amounts of income and expense during the reporting
period. Actual results could differ from those estimates.
2. BENEFICIAL SHARES
The Fund offers two classes of shares: Class 1 and Class 2 shares. The shares
differ by their distribution fees, voting rights on matters affecting a single
class and the exchange privilege of each class.
At June 30, 1998, there were an unlimited number of shares authorized ($0.01 par
value). Transactions in the Fund's Class 1 shares were as follows:
Period Ended
June 30, 1998*
----------------------------
Class 1 Shares: Shares Amount
------------- ---------------
Shares sold 25,000 $250,000
------------- ---------------
Net increase 25,000 $250,000
=============================
*Commencement of sales was May 1, 1998.
As of June 30, 1998, there were no transactions in the Fund's Class 2 shares.
Templeton Funds Annuity Company, the Fund's administrative manager, is the
record owner of 100% of the Fund's Class 1 shares as of June 30, 1998.
3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Certain officers of the Trust are also officers or directors of Franklin Mutual
Advisers, Inc. (Franklin Mutual), Templeton Funds Annuity Company (TFAC) and
Franklin/Templeton Distributors, Inc. (Distributors), the Fund's investment
manager, administrative manager and principal underwriter, respectively.
The Fund pays an investment management fee to Franklin Mutual of 0.80% per year
of the average daily net assets of the Fund. Franklin Mutual agreed in advance
to reduce management fees to the extent necessary to limit total expenses to an
annual rate of 1.00% and 1.25% of the average daily net assets of Class 1 and
Class 2 shares, respectively, through December 31, 1998, as noted in the
Statement of Operations.
The Fund pays its allocated share of an administrative fee to TFAC based on the
Trust's aggregate average daily net assets as follows:
ANNUALIZED FEE
RATE AVERAGE DAILY NET ASSETS
- ----------------- ---------------------------------------------------------
0.15% First $200 million
0.135% Over $200 million, up to and including $700 million
0.10% Over $700 million, up to and including $1.2 billion
0.075% Over $1.2 billion
PAGE
TEMPLETON VARIABLE PRODUCTS SERIES FUND
MUTUAL DISCOVERY INVESTMENTS FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
4. INCOME TAXES
The cost of securities for income tax purposes is the same as that shown in the
Statement of Investments. At June 30, 1998, the net unrealized depreciation
based on the cost of investments for income tax purposes was as follows:
Unrealized appreciation $ 3,387
Unrealized depreciation (14,301)
-------------------
Net unrealized depreciation $ (10,914)
-------------------
5. INVESTMENT TRANSACTIONS
Purchases and sales of securities (excluding short-term securities) for the
period ended June 30, 1998 aggregated $214,400 and $10,429, respectively.
|
|