o 132*SA1
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SHARE CLASS REDESIGNATION
Effective January 1, 1999
Class A - Formerly Class I
Class B - New Share Class
Class C - Formerly Class II
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SUPPLEMENT DATED APRIL 1, 1999
TO THE STATEMENT OF ADDITIONAL INFORMATION OF
FRANKLIN GOLD FUND
DATED DECEMBER 1, 1998
The Statement of Additional Information is amended as follows:
I. The second paragraph in the section "Organization, Voting Rights and
Principal Holders" is replaced with the following:
The fund currently offers four classes of shares, Class A, Class B, Class C
and Advisor Class. Before January 1, 1999, Class A shares were designated
Class I and Class C shares were designated Class II. The fund began
offering Class B shares on January 1, 1999. All references in the Statement
of Additional Information to Class I shares are replaced with Class A, and
all references to Class II shares are replaced with Class C. The fund may
offer additional classes of shares in the future. The full title of each
class is:
o Franklin Gold Fund, Franklin Gold Fund Series,
Franklin Gold Fund - Class A
o Franklin Gold Fund, Franklin Gold Fund Series,
Franklin Gold Fund - Class B
o Franklin Gold Fund, Franklin Gold Fund Series,
Franklin Gold Fund - Class C
o Franklin Gold Fund, Franklin Gold Fund Series,
Franklin Gold Fund - Advisor Class
II. The following is added to the section "Organization, Voting Rights and
Principal Holders":
As of December 7, 1998, the principal shareholders of the fund, beneficial
or of record, were:
Name and Address Share Class Percentage (%)
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Franklin Templeton
Trust Company1 for ValuSelect
Franklin
Resources Profit
Sharing Plan
Attn: Trading
PO Box 2438
Rancho Cordova, CA
95741-2438............ Advisor 37.44%
1. Franklin Templeton Trust Company is a California corporation and is
wholly owned by Franklin Resources, Inc.
As of December 7, 1998, the officers and board members, as a group, owned
of record and beneficially 3.76% of the fund's Advisor Class shares and
less than 1% of the outstanding shares of the fund's other classes.
III. The first sentence of the section "Initial sales charges" on page 20
is revised to read:
The maximum initial sales charge is 5.75% for Class A and 1% for Class C.
There is no initial sales charge for Class B.
IV. The last sentence of the first waiver category in the section "Waivers for
investments from certain payments" on page 22 is revised to read:
This waiver category also applies to Class B and C shares.
V. The following is added after the second paragraph in the section
"Contingent deferred sales charge (CDSC)" on page 24:
For Class B shares, there is a CDSC if you sell your shares within six
years, as described in the table below. The charge is based on the value of
the shares sold or the net asset value at the time of purchase, whichever
is less.
IF YOU SELL YOUR CLASS B THIS % IS DEDUCTED
SHARES WITHIN THIS MANY YEARS FROM YOUR PROCEEDS
AFTER BUYING THEM AS A CDSC
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1 Year 4
2 Years 4
3 Years 3
4 Years 3
5 Years 2
6 Years 1
7 Years 0
VI. The section "CDSC waivers" on page 24 is replaced with the following:
CDSC WAIVERS. The CDSC for any share class will generally be waived for:
o Account fees
o Sales of Class A shares purchased without an initial sales charge by
certain retirement plan accounts if (i) the account was opened before
May 1, 1997, or (ii) the securities dealer of record received a
payment from Distributors of 0.25% or less, or (iii) Distributors did
not make any payment in connection with the purchase, or (iv) the
securities dealer of record has entered into a supplemental agreement
with Distributors
o Redemptions of Class A shares by investors who purchased $1 million or
more without an initial sales charge if the securities dealer of
record waived its commission in connection with the purchase.
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% monthly, 3% quarterly, 6% semiannually or
12% annually of your account's net asset value depending on the
frequency of your plan
o Redemptions by Franklin Templeton Trust Company employee benefit plans
or employee benefit plans serviced by ValuSelect(R) (not applicable to
Class B)
o Distributions from individual retirement accounts (IRAs) due to death
or disability or upon periodic distributions based on life expectancy
(for Class B, this applies to all retirement plan accounts, not only
IRAs)
o Returns of excess contributions (and earnings, if applicable) from
retirement plan accounts
o Participant initiated distributions from employee benefit plans or
participant initiated exchanges among investment choices in employee
benefit plans (not applicable to Class B)
VII. The first sentence of the section "Exchange privilege" on page 25 is
revised to read:
If you request the exchange of the total value of your account, declared
but unpaid income dividends and capital gain distributions will be
reinvested in the fund and exchanged into the new fund at net asset value
when paid.
VIII.The section "The Class II Plan," found under "Distribution and service
(12b-1) fees" on page 28, is replaced with the following:
THE CLASS B AND C PLANS. Under the Class B and C plans, the fund pays
Distributors up to 0.75% per year of the class's average daily net assets,
payable quarterly, to pay Distributors or others for providing distribution
and related services and bearing certain expenses. All distribution
expenses over this amount will be borne by those who have incurred them.
The fund may also pay a servicing fee of up to 0.25% per year of the
class's average daily net assets, payable quarterly. This fee may be used
to pay securities dealers or others for, among other things, helping to
establish and maintain customer accounts and records, helping with requests
to buy and sell shares, receiving and answering correspondence, monitoring
dividend payments from the fund on behalf of customers, and similar
servicing and account maintenance activities.
The expenses relating to each of the Class B and C plans are also used to
pay Distributors for advancing the commission costs to securities dealers
with respect to the initial sale of Class B and C shares. Further, the
expenses relating to the Class B plan may be used by Distributors to pay
third party financing entities that have provided financing to Distributors
in connection with advancing commission costs to securities dealers.
IX. The section "The Class I and II Plans," found under "Distribution and
service (12b-1) fees" on page 28, is renamed "The Class A, B and C Plans."
Please keep this supplement for future reference.
