SUPPLEMENT DATED DECEMBER 5, 1995
TO THE PROSPECTUS FOR
FRANKLIN EQUITY FUND
DATED NOVEMBER 1, 1995
The Prospectus for the Fund is amended in the following respects:
A. The following discussion of the Fund's Annual Operating Expenses, including
the footnotes thereto, appearing in the Expense Table replaces the current
discussion of these matters in the Table. The remainder of the table has not
been changed.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES CLASS I CLASS II
<S> <C> <C>
(as a percentage of average net assets)
Management Fees 0.54% 0.54%
Rule 12b-1 Fees 0.18%* 1.00%*
Other Expenses:
Shareholder Servicing Costs 0.09% 0.09%
Reports to Shareholders 0.08% 0.08%
Other 0.06% 0.06%
Total Other Expenses 0.23% 0.23%**
----- -------
Total Fund Operating Expenses 0.95% 1.77%
===== =====
</TABLE>
* The maximum annual amount of Rule 12b-1 fees allowed pursuant to the Class I
distribution plan is 0.25%. The Class II Rule 12b-1 fee is based on the maximum
amount allowed pursuant to the Class II plan of distribution. See "Plans of
Distribution" under "Management of the Fund". Consistent with National
Association of Securities Dealers, Inc.Os rules, it is possible that 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 charges permitted under those same rules. **"Other Expenses" for Class II
shares are estimates based on the actual expenses incurred by Class I shares for
the fiscal year ended June 30, 1995.
B. The table and accompanying matters discussed under "Financial Highlights" in
the Prospectus are revised to read as follows:
FINANCIAL HIGHLIGHTS
Set forth below is a table containing the financial highlights for a share of
each class of the Fund. The information for each of the five fiscal years in the
period ended June 30, 1995 has been audited by Coopers & Lybrand L.L.P.,
independent auditors, whose audit report appears in the financial statements in
the FundOs Annual Report to Shareholders dated June 30, 1995. The remaining
figures, which are also audited, are not covered by the auditor's current
report. See "Reports to Shareholders" under "General Information."
<TABLE>
<CAPTION>
Class I Shares:
Year ended June 30
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance
Net asset value at
beginning of year..... $6.53 $7.25 $7.12 $7.36 $7.17 $7.21 $6.67 $7.73 $7.19 $5.43
Net investment income.. .08 .10 .12 .14 .15 .17 .19 .12 .10 .11
Net realized & unrealized
gains on securities 1.329 .107 .557 .089 .190 .344 .558 (.249) 1.141 2.000
Total from investment
operations............ 1.409 .207 .677 .229 .340 .514 .748 (.129) 1.241 2.110
Less distributions:
Distributions from net
investment income..... (.079) (.103) (.119) (.142) (.150) (.296) (.109) (.116) (.100) (.118)
Distributions from net
capital gains......... (.620) (.824) (.428) (.327) -- (.258) (.099) (.815) (.601) (.232)
Total Distributions.... (.699) (.927) (.547) (.469) (.150) (.554) (.208) (.931) (.701) (.350)
Net asset value at
end of year $7.24 $6.53 $7.25 $7.12 $7.36 $7.17 $7.21 $6.67 $7.73 $7.19
Total Return**......... 23.78% 2.28% 9.53% 3.36% 4.87% 7.00% 11.54% (.53)% 19.66% 41.26%
Ratios/Supplemental Data
Net assets at end of period
(in 000's)............ $317,463 $279,880 $345,755 $364,826 $374,993 $419,422 $370,705 $341,520 $299,353 $161,222
Ratio of expenses to
average net assets.... .95% .79% .69% .70% .69% .69% .70% .72% .78% .89%
Ratio of net income to
average net assets.... 1.21% 1.27% 1.67% 1.86% 2.29% 2.51% 2.82% 1.97% 1.74% 2.00%
Portfolio turnover rate 86.20% 95.18% 51.12% 49.19% 56.76% 42.71% 51.17% 85.03% 44.82% 48.96%
</TABLE>
<TABLE>
<CAPTION>
Class II Shares:
May 1, 1995 to
June 30 1995
<S> <C>
Per Share Operating
Performance
Net asset value at
beginning of period..... $6.65
Net investment income.. .010
Net realized & unrealized
gains on securities .615
Total from investment
operations............ .625
Less Distributions from net
investment income..... (.035)
Net asset value at
end of period $7.24
Total Return**......... 9.42%
Ratios/Supplemental Data
Net assets at end of year
(in 000's)............ $342
Ratio of expenses to
average net assets.... 1.77%*
Ratio of net income to
average net assets.... .74%*
Portfolio turnover rate 86.20%
</TABLE>
* Annualized
**Total return measures the change in value of an investment over the periods
indicated. It does not include the maximum front-end sales charge and assumes
reinvestment of dividends and capital gains at net asset value. Prior
to May 1, 1994, dividends were reinvested at the maximum offering price.
C. The following text replaces the clause which discusses waivers to
participants in individual retirement plan accounts under "How to Sell Shares of
the Fund(s) - Contingent Deferred Sales Charge":
"; distributions from an individual retirement plan account by reason of death
or disability, or upon periodic distributions based on life expectancy;"
