134 *PA
SUPPLEMENT DATED JANUARY 1, 1999
TO THE PROSPECTUS OF
FRANKLIN EQUITY FUND - ADVISOR CLASS
DATED NOVEMBER 1, 1998
The prospectus is amended as follows:
I. As of January 1, 1999, the fund 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. All references in the prospectus to Class I shares are replaced with
Class A.
II. The following paragraph is added under "What Are the Risks of
Investing in the Fund?":
YEAR 2000. When evaluating current and potential portfolio positions,
Year 2000 is one of the factors the manager considers.
The manager will rely upon public filings and other statements made by
companies about their Year 2000 readiness. Issuers in countries outside
the U.S. may not be required to make the same level of disclosure about
Year 2000 readiness as is required in the U.S. The manager, of course,
cannot audit each company and its major suppliers to verify their Year
2000 readiness.
If a company in which the fund is invested is adversely affected by Year
2000 problems, it is likely that the price of its security will also be
adversely affected. A decrease in the value of one or more of the fund's
portfolio holdings will have a similar impact on the price of the fund's
shares. Please see "Year 2000 Problem" under "Who Manages the Fund?" for
more information.
III.Under "Who Manages the Fund?", the section "Year 2000 Issue" is
replaced with the following:
YEAR 2000 PROBLEM. The fund's business operations depend on a worldwide
network of computer systems that contain date fields, including
securities trading systems, securities transfer agent operations and
stock market links. Many of the systems currently use a two digit date
field to represent the date, and unless these systems are changed or
modified, they may not be able to distinguish the Year 1900 from the
Year 2000 (commonly referred to as the Year 2000 problem). In addition,
the fact that the Year 2000 is a non-standard leap year may create
difficulties for some systems.
When the Year 2000 arrives, the fund's operations could be adversely
affected if the computer systems used by the manager, its service
providers and other third parties it does business with are not Year
2000 ready. For example, the fund's portfolio and operational areas
could be impacted, including securities trade processing, interest and
dividend payments, securities pricing, shareholder account services,
reporting, custody functions and others. The fund could experience
difficulties in effecting transactions if any of its foreign
subcustodians, or if foreign broker-dealers or foreign markets are not
ready for Year 2000.
The manager and its affiliated service providers are making a concerted
effort to take steps they believe are reasonably designed to address
their Year 2000 problems. Of course, the fund's ability to reduce the
effects of the Year 2000 problem is also very much dependent upon the
efforts of third parties over which the fund and the manager may have no
control.
IV. Under "How Is the Fund Organized?", the first paragraph is replaced
with the following:
The fund is a diversified, open-end management investment company,
commonly called a mutual fund. It was organized as a California
corporation on August 30, 1984, and is registered with the SEC. The fund
offers four classes of shares: Franklin Equity Fund - Class A, Franklin
Equity Fund - Class B, Franklin Equity Fund - Class C and Franklin
Equity Fund - Advisor Class. Additional classes of shares may be offered
in the future.
V. In step 2 under "How Do I Buy Shares? - Opening Your Account," the
minimum investment to add to your account is changed from $25 to $50.
VI. The section "How Do I Buy Shares in Connection with Retirement
Plans?", found under "How Do I Buy Shares?", is replaced with the
following:
HOW DO I BUY SHARES IN CONNECTION WITH RETIREMENT PLANS?
Your individual or employer-sponsored retirement plan may invest in the
fund. Plan documents are required for all retirement plans. Trust
Company can provide the plan documents for you and serve as custodian or
trustee.
Trust Company can provide you with brochures containing important
information about its plans. These plans require separate applications
and their policies and procedures may be different than those described
in this prospectus. For more information, including a free retirement
plan brochure or application, please call Retirement Plan Services.
Please consult your legal, tax or retirement plan specialist before
choosing a retirement plan. Your investment representative or advisor
can help you make investment decisions within your plan.
VII. The third item in the section "Exchange Restrictions," found
under "May I Exchange Shares for Shares of Another Fund?", is replaced
with the following:
Generally exchanges may only be made between identically registered
accounts, unless you send written instructions with a signature guarantee.
You may, however, exchange shares from a fund account requiring two or
more signatures into an identically registered money fund account
requiring only one signature for all transactions. PLEASE NOTIFY US IN
WRITING IF YOU DO NOT WANT THIS OPTION TO BE AVAILABLE ON YOUR ACCOUNT.
Additional procedures may apply. Please see "Transaction Procedures and
Special Requirements."
VIII.In the "By Phone" section of the chart under "How Do I Sell
Shares?",
(a) the first bulleted item is replaced with the following:
o If the request is $100,000 or less. Institutional accounts may exceed
$100,000 by completing a separate agreement. Call Institutional
Services to receive a copy.
(b) and the third bulleted item is deleted.
IX. Under "Transaction Procedures and Special Requirements,"
(a) the section "Joint Accounts" is replaced with the following:
JOINT ACCOUNTS. For accounts with more than one registered owner, the
fund accepts written instructions signed by only one owner for
transactions and account changes that could otherwise be made by phone.
For all other transactions and changes, all registered owners must sign
the instructions.
Please keep in mind that if you have previously told us that you do not
want telephone exchange or redemption privileges on your account, then
we can only accept written instructions to exchange or redeem shares if
they are signed by all registered owners on the account.
(b) the reference to $50,000 in the section "Signature Guarantees" is
replaced with $100,000.
(c) and the section "Trust Company Retirement Plan Accounts," found
under "Telephone Transactions," is deleted.
X. In the "Useful Terms and Definitions" section, the definition of
"Class I, Class II and Advisor Class" is replaced with the following:
CLASS A, CLASS B, CLASS C AND ADVISOR CLASS - The fund offers four
classes of shares, designated "Class A," "Class B," "Class C" and
"Advisor Class." The four classes have proportionate interests in the
fund's portfolio. They differ, however, primarily in their sales charge
and expense structures.
Please keep this supplement for future reference.
134 *SAA
SUPPLEMENT DATED JANUARY 1, 1999
TO THE STATEMENT OF ADDITIONAL INFORMATION OF
FRANKLIN EQUITY FUND - ADVISOR CLASS
DATED NOVEMBER 1, 1998
The Statement of Additional Information is amended as follows:
I. As of January 1, 1999, the fund 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. All references in the Statement of Additional Information to Class I
shares are replaced with Class A.
II. The first sentence in the section "Additional Information on
Exchanging Shares," found under "How Do I Buy, Sell and Exchange
Shares?", is replaced with the following:
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.
III. Under "Miscellaneous Information,"
(a) the third paragraph is replaced with the following:
The fund offers four classes of shares: Franklin Equity Fund, Franklin
Equity Fund Series, Franklin Equity Fund - Class A; Franklin Equity
Fund, Franklin Equity Fund Series, Franklin Equity Fund - Class B;
Franklin Equity Fund, Franklin Equity Fund Series, Franklin Equity Fund
- Class C; and Franklin Equity Fund, Franklin Equity Fund Series,
Franklin Equity Fund - Advisor Class.
(b) and the following is added:
The Information Services & Technology division of Resources established
a Year 2000 Project Team in 1996. This team has already begun making
necessary software changes to help the computer systems that service the
fund and its shareholders to be Year 2000 compliant. After completing
these modifications, comprehensive tests are conducted in one of
Resources' U.S. test labs to verify their effectiveness. Resources
continues to seek reasonable assurances from all major hardware,
software or data-services suppliers that they will be Year 2000
compliant on a timely basis. Resources is also beginning to develop a
contingency plan, including identification of those mission critical
systems for which it is practical to develop a contingency plan.
However, in an operation as complex and geographically distributed as
Resources' business, the alternatives to use of normal systems,
especially mission critical systems, or supplies of electricity or long
distance voice and data lines are limited.
IV. In the "Useful Terms and Definitions" section, the definition of
"Class I, Class II and Advisor Class" is replaced with the following:
CLASS A, CLASS B, CLASS C AND ADVISOR CLASS - The fund offers four
classes of shares, designated "Class A," "Class B," "Class C" and
"Advisor Class." The four classes have proportionate interests in the
fund's portfolio. They differ, however, primarily in their sales charge
and expense structures.
Please keep this supplement for future reference.
