SUPPLEMENT DATED January 30, 1998
TO THE PROSPECTUS OF
FRANKLIN VALUEMARK FUNDS
Dated May 1, 1997
A. The Prospectus is amended by adding the following to the section entitled
"Utility Equity Fund," under "Fund Investment Objectives and Policies":
Changes of Fund Name and Non-fundamental Policies. On May 1, 1998, the Fund's
name will change to "Global Utilities Securities Fund." The Fund's current
policy limiting foreign investments to 25% of net assets will be lifted, so that
the Fund will be authorized to invest without limit in foreign securities. The
Fund's investment objective, its policy of concentrating its investments in the
public utilities industry, and its other investment policies and restrictions
will remain the same.
After the changes take place, the Fund will normally invest at least 65% of its
total assets in issuers domiciled in at least three different countries, one of
which may be the U.S. Under normal circumstances, the Fund is expected to invest
a higher percentage of its assets in U.S. securities than in securities of any
other single country. The Fund's Manager believes that a global utilities fund
may benefit from a wider selection of investment opportunities and greater
diversification than a fund which invests primarily in securities of domestic
utility companies.
The Fund's increasing investments in foreign securities will involve increasing
risk. Foreign securities involve greater risks than similar domestic securities
due to currency fluctuations, market volatility, and economic, social and
political uncertainty. Investments in foreign developing markets involve
heightened risks related to the smaller size and lesser liquidity of these
markets. INVESTORS SHOULD CONSIDER CAREFULLY THE SUBSTANTIAL RISKS INVOLVED IN
INVESTING IN FOREIGN SECURITIES, RISKS THAT ARE HEIGHTENED FOR INVESTMENTS IN
DEVELOPING MARKETS. SEE "HIGHLIGHTED RISK CONSIDERATIONS, FOREIGN TRANSACTIONS."
When reviewing their investments or considering new purchases or transfers,
Contract Owners may wish to take these upcoming Fund changes into account and to
consult with their investment representatives.
B. The discussion under "Highlighted Risk Considerations - Foreign Transactions"
is amended by adding the following text:
Hong Kong reverted to the sovereignty of China on July 1, 1997. As with any
major political transfer of power, this could result in political, social,
economic, market or other developments in Hong Kong, China or other countries
that could affect the value of Fund investments.
C. The discussions under "Portfolio Operations - Templeton International Equity
Fund, Templeton International Smaller Companies Fund, and Templeton Global Asset
Allocation Fund" is amended by replacing it with the following text:
Templeton International Equity Fund Templeton Global Asset
Allocation Fund
Howard J. Leonard Dale A. Winner
Mark Beveridge Jeffrey A. Everett
William Howard Sean Farrington
Templeton International Smaller Companies Fund High Income Fund
Simon Rudolph Jeff Holbrook
Peter A. Nori Chris Molumphy
R. Martin Wiskemann
D. The "Biographical Information" is amended by the addition of the following
text:
Howard J. Leonard
Senior Vice President and Portfolio Manager
Templeton Investment Counsel, Inc.
Mr. Leonard is a Chartered Financial Analyst and holds a bachelor of business
administration degree in finance and economics from Temple University. Prior to
joining the Franklin Templeton organization in 1989, Mr. Leonard was director of
investment research at First Pennsylvania Bank. Mr. Leonard has managed the
Templeton International Equity Fund since June 1997.
Peter A. Nori
Vice President and Portfolio Manager
Templeton Investment Counsel, Inc.
Mr. Nori is a Chartered Financial Analyst and holds both a Master of Business
Administration degree and a Bachelor of Science degree in finance from the
University of San Francisco. After completing the Franklin management training
program, Mr. Nori joined Franklin portfolio research in 1990 as an equity
analyst. In 1994, Mr. Nori joined the Templeton organization. He has managed the
Templeton International Smaller Companies Fund since June 1997.
Simon Rudolph
Vice President and Portfolio Manager
Templeton Investment Counsel, Inc.
Mr. Rudolph is a Chartered Accountant and holds a Bachelor of Arts degree in
economic history from Durham University in England. Mr. Rudolph has been a
securities analyst since 1986. Before joining the Franklin Templeton
organization in 1997, he was an executive director with Morgan Stanley. Mr.
Rudolph has managed the Templeton International Smaller Companies Fund since
June 1997.
Dale A. Winner
Portfolio Manager
Templeton Global Advisors Limited
Mr. Winner received his LLB from Reading University, England and is currently a
Level II Chartered Financial Analyst candidate. Prior to joining the Franklin
Templeton Group in 1995, Mr. Winner was a Trust Officer at J.P. Morgan, Bahamas
for two years. He has managed the Asset Allocation Fund since August 1997.
Jeff Holbrook
Portfolio Manager
Franklin Advisers, Inc.
Mr. Holbrook is a Chartered Financial Analyst and holds a Master of Business
Administration degree in Finance from University of Chicago and a Bachelor of
Science degree from Brigham Young University. Mr. Holbrook joined the Franklin
Templeton Group in July 1992. Mr. Holbrook is a member of several securities
industry-related associations. He has managed the High Income Fund since
September 1997.
