<PAGE> PAGE 1
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000 C000000 0000856119
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002 C000000 CA
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008 D030001 94403
008 D040001 7777
011 A000001 FRANKLIN/TEMPLETON DISTRIBUTORS, INC.
<PAGE> PAGE 2
011 B000001 8-5889
011 C010001 SAN MATEO
011 C020001 CA
011 C030001 94443
011 C040001 7777
012 A000001 FRANKLIN/TEMPLETON INVESTOR SERVICES, INC.
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012 C040001 7777
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015 D010005 AUSTRIA
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015 B000006 S
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015 D010006 BANGLADESH
015 E040006 X
015 A000007 BANQUE BRUXELLES LAMBERT SA
<PAGE> PAGE 3
015 B000007 S
015 C010007 BRUSSELS
015 D010007 BELGIUM
015 E040007 X
015 A000008 THE BANK OF N.T. BUTTERFIELD & SON
015 B000008 S
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015 D010008 BERMUDA
015 E040008 X
015 A000009 THE CANADA TRUST COMPANY
015 B000009 S
015 C010009 TORONTO
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015 E040009 X
015 A000010 HONG KONG AND SHANGHAI BANK
015 B000010 S
015 C010010 SHANGHAI
015 D010010 CHINA
015 E040010 X
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015 B000011 S
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015 E040011 X
015 A000012 UNIBANK A/S
015 B000012 S
015 C010012 COPENHAGEN
015 D010012 DENMARK
015 E040012 X
015 A000013 KANSALLIS OSAKE PANKKI
015 B000013 S
015 C010013 HELSINKI
015 D010013 FINLAND
015 E040013 X
015 A000014 SOCIETE GENERALE
015 B000014 S
015 C010014 NANTES
015 D010014 FRANCE
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015 A000015 BERLINER HANDLS-UND FRANKFURTER BANK
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015 D010015 GERMANY
015 E040015 X
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015 B000016 S
015 C010016 ATHENS
015 D010016 GREECE
015 E040016 X
015 A000017 BARCLAYS BANK PLC
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<PAGE> PAGE 4
015 C010017 HONG KONG
015 D010017 HONG KONG
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015 A000018 STANDARD CHARTERED BANK
015 B000018 S
015 C010018 BOMBAY
015 D010018 INDIA
015 E040018 X
015 A000019 HONG KONG & SHANGHAI BANK
015 B000019 S
015 C010019 JAKARTA
015 D010019 INDONESIA
015 E040019 X
015 A000020 BANK OF IRELAND
015 B000020 S
015 C010020 DUBLIN
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015 B000022 S
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015 A000024 HONG KONG AND SHANGHAI BANK
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015 C010026 KUALA LUMPUR
015 D010026 MALAYSIA
015 E040026 X
015 A000027 BANCO NACIONAL DE MEXICO
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<PAGE> PAGE 5
015 D010027 MEXICO
015 E040027 X
015 A000028 KAS-ASSOCIATIE N.V.
015 B000028 S
015 C010028 AMSTERDAM
015 D010028 NETHERLANDS
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015 A000029 ANZ BANKING GROUP LIMITED
015 B000029 S
015 C010029 WELLINGTON
015 D010029 NEW ZEALAND
015 E040029 X
015 A000030 CHRISTIANA BANK OG KREDITKASSE
015 B000030 S
015 C010030 BERGEN
015 D010030 NORWAY
015 E040030 X
015 A000031 STANDARD CHARTERED BANK
015 B000031 S
015 C010031 KARACHI
015 D010031 PAKISTAN
015 E040031 X
015 A000032 BANCO DE CREDITO DEL PERU
015 B000032 S
015 C010032 LIMA
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015 E040032 X
015 A000033 HONG KONG AND SHANGHAI BANK
015 B000033 S
015 C010033 MANILA
015 D010033 PHILIPPINES
015 E040033 X
015 A000034 BANCO ESPIRITO SANTO E COMMERCIAL
015 B000034 S
015 C010034 LISBON
015 D010034 PORTUGAL
015 E040034 X
015 A000035 BARCLAYS BANK PLC
015 B000035 S
015 C010035 SINGAPORE
015 D010035 SINGAPORE
015 E040035 X
015 A000036 STANDARD BANK OF SOUTH AFRICA LIMITED
015 B000036 S
015 C010036 JOHANNESBURG
015 D010036 SOUTH AFRICA
015 E040036 X
015 A000037 BANCO DE SANTANDER
015 B000037 S
015 C010037 MADRID
015 D010037 SPAIN
<PAGE> PAGE 6
015 E040037 X
015 A000038 HONG KONG AND SHANGHAI BANK
015 B000038 S
015 C010038 COLOMBO
015 D010038 SRI LANKA
015 E040038 X
015 A000039 SKANDINAVISKA ENSKILDA BANKEN
015 B000039 S
015 C010039 STOCKHOLM
015 D010039 SWEDEN
015 E040039 X
015 A000040 SWISS BANK CORPORATION
015 B000040 S
015 C010040 ZURICH
015 D010040 SWITZERLAND
015 E040040 X
015 A000041 BANGKOK BANK LIMITED
015 B000041 S
015 C010041 BANGKOK
015 D010041 THAILAND
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015 A000042 YAPI VE KREDI BANKASI A.S.
015 B000042 S
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015 D010042 TURKEY
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015 A000043 BANK OF AMERICA NT & SA
015 B000043 S
015 C010043 LONDON
015 D010043 UNITED KINDOM
015 E040043 X
015 A000044 CITIBANK, N.A.
015 B000044 S
015 C010044 CARACAS
015 D010044 VENEZUELA
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020 B000002 64-0604517
020 C000002 30
020 A000003 GOLDMAN SACHS & CO
020 B000003 13-5108880
020 C000003 26
020 A000004 KEMPER FINANCIAL SERVICES INC
020 B000004 36-2693816
<PAGE> PAGE 7
020 C000004 21
020 A000005 EDWARDS (A G) & SONS INC
020 B000005 43-0895447
020 C000005 18
020 A000006 CONNING & CO
020 B000006 06-1174588
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020 A000007 MORGAN STANLEY & CO INC
020 B000007 13-2655998
020 C000007 13
020 A000008 MERRILL LYNCH PIERCE FENNER
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020 C000008 13
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020 C000010 11
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022 C000002 332759
022 D000002 2125
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022 B000003 13-3038090
022 C000003 73545
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022 A000004 CITICORP/CITIBANK
022 B000004 13-3187336
022 C000004 90850
022 D000004 0
022 A000005 DONALDSON LUFKIN & JENRETTE
022 B000005 13-2741729
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022 C000006 31526
022 D000006 3638
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022 B000007 13-3154528
022 C000007 20666
022 D000007 0
022 A000008 MERRILL LYNCH PIERCE FENNER
022 B000008 13-5674085
022 C000008 6718
<PAGE> PAGE 8
022 D000008 1149
022 A000009 GREENWICH SECS
022 B000009 13-2697091
022 C000009 6248
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022 A000010 FOX-PITT KELTON INC
022 B000010 06-1058201
022 C000010 6170
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<PAGE> PAGE 9
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<PAGE> PAGE 10
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<PAGE> PAGE 11
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<PAGE> PAGE 12
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<PAGE> PAGE 13
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<PAGE> PAGE 14
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SIGNATURE KENNETH V. DOMINGUES
TITLE VP, TREAS, CFO, CAO
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE FRANKLIN BALANCE SHEET INVESTMENT FUND OCTOBER 31, 1994
ANNUAL REPORT AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1994
<PERIOD-START> NOV-01-1993
<PERIOD-END> OCT-31-1994
<INVESTMENTS-AT-COST> 131,269,661
<INVESTMENTS-AT-VALUE> 134,105,835
<RECEIVABLES> 1,582,845
<ASSETS-OTHER> 343,926
<OTHER-ITEMS-ASSETS> 6,796
<TOTAL-ASSETS> 136,039,402
<PAYABLE-FOR-SECURITIES> 76,250
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 388,156
<TOTAL-LIABILITIES> 1,784,545
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 129,045,375
<SHARES-COMMON-STOCK> 5,920,637
<SHARES-COMMON-PRIOR> 971,394
<ACCUMULATED-NII-CURRENT> 938
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 2,224,227
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2,984,317
<NET-ASSETS> 134,254,857
<DIVIDEND-INCOME> 956,052
<INTEREST-INCOME> 578,803
<OTHER-INCOME> 0
<EXPENSES-NET> 837,769
<NET-INVESTMENT-INCOME> 697,086
<REALIZED-GAINS-CURRENT> 2,224,227
<APPREC-INCREASE-CURRENT> 384,302
<NET-CHANGE-FROM-OPS> 3,305,615
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (718,426)
<DISTRIBUTIONS-OF-GAINS> (1,042,553)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5,433,555
<NUMBER-OF-SHARES-REDEEMED> 549,389
<SHARES-REINVESTED> 65,077
<NET-CHANGE-IN-ASSETS> 111,937,674
<ACCUMULATED-NII-PRIOR> 21,667
<ACCUMULATED-GAINS-PRIOR> 1,043,829
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 441,764
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 949,516
<AVERAGE-NET-ASSETS> 70,607,109
<PER-SHARE-NAV-BEGIN> 22.97
<PER-SHARE-NII> .23
<PER-SHARE-GAIN-APPREC> .51
<PER-SHARE-DIVIDEND> (.26)
<PER-SHARE-DISTRIBUTIONS> (.77)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 22.68
<EXPENSE-RATIO> 1.19
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors
of Franklin Balance Sheet Investment Fund:
In planning and performing our audit of the financial statements
and financial highlights of the Franklin Balance Sheet Investment
Fund for the year ended October 31, 1994, we considered its
internal control structure, including procedures for
safeguarding securities, in order to determine our auditing
procedures for the purpose of expressing our opinion on the
financial statements and financial highlights and to comply with
the requirements of Form N-SAR, not to provide assurance on the
internal control structure.
The management of Franklin Balance Sheet Investment Fund is
responsible for establishing and maintaining an internal control
structure. In fulfilling this responsibility, estimates and
judgements by management are required to assess the expected
benefits and related costs of internal control structure policies
and procedures. Two of the objectives of an internal control
structure are to provide management with reasonable, but not
absolute, assurance that assets are safeguarded against loss from
unauthorized use or disposition and that transactions are executed
in accordance with management's authorization and recorded properly
to permit preparation of financial statements in conformity with
generally accepted accounting principles.
Because of inherent limitations in any internal control structure,
errors or irregularities may occur and not be detected. Also,
projection of any evaluation of the structure to future periods
is subject to the risk that it may become inadequate because of
changes in conditions or that the effectiveness of the design and
operation may deteriorate.
Our consideration of the internal control structure would not
necessarily disclose all matters in the internal control structure
that might be material weaknesses under standards established by
the American Institute of Certified Public Accountants. A material
weakness is a condition in which the design or operation of the
specific internal control structure elements does not reduce to a
relatively low level the risk that errors or irregularities in
amounts that would be material in relation to the financial
statements and financial highlights being audited may occur and not
be detected within a timely period by employees in the normal
course of performing their assigned functions. However, we noted
no matters involving the internal control structure, including
procedures for safeguarding securities, that we consider to be
material weaknesses, as defined above, as of October 31, 1994.
This report is intended solely for the information and use of
management of Franklin Balance Sheet Investment Fund and the
Securities and Exchange Commission.
S\COOPERS AND LYBRAND L.L.P.
Coopers and Lybrand L.L.P.
San Francisco, California
December 27, 1994
