<PAGE>
TEMPLETON GLOBAL
OPPORTUNITIES TRUST
Your Fund's Objective:
The Templeton Global Opportunities Trust seeks long-term capital growth through
a flexible policy of investing in global securities. The fund invests primarily
in common stock and it may also invest in preferred stocks and certain debt
securities, rated or unrated, such as convertible bonds and bonds selling at a
discount.
February 15, 1995
Dear Shareholder:
1994 proved to be a somewhat unsettling year for the world's stock markets.
After the U.S. economy exhibited stronger-than-expected growth in the fourth
quarter of 1993, the Federal Reserve Board began raising short-term interest
rates in a pre-emptive strike against inflation. Over the course of the year,
the Board raised the federal funds rate six times from 3% to 5.5%. Subsequently
interest rates rose worldwide, leading to investor uncertainty and, in some
cases, declines in global stock markets.
The developing markets of the world bore the brunt of this unfavorable trend as
the International Finance Corporation (IFC) Emerging Markets Index fell 12.2%
for the year. Your Fund, which can invest up to 25% of its assets in developing
markets, was negatively affected by this and, as shown in the Performance
Summary on page 5, posted a total return of -4.09% for the year. The Morgan
Stanley Capital International (MSCI) World Index, which does not include most of
the developing markets, reported a total return of 5.6% for the same period.
Another reason for the Fund's shortfall relative to the index is the fact that
the Fund had no investments in Japan. If Japanese stocks were excluded from the
index, its return for the year would have been only 0.6%.
- --------------------------------------------------------------------------------
TEMPLETON GLOBAL OPPORTUNITIES TRUST
Geographic Distribution on 12/31/94
Based on Total Net Assets
[PIE CHART APPEARS HERE SHOWING
GEOGRAPHIC DISTRIBUTION OF THE FUND]
<TABLE>
<CAPTION>
Description Amount
----------------------- -----------------
<S> <C>
United States Stocks 20.5%
European Stocks 35.9
Short-term Obligations
and Other Net Assets 5.1
Asian Stocks 16.6
Fixed Income Securities 4.5
Latin American Stocks 5.2
Australian/New Zealand
Stocks 5.7
Other Stocks 6.5
</TABLE>
1
<PAGE>
While our presence in the developing markets and our absence from Japan hurt the
performance of the Fund over the short term, we believe that both of these
strategies will yield better results in the future. The strong performance of
the Japanese stock market was due in great part to the strength of Japan's
currency, and this strength may make it difficult for Japanese corporations to
improve their profitability in the future. Moreover, Japanese stocks remain the
most expensive in the world, while shares in the developing markets appear
inexpensive relative to their superior long-term growth potential. We have, of
course, always managed our investments with a long-term perspective and
encourage you to do the same. As you can see in the Performance Summary on page
5, the Fund has outperformed the MSCI during most years since its inception in
January 1990.
Aiding the performance of the Fund in 1994 was our exposure to basic material,
natural resources and capital equipment stocks. Of particular interest to us, is
the paper and forest products industry. We believe it will be helped not only by
the recovery in pricing that it is already experiencing, but also from two other
major trends that should favorably impact demand in coming years. First, rapidly
expanding developing market nations like China and India have very little wood
to make paper
- -------------------------------------------------------------
TEMPLETON GLOBAL OPPORTUNITIES TRUST
Top 10 Industries on 12/31/94
As a Percentage of Total Net Assets
<TABLE>
<CAPTION>
% of Total
Industry Net Assets
- -------------------------------------------------------------
<S> <C>
Forest Products & Paper 12.5%
- -------------------------------------------------------------
Banking 9.6%
- -------------------------------------------------------------
Metals & Mining 7.7%
- -------------------------------------------------------------
Financial Services 7.4%
- -------------------------------------------------------------
Energy Sources 6.5%
- -------------------------------------------------------------
Insurance 5.9%
- -------------------------------------------------------------
Telecommunications 5.8%
- -------------------------------------------------------------
Electrical & Electronics 3.5%
- -------------------------------------------------------------
Building Materials & Components 3.3%
- -------------------------------------------------------------
Health & Personal Care 3.3%
- -------------------------------------------------------------
</TABLE>
and are turning to imports from the U.S., Indonesia and Europe. Second, Japan,
the world's second largest consumer of paper cannot make it profitably at
current world prices, which could mean sizable new demand for the rest of the
world's paper producers.
Another area of emphasis for the Fund has been financial services stocks. Market
conditions in 1994 were not favorable for these stocks, but we believe that
substantial long-term opportunities exist in this area. Holdings in this sector
include Credit Suisse, Merrill Lynch and Morgan Stanley, all of which have the
global underwriting capacity and significant asset management arms necessary to
2
<PAGE>
participate in the worldwide growth of capitalism. Peregrine Investments
Holdings, Ltd., Hong Kong's biggest investment bank, and one of the Fund's
largest holdings, is uniquely positioned to benefit from the growth of
capitalism in China and throughout Asia.
Our positions in the U.S., which represented 20.5% of the Fund's assets on
December 31, 1994, reflect our previously noted interest in basic material,
natural resources and capital equipment stocks. In addition to paper and forest
product companies, energy, retailing, technology and financial stocks also
figure prominently in our U.S. holdings. We are relatively comfortable with our
U.S. exposure, but we can foresee taking some profits on the paper stocks if
their prices move higher.
The Nordic stock markets were among the world's best performing in 1994, and our
significant weighting in this region enabled us to participate in their
excellent results. In fact, five of our ten largest holdings on December 31,
were Swedish, Danish or Finnish companies purchased in 1994. Our holdings in
this area are largely in companies that should benefit from higher raw material
prices and Scandinavia's improved export prospects. We believe that many of
these shares, despite performing well in
- ---------------------------------------------------------------
TEMPLETON GLOBAL OPPORTUNITIES TRUST
Top 10 Holdings on 12/31/94
As a Percentage of Total Net Assets
<TABLE>
<CAPTION>
% of Total
Company, Industry, Country Net Assets
- ---------------------------------------------------------------
<S> <C>
Newbridge Networks Corp.; Data
Processing & Reproduction, Canada 2.3%
- ---------------------------------------------------------------
Peregrine Investments Holdings, Ltd.;
Financial Services, Hong Kong 1.9%
- ---------------------------------------------------------------
Astra AB, B; Health & Personal Care,
Sweden 1.8%
- ---------------------------------------------------------------
Assidomaen AB, B; Forest Products &
Paper, Sweden 1.7%
- ---------------------------------------------------------------
Volvo AB, B; Automobiles, Sweden 1.5%
- ---------------------------------------------------------------
Outokumpu OY; Metals and Mining,
Finland 1.5%
- ---------------------------------------------------------------
Teledanmark AS, B; Telecommunications,
Denmark 1.5%
- ---------------------------------------------------------------
Govett & Co., Ltd.; Financial Services,
United Kingdom 1.5%
- ---------------------------------------------------------------
Metall Mining Corp.; Metals & Mining,
Canada 1.4%
- ---------------------------------------------------------------
Iberdrola SA; Utilities, Spain 1.4%
- ---------------------------------------------------------------
</TABLE>
For a complete list of portfolio holdings, see page 7
of this report.
1994, are still bargains based on our long-term earnings estimates.
The price declines suffered by many developing markets during the year presented
us with opportunities to purchase shares at what we believed were bargain
prices. During the year, we took positions in Colombia, Indonesia, Pakistan,
Venezuela, Argentina and Greece.
3
<PAGE>
In Colombia, we purchased Banco Ganadero, a rapidly growing bank, and Cementos
Diamante, a strategically positioned cement producer. In Indonesia, we added PT
Jaya Properties, a residential property developer with strong earnings
potential. And in Pakistan, we bought Dhan Fibres, a Pakastani synthetic fiber
producer, which we believe should experience an increase in earnings from a new
factory scheduled to begin production in mid-1995.
Looking forward, we anticipate that increasing demand for goods and services
from developing countries will lead to the continuation of worldwide economic
growth. We believe financial markets in these countries should benefit from the
development of pension and mutual fund industries, which could create as much as
$2 to $3 trillion in new demand for stocks and bonds during the next decade.
While the future is impossible to predict, and we do not know when the next bull
market will begin, we do know that Templeton research analysts located around
the world will be working diligently to discover investment opportunities that
may provide our shareholders with rewarding gains.
There are, of course, special risks involved with global investing related to
market, currency, economic, political and other factors. Developing markets
involve heightened risks related to these same factors, in addition to those
associated with the relatively small size and lesser liquidity of these markets.
These risks are discussed in the Fund's prospectus.
We thank you for the trust you have placed in us and look forward to helping you
meet your financial objectives in the years to come.
Sincerely,
/s/ Martin L. Flanagan
Martin L. Flanagan
President
Templeton Global Opportunities Trust
/s/ Howard J. Leonard
Howard J. Leonard
Portfolio Manager
4
<PAGE>
PERFORMANCE SUMMARY
The Templeton Global Opportunities Trust reported a total return of -4.09% for
the one-year period ended December 31, 1994. Total return measures the change in
value of an investment, assuming reinvestment of dividends and capital gains
distributions, and does not include the initial sales charge.
We have always maintained a long-term perspective when managing the Fund, and we
encourage shareholders to view their investments in a similar manner. As you can
see from the chart to the right, the Fund has delivered a cumulative total
return of more than 73% since inception on January 19, 1990.
During the reporting period, shareholders received distributions of 9 cents
($0.09) per share in income dividends, 24 cents ($0.24) per share in short-term
capital gains, and 1.745 dollars ($1.745) per share in long-term capital gains.
The Fund's share price, as measured by net asset value, decreased from $14.46 on
December 31, 1993 to $11.84 on December 31, 1994. Of course, past performance is
not indicative of future results, and distributions will vary depending on
income earned by the Fund, as well as any profits realized from the sale of
securities in the portfolio.
The graph to the right shows how an investment in the Templeton Global
Opportunities Trust, since its inception on January 19, 1990, has kept your
purchasing power ahead of inflation, as measured by the Consumer Price Index
(CPI), during most of this time. It also shows that, during most of this time,
the Fund has outperformed the unmanaged Morgan Stanley Capital International
(MSCI) World Index, which tracks 22 equity markets worldwide. Please remember
that the Fund's performance differs from that of the index because the index
does not contain cash (the Fund generally carries a certain percentage of cash
at any given time) and includes no sales charges or management expenses. Of
course, one cannot invest directly in an index.
TEMPLETON GLOBAL OPPORTUNITIES TRUST
Total Return Index Corporation
$10,000 Investment (1/19/90-12/31/94)
[GRAPH APPEARS HERE SHOWING COMPARISON BETWEEN TEMPLETON GLOBAL OPPORTUNITIES
TRUST, MSCI WORLD INDEX, AND THE CPI*]
<TABLE>
<CAPTION>
1/19/94 12/31/94
------- --------
<S> <C> <C>
Templeton Global Opportunities
Trust $10,000 $16,315
MSCI World Index $10,000 $12,671
CPI** $10,000 $11,797
</TABLE>
1. Includes all sales charges and represents the change in value of an
investment over the period shown. Total return assuming reinvestment of
dividends and capital gains. Past performance is not indicative of future
results.
2. Includes reinvested dividends.
3. Source: U.S. Bureau of Labor Statistics
- --------------------------------------------------------------------------------
TEMPLETON GLOBAL OPPORTUNITIES TRUST
Periods ended December 31, 1994
<TABLE>
<CAPTION>
Since
Inception
One-Year Three-Year (1/19/90)
<S> <C> <C> <C>
Average Annual
Total Return/1/ -9.61% 10.11% 10.42%
Cumulative
Total Return/2/ -4.09% 41.67% 73.19%
</TABLE>
1. Average annual total return calculations include the maximum 5.75% initial
sales charge and represent the average annual change in value of an investment
over the specified periods.
2. Cumulative total return shows the change in value of an investment over the
periods indicated. These calculations do not include the maximum 5.75% initial
sales charge.
Note: Prior to July 1, 1992, Fund shares were offered at a higher sales charge.
Thus, actual total return would have been somewhat lower than noted above.
All total return calculations assume reinvestment of dividends and capital gains
distributions when paid.
Investment return and principal value will fluctuate with market conditions,
currencies and the economic and political climates of the countries where
investments are made. Developing markets involve heightened risks related to the
same factors, in addition to those associated with the relatively small size and
lesser liquidity of these markets. Because of these factors, your shares, when
redeemed, may be worth more or less than their original cost. Past performance
is not predictive of future results.
5
<PAGE>
Templeton Global Opportunities Trust
Financial Highlights
- --------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
FEBRUARY 28, 1990
YEAR ENDED DECEMBER 31 (COMMENCEMENT OF
-------------------------------------- OPERATIONS) TO
1994 1993 1992 1991 DECEMBER 31, 1990
-------- -------- -------- -------- -----------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 14.46 $ 10.75 $ 10.94 $ 8.36 $ 9.40
-------- -------- -------- -------- --------
Income from investment
operations:
Net investment income .09 .12 .14 .17 .27
Net realized and
unrealized gain (loss) (.63) 3.97 .61 2.59 (1.04)
-------- -------- -------- -------- --------
Total from investment
operations (.54) 4.09 .75 2.76 (.77)
-------- -------- -------- -------- --------
Distributions:
Dividends from net
investment income (.09) (.11) (.14) (.01) (.27)
Distributions from net
realized gains (1.99) (.27) (.65) (.17) --
Amount in excess of net
realized gains -- -- (.15) -- --
-------- -------- -------- -------- --------
Total distributions (2.08) (.38) (.94) (.18) (.27)
-------- -------- -------- -------- --------
Change in net asset
value (2.62) 3.71 (.19) 2.58 (1.04)
-------- -------- -------- -------- --------
Net asset value, end of
year $ 11.84 $ 14.46 $ 10.75 $ 10.94 $ 8.36
======== ======== ======== ======== ========
TOTAL RETURN * (4.09)% 38.13% 6.85% 31.16% (8.19)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year
(000) $476,822 $410,747 $248,807 $200,848 $159,018
Ratio of expenses to
average net assets 1.53% 1.51% 1.63% 1.76% 1.64%**
Ratio of net investment
income to average net
assets 0.71% 1.07% 1.36% 1.63% 3.55%**
Portfolio turnover rate 37.31% 40.56% 22.03% 21.02% 15.92%
</TABLE>
*TOTAL RETURN DOES NOT REFLECT SALES COMMISSIONS. NOT ANNUALIZED IN PERIODS OF
LESS THAN ONE YEAR.
**ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE>
Templeton Global Opportunities Trust
Investment Portfolio, December 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
<C> <S> <C> <C> <C>
- -------------------------------------------------------------------------------
COMMON STOCKS: 87.5%
- -------------------------------------------------------------------------------
Aerospace & Military Technical Systems:
0.3%
British Aerospace PLC U.K. 200,000 $ 1,337,651
- -------------------------------------------------------------------------------
Automobiles: 2.1%
Ciadea SA Arg. 300,000 2,624,869
Volvo AB, B Swe. 384,000 7,234,996
------------
9,859,865
- -------------------------------------------------------------------------------
Banking: 6.8%
Banco Ganadero, ADR Col. 85,000 1,721,250
Banco Popular Espanol Sp. 35,000 4,161,444
Banco Portugues de
Investimento SA Port. 85,000 1,270,828
Barclays Bank PLC U.K. 10,393 99,267
Ergo Bank SA Gr. 50,050 2,062,660
*Foereningsbanken AB, A Swe. 2,000,000 3,902,807
Korea Long Term Credit Bank Kor. 20,000 621,433
*Korea Long Term Credit
Bank, new Kor. 3,758 114,384
National Australia Bank
Ltd. Aus. 424,214 3,400,526
National Bank of Greece SA Gr. 78,000 3,628,738
Philippine National Bank Phil. 82,311 1,163,824
Shinhan Bank Co. Ltd. Kor. 65,000 1,541,535
Signet Banking Corp. U.S. 116,800 3,343,400
*Stadshypotek AB, A Swe. 426,600 5,626,340
------------
32,658,436
- -------------------------------------------------------------------------------
Broadcasting & Publishing: 0.8%
News Corp. Ltd. Aus. 604,576 2,366,916
Sing Tao Holdings Ltd. H.K. 1,911,800 1,198,350
------------
3,565,266
- -------------------------------------------------------------------------------
Building Materials & Components: 3.2%
*Aker A/S, A Nor. 404,700 4,817,501
Cementos Diamante, ADR Col. 174,000 4,089,000
*Owens-Corning Fiberglas
Corp. U.S. 125,000 4,000,000
Tolmex Empresas Tolteca de
Mexico SA Mex. 250,000 2,100,000
------------
15,006,501
- -------------------------------------------------------------------------------
Business & Public Services: 1.0%
Laidlaw Inc., B Can. 600,000 4,811,976
- -------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
Templeton Global Opportunities Trust
Investment Portfolio, December 31, 1994 (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
<C> <S> <C> <C> <C>
- -------------------------------------------------------------------------------
COMMON STOCKS (CONT.)
- -------------------------------------------------------------------------------
Chemicals: 2.1%
*European Vinyls Corp. EVC
International NV Neth. 117,400 $ 5,200,795
*Gujarat Narmada Valley
Fertilizers Co. Ltd., GDR Ind. 393,000 4,617,750
------------
9,818,545
- -------------------------------------------------------------------------------
Construction & Housing: 1.3%
*National Gypsum Co. U.S. 150,000 6,112,500
- -------------------------------------------------------------------------------
Data Processing & Reproduction: 2.6%
*Conner Peripherals Inc. U.S. 150,000 1,425,000
*Newbridge Networks Corp. Can. 281,100 10,752,075
------------
12,177,075
- -------------------------------------------------------------------------------
Electrical & Electronics: 3.5%
BBC Brown Boveri AG, br. Swtz. 7,248 6,238,589
Great Wall Electronic In-
ternational Ltd. H.K. 18,724,000 1,476,141
Motorola Inc. U.S. 70,000 4,051,250
Philips Electronics NV Neth. 170,000 5,033,700
------------
16,799,680
- -------------------------------------------------------------------------------
Electronic Components & Instruments: 0.8%
Intel Corp. U.S. 60,000 3,832,500
- -------------------------------------------------------------------------------
Energy Equipment & Services: 0.4%
*Parker Drilling Co. U.S. 378,000 1,795,500
- -------------------------------------------------------------------------------
Energy Sources: 6.5%
Amerada Hess Corp. U.S. 50,000 2,281,250
Societe National Elf
Aquitane Fr. 55,000 3,870,904
Tosco Corp. U.S. 180,000 5,242,500
Total SA, B Fr. 100,000 5,807,901
*Transocean Drilling AS Nor. 750,000 6,266,174
Valero Energy Corp. U.S. 161,400 2,723,625
*Wascana Energy Inc. Can. 675,000 4,811,976
------------
31,004,330
- -------------------------------------------------------------------------------
Financial Services: 6.5%
Alex Brown & Sons Co. U.S. 80,000 2,430,000
Federal National Mortgage
Assn. U.S. 55,000 4,008,125
Govett & Co. Ltd. U.K. 1,243,900 6,928,070
Merrill Lynch & Co. Inc. U.S. 100,000 3,575,000
Morgan Stanley Group U.S. 83,000 4,897,000
Peregrine Investments Hold-
ings Ltd. H.K. 7,750,000 9,114,701
------------
30,952,896
- -------------------------------------------------------------------------------
</TABLE>
8
<PAGE>
Templeton Global Opportunities Trust
Investment Portfolio, December 31, 1994 (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
<C> <S> <C> <C> <C>
- ------------------------------------------------------------------------------
COMMON STOCKS (CONT.)
- ------------------------------------------------------------------------------
Food & Household Products: 1.1%
Albert Fisher Group PLC U.K. 500,000 $ 371,570
Amway Asia Pacific Ltd. U.S. 10,600 344,500
Cafe de Coral Group Ltd. H.K. 7,599,000 1,865,990
Grupo Embotellador de Mex-
ico SA, B Mex. 123,400 950,180
Hellenic Bottling Co. SA Gr. 50,830 1,799,479
------------
5,331,719
- ------------------------------------------------------------------------------
Forest Products & Paper: 12.1%
*Assidomaen AB Swe. 345,000 8,218,100
Boise Cascade Corp. U.S. 100,000 2,675,000
Bowater Inc. U.S. 180,000 4,792,500
Carter Holt Harvey Ltd. N.Z. 3,084,890 6,319,351
Empaques Ponderosa SA, B Mex. 500,000 1,250,000
Enso Gutzeit (OY), R Fin. 625,000 5,369,280
Fletcher Forestry, N.Z. N.Z. 3,762,518 4,504,048
Georgia-Pacific Corp. U.S. 75,000 5,362,500
International Paper Co. U.S. 60,000 4,522,500
Mead Corp. U.S. 90,000 4,376,250
PT Barito Pacific Timber,
fgn. Indo. 3,543,500 5,602,212
Rayonier Inc. U.S. 155,000 4,727,500
------------
57,719,241
- ------------------------------------------------------------------------------
Health & Personal Care: 3.3%
Astra AB, B Swe. 340,000 8,670,960
Medeva PLC U.K. 2,000,900 5,102,580
Windmere Corp. U.S. 225,000 1,771,875
------------
15,545,415
- ------------------------------------------------------------------------------
Industrial Components: 1.0%
Goodyear Tire & Rubber Co. U.S. 150,000 5,043,750
- ------------------------------------------------------------------------------
Insurance: 5.9%
Ace Ltd. Bmu. 171,000 3,997,125
American International
Group Inc. U.S. 50,000 4,900,000
Baloise-Holding, Basel Swtz. 2,269 4,124,352
CCP Insurance Inc. U.S. 150,000 3,056,250
GIO Austrailia Holdings
Ltd. Aus. 2,000,000 3,798,715
National Mutual Asia Ltd. H.K. 9,612,000 6,335,535
Presidential Life Corp. U.S. 375,000 1,968,750
------------
28,180,727
- ------------------------------------------------------------------------------
</TABLE>
9
<PAGE>
Templeton Global Opportunities Trust
Investment Portfolio, December 31, 1994 (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
<C> <S> <C> <C> <C>
- -------------------------------------------------------------------------------
COMMON STOCKS (CONT.)
- -------------------------------------------------------------------------------
Leisure & Tourism: 0.9%
Reisebuero Kuoni AG, partn.
ctf. Swtz. 159 $ 4,432,352
- -------------------------------------------------------------------------------
Machinery & Engineering: 2.0%
*Tampella AB (OY) Fin. 688,333 2,034,081
*Tampella AB (OY), 144A Fin. 801,667 2,368,992
*VA Technologie AG, br. Aust. 52,300 5,264,763
------------
9,667,836
- -------------------------------------------------------------------------------
Merchandising: 2.8%
Cifra SA, B Mex. 501,000 1,014,024
Dayton-Hudson Corp. U.S. 60,000 4,245,000
*Jan Bell Marketing Inc. U.S. 310,000 1,240,000
Limited Inc. U.S. 235,000 4,259,375
*Waban Inc. U.S. 140,000 2,485,000
------------
13,243,399
- -------------------------------------------------------------------------------
Metals & Mining: 7.7%
Aluminum Co. of America U.S. 70,000 6,063,750
Comalco Ltd. Aus. 900,000 3,488,615
*Elkem AS, A Nor. 323,800 4,189,649
*Metall Mining Corp. Can. 800,000 6,843,700
*Outokumpu (OY), A Fin. 379,175 6,963,067
*Outokumpu (OY), wts. Fin. 291,975 258,843
Pechiney SA, invt. ctf. Fr. 75,000 5,055,233
Trelleborg AB, B Swe. 264,500 3,862,197
------------
36,725,054
- -------------------------------------------------------------------------------
Multi-Industry: 1.1%
Fotex First Hungarian-Amer-
ican Photo-Service Hun. 775,200 2,345,322
Swire Pacific Ltd., A H.K. 500,000 3,114,701
------------
5,460,023
- -------------------------------------------------------------------------------
Real Estate: 1.2%
PT Jaya Properties, fgn. Indo. 1,799,000 5,729,299
- -------------------------------------------------------------------------------
Telecommunications: 3.2%
*Teledanmark AS, B Den. 138,000 7,009,682
Telefonica de Espana SA Sp. 340,000 4,016,714
Telefonos de Mexico SA, ADR
L Mex. 2,000,000 4,096,000
------------
15,122,396
- -------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
Templeton Global Opportunities Trust
Investment Portfolio, December 31, 1994 (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
<C> <S> <C> <C> <C>
- -------------------------------------------------------------------------------
COMMON STOCKS (CONT.)
- -------------------------------------------------------------------------------
Textiles & Apparel: 1.2%
*Dhan Fibres Pkr 13,575,000 $ 5,867,800
- -------------------------------------------------------------------------------
Transportation: 2.7%
Airborne Freight Corp. U.S. 200,000 4,100,000
Cathay Pacific Airways Ltd. H.K. 2,000,000 2,907,916
*Shanghai Hai Xing Shipping
Co., H Chn. 20,611,000 3,942,395
Singapore Bus Service Ltd.,
fgn. Sing. 261,100 2,060,137
------------
13,010,448
- -------------------------------------------------------------------------------
Utilities Electrical & Gas: 2.6%
Consolidated Electric Power
Asia Ltd., ADR H.K. 220,000 4,771,250
Electricidad de Caracas Venz. 1,097,733 1,331,586
Iberdrola SA Sp. 1,050,000 6,477,493
------------
12,580,329
- -------------------------------------------------------------------------------
Wholesale & International Trade: 0.8%
Brierley Investments Ltd. N.Z. 3,799,599 2,748,521
Sime Darby Hongkong Ltd. H.K. 1,127,000 1,252,627
------------
4,001,148
------------
TOTAL COMMON STOCKS (cost $396,218,643) 417,393,657
- -------------------------------------------------------------------------------
PREFERRED STOCKS: 2.9%
- -------------------------------------------------------------------------------
ABN Amro Holdings NV,
conv., pfd. Neth. 90,000 2,996,716
Kaufman & Broad Home Corp.,
conv., pfd. U.S. 77,000 1,029,875
News Corp. Ltd., conv.,
pfd. Aus. 302,288 1,040,506
Philippine Long Distance
Telephone Co., conv., pfd. Phil. 105,000 5,683,125
Telebras-Telecomunicacoes
Brasileiras SA, pfd. Braz. 65,000 2,925,000
------------
TOTAL PREFERRED STOCKS (cost $11,962,772) 13,675,222
- -------------------------------------------------------------------------------
</TABLE>
11
<PAGE>
Templeton Global Opportunities Trust
Investment Portfolio, December 31, 1994 (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL IN
ISSUE COUNTRY LOCAL CURRENCY** VALUE
<C> <S> <C> <C> <C>
- --------------------------------------------------------------------------------
BONDS: 4.5%
- --------------------------------------------------------------------------------
Banco Nacional de Mexico
SA, 7.00%, conv.,
12/15/99 U.S. 3,530,000 $ 2,859,300
Brierley Investments
Ltd., 9.00%, conv.,
6/30/98 N.Z. 849,949 557,997
C.S. Holding Finance BV,
4.875%, conv., 11/19/02 U.S. 2,800,000 3,542,000
Gujarat Ambuja Cements
Ltd., 3.50%, conv.,
6/30/99 U.S. 500,000 747,500
Industrial. Credit &
Invest. Corp. of India,
2.50%, conv. 4/3/00 U.S. 5,610,000 4,193,475
PT Inti Indorayon Utama,
5.50%, conv., 10/01/02 U.S. 1,680,000 1,881,600
SCICI Ltd., 3.50%,
conv., 4/01/04 U.S. 3,940,000 3,467,200
Softe SA, 4.25%, conv.,
7/30/98 Itl. 6,400,000,000 4,113,440
------------
TOTAL BONDS (cost $26,234,141) 21,362,512
- --------------------------------------------------------------------------------
SHORT TERM OBLIGATIONS: 3.4% (cost $16,430,163)
- --------------------------------------------------------------------------------
U.S. Treasury Bills,
4.10% to 5.26% with
maturities to 2/9/95 U.S. 16,470,000 16,432,689
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS: 98.3% (cost
$450,845,719) 468,864,080
OTHER ASSETS, LESS LIABILITIES: 1.7% 7,958,170
------------
TOTAL NET ASSETS: 100.0% $476,822,250
============
</TABLE>
*NON-INCOMING PRODUCING.
**PRINCIPAL AMOUNT IN CURRENCY OF COUNTRY INDICATED.
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE>
Templeton Global Opportunities Trust
Financial Statements
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1994
<TABLE>
<S> <C>
Assets:
Investment in securities, at value (identified cost $450,845,719) $468,864,080
Receivables:
Investment securities sold 6,375,000
Fund shares sold 2,436,188
Dividends and interest 1,227,802
Unamortized organization costs 9,230
------------
Total assets 478,912,300
------------
Liabilities:
Payables:
Investment securities purchased 252,432
Fund shares redeemed 701,971
Accrued expenses 1,135,647
------------
Total liabilities 2,090,050
------------
Net assets, at value $476,822,250
============
Net assets consist of:
Undistributed net investment income $ 369,438
Net unrealized appreciation 18,018,361
Accumulated net realized gain 6,726,226
Net capital paid in on shares of beneficial interest 451,708,225
------------
Net assets, at value $476,822,250
============
Shares outstanding 40,256,788
============
Net asset value per share ($476,822,250 / 40,256,788) $ 11.84
============
Maximum offering price ($11.84 / 94.25%) $ 12.56
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF OPERATIONS
for the year ended December 31, 1994
<TABLE>
<S> <C> <C>
Investment income:
(net of $590,993
foreign taxes withheld)
Dividends $ 8,700,140
Interest 1,923,835
------------
Total income $ 10,623,975
Expenses:
Management fees (Note 3) 3,794,011
Administrative fees (Note 3) 670,170
Distribution fees (Note 3) 1,187,627
Transfer agent fees (Note 3) 616,700
Custodian fees 356,000
Reports to shareholders 315,500
Audit fees 44,500
Legal fees 18,000
Registration and filing fees 99,000
Trustees' fees and expenses 22,000
Amortization of organization costs 59,068
Other 83,486
------------
Total expenses 7,266,062
------------
Net investment income 3,357,913
Realized and unrealized
gain (loss):
Net realized gain (loss) on:
Investments 39,076,316
Foreign currency transactions (1,148,323)
------------
37,927,993
Net unrealized depreciation on investments (61,432,182)
------------
Net realized and unrealized loss (23,504,189)
------------
Net decrease in net assets resulting from
operations $(20,146,276)
============
</TABLE>
13
<PAGE>
Templeton Global Opportunities Trust
Financial Statements (cont.)
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
for the years ended December 31, 1994 and 1993
<TABLE>
<CAPTION>
1994 1993
------------ ------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income $ 3,357,913 $ 3,310,230
Net realized gain from security and foreign
currency transactions 37,927,993 46,495,902
Net unrealized appreciation (depreciation) (61,432,182) 51,881,461
------------ ------------
Net increase (decrease) in net assets from
operations (20,146,276) 101,687,593
Distributions to shareholders:
From net investment income (3,328,344) (2,970,361)
From net realized gain (67,015,314) (7,291,765)
Fund share transactions (Note 2) 156,565,008 70,514,617
------------ ------------
Net increase in net assets 66,075,074 161,940,084
Net assets:
Beginning of year 410,747,176 248,807,092
------------ ------------
End of year $476,822,250 $410,747,176
============ ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE>
Templeton Global Opportunities Trust
Notes to Financial Statements
- --------------------------------------------------------------------------------
1. SUMMARY OF ACCOUNTING POLICIES
Templeton Global Opportunities Trust (the Fund) is a Massachusetts business
trust and an open-end, diversified management investment company registered un-
der the Investment Company Act of 1940. The following summarizes the Fund's
significant accounting policies.
a. Securities Valuations:
Securities listed or traded on a recognized national or foreign stock exchange
or NASDAQ are valued at the last reported sales prices on the principal ex-
change on which the securities are traded. Over-the-counter securities and
listed securities for which no sale is reported are valued at the mean between
the last current bid and asked prices. Securities for which market quotations
are not readily available are valued at fair value as determined by management
and approved in good faith by the Board of Trustees.
b. Foreign Currency Translations:
Portfolio securities and other assets and liabilities denominated in foreign
currencies are translated into U.S. dollars based on the rate of exchange of
such currencies against U.S. dollars on the date of valuation. Purchases and
sales of portfolio securities and income items denominated in foreign curren-
cies are translated into U.S. dollar amounts on the respective dates of such
transactions. When the Fund purchases or sells foreign securities it customar-
ily enters into foreign exchange contracts to minimize foreign exchange risk
between the trade date and the settlement date of such transactions.
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from sales of for-
eign currencies, currency gains or losses realized between the trade and set-
tlement dates on securities transactions, the differences between the amounts
of dividends, interest, and foreign withholding taxes recorded on the Fund's
books, and the U.S. dollar equivalent of the amounts actually received or paid.
Net unrealized foreign exchange gains and losses arise from changes in the
value of assets and liabilities other than investments in securities at the end
of the fiscal period, resulting from changes in the exchange rate.
c. Income Taxes:
It is the Fund's policy to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all its
taxable income to its shareholders. Therefore, no provision has been made for
income taxes.
d. Unamortized Organization Costs:
Organization costs are being amortized on a straight line basis over a five
year period.
e. Security Transactions, Investment Income, Distributions and Expenses:
Security transactions are accounted for on a trade date basis. Dividend income
is recorded on the ex-dividend date. Certain dividend income from foreign secu-
rities is recorded as soon as information is available to the Fund. Interest
income and estimated expenses are accrued daily. Distributions to shareholders,
which are determined in accordance with income tax regulations, are recorded on
the ex-dividend date.
15
<PAGE>
Templeton Global Opportunities Trust
Notes to Financial Statements (cont.)
- --------------------------------------------------------------------------------
2. TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
At December 31, 1994, there were an unlimited number of shares of beneficial
interest authorized ($0.01 par value). Transactions in the Fund's shares were
as follows for the years ended December 31, 1994 and 1993 were as follows:
<TABLE>
<CAPTION>
1994 1993
-------------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ---------- ------------
<S> <C> <C> <C> <C>
Shares sold 18,544,844 $ 250,256,892 9,711,476 $128,427,917
Shares issued in
reinvestment of
distributions 4,980,654 62,368,806 647,485 9,156,322
Shares redeemed (11,680,771) (156,060,690) (5,085,439) (67,069,622)
----------- ------------- ---------- ------------
Net increase 11,844,727 $ 156,565,008 5,273,522 $ 70,514,617
=========== ============= ========== ============
</TABLE>
3. INVESTMENT MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Certain officers of the Fund are also directors or officers of Templeton In-
vestment Counsel, Inc. (TICI), Templeton Global Investors, Inc. (TGII), Frank-
lin Templeton Distributors, Inc. (FTD) and Franklin Templeton Investor Servic-
es, Inc. (FTIS), the Fund's investment manager, administrative manager, princi-
pal underwriter, and transfer agent, respectively. The Fund pays monthly an in-
vestment management fee to TICI equal, on an annual basis, to 0.80% of the av-
erage daily net assets of the Fund. The fee is subject to reduction in any year
to the extent that expenses (exclusive of certain expenses) of the Fund exceed
2 1/2% of the first $30 million of net assets, 2% of the next $70 million of
net assets and 1 1/2% of the remainder. During the year ended December 31,
1994, no reduction in fee was required as a result of this limitation. The In-
vestment Manager has entered into a Sub-Advisory Agreement with Dean Witter
InterCapital, Inc. (InterCapital) a subsidiary of Dean Witter, Discover & Co.
whereby InterCapital provides the Investment Manager with economic, market, in-
dustry, asset allocation and foreign currency research. For its services, the
Investment Manager pays InterCapital a fee equal, on an annual basis, to 0.25%
of the Fund's average daily net assets. The Fund pays TGII an administrative
fee of 0.15% per annum on the first $200 million of the Fund's average daily
net assets, 0.135% of the next $500 million, 0.10% of the next $500 million,
and 0.075% per annum of such average net assets in excess of $1.2 billion. For
the year ended December 31, 1994, FTD received net commissions of $771,208 from
the sale of the Fund's shares and FTIS received fees of $616,700.
Pursuant to a Distribution Plan, the Fund reimburses FTD monthly, the substan-
tial portion of which is paid to Dean Witter, Discover & Co. and other dealers
who distribute the Fund's shares, for FTD's costs and expenses in connection
with any activity that is primarily intended to result in a sale of Fund
shares, subject to a maximum of 0.25% per annum of the Fund's average daily net
assets. Such distribution fees are set forth in the Statement of Operations.
4. PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities (excluding short-term securities) for the
year ended December 31, 1994 aggregated $308,224,460 and $166,395,481, respec-
tively. The cost of securities for federal income tax purposes is the same as
that shown in the investment portfolio. Realized gains and losses are reported
on an identified cost basis.
At December 31, 1994, the aggregate gross unrealized appreciation and deprecia-
tion of portfolio securities, based on cost for federal income tax purposes,
was as follows:
<TABLE>
<S> <C>
Unrealized appreciation $ 63,535,768
Unrealized depreciation (45,517,407)
------------
Net unrealized appreciation $ 18,018,361
============
</TABLE>
16
<PAGE>
Templeton Global Opportunities Trust
Independent Auditor's Report
- --------------------------------------------------------------------------------
The Board of Trustees and Shareholders Templeton Global Opportunities Trust
We have audited the accompanying statement of assets and liabilities, including
the investment portfolio, of Templeton Global Opportunities Trust as of Decem-
ber 31, 1994, and the related statement of operations for the year then ended,
the statement of changes in net assets for each of the two years in the period
then ended and the financial highlights for each of the four years in the pe-
riod then ended and for the period from February 28, 1990 (commencement of op-
erations) to December 31, 1990. These financial statements and financial high-
lights are the responsibility of the Fund's management. Our responsibility is
to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing stan-
dards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial high-
lights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of De-
cember 31, 1994, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant esti-
mates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Templeton Global Opportunities Trust as of December 31, 1994, the results of
its operations, the changes in its net assets and the financial highlights for
the periods indicated, in conformity with generally accepted accounting
principles.
[SIGNATURE OF MCGLADREY & PULLEN, LLP APPEARS HERE]
New York, New York February 3, 1995
17
<PAGE>
NOTES
-----
<PAGE>
The Franklin Templeton Group
- --------------------------------------------------------------------------------
To receive a free brochure and prospectus, which contain more complete informa-
tion, including charges and expenses on each of the funds listed below, call
Franklin Fund Information, toll free, at 1-800-DIAL-BEN (1-800-342-5236) or
Templeton Fund Information at 1-800-292-9293. Please read the prospectus care-
fully before you invest or send money.
TEMPLETON
FAMILY OF FUNDS
Franklin Templeton Japan Fund
Templeton American Trust
Templeton Americas
Government Securities Fund
Templeton Developing
Markets Trust
Templeton Foreign Fund
Templeton Global
Infrastructure Fund
Templeton Global
Opportunities Trust
Templeton Global Rising
Dividends Fund
Templeton Growth Fund
Templeton Income Fund
Templeton Money Fund
Templeton Real Estate
Securities Fund
Templeton Smaller
Companies Growth Fund
Templeton World Fund
FRANKLIN GROUP OF FUNDS(R)
FRANKLIN GLOBAL/
INTERNATIONAL FUNDS
Franklin Global Health Care
Fund
Franklin Global Government
Income Fund
Franklin Global Utilities Fund
Franklin International Equity
Fund
Franklin Pacific Growth Fund
FUNDS SEEKING CAPITAL GROWTH
Franklin California Growth
Fund
Franklin DynaTech Fund
Franklin Equity Fund
Franklin Gold Fund
Franklin Growth Fund
Franklin Rising Dividends Fund
Franklin Small Cap Growth
Fund
FUNDS SEEKING GROWTH AND
INCOME
Franklin Balance Sheet
Investment Fund
Franklin Convertible
Securities Fund
Franklin Income Fund
Franklin Equity Income Fund
Franklin Utilities Fund
FUNDS SEEKING HIGH CURRENT
INCOME
Franklin's AGE High Income
Fund
Franklin Investment Grade
Income Fund
Franklin Premier Return Fund
Franklin U.S. Government
Securities Fund
FUNDS SEEKING TAX-FREE
INCOME
Franklin Federal Tax-Free
Income Fund
Franklin High Yield Tax-Free
Income Fund
Franklin California High Yield
Municipal Fund
Franklin Alabama Tax-Free
Income Fund
Franklin Arizona Tax-Free
Income Fund
Franklin California Tax-Free
Income Fund
Franklin Colorado Tax-Free
Income Fund
Franklin Connecticut Tax-Free
Income Fund
Franklin Florida Tax-Free
Income Fund
Franklin Georgia Tax-Free
Income Fund
Franklin Hawaii Municipal
Bond Fund
Franklin Indiana Tax-Free
Income Fund
Franklin Kentucky Tax-Free
Income Fund
Franklin Louisiana Tax-Free
Income Fund
Franklin Maryland Tax-Free
Income Fund
Franklin Missouri Tax-Free
Income Fund
Franklin New Jersey Tax-Free
Income Fund
Franklin New York Tax-Free
Income Fund
Franklin North Carolina Tax-Free
Income Fund
Franklin Oregon Tax-Free
Income Fund
Franklin Pennsylvania Tax-Free
Income Fund
Franklin Puerto Rico Tax-Free
Income Fund
Franklin Texas Tax-Free
Income Fund
Franklin Virginia Tax-Free
Income Fund
Franklin Washington Municipal
Bond Fund
FUNDS SEEKING TAX-FREE
INCOME THROUGH INSURED
PORTFOLIOS
Franklin Insured Tax-Free
Income Fund
Franklin Arizona Insured
Tax-Free Income Fund
Franklin California Insured
Tax-Free Income Fund
Franklin Florida Insured
Tax-Free Income Fund
Franklin Massachusetts Insured
Tax-Free Income Fund
Franklin Michigan Insured
Tax-Free Income Fund
Franklin Minnesota Insured
Tax-Free Income Fund
Franklin New York Insured
Tax-Free Income Fund
Franklin Ohio Insured
Tax-Free Income Fund
FUNDS SEEKING HIGH CURRENT
INCOME AND STABILITY OF
PRINCIPAL
Franklin Adjustable Rate
Securities Fund
Franklin Adjustable
U.S. Government
Securities Fund
Franklin Short-Intermediate
U.S. Government Securities
Fund
FUND SEEKING HIGH AFTER-TAX
INCOME FOR CORPORATIONS
Franklin Corporate
Qualified Dividend Fund
MONEY MARKET FUNDS SEEKING
SAFETY OF PRINCIPAL AND
INCOME
Franklin Money Fund
Franklin Federal Money
Fund
Franklin Tax-Exempt
Money Fund
Franklin California
Tax-Exempt Money Fund
Franklin New York
Tax-Exempt Money Fund
IFT Franklin U.S. Treasury
Money Market Portfolio
FUNDS FOR
NON-U.S. INVESTORS
FRANKLIN PARTNERS FUNDS(R)
Franklin Tax-Advantaged
High Yield Securities Fund
Franklin Tax-Advantaged
International Bond Fund
Franklin Tax-Advantaged
U.S. Government
Securities Fund
To ensure the highest quality of service, telephone calls to or from our serv-
ice departments may be monitored, recorded and accessed. These calls can be de-
termined by the presence of a regular beeping tone.
<PAGE>
TEMPLETON GLOBAL
OPPORTUNITIES TRUST
Auditors
McGladrey & Pullen, LLP
555 Fifth Avenue
New York, New York 10017-2416
PRINCIPAL UNDERWRITER:
Franklin Templeton
Distributors, Inc.
700 Central Avenue
St. Petersburg,
Florida 33701-3628
Account Services
1-800-354-9191
Sales Information
1-800-292-9293
This report must be preceded or accompanied
by the prospectus of Templeton Global
Opportunities Trust.
Like any investment in securities, the value
of the Fund's portfolio will be subject to the
risk of loss from market, currency, economic,
political and other factors, as well as
investment decisions by the investment
manager which will not always be profitable
or wise. The Fund and its investors are not
protected from such losses by the investment
manager. Therefore, investors who cannot accept
this risk should not invest in shares of the Fund.
TL15 A 12/94
[LOGO OF RECYCLED PAPER APPEARS HERE]
TEMPLETON
GLOBAL
OPPORTUNITIES
TRUST
Annual Report
December 31, 1994
[LOGO OF FRANKLIN TEMPLETON APPEARS HERE]
