Semi Annual Report
TEMPLETON GLOBAL
OPPORTUNITIES TRUST
JUNE 30 , 1997
[FRANKLIN TEMPLETON LOGO]
<PAGE>
CELEBRATING 50 YEARS
This year marks 50 years of business for Franklin Templeton. Over these years,
we have experienced profound changes in technology, regulations and customer
expectations within the mutual fund industry. As one of the largest mutual fund
families, we're proud to be an innovative industry leader, providing people like
you with an opportunity to invest in companies and governments around the globe.
In addition, we want to stress that all securities markets move both up and
down. Mixed in with the good years can be some bad years. Accordingly, mutual
fund share prices also move up and down. Every investor should expect such
fluctuations, which can be wide. When markets are going down, as well as up, we
encourage investors to maintain a long-term perspective. We thank you for your
past support and look forward to serving your investment needs in the years
ahead.
<PAGE>
SHAREHOLDER LETTER
Your Fund's Objective: The Templeton Global Opportunities Trust seeks long-term
capital growth through a flexible policy of investing in global securities. It
invests primarily in common stock and may also invest in preferred stocks and
certain debt securities, rated or unrated, such as convertible bonds, bonds
selling at a discount, and structured investments.
Dear Shareholder:
We are pleased to bring you the semi-annual report of the Templeton Global
Opportunities Trust for the six months ended June 30, 1997. During this time,
Templeton Global Opportunities Trust Class I shares produced a six-month total
return of 17.64%, as discussed in the Performance Summary on page 6,
outperforming the Morgan Stanley Capital International(R) (MSCI)(1) World Index,
which returned 15.63% for the same period.(2) The Fund's results were largely
attributable to the strong performance of many of its emerging markets'
holdings, as well as generally good stock selection and the continued subpar
performance of the Japanese market.
The Fund can invest up to 25% of its assets in emerging market stocks, and for
some time we have maintained our exposure to
(1) A registered trademark of Morgan Stanley & Co. Inc.
(2) The MSCI World Index represents the stock markets of 22 countries, including
the U.S., Germany, Canada, Australia, New Zealand, and Japan. The index is not
managed according to any investment strategy, includes no sales charges or
management expenses, and does not contain cash (the Fund generally carries a
certain percentage of cash at any given time). Of course, one cannot invest
directly in an index, and the index is not representative of the Fund's
portfolio. Total return includes reinvested dividends.
CONTENTS
Shareholder Letter ................. 1
Performance Summaries
Class I .......................... 6
Class II ......................... 8
Financial Highlights ............... 11
Statement of Investments ........... 13
Financial Statements ............... 18
Notes to Financial
Statements ......................... 21
<PAGE>
these stocks near that level. Throughout the reporting period, economic
fundamentals improved in many emerging market nations, most notably those in
Latin America, as these countries adapted their economies to more capitalistic
formats. Many of our Brazilian holdings, including telephone company Telebras,
electric utility Cia Energetica de Minas Gerais, raw material conglomerate Cia
Vale do Rio Doce and banking giant Banco Bradesco, rose in value, as prices of
shares in these companies increased 98%,15%, and 39%, respectively, during the
reporting period. Of course, not all emerging markets performed well, but the
Fund largely avoided problems in places like Thailand, where share prices fell
precipitously.
During the first half of 1997, the U.S. stock market, as measured by the Dow
Jones(R) Industrial Average,(3) responded to strong corporate profits and
relatively stable inflation, and climbed to record highs. Since it became
increasingly difficult to find stocks we considered to be bargains, we reduced
our exposure to U.S. equities. Large gains by brokerage stocks prompted us to
take profits by selling our shares of Morgan Stanley Group and Alex Brown Inc.
But we increased our holdings in the telecommunications equipment sector when
prices of these stocks were hit temporarily by concerns over short-term earnings
trends. On June 30, 1997, our weighting of U.S. stocks was 17.0%, well below
their 45.6% weighting in the MSCI index on that date.
European stocks contributed to the value of the Fund's portfolio, but the U.S.
dollar's strength reduced these gains somewhat. Our positions in Swedish,
Norwegian, Swiss, Spanish and Portuguese banks performed well. One of them,
(3) A registered trademark of the Dow Jones Corporation. The Dow Jones
Industrial Average is a price-weighted average of 30 actively traded U.S. blue
chip stocks.
2
<PAGE>
Stadshypotek AS, was bought out by Svenska Handelsbanken, and others were
rumored to be acquisition candidates. We took advantage of the resulting higher
share prices, and reduced our holdings of Fokus Bank AS. Our large exposure to
cyclical shares (companies which do well when the economy expands) was also
profitable as investors began to focus on the possibility of an upturn in
European economies.
Also helping the Fund's performance was its absence from the Japanese stock
market, which underperformed the MSCI index and delivered a total return of only
8.0% during the reporting period, as measured in U.S. dollars.(4) Japanese
stocks remain the world's most expensive, but we are scrutinizing this market
intently, hoping to take advantage of any opportunities that may eventually
arise. We are hopeful that the sudden strength of the yen toward the end of the
reporting period could precipitate a restructuring of Japanese industry that
might increase profits and shareholder value.
Because of the Fund's exposure to emerging markets and cyclical shares, the
Templeton Global Opportunities Trust generally performs best when the world's
economies experience a synchronized period of moderate economic growth. Since we
think the potential for this is rising, we are optimistic about the Fund's
long-term outlook. However, a period of consolidation in the world's securities
markets would not surprise us, and we increased our cash position somewhat to
prepare for any future market weakness.
This discussion reflects the strategies we employed for the Fund during the six
months under review, and includes our opinions
(4) source: Bloomberg.
TOP 10 HOLDINGS
6/30/97
<TABLE>
<CAPTION>
COMPANY,
INDUSTRY, % OF TOTAL
COUNTRY NET ASSETS
- ------- ----------
<S> <C>
Peregrine Investments
Holdings Ltd.
Financial Services,
Hong Kong 2.2%
PT Bimantara Citra, fgn.
Multi-Industry, Indonesia 1.9%
Ace Limited
Insurance, Bermuda 1.8%
Foreningssparbankan AB
Banking, Sweden 1.7%
Kuoni Reisen Holding AG
Leisure & Tourism,
Switzerland 1.5%
Nokia AB, A
Telecommunications,
Finland 1.5%
Merrill Lynch & Co. Inc.
Financial Services,
United States 1.4%
Cia Energetica de
Minas Gerais, AD
Utilities - Electrical &
Gas, Brazil 1.4%
National Mutual Asia Ltd.
Insurance, Hong Kong 1.4%
Newbridge Networks
Corp.
Data Processing &
Reproduction, Canada 1.3%
</TABLE>
For a complete list of portfolio holdings, see page 13 of this report.
3
<PAGE>
TOP 10 INDUSTRIES
6/30/97
<TABLE>
<CAPTION>
% OF TOTAL
INDUSTRY NET ASSETS
- -------- ----------
<S> <C>
Forest Products & Paper 10.4%
Telecommunications 10.2%
Banking 9.8%
Insurance 5.7%
Metals & Mining 5.3%
Financial Services 5.3%
Energy Sources 4.9%
Electrical & Electronics 3.9%
Utilities - Electrical & Gas 3.1%
Data Processing &
Reproduction 3.0%
</TABLE>
as of the close of the period. Since economic and market conditions are
constantly changing, our strategies, and our evaluations, conclusions and
decisions regarding portfolio holdings, may change as new circumstances arise.
All figures shown are as of June 30, 1997, and the level of the Fund's holdings
can be expected to change with market developments and management of the
portfolio. Although past performance of a specific investment or sector cannot
guarantee future performance, such information can be useful in analyzing
securities we purchase or sell for the Fund.
There are, of course, special risks involved with global investing related to
market, currency, economic, social, political and other factors. Emerging
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. These risks are discussed in the Fund's prospectus. While short-term
volatility can be disconcerting, declines of as much as 40% to 50% are not
unusual in emerging markets. For example, the Hong Kong market has increased
1,089% in the last 15 years, but has suffered five quarterly declines of more
than 20% during that time.(5)
(5) Source: Bloomberg. Based on quarterly percentage change over 15 years ended
June 30, 1997.
4
<PAGE>
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. FLANGAN
Martin L. Flanagan
President
Templeton Global Opportunities Trust
/s/HOWARD J. LEONARD
Howard J. Leonard
Portfolio Manager
Templeton Global Opportunities Trust
As of June 1, 1997, Dean Witter InterCapital, Inc. ("InterCapital") no longer
serves as sub-advisor of the Fund. Templeton Investment Counsel, Inc., the
Fund's Investment Manager, now provides the investment management advice,
economic and market analyses, and assistance previously provided by
InterCapital.
5
<PAGE>
PERFORMANCE SUMMARY
Class I
The Templeton Global Opportunities Trust Class I shares produced a cumulative
total return of 17.64% for the six-month period ended June 30, 1997. Cumulative
total return measures the change in value of an investment, assuming
reinvestment of dividends and capital gains, and does not include the 5.75%
maximum initial sales charge. We always maintain 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 below, the Fund delivered a
cumulative total return of more than 185% since inception on January 19, 1990.
The price of the Fund's shares increased $2.21, from $14.62 on December 31,
1996, to $16.83 on June 30, 1997. During this time, shareholders received
distributions of 3.5 cents ($0.035) per share in income dividends, 1.0 cent
($0.01) in short-term capital gains, and 29.0 cents ($0.29) in long-term capital
gains. Of course, distributions will vary depending on income earned by the Fund
and any profits realized from the sale of securities in the portfolio, as well
as the level of the Fund's operating expenses.
Past performance is not predictive of future results.
6
<PAGE>
CLASS I
PERIODS ENDED 6/30/97
<TABLE>
<CAPTION>
SINCE
INCEPTION
1-YEAR 5-YEAR (1/19/90)
------ ------ ----------
<S> <C> <C> <C>
Cumulative Total Return1 30.02% 114.21% 185.35%
Average Annual Total Return2 22.52% 15.08% 14.22%
Value of a $10,000 Investment3 $12,252 $20,186 $26,904
</TABLE>
<TABLE>
<CAPTION>
6/30/93 6/30/94 6/30/95 6/30/96 6/30/97
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
One-Year Total Return4 10.83% 14.98% 13.50% 13.91% 30.02%
</TABLE>
1. Cumulative total return represents the change in value of an investment over
the indicated periods, and does not include the initial sales charge.
2. Average annual total return represents the average annual change in value of
an investment over the indicated periods, and includes the current maximum 5.75%
initial sales charge.
3. These figures represent the value of a hypothetical $10,000 investment in the
Fund over the indicated periods, and include the current maximum 5.75% initial
sales charge.
4. One-year total return represents the change in value of an investment over
the one-year periods ended on the dates indicated, and does not include the
initial sales charge. All calculations assume reinvestment of dividends and
capital gains at net asset value. Prior to July 1, 1992, Class I shares were
offered at a higher sales charge. Thus, actual total returns for investors who
paid this higher charge would have been lower than noted. On January 1, 1993,
Class I shares implemented a plan of distribution under Rule 12b-1, which
affects performance for periods after that date. Investment return and principal
value will fluctuate with market conditions, currencies and the economic,
social, and political climates of the countries where investments are made.
Emerging 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. You may have a gain or loss when you sell your shares.
Past performance is not predictive of future results.
7
<PAGE>
Class II
The Templeton Global Opportunities Trust Class II shares produced a cumulative
total return of 17.34% for the six-month period ended June 30, 1997. Cumulative
total return measures the change in value of an investment, assuming
reinvestment of dividends and capital gains distributions, and does not include
sales charges. We always maintain 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 below, the Fund delivered a cumulative
total return of more than 55% since inception on May 1, 1995.
The price of the Fund's shares increased $2.15, from $14.52 on December 31,
1996, to $16.67 on June 30, 1997. During this time, shareholders received
distributions of 3.47 cents ($0.0347) per share in income dividends, 1.0 cent
($0.01) in short-term capital gains, and 29.0 cents ($0.29) in long-term capital
gains. Of course, distributions will vary depending on income earned by the Fund
and any profits realized from the sale of securities in the portfolio, as well
as the level of the Fund's operating expenses.
Past performance is not predictive of future results.
8
<PAGE>
Class II
Periods ended 6/30/97
<TABLE>
<CAPTION>
Since
Inception
1-Year (5/1/95)
------ ---------
<S> <C> <C>
Cumulative Total Return1 29.15% 55.41%
Average Annual Total Return2 26.87% 20.90%
Value of a $10,000 Investment3 $12,687 $15,390
6/30/96 6/30/97
------- -------
One-Year Total Return4 13.13% 29.15%
</TABLE>
1. Cumulative total return represents the change in value of an investment over
the indicated periods, and does not include sales charges.
2. Average annual total return represents the average annual change in value of
an investment over the indicated periods and includes the 1.00% initial sales
charge and the 1.00% contingent deferred sales charge applicable to shares
redeemed within 18 months of purchase.
3. These figures represent the value of a hypothetical $10,000 investment in the
Fund over the indicated periods, and include all sales charges.
4. One-year total return represents the change in value of an investment over
the one-year periods ended on the dates indicated and does not include the sales
charges. All calculations assume reinvestment of dividends and capital gains
distributions at net asset value. Investment return and principal value will
fluctuate with market conditions, currency volatility and the economic, social
and political climates of the countries where investments are made. Emerging
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. You may have a gain or loss when you sell your shares.
Past performance is not predictive of future results.
9
<PAGE>
Many investors have asked us about the activities of Sir John Templeton, since
his retirement from the funds. We asked Professor Robert Herrmann to update us
on Sir John's current activities and his comments follow. 10
THE NEW CAREER OF
SIR JOHN TEMPLETON
10
By Professor
Robert Herrmann
In 1992, Sir John Templeton
retired after a 50-year career of helping investors manage their money.
Currently, he devotes all of his time and efforts to the John Templeton
Foundation. A major portion of his assets remain invested in Templeton funds,
managed by many of the investment professionals he selected and trained. For
sentimental reasons, he allows his name to be associated with the funds,
although he knows no more about their management and holdings than any other
investor.
Sir John Templeton established the Templeton Foundation in 1987, to foster the
acquisition of spiritual information through scientific research. Working with
scientists, theologians and others, he strives toward a new science that uses
empirical and statistical scientific methods to discover and test spiritual
knowledge. A crucial ingredient in his research is what Sir John calls "humility
theology," an attitude of humility toward the Creator, combined with
receptiveness to the theological significance of current scientific discoveries.
Universal spiritual laws, or "laws of life," are among the areas of
investigation. In his recent book, Worldwide Laws of Life, Sir John compiles 200
laws and proverbs from nearly all religions, and deeply embedded in human
history. For example, the Golden Rule taught by Jesus in the Sermon on the
Mount, states "Do unto others as you would have others do unto you," and is
affirmed by all major religions as an acceptable, universal law of life. Other
books which Sir John has authored or co-authored during the past few years
include: The Humble Approach, Is God the Only Reality, Evidence of Purpose,
Who's Who in Theology and Science and The God Who Would Be Known.
With an annual budget of more than $30 million, the Templeton Foundation
sponsors 60 programs focusing on spiritual progress and the benefits of freedom.
Sir John's first sizable investment in the programs was the Templeton Prize for
Progress in Religion. A panel of nine judges gives the annual award which now
exceeds $1.2 million to individuals who have shown extraordinary originality in
furthering the world's understanding of God or spirituality.
Recipients of the prize include Professor Paul Davies, author of The Mind of
God; the Right Honorable Lord Jacobovits, former Chief Rabbi of Great Britain
and The Commonwealth; the Reverend Dr. Billy Graham, world-renowned preacher and
presidential inauguration speaker; Mr. Nikkyo Nimano, founder of the World
Conference on Religion and Peace; and Sir Sarepalli Radhakrishnan, former
President of India, and Oxford professor of Eastern Religions and Ethics.
To encourage young people's and their parents' appreciation of spiritual laws of
life, Sir John established an essay contest for teenagers in his home county of
Franklin, Tennessee. Students submit essays about the spiritual life principles
they plan to follow, and prizes are offered semiannually. In 1996, more than 800
youth participated. Twenty-six similar programs have been launched in various
locations, with the support of generous local donors.
The Foundation also sponsors a worldwide program that awards college-level
faculty who teach courses integrating science and religion. During the program's
first two years, more than 200 courses were created. The Foundation maintains an
extensive program of research and education on the health benefits of
spirituality, including prizes for medical schools providing courses on
spirituality in medicine. Lastly, the Foundation publishes a newsletter with
over 2,000 subscribers. Free subscriptions are available to Templeton
shareholders by writing to the Foundation.
To contact Sir John Templeton or receive the free newsletter subscription,
please write to:
The John Templeton Foundation
2 Radnor Corporate Center #320
100 Matsonford Road
Radnor, PA 19087
10
<PAGE>
Templeton GLOBAL OPPORTUNITIES TRUST
Financial Highlights
<TABLE>
<CAPTION>
CLASS I
--------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31
JUNE 30, 1997 ---------------------------------------------------------
(UNAUDITED) 1996 1995 1994 1993 1992
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE - CLASS I
(FOR A SHARE OUTSTANDING THROUGHOUT THE
PERIOD)
Net asset value, beginning of period.......... $14.62 $12.57 $11.84 $14.46 $10.75 $10.94
-------------------------------------------------------------
Income from investment operations:
Net investment income....................... .25 .30 .16 .09 .12 .14
Net realized and unrealized gain (loss)..... 2.30 2.69 1.33 (.63) 3.97 .61
-------------------------------------------------------------
Total from investment operations.............. 2.55 2.99 1.49 (.54) 4.09 .75
-------------------------------------------------------------
Distributions:
Dividends from net investment income........ (.04) (.30) (.16) (.09) (.11) (.14)
Amount in excess of net investment income... -- (.06) -- -- -- --
Distributions from net realized gains....... (.30) (.58) (.60) (1.99) (.27) (.65)
Amount in excess of net realized gain....... -- -- -- -- -- (.15)
-------------------------------------------------------------
Total distributions........................... (.34) (.94) (.76) (2.08) (.38) (.94)
-------------------------------------------------------------
Change in net asset value..................... 2.21 2.05 .73 (2.62) 3.71 (.19)
-------------------------------------------------------------
Net asset value, end of period................ $16.83 $14.62 $12.57 $11.84 $14.46 $10.75
=============================================================
TOTAL RETURN*................................. 17.64% 24.19% 12.87% (4.09)% 38.13% 6.85%
RATIOS /SUPPLEMENTAL DATA
Net assets, end of period (000)............... $798,186 $634,478 $510,777 $476,822 $410,747 $248,807
Ratio of expenses to average net assets....... 1.36%** 1.45% 1.52% 1.53% 1.51% 1.63%
Ratio of net investment income to average net
assets...................................... 3.28%** 2.10% 1.19% .71% 1.07% 1.36%
Portfolio turnover rate....................... 12.86% 18.54% 15.54% 37.31% 40.56% 22.03%
Average commission rate paid (per share)...... $.0009 $.0028
</TABLE>
*Total return does not reflect sales commissions. Not annualized for periods of
less than one year.
**Annualized.
See Notes to Financial Statements.
11
<PAGE>
TEMPLETON GLOBAL OPPORTUNITIES TRUST
Financial Highlights (continued)
<TABLE>
<CAPTION>
CLASS II
------------------------------------------------------
FOR THE SIX
MONTHS ENDED FOR THE PERIOD
JUNE 30, MAY 1, 1995+
1997 YEAR ENDED THROUGH
(UNAUDITED) DECEMBER 31, 1996 DECEMBER 31, 1995
------------------------------------------------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE - CLASS II
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
Net asset value, beginning of period......................... $14.52 $12.53 $12.26
---------------------------------------------
Income from investment operations:
Net investment income...................................... .13 .24 .02
Net realized and unrealized gain........................... 2.36 2.63 .88
---------------------------------------------
Total from investment operations............................. 2.49 2.87 .90
---------------------------------------------
Distributions:
Dividends from net investment income....................... (.04) (.24) (.12)
Amount in excess of net investment income.................. -- (.06) --
Distributions from net realized gains...................... (.30) (.58) (.51)
---------------------------------------------
Total distributions.......................................... (.34) (.88) (.63)
---------------------------------------------
Change in net asset value.................................... 2.15 1.99 .27
---------------------------------------------
Net asset value, end of period............................... $16.67 $14.52 $12.53
=============================================
TOTAL RETURN*................................................ 17.34% 23.28% 7.43%
RATIOS /SUPPLEMENTAL DATA
Net assets, end of period (000).............................. $26,738 $11,622 $2,264
Ratio of expenses to average net assets...................... 1.99%** 2.20% 2.22%**
Ratio of net investment income to average net assets......... 1.47%** 1.12% (.01)%**
Portfolio turnover rate...................................... 12.86% 18.54% 15.54%
Average commission rate paid (per share)..................... $.0009 $.0028
</TABLE>
*Total return does not reflect sales commissions or the contingent deferred
sales charge. Not annualized for periods of less than one year.
**Annualized.
+Commencement of sales.
See Notes to Financial Statements.
12
<PAGE>
TEMPLETON GLOBAL OPPORTUNITIES TRUST
INVESTMENT PORTFOLIO, JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMMON STOCKS 70.8%
AUTOMOBILES 1.3%
Volvo AB, B...................................... Swe. 384,000 $ 10,275,746
------------
BANKING 7.9%
Banco Popular Espanol SA......................... Sp. 35,000 8,574,822
BPI Socieda de Gestora de Participacoes Socias
SA.............................................. Port. 117,300 2,282,814
Credit Suisse Group, reg......................... Swtz. 42,000 5,391,989
Ergo Bank SA..................................... Gr. 69,232 4,158,305
Fokus Bank AS.................................... Nor. 106,500 900,917
Foreningssparbanken AB, A........................ Swe. 40,400 898,300
Foreningssparbanken AB, A, 144A.................. Swe. 601,700 13,378,890
Korea Long Term Credit Bank...................... S.Kor. 26,143 413,920
National Australia Bank Ltd...................... Aus. 424,214 6,076,124
National Australia Cap Sec PLC................... Aus. 159,608 4,459,049
Shinhan Bank Co. Ltd............................. S.Kor. 76,935 1,132,907
* Unibanco Uniao de Bancos Brasileiros SA, GDR..... Braz. 236,475 8,779,134
Union Bank of Norway, Primary Capital Cert....... Nor. 124,800 3,695,028
Union Bank of Norway, Primary Capital Cert.
144A............................................ Nor. 175,200 5,187,251
------------
65,329,450
------------
BROADCASTING & PUBLISHING 0.1%
*Sing Tao Holdings Ltd........................... H.K. 1,911,800 715,633
------------
BUILDING MATERIALS & COMPONENTS 0.3%
Cementos Diamante, ADR, 144A..................... Col. 174,000 2,262,000
Pioneer International Ltd........................ Aus. 100,000 386,584
------------
2,648,584
------------
BUSINESS & PUBLIC SERVICES 1.1%
Hyder PLC........................................ U.K. 79,780 1,079,473
Laidlaw Inc., B.................................. Can. 600,000 8,276,911
------------
9,356,384
------------
CHEMICALS 1.1%
Akzo Nobel NV.................................... Neth. 2,000 274,084
* Beijing Yanhua Petrochemical Company Ltd., ADR... Chn. 411,600 4,733,400
European Vinyls Corp. EVC International NV....... Neth. 117,400 2,972,530
Gujarat Narmada Valley Fertilizers Co. Ltd., GDR,
144A............................................ Ind. 517,600 1,294,000
Gujarat Narmada Valley Fertilizers Co. Ltd.,
ADR............................................. Ind. 83,600 209,000
------------
9,483,014
------------
CONSTRUCTION & HOUSING 0.2%
Kaufman & Broad Home Corp........................ U.S. 77,000 1,352,313
------------
DATA PROCESSING & REPRODUCTION 3.0%
* Bay Networks Inc................................. U.S. 300,000 7,968,750
* Newbridge Networks Corp.......................... Can. 256,000 11,136,000
* ODS Networks Inc................................. U.S. 489,200 5,809,250
------------
24,914,000
------------
</TABLE>
13
<PAGE>
TEMPLETON GLOBAL OPPORTUNITIES TRUST
INVESTMENT PORTFOLIO, JUNE 30, 1997 (UNAUDITED) (continued)
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ELECTRICAL & ELECTRONICS 3.9%
ABB AG, br....................................... Swtz. 7,248 $ 10,967,532
Alphatec Electronics Pub. Co. Ltd., fgn.......... Thai. 592,800 371,859
* DSC Communications Corp.......................... U.S. 326,500 7,264,625
Motorola Inc..................................... U.S. 10,000 760,000
Philips Electronics NV........................... Neth. 135,000 9,669,876
Scitex Corp. Ltd................................. Isr. 360,000 3,172,500
------------
32,206,392
------------
ELECTRONIC COMPONENTS & INSTRUMENTS 0.8%
Intel Corp....................................... U.S. 48,000 6,807,000
------------
ENERGY SOURCES 4.9%
Amerada Hess Corp................................ U.S. 50,000 2,778,125
*Hub Power Co. Ltd., GDR, 144A................... Pak. 310,000 7,672,500
Rao Gazprom, ADR, 144A........................... Rus. 390,300 6,664,373
Repsol SA........................................ Sp. 25,000 1,057,007
Societe Elf Aquitaine SA......................... Fr. 55,000 5,933,602
Total SA, B...................................... Fr. 100,000 10,107,714
Valero Energy Corp. ............................. U.S. 161,400 5,850,750
------------
40,064,071
------------
FINANCIAL SERVICES 5.3%
Federal National Mortgage Assn. ................. U.S. 220,000 9,597,500
London Pacific Group Ltd. ....................... U.K. 1,243,900 4,319,025
Merrill Lynch & Co. Inc. ........................ U.S. 200,000 11,925,000
Peregrine Investments Holdings Ltd. ............. H.K. 8,550,000 17,602,584
*Peregrine Investments Holdings Ltd., wts. ...... H.K. 775,000 340,118
------------
43,784,227
------------
FOOD & HOUSEHOLD PRODUCTS 0.2%
Cafe de Coral Holdings Ltd. ..................... H.K. 7,599,000 1,951,907
------------
FOREST PRODUCTS & PAPER 9.7%
*Asia Pacific Resources International, A......... Indo. 1,099,300 5,359,088
Assidomaen AB.................................... Swe. 234,900 6,680,628
Boise Cascade Corp. ............................. U.S. 100,000 3,531,250
Bowater Inc. .................................... U.S. 180,000 8,325,000
Carter Holt Harvey Ltd. ......................... N.Z. 3,084,890 7,983,529
*Empaques Ponderosa SA de CV, B.................. Mex. 3,000,000 2,455,301
Enso OY, R....................................... Fin. 625,000 5,777,286
Fletcher Challenge Ltd. Forestry Division........ N.Z. 4,652,452 6,762,790
Georgia-Pacific Corp. ........................... U.S. 75,000 6,403,125
International Paper Co. ......................... U.S. 59,830 2,905,494
Mead Corp. ...................................... U.S. 90,000 5,602,500
Portucel Industrial Empresa Product Celulose,
ADR, 144A....................................... Port. 1,094,800 8,118,154
PT Barito Pacific Timber, fgn. .................. Indo. 3,884,000 3,313,857
Rayonier Inc. ................................... U.S. 155,000 6,519,687
------------
79,737,689
------------
</TABLE>
14
<PAGE>
TEMPLETON GLOBAL OPPORTUNITIES TRUST
INVESTMENT PORTFOLIO, JUNE 30, 1997 (UNAUDITED) (continued)
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
HEALTH & PERSONAL CARE 1.5%
Astra AB, B...................................... Swe. 266,664 $ 4,705,531
Medeva PLC....................................... U.K. 988,516 4,222,458
Windmere-Durable Holdings Inc. .................. U.S. 225,000 3,684,375
------------
12,612,364
------------
INDUSTRIAL COMPONENTS 1.7%
BTR PLC.......................................... U.K. 1,250,000 4,277,756
Goodyear Tire & Rubber Co. ...................... U.S. 150,000 9,496,875
------------
13,774,631
------------
INSURANCE 5.7%
Ace Ltd. ........................................ Bmu. 203,000 14,996,625
American International Group Inc. ............... U.S. 50,000 7,468,750
GIO Australia Holdings Ltd. ..................... Aus. 2,000,000 6,191,389
National Mutual Asia Ltd. ....................... H.K. 10,338,000 11,475,843
Presidential Life Corp. ......................... U.S. 375,000 7,265,625
------------
47,398,232
------------
LEISURE & TOURISM 1.5%
Kuoni Reisen Holding AG, B....................... Swtz. 3,660 12,529,955
------------
MACHINERY & ENGINEERING 2.3%
Rauma, ADS....................................... Fin. 353,700 8,135,100
VA Technologie AG, 144A.......................... Aust. 57,300 10,486,038
------------
18,621,138
------------
MERCHANDISING 0.7%
Cifra SA de CV, A................................ Mex. 61,276 113,263
Cifra SA, B...................................... Mex. 501,000 933,619
Robinson Depart. Store Public Co. Ltd., fgn. .... Thai. 195,400 73,544
*Waban Inc. ..................................... U.S. 140,000 4,506,250
------------
5,626,676
------------
METALS & MINING 4.4%
Aluminum Co. of America.......................... U.S. 70,000 5,276,250
Boehler Uddeholm AG, 144A........................ Aust. 58,500 4,536,511
Companhia Siderurgica Nacional................... Braz. 151,111,000 4,982,992
Elkem AS......................................... Nor. 501,000 9,809,188
*Inmet Mining Corp. ............................. Can. 490,100 2,697,245
Pechiney SA, A................................... Fr. 103,125 4,062,388
Trelleborg AB, B................................. Swe. 324,500 5,327,581
------------
36,692,155
------------
MULTI-INDUSTRY 1.9%
PT Bimantara Citra, fgn. ........................ Indo. 8,975,000 15,684,108
------------
REAL ESTATE 0.6%
*PT Jaya Properties, fgn. ....................... Indo. 3,598,000 4,845,169
------------
</TABLE>
15
<PAGE>
TEMPLETON GLOBAL OPPORTUNITIES TRUST
INVESTMENT PORTFOLIO, JUNE 30, 1997 (UNAUDITED) (continued)
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
RECREATION & OTHER CONSUMER GOODS 0.6%
Yue Yuen Industrial (Holdings) Ltd. ............. H.K. 2,453,600 $ 5,083,097
------------
TELECOMMUNICATIONS 5.9%
Cpt-Telefonica Del Peru SA, ADR B................ Per. 171,500 4,491,156
Lucent Technologies Inc. ........................ U.S. 121,000 8,719,562
Nokia AB, A...................................... Fin. 160,000 12,078,377
Tele Danmark AS, B............................... Den. 9,500 493,607
Telecom Italia Mobile, di risp................... Itl. 2,929,276 5,196,991
Telecom Italia SpA, di Risp...................... Itl. 2,929,276 5,860,620
Telefonica de Espana SA.......................... Sp. 340,000 9,829,657
*Videsh Sanchar Nigam Ltd., GDR, 144A............ Ind. 77,600 1,616,020
------------
48,285,990
------------
TEXTILES & APPAREL 0.2%
*Dhan Fibres Ltd. ............................... Pak. 13,575,000 1,544,923
------------
TRANSPORTATION 2.1%
Air New Zealand Ltd., B.......................... N.Z. 2,408,000 7,360,363
Guangshen Railway Co. Ltd., ADR.................. Chn. 163,200 3,570,000
Qantas Airways Ltd., ADR, 144A................... Aus. 182,100 4,139,133
*Railtrack Group PLC, 144A....................... U.K. 224,100 2,334,336
------------
17,403,832
------------
UTILITIES ELECTRICAL & GAS 1.7%
British Energy Ltd., 144A........................ U.K. 2,942,800 7,179,473
Electricidad de Caracas.......................... Venz. 226,161 362,351
Iberdrola SA..................................... Sp. 515,000 6,500,848
------------
14,042,672
------------
WHOLESALE & INTERNATIONAL TRADE 0.2%
Sime Darby Hongkong Ltd. ........................ H.K. 1,127,000 1,251,042
------------
TOTAL COMMON STOCKS (COST $397,022,347).......... 584,022,394
============
PREFERRED STOCKS 8.6%
Banco Bradesco SA, pfd. ......................... Braz. 508,140,000 5,121,285
Cia de Inversiones en Telecomunicaciones SA,
7.00%, pfd...................................... Arg. 138,707 9,432,076
Cia Energetica de Minas Gerais, ADR, pfd. ....... Braz. 225,000 11,517,188
Cia Vale do Rio Doce, ADR........................ Braz. 330,000 7,298,593
Coteminas Cia Tecidos Norte de Minas, pfd. ...... Braz. 11,918,000 4,649,631
Jardine Strategic Holdings Ltd., 7.50%, conv.,
pfd. ........................................... H.K. 5,054,000 6,241,690
Nacional Financiera SA, 11.25%, conv., pfd. ..... Mex. 226,050 10,850,400
Philippine Long Distance Telephone Co., 7.00%,
cnv., pfd., ser.3............................... Phil. 105,000 6,090,000
Telebras-Telecomunicacoes Brasileiras SA, ADR,
pfd. ........................................... Braz. 65,000 9,863,750
------------
TOTAL PREFERRED STOCKS (COST $46,602,561)........ 71,064,613
============
</TABLE>
16
<PAGE>
TEMPLETON GLOBAL OPPORTUNITIES TRUST
INVESTMENT PORTFOLIO, JUNE 30, 1997 (UNAUDITED) (continued)
<TABLE>
<CAPTION>
PRINCIPAL IN
ISSUE COUNTRY LOCAL CURRENCY VALUE
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
BONDS 2.9%
Banco Nacional de Mexico SA, 7.00%, conv.,
12/15/99..................................... Mex. 10,910,000 $ 10,759,988
Brierley Investments Ltd., 9.00%, conv.,
6/30/98...................................... N.Z. 849,949 773,500
Italy Govt., 5.0%, conv., 6/28/01 ............ Itl. 5,235,000 5,359,593
Repap Enterprises Inc., 8.50%, conv.,
8/01/97...................................... Can. 7,578,000 4,205,790
Repap Enterprises Inc., 9.0%, conv.,
06/30/98..................................... Can. 5,872,000 2,019,769
Sasib International, 9.25%, conv., 12/31/97... Itl. 1,775,000,000 647,581
------------
TOTAL BONDS (COST $27,946,228)................ 23,766,221
============
SHORT TERM OBLIGATIONS 9.9%
U.S. Treasury Bills, 5.07% to 5.14% with
maturities to 7/31/97........................ U.S. 35,226,000 35,151,110
Federal Home Loan Mortgage Corp., 07/01/97.... U.S. 21,315,000 21,315,000
Federal National Mortgage Assn., 7/3/97....... U.S. 25,000,000 24,992,525
------------
TOTAL SHORT TERM OBLIGATIONS
(COST $81,444,136)....................... 81,458,635
============
RECEIVABLES FROM REPURCHASE AGREEMENTS 7.7%
a Swiss Bank Corp., 5.90%, 07/01/97, (Maturity
Value $21,315,492.80) Collateral: U.S.
Treasury Notes, 7.50%, 10/31/99.............. U.S. 20,953,000 21,312,000
a Aubrey G. Lanston & Co., 5.50%, 07/01/97,
(Maturity Value $21,315,256) Collateral: U.S.
Treasury Notes, 6.125%, 08/31/98............. U.S. 21,260,000 21,312,000
a UBS Securities, Inc., 5.87%, 07/01/97,
(Maturity Value $21,315,475.04) Collateral:
U.S. Treasury Notes, 6.005%, 08/15/99........ U.S. 21,312,000 21,312,000
------------
TOTAL RECEIVABLES FROM REPURCHASE
AGREEMENTS (COST $63,936,000)............ 63,936,000
------------
TOTAL INVESTMENTS 99.9% (COST $616,951,272)... 824,247,863
OTHER ASSETS, LESS LIABILITIES 0.1%.......... 676,232
------------
TOTAL NET ASSETS 100.0%...................... $824,924,095
============
</TABLE>
* Non-income producing.
a At June 30, 1997, all repurchase agreements held by the Fund had been entered
into on that date.
See Notes to Financial Statements.
17
<PAGE>
TEMPLETON GLOBAL OPPORTUNITIES TRUST
Financial Statements
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<S> <C>
Assets:
Investments in securities, at value (identified cost $616,951,272).................. $824,247,863
Receivables:
Investment securities sold......................................................... 31,868
Fund shares sold................................................................... 2,885,267
Dividends and interest............................................................. 2,841,290
-----------
Total assets.................................................................... 830,006,288
-----------
Liabilities:
Payables:
Investment securities purchased.................................................... 44,200
Fund shares redeemed............................................................... 3,668,108
Accrued expenses.................................................................... 1,369,885
-----------
Total liabilities............................................................... 5,082,193
-----------
Net assets, at value................................................................. $824,924,095
===========
Net assets consist of:
Undistributed net investment income................................................. $ 7,514,483
Net unrealized appreciation......................................................... 207,296,591
Accumulated net realized gain....................................................... 29,769,374
Net capital paid in on shares of beneficial interest................................ 580,343,647
-----------
Net assets, at value................................................................. $824,924,095
===========
CLASS I
Net asset value per share ($798,185,958 / 47,420,578 shares outstanding).................. $16.83
======
Maximum offering price ($16.83 / 94.25%).................................................. $17.86
======
CLASS II
Net asset value per share ($26,738,137 / 1,604,080 shares outstanding).................... $16.67
======
Maximum offering price ($16.67 / 99.0%)................................................... $16.84
======
</TABLE>
See Notes to Financial Statements.
18
<PAGE>
TEMPLETON GLOBAL OPPORTUNITIES TRUST
Financial Statements (continued)
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
<TABLE>
<S> <C> <C>
Investment income:
(net of $1,221,977 foreign taxes withheld)
Dividends............................................................ $12,306,090
Interest............................................................. 4,312,341
------------
Total income..................................................... $ 16,618,431
Expenses:
Management fees (Note 3)............................................. 2,863,670
Administrative fees (Note 3)......................................... 497,330
Distribution fees (Note 3)
Class I........................................................ 881,886
Class II....................................................... 79,633
Transfer agent fees (Note 3)......................................... 398,000
Custodian fees....................................................... 132,877
Reports to shareholders.............................................. 35,000
Audit fees........................................................... 12,200
Legal fees (Note 3).................................................. 4,900
Registration and filing fees......................................... 28,000
Trustees' fees and expenses.......................................... 25,500
Other................................................................ 3,873
------------
Total expenses................................................... 4,962,869
------------
Net investment income............................................ 11,655,562
Realized and unrealized gain (loss):
Net realized gain (loss) on:
Investments......................................................... 32,600,300
Foreign currency transactions....................................... (412,696)
------------
32,187,604
Net unrealized appreciation on investments........................... 74,796,875
------------
Net realized and unrealized gain...................................... 106,984,479
------------
Net increase in net assets resulting from operations.................. $118,640,041
============
</TABLE>
See Notes to Financial Statements.
19
<PAGE>
TEMPLETON GLOBAL OPPORTUNITIES TRUST
Financial Statements (continued)
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, 1997 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1996
-------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income........................................... $ 11,655,562 $ 12,076,812
Net realized gain on investment and foreign currency
transactions.................................................. 32,187,604 29,013,863
Net unrealized appreciation..................................... 74,796,875 83,861,546
-------------------------------------
Net increase in net assets resulting from operations.......... 118,640,041 124,952,221
Distributions to shareholders:
From net investment income
Class I......................................................... (1,546,946) (12,133,064)
Class II........................................................ (34,697) (164,600)
In excess of net investment income
Class I......................................................... -- (2,513,780)
Class II........................................................ -- (45,656)
From net realized gain
Class I......................................................... (13,285,244) (23,782,315)
Class II........................................................ (299,492) (343,200)
Capital share transactions (Note 2)
Class I......................................................... 62,897,718 38,648,962
Class II........................................................ 12,453,123 8,440,010
-------------------------------------
Net increase in net assets.................................... 178,824,503 133,058,578
Net assets:
Beginning of period.............................................. 646,099,592 513,041,014
-------------------------------------
End of period.................................................... $ 824,924,095 $ 646,099,592
=====================================
</TABLE>
See Notes to Financial Statements.
20
<PAGE>
TEMPLETON GLOBAL OPPORTUNITIES TRUST
Notes to Financial Statements (unaudited)
1. SUMMARY OF ACCOUNTING POLICIES
Templeton Global Opportunities Trust (the Fund) is registered under the
Investment Company Act of 1940 as a diversified, open-end investment company.
The Fund seeks long-term capital growth through a flexible policy of investing
in global securities. The following summarizes the Fund's significant accounting
policies.
a. SECURITIES VALUATIONS:
Securities listed or traded on a recognized national exchange or NASDAQ are
valued at the latest reported sales price. Over-the-counter securities and
listed securities for which no sale is reported are valued within the range of
the latest quoted bid and asked prices. Securities for which market quotations
are not readily available are valued at fair value as determined by management
in accordance with procedures established by the Board of Trustees.
b. FOREIGN CURRENCY TRANSACTIONS:
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 securities and income items denominated in foreign currencies are
translated into U.S. dollars at the exchange rate in effect on the transaction
date.
The Fund does not separately report the effect of changes in foreign exchange
rates from changes in market prices on securities held. Such changes are
included in net realized and unrealized gain or loss from investments.
Realized foreign exchange gains or losses arise from sales of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on securities transactions, the difference between the recorded amounts of
dividends, interest, and foreign withholding taxes, and the U.S. dollar
equivalent of the amounts actually received or paid. Net unrealized foreign
exchange gains and losses arise from changes in foreign exchange rates in
foreign denominated assets and liabilities other than investments in securities
held at the end of the reporting period.
c. INCOME TAXES:
No provision has been made for income taxes because the Fund's policy is to
qualify as a regulated investment company under the Internal Revenue Code and
distribute substantially all of its taxable income.
d. SECURITY TRANSACTIONS, INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS:
Security transactions are accounted for on trade date. Realized gains and losses
on security transactions are determined on a specific identification basis.
Certain income from foreign securities is recorded as soon as information is
available to the Fund. Interest income and estimated expenses are accrued daily.
Dividend income and distributions to shareholders are recorded on the
ex-dividend date.
Realized and unrealized gains and losses on security transactions and net
investment income, other than class specific expenses, are allocated daily to
each class of shares based upon the relative proportion of net assets of each
class.
21
<PAGE>
TEMPLETON GLOBAL OPPORTUNITIES TRUST
Notes to Financial Statements (unaudited) (continued)
1. SUMMARY OF ACCOUNTING POLICIES (CONT.)
e. ACCOUNTING ESTIMATES:
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the amounts of income and expense during the reporting
period. Actual results could differ from those estimates.
2. BENEFICIAL STOCK
The Fund offers two classes of shares: Class I and Class II. The shares have the
same rights except for their initial sales load, distribution fees, voting
rights on matters affecting a single class and the exchange privilege of each
class.
At June 30, 1997, there were an unlimited number of shares authorized ($0.01 par
value). Transactions in the Fund's shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1997 DECEMBER 31, 1996
------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS I
Shares sold................................................ 8,513,340 $132,762,611 7,047,189 $96,865,915
Shares issued on reinvestment of distributions............. 872,615 13,341,283 2,459,156 34,358,478
Shares redeemed............................................ (5,365,308) (83,206,176) (6,755,860) (92,575,431)
------------------------------------------------------------
Net increase............................................... 4,020,647 $62,897,718 2,750,485 $38,648,962
============================================================
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1997 DECEMBER 31, 1996
--------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
--------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS II
Shares sold................................................... 828,194 $12,829,512 610,014 $8,301,964
Shares issued on reinvestment of distributions................ 19,935 302,396 35,561 497,767
Shares redeemed............................................... (44,275) (678,786) (25,995) (359,721)
--------------------------------------------------------
Net increase.................................................. 803,854 $12,453,122 619,580 $8,440,010
========================================================
</TABLE>
3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Certain Officers of the Fund are also officers or directors of Templeton
Investment Council, Inc. (TICI), Franklin Templeton Services, Inc. (FTSI),
Franklin Templeton Distributors, Inc. (FTD) and Franklin Templeton Investor
Services, Inc. (FTIS), the Fund's investment manager, administrative manager,
principal underwriter, and transfer agent, respectively.
22
<PAGE>
TEMPLETON GLOBAL OPPORTUNITIES TRUST
Notes to Financial Statements (unaudited) (continued)
3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (CONT.)
The Fund pays an investment management fee to TICI of 0.80% per year of the
average daily net assets of the Fund. The Fund pays an administrative fee to
FTSI based on the Fund's average net assets as follows: 0.15% per annum on the
first $200 million of the Company's aggregate 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.
The Fund reimburses FTD up to 0.25% and 1.00% per year of the average daily net
assets of Class I and Class II, respectively, for costs incurred in marketing
the Fund's shares. Under the Class I distribution plan, costs exceeding the
maximum may be reimbursed in subsequent periods. At June 30, 1997, unreimbursed
costs were $77,226.
FTD received net commissions from sales of fund shares, and received contingent
deferred sales charges for the period of $124,948 and $2,446, respectively.
During the period ended June 30, 1997, legal fees of $4,900 were paid to a law
firm in which an officer of the Company is a partner.
4. INVESTMENT TRANSACTIONS
Purchases and sales of securities (excluding short-term securities) for the
period ended June 30, 1997 aggregated $80,546,240 and $97,822,610, respectively.
5. INCOME TAXES
At June 30, 1997, the net unrealized appreciation based on the cost of
investments for income tax purposes of $616,951,272 was as follows:
<TABLE>
<S> <C>
Unrealized appreciation...................................... $247,340,794
Unrealized depreciation...................................... (40,044,203)
------------
Net unrealized appreciation.................................. $207,296,591
============
</TABLE>
23
<PAGE>
This page intentionally left blank
<PAGE>
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including charges and expenses, call Franklin Fund Information, toll free, at
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invest or send money. To ensure the highest quality of service, telephone calls
to or from our service departments may be monitored, recorded and accessed.
These calls can be determined by the presence of a regular beeping tone.
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Variable Annuities
Franklin Valuemark(R)
Franklin Templeton
Valuemark Income Plus
(an immediate annuity)
*Two or more fund options available: long-term portfolio, intermediate-term
portfolio, a portfolio of insured municipal securities, and/or a high yield
portfolio (CA) and a money market portfolio (CA and NY).
**The fund may invest up to 100% of its assets in bonds that pay interest
subject to the federal alternative minimum tax.
***Portfolio of insured municipal securities. Franklin Valuemark and Franklin
Templeton Valuemark Income Plus are issued by Allianz Life Insurance Company of
North America or by its wholly owned subsidiary, Preferred Life Insurance
Company of New York, and distributed by NALAC Financial Plans, LLC.
<PAGE>
[FRANKLIN TEMPLETON LOGO]
PRINCIPAL UNDERWRITER
Franklin/Templeton Distributors, Inc.
700 Central Avenue
St. Petersburg, Florida 33701-3628
SHAREHOLDER SERVICES
1-800-632-2301
Fund Information
1-800-342-5236
This report must be preceded or accompanied by the current prospectus of the
Templeton Global Opportunities Trust, which contains more complete information
including risk factors, charges and expenses. Like any investment in securities,
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 the risk of such losses should not invest
in shares of the Fund.
To ensure the highest quality of service, telephone calls to or from our service
departments may be monitored, recorded and accessed. These calls can be
determined by the presence of a regular beeping tone.
Printed on recycled paper
<PAGE>
