TEMPLETON GLOBAL
OPPORTUNITIES TRUST
[GRAPHIC OF MAP]
SEMI ANNUAL REPORT
JUNE 30, 1999
[FRANKLIN TEMPLETON LOGO]
PAGE
[FRANKLIN TEMPLETON CELEBRATING OVER 50 YEARS LOGO]
Thank you for investing with Franklin Templeton. We encourage our investors to
maintain a long-term perspective and remember that all securities markets move
both up and down, as do mutual fund share prices. We appreciate your past
support and look forward to serving your investment needs in the years ahead.
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 the
Templeton funds which are managed by many of the investment professionals he
selected and trained.
[PHOTO OF HOWARD J. LEONARD]
HOWARD J. LEONARD
Portfolio Manager
Templeton Global Opportunities Trust
PAGE
SHAREHOLDER LETTER
Your Fund's Goal: Templeton Global Opportunities Trust seeks long-term capital
growth. Under normal market conditions, the Fund invests primarily in the equity
securities of companies located anywhere in the world, including developing or
emerging markets.
Dear Shareholder:
We are pleased to bring you this semiannual report of Templeton Global
Opportunities Trust covering the six months ended June 30, 1999. During the
reporting period, concerns about Asia's economic problems receded, and many
equity markets around the world advanced as investors bid up the prices of
stocks previously thought to be at risk from Asia's turmoil. The U.S. economy
continued to surge ahead and its strength helped support economic growth in
other parts of the world. Even Brazil's currency devaluation could not undermine
investor confidence, and Latin American and other emerging markets also
performed well. Although economic growth in Europe was slower than many
investors hoped for, corporate earnings generally increased there and interest
rates fell, in contrast to the U.S. where interest rates rose. Meanwhile, the
prices of many stocks once viewed as safe havens from a potential global
economic downturn fell, and investors displayed renewed interest in cyclical
stocks.
You will find a complete listing of the Fund's portfolio holdings, including
dollar value and number of shares or principal amount, beginning on page 11 of
this report.
CONTENTS
Shareholder Letter .................. 1
Performance Summary ................. 6
Financial Highlights &
Statement of Investments ............ 8
Financial Statements ................ 16
Notes to Financial
Statements .......................... 19
[FUND CATEGORY PYRAMID GRAPH]
PAGE
GEOGRAPHIC DISTRIBUTION
Based on Total Net Assets
6/30/99
[PIE CHART]
GEOGRAPHIC DISTRIBUTION
Based on Total Net Assets
6/30/99
COUNTRY % OF TOTAL NET ASSETS
- ------- ---------------------
Europe 38.5%
North America 17.2%
Latin America 14.0%
Asia 8.6%
Australia/New Zealand 4.9%
Middle East/Africa 0.5%
Short-Term Investment &
Other Net Assets 16.3%
TOP 10 COUNTRIES (EQUITY)
6/30/99
% OF TOTAL
COUNTRY NET ASSETS
------- ----------
U.S. 14.0%
Brazil 7.6%
U.K. 7.5%
Hong Kong* 5.5%
Spain 5.2%
Mexico 4.7%
Sweden 4.2%
France 4.1%
Finland 3.7%
Netherlands 3.5%
*Hong Kong reverted to the sovereignty of China on July 1, 1997.
Within this environment, Templeton Global Opportunities Trust - Class A
delivered a 10.42% six-month cumulative total return, as shown in the
Performance Summary on page 7. The Fund's benchmark, the Morgan Stanley Capital
International(R) (MSCI) All Country World Free Index, posted a cumulative total
return of 9.82% for the same period.(1)
At the close of the six months under review, Europe remained our largest
regional weighting, representing 38.5% of the Fund's total net assets. Many
cyclical stocks in the Fund's portfolio rose in price when investor attention
focused on the potential for earnings to improve if the world's economic rebound
led to higher commodity prices. For example, the price of our shares of Elkem
ASA, a Norwegian metals producer and Imperial Chemical Industries PLC, a British
company, increased during the six months under review. Although the euro
remained weak versus the U.S. dollar, negatively impacting the performance of
some of our holdings, this improved the export competitiveness of many European
manufacturers, increasing their potential profit margins and demand for their
products. Despite the fact that valuations of most European stocks remained high
by historical standards, we found what we believed to be attractive
opportunities in Northern European countries, and purchased shares of Invensys
PLC, a British designer of industrial control products. We also added to our
holdings of IHC Caland NV, a Dutch supplier of offshore oil rigs.
1. Source: Standard & Poor's(R) Micropal. The unmanaged MSCI All Country World
Free Index measures the performance of securities located in 48 countries,
including emerging markets in Latin America, Asia and Eastern Europe. It
includes reinvested dividends. One cannot invest directly in an index, nor is an
index representative of the Fund's portfolio.
2
PAGE
During the reporting period, our positions in Brazilian companies, including
Unibanco Uniao de Bancos Brasileiros SA, Petrobras-Petroleo Brasileiro SA and
Cia Energetica de Minas Gerais Cemig, greatly contributed to the Fund's
performance. In spite of the rise of their share price, the price-to-earnings
ratios of our Brazilian holdings remained among the lowest in the world, and on
June 30, 1999, they represented 7.6% of the Fund's total net assets.
Although many Asian economies improved, their banking and corporate sectors
remained damaged, and, in our opinion, require much time and money to repair.
Some companies may begin to announce improved sales and operating earnings
during the next two years, but we believe their earnings-per-share could be
diminished if they issue new, dilutive shares to restore strength to their
balance sheets. Because we found it difficult to discover Asian stocks that
suited our long-term investment strategy, our exposure to the region remained
small, and we only purchased shares of companies such as Korea Telecom Corp. and
Hong Kong-based Smartone Telecommunications Holdings Ltd., which were strongly
capitalized according to our analysis.
Believing the U.S. stock market was overvalued, we added new stocks from only
two U.S. companies, Lyondell Chemical Co., which in our view has potential to
benefit if chemical prices rise and it restructures its balance sheet, and
Airborne Freight Corp., whose share price fell after a poor short-term earnings
report. We believe Airborne Freight may return to more normal operating
conditions over the long term in light of a contract with the U.S. Postal
Service.
Looking forward, we are optimistic about prospects for global equity markets. We
shall continue to scour the globe, searching for those
TOP 10 INDUSTRIES
6/30/99
% OF TOTAL
INDUSTRY NET ASSETS
-------- ----------
Telecommunications 19.6%
Banking 9.6%
Insurance 8.1%
Energy Sources 6.1%
Electrical & Electronics 5.5%
Utilities Electrical & Gas 3.9%
Machinery & Engineering 3.4%
Metals & Mining 3.3%
Health & Personal Care 2.7%
Forest Products & Paper 2.5%
3
PAGE
TOP 10 EQUITY HOLDINGS
6/30/99
COMPANY % OF TOTAL
INDUSTRY, COUNTRY NET ASSETS
----------------- ----------
Nokia Corp., A
Telecommunications, Finland 3.0%
Telefonos de Mexico
SA (Telmex), L, ADR
Telecommunications, Mexico 2.6%
Telefonica SA
Telecommunications, Spain 2.4%
Hong Kong
Telecommunications Ltd.
Telecommunications,
Hong Kong* 2.2%
Fannie Mae
Financial Services, U.S. 2.2%
Kuoni Reisen
Holding AG, B
Leisure & Tourism, Switzerland 2.0%
Foreningssparbanken AB, A
Banking, Sweden 2.0%
General Electric Co. PLC
Electrical & Electronics, U.K. 2.0%
American International
Group Inc.
Insurance, U.S. 1.9%
Total Fina SA, B
Energy Sources, France 1.9%
*Hong Kong reverted to the sovereignty of China on July 1, 1997.
stocks our analysis indicates are selling at a low value in relation to their
future earnings potential, and if markets advance, we will be watching for
opportunities to sell our high-priced North American and European stocks in
favor of bargain-priced stocks that meet our demanding criteria. This strategy
is designed to help reduce risk while offering the possibility for attractive
long-term returns to shareholders in Templeton Global Opportunities Trust.
There are, of course, special risks involved with global investing related to
market, currency, economic, social, political and other factors. Emerging market
securities involve heightened risks related to the same factors, in addition to
those associated with their relatively small size and lesser liquidity.
Investing in any emerging market means accepting a certain amount of volatility
and, in some cases, the consequences of severe market corrections. In fact,
Mexico's equity market has increased 3,760% in the last 15 years, but has
suffered 8 quarterly declines of more than 15% during that time.(2) While
short-term volatility can be disconcerting, declines of more than 50% are not
unusual in emerging markets. These special risks and other considerations are
discussed in the Fund's prospectus.
Please remember, this discussion reflects our views, opinions and portfolio
holdings as of June 30, 1999, the end of the reporting period. However, market
and economic conditions are changing
2. Source: Mexico Bolsa Index. Based on quarterly percentage price change over
15 years ended June 30, 1999. Market return is measured in U.S. dollars and does
not include reinvested dividends.
4
PAGE
constantly, which can be expected to affect our strategies and the Fund's
portfolio composition. Although past performance is not predictive of future
results, these insights may help you understand our investment and management
philosophy.
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/HOWARD J. LEONARD
- -----------------------------------
Howard J. Leonard, CFA
Portfolio Manager
Templeton Global Opportunities Trust
5
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CLASS A (formerly Class I):
Subject to the current, maximum 5.75% initial sales charge. Prior to January 1,
1992, Fund shares were offered at a higher initial sales charge. Thus, actual
returns would have been lower. On January 1, 1993, the Fund's Class A shares
implemented a Rule 12b-1 Plan, which affects subsequent performance.
CLASS B:
Subject to no initial sales charge, but subject to a contingent deferred sales
charge (CDSC) declining from 4% to 0% over six years. These shares have higher
annual fees and expenses than Class A shares.
CLASS C (formerly Class II):
Subject to 1% initial sales charge and 1% CDSC for shares redeemed within 18
months of investment. These shares have higher annual fees and expenses than
Class A shares.
PERFORMANCE SUMMARY AS OF 6/30/99
Distributions will vary based on earnings of the Fund's portfolio and any
profits realized from the sale of the portfolio's securities, as well as the
level of each class' operating expenses. Past distributions are not indicative
of future trends. All total returns include reinvested distributions at net
asset value.
PRICE AND DISTRIBUTION INFORMATION
CLASS A CHANGE 6/30/99 12/31/98
- -------------------------------------------------------------------------------
Net Asset Value +$1.01 $15.64 $14.63
DISTRIBUTIONS (1/1/99-6/30/99)
--------------------------------------------
Dividend Income $0.0850
Long-Term Capital Gain $0.3100
Short-Term Capital Gain $0.0530
TOTAL $0.4480
CLASS B CHANGE 6/30/99 1/1/99
- ------------------------------------------------------------------------------
Net Asset Value +$0.95 $15.58 $14.63
DISTRIBUTIONS (1/1/99-6/30/99)
---------------------------------------------
Dividend Income $0.0850
Long-Term Capital Gain $0.3100
Short-Term Capital Gain $0.0530
TOTAL $0.4480
CLASS C CHANGE 6/30/99 12/31/98
- ------------------------------------------------------------------------------
Net Asset Value +$0.94 $15.44 $14.50
DISTRIBUTIONS (1/1/99-6/30/99)
--------------------------------------------
Dividend Income $0.0848
Long-Term Capital Gain $0.3100
Short-Term Capital Gain $0.0530
TOTAL $0.4478
Past performance is not predictive of future results.
6
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PERFORMANCE
<TABLE>
<CAPTION>
INCEPTION
CLASS A 6-MONTH 1-YEAR 5-YEAR (1/19/90)
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cumulative Total Return(1) 10.42% 5.00% 79.62% 204.91%
Average Annual Total Return(2) 4.09% -1.05% 11.11% 11.98%
Value of $10,000 Investment(3) $ 10,409 $ 9,895 $ 16,934 $ 28,748
</TABLE>
<TABLE>
<CAPTION>
6/30/95 6/30/96 6/30/97 6/30/98 6/30/99
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
One-Year
Total Return(4) 13.50% 13.91% 30.02% 1.77% 5.00%
</TABLE>
<TABLE>
<CAPTION>
INCEPTION
CLASS B 6-MONTH (1/1/99)
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Cumulative Total Return(1) 10.00% 10.00%
Aggregate Total Return(2) 6.00% 6.00%
Value of $10,000 Investment(3) $10,600 $10,600
</TABLE>
<TABLE>
<CAPTION>
INCEPTION
CLASS C 6-MONTH 1-YEAR 3-YEAR (5/1/95)
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cumulative Total Return(1) 10.02% 4.25% 35.96% 63.60%
Average Annual Total Return(2) 7.91% 2.20% 10.41% 12.28%
Value of $10,000 Investment(3) $10,791 $10,220 $13,459 $16,201
</TABLE>
<TABLE>
<CAPTION>
6/30/96 6/30/97 6/30/98 6/30/99
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
One-Year
Total Return(4) 13.13% 29.15% 0.98% 4.25%
</TABLE>
1. Cumulative total return represents the change in value of an investment over
the periods indicated and does not include sales charges.
2. Average annual total return represents the average annual change in value of
an investment over the periods indicated and includes the current, applicable,
maximum sales charge(s) for that class. Six-month return has not been
annualized. Since Class B shares have existed for less than one year, aggregate
total return for that class represents total return since inception, including
the maximum sales charge.
3. These figures represent the value of a hypothetical $10,000 investment in the
Fund over the periods indicated and include the current, applicable, maximum
sales charge(s) for that class.
4. One-year total return represents the change in value of an investment over
the one-year periods ended on the specified dates and does not include sales
charges.
Since markets can go down as well as up, investment return and principal value
will fluctuate with market conditions, currency volatility and the social,
economic and political climates of countries where the Fund invests. Emerging
markets involve heightened risks related to the same factors, in addition to
those associated with their relatively small size and lesser liquidity. You may
have a gain or loss when you sell your shares.
Past performance is not predictive of future results. 7
PAGE
TEMPLETON GLOBAL OPPORTUNITIES TRUST
Financial Highlights
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1999 --------------------------------------------------------
(UNAUDITED)+ 1998 1997 1996 1995 1994
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
(For a share outstanding throughout the
period)
Net asset value, beginning of period.......... $14.63 $15.32 $14.62 $12.57 $11.84 $14.46
-------------------------------------------------------------------------
Income from investment operations:
Net investment income........................ .17 .39 .38 .30 .16 .09
Net realized and unrealized gains (losses)... 1.29 (.48) 1.70 2.69 1.33 (.63)
-------------------------------------------------------------------------
Total from investment operations.............. 1.46 (.09) 2.08 2.99 1.49 (.54)
-------------------------------------------------------------------------
Less distributions from:
Net investment income........................ (.09) (.32) (.37) (.30) (.16) (.09)
In excess of net investment income........... (.36) -- -- (.06) -- --
Net realized gains........................... -- (.28) (1.01) (.58) (.60) (1.99)
-------------------------------------------------------------------------
Total distributions........................... (.45) (.60) (1.38) (.94) (.76) (2.08)
-------------------------------------------------------------------------
Net asset value, end of period................ $15.64 $14.63 $15.32 $14.62 $12.57 $11.84
=========================================================================
Total Return*................................. 10.42% (.61)% 14.53% 24.19% 12.87% (4.09)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's)............. $662,238 $656,108 $786,219 $634,478 $510,777 $476,822
Ratios to average net assets:
Expenses..................................... 1.44%** 1.41% 1.37% 1.45% 1.52% 1.53%
Net investment income........................ 2.25%** 2.38% 2.30% 2.10% 1.19% .71%
Portfolio turnover rate....................... 12.01% 3.09% 26.21% 18.54% 15.54% 37.31%
</TABLE>
*Total return does not reflect sales commissions and is not annualized.
**Annualized.
+Based on average weighted shares outstanding.
8
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TEMPLETON GLOBAL OPPORTUNITIES TRUST
Financial Highlights (continued)
CLASS B
-------------
PERIOD ENDED
JUNE 30, 1999
(UNAUDITED)+
-------------
PER SHARE OPERATING PERFORMANCE
(For a share outstanding throughout the period)
Net asset value, beginning of period........................ $14.63
------
Income from investment operations:
Net investment income...................................... .14
Net realized and unrealized gain........................... 1.26
-------------
Total from investment operations............................ 1.40
-------------
Less distributions from:
Net investment income...................................... (.09)
In excess of net investment income......................... (.36)
-------------
Total distributions......................................... (.45)
-------------
Net asset value, end of period.............................. $15.58
=============
Total Return*............................................... 10.00%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's)........................... $118
Ratios to average net assets:
Expenses................................................... 2.19%**
Net investment income...................................... 1.89%**
Portfolio turnover rate..................................... 12.01%
* Total return does not reflect the contingent deferred sales charge and is not
annualized.
** Annualized.
+ Effective date of Class B shares was January 1, 1999. Based on average
weighted shares outstanding.
9
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TEMPLETON GLOBAL OPPORTUNITIES TRUST
Financial Highlights (continued)
<TABLE>
<CAPTION>
CLASS C
--------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1999 ---------------------------------------------
(UNAUDITED)++ 1998 1997 1996 1995+
--------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
(For a share outstanding throughout the period)
Net asset value, beginning of period.................... $14.50 $15.17 $14.52 $12.53 $12.26
--------------------------------------------------------------
Income from investment operations:
Net investment income.................................. .11 .24 .18 .24 .02
Net realized and unrealized gains (losses)............. 1.28 (.43) 1.77 2.63 .88
--------------------------------------------------------------
Total from investment operations........................ 1.39 (.19) 1.95 2.87 .90
--------------------------------------------------------------
Less distributions from:
Net investment income.................................. (.09) (.20) (.29) (.24) (.12)
In excess of net investment income..................... (.36) -- -- (.06) --
Net realized gains..................................... -- (.28) (1.01) (.58) (.51)
--------------------------------------------------------------
Total distributions..................................... (.45) (.48) (1.30) (.88) (.63)
--------------------------------------------------------------
Net asset value, end of period.......................... $15.44 $14.50 $15.17 $14.52 $12.53
==============================================================
Total Return*........................................... 10.02% (1.29)% 13.74% 23.28% 7.43%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's)....................... $28,014 $33,423 $38,627 $11,622 $2,264
Ratios to average net assets:
Expenses............................................... 2.16%** 2.16% 2.12% 2.20% 2.22%**
Net investment income (loss)........................... 1.49%** 1.62% .93% 1.12% (.01)%**
Portfolio turnover rate................................. 12.01% 3.09% 26.21% 18.54% 15.54%
</TABLE>
* Total return does not reflect sales commissions or the contingent deferred
sales charge and is not annualized.
** Annualized.
+ For the period May 1, 1995 (effective date) to December 31, 1995.
++ Based on average weighted shares outstanding.
See Notes to Financial Statements.
10
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TEMPLETON GLOBAL OPPORTUNITIES TRUST
STATEMENT OF INVESTMENTS, JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS 76.1%
AUTOMOBILES 1.1%
Autoliv Inc., SDR........................................... Sweden 217,000 $ 6,610,562
Volvo AB, B................................................. Sweden 39,700 1,151,029
------------
7,761,591
------------
BANKING 7.0%
Banco Popular Espanol SA.................................... Spain 140,000 10,070,125
BPI Socieda de Gestora de Participacoes Socias SA........... Portugal 117,300 2,461,643
Foreningssparbanken AB, A................................... Sweden 963,150 13,594,213
National Australia Bank Ltd. ............................... Australia 424,214 7,019,692
Unibanco Uniao de Bancos Brasileiros SA, GDR................ Brazil 385,575 9,277,898
Union Bank of Norway, Primary Capital Cert. ................ Norway 124,800 2,330,340
Union Bank of Norway, Primary Capital Cert. 144A............ Norway 175,200 3,271,439
------------
48,025,350
------------
BUILDING MATERIALS & COMPONENTS .1%
Cementos Diamante SA, ADR, 144A............................. Colombia 129,200 169,575
Pioneer International Ltd. ................................. Australia 100,000 254,832
------------
424,407
------------
BUSINESS & PUBLIC SERVICES .8%
Hyder PLC................................................... United Kingdom 79,780 941,887
Laidlaw Inc. ............................................... Canada 600,000 4,386,744
------------
5,328,631
------------
CHEMICALS 2.2%
Akzo Nobel NV............................................... Netherlands 8,000 336,599
Imperial Chemical Industries PLC............................ United Kingdom 575,000 5,719,003
Lyondell Chemical Co. ...................................... United State 454,500 9,374,063
------------
15,429,665
------------
CONSTRUCTION & HOUSING 1.1%
Fletcher Challenge Building Ltd. ........................... New Zealand 5,264,000 7,670,826
------------
DATA PROCESSING & REPRODUCTION 1.1%
*Newbridge Networks Corp. .................................. Canada 256,000 7,360,000
------------
ELECTRICAL & ELECTRONICS 5.5%
Alcatel SA, ADR............................................. France 266,098 7,550,517
General Electric Co. PLC.................................... United Kingdom 1,325,000 13,470,966
Koninklijke Philips Electronics NV.......................... Netherlands 124,200 12,250,933
Motorola Inc. .............................................. United States 10,000 947,500
*Scitex Corp. Ltd. ......................................... Israel 360,000 3,600,000
------------
37,819,916
------------
ELECTRONIC COMPONENTS & INSTRUMENTS 1.7%
Intel Corp. ................................................ United States 192,000 11,424,000
------------
</TABLE>
11
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TEMPLETON GLOBAL OPPORTUNITIES TRUST
STATEMENT OF INVESTMENTS, JUNE 30, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS (CONT.)
ENERGY SOURCES 5.1%
Amerada Hess Corp. ......................................... United States 50,000 $ 2,975,000
*Hub Power Co. Ltd., GDR, 144A.............................. Pakistan 310,000 2,117,733
*Rao Gazprom, ADR, 144A..................................... Russia 390,300 4,400,633
Repsol SA................................................... Spain 75,000 1,531,401
Societe Elf Aquitaine SA, Br. .............................. France 55,000 8,071,053
Total Fina SA, B............................................ France 100,000 12,900,897
Valero Energy Corp., new.................................... United States 161,400 3,460,013
------------
35,456,730
------------
FINANCIAL SERVICES 2.4%
Fannie Mae.................................................. United States 220,000 15,042,500
Merrill Lynch & Co. Inc. ................................... United States 20,000 1,598,750
------------
16,641,250
------------
FOREST PRODUCTS & PAPER 2.5%
*Asia Pacific Resources International Hldgs. Ltd., A........ Indonesia 1,923,775 2,284,483
Assidoman AB................................................ Sweden 305,370 4,597,432
Bowater Inc. ............................................... United States 10,000 472,500
Carter Holt Harvey Ltd. .................................... New Zealand 3,084,890 3,694,381
*Empaques Ponderosa SA de CV, B............................. Mexico 3,000,000 2,178,324
Fletcher Challenge Ltd. Forestry Division................... New Zealand 4,652,452 2,613,252
Georgia-Pacific Corp. ...................................... United States 10,000 473,750
Georgia Pacific Timber Group................................ United States 5,000 126,250
*PT Inti Indorayon Utama, ADR............................... Indonesia 547,570 175,222
Stora Enso OYJ, R........................................... Finland 69,400 744,313
------------
17,359,907
------------
HEALTH & PERSONAL CARE 2.7%
Astrazeneca PLC, fgn. ...................................... United Kingdom 134,534 5,237,660
Medeva PLC.................................................. United Kingdom 988,516 1,620,467
Nycomed Amersham PLC........................................ United Kingdom 1,165,800 8,292,766
*Windmere-Durable Holdings Inc. ............................ United States 225,000 3,796,875
------------
18,947,768
------------
INSURANCE 6.9%
Ace Ltd. ................................................... Bermuda 309,000 8,729,250
American International Group Inc. .......................... United States 112,500 13,169,531
AXA China Region Ltd. ...................................... Hong Kong 10,338,000 8,260,967
Muenchener Rueckversicherungs-Gesellschaft.................. Germany 26,000 4,898,628
*Muenchener Rueckversicherungs-Gesellschaft, 144A........... Germany 26,000 4,853,047
Presidential Life Corp. .................................... United States 375,000 7,359,375
------------
47,270,798
------------
LEISURE & TOURISM 2.0%
Kuoni Reisen Holding AG, B.................................. Switzerland 3,660 14,114,049
------------
</TABLE>
12
PAGE
TEMPLETON GLOBAL OPPORTUNITIES TRUST
STATEMENT OF INVESTMENTS, JUNE 30, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS (CONT.)
MACHINERY & ENGINEERING 3.4%
IHC Caland NV............................................... Netherlands 291,000 $ 11,403,527
Invensys PLC................................................ United Kingdom 541,328 2,564,060
Rauma OY, ADR............................................... Finland 353,700 3,979,125
VA Technologie AG, 144A, Br. ............................... Austria 57,300 5,191,095
------------
23,137,807
------------
MERCHANDISING 2.2%
*BJ's Wholesale Club Inc. .................................. United States 280,000 8,417,500
*Cifra SA de CV, V.......................................... Mexico 627,753 1,260,198
*Homebase Inc. ............................................. United States 140,000 883,750
Storehouse PLC.............................................. United Kingdom 2,300,000 4,948,614
------------
15,510,062
------------
METALS & MINING 2.3%
Boehler Uddeholm AG, 144A................................... Austria 58,500 2,895,138
*Boliden Ltd., SDR.......................................... Canada 126,815 290,859
Companhia Siderurgica Nacional Sid Nacional CSN............. Brazil 151,111,000 3,987,951
Elkem ASA, A................................................ Norway 501,000 8,909,495
------------
16,083,443
------------
MULTI-INDUSTRY 1.0%
Jardine Strategic Holdings Ltd. ............................ Hong Kong 1,656,137 4,305,956
Trelleborg AB, B............................................ Sweden 324,500 2,862,562
------------
7,168,518
------------
RECREATION & OTHER CONSUMER GOODS .8%
Yue Yuen Industrial (Holdings) Ltd. ........................ Hong Kong 2,453,600 5,660,561
------------
TELECOMMUNICATIONS 18.8%
Hong Kong Telecommunications Ltd. .......................... Hong Kong 5,808,473 15,084,804
*Korea Telecom Corp., ADR................................... South Korea 239,975 9,599,000
Lucent Technologies Inc. ................................... United States 156,100 10,526,994
Nokia Corp., A.............................................. Finland 234,800 20,581,623
Nortel Networks Corp. ...................................... Canada 9,000 781,313
Smartone Telecommunications Holdings Ltd. .................. Hong Kong 1,352,000 4,809,373
*Telecom Italia SpA, di Risp................................ Italy 1,703,050 9,264,297
*Telecomunicacoes Brasileiras SA (Telebras), ADR............ Brazil 135,000 12,175,313
Telefonica de Argentina SA, ADR............................. Argentina 277,414 8,703,864
Telefonica del Peru SA, ADR................................. Peru 171,500 2,593,938
*Telefonica SA.............................................. Spain 340,000 16,377,643
Telefonos de Mexico SA (Telmex), L, ADR..................... Mexico 226,050 18,267,666
Videsh Sanchar Nigam Ltd., GDR, 144A........................ India 77,600 994,250
------------
129,760,078
------------
</TABLE>
13
PAGE
TEMPLETON GLOBAL OPPORTUNITIES TRUST
STATEMENT OF INVESTMENTS, JUNE 30, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS (CONT.)
TRANSPORTATION 2.3%
Air New Zealand Ltd., B..................................... New Zealand 1,174,000 $ 2,426,198
Airborne Freight Corp. ..................................... United States 250,000 6,921,875
Guangshen Railway Co. Ltd., H, ADR.......................... China 163,200 1,244,400
Mayne Nickless Ltd., A...................................... Australia 1,572,500 5,381,139
------------
15,973,612
------------
UTILITIES ELECTRICAL & GAS 3.1%
British Energy Ltd., 144A................................... United Kingdom 1,021,900 8,738,387
*Centrais Eletricas Brasileiras SA (Electrobras)............ Brazil 237,540,000 4,527,153
Centrais Geradoras do Sul do Brasil SA (Gerasul)............ Brazil 237,540,000 189,761
Iberdrola SA, Br. .......................................... Spain 515,000 7,844,191
------------
21,299,492
------------
TOTAL COMMON STOCKS (COST $373,128,313)..................... 525,628,461
------------
PREFERRED STOCKS 4.8%
Banco Bradesco SA BBD, pfd. ................................ Brazil 508,140,000 2,609,558
Cia Energetica de Minas Gerais Cemig, ADR, pfd. ............ Brazil 275,348 5,814,915
Cia Vale do Rio Doce, ADR, pfd. ............................ Brazil 330,000 6,552,924
Coteminas Cia Tecidos Norte de Minas, pfd. ................. Brazil 11,918,000 1,006,484
*Empresa Nacional de Comercio Redito Participacoe, pfd. .... Brazil 11,918,000 10,269
National Australia Bank Cap Sec PLC, 7.88%, cvt., pfd. ..... Australia 159,608 4,848,093
Petrobras-Petroleo Brasileiro SA, pfd. ..................... Brazil 42,000,000 6,590,585
Philippine Long Distance Telephone Co., 7.00%, cvt., pfd.
Ser 3..................................................... Philippines 105,000 5,460,000
Telecomunicacoes Brasileiras SA (Telebras), ADR, pfd. ...... Brazil 135,000 8,438
------------
TOTAL PREFERRED STOCKS (COST $37,617,474)................... 32,901,266
------------
<CAPTION>
PRINCIPAL
AMOUNT**
--------
<S> <C> <C> <C>
BONDS 2.8%
Banco Nacional de Mexico, cvt., Reg S, 7.00%, 12/15/99...... Mexico $ 10,910,000 10,910,000
Government of Italy, cvt., 5.00%, 6/28/01................... Italy 5,235,000 8,637,750
------------
TOTAL BONDS (COST $16,923,274).............................. 19,547,750
------------
SHORT TERM INVESTMENT (COST $25,232,011) 3.7%
Fannie Mae, 4.71%, 7/13/99.................................. United States 25,275,000 25,234,484
------------
TOTAL INVESTMENTS BEFORE REPURCHASE AGREEMENTS
(COST $452,901,072)............................................. 603,311,961
------------
</TABLE>
14
PAGE
TEMPLETON GLOBAL OPPORTUNITIES TRUST
STATEMENT OF INVESTMENTS, JUNE 30, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
COUNTRY AMOUNT** VALUE
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
(a)REPURCHASE AGREEMENTS 10.5%
BZW Securities, 4.75%, 7/01/99 (Maturity Value $24,003,167)
Collateralized by U.S. Treasury Notes & Bonds............. United States $ 24,000,000 $ 24,000,000
CIBC NY, 4.80%, 7/01/99 (Maturity Value $24,003,200)
Collateralized by U.S. Treasury Notes & Bonds............. United States 24,000,000 24,000,000
Morgan Stanley & Co. Inc., 4.88%, 7/01/99 (Maturity Value
$24,676,345) Collateralized by U.S. Treasury Notes &
Bonds..................................................... United States 24,673,000 24,673,000
------------
TOTAL REPURCHASE AGREEMENTS (COST $72,673,000).............. 72,673,000
------------
TOTAL INVESTMENTS (COST $525,574,072) 97.9%................. 675,984,961
OTHER ASSETS, LESS LIABILITIES 2.1%......................... 14,384,689
------------
TOTAL NET ASSETS 100.0%..................................... $690,369,650
============
</TABLE>
*Non-Income Producing.
**Securities denominated in U.S. dollars.
(a)See Note 1(c) regarding repurchase agreements.
See Notes to Financial Statements.
15
PAGE
TEMPLETON GLOBAL OPPORTUNITIES TRUST
Financial Statements
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<S> <C>
Assets:
Investments in securities, at value (cost $452,901,072).... $603,311,961
Repurchase agreement, at value and cost.................... 72,673,000
Cash....................................................... 1,894
Receivables:
Fund shares sold.......................................... 14,767,423
Dividends and interest.................................... 2,131,341
------------
Total assets.......................................... 692,885,619
------------
Liabilities:
Payables:
Investment securities purchased........................... 179,643
Fund shares redeemed...................................... 1,184,252
To affiliates............................................. 914,020
Accrued Expenses........................................... 238,054
------------
Total liabilities..................................... 2,515,969
------------
Net assets, at value........................................ $690,369,650
============
Net assets consist of:
Undistributed net investment income........................ $ 7,247,091
Net unrealized appreciation................................ 150,410,889
Accumulated net realized gain.............................. 23,395,628
Beneficial shares.......................................... 509,316,042
------------
Net assets, at value........................................ $690,369,650
============
CLASS A:
Net asset value per share ($662,237,840 / 42,340,032 shares
outstanding)............................................. $15.64
============
Maximum offering price per share ($15.64 / 94.25%)......... $16.59
============
CLASS B:
Net asset value and maximum offering price per share
($118,032 / 7,575 shares outstanding)*.................... $15.58
============
CLASS C:
Net asset value per share ($28,013,778 / 1,814,361 shares
outstanding)*............................................. $15.44
============
Maximum offering price per share ($15.44 / 99.00%)......... $15.60
============
</TABLE>
*Redemption price per share is equal to net asset value less any applicable
sales charge.
See Notes to Financial Statements.
16
PAGE
TEMPLETON GLOBAL OPPORTUNITIES TRUST
Financial Statements (continued)
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1999 (UNAUDITED)
<TABLE>
<S> <C> <C>
Investment Income:
(net of foreign taxes of $925,524)
Dividends.................................................. $ 8,363,842
Interest................................................... 3,780,501
-----------
Total investment income............................... $12,144,343
Expenses:
Management fees (Note 3)................................... 2,634,903
Administrative fees (Note 3)............................... 459,516
Distribution fees (Note 3)
Class A................................................... 786,407
Class B................................................... 315
Class C................................................... 143,114
Transfer agent fees (Note 3)............................... 511,500
Custodian fees............................................. 86,500
Reports to shareholders.................................... 96,100
Registration and filing fees............................... 50,300
Professional fees.......................................... 36,200
Trustees' fees and expenses................................ 32,400
Other...................................................... 2,289
-----------
Total expenses........................................ 4,839,544
-----------
Net investment income........................... 7,304,799
-----------
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments............................................... 23,588,035
Foreign currency transactions............................. (150,945)
-----------
Net realized gain..................................... 23,437,090
Net unrealized appreciation on investments............ 35,460,418
-----------
Net realized and unrealized gain............................ 58,897,508
-----------
Net increase in net assets resulting from operations........ $66,202,307
===========
</TABLE>
See Notes to Financial Statements.
17
PAGE
TEMPLETON GLOBAL OPPORTUNITIES TRUST
Financial Statements (continued)
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, 1999 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1998
-------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income..................................... $ 7,304,799 $ 18,259,791
Net realized gain from investments and foreign currency
transactions............................................. 23,437,090 16,210,598
Net unrealized appreciation (depreciation) on
investments.............................................. 35,460,418 (36,288,088)
-------------------------------------
Net increase (decrease) in net assets resulting from
operations............................................ 66,202,307 (1,817,699)
Distributions to shareholders from:
Net investment income:
Class A.................................................. (3,572,086) (14,111,066)
Class B.................................................. (303) --
Class C.................................................. (175,455) (458,589)
Net realized gains:
Class A.................................................. (15,245,924) (14,629,485)
Class B.................................................. (1,292) --
Class C.................................................. (750,751) (723,508)
Beneficial share transactions (Note 2):
Class A.................................................. (38,528,516) (100,213,697)
Class B.................................................. 112,596 --
Class C.................................................. (7,201,830) (3,361,227)
-------------------------------------
Net increase (decrease) in net assets................... 838,746 (135,315,271)
Net assets:
Beginning of period........................................ 689,530,904 824,846,175
-------------------------------------
End of period.............................................. $690,369,650 $ 689,530,904
=====================================
Undistributed net investment income included in net assets:
End of period.............................................. $ 7,247,091 $ 3,690,136
=====================================
</TABLE>
See Notes to Financial Statements.
18
PAGE
TEMPLETON GLOBAL OPPORTUNITIES TRUST
Notes to Financial Statements (unaudited)
1. ORGANIZATION AND SIGNIFICANT 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. Under normal market conditions, the
Fund invests primarily in the equity securities of companies located anywhere in
the world, including developing or emerging markets. The following summarizes
the Fund's significant accounting policies.
a. SECURITY VALUATION:
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 TRANSLATION:
Portfolio securities and other assets and liabilities denominated in foreign
currencies are translated into U.S. dollars based on the exchange rate 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. When
the Fund purchases or sells foreign securities it will customarily enter into a
foreign exchange contract to minimize foreign exchange risk from the trade date
to the settlement date of such transactions.
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 and 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 on
foreign currency denominated assets and liabilities other than investments in
securities held at the end of the reporting period.
c. REPURCHASE AGREEMENTS:
The Fund may enter into repurchase agreements, which are accounted for as a loan
by the Fund to the seller, collateralized by securities which are delivered to
the Fund's custodian. The market value, including accrued interest, of the
initial collateralization is required to be at least 102% of the dollar amount
invested by the Funds, with the value of the underlying securities marked to
market daily to maintain coverage of at least 100%. At June 30, 1999, all
outstanding repurchase agreements held by the Fund had been entered into on that
date.
19
PAGE
TEMPLETON GLOBAL OPPORTUNITIES TRUST
Notes to Financial Statements (unaudited) (continued)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONT.)
d. 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 to
distribute all of its taxable income.
e. 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 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.
f. 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 SHARES
The Fund offers three classes of shares: Class A, Class B and Class C shares.
Effective January 1, 1999, Class I and Class II shares were renamed Class A and
Class C, respectively, and a third class of shares, Class B, was established.
The shares differ by their initial sales load, distribution fees, voting rights
on matters affecting a single class, and the exchange privilege of each class.
At June 30, 1999, 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, 1999 DECEMBER 31, 1998
-----------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
-----------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS A SHARES:
Shares sold............................................ 31,229,554 $ 465,940,350 31,019,020 $ 466,421,039
Shares issued on reinvestment of distributions......... 1,211,967 16,507,198 1,692,945 25,243,069
Shares redeemed........................................ (34,936,082) (520,976,064) (39,210,265) (591,877,805)
-----------------------------------------------------------------
Net decrease........................................... (2,494,561) $ (38,528,516) (6,498,300) $(100,213,697)
=================================================================
</TABLE>
20
PAGE
TEMPLETON GLOBAL OPPORTUNITIES TRUST
Notes to Financial Statements (unaudited) (continued)
2. BENEFICIAL SHARES (CONT.)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1999+
-----------------------
SHARES AMOUNT
-----------------------
<S> <C> <C> <C> <C>
CLASS B SHARES:
Shares sold................................................. 7,503 $ 111,614
Shares issued on reinvestment of distributions.............. 72 982
-----------------------
Net increase................................................ 7,575 $ 112,596
=======================
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1999 DECEMBER 31, 1998
----------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
----------------------------------------------------
<S> <C> <C> <C> <C>
CLASS C SHARES:
Shares sold................................................. 114,299 $ 1,689,933 660,394 $ 9,995,284
Shares issued on reinvestment of distributions.............. 62,554 842,609 70,768 1,054,025
Shares redeemed............................................. (667,304) (9,734,372) (972,334) (14,410,536)
--------------------------------------------------------
Net decrease................................................ (490,451) $(7,201,830) (241,172) $ (3,361,227)
========================================================
+Effective date of Class B Shares was January 1, 1999.
</TABLE>
3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Certain officers of the Fund are also directors or officers of Templeton
Investment Counsel, Inc. (TICI), Franklin Templeton Services, Inc. (FT
Services), Franklin/Templeton Distributors, Inc. (Distributors) and
Franklin/Templeton Investor Services, Inc. (Investor Services), the Fund's
investment manager, administrative manager, principal underwriter, and transfer
agent, respectively.
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 FT
Services based on the Fund's average daily net assets as follows:
<TABLE>
<CAPTION>
ANNUALIZED
FEE RATE AVERAGE DAILY NET ASSETS
- -----------------------------------------------------------------
<S> <C>
0.15% First $200 million
0.135% Over $200 million, up to and including $700 million
0.10% Over $700 million, up to and including $1.2 billion
0.075% Over $1.2 billion
</TABLE>
The Fund reimburses Distributors for costs incurred in marketing the Fund's
shares up to .25%, 1.00% and 1.00% per year of the average daily net assets of
Class A, Class B and Class C shares, respectively. Under the Class A
distribution plan, costs exceeding the maximum may be reimbursed in subsequent
periods. At June 30, 1999, unreimbursed costs were $1,197,720. Distributors
received net commissions from sales of fund shares, and received contingent
deferred sales charges for the period of $28,112 and $17,641, respectively.
21
PAGE
TEMPLETON GLOBAL OPPORTUNITIES TRUST
Notes to Financial Statements (unaudited) (continued)
4. INCOME TAXES
The cost of securities for income tax purposes is the same as that shown in the
Statement of Investments. At June 30, 1999, the net unrealized appreciation
based on the cost of investments for income tax purposes was as follows:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $216,712,051
Unrealized depreciation..................................... (66,301,162)
------------
Net unrealized appreciation................................. $150,410,889
============
</TABLE>
5. INVESTMENT TRANSACTIONS
Purchases and sales of securities (excluding short-term securities) for the six
months ended June 30, 1999 aggregated $66,155,410 and $64,940,304, respectively.
22
PAGE
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PAGE
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PAGE
SEMIANNUAL REPORT
PRINCIPAL UNDERWRITER
Franklin/Templeton Distributors, Inc.
1-800/DIAL-BEN(R)
www.franklin-templeton.com
SHAREHOLDER SERVICES
1-800/632-2301
FUND INFORMATION
1-800/342-5236
This report must be preceded or accompanied by the current Templeton Global
Opportunities Trust prospectus, 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.
415 S99 08/99
