TEMPLETON INSTITUTIONAL FUNDS, INC.
GLOBAL FIXED INCOME SERIES
FOR THE SIX MONTHS ENDED
JUNE 30,1995
Principal Underwriter:
Franklin Templeton
Distributors, Inc.
700 Central Avenue
St. Petersburg
Florida 33701-3628
Account Services
1-800-684-4001
Sales Information
1-800-362-6243
This report must be preceded or accompanied by the prospecuts of The Templeton
Institutional Funds, Inc. Like any investment in securities, the value of The
Fund's portfolio will be subject to the risk of loss from market, currency,
economic, political and other factors, as well as investment decisions by the
investment manager which will not always be profitable or wise. The Fund and its
investors are not protected from such losses by the investment
manager.Therefore, investors who cannot accept this risk should not invest in
shares of the Fund.
<PAGE>
TEMPLETON INSTITUTIONAL FUNDS, INC.
GLOBAL FIXED INCOME SERIES
INVESTMENT PORTFOLIO, JUNE 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL IN
LOCAL CURRENCY* VALUE
BONDS - GOVERNMENT & GOVERNMENT AGENCIES: (cost $30,717) 30.0%
<S> <C> <C> <C>
30,000 U.S. U.S. Treasury Note, 7.50%, 1/31/96 $30,313
SHORT TERM OBLIGATIONS: (cost $ 49,902) 49.4%
50,000 U.S. U.S. Treasury Bill, 5.30% with maturity to 7/13/95 49,924
---------
TOTAL INVESTMENTS: (cost $80,619) 79.4% 80,237
OTHER ASSETS, LESS LIABILTIES: 20.6% 20,819
---------
TOTAL NET ASSETS: 100.0% $101,056
=========
</TABLE>
*Currency of country indicated.
See Notes to Financial Statements.
<PAGE>
TEMPLETON INSTITUTIONAL FUNDS, INC.
GLOBAL FIXED INCOME SERIES
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
PER SHARE OPERATING PERFORMANCE PERIOD FROM
(for a share outstanding throughout the period) MAY 3, 1993
SIX MONTHS
ENDED (COMMENCEMENT
JUNE 30, 1995 YEAR ENDED OF OPERATIONS) TO
(UNAUDITED) DECEMBER 31, 1994 DECEMBER 31, 1993
<S> <C> <C> <C>
Net asset value, beginning of period $.79 $.99 $10.00
Income from investment operations:
Net investment income .18 2.74 .25
Net realized and unrealized loss .04 (.30) (.11)
Total from investment operations .22 (.30) .14
Distributions:
Dividends from net investment income - (.16) (.16)
Distributions from net realized gains - - (.05)
Return of capital - (.09) -
Total distributions - (.17) (.21)
Change in net asset value .22 (.20) (.07)
Net asset value, end of period $8.15 $7.93 $.99
TOTAL RETURN * 2.77% (2.97)% 1.36%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000) $101 $98 $712
Ratio of expenses to average net assets .37% ** .12% .97%
Ratio of expenses, net of reimbursement, to
average net assets .10% ** .10% .10%
Ratio of net investment income to average
net assets .45% ** .56% .49%
Portfolio turnover rate - .34% .25%
</TABLE>
* Not annualized for periods of less than one year.
**Annualized.
See Notes to Financial Statements.
<PAGE>
Templeton Institutional Funds, Inc.
Global Fixed Income Series
Financial Statements
<TABLE>
<CAPTION>
Statement of Assets and Liabilities Statement of Operations
June 30, 1995 (unaudited) for the six months ended June 30, 1995 (unaudited)
<S> <C> <C> <C> <C>
Assets:
Investment in securities, at value Interest income $2,726
(identified cost $80,619)
$80,237
Cash 11,839 Expenses:
Management fees (Note 3) $272
Receivables: Administrative fees (Note 3) 49
Interest 2,535
Other 5,158 Custodian fees 400
Unamortized organization costs 4,042 Reports to shareholders 750
---------
Total assets 103,811 Audit fees 1,500
---------
Legal fees 1,200
Liabilities: Registration and filing fees 11,250
Accrued expenses 2,755 Directors' fees and expenses 1,500
---------
Total liabilities 2,755 Amortization of organization costs 714
---------
Net assets, at value $101,056 Other 830
========= ----------
Total expenses 18,465
Less expenses reimbursed (Note 3) (17,969)
----------
Net assets consist of: Total expenses less reimbursement 496
Undistributed net investment income 2,230 --------
Unrealized deprecation (171) Net investment income 2,230
Accumulated net realized loss (54,096)
Net capital paid in on shares of
capital stock 153,093 Realized and unrealized gain:
----------
Net assets, at value $101,056 Net realized gain on:
========== Investments 3
Shares outstanding 12,398 Foreign currency transactions 1
========== -----------
4
-----------
Net asset value per share Net unrealized appreciation on:
($101,056 /12,398) $8.15 Investments 330
========== Foreign currency translation of other
assets and liabilities 145
-----------
475
------------
Net realized and unrealized gain 479
--------
Net increase in net assets resulting
from operations $2,709
========
</TABLE>
See Notes to Financial Statements.
<PAGE>
TEMPLETON INSTITUTIONAL FUNDS, INC.
GLOBAL FIXED INCOME SERIES
FINANCIAL STATEMENTS (CONT.)
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, 1995 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1994
Increase (decrease) in net assets:
Operations: <S> <C>
Net investment income $2,230 $25,007
Net realized gain (loss) from security and foreign currency 4 (52,414)
transactions
Net unrealized appreciation (depreciation) during the period 475 (8,575)
------------ ----------
Net increase (decrease) in net asset resulting from operations 2,709 (35,982)
Distribution to shareholders:
From net investment income - (16,404)
From return of capital - (949)
Capital share transactions (Note 2) - (560,361)
----------- ----------
Net increase (decrease) in net assets 2,709 (613,696)
Net assets:
Beginning of period 98,347 712,043
----------- ----------
End of period $101,056 $98,347
</TABLE>
See Notes to Financial Statements.
<PAGE>
Templeton Institutional Funds, Inc.
Global Fixed Income Series
Notes to Financial Statements (unaudited)
1. Summary of Accounting Policies
Global Fixed Income Series (the Fund) is a separate series of Templeton
Institutional Funds, Inc. (the Company) which is an open-end, diversified
management investment company registered under the Investment Company Act of
1940. The following summarizes the Fund's significant accounting policies.
A. SECURITIES VALUATIONS:
Securities listed or traded on a recognized national or foreign stock
exchange or NASDAQ are valued at the last reported sales prices on the prin-
cipal exchange on which the securities are traded. Over-the-counter
securities and listed securities for which no sale is reported are valued
at the mean between the last current bid and asked prices. Securities for
which market quotations are not readily available are valued at fair value
as determined by management and approved in good faith by the Board of
Directors.
B. FOREIGN CURRENCY TRANSLATIONS:
Portfolio securities and other assets and liabilities denominated in foreign
currencies are translated into U.S. dollars based on the rate of exchange
of such currencies against U.S. dollars on the date of valuation.
Purchases and sales of portfolio securities and income items denominated in
foreign currencies are translated into U.S. dollar amounts on the respective
dates of such transactions. When the Fund purchases or sells foreign
securities it customarily enters into foreign exchange contracts to min-
imize foreign exchange risk between the trade date and the settlement date
of such transactions.
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctua-
tions arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss
from investments.
Reported net realized foreign exchange gains or losses arise from sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, the differences between the
amounts of dividends, interest, and foreign withholding taxes recorded on
the Fund's books, and the U.S. dollar equivalent of the amounts actually
received or paid. Net unrealized foreign exchange gains and losses arise from
changes in the value of assets and liabilities other than investments in
securities at the end of the fiscal period, resulting from changes in the
exchange rate.
C. INCOME TAXES:
It is the Fund's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
all its taxable income to its shareholders. Therefore, no provision has
been made for income taxes.
<PAGE>
D. UNAMORTIZED ORGANIZATIONS COSTS:
Organization costs are being amortized on a straight line basis over a five
year period.
E. SECURITY TRANSACTIONS, INVESTMENT INCOME, DISTRIBUTIONS AND EXPENSES:
Security transactions are accounted for on a trade date basis. Dividend
income is recorded on ex-dividend date. Certain dividend income on foreign
securities are recorded as soon as information is available to the Fund.
Interest income and estimated expenses are accrued daily. Distributions to
shareholders which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date.
2. Transactions in Shares of Capital Stock
At June 30, 1995, there were 520 million shares of $.01 par value capital
stock authorized of which 10 million have been classified as Fund shares.
There was no share activity for the period ended June 30, 1995.
Transactions in the Fund's shares for the year ended December 31, 1994, were
as follows:
Shares Amount
Shares sold 8,465 $ 85,000
Shares issued on reinvestment of
distributions 2,191 17,352
Shares redeemed (69,976) (662,713)
--------- ----------
Net decrease (59,320) $(560,361)
========== ==========
Templeton Global Investors, Inc., the Fund's administrative manager, is
the record owner of 100% of the Fund's shares as of June 30, 1995.
3. Investment Management Fees and Other Transactions with Affiliates
The Fund pays monthly an investment management fee to Templeton Investment
Counsel, Inc. equal, on an annual basis, to 0.55% of the average daily net
assets of the Fund. Certain officers of the Company are also directors
or officers of Templeton Global Investors, Inc. (TGII), Franklin Templeton
Distributors, Inc. (FTD), and Franklin Templeton Investor Services, Inc.
(FTIS), the Company's administrative manager, distributor and transfer agent,
respectively. The Fund pays TGII monthly its allocated share of an
administrative fee of 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. TGII has voluntarily agreed to limit the total
expenses of the Fund to an annual rate of 1.00% of the Fund's average net
assets through December 31, 1995. The amount of reimbursement for the six
months ended June 30, 1995, is set forth in the Statement of Operations.
For the six months ended June 30, 1995, FTD and FTIS received no amounts
with respect to the fund.
An officer of the Fund is a partner of Dechert Price & Rhoads, legal counsel
for the Funds, which firm received fees of $1,200 for the six months ended
June 30, 1995.
<PAGE>
4. Purchases and Sales of Securities
There was no purchases and sales of securities for the six months ended
June 30, 1995. The cost of securities for federal income tax purposes is
the same as that shown in the investment portfolio. Realized gains and losses
are reported on an identified cost basis.
At June 30, 1995, the aggregate gross unrealized appreciation and depreci-
ation of portfolio securities, based on cost for federal income tax pur-
poses, was as follows:
Unrealized appreciation $ 44
Unrealized depreciation (426)
Net unrealized depreciation $ (382)
<PAGE>
TEMPLETON INSTITUTIONAL FUNDS, INC.
SPECIAL MEETING OF SHAREHOLDERS, MAY 4, 1995
A Special Meeting of Shareholders of the Fund was held at the Fund's offices,
700 Central Avenue, St. Petersburg, Florida, on May 4, 1995. The purpose of the
meeting was to elect twelve directors of the Fund. At the meeting, the
following persons were elected by the shareholders to serve as directors of the
Fund: John Wm. Galbraith, Charles B. Johnson , Nicholas F. Brady, Betty P.
Krahmer, Constantine .D. Tseretopoulos, Frank J. Crothers, Fred R. Millsaps,
S. Joseph Fortunato, Harris J. Ashton, Andrew H. Hines, Jr., John G.
Bennett, Jr., and Gordon S. Macklin.
The results of the voting at the Special Meeting are as follows:
1. Election of twelve (12) Directors:
<TABLE>
<CAPTION>
% of % of % of
outstanding shares outstanding
FOR SHARES VOTED AGAINST % ABSTAIN SHARES
<S> <C> <C> <C> <C> <C> <C> <C>
John Wm Galbraith* 92,515,630 53.41% 99.98% 0 0 15,858 0.01%
Charles B.Johnson 92,515,630 53.41 99.98 0 0 15,858 0.01
Nicholas F. Brady 92,515,630 53.41 99.98 0 0 15,858 0.01
Betty P. Krahmer 92,515,630 53.41 99.98 0 0 15,858 0.01
Constantine D. Tseretopoulos 92,515,630 53.41 99.98 0 0 15,858 0.01
Frank J. Crothers 92,515,630 53.41 99.98 0 0 15,858 0.01
Fred R. Millsaps 92,515,630 53.41 99.98 0 0 15,858 0.01
S. Joseph Fortunato 92,515,630 53.41 99.98 0 0 15,858 0.01
Harris J. Ashton 92,515,630 53.41 99.98 0 0 15,858 0.01
Andrew H. Hines Jr. 92,515,630 53.41 99.98 0 0 15,858 0.01
John G. Bennett Jr.** 92,515,630 53.41 99.98 0 0 15,858 0.01
Gordon S. Macklin 92,515,630 53.41 99.98 0 0 15,858 0.01
</TABLE>
* After his nomination and the mailing of the proxy for the Special Meeting, Sir
John Templeton stepped down as Chairman and Director of the U.S. registered
Templeton Funds, effective April 16, 1995, and declined to stand for
re-election. Consequently, pursuant to discretionary authority granted in the
proxies, the proxy holders cast the proxies for John Wm. Galbraith, former Vice
Chariman of Templeton, Galbraith & Hansberger Ltd.
** Subsequent to the Special Meeting, Mr. John G. Bennett, Jr., resigned from
all of the Templeton Funds, effective May 19, 1995.
