Registration No. 33-35779
As filed with the Securities and Exchange Commission on May 1, 1995
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / /
Pre-Effective Amendment No. / /
Post-Effective Amendment No. 8 / X /
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY / /
ACT OF 1940
Amendment No. 11 / X /
(Check appropriate box or boxes)
TEMPLETON INSTITUTIONAL FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
700 Central Avenue, P.O. Box 33030, St. Petersburg, Florida 33733-8030
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number: (813) 823-8712
Thomas M. Mistele, Esq.
700 Central Avenue, P.O. Box 33030
St. Petersburg, Florida 33373-8030
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box):
____
/ X / immediately upon filing pursuant to paragraph (b) or
____
/ / on May 1, 1995 pursuant to paragraph (b) or
____
/ / 60 days after filing pursuant to paragraph (a) or
____
/ / on May 1, 1994 pursuant to paragraph (a) of Rule 485
CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
Registrant has elected to register an indefinite number os Shares of its Common
Stock, $0.01 par value per Share, pursuant to Rule 24f-2 under the Investment
Company Act of 1940. Registrant filed its Rule 24f-2 Notice for the fiscal
year ended December 31, 1993 on February 28, 1995.
<PAGE>
TEMPLETON INSTITUTIONAL FUNDS, INC.
CROSS-REFERENCE SHEET
REQUIRED BY RULE 495
UNDER THE SECURITIES ACT OF 1933
Part A
Item No. Caption
1 Cover Page
2 Expense Table
3 Selected Financial Information
4 General Description, Investment
Objectives and
Policies
5 Management of the Funds
6 General Information
7 How to Buy Shares of the Funds
8 How to Sell Shares of the Funds
9 Not Applicable
Part B
10 Cover Page
11 Table of Contents
12 General Information and History
13 Investment Objectives and Policies
14 Management of the Funds
15 Principal Shareholders
16 Investment Management and Other
Services
17 Brokerage Allocation
18 Description of Shares; Part A
19 Purchase, Redemption and Pricing of
Shares
20 Tax Status
21 Principal Underwriter
22 Performance Information
23 Financial Statements
TEMPLETON
INSTITUTIONAL FUNDS, INC. PROSPECTUS -- MAY 1, 1995
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INVESTMENT Templeton Institutional Funds, Inc. (the 'Company') is an open-
OBJECTIVES AND end management investment company currently consisting of five
POLICIES separate series (the 'Funds'). The Company is primarily
designed as an investment medium for financial institutions
(such as banks, savings institutions and credit unions);
pension, profit sharing and employee benefit plans and trusts;
endowments, foundations and corporations; and individuals who
meet the Company's minimum $5 million investment requirement.
GROWTH SERIES seeks to achieve long-term capital growth by investing in
stocks and debt obligations of companies and governments of any nation.
FOREIGN EQUITY SERIES seeks to achieve long-term capital growth by investing
in stocks and debt obligations of companies and governments outside the United
States.
EMERGING MARKETS SERIES seeks to achieve long-term capital growth by
investing in securities of issuers of countries having emerging markets.
GLOBAL FIXED INCOME SERIES seeks to achieve high total return by investing
primarily in a portfolio of fixed-income securities (including debt securities
and preferred stock) of U.S. and foreign issuers.
FOREIGN EQUITY (SOUTH AFRICA FREE) SERIES seeks to achieve long-term capital
growth by investing in stocks and debt obligations of companies and governments
outside both the U.S. and South Africa.
INVESTMENTS IN EMERGING MARKETS INVOLVES CERTAIN CONSIDERATIONS WHICH ARE
NOT NORMALLY INVOLVED IN INVESTMENT IN SECURITIES OF U.S. COMPANIES, AND AN
INVESTMENT IN THE FUNDS MAY BE CONSIDERED SPECULATIVE. THE FUNDS MAY BORROW
MONEY FOR INVESTMENT PURPOSES, WHICH MAY INVOLVE GREATER RISK AND ADDITIONAL
COSTS TO THE FUNDS. IN ADDITION, THE FUNDS MAY INVEST UP TO 10% OF THEIR ASSETS
IN RESTRICTED SECURITIES, WHICH MAY INVOLVE GREATER RISK AND INCREASED FUND
EXPENSES.
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PURCHASE OF Please complete and return the Institutional Account
SHARES Application Form. If you need assistance in completing this
Form, please call our Account Services Department. The Funds'
Shares may be purchased at a price equal to their net asset
value, subject to certain minimum initial purchase
requirements. See 'How to Buy Shares of the Funds.'
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PROSPECTUS This Prospectus sets forth concisely information about the
INFORMATION Funds that a prospective investor ought to know before
investing. Investors are advised to read and retain this
Prospectus for future reference. A Statement of Additional
Information ('SAI') dated May 1, 1995 has been filed with the
Securities and Exchange Commission (the 'SEC') and is
incorporated in its entirety by reference in and made a part of
this Prospectus. The SAI is available without charge upon
request to Franklin Templeton Distributors, Inc., P.O. Box
33030, St. Petersburg, Florida 33733-8030 or by calling
1-800-368-3677.
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ACCOUNT SERVICES -- 1-800-321-8563
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SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK; FURTHER, SUCH SHARES ARE NOT FEDERALLY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
1
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
EXPENSE TABLE..................................... 3
FINANCIAL HIGHLIGHTS.............................. 4
GENERAL DESCRIPTION............................... 9
INVESTMENT OBJECTIVES AND POLICIES................ 9
Growth Series..................................... 10
Foreign Equity Series............................. 10
Emerging Markets Series........................... 10
Global Fixed Income Series........................ 11
Foreign Equity (South Africa Free) Series......... 11
INVESTMENT TECHNIQUES............................. 12
Temporary Investments............................. 12
Debt Securities................................... 12
Repurchase Agreements............................. 12
Borrowing......................................... 12
Loans of Portfolio Securities..................... 13
Options on Securities or Indices.................. 13
Forward Foreign Currency Contracts and
Options on Foreign Currencies................... 13
Futures Contracts................................. 14
Swap Agreements................................... 14
Closed-End Investment Companies................... 15
Depositary Receipts............................... 15
RISK FACTORS...................................... 15
HOW TO BUY SHARES OF THE FUNDS.................... 17
Purchases by Telephone............................ 18
Purchases by Mail................................. 18
Letter of Intent.................................. 19
Group Purchases................................... 19
Account Statements................................ 19
<CAPTION>
PAGE
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<S> <C>
Templeton STAR Service............................ 20
EXCHANGE PRIVILEGE................................ 20
Exchanges by Telephone............................ 20
Exchanges by Mail................................. 20
General........................................... 20
Exchanges by Timing Accounts...................... 20
HOW TO SELL SHARES OF THE FUNDS................... 21
Redemptions by Telephone.......................... 22
TELEPHONE TRANSACTIONS............................ 23
Verification Procedures........................... 23
General........................................... 23
MANAGEMENT OF THE FUNDS........................... 23
Investment Managers............................... 23
Business Manager.................................. 25
Transfer Agent.................................... 25
Custodian......................................... 25
Expenses.......................................... 25
Brokerage Commissions............................. 25
GENERAL INFORMATION............................... 25
Description of Shares/Share Certificates.......... 25
Meetings of Shareholders.......................... 25
Dividends and Distributions....................... 25
Federal Tax Information........................... 26
Account Inquiries................................. 26
Performance Information........................... 26
Statements and Reports............................ 26
WITHHOLDING INFORMATION........................... 27
CORPORATE RESOLUTION.............................. 28
The Franklin Templeton Group...................... 29
</TABLE>
2
<PAGE>
EXPENSE TABLE
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
FOREIGN
GLOBAL EQUITY
FOREIGN EMERGING FIXED (SOUTH AFRICA
GROWTH EQUITY MARKETS INCOME FREE)
SERIES SERIES SERIES SERIES SERIES
----------- ------------ ------------- ----------- ------------------
<S> <C> <C> <C> <C> <C>
Management Fees........................ 0.70% 0.70% 1.25% 0.55% 0.70%
Other Expenses (audit, legal, business
management, transfer agent and
custodian) (after expense
reimbursement)*...................... 0.25% 0.25% 0.35% 0.45% 0.30%
Total Fund Operating Expenses (after
expense reimbursement)*.............. 0.95% 0.95% 1.60% 1.00% 1.00%
</TABLE>
EXAMPLE: You would pay the following expenses on a $1,000 investment, assuming
(1) 5% annual return and (2) redemption at the end of each time period:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
Growth Series................................... $ 10 $ 30 $ 53 $ 117
Foreign Equity Series........................... $ 10 $ 30 $ 53 $ 117
Emerging Markets Series......................... $ 16 $ 50 $ 87 $ 190
Global Fixed Income Series...................... $ 10 $ 32 $ 55 $ 122
Foreign Equity (South Africa Free) Series....... $ 10 $ 32 $ 55 $ 122
</TABLE>
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*The Business Manager, Templeton Global Investors, Inc., voluntarily agreed to
limit the total expenses (excluding interest, taxes, brokerage commissions and
extraordinary expenses) of each Fund to an annual rate of 1.0% (1.6% for
Emerging Markets Series) of the Fund's average net assets until December 31,
1995. During the fiscal period ended December 31, 1994, this expense
limitation arrangement resulted in a reduction in expenses for Global Fixed
Income Series, Emerging Markets Series and Foreign Equity (South Africa Free)
Series. If this policy were not in effect, the Funds' Total Fund Operating
Expenses would be as follows: 12.15% for Global Fixed Income Series; 1.66% for
Emerging Markets Series; and 1.05% for Foreign Equity (South Africa Free)
Series. If the policy were not in effect, the estimated expenses on a $1,000
investment in the Funds (assuming 5% annual return) would be as follows:
Global Fixed Income Series -- $117 for one year, $327 for three years, $508
for five years and $858 for ten years; and Foreign Equity (South Africa Free)
Series -- $11 for one year, $33 for three years, $58 for five years and $128
for ten years; Emerging Markets Series -- $17 for one year, $52 for three
years, $90 for five years and $197 for ten years. As long as this temporary
expense limitation continues, it may lower each Fund's expenses. The expense
limitation may be terminated or revised at any time after December 31, 1995,
at which time each Fund's expenses may increase, depending on the total assets
of the Fund. For a more detailed discussion of the Funds' fees and expenses,
see 'Management of the Funds.'
The information in the table above is an estimate based on the Funds'
expenses as of the end of the most recent fiscal year. The table is provided for
purposes of assisting current and prospective Shareholders in understanding the
various costs and expenses that an investor in the Funds will bear, directly or
indirectly. The information in the table does not reflect an administrative
service fee of $5.00 per exchange for market timing or allocation service
accounts. THE 5% ANNUAL RETURN AND ANNUAL EXPENSES SHOULD NOT BE CONSIDERED A
REPRESENTATION OF ACTUAL OR EXPECTED FUND PERFORMANCE OR EXPENSES, BOTH OF WHICH
MAY VARY. For a more detailed discussion of the Funds' fees and expenses, see
'Management of the Funds.'
3
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS
FILED
WITH
POST-EFFECTIVE AMENDMENT NO. 8 TO
REGISTRATION STATEMENT
ON
FORM N-1A
TEMPLETON INSTITUTIONAL FUNDS, INC.
<PAGE>
EXHIBIT LIST
EXHIBIT NUMBER NAME OF EXHIBIT
(1) (g) Articles Supplementary
dated March 1, 1994
(1) (h) Articles Supplementary dated
January 6, 1995
(5) (a) Amended and Restated Investment
Management Agreement for Foreign
Equity Series
(5) (b) Amended and Restated Investment
Management Agreement for Foreign
Equity (South Africa Free) Series
(5) (c) Amended and Restated Investment
Management Agreement for Emerging
Markets Series
(5) (d) Amended and Restated Investment
Management Agreement for Global Fixed
Income Series
(11) Consent of Independent Public
Accountants
(16) Schedule Showing Computation of
Performance Quotations Provided in
Response to Item 22 (Unaudited)
McGladrey & Pullen, LLP
555 Fifth Avenue
New York, NY 10017-2416
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the use of our report dated February 3,
1995 on the financial statements of the Growth Series, the Foreign
Equity Series, the Emerging Markets Series, the Global Fixed Income
Series and the Foreign Equity (South Africa Free) Series of
Templeton Institutional Funds, Inc. referred to therein which
appears in the 1994 Annual Report to Shareholders, and which is
incorporated herein by reference, in Post-Effective Amendment No.
8 to the Registration Statement on Form N-1A, File No. 33-35779, as
filed with the Securities and Exchange Commission.
We also consent to the reference to our firm in the Prospectus
under the caption "Financial Highlights" and in the Statement of
Additional Information under the caption "Independent Accountants".
McGladrey & Pullen, LLP
New York, New York
April 26, 1995
TEMPLETON INSTITUTIONAL FUNDS, INC.
ARTICLES SUPPLEMENTARY
TEMPLETON INSTITUTIONAL FUNDS, INC., a Maryland corporation
registered as an open-end investment company under the Investment Company Act
of 1940 and having its principal office in the State of Maryland in Baltimore
City, Maryland (hereinafter called the "Corporation"), hereby certifies to the
State Department of Assessments and Taxation of Maryland that:
FIRST: The Board of Directors of the Corporation, at a meeting
duly convened and held on February 25, 1994, adopted a resolution to increase
the total number of Shares of stock which the Corporation shall have the
authority to issue to THREE HUNDRED MILLION (300,000,000) Common Shares of the
par value of ONE CENT ($0.01) per Share and of the aggregate par value of
THREE MILLION DOLLARS ($3,000,000). The Board of Directors also adopted a
resolution classifying 20,000,000 authorized and unissued Common Shares as
Templeton Growth Series Shares, 60,000,000 authorized and unissued Common
Shares as Templeton Emerging Markets Series Shares, and 20,000,000 authorized
and unissued Common Shares as Templeton Smaller Companies Series Shares.
SECOND: Immediately prior to the effectiveness of the Articles
Supplementary of the Corporation as hereinabove set forth, the Corporation had
the authority to issue 200,000,000 Common Shares of the par value of $0.01 per
Share and having an aggregate par value of $2,000,000, of which the Board of
Directors had classified 80,000,000 Shares as Templeton Foreign Equity Series
Shares, 40,000,000 Shares as Templeton Growth Series Shares, 40,000,000 Shares
as Templeton Emerging Markets Series Shares, 10,000,000 Shares as Templeton
Smaller Companies Series Shares, 10,000,000 Shares as Templeton Global Fixed
Income Series Shares, and 20,000,000 Shares as Templeton Foreign Equity (South
Africa Free) Series Shares. As amended hereby, the Corporation's Articles of
Incorporation authorize the issuance of 300,000,000 Common Shares of the par
value of $0.01 per Share and having an aggregate par value of $3,000,000, of
which the Board of Directors has classified 80,000,000 Shares as Templeton
Foreign Equity Series Shares, 60,000,000 Shares as Templeton Growth Series
Shares, 100,000,000 Shares as Templeton Emerging Markets Series Shares,
30,000,000 Shares as Templeton Smaller Companies Series Shares, 10,000,000
Shares as Templeton Global Fixed Income Series Shares, and 20,000,000 Shares
as Templeton Foreign Equity (South Africa Free) Series Shares. The
preferences, rights, voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption of the various classes
of Shares, as set forth in the Articles of Incorporation of the Corporation,
are not changed by these Articles Supplementary.
THIRD: The Shares of the Corporation authorized and classified
pursuant to Article First of these Articles Supplementary have been so
authorized and classified by the Board of Directors under the authority
contained in the Charter of the Corporation. The number of Shares of capital
stock of the various classes that the Corporation has authority to issue has
been increased by the Board of Directors in accordance with Section 2-105(c)
of the Maryland General Corporation Law.
<PAGE> IN WITNESS WHEREOF, Templeton Institutional Funds, Inc. has
caused these Articles Supplementary to be signed in its name on its behalf by
its authorized officers who acknowledge that these Articles Supplementary are
the act of the Corporation, that to the best of their knowledge, information
and belief, all matters and facts set forth herein relating to the
authorization and approval of these Articles Supplementary are true in all
material respects and that this statement is made under the penalties of
perjury.
Date: March 1, 1994
TEMPLETON INSTITUTIONAL FUNDS, INC.
[CORPORATE SEAL]
By: ________________________
Harold F. McElraft
Vice President
Attest:
________________________
Thomas M. Mistele
Secretary
TEMPLETON INSTITUTIONAL FUNDS, INC.
ARTICLES SUPPLEMENTARY
TEMPLETON INSTITUTIONAL FUNDS, INC., a Maryland corporation
registered as an open-end investment company under the Investment Company Act
of 1940 and having its principal office in the State of Maryland in Baltimore
City, Maryland (hereinafter called the "Corporation"), hereby certifies to the
State Department of Assessments and Taxation of Maryland that:
FIRST: The Board of Directors of the Corporation, at a meeting
duly convened and held on December 6, 1994, adopted a resolution to increase
the total number of Shares of stock which the Corporation shall have the
authority to issue to FIVE HUNDRED TWENTY MILLION (520,000,000) Common Shares
of the par value of ONE CENT ($0.01) per Share and of the aggregate par value
of FIVE MILLION TWO HUNDRED THOUSAND DOLLARS ($5,200,000). The Board of
Directors also adopted a resolution classifying 30,000,000 authorized and
unissued Common Shares as Templeton Foreign Equity Series Shares.
SECOND: Immediately prior to the effectiveness of the Articles
Supplementary of the Corporation as hereinabove set forth, the Corporation had
the authority to issue 300,000,000 Common Shares of the par value of $0.01 per
Share and having an aggregate par value of $3,000,000, of which the Board of
Directors had classified 80,000,000 Shares as Templeton Foreign Equity Series
Shares, 60,000,000 Shares as Templeton Growth Series Shares, 100,000,000
Shares as Templeton Emerging Markets Series Shares, 30,000,000 Shares as
Templeton Smaller Companies Series Shares, 10,000,000 Shares as Templeton
Global Fixed Income Series Shares, and 20,000,000 Shares as Templeton Foreign
Equity (South Africa Free) Series Shares. As amended hereby, the
Corporation's Articles of Incorporation authorize the issuance of 520,000,000
Common Shares of the par value of $0.01 per Share and having an aggregate par
value of $5,200,000, of which the Board of Directors has classified
160,000,000 Shares as Templeton Foreign Equity Series Shares, 120,000,000
Shares as Templeton Growth Series Shares, 200,000,000 Shares as Templeton
Emerging Markets Series Shares, 10,000,000 Shares as Templeton Global Fixed
Income Series Shares, and 30,000,000 Shares as Templeton Foreign Equity (South
Africa Free) Series Shares. The preferences, rights, voting powers,
restrictions, limitations as to dividends, qualifications, and terms and
conditions of redemption of the various classes of Shares, as set forth in the
Articles of Incorporation of the Corporation, are not changed by these
Articles Supplementary.
THIRD: The Shares of the Corporation authorized and classified
pursuant to Article First of these Articles Supplementary have been so
authorized and classified by the Board of Directors under the authority
contained in the Charter of the Corporation. The number of Shares of capital
stock of the various classes that the Corporation has authority to issue has
been increased by the Board of Directors in accordance with Section 2-105(c)
of the Maryland General Corporation Law.
IN WITNESS WHEREOF, Templeton Institutional Funds, Inc. has caused
these Articles Supplementary to be signed in its name on its behalf by its
authorized officers who acknowledge that these Articles Supplementary are the
act of the Corporation, that to the best of their knowledge, information and
belief, all matters and facts set forth herein relating to the authorization
and approval of these Articles Supplementary are true in all material respects
and that this statement is made under the penalties of perjury.
Date: January 6, 1995
TEMPLETON INSTITUTIONAL FUNDS, INC.
[CORPORATE SEAL]
By: ________________________
John R. Kay
Vice President
Attest:
________________________
Thomas M. Mistele
Secretary
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT dated as of the 3rd day of May, 1993 and amened and
restated as of February 25, 1994, between TEMPLETON INSTITUTIONAL FUNDS, INC.
(hereinafter referred to as the "Company") on behalf of Emerging Markets
Series (hereinafter referred to as the "Fund"), and TEMPLETON INVESTMENT
MANAGEMENT (HONG KONG) LIMITED (hereinafter referred to as the "Investment
Manager").
In consideration of the mutual agreements herein made, the Company
and the Investment Manager understand and agree as follows:
(1) The Investment Manager shall manage the investment and
reinvestment of the Fund's assets consistent with the provisions of the
Funds's Agreement and Articles of Incorporation and the investment policies
adopted and declared by the Fund's Board of Directors. In pursuance of the
foregoing, the Investment Manager shall make all determinations with respect
to the investment of the Fund's assets and the purchase and sale of its
investment securities, and shall take all such steps as may be necessary to
implement those determinations. Such determinations and services shall
include determining the manner in which any voting rights, rights to consent
to corporate action and any other rights pertaining to the Fund's investment
securities shall be exercised, subject to the guidelines adopted by the Board
of Directors.
(2) The Investment Manager is not required to furnish any
personnel, overhead items or facilities for the Company, including trading
desk facilities or daily pricing of the Fund's portfolio.
(3) The Investment Manager shall be responsible for selecting
members of securities exchanges, brokers and dealers (such members, brokers
and dealers being hereinafter referred to as "brokers") for the execution of
the Fund's portfolio transactions consistent with the Fund's brokerage
policies and, when applicable, the negotiation of commissions in connection
therewith.
All decisions and placements shall be made in accordance with the
following principles:
A. Purchase and sale orders will usually be placed with brokers
which are selected by the Investment Manager as able to
achieve "best execution" of such orders. "Best execution"
shall mean prompt and reliable execution at the most
favorable security price, taking into account the other
provisions hereinafter set forth. The determination of what
may constitute best execution and price in the execution of
a securities transaction by a broker involves a number of
considerations, including, without limitation, the overall
direct net economic result to the Fund (involving both price
paid or received and any commissions and other costs paid),
the efficiency with which the transaction is effected, the
ability to effect the transaction at all where a large block
is involved, availability of the broker to stand ready to
execute possibly difficult transactions in the future, and
the financial strength and stability of the broker. Such
considerations are judgmental and are weighed by the
Investment Manager in determining the overall reasonableness
of brokerage commissions.
B. In selecting brokers for portfolio transactions, the
Investment Manager shall take into account its past
experience as to brokers qualified to achieve "best
execution," including brokers who specialize in any foreign
securities held by the Fund.
C. The Investment Manager is authorized to allocate brokerage
business to brokers who have provided brokerage and research
services, as such services are defined in Section 28(e) of
the Securities Exchange Act of 1934 (the "1934 Act"), for
the Fund and/or other accounts, if any, for which the
Investment Manager exercises investment discretion (as
defined in Section 3(a)(35) of the 1934 Act) and, as to
transactions for which fixed minimum commission rates are
not applicable, to cause the Fund to pay a commission for
effecting a securities transaction in excess of the amount
another broker would have charged for effecting that
transaction, if the Investment Manager determines in good
faith that such amount of commission is reasonable in
relation to the value of the brokerage and research services
provided by such broker, viewed in terms of either that
particular transaction or the Investment Manager's overall
responsibilities with respect to the Fund and the other
accounts, if any, as to which it exercises investment
discretion. In reaching such determination, the Investment
Manager will not be required to place or attempt to place a
specific dollar value on the research or execution services
of a broker or on the portion of any commission reflecting
either of said services. In demonstrating that such
determinations were made in good faith, the Investment
Manager shall be prepared to show that all commissions were
allocated and paid for purposes contemplated by the Fund's
brokerage policy; that the research services provide lawful
and appropriate assistance to the Investment Manager in the
performance of its investment decision-making
responsibilities; and that the commissions paid were within
a reasonable range. Whether commissions were within a
reasonable range shall be based on any available information
as to the level of commission known to be charged by other
brokers on comparable transactions, but there shall be taken
into account the Fund's policies that (i) obtaining a low
commission is deemed secondary to obtaining a favorable
securities price, since it is recognized that usually it is
more beneficial to the Fund to obtain a favorable price than
to pay the lowest commission; and (ii) the quality,
comprehensiveness and frequency of research studies that are
provided for the Investment Manager are useful to the
Investment Manager in performing its advisory services under
this Agreement. Research services provided by brokers to
the Investment Manager are considered to be in addition to,
and not in lieu of, services required to be performed by the
Investment Manager under this Agreement. Research furnished
by brokers through which the Fund effects securities
transactions may be used by the Investment Manager for any
of its accounts, and not all research may be used by the
Investment Manager for the Fund. When execution of
portfolio transactions is allocated to brokers trading on
exchanges with fixed brokerage commission rates, account may
be taken of various services provided by the broker.
D. Purchases and sales of portfolio securities within the
United States other than on a securities exchange shall be
executed with primary market makers acting as principal,
except where, in the judgment of the Investment Manager,
better prices and execution may be obtained on a commission
basis or from other sources.
E. Sales of the Fund's shares (which shall be deemed to include
also shares of other registered investment companies which
have either the same adviser or an investment adviser
affiliated with the Investment Manager) by a broker are one
factor among others to be taken into account in deciding to
allocate portfolio transactions (including agency
transactions, principal transactions, purchases in
underwritings or tenders in response to tender offers) for
the account of the Fund to that broker; provided that the
broker shall furnish "best execution," as defined in
subparagraph A above, and that such allocation shall be
within the scope of the Fund's policies as stated above;
provided further, that in every allocation made to a broker
in which the sale of Fund shares is taken into account,
there shall be no increase in the amount of the commissions
or other compensation paid to such broker beyond a
reasonable commission or other compensation determined, as
set forth in subparagraph C above, on the basis of best
execution alone or best execution plus research services,
without taking account of or placing any value upon such
sale of the Fund's shares.
(4) The Company agrees to pay to the Investment Manager a
monthly fee in dollars at an annual rate of 1.25% of the Fund's average daily
net assets, payable at the end of each calendar month.
Notwithstanding the foregoing, if the total expenses of the Fund
(including the fee to the Investment Manager) in any fiscal year of the Fund
exceed any expense limitation imposed by applicable State law, the Investment
Manager shall reimburse the Fund for such excess in the manner and to the
extent required by applicable State law. The term "total expenses," as used
in this paragraph, does not include interest, taxes, litigation expenses,
distribution expenses, brokerage commissions or other costs of acquiring or
disposing of any of the Fund's portfolio securities or any costs or expenses
incurred or arising other than in the ordinary and necessary course of the
Fund's business. When the accrued amount of such expenses exceeds this limit,
the monthly payment of the Investment Manager's fee will be reduced by the
amount of such excess, subject to adjustment month by month during the balance
of the Fund's fiscal year if accrued expenses thereafter fall below the limit.
(5) This Agreement shall become effective on May 3, 1993 and
shall continue in effect until April 30, 1994. If not sooner terminated, this
Agreement shall continue in effect for successive periods of 12 months each
thereafter, provided that each such continuance shall be specifically approved
annually by the vote of a majority of the Company's Board of Directors who are
not parties to this Agreement or "interested persons" (as defined in
Investment Company Act of 1940 (the "1940 Act")) of any such party, cast in
person at a meeting called for the purpose of voting on such approval and
either the vote of (a) a majority of the outstanding voting securities of the
Fund, as defined in the 1940 Act, or (b) a majority of the Company's Board of
Directors as a whole.
(6) Notwithstanding the foregoing, this Agreement may be
terminated by either party at any time, without the payment of any penalty, on
sixty (60) days' written notice to the other party, provided that termination
by the Company is approved by vote of a majority of the Company's Board of
Directors in office at the time or by vote of a majority of the outstanding
voting securities of the Fund (as defined by the 1940 Act).
(7) This Agreement will terminate automatically and immediately
in the event of its assignment (as defined in the 1940 Act).
(8) In the event this Agreement is terminated and the Investment
Manager no longer acts as Investment Manager to the Fund, the Investment
Manager reserves the right to withdraw from the Fund the use of the name
"Templeton" or any name misleadingly implying a continuing relationship
between the Fund and the Investment Manager or any of its affiliates.
(9) Except as may otherwise be provided by the 1940 Act, neither
the Investment Manager nor its officers, directors, employees or agents shall
be subject to any liability for any error of judgment, mistake of law, or any
loss arising out of any investment or other act or omission in the performance
by the Investment Manager of its duties under the Agreement or for any loss or
damage resulting from the imposition by any government of exchange control
restrictions which might affect the liquidity of the Fund's assets, or from
acts or omissions of custodians, or securities depositories, or from any war
or political act of any foreign government to which such assets might be
exposed, or for failure, on the part of the custodian or otherwise, timely to
collect payments, except for any liability, loss or damage resulting from
willful misfeasance, bad faith or gross negligence on the Investment Manager's
part or by reason of reckless disregard of the Investment Manager's duties
under this Agreement.
(10) It is understood that the services of the Investment Manager
are not deemed to be exclusive, and nothing in this Agreement shall prevent
the Investment Manager, or any affiliate thereof, from providing similar
services to other investment companies and other clients, including clients
which may invest in the same types of securities as the Fund, or, in providing
such services, from using information furnished by others. When the
Investment Manager determines to buy or sell the same security for the Fund
that the Investment Manager or one or more of its affiliates has selected for
clients of the Investment Manager or its affiliates, the orders for all such
security transactions shall be placed for execution by methods determined by
the Investment Manager, with approval by the Company's Board of Directors, to
be impartial and fair.
(11) This Agreement shall be construed in accordance with the
laws of the State of Maryland, provided that nothing herein shall be construed
as being inconsistent with applicable Federal and state securities laws and
any rules, regulations and orders thereunder.
(12) If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby and, to this extent, the provisions of
this Agreement shall be deemed to be severable.
(13) Nothing herein shall be construed as constituting the
Investment Manager an agent of the Company or of the Fund.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their duly authorized officers and their respective
corporate seals to be hereunto duly affixed and attested.
TEMPLETON INSTITUTIONAL FUNDS, INC.
By:________________________________
John R. Kay
Vice President
ATTEST:
______________________________
Thomas M. Mistele
Secretary
TEMPLETON INVESTMENT MANAGEMENT
(HONG KONG) LIMITED
By:_________________________________
Charles E. Johnson
Director
ATTEST:
______________________________
Gregory E. McGowan
Director
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT dated as of the 3rd day of May, 1993, and amended and
restated as of February 25, 1994, between TEMPLETON INSTITUTIONAL FUNDS, INC.
(hereinafter referred to as the "Company") on behalf of Foreign Equity Series
(the "Fund"), and TEMPLETON INVESTMENT COUNSEL, INC. (hereinafter referred to
as the "Investment Manager").
In consideration of the mutual agreements herein made, the Company
and the Investment Manager understand and agree as follows:
(1) The Investment Manager shall manage the investment and
reinvestment of the Fund's assets consistent with the provisions of the
Funds's Agreement and Articles of Incorporation and the investment policies
adopted and declared by the Fund's Board of Directors. In pursuance of the
foregoing, the Investment Manager shall make all determinations with respect
to the investment of the Fund's assets and the purchase and sale of its
investment securities, and shall take all such steps as may be necessary to
implement those determinations. Such determinations and services shall
include determining the manner in which any voting rights, rights to consent
to corporate action and any other rights pertaining to the Fund's investment
securities shall be exercised, subject to the guidelines adopted by the Board
of Directors.
(2) The Investment Manager is not required to furnish any
personnel, overhead items or facilities for the Company, including trading
desk facilities or daily pricing of the Fund's portfolio.
(3) The Investment Manager shall be responsible for selecting
members of securities exchanges, brokers and dealers (such members, brokers
and dealers being hereinafter referred to as "brokers") for the execution of
the Fund's portfolio transactions consistent with the Fund's brokerage
policies and, when applicable, the negotiation of commissions in connection
therewith.
All decisions and placements shall be made in accordance with the
following principles:
A. Purchase and sale orders will usually be placed with brokers
which are selected by the Investment Manager as able to
achieve "best execution" of such orders. "Best execution"
shall mean prompt and reliable execution at the most
favorable security price, taking into account the other
provisions hereinafter set forth. The determination of what
may constitute best execution and price in the execution of
a securities transaction by a broker involves a number of
considerations, including, without limitation, the overall
direct net economic result to the Fund (involving both price
paid or received and any commissions and other costs paid),
the efficiency with which the transaction is effected, the
ability to effect the transaction at all where a large block
is involved, availability of the broker to stand ready to
execute possibly difficult transactions in the future, and
the financial strength and stability of the broker. Such
considerations are judgmental and are weighed by the
Investment Manager in determining the overall reasonableness
of brokerage commissions.
B. In selecting brokers for portfolio transactions, the
Investment Manager shall take into account its past
experience as to brokers qualified to achieve "best
execution," including brokers who specialize in any foreign
securities held by the Fund.
C. The Investment Manager is authorized to allocate brokerage
business to brokers who have provided brokerage and research
services, as such services are defined in Section 28(e) of
the Securities Exchange Act of 1934 (the "1934 Act"), for
the Fund and/or other accounts, if any, for which the
Investment Manager exercises investment discretion (as
defined in Section 3(a)(35) of the 1934 Act) and, as to
transactions for which fixed minimum commission rates are
not applicable, to cause the Fund to pay a commission for
effecting a securities transaction in excess of the amount
another broker would have charged for effecting that
transaction, if the Investment Manager determines in good
faith that such amount of commission is reasonable in
relation to the value of the brokerage and research services
provided by such broker, viewed in terms of either that
particular transaction or the Investment Manager's overall
responsibilities with respect to the Fund and the other
accounts, if any, as to which it exercises investment
discretion. In reaching such determination, the Investment
Manager will not be required to place or attempt to place a
specific dollar value on the research or execution services
of a broker or on the portion of any commission reflecting
either of said services. In demonstrating that such
determinations were made in good faith, the Investment
Manager shall be prepared to show that all commissions were
allocated and paid for purposes contemplated by the Fund's
brokerage policy; that the research services provide lawful
and appropriate assistance to the Investment Manager in the
performance of its investment decision-making
responsibilities; and that the commissions paid were within
a reasonable range. Whether commissions were within a
reasonable range shall be based on any available information
as to the level of commission known to be charged by other
brokers on comparable transactions, but there shall be taken
into account the Fund's policies that (i) obtaining a low
commission is deemed secondary to obtaining a favorable
securities price, since it is recognized that usually it is
more beneficial to the Fund to obtain a favorable price than
to pay the lowest commission; and (ii) the quality,
comprehensiveness and frequency of research studies that are
provided for the Investment Manager are useful to the
Investment Manager in performing its advisory services under
this Agreement. Research services provided by brokers to
the Investment Manager are considered to be in addition to,
and not in lieu of, services required to be performed by the
Investment Manager under this Agreement. Research furnished
by brokers through which the Fund effects securities
transactions may be used by the Investment Manager for any
of its accounts, and not all research may be used by the
Investment Manager for the Fund. When execution of
portfolio transactions is allocated to brokers trading on
exchanges with fixed brokerage commission rates, account may
be taken of various services provided by the broker.
D. Purchases and sales of portfolio securities within the
United States other than on a securities exchange shall be
executed with primary market makers acting as principal,
except where, in the judgment of the Investment Manager,
better prices and execution may be obtained on a commission
basis or from other sources.
E. Sales of the Fund's shares (which shall be deemed to include
also shares of other registered investment companies which
have either the same adviser or an investment adviser
affiliated with the Investment Manager) by a broker are one
factor among others to be taken into account in deciding to
allocate portfolio transactions (including agency
transactions, principal transactions, purchases in
underwritings or tenders in response to tender offers) for
the account of the Fund to that broker; provided that the
broker shall furnish "best execution," as defined in
subparagraph A above, and that such allocation shall be
within the scope of the Fund's policies as stated above;
provided further, that in every allocation made to a broker
in which the sale of Fund shares is taken into account,
there shall be no increase in the amount of the commissions
or other compensation paid to such broker beyond a
reasonable commission or other compensation determined, as
set forth in subparagraph C above, on the basis of best
execution alone or best execution plus research services,
without taking account of or placing any value upon such
sale of the Fund's shares.
(4) The Company agrees to pay to the Investment Manager a
monthly fee in dollars at an annual rate of 0.70% of the Fund's average daily
net assets, payable at the end of each calendar month.
Notwithstanding the foregoing, if the total expenses of the Fund
(including the fee to the Investment Manager) in any fiscal year of the Fund
exceed any expense limitation imposed by applicable State law, the Investment
Manager shall reimburse the Fund for such excess in the manner and to the
extent required by applicable State law. The term "total expenses," as used
in this paragraph, does not include interest, taxes, litigation expenses,
distribution expenses, brokerage commissions or other costs of acquiring or
disposing of any of the Fund's portfolio securities or any costs or expenses
incurred or arising other than in the ordinary and necessary course of the
Fund's business. When the accrued amount of such expenses exceeds this limit,
the monthly payment of the Investment Manager's fee will be reduced by the
amount of such excess, subject to adjustment month by month during the balance
of the Fund's fiscal year if accrued expenses thereafter fall below the limit.
(5) This Agreement shall become effective on
May 3, 1993 and shall continue in effect until
April 30, 1994. If not sooner terminated, this Agreement shall continue in
effect for successive periods of 12 months each thereafter, provided that each
such continuance shall be specifically approved annually by the vote of a
majority of the Company's Board of Directors who are not parties to this
Agreement or "interested persons" (as defined in Investment Company Act of
1940 (the "1940 Act")) of any such party, cast in person at a meeting called
for the purpose of voting on such approval and either the vote of (a) a
majority of the outstanding voting securities of the Fund, as defined in the
1940 Act, or (b) a majority of the Company's Board of Directors as a whole.
(6) Notwithstanding the foregoing, this Agreement may be
terminated by either party at any time, without the payment of any penalty, on
sixty (60) days' written notice to the other party, provided that termination
by the Company is approved by vote of a majority of the Company's Board of
Directors in office at the time or by vote of a majority of the outstanding
voting securities of the Fund (as defined by the 1940 Act).
(7) This Agreement will terminate automatically and immediately
in the event of its assignment (as defined in the 1940 Act).
(8) In the event this Agreement is terminated and the Investment
Manager no longer acts as Investment Manager to the Fund, the Investment
Manager reserves the right to withdraw from the Fund the use of the name
"Templeton" or any name misleadingly implying a continuing relationship
between the Fund and the Investment Manager or any of its affiliates.
(9) Except as may otherwise be provided by the 1940 Act, neither
the Investment Manager nor its officers, directors, employees or agents shall
be subject to any liability for any error of judgment, mistake of law, or any
loss arising out of any investment or other act or omission in the performance
by the Investment Manager of its duties under the Agreement or for any loss or
damage resulting from the imposition by any government of exchange control
restrictions which might affect the liquidity of the Fund's assets, or from
acts or omissions of custodians, or securities depositories, or from any war
or political act of any foreign government to which such assets might be
exposed, or for failure, on the part of the custodian or otherwise, timely to
collect payments, except for any liability, loss or damage resulting from
willful misfeasance, bad faith or gross negligence on the Investment Manager's
part or by reason of reckless disregard of the Investment Manager's duties
under this Agreement.
(10) It is understood that the services of the Investment Manager
are not deemed to be exclusive, and nothing in this Agreement shall prevent
the Investment Manager, or any affiliate thereof, from providing similar
services to other investment companies and other clients, including clients
which may invest in the same types of securities as the Fund, or, in providing
such services, from using information furnished by others. When the
Investment Manager determines to buy or sell the same security for the Fund
that the Investment Manager or one or more of its affiliates has selected for
clients of the Investment Manager or its affiliates, the orders for all such
security transactions shall be placed for execution by methods determined by
the Investment Manager, with approval by the Company's Board of Directors, to
be impartial and fair.
(11) This Agreement shall be construed in accordance with the
laws of the State of Maryland, provided that nothing herein shall be construed
as being inconsistent with applicable Federal and state securities laws and
any rules, regulations and orders thereunder.
(12) If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby and, to this extent, the provisions of
this Agreement shall be deemed to be severable.
(13) Nothing herein shall be construed as constituting the
Investment Manager an agent of the Company or of the Fund.
<PAGE> IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their duly authorized officers and their
respective corporate seals to be hereunto duly affixed and attested.
TEMPLETON INSTITUTIONAL FUNDS, INC.
By:________________________________
John R. Kay
Vice President
ATTEST:
______________________________
Thomas M. Mistele
Secretary
TEMPLETON INVESTMENT COUNSEL, INC.
By:_________________________________
Donald F. Reed
President
ATTEST:
______________________________
Elizabeth M. Knoblock
Secretary
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT dated as of the 3rd day of May, 1993, and amended and
restated as of February 25, 1994, between TEMPLETON INSTITUTIONAL FUNDS, INC.
(hereinafter referred to as the "Company") on behalf of Global Fixed Income
Series (hereinafter referred to as the "Fund"), and TEMPLETON INVESTMENT
COUNSEL, INC., through its TEMPLETON GLOBAL BOND MANAGERS division
(hereinafter referred to as the "Investment Manager").
In consideration of the mutual agreements herein made, the Company
and the Investment Manager understand and agree as follows:
(1) The Investment Manager shall manage the investment and
reinvestment of the Fund's assets consistent with the provisions of the
Funds's Agreement and Articles of Incorporation and the investment policies
adopted and declared by the Fund's Board of Directors. In pursuance of the
foregoing, the Investment Manager shall make all determinations with respect
to the investment of the Fund's assets and the purchase and sale of its
investment securities, and shall take all such steps as may be necessary to
implement those determinations. Such determinations and services shall
include determining the manner in which any voting rights, rights to consent
to corporate action and any other rights pertaining to the Fund's investment
securities shall be exercised, subject to the guidelines adopted by the Board
of Directors.
(2) The Investment Manager is not required to furnish any
personnel, overhead items or facilities for the Company, including trading
desk facilities or daily pricing of the Fund's portfolio.
(3) The Investment Manager shall be responsible for selecting
members of securities exchanges, brokers and dealers (such members, brokers
and dealers being hereinafter referred to as "brokers") for the execution of
the Fund's portfolio transactions consistent with the Fund's brokerage
policies and, when applicable, the negotiation of commissions in connection
therewith.
All decisions and placements shall be made in accordance with the
following principles:
A. Purchase and sale orders will usually be placed with brokers
which are selected by the Investment Manager as able to
achieve "best execution" of such orders. "Best execution"
shall mean prompt and reliable execution at the most
favorable security price, taking into account the other
provisions hereinafter set forth. The determination of what
may constitute best execution and price in the execution of
a securities transaction by a broker involves a number of
considerations, including, without limitation, the overall
direct net economic result to the Fund (involving both price
paid or received and any commissions and other costs paid),
the efficiency with which the transaction is effected, the
ability to effect the transaction at all where a large block
is involved, availability of the broker to stand ready to
execute possibly difficult transactions in the future, and
the financial strength and stability of the broker. Such
considerations are judgmental and are weighed by the
Investment Manager in determining the overall reasonableness
of brokerage commissions.
B. In selecting brokers for portfolio transactions, the
Investment Manager shall take into account its past
experience as to brokers qualified to achieve "best
execution," including brokers who specialize in any foreign
securities held by the Fund.
C. The Investment Manager is authorized to allocate brokerage
business to brokers who have provided brokerage and research
services, as such services are defined in Section 28(e) of
the Securities Exchange Act of 1934 (the "1934 Act"), for
the Fund and/or other accounts, if any, for which the
Investment Manager exercises investment discretion (as
defined in Section 3(a)(35) of the 1934 Act) and, as to
transactions for which fixed minimum commission rates are
not applicable, to cause the Fund to pay a commission for
effecting a securities transaction in excess of the amount
another broker would have charged for effecting that
transaction, if the Investment Manager determines in good
faith that such amount of commission is reasonable in
relation to the value of the brokerage and research services
provided by such broker, viewed in terms of either that
particular transaction or the Investment Manager's overall
responsibilities with respect to the Fund and the other
accounts, if any, as to which it exercises investment
discretion. In reaching such determination, the Investment
Manager will not be required to place or attempt to place a
specific dollar value on the research or execution services
of a broker or on the portion of any commission reflecting
either of said services. In demonstrating that such
determinations were made in good faith, the Investment
Manager shall be prepared to show that all commissions were
allocated and paid for purposes contemplated by the Fund's
brokerage policy; that the research services provide lawful
and appropriate assistance to the Investment Manager in the
performance of its investment decision-making
responsibilities; and that the commissions paid were within
a reasonable range. Whether commissions were within a
reasonable range shall be based on any available information
as to the level of commission known to be charged by other
brokers on comparable transactions, but there shall be taken
into account the Fund's policies that (i) obtaining a low
commission is deemed secondary to obtaining a favorable
securities price, since it is recognized that usually it is
more beneficial to the Fund to obtain a favorable price than
to pay the lowest commission; and (ii) the quality,
comprehensiveness and frequency of research studies that are
provided for the Investment Manager are useful to the
Investment Manager in performing its advisory services under
this Agreement. Research services provided by brokers to
the Investment Manager are considered to be in addition to,
and not in lieu of, services required to be performed by the
Investment Manager under this Agreement. Research furnished
by brokers through which the Fund effects securities
transactions may be used by the Investment Manager for any
of its accounts, and not all research may be used by the
Investment Manager for the Fund. When execution of
portfolio transactions is allocated to brokers trading on
exchanges with fixed brokerage commission rates, account may
be taken of various services provided by the broker.
D. Purchases and sales of portfolio securities within the
United States other than on a securities exchange shall be
executed with primary market makers acting as principal,
except where, in the judgment of the Investment Manager,
better prices and execution may be obtained on a commission
basis or from other sources.
E. Sales of the Fund's shares (which shall be deemed to include
also shares of other registered investment companies which
have either the same adviser or an investment adviser
affiliated with the Investment Manager) by a broker are one
factor among others to be taken into account in deciding to
allocate portfolio transactions (including agency
transactions, principal transactions, purchases in
underwritings or tenders in response to tender offers) for
the account of the Fund to that broker; provided that the
broker shall furnish "best execution," as defined in
subparagraph A above, and that such allocation shall be
within the scope of the Fund's policies as stated above;
provided further, that in every allocation made to a broker
in which the sale of Fund shares is taken into account,
there shall be no increase in the amount of the commissions
or other compensation paid to such broker beyond a
reasonable commission or other compensation determined, as
set forth in subparagraph C above, on the basis of best
execution alone or best execution plus research services,
without taking account of or placing any value upon such
sale of the Fund's shares.
(4) The Company agrees to pay to the Investment Manager a
monthly fee in dollars at an annual rate of 0.55% of the Fund's average daily
net assets, payable at the end of each calendar month.
Notwithstanding the foregoing, if the total expenses of the Fund
(including the fee to the Investment Manager) in any fiscal year of the Fund
exceed any expense limitation imposed by applicable State law, the Investment
Manager shall reimburse the Fund for such excess in the manner and to the
extent required by applicable State law. The term "total expenses," as used
in this paragraph, does not include interest, taxes, litigation expenses,
distribution expenses, brokerage commissions or other costs of acquiring or
disposing of any of the Fund's portfolio securities or any costs or expenses
incurred or arising other than in the ordinary and necessary course of the
Fund's business. When the accrued amount of such expenses exceeds this limit,
the monthly payment of the Investment Manager's fee will be reduced by the
amount of such excess, subject to adjustment month by month during the balance
of the Fund's fiscal year if accrued expenses thereafter fall below the limit.
(5) This Agreement is amended and restated as of February 25,
1994 and shall continue in effect until April 30, 1995. If not sooner
terminated, this Agreement shall continue in effect for successive periods of
12 months each thereafter, provided that each such continuance shall be
specifically approved annually by the vote of a majority of the Company's
Board of Directors who are not parties to this Agreement or "interested
persons" (as defined in Investment Company Act of 1940 (the "1940 Act")) of
any such party, cast in person at a meeting called for the purpose of voting
on such approval and either the vote of (a) a majority of the outstanding
voting securities of the Fund, as defined in the 1940 Act, or (b) a majority
of the Company's Board of Directors as a whole.
(6) Notwithstanding the foregoing, this Agreement may be
terminated by either party at any time, without the payment of any penalty, on
sixty (60) days' written notice to the other party, provided that termination
by the Company is approved by vote of a majority of the Company's Board of
Directors in office at the time or by vote of a majority of the outstanding
voting securities of the Fund (as defined by the 1940 Act).
(7) This Agreement will terminate automatically and immediately
in the event of its assignment (as defined in the 1940 Act).
(8) In the event this Agreement is terminated and the Investment
Manager no longer acts as Investment Manager to the Fund, the Investment
Manager reserves the right to withdraw from the Fund the use of the name
"Templeton" or any name misleadingly implying a continuing relationship
between the Fund and the Investment Manager or any of its affiliates.
(9) Except as may otherwise be provided by the 1940 Act, neither
the Investment Manager nor its officers, directors, employees or agents shall
be subject to any liability for any error of judgment, mistake of law, or any
loss arising out of any investment or other act or omission in the performance
by the Investment Manager of its duties under the Agreement or for any loss or
damage resulting from the imposition by any government of exchange control
restrictions which might affect the liquidity of the Fund's assets, or from
acts or omissions of custodians, or securities depositories, or from any war
or political act of any foreign government to which such assets might be
exposed, or for failure, on the part of the custodian or otherwise, timely to
collect payments, except for any liability, loss or damage resulting from
willful misfeasance, bad faith or gross negligence on the Investment Manager's
part or by reason of reckless disregard of the Investment Manager's duties
under this Agreement.
(10) It is understood that the services of the Investment Manager
are not deemed to be exclusive, and nothing in this Agreement shall prevent
the Investment Manager, or any affiliate thereof, from providing similar
services to other investment companies and other clients, including clients
which may invest in the same types of securities as the Fund, or, in providing
such services, from using information furnished by others. When the
Investment Manager determines to buy or sell the same security for the Fund
that the Investment Manager or one or more of its affiliates has selected for
clients of the Investment Manager or its affiliates, the orders for all such
security transactions shall be placed for execution by methods determined by
the Investment Manager, with approval by the Company's Board of Directors, to
be impartial and fair.
(11) This Agreement shall be construed in accordance with the
laws of the State of Maryland, provided that nothing herein shall be construed
as being inconsistent with applicable Federal and state securities laws and
any rules, regulations and orders thereunder.
(12) If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby and, to this extent, the provisions of
this Agreement shall be deemed to be severable.
(13) Nothing herein shall be construed as constituting the
Investment Manager an agent of the Company or of the Fund.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their duly authorized officers and their respective
corporate seals to be hereunto duly affixed and attested.
TEMPLETON INSTITUTIONAL FUNDS, INC.
By:________________________________
John R. Kay
Vice President
ATTEST:
______________________________
Thomas M. Mistele
Secretary
TEMPLETON INVESTMENT COUNSEL, INC.
By:_________________________________
Donald F. Reed
President
ATTEST:
______________________________
Elizabeth M. Knoblock
Secretary
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT dated as of the 3rd day of May, 1993, amended and
restated February 25, 1994, between TEMPLETON INSTITUTIONAL FUNDS, INC.
(hereinafter referred to as the "Company") on behalf of Foreign Equity (South
Africa Free) Series, (hereinafter referred to as the "Fund"), and TEMPLETON
INVESTMENT COUNSEL, INC. (hereinafter referred to as the "Investment
Manager").
In consideration of the mutual agreements herein made, the Company
and the Investment Manager understand and agree as follows:
(1) The Investment Manager shall manage the investment and
reinvestment of the Fund's assets consistent with the provisions of the
Funds's Agreement and Articles of Incorporation and the investment policies
adopted and declared by the Fund's Board of Directors. In pursuance of the
foregoing, the Investment Manager shall make all determinations with respect
to the investment of the Fund's assets and the purchase and sale of its
investment securities, and shall take all such steps as may be necessary to
implement those determinations. Such determinations and services shall
include determining the manner in which any voting rights, rights to consent
to corporate action and any other rights pertaining to the Fund's investment
securities shall be exercised, subject to the guidelines adopted by the Board
of Directors.
(2) The Investment Manager is not required to furnish any
personnel, overhead items or facilities for the Company, including trading
desk facilities or daily pricing of the Fund's portfolio.
(3) The Investment Manager shall be responsible for selecting
members of securities exchanges, brokers and dealers (such members, brokers
and dealers being hereinafter referred to as "brokers") for the execution of
the Fund's portfolio transactions consistent with the Fund's brokerage
policies and, when applicable, the negotiation of commissions in connection
therewith.
All decisions and placements shall be made in accordance with the
following principles:
A. Purchase and sale orders will usually be placed with brokers
which are selected by the Investment Manager as able to
achieve "best execution" of such orders. "Best execution"
shall mean prompt and reliable execution at the most
favorable security price, taking into account the other
provisions hereinafter set forth. The determination of what
may constitute best execution and price in the execution of
a securities transaction by a broker involves a number of
considerations, including, without limitation, the overall
direct net economic result to the Fund (involving both price
paid or received and any commissions and other costs paid),
the efficiency with which the transaction is effected, the
ability to effect the transaction at all where a large block
is involved, availability of the broker to stand ready to
execute possibly difficult transactions in the future, and
the financial strength and stability of the broker. Such
considerations are judgmental and are weighed by the
Investment Manager in determining the overall reasonableness
of brokerage commissions.
B. In selecting brokers for portfolio transactions, the
Investment Manager shall take into account its past
experience as to brokers qualified to achieve "best
execution," including brokers who specialize in any foreign
securities held by the Fund.
C. The Investment Manager is authorized to allocate brokerage
business to brokers who have provided brokerage and research
services, as such services are defined in Section 28(e) of
the Securities Exchange Act of 1934 (the "1934 Act"), for
the Fund and/or other accounts, if any, for which the
Investment Manager exercises investment discretion (as
defined in Section 3(a)(35) of the 1934 Act) and, as to
transactions for which fixed minimum commission rates are
not applicable, to cause the Fund to pay a commission for
effecting a securities transaction in excess of the amount
another broker would have charged for effecting that
transaction, if the Investment Manager determines in good
faith that such amount of commission is reasonable in
relation to the value of the brokerage and research services
provided by such broker, viewed in terms of either that
particular transaction or the Investment Manager's overall
responsibilities with respect to the Fund and the other
accounts, if any, as to which it exercises investment
discretion. In reaching such determination, the Investment
Manager will not be required to place or attempt to place a
specific dollar value on the research or execution services
of a broker or on the portion of any commission reflecting
either of said services. In demonstrating that such
determinations were made in good faith, the Investment
Manager shall be prepared to show that all commissions were
allocated and paid for purposes contemplated by the Fund's
brokerage policy; that the research services provide lawful
and appropriate assistance to the Investment Manager in the
performance of its investment decision-making
responsibilities; and that the commissions paid were within
a reasonable range. Whether commissions were within a
reasonable range shall be based on any available information
as to the level of commission known to be charged by other
brokers on comparable transactions, but there shall be taken
into account the Fund's policies that (i) obtaining a low
commission is deemed secondary to obtaining a favorable
securities price, since it is recognized that usually it is
more beneficial to the Fund to obtain a favorable price than
to pay the lowest commission; and (ii) the quality,
comprehensiveness and frequency of research studies that are
provided for the Investment Manager are useful to the
Investment Manager in performing its advisory services under
this Agreement. Research services provided by brokers to
the Investment Manager are considered to be in addition to,
and not in lieu of, services required to be performed by the
Investment Manager under this Agreement. Research furnished
by brokers through which the Fund effects securities
transactions may be used by the Investment Manager for any
of its accounts, and not all research may be used by the
Investment Manager for the Fund. When execution of
portfolio transactions is allocated to brokers trading on
exchanges with fixed brokerage commission rates, account may
be taken of various services provided by the broker.
D. Purchases and sales of portfolio securities within the
United States other than on a securities exchange shall be
executed with primary market makers acting as principal,
except where, in the judgment of the Investment Manager,
better prices and execution may be obtained on a commission
basis or from other sources.
E. Sales of the Fund's shares (which shall be deemed to include
also shares of other registered investment companies which
have either the same adviser or an investment adviser
affiliated with the Investment Manager) by a broker are one
factor among others to be taken into account in deciding to
allocate portfolio transactions (including agency
transactions, principal transactions, purchases in
underwritings or tenders in response to tender offers) for
the account of the Fund to that broker; provided that the
broker shall furnish "best execution," as defined in
subparagraph A above, and that such allocation shall be
within the scope of the Fund's policies as stated above;
provided further, that in every allocation made to a broker
in which the sale of the Fund's shares is taken into
account, there shall be no increase in the amount of the
commissions or other compensation paid to such broker beyond
a reasonable commission or other compensation determined, as
set forth in subparagraph C above, on the basis of best
execution alone or best execution plus research services,
without taking account of or placing any value upon such
sale of the Fund's shares.
(4) The Company agrees to pay to the Investment Manager a
monthly fee in dollars at an annual rate of 0.70% of the Fund's average daily
net assets, payable at the end of each calendar month.
Notwithstanding the foregoing, if the total expenses of the Fund
(including the fee to the Investment Manager) in any fiscal year exceed any
expense limitation imposed by applicable State law, the Investment Manager
shall reimburse the Fund for such excess in the manner and to the extent
required by applicable State law. The term "total expenses," as used in this
paragraph, does not include interest, taxes, litigation expenses, distribution
expenses, brokerage commissions or other costs of acquiring or disposing of
any of the Fund's portfolio securities or any costs or expenses incurred or
arising other than in the ordinary and necessary course of the Fund's
business. When the accrued amount of such expenses exceeds this limit, the
monthly payment of the Investment Manager's fee will be reduced by the amount
of such excess, subject to adjustment month by month during the balance of
that Fund's fiscal year if accrued expenses thereafter fall below the limit.
(5) This Agreement shall become effective on May 3, 1993 and
shall continue in effect until April 30, 1994. If not sooner terminated, this
Agreement shall continue in effect for successive periods of 12 months each
thereafter, provided that each such continuance shall be specifically approved
annually by the vote of a majority of the Company's Board of Directors who are
not parties to this Agreement or "interested persons" (as defined in
Investment Company Act of 1940 (the "1940 Act")) of any such party, cast in
person at a meeting called for the purpose of voting on such approval and
either the vote of (a) a majority of the outstanding voting securities of the
Fund, as defined in the 1940 Act, or (b) a majority of the Company's Board of
Directors as a whole.
(6) Notwithstanding the foregoing, this Agreement may be
terminated by either party at any time, without the payment of any penalty, on
sixty (60) days' written notice to the other party, provided that termination
by the Company is approved by vote of a majority of the Company's Board of
Directors in office at the time or by vote of a majority of the outstanding
voting securities of the Fund (as defined by the 1940 Act).
(7) This Agreement will terminate automatically and immediately
in the event of its assignment (as defined in the 1940 Act).
(8) In the event this Agreement is terminated and the Investment
Manager no longer acts as Investment Manager to the Fund, the Investment
Manager reserves the right to withdraw from the Fund the use of the name
"Templeton" or any name misleadingly implying a continuing relationship
between the Fund and the Investment Manager or any of its affiliates.
(9) Except as may otherwise be provided by the 1940 Act, neither
the Investment Manager nor its officers, directors, employees or agents shall
be subject to any liability for any error of judgment, mistake of law, or any
loss arising out of any investment or other act or omission in the performance
by the Investment Manager of its duties under the Agreement or for any loss or
damage resulting from the imposition by any government of exchange control
restrictions which might affect the liquidity of the Fund's assets, or from
acts or omissions of custodians, or securities depositories, or from any war
or political act of any foreign government to which such assets might be
exposed, or for failure, on the part of the custodian or otherwise, timely to
collect payments, except for any liability, loss or damage resulting from
willful misfeasance, bad faith or gross negligence on the Investment Manager's
part or by reason of reckless disregard of the Investment Manager's duties
under this Agreement.
(10) It is understood that the services of the Investment Manager
are not deemed to be exclusive, and nothing in this Agreement shall prevent
the Investment Manager, or any affiliate thereof, from providing similar
services to other investment companies and other clients, including clients
which may invest in the same types of securities as the Fund, or, in providing
such services, from using information furnished by others. When the
Investment Manager determines to buy or sell the same security for the Fund
that the Investment Manager or one or more of its affiliates has selected for
clients of the Investment Manager or its affiliates, the orders for all such
security transactions shall be placed for execution by methods determined by
the Investment Manager, with approval by the Company's Board of Directors, to
be impartial and fair.
(11) This Agreement shall be construed in accordance with the
laws of the State of Maryland, provided that nothing herein shall be construed
as being inconsistent with applicable Federal and state securities laws and
any rules, regulations and orders thereunder.
(12) If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby and, to this extent, the provisions of
this Agreement shall be deemed to be severable.
(13) Nothing herein shall be construed as constituting the
Investment Manager an agent of the Company or of the Fund.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their duly authorized officers and their respective
corporate seals to be hereunto duly affixed and attested.
TEMPLETON INSTITUTIONAL FUNDS, INC.
By:________________________________
John R. Kay
Vice President
ATTEST:
______________________________
Thomas M. Mistele
Secretary
TEMPLETON INVESTMENT COUNSEL, INC.
By:_________________________________
Donald F. Reed
President
ATTEST:
______________________________
Elizabeth M. Knoblock
Secretary
EXHIBIT 16
COMPUTATION OF PERFORMANCE QUOTATIONS
PROVIDED IN RESPONSE TO ITEM 22
(UNAUDITED)
TEMPLETON INSTITUTIONAL FUNDS, INC.
Growth Series
TOTAL RETURN FOR ONE-YEAR ENDED DECEMBER 31, 1994
P (1 + T)N = ERV
$1000 (1 + T)1 = $986.80
(1 + T) = .9868
T = -.0132
T = -1.32%
TOTAL RETURN SINCE INCEPTION ON MAY 3, 1993 - 1.91 YEARS
P (1 + T)N = ERV
$1000 (1 + T)1.91 = $1,382.04
(1 + T)1.91 = 1.38204
(1 + T) = 1.1846
T = .1846
T = 18.46%
<PAGE>
EXHIBIT 16
COMPUTATION OF PERFORMANCE QUOTATIONS
PROVIDED IN RESPONSE TO ITEM 22
(UNAUDITED)
TEMPLETON INSTITUTIONAL FUNDS, INC.
Foreign Equity Series
TOTAL RETURN FOR THE ONE-YEAR PERIOD ENDED DECEMBER 31, 1994
P (1 + T)N = ERV
$1000 (1 + T)1 = $997.60
(1 + T) = .9976
T = .0024
T = 0.24%
AVERAGE ANNUAL TOTAL RETURN SINCE INCEPTION ON OCTOBER 18, 1990 - 4.20 YEARS
P (1 + T)N = ERV
$1000 (1 + T)4.20 = $ 1,564.00
(1 + T)4.20 = 1.5640
(1 + T) = 1.1123
T = .1123
T = 11.23%
<PAGE>
EXHIBIT 16
COMPUTATION OF PERFORMANCE QUOTATIONS
PROVIDED IN RESPONSE TO ITEM 22
(UNAUDITED)
TEMPLETON INSTITUTIONAL FUNDS, INC.
Emerging Markets Series
TOTAL RETURN FOR ONE-YEAR ENDED DECEMBER 31, 1994
P (1 + T)N = ERV
$1000 (1 + T)1 = $886.10
(1 + T) = .8861
T = -.1139
T = -11.39%
TOTAL RETURN SINCE INCEPTION ON MAY 3, 1994 - 1.91 YEARS
P (1 + T)N = ERV
$1000 (1 + T)1.91 = $1,367.15
(1 + T)1.91 = 1.36715
(1 + T) = 1.1779
T = .1779
T = 17.79%
<PAGE>
EXHIBIT 16
COMPUTATION OF PERFORMANCE QUOTATIONS
PROVIDED IN RESPONSE TO ITEM 22
(UNAUDITED)
TEMPLETON INSTITUTIONAL FUNDS, INC.
Global Fixed Income Series
TOTAL RETURN FOR ONE-YEAR ENDED DECEMBER 31, 1994
P (1 + T)N = ERV
$1000 (1 + T)1 = $970.30
(1 + T) = .9703
T = -.0297
T = -2.97%
TOTAL RETURN SINCE INCEPTION ON MAY 3, 1993 - 1.91 YEARS
P (1 + T)N = ERV
$1000 (1 + T)1.91 = $968.16
(1 + T)1.91 = .968157
(1 + T) = .9832
T = -.0168
T = -1.68%
<PAGE>
EXHIBIT 16
COMPUTATION OF PERFORMANCE QUOTATIONS
PROVIDED IN RESPONSE TO ITEM 22
(UNAUDITED)
TEMPLETON INSTITUTIONAL FUNDS, INC.
Foreign Equity (South Africa Free) Series
Total Return for One-Year Ended December 31, 1994
P (1 + T)N = ERV
$1000 (1 + T)1 = $980.60
(1 + T) = .9806
T = -.0194
T = -1.94%
TOTAL RETURN SINCE INCEPTION ON MAY 3, 1993 - 1.91 YEARS
P (1 + T)N = ERV
$1000 (1 + T)1.91 = $1,563.42
(1 + T)1.91 = 1.56342
(1 + T) = 1.2636
T = .2636
T = 26.36%
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
TEMPLETON INSTITUTIONAL FUNDS, INC. EMERGING MARKETS SERIES,
DECEMBER 31, 1994 ANNUAL REPORT AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 2
<NAME> EMERGING MARKETS SERIES
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 600004979
<INVESTMENTS-AT-VALUE> 580879916
<RECEIVABLES> 5419685
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 517897
<TOTAL-ASSETS> 586817498
<PAYABLE-FOR-SECURITIES> 1335141
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2604075
<TOTAL-LIABILITIES> 3939216
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 601053671
<SHARES-COMMON-STOCK> 51997882
<SHARES-COMMON-PRIOR> 31950843
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 949674
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (19125063)
<NET-ASSETS> 582878282
<DIVIDEND-INCOME> 10698056
<INTEREST-INCOME> 6321408
<OTHER-INCOME> 0
<EXPENSES-NET> 8539160
<NET-INVESTMENT-INCOME> 8480304
<REALIZED-GAINS-CURRENT> 13497874
<APPREC-INCREASE-CURRENT> (88281405)
<NET-CHANGE-FROM-OPS> (66303227)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (8480304)
<DISTRIBUTIONS-OF-GAINS> (16581020)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 21165430
<NUMBER-OF-SHARES-REDEEMED> (2916467)
<SHARES-REINVESTED> 1798076
<NET-CHANGE-IN-ASSETS> 160444879
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 4032820
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 6669935
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 8838514
<AVERAGE-NET-ASSETS> 533594917
<PER-SHARE-NAV-BEGIN> 13.22
<PER-SHARE-NII> .17
<PER-SHARE-GAIN-APPREC> (1.65)
<PER-SHARE-DIVIDEND> (.17)
<PER-SHARE-DISTRIBUTIONS> (.36)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.21
<EXPENSE-RATIO> 1.60
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
TEMPLETON INSTITUTIONAL FUNDS, INC. GLOBAL FIXED INCOME SERIES,
DECEMBER 31, 1994 ANNUAL REPORT AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 3
<NAME> GLOBAL FIXED INCOME
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 100418
<INVESTMENTS-AT-VALUE> 99706
<RECEIVABLES> 6366
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 7079
<TOTAL-ASSETS> 113151
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 14804
<TOTAL-LIABILITIES> 14804
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 153093
<SHARES-COMMON-STOCK> 12398
<SHARES-COMMON-PRIOR> 71718
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (54100)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (646)
<NET-ASSETS> 98347
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 29457
<OTHER-INCOME> 0
<EXPENSES-NET> 4450
<NET-INVESTMENT-INCOME> 25007
<REALIZED-GAINS-CURRENT> (52414)
<APPREC-INCREASE-CURRENT> (8575)
<NET-CHANGE-FROM-OPS> (35982)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (16404)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> (949)<F1>
<NUMBER-OF-SHARES-SOLD> 8465
<NUMBER-OF-SHARES-REDEEMED> (69976)
<SHARES-REINVESTED> 2191
<NET-CHANGE-IN-ASSETS> (613696)
<ACCUMULATED-NII-PRIOR> 6379
<ACCUMULATED-GAINS-PRIOR> (16668)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2453
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 54150
<AVERAGE-NET-ASSETS> 445529
<PER-SHARE-NAV-BEGIN> 9.93
<PER-SHARE-NII> 2.74
<PER-SHARE-GAIN-APPREC> (3.04)
<PER-SHARE-DIVIDEND> (1.61)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> (.09)
<PER-SHARE-NAV-END> 7.93
<EXPENSE-RATIO> 1.00<F2>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Distribution Other is from Return of Capital.
<F2>The Expense Ratio per the Templeton Institutional Funds, Global Fixed
Income Annual Report December 31, 1994, without reimbursement equaled 12.15%.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
TEMPLETON INSTITUTIONAL FUNDS, INC. FOREIGN EQUITY SERIES DECEMBER 31, 1994
ANNUAL REPORT AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 1
<NAME> FOREIGN EQUITY SERIES
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 1090523241
<INVESTMENTS-AT-VALUE> 1090660455
<RECEIVABLES> 17099805
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1107760260
<PAYABLE-FOR-SECURITIES> 12016758
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2516695
<TOTAL-LIABILITIES> 14533453
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1094290617
<SHARES-COMMON-STOCK> 85023429
<SHARES-COMMON-PRIOR> 30618936
<ACCUMULATED-NII-CURRENT> 1866114
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (3067138)
<ACCUM-APPREC-OR-DEPREC> 137214
<NET-ASSETS> 1093226807
<DIVIDEND-INCOME> 19242960
<INTEREST-INCOME> 5194308
<OTHER-INCOME> 0
<EXPENSES-NET> 7804997
<NET-INVESTMENT-INCOME> 16632271
<REALIZED-GAINS-CURRENT> 9358727
<APPREC-INCREASE-CURRENT> (41946256)
<NET-CHANGE-FROM-OPS> (15955258)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (15267921)
<DISTRIBUTIONS-OF-GAINS> (19111004)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 55873309
<NUMBER-OF-SHARES-REDEEMED> (3642203)
<SHARES-REINVESTED> 2173387
<NET-CHANGE-IN-ASSETS> 685256297
<ACCUMULATED-NII-PRIOR> 501794
<ACCUMULATED-GAINS-PRIOR> 6685139
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 5740479
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 7804997
<AVERAGE-NET-ASSETS> 820100277
<PER-SHARE-NAV-BEGIN> 13.32
<PER-SHARE-NII> .20
<PER-SHARE-GAIN-APPREC> (.16)
<PER-SHARE-DIVIDEND> (.19)
<PER-SHARE-DISTRIBUTIONS> (.31)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.86
<EXPENSE-RATIO> 0.95
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
TEMPLETON INSTITUTIONAL FUNDS, INC. GROWTH SERIES, DECEMBER 31, 1994
ANNUAL REPORT IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 4
<NAME> GROWTH SERIES
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 181961233
<INVESTMENTS-AT-VALUE> 191650258
<RECEIVABLES> 3015561
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 4830
<TOTAL-ASSETS> 194670649
<PAYABLE-FOR-SECURITIES> 275114
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 336656
<TOTAL-LIABILITIES> 611770
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 184632494
<SHARES-COMMON-STOCK> 17740337
<SHARES-COMMON-PRIOR> 15600726
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (262640)
<ACCUM-APPREC-OR-DEPREC> 9689025
<NET-ASSETS> 194058879
<DIVIDEND-INCOME> 4658791
<INTEREST-INCOME> 496649
<OTHER-INCOME> 0
<EXPENSES-NET> 1853701
<NET-INVESTMENT-INCOME> 3301739
<REALIZED-GAINS-CURRENT> 7834966
<APPREC-INCREASE-CURRENT> (14142808)
<NET-CHANGE-FROM-OPS> (3006103)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (3458409)
<DISTRIBUTIONS-OF-GAINS> (8353991)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1772408
<NUMBER-OF-SHARES-REDEEMED> (697333)
<SHARES-REINVESTED> 1064536
<NET-CHANGE-IN-ASSETS> 10046372
<ACCUMULATED-NII-PRIOR> 156670
<ACCUMULATED-GAINS-PRIOR> 256385
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1365883
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1853701
<AVERAGE-NET-ASSETS> 195126801
<PER-SHARE-NAV-BEGIN> 11.80
<PER-SHARE-NII> .20
<PER-SHARE-GAIN-APPREC> (.36)
<PER-SHARE-DIVIDEND> (.20)
<PER-SHARE-DISTRIBUTIONS> (.50)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.94
<EXPENSE-RATIO> .95
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
TEMPLETON INSTITUTIONAL FUNDS, INC. FOREIGN EQUITY SERIES (SOUTH AFRICA
FREE) DECEMBER 31, 1994 ANNUAL REPORT AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 5
<NAME> SOUTH AFRICA FREE
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 36768259
<INVESTMENTS-AT-VALUE> 38148480
<RECEIVABLES> 1549857
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 15478
<TOTAL-ASSETS> 39713815
<PAYABLE-FOR-SECURITIES> 3305
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 134031
<TOTAL-LIABILITIES> 137336
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 36903640
<SHARES-COMMON-STOCK> 4869622
<SHARES-COMMON-PRIOR> 7442346
<ACCUMULATED-NII-CURRENT> 703936
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 588682
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1380221
<NET-ASSETS> 39576479
<DIVIDEND-INCOME> 1843580
<INTEREST-INCOME> 251045
<OTHER-INCOME> 0
<EXPENSES-NET> 689143
<NET-INVESTMENT-INCOME> 1405482
<REALIZED-GAINS-CURRENT> 11933455
<APPREC-INCREASE-CURRENT> (14496288)
<NET-CHANGE-FROM-OPS> (1157351)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (978249)
<DISTRIBUTIONS-OF-GAINS> (20207441)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 436822
<NUMBER-OF-SHARES-REDEEMED> (4657485)
<SHARES-REINVESTED> 1647939
<NET-CHANGE-IN-ASSETS> (53429046)
<ACCUMULATED-NII-PRIOR> 276703
<ACCUMULATED-GAINS-PRIOR> 8862668
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 485980
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 723248
<AVERAGE-NET-ASSETS> 68914386
<PER-SHARE-NAV-BEGIN> 12.50
<PER-SHARE-NII> .32
<PER-SHARE-GAIN-APPREC> (.55)
<PER-SHARE-DIVIDEND> (.21)
<PER-SHARE-DISTRIBUTIONS> (3.93)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.13
<EXPENSE-RATIO> 1.00<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Expense Ratio per the Templeton Institutional Funds, Inc. Foreign
Equity Series (South Africa Free) Annual Report December 31, 1994, without
reimbursement equaled 1.05%.
</TABLE>
