SUPPLEMENT DATED OCTOBER 1, 1998
TO THE PROSPECTUS OF
TEMPLETON INSTITUTIONAL FUNDS, INC.
dated May 1, 1998
The prospectus is amended as follows:
I. The third paragraph of the section "Portfolio Management," found under "Who
Manages the Funds?" is replaced with the following:
The portfolio manager of the Emerging Fixed Income Markets Series is Umran
Demirors who has served as a portfolio manager for this Series since its
inception. Dr. Demirors is vice president of Templeton Global Bond Managers
("TGBM"), a division of Investment Counsel. He holds a Ph.D. and an MA in
economics from New York University, and a BA in economics from Bursa Academy of
Economics and Business Administration in Turkey. Prior to joining the Templeton
organization in 1996, Dr. Demirors was a principal and portfolio manager for
Socimer Advisory Inc. in New York. Before joining Socimer Advisory Inc., Dr.
Demirors was the head of research and strategy at VestcorPartners Group in Miami
from 1992 through 1994. Currently, Dr. Demirors manages several emerging markets
fixed income portfolios, and directs the TGBM emerging markets group.
II. The following paragraphs are added to the end of the section "Foreign
Investments," under "What Are the Risks of Investing in the Funds?":
On January 1, 1999, the European Monetary Union ("EMU") plans to introduce a new
single currency, the Euro, which will replace the national currency for
participating member countries. If the funds hold investments in countries with
currencies replaced by the Euro, the investment process, including trading,
foreign exchange, payments, settlements, cash accounts, custody and accounting
will be impacted.
The process to establish the Euro may result in market volatility. It is not
possible to predict the impact of the Euro on the business or financial
condition of European issuers or on the funds. The transition and the
elimination of currency risk among EMU countries may change the economic
environment and behavior of investors, particularly in European markets. To the
extent a fund holds non-U.S. dollar (Euro or other) denominated securities, it
will still be exposed to currency risk due to fluctuations in those currencies
versus the U.S. dollar.
Resources has created an interdepartmental team to handle all Euro-related
changes to enable the Franklin Templeton Funds to process transactions
accurately and completely with minimal disruption to business activities. While
there can be no assurance that the funds will not be adversely affected, the
Investment Managers and their affiliated service providers are taking steps that
they believe are reasonably designed to address the Euro issue.
Please keep this supplement for future reference.
