<PAGE>
Templeton Capital
Accumulator Fund
[PHOTO OF GARY P. MOTYL Your Fund's
APPEARS HERE] Objective:
Gary P. Motyl, CFA The Templeton Capital Accumulator Fund
President seeks long-term capital growth by
Templeton Capital investing in a portfolio primarily
Accumulator Fund composed of common stocks in various
- ----------------------- nations throughout the world.
April 16, 1996
Dear Shareholder:
We are pleased to bring you the semi-annual report of the Templeton Capital
Accumulator Fund for the six months ended February 29, 1996. Spearheaded by the
spectacular gains of the U.S. stock market, many international equity markets
performed well due to subdued inflation, declining interest rates, and higher-
than-expected corporate earnings. Global merger and acquisition activity was
strong, and many companies raised their dividends. U.S. stock prices also rose
due to huge cash inflows into mutual funds.
Within this environment, the Fund posted a total return of 8.93%, as discussed
in the Performance Summary on page 5, compared with a 10.62% increase in the
Morgan Stanley Capital International (MSCI) World Index./1/ The primary reason
for the Fund's underperformance was its relatively low weighting of U.S.
equities. As the U.S. stock market advanced, we found it increasingly difficult
to find
1. The Fund's performance differs from that of the index because an index is not
managed according to any investment strategy, does not contain cash (the Fund
generally carries a certain percentage of cash at any given time), and includes
no management expenses. Of course, one cannot invest directly in an index, and
past performance is not predictive of future results.
1
<PAGE>
undervalued stocks in which to invest. Price/earnings multiples rose
substantially, with some sectors such as technology and blue-chip stocks trading
at valuations which we considered too high to warrant representation in the
Fund's portfolio. At the end of the period, 23.7% of the Fund's assets were
invested in the U.S., compared with the MSCI's weighting of 41.65%.
It is interesting to note that foreign currency movements had very little impact
on the Fund's total return during the period, as the values of most European
currencies were unchanged relative to the U.S. dollar. While the Japanese yen
did fall sharply versus the dollar, the Fund had no exposure to Japanese
securities. We found better value in other countries, and added a number of new
stocks to the portfolio that we feel have solid long-term potential.
Akzo Nobel is one of the stocks we purchased. Headquartered in the Netherlands,
the company produces basic and specialty chemicals and has a large
pharmaceuticals business. Despite having an attractive long-term earnings
outlook on February 29, 1996, the stock was selling at a lower price/earnings
multiple than its global peers. We also initiated a position in Merita Limited,
the largest banking group in Finland. It offers exposure to the
- --------------------------------------
Templeton Capital Accumulator Fund
Geographic Distribution on 2/29/96
Based on Total Net Assets
[PIE GRAPH APPEARS HERE]
<TABLE>
<S> <C>
European Stocks 47.4%
United States Stocks 23.7%
Asian Stocks 10.4%
Australian & New Zealand Stocks 9.0%
Latin American Stocks 3.5%
Short-Term Obligations & Other Net Assets 6.0%
</TABLE>
potentially lucrative Baltic banking market, and we feel it should benefit from
cost reductions related to a recent merger. Volvo, the Swedish industrial group,
was another new addition to the portfolio. Known for its high quality
automobiles, Volvo also manufacturers trucks and construction equipment. At the
end of the reporting period, it was divesting non-core businesses, and selling
at a discount to its underlying asset value. During the period, we added to our
existing positions in Societe Elf Aquitaine, the major French energy company,
and Telefonica de Espana, the leading Spanish telecommunications group.
2
<PAGE>
In emerging markets, we purchased shares in PT Indorayon, a leading Asian
producer of pulp and rayon products. While short-term performance may be
affected by the recent weakening of pulp prices, the company is converting
production to higher value-added rayon, and we believe earnings should increase
in the future.
On the sell side, we took profits in British Airways. Although the firm had a
strong presence within the global airline industry, we felt that its shares were
no longer undervalued. Following positive moves in their stocks, we also reduced
our holdings in Burton Group, the U.K. retailing firm, and Swiss Reinsurance,
the large Switzerland-based reinsurance group.
This discussion reflects the strategies we employed for the Fund during the six
months under review, and includes our opinions as of the close of the period.
Since economic and market conditions are constantly changing, our strategies,
and our evaluations, conclusions and decisions regarding portfolio holdings, may
change as new circumstances arise. Although past performance of a specific
investment or sector cannot guarantee future performance, such information can
be useful in analyzing securities we purchase or sell for the Fund.
<TABLE>
<CAPTION>
- ----------------------------------------------------------
TEMPLETON CAPITAL
ACCUMULATOR FUND
Top 10 Holdings on 2/29/96
As a Percentage of Total Net Assets
% of Total
Company, Industry, Country Net Assets
- ----------------------------------------------------------
<S> <C>
Telefonica de Espana SA;
Telecommunications, Spain 1.8%
- ----------------------------------------------------------
Societe Elf Aquitaine SA; Energy Sources,
France 1.6%
- ----------------------------------------------------------
Iberdrola SA; Utilities - Electrical & Gas,
Spain 1.6%
- ----------------------------------------------------------
Brambles Industries, Ltd.; Transportation,
Australia 1.5%
- ----------------------------------------------------------
VEBA AG; Utilities - Electrical & Gas,
Germany 1.4%
- ----------------------------------------------------------
Qantas Airways, Ltd., ADR, 144a;
Transportation, Australia 1.4%
- ----------------------------------------------------------
Stora Kopparbergs Bergslags AB, B;
Forest Products & Paper, Sweden 1.4%
- ----------------------------------------------------------
Rhone-Poulenc SA, A; Chemicals,
France 1.3%
- ----------------------------------------------------------
SIG (Schweizerische Industrie Gesellschaft)
Holdings AG; Metals & Mining, Switzerland 1.3%
- ----------------------------------------------------------
Cheung Kong Holdings, Ltd.; Multi-Industry,
Hong Kong 1.3%
- ----------------------------------------------------------
</TABLE>
For a complete list of portfolio holdings, please see page 7 of this report.
Low inflation, reasonable economic growth, solid corporate profits, and the
spread of capitalism have contributed to the strong performance of most global
financial markets over the past five years. Although we do not know whether the
next several months will offer good investment returns for international
equities, we believe that opportunities in the expanding global marketplace
3
<PAGE>
should allow well-positioned companies to prosper and their stock prices to
appreciate in the long term. However, as always, we remind our shareholders that
investments in foreign securities involve special risks, which are heightened in
developing markets, such as adverse economic, social and political developments
in the countries where the Fund is invested, as well as currency and market
volatility. While short-term volatility can be disconcerting, declines of as
much as 40% to 50% are not unusual in emerging markets. For example, the Hong
Kong market has increased 700% in the last 15 years, but has suffered six
declines of more than 20% during that time./2/ Developing markets are
represented in the Fund's portfolio, and also involve risks associated with the
relatively small size and lesser liquidity of these markets. These special risks
and other considerations are discussed in the Fund's prospectus.
2. Source: Bloomberg. Based on quarterly percentage change over 15 years ended
March 31, 1996.
In closing, we would like to mention that on December 5, 1995, the Board of
Directors voted to split the shares of the Fund, 2-for-1, effective at the close
of business on Wednesday, March 27, 1996. After that date, the number of shares
in each account will be doubled, and the net asset value (NAV) per share will be
halved. Your account value, therefore, will remain the same. You do not need to
take any action, and will experience no tax consequences because of this
transaction. You will receive written confirmation listing your new number of
shares and their NAV per share as of the date of the split.
We appreciate your support, and welcome any comments or suggestions you may
have.
Sincerely,
/s/ Gary P. Motyl
Gary P. Motyl, CFA
President
Templeton Capital Accumulator Fund, Inc.
4
<PAGE>
PERFORMANCE SUMMARY
The Templeton Capital Accumulator Fund reported a total return of 8.93% for the
six-month period ended February 29, 1996. Total return measures the change in
value of an investment, assuming reinvestment of dividends and capital gains
distributions, and does not include the initial sales and creation charge. While
we expect market volatility in the short term, we have always maintained a long-
term perspective when managing the Fund and encourage shareholders to view their
investments in a similar manner. As you can see from the table to the right,
the Fund has delivered a cumulative total return of more than 94% since
inception on March 1, 1991.
As restated to reflect the 2-for-1 stock dividend/split, the price of the
Fund's shares, as measured by net asset value, increased from $7.97 on August
31, 1995 to $8.49 on February 29, 1996. During this time, shareholders received
distributions of 14.75 cents ($0.1475) per share in dividend income and 3 cents
($0.03) in long-term capital gains.** Of course, past performance is not
predictive of future results, and distributions will vary depending on income
earned by the Fund, as well as any profits realized from the sale of securities
in the portfolio.
- --------------------------------------------------------------------------------
TEMPLETON CAPITAL ACCUMULATOR FUND
Periods Ended 2/29/96
Since
Inception
One-Year Three-Year (3/1/91)
Cumulative
Total Return* 18.69% 62.79% 94.56%
* Cumulative total return represents the change in value of an investment over
the indicated periods, assuming reinvestment of dividends and capital gains. It
does not include any sales and creation charges. Investment return and principal
value will fluctuate, so your shares, when redeemed, may be worth more or less
than their initial cost. Past performance is not predictive of future results.
Note: The Fund's manager has agreed in advance to waive a portion of its
management fees and to make certain payments to reduce expenses, which increases
total return to shareholders. If the manager had not taken this action, the
Fund's total return would have been lower. The fee waiver may be discontinued at
any time, upon notice to the Fund's Board of Directors.
** Per share amounts for all periods prior to February 29, 1996, have been
restated to reflect a 2-for-1 stock dividend/split effective at the close of
business on Wednesday, March 27, 1996.
5
<PAGE>
Templeton Capital Accumulator Fund, Inc.
Financial Highlights
- --------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE++(For a share outstanding throughout the
period)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED AUGUST 31
FEBRUARY 29, 1996 -----------------------------------------
(UNAUDITED) 1995 1994 1993 1992 1991+
----------------- ------- ------- ------- ------ ------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, begin-
ning of period $ 7.97 $ 8.10 $ 6.87 $ 5.48 $ 5.21 $ 5.00
------- ------- ------- ------- ------ ------
Income from investment
operations:
Net investment income .04 .14 .09 .10 .08 .07
Net realized and
unrealized gain .66 .12 1.30 1.44 .28 .14
------- ------- ------- ------- ------ ------
Total from investment
operations .70 .26 1.39 1.54 .36 .21
------- ------- ------- ------- ------ ------
Distributions:
Dividends from net in-
vestment income (.15) (.10) (.07) (.10) (.09) --
Distributions from net
realized gains (.03) (.29) (.09) (.05) -- --
------- ------- ------- ------- ------ ------
Total distributions (.18) (.39) (.16) (.15) (.09) --
------- ------- ------- ------- ------ ------
Change in net asset
value .52 (.13) 1.23 1.39 .27 .21
------- ------- ------- ------- ------ ------
Net asset value, end of
period $ 8.49 $ 7.97 $ 8.10 $ 6.87 $ 5.48 $ 5.21
======= ======= ======= ======= ====== ======
TOTAL RETURN* 8.93% 3.40% 20.64% 29.11% 7.01% 4.20%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year
(000) $85,895 $65,538 $38,323 $18,365 $8,690 $3,635
Ratio of expenses to av-
erage net assets 1.19%** 1.34% 1.58% 1.91% 1.84% 3.99%**
Ratio of expenses, net
of reimbursement, to
average net assets 1.00%** 1.00% 1.00% 1.00% 1.00% 1.00%**
Ratio of net investment
income to average
net assets 1.26%** 2.37% 1.58% 1.99% 2.06% 3.80%**
Portfolio turnover rate 3.53% 12.91% 15.25% 14.97% 16.42% --
Average commission rate
paid (per share) $ .0021
</TABLE>
+PERIOD FROM MARCH 1, 1991 (COMMENCEMENT OF OPERATIONS) TO AUGUST 31, 1991.
++PER SHARE AMOUNTS FOR ALL PERIODS ARE ADJUSTED FOR A 2-FOR-1 STOCK SPLIT
EFFECTIVE MARCH 27, 1996.
*NOT ANNUALIZED IN PERIODS OF LESS THAN ONE YEAR.
**ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE>
Templeton Capital Accumulator Fund, Inc.
Investment Portfolio, February 29, 1996 (unaudited)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
INDUSTRY ISSUE COUNTRY SHARES VALUE
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMMON STOCKS: 91.4%
Appliances & Household Durables: 1.6%
Electrolux AB, B Swe. 22,250 $ 1,092,722
Fisher & Paykel Ltd. N.Z. 100,000 302,918
-----------
1,395,640
- -----------------------------------------------------------------------------------------
Automobiles: 2.9%
*Ciadea SA Arg. 26,667 120,054
Ford Motor Co. U.S. 24,000 750,000
General Motors Corp. U.S. 14,000 717,500
Volvo AB, B Swe. 43,000 920,519
-----------
2,508,073
- -----------------------------------------------------------------------------------------
Banking: 10.2%
ABN AMRO NV Neth. 15,000 697,017
Australia & New Zealand Banking
Group Ltd. Aus. 200,000 983,083
Banco Bilbao Vizcaya Sp. 20,000 778,770
Bank of Montreal Can. 10,000 232,350
Bankinter SA Sp. 7,500 805,833
Banque Nationale de Paris Fr. 15,000 580,236
Barclays PLC U.K. 22,100 262,785
BPI Socieda de Gestora de
Participacoes Socias SA Port. 18,240 231,720
*Fokus Bank AS Nor. 27,500 156,772
HSBC Holdings PLC H.K. 55,200 885,382
Korea Long Term Credit Bank Kor. 5,250 150,010
*Merita Ltd., A Fin. 225,000 579,170
Nations Bank Corp. U.S. 5,800 427,750
*Philippine National Bank Phil. 16,170 228,748
PT Bank Bali, fgn. Indo. 49,500 122,869
PT Panin Bank, fgn. Indo. 128,600 141,563
Sparbanken Sverige AB, A Swe. 85,000 919,259
Sparbanken Sverige AB, A, 144A U.S. 51,800 560,207
-----------
8,743,524
- -----------------------------------------------------------------------------------------
Broadcasting & Publishing: 0.5%
News Corp. Ltd. Aus. 70,000 398,126
- -----------------------------------------------------------------------------------------
Building Materials & Components: 1.8%
*Owens Corning U.S. 5,500 223,438
Pioneer International Ltd. Aus. 275,815 818,086
*Unione Cementi Marchino
Emiliane (Unicem) Itl. 80,000 516,605
-----------
1,558,129
- -----------------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
Templeton Capital Accumulator Fund, Inc.
Investment Portfolio, February 29, 1996 (unaudited) (cont.)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
INDUSTRY ISSUE COUNTRY SHARES VALUE
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
COMMON STOCKS (CONT.)
- ----------------------------------------------------------------------------------------------
Business & Public Services: 4.5%
Esselte AB, B Swe. 40,000 $ 699,259
Lex Service PLC U.K. 165,000 826,757
Societe Generale de Surveillance
Holdings Ltd., br. Swtz. 460 882,402
Wheelabrator Technologies Inc. U.S. 60,000 952,500
WMX Technologies Inc. U.S. 18,000 513,000
-----------
3,873,918
- ----------------------------------------------------------------------------------------------
Chemicals: 4.2%
Akzo Nobel NV Neth. 7,500 834,143
Bayer AG Ger. 420 128,769
Great Lakes Chemical Corp. U.S. 7,400 529,100
Rhone-Poulenc SA, A Fr. 46,000 1,147,023
Solvay SA Bel. 1,600 938,141
-----------
3,577,176
- ----------------------------------------------------------------------------------------------
Electrical & Electronics: 2.7%
Alcatel Alsthom SA Fr. 6,661 590,776
BBC Brown Boveri Ltd., br. Swtz. 652 780,877
GP Batteries International Ltd. Sing. 56,000 138,320
*GP Batteries International Ltd.,
wts. Sing. 14,000 10,080
Motorola Inc. U.S. 4,000 217,000
Philips Electronics NV Neth. 13,940 580,022
-----------
2,317,075
- ----------------------------------------------------------------------------------------------
Electronic Components & Instruments: 0.5%
Intel Corp. U.S. 8,000 470,500
- ----------------------------------------------------------------------------------------------
Energy Equipment & Services: 0.7%
*Parker Drilling Co. U.S. 25,000 150,000
Sun Co. Inc. U.S. 16,000 466,000
-----------
616,000
- ----------------------------------------------------------------------------------------------
Energy Sources: 7.9%
Amerada Hess Corp. U.S. 3,000 154,500
*Barrett Resources Corp. U.S. 26,000 624,000
Norsk Hydro AS Nor. 10,000 426,389
Royal Dutch Petroleum Co. Neth. 800 110,200
Saga Petroleum AS, B Nor. 49,070 547,981
Societe Elf Aquitane SA Fr. 20,000 1,379,871
Tosco Corp. U.S. 15,600 696,150
Total SA, B Fr. 13,000 857,976
USX-Marathon Group Inc. U.S. 25,000 462,500
</TABLE>
8
<PAGE>
Templeton Capital Accumulator Fund, Inc.
Investment Portfolio, February 29, 1996 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------
COMMON STOCKS (CONT.)
- ------------------------------------------------------------------------------
Energy Sources (cont.)
Valero Energy Corp. U.S. 32,650 $ 771,356
YPF Sociedad Anonima, ADR U.S. 37,500 726,563
-----------
6,757,486
- ------------------------------------------------------------------------------
Financial Services: 1.9%
American Express Co. U.S. 6,050 278,300
Axa SA Fr. 13,757 888,834
Onbancorp Inc. U.S. 14,000 472,500
-----------
1,639,634
- ------------------------------------------------------------------------------
Food & Household Products: 1.1%
Burns Philp & Co. Ltd. Aus. 438,800 979,487
- ------------------------------------------------------------------------------
Forest Products & Paper: 6.5%
*Asia Pulp & Paper Co. Ltd., ADR U.S. 11,700 112,612
Boise Cascade Corp. U.S. 7,000 246,750
*Enso Gutzeit OY, R Fin. 70,400 500,279
Georgia-Pacific Corp. U.S. 12,000 757,500
Hansol Paper Co. Ltd., GDS Kor. 21,723 419,173
International Paper Co. U.S. 21,000 748,125
Maderas Y Sinteticos SA, ADR U.S. 16,000 322,000
*Portucel Industrial Empresa
Product Celulose, ADR, 144 U.S. 49,100 272,152
PT Inti Indorayon Utama, fgn. Indo. 450,000 553,637
*Shorewood Packaging Corp. U.S. 18,500 263,625
Stora Kopparbergs Bergslags AB, B Swe. 90,000 1,160,000
Unipapel SA Sp. 12,000 222,967
-----------
5,578,820
- ------------------------------------------------------------------------------
Health & Personal Care: 4.6%
Astra AB, B Swe. 20,000 915,556
Ciba-Geigy AG Swtz. 800 714,595
Hafslund Nycomed SA, B Nor. 36,000 955,862
Internatio-Mueller NV Neth. 7,000 510,235
Windmere Corp. U.S. 90,000 900,000
-----------
3,996,248
- ------------------------------------------------------------------------------
Industrial Components: 3.0%
BW/IP Inc. U.S. 31,000 480,500
Goodyear Tire & Rubber Co. U.S. 23,000 1,092,500
SKF AB, B Swe. 45,000 986,667
-----------
2,559,667
- ------------------------------------------------------------------------------
</TABLE>
9
<PAGE>
Templeton Capital Accumulator Fund, Inc.
Investment Portfolio, February 29, 1996 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------
COMMON STOCKS (CONT.)
- ------------------------------------------------------------------------------
Insurance: 3.9%
Aegon NV Neth. 17,500 $ 752,597
American International Group Inc. U.S. 10,250 990,406
Ing Groep NV Neth. 13,000 863,087
Progressive Corp. Ohio U.S. 2,000 92,000
Swiss Reinsurance Co. Swtz. 605 630,734
-----------
3,328,824
- ------------------------------------------------------------------------------
Machinery & Engineering: 1.4%
Sasib SPA, di Risp Itl. 310,000 702,069
VA Technologie AG, br., 144A U.S. 4,000 505,972
-----------
1,208,041
- ------------------------------------------------------------------------------
Merchandising: 3.4%
Burton Group PLC U.K. 375,000 765,675
Dairy Farm International Holdings
Ltd. H.K. 450,000 438,750
Dayton-Hudson Corp. U.S. 14,000 1,041,250
K Mart Corp. U.S. 60,000 420,000
Sa des Galeries Lafayette Fr. 800 240,743
-----------
2,906,418
- ------------------------------------------------------------------------------
Metals & Mining: 2.3%
*Pechiney SA, A Fr. 22,000 892,473
SIG (Schweizerische Industrie
Gesellschaft) Holdings AG Swtz. 500 1,125,938
-----------
2,018,411
- ------------------------------------------------------------------------------
Multi-Industry: 3.4%
Cheung Kong Holdings Ltd. H.K. 160,000 1,112,419
Hutchison Whampoa Ltd. H.K. 101,500 643,327
Jardine Matheson Holdings Ltd. H.K. 32,336 258,688
Swire Pacific Ltd., A H.K. 85,000 742,152
Swire Pacific Ltd., B H.K. 100,000 144,226
-----------
2,900,812
- ------------------------------------------------------------------------------
Real Estate: 2.0%
Beacon Properties Corp U.S. 24,000 630,000
Carr Realty Corp. U.S. 26,000 640,250
*Catellus Development Corp. U.S. 50,000 381,250
PT Jaya Properties, fgn. Indo. 4,000 13,814
-----------
1,665,314
- ------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
Templeton Capital Accumulator Fund, Inc.
Investment Portfolio, February 29, 1996 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------
COMMON STOCKS (CONT.)
- -------------------------------------------------------------------------------
Telecommunications: 4.6%
Compania de Telecomunicaciones de
Chile SA, ADR U.S. 4,500 $ 372,375
Philippine Long Distance Telephone
Co Phil. 3,000 177,213
STET (Sta Finanziaria Telefonica
Torino) SPA Itl. 297,100 907,637
Telecomunicacoes Brasileiras SA,
ADR, 144A U.S. 227 11,918
Telefonica de Argentina SA, B, ADR U.S. 16,600 433,675
Telefonica de Espana SA Sp. 95,500 1,570,000
Telmex-Telefonos de Mexico SA, L,
ADR U.S. 15,000 457,500
-----------
3,930,318
- -------------------------------------------------------------------------------
Textiles & Apparel: 3.0%
Dawson International PLC U.K. 226,800 330,151
*Fruit of the Loom Inc., A U.S. 22,500 570,938
Kellwood Co. U.S. 18,500 279,813
PT Indorama Synthetics, fgn. Indo. 220,400 782,556
Shaw Industries Inc. U.S. 53,000 602,875
-----------
2,566,333
- -------------------------------------------------------------------------------
Transportation: 5.9%
American President Cos. Ltd. U.S. 20,000 420,000
Brambles Industries Ltd. Aus. 105,000 1,308,356
Cathay Pacific Airways Ltd. H.K. 150,000 274,548
Kvaerner Industrier AS, A Nor. 12,000 384,219
Qantas Airways Ltd., ADR, 144A U.S. 65,000 1,182,188
Shun Tak Holdings H.K. 598,000 440,906
Unitor AS Nor. 70,000 1,093,306
-----------
5,103,523
- -------------------------------------------------------------------------------
Utilities Electrical & Gas: 5.6%
Electricidad de Caracas Venz. 226,041 142,300
Endesa-Empresa Nacional de
Electricidad SA Sp. 4,800 273,377
Entergy Corp. U.S. 16,500 468,187
Evn Energie-Versorgung
Niederoesterreich AG Aust. 4,800 636,410
Iberdrola SA Sp. 135,000 1,330,533
Nova Corp. Can. 36,200 319,951
Texas Utilties Electric Co. U.S. 10,500 423,938
VEBA AG Ger. 26,000 1,225,964
-----------
4,820,660
- -------------------------------------------------------------------------------
</TABLE>
11
<PAGE>
Templeton Capital Accumulator Fund, Inc.
Investment Portfolio, February 29, 1996 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
<S> <S> <C> <C> <C>
- -----------------------------------------------------------------------------------
COMMON STOCKS (CONT.)
- -----------------------------------------------------------------------------------
Wholesale & International Trade: 1.3%
Brierley Investments Ltd. N.Z. 1,200,000 $ 1,042,038
Sime Darby Hongkong Ltd. H.K. 90,000 93,133
-----------
1,135,171
-----------
TOTAL COMMON STOCKS (cost $66,696,612) 78,553,328
- -----------------------------------------------------------------------------------
PREFERRED STOCKS: 2.0%
- -----------------------------------------------------------------------------------
ABN Amro NV, conv., pfd. Neth. 333 14,766
Concessioni e Costruzioni
Autostrade SPA, B, pfd. Itl. 490,000 553,130
*Everen Capital Corp., pfd. A U.S. 205 5,219
News Corp. Ltd., pfd. Aus. 140,000 706,352
Telebras-Telecomunicacoes
Brasileiras SA, pfd., ADR U.S. 8,200 430,500
-----------
TOTAL PREFERRED STOCKS (cost $1,566,610) 1,709,967
- -----------------------------------------------------------------------------------
<CAPTION>
PRINCIPAL IN
LOCAL CURRENCY**
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
BOND: 1.2% (cost $1,080,335)
- -----------------------------------------------------------------------------------
Essar Gujarat Ltd., 5.50%,
conv., 8/05/98 Ind. 1,050,000 1,023,750
- -----------------------------------------------------------------------------------
SHORT TERM OBLIGATIONS: 13.4% (cost
$11,482,185)
- -----------------------------------------------------------------------------------
U.S. Treasury Bills, 4.59% to
4.95% with maturities to
5/02/96 U.S. 11,526,000 11,483,068
- -----------------------------------------------------------------------------------
TOTAL INVESTMENTS: 108.0% (cost $79,745,407) 92,770,113
OTHER ASSETS, LESS LIABILITIES: (8.0%) (6,875,384)
-----------
TOTAL NET ASSETS: 100.0% $85,894,729
===========
</TABLE>
*NON-INCOME PRODUCING.
**CURRENCY OF COUNTRIES INDICATED.
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE>
Templeton Capital Accumulator Fund, Inc.
Financial Statements
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
February 29, 1996 (unaudited)
<TABLE>
<S> <C>
Assets:
Investments in securities, at value (identified cost $79,745,407) $92,770,113
Cash 127,970
Receivables:
Investment securities sold 46,779
Capital shares sold 193,657
Dividends and interest 27,289
-----------
Total assets 93,165,808
-----------
Liabilities:
Payables:
Investment securities purchased 7,134,254
Capital shares redeemed 22,802
Accrued expenses 114,023
-----------
Total liabilities 7,271,079
-----------
Net assets, at value $85,894,729
===========
Net assets consists of:
Undistributed net investment income $ 176,055
Net unrealized appreciation 13,024,706
Accumulated net realized gain 530,757
Net capital paid in on shares of capital stock 72,163,211
-----------
Net assets, at value $85,894,729
===========
Shares outstanding (Note 2) 10,119,984
===========
Net asset value per share (Note 2) ($85,894,729 / 10,119,984) $ 8.49
===========
</TABLE>
STATEMENT OF OPERATIONS
for the six months ended February 29, 1996 (unaudited)
<TABLE>
<S> <C> <C>
Investment income:
(net of $42,481 foreign taxes withheld)
Dividends $ 614,278
Interest 236,389
----------
Total income $ 850,667
Expenses:
Management fees (Note 3) 282,259
Administrative fees (Note 3) 56,454
Reports to shareholders 68,700
Audit fees 6,500
Legal fees (Note 3) 4,500
Registration and filing fees 20,200
Directors' fees and expenses 9,244
Other 2,344
----------
Total expenses 450,201
Less expenses reimbursed (Note 3) (73,878)
----------
Total expenses less reimbursement 376,323
----------
Net investment income 474,344
Realized and unrealized gain (loss):
Net realized gain (loss) on:
Investments 914,550
Foreign currency transactions (46,795)
----------
867,755
Net unrealized appreciation on investments 5,234,909
----------
Net realized and unrealized gain 6,102,664
----------
Net increase in net assets resulting from operations $6,577,008
==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
13
<PAGE>
Templeton Capital Accumulator Fund, Inc.
Financial Statements (cont.)
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR
FEBRUARY 29, 1996 ENDED
(UNAUDITED) AUGUST 31, 1995
----------------- ---------------
<S> <C> <C>
Increase in net assets:
Operations:
Net investment income $ 474,344 $ 1,196,838
Net realized gain on investments and for-
eign currency transactions 867,755 411,227
Net unrealized appreciation 5,234,909 961,710
----------- -----------
Net increase in net assets resulting from
operations 6,577,008 2,569,775
Distributions to shareholders:
From net investment income (1,315,934) (584,857)
From net realized gain (285,372) (1,459,126)
Capital share transactions (Note 2) 15,381,401 26,689,267
----------- -----------
Net increase in net assets 20,357,103 27,215,059
Net assets:
Beginning of period 65,537,626 38,322,567
----------- -----------
End of period $85,894,729 $65,537,626
=========== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE>
Templeton Capital Accumulator Fund, Inc.
Notes to Financial Statements (unaudited)
- -------------------------------------------------------------------------------
1. SUMMARY OF ACCOUNTING POLICIES
Templeton Capital Accumulator Fund, Inc. (the Fund) is an open-end, diversi-
fied management investment company registered under the Investment Company Act
of 1940. Shares of the Fund are offered to the general public only through
Templeton Capital Accumulation Plans. The Fund seeks long-term capital growth
by investing in a portfolio primarily composed of common stocks in various na-
tions throughout the world. The following summarizes the Fund's significant
accounting policies.
a. Securities Valuations:
Securities listed or traded on a recognized national or foreign stock exchange
or NASDAQ are valued at the last reported sales prices on the principal ex-
change on which the securities are traded. Over-the-counter securities and
listed securities for which no sale is reported are valued at the mean between
the last current bid and asked prices. Securities for which market quotations
are not readily available are valued at fair value as determined by management
and approved in good faith by the Board of Directors.
b. Foreign Currency Transactions:
Portfolio securities and other assets and liabilities denominated in foreign
currencies are translated into U.S. dollars based on the rate of exchange of
such currencies against U.S. dollars on the date of valuation. Purchases and
sales of portfolio securities and income items denominated in foreign curren-
cies are translated into U.S. dollar amounts on the respective dates of such
transactions. When the Fund purchases or sells foreign securities it customar-
ily enters into a foreign exchange contract to minimize foreign exchange risk
between the trade date and the settlement date of such transactions.
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held. Such fluctuations
are included with the net realized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, the differences between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books, and the U.S. dollar equivalent of the amounts actually received
or paid. Net unrealized foreign exchange gains and losses arise from changes
in the value of assets and liabilities other than investments in securities at
the end of the fiscal period, resulting from changes in the exchange rates.
c. Income Taxes:
It is the Fund's policy to comply with the requirements of the Internal Reve-
nue Code applicable to regulated investment companies and to distribute all of
its taxable income to its shareholders. Therefore, no provision has been made
for income taxes.
d. Security Transactions, Investment Income, Distributions and Expenses:
Security transactions are accounted for on a trade date basis. Dividend income
is recorded on the ex-dividend date. Certain dividend income from foreign se-
curities is recorded as soon as information is available to the Fund. Interest
income and estimated expenses are accrued daily. Distributions to sharehold-
ers, which are determined in accordance with income tax regulations, are re-
corded on the ex-dividend date.
e. Accounting Estimates:
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of the
financial statements and the amounts of income and expense during the report-
ing period. Actual results could differ from those estimates.
15
<PAGE>
Templeton Capital Accumulator Fund, Inc.
Notes to Financial Statements (unaudited) (cont.)
- -------------------------------------------------------------------------------
2. TRANSACTIONS IN SHARES OF CAPITAL STOCK
Effective March 27, 1996, the shares of the Fund were split on a 2-for-1 ba-
sis. Accordingly, all per share amounts have been restated to reflect the
split. At February 29, 1996, there were 100 million shares of capital stock
authorized ($0.01 par value). Transactions in the Fund's shares were as fol-
lows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
FEBRUARY 29, 1996 DECEMBER 31, 1995
---------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
--------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Shares sold 970,378 $15,793,505 1,748,863 $26,758,403
Shares issued on
reinvestment of
distributions 101,001 1,597,519 135,355 2,042,103
Shares issued on 2-for-1
stock split 5,059,992 -- -- --
Shares redeemed (122,558) (2,009,623) (137,739) (2,111,239)
--------- ----------- --------- -----------
Net increase 6,008,813 $15,381,401 1,746,479 $26,689,267
========= =========== ========= ===========
</TABLE>
3. INVESTMENT MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Certain officers of the Fund are also directors or officers of Templeton In-
vestment Counsel, Inc. (TICI) and Templeton Global Investors Inc. (TGII), the
Fund's investment manager and administrative manager, respectively. The Fund
pays monthly an investment management fee to TICI equal, on an annual basis,
to 0.75% per annum of its average daily net assets. The Fund pays to TGII
monthly a fee of 0.15% per annum, on the first $200 million of the Fund's av-
erage daily net assets, 0.135% of the next $500 million, 0.10% of the next
$500 million and 0.075% per annum of such average net assets in excess of $1.2
billion. TGII has voluntarily agreed to limit the total expenses of the fund
to an annual rate of 1.00% of the Fund's average net assets. The amount of the
reimbursement for the period ended February 29, 1996 is set forth in the
Statement of Operations.
An officer of the Company is a partner of Dechert Price & Rhoads, legal coun-
sel for the Fund, which firm received fees of $4,500 for the six months ended
February 29, 1996.
4. PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities (excluding short-term securities) for the
six months ended February 29, 1996, aggregated $15,132,202 and $2,403,986, re-
spectively. The cost of securities for federal income tax purposes is the same
as that shown in the investment portfolio. Realized gains and losses are re-
ported on identified cost basis.
At February 29, 1996, the aggregate gross unrealized appreciation and depreci-
ation of portfolio securities, based on cost for federal income tax purposes,
was as follows:
<TABLE>
<S> <C>
Unrealized appreciation $15,060,858
Unrealized depreciation (2,036,152)
-----------
Net unrealized appreciation $13,024,706
===========
</TABLE>
16
<PAGE>
Notes
-----
<PAGE>
Notes
-----
<PAGE>
THE FRANKLIN TEMPLETON GROUP
Literature Request - Call today for a free descriptive brochure and prospectus
on any of the funds listed below. The prospectus contains more complete
information, including fees, charges and expenses, and should be read carefully
before investing or sending money.
Templeton Funds
Americas Government
Securities Fund
Developing Markets Trust
Foreign Fund
Global Infrastructure Fund
Global Opportunities Trust
Greater European Fund
Growth Fund
Growth and Income Fund
Income Fund
Latin America Fund
Real Estate
Securities Fund
Smaller Companies
Growth Fund
World Fund
Franklin Funds Seeking
Tax-Free Income
Federal Tax-Free
Income Fund
Federal Intermediate-Term
Tax-Free Income Fund
High Yield Tax-Free
Income Fund
Insured Tax-Free
Income Fund***
Puerto Rico Tax-Free
Income Fund
Franklin State-Specific
Funds Seeking Tax-Free
Income
Alabama
Arizona*
Arkansas**
California*
Colorado
Connecticut
Florida*
Georgia
Hawaii**
Indiana
Kentucky
Louisiana
Maryland
Massachusetts***
Michigan***
Minnesota***
Missouri
New Jersey
New York*
North Carolina
Ohio***
Oregon
Pennsylvania
Tennessee
Texas
Virginia
Washington**
Franklin Funds
Seeking Capital Growth
California Growth Fund
DynaTech Fund
Equity Fund
Global Health
Care Fund
Gold Fund
Growth Fund
International
Equity Fund
Japan Fund
Pacific Growth Fund
Small Cap Growth Fund
Franklin Funds Seeking
Growth and Income
Balance Sheet
Investment Fund
Convertible Securities Fund
Equity Income Fund
Global Utilities Fund
Income Fund
Natural Resources Fund
Premier Return Fund
Real Estate Securities Fund
Rising Dividends Fund
Strategic Income Fund
Utilities Fund
Franklin Funds Seeking
High Current Income
AGE High Income Fund
Global Government
Income Fund
Investment Grade
Income Fund
U.S. Government
Securities Fund
Franklin Funds Seeking
High Current Income and
Stability of Principal
Adjustable Rate
Securities Fund
Adjustable U.S. Government
Securities Fund
Short-Intermediate U.S.
Government
Securities Fund
Franklin Funds for
Non-U.S. Investors
Tax-Advantaged High Yield
Securities Fund
Tax-Advantaged International
Bond Fund
Tax-Advantaged U.S.
Government Securities Fund
Franklin Templeton Global
Currency Funds
German Government
Bond Fund
Global Currency Fund
High Income Currency Fund
Hard Currency Fund
Franklin Money
Market Funds
Money Fund
Federal Money Fund
Tax-Exempt Money
Fund
California Tax-Exempt
Money Fund
New York Tax-Exempt
Money Fund
IFT U.S. Treasury Money
Market Portfolio
Franklin Fund for
Corporations
Corporate Qualified
Dividend Fund
Franklin Tax-Deferred
Annuity
Franklin Valuemark
Franklin Templeton
Valuemark Income Plus
(an immediate annuity)
Fund Information: 1-800/342-5236
Shareholder Services: 1-800/632-2301
To ensure the highest quality of service, telephone calls to or from our service
departments may be monitored, recorded and accessed. These calls can be
determined by the presence of a regular beeping tone.
*Two or more fund options available: long-term portfolio, intermediate-term
portfolio, a portfolio of insured municipal securities, and a high yield
portfolio (CA).
**The fund may invest up to 100% of its assets in bonds that pay interest
subject to the federal alternative minimum tax.
***Portfolio of insured municipal securities.
<PAGE>
- --------------------------
TEMPLETON CAPITAL
ACCUMULATOR FUND,
INC.
PRINCIPAL UNDERWRITER:
Franklin Templeton
Distributors, Inc.
700 Central Avenue
St. Petersburg,
Florida 33701-3628
Shareholder Services
1-800-632-2301
Fund Information
1-800-342-5236
This report must be
preceded or accompanied
by the current
prospectus of the
Templeton Capital
Accumulator Fund, Inc.
which contains more
complete information
including charges and
expenses.
Like any investment in
securities, the value
of the Fund's portfolio
will be subject to the
risk of loss from
market, currency,
economic, political,
and other factors, as
well as investment
decisions by the
investment manager
which will not always
be profitable or wise.
The Fund and its
investors are not
protected from such
losses by the
investment manager.
Therefore, investors
who cannot accept this
risk should not invest
in shares of the Fund.
To ensure the highest
quality of service,
telephone calls to or
from our service
departments may be
monitored, recorded,
and accessed. These
calls can be determined
by the presence of
a regular beeping tone.
- --------------------------
[LOGO OF RECYCLED PAPER APPEARS HERE] TL450 S96 04/96
TEMPLETON
CAPITAL
ACCUMULATOR
FUND, INC.
Semi-Annual Report
February 29, 1996
[LOGO OF FRANKLIN TEMPLETON APPEARS HERE]
