<PAGE> 1
TEMPLETON CAPITAL
ACCUMULATOR FUND
YOUR FUND'S OBJECTIVE:
The Templeton Capital Accumulator Fund seeks long-term growth by investing in
a portfolio primarily composed of common stocks in various nations throughout
the world.
[PHOTO OF Gary P. Motyl]
GARY P. MOTYL
President
Templeton Capital
Accumulator Fund
April 16, 1997
Dear Shareholder:
We are pleased to bring you the semi-annual report of the Templeton Capital
Accumulator Fund for the six months ended February 28, 1997. This was a
profitable period for many equity investors, as moderately strong economic
growth, subdued inflation and solid corporate earnings drove some of the world's
stock markets to all-time highs. Japan was the only major industrialized nation
whose equity market posted a negative return (measured in local currency terms).
Within this environment, the Fund posted a six-month cumulative total return of
13.77%, as discussed in the Performance Summary on page 6, outperforming the
unmanaged Morgan Stanley Capital International(R) (MSCI) World Index, which
1
<PAGE> 2
delivered a total return of 11.43% for the same period.(1) The Fund's strong
performance was the result of its large European weighting, small position in
the weak Japanese market, and high exposure to the banking sector, which
strengthened largely because of relatively stable interest rates, cost reduction
programs, and a decline in bad loans.
During the reporting period, many European companies reduced costs, invested in
new plants and equipment, and implemented programs designed to enhance
shareholder value. As a result of these efforts to compete more effectively in
the global marketplace, many of their share prices rose. The Fund's performance
was significantly impacted by the rising stock prices of Nokia AB and Telefonica
de Espana SA. Nokia, a Finnish cellular telecommunications company, profited
from growing demands for its new products, and Telefonica de Espana benefited
from its domestic telecommunications business and continued expansion in Latin
American markets.
In the U.S., healthy corporate profits, appreciating real estate prices, rising
exports, and large cash inflows into equity mutual funds supported an extended
market rally. However, it became increasingly difficult for us to identify
domestic investment bargains, and, compared with the MSCI World Index, the Fund
was underweighted in the U.S. on February 28, 1997.
TEMPLETON CAPITAL
ACCUMULATOR FUND
Geographic Distribution on 2/28/97
Based on Total Net Assets
[PIE CHART]
<TABLE>
<S> <C>
European Stocks 49.4%
United States Stocks 18.7%
Asian Stocks 11.7%
Australian & New Zealand Stocks 6.6%
Latin American Stocks 4.1%
Canadian Stocks 0.5%
Short-Term Obligations &
Other Net Assets 9.0%
</TABLE>
1. THE MSCI WORLD INDEX INCLUDES APPROXIMATELY 1,500 COMPANIES REPRESENTING THE
STOCK MARKETS OF 22 COUNTRIES, INCLUDING THE U.S., GERMANY, CANADA, AUSTRALIA,
NEW ZEALAND, AND JAPAN. THE INDEX IS NOT MANAGED ACCORDING TO ANY INVESTMENT
STRATEGY, INCLUDES NO SALES CHARGES OR MANAGEMENT EXPENSES, AND DOES NOT CONTAIN
CASH (THE FUND GENERALLY CARRIES A CERTAIN PERCENTAGE OF CASH AT ANY GIVEN
TIME). OF COURSE, ONE CANNOT INVEST DIRECTLY IN AN INDEX, AND THE INDEX IS NOT
REPRESENTATIVE OF THE FUND'S PORTFOLIO. TOTAL RETURN INCLUDES REINVESTED
DIVIDENDS.
2
<PAGE> 3
Asian stock markets posted mixed results, with solid gains in Hong Kong, China,
Malaysia, and Indonesia, and disappointing returns in Thailand, South Korea, and
Japan. Based on standard measures such as price/earnings ratios, Japanese stocks
remained among the world's most expensive, and although we redoubled our
efforts, we were unable to find stocks we considered bargains there. Our low
exposure in Japan was rewarded as the Nikkei 225 Index fell 7.71% between August
31, 1996 and February 28, 1997. (2) During the same period, Hong Kong's equity
market surged to all-time highs despite the death of Deng Xiaoping (China's
patriarch leader) and investor concerns about the colony's reversion to Chinese
control in July. We believe that our Hong Kong holdings could benefit from this
change in the long term, regardless of any volatility that Hong Kong's stock
market may experience in the near future.
TEMPLETON CAPITAL ACCUMULATOR FUND
Top Ten Holdings on 2/28/97
Based on Total Net Assets
<TABLE>
<CAPTION>
% of Total
Company, Industry, Country Net Assets
-------------------------- ----------
<S> <C>
Sparbanken Sverige AB, A
Banking, Sweden 1.9%
Telefonica de Espana SA
Telecommunications, Spain 1.6%
Merita Ltd., A
Banking, Finland 1.6%
Nokia AB, A
Telecommunications, Finland 1.5%
Fiat Spa
Automobiles, Italy 1.5%
Svedala Industri, A
Building Materials & Components, Sweden 1.4%
Societe Elf Aquitaine SA
Energy Sources, France 1.4%
News Corp. Ltd.
Broadcasting & Publishing, Australia 1.3%
Volvo AB, B
Automobiles, Sweden 1.3%
Dayton-Hudson Corp.
Merchandising, U.S. 1.3%
</TABLE>
For a complete list of portfolio holdings, please see page 10
of this report.
During the six months under review, we made moderate changes to the Fund's
portfolio, initiating positions in BTR PLC, a diversified industrial products
company based in the United Kingdom; Merloni Elettrodomestici SPA, an Italian
producer of appliances; and Svedala Industria, a Swedish manufacturer of
machinery for the mining and construction industries. We also added to several
existing holdings, such as Fiat Spa, Bay Networks Inc., and Pioneer
International Ltd. On the sell side, we realized profits by eliminating our
position in Fruit of the Loom Inc.,
2. Source: Bloomberg. Price depreciation is measured in local currency terms,
and includes reinvested dividends.
3
<PAGE> 4
TEMPLETON CAPITAL ACCUMULATOR FUND
Top Ten Industries on 2/28/97
Based on Total Net Assets
<TABLE>
<CAPTION>
% of Total
Country Net Assets
------- ----------
<S> <C>
Banking 11.3%
Telecommunications 7.6%
Forest Products & Paper 5.8%
Transportation 5.3%
Electrical & Electronics 5.3%
Energy Sources 4.8%
Automobiles 4.2%
Insurance 3.9%
Chemicals 3.8%
Utilities - Electrical & Gas 3.6%
</TABLE>
and in Hafslund ASA, which we received in a spin-off from Nycomed, a Norwegian
medical products company.
Looking forward, we remain positive about the long-term outlook for global stock
investing. Thanks to a healthy global economy, many emerging market countries
continue to benefit from strong exports to developed markets and appear to have
achieved the levels of gross domestic product and per capita income necessary to
sustain domestic growth. We believe that the U.S. economy could strengthen, if
factory orders and output remain healthy and inflation stays under control. We
also feel that many European economies could grow modestly, although constrained
somewhat by fiscal pressures associated with the need to meet the criteria for
membership in the European Monetary Union. In our opinion, the Fund's portfolio
is well-positioned in a diverse group of attractively valued securities.
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.
As always, we remind our shareholders that investments in foreign securities
involve special risks, such as adverse economic, social and political
developments in the countries where the Fund
4
<PAGE> 5
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
857% in the last 15 years, but has suffered five declines or more than 20%
during that time.(3) Emerging markets are represented in the Fund's portfolio,
and involve heightened risks associated with the same factors as well as those
related to the relatively small size and lesser liquidity of these markets.
These risks and other considerations are discussed in the Fund's prospectus.
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.
3. Source: Bloomberg. Based on quarterly percentage price change over 15 years
ended December 31, 1996.
CELEBRATING 50 YEARS
This year marks 50 years of business for Franklin Templeton. Over these years,
we have experienced profound changes in technology, regulations and customer
expectations within the mutual fund industry. As one of the largest mutual
fund families, we're proud to be an innovative industry leader, providing
people like you with an opportunity to invest in companies and governments
around the globe.
In addition, we want to stress that all securities markets move both up and
down. Mixed in with the good years can be some bad years. Accordingly, mutual
fund share prices also move up and down. Every investor should expect such
fluctuations, which can be wide. When markets are going down, as well as up,
we encourage investors to maintain a long-term perspective. We thank you for
your past support and look forward to serving your investment needs in the
years ahead.
5
<PAGE> 6
PERFORMANCE SUMMARY
The Templeton Capital Accumulator Fund provided a cumulative total return of
13.77% for the six-month period ended February 28, 1997. Cumulative 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 charges. 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 136% since inception on March 1, 1991.
The price of the Fund's shares, as measured by net asset value, increased 90
cents ($0.90), from $9.08 on August 31, 1996, to $9.98 on February 28, 1997.
During this time, shareholders received distributions of 18 cents ($0.18) per
share in dividend income and 14 cents ($0.14) per share in capital gains, of
which 2 cents ($0.02) represented short-term gains and 12 cents ($0.12)
represented long-term 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 2/28/97
<TABLE>
<CAPTION>
SINCE
INCEPTION
ONE-YEAR FIVE-YEAR (3/1/91)
<S> <C> <C> <C>
Cumulative Total Return(1) 21.68% 113.35% 136.73%
Average Total Return(2) 21.68% 16.37% 15.45%
Value of $10,000
Investment(3) $12,168 $21,335 $23,673
- -----------------------------------------------------------------
<CAPTION>
2/28/93 2/28/94 2/28/95 2/29/96 2/28/97
<S> <C> <C> <C> <C> <C>
One-Year
Total Return(4) 7.72% 40.15% -2.14% 18.68% 21.68%
- -----------------------------------------------------------------
</TABLE>
1. CUMULATIVE TOTAL RETURN REPRESENTS THE CHANGE IN VALUE OF AN INVESTMENT OVER
THE PERIODS INDICATED, AND DOES NOT INCLUDE ANY SALES AND CREATION CHARGES.
2. AVERAGE ANNUAL TOTAL RETURN REPRESENTS THE AVERAGE ANNUAL CHANGE IN VALUE OF
AN INVESTMENT OVER THE INDICATED PERIODS.
3. THESE FIGURES REPRESENT THE VALUE OF A HYPOTHETICAL $10,000 INVESTMENT IN THE
FUND OVER THE SPECIFIED PERIODS.
4. ONE-YEAR TOTAL RETURN REPRESENTS THE CHANGE IN VALUE OF AN INVESTMENT OVER
THE ONE-YEAR PERIODS ENDED ON THE SPECIFIED DATES.
ALL CALCULATIONS ASSUME REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS AT NET ASSET
VALUE. CALCULATIONS DO NOT INCLUDE THE EFFECT OF PAYING SALES AND CREATION
CHARGES APPLICABLE TO PURCHASES OF FUND SHARES THROUGH TEMPLETON CAPITAL
ACCUMULATOR PLANS. THESE CHARGES FOR THE FIRST YEAR OF A PLAN CAN AMOUNT TO 50%
OF THE TOTAL AMOUNT PAID DURING THE YEAR. TOTAL RETURNS WOULD HAVE BEEN LOWER IF
THESE CHARGES HAD BEEN APPLIED. PLEASE REFER TO THE TEMPLETON CAPITAL
ACCUMULATOR PLAN PROSPECTUS FOR INFORMATION REGARDING APPLICABLE CHARGES.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE WITH MARKET CONDITIONS,
CURRENCIES AND THE POLITICAL AND ECONOMIC CLIMATES OF COUNTRIES WHERE
INVESTMENTS ARE MADE. YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS.
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 RETURNS WOULD HAVE BEEN LOWER. THE FEE WAIVER MAY BE DISCONTINUED AT
ANYTIME, UPON NOTICE TO THE FUND'S BOARD OF DIRECTORS.
6
<PAGE> 7
Many investors have asked us about the activities of Sir John Templeton, since
his retirement from the funds. We asked Professor Robert Herrmann to update us
on Sir John's current activities and his comments follow.
THE NEW CAREER OF
SIR JOHN TEMPLETON
[PHOTO OF SIR JOHN TEMPLETON]
By Professor Robert Herrmann
In 1992, Sir John Templeton retired after a 50-year career of helping investors
manage their money. Currently, he devotes all of his time and efforts to the
John Templeton Foundation. A major portion of his assets remain invested in
Templeton funds, managed by many of the investment professionals he selected and
trained. For sentimental reasons, he allows his name to be associated with the
funds, although he knows no more about their management and holdings than any
other investor.
Sir John Templeton established the Templeton Foundation in 1987, to foster the
acquisition of spiritual information through scientific research. Working with
scientists, theologians and others, he strives toward a new science that uses
empirical and statistical scientific methods to discover and test spiritual
knowledge. A crucial ingredient in his research is what Sir John calls "humility
theology," an attitude of humility toward the Creator, combined with
receptiveness to the theological significance of current scientific discoveries.
Universal spiritual laws, or "laws of life," are among the areas of
investigation. In his recent book, Worldwide Laws of Life, Sir John compiles 200
laws and proverbs from nearly all religions, and deeply embedded in human
history. For example, the Golden Rule taught by Jesus in the Sermon on the
Mount, states "Do unto others as you would have others do unto you," and is
affirmed by all major religions as an acceptable, universal law of life. Other
books which Sir John has authored or co-authored during the past few years
include: The Humble Approach, Is God the Only Reality, Evidence of Purpose,
Who's Who in Theology and Science and The God Who Would Be Known.
With an annual budget of more than $30 million, the Templeton Foundation
sponsors 60 programs focusing on spiritual progress and the benefits of freedom.
Sir John's first sizable investment in the programs was the Templeton Prize for
Progress in Religion. A panel of nine judges gives the annual award which now
exceeds $1.2 million to individuals who have shown extraordinary originality in
furthering the world's understanding of God or spirituality.
Recipients of the prize include Professor Paul Davies, author of The Mind of
God; the Right Honorable Lord Jacobovits, former Chief Rabbi of Great Britain
and The Commonwealth; the Reverend Dr. Billy Graham, world-renowned preacher and
presidential inauguration speaker; Mr. Nikkyo Nimano, founder of the World
Conference on Religion and Peace; and Sir Sarepalli Radhakrishnan, former
President of India, and Oxford professor of Eastern Religions and Ethics.
To encourage young people's and their parents' appreciation of spiritual laws of
life, Sir John established an essay contest for teenagers in his home county of
Franklin, Tennessee. Students submit essays about the spiritual life principles
they plan to follow, and prizes are offered semiannually. In 1996, more than 800
youth participated. Twenty-six similar programs
7
<PAGE> 8
have been launched in various locations, with the support of generous local
donors.
The Foundation also sponsors a worldwide program that awards college-level
faculty who teach courses integrating science and religion. During the program's
first two years, more than 200 courses were created. The Foundation maintains an
extensive program of research and education on the health benefits of
spirituality, including prizes for medical schools providing courses on
spirituality in medicine. Lastly, the Foundation publishes a newsletter with
over 2,000 subscribers. Free subscriptions are available to Templeton
shareholders by writing to the Foundation.
To contact Sir John Templeton or receive the free
newsletter subscription, please write to:
The John Templeton Foundation
2 Radnor Corporate Center #320
100 Matsonford Road
Radnor, PA 19087
8
<PAGE> 9
TEMPLETON CAPITAL ACCUMULATOR FUND INC.
Financial Highlights
- --------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE+
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
FEBRUARY 28, 1997
(UNAUDITED) YEAR ENDED AUGUST 31
----------------- ----------------------------------------------
1997 1996 1995 1994 1993 1992
----------------- -------- ------- ------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.08 $ 7.97 $ 8.10 $ 6.87 $ 5.48 $ 5.21
-------- -------- ------- ------- ------- ------
Income from investment operations:
Net investment income .03 .19 .14 .09 .10 .08
Net realized and unrealized gain 1.19 1.10 .12 1.30 1.44 .28
-------- -------- ------- ------- ------- ------
Total from investment operations 1.22 1.29 .26 1.39 1.54 .36
-------- -------- ------- ------- ------- ------
Distributions:
Dividends from net investment income (.18) (.15) (.10) (.07) (.10) (.09)
Distributions from net realized gains (.14) (.03) (.29) (.09) (.05) --
-------- -------- ------- ------- ------- ------
Total distributions (.32) (.18) (.39) (.16) (.15) (.09)
-------- -------- ------- ------- ------- ------
Change in net asset value .90 1.11 (.13) 1.23 1.39 .27
-------- -------- ------- ------- ------- ------
Net asset value, end of period $ 9.98 $ 9.08 $ 7.97 $ 8.10 $ 6.87 $ 5.48
======== ======== ======= ======= ======= ======
TOTAL RETURN* 13.77% 16.50% 3.40% 20.64% 29.11% 7.01%
RATIOS /SUPPLEMENTAL DATA
Net assets, end of period (000) $ 140,072 $108,019 $65,538 $38,323 $18,365 $8,690
Ratio of expenses to average net assets 1.12%** 1.16% 1.34% 1.58% 1.91% 1.84%
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 .82%** 2.56% 2.37% 1.58% 1.99% 2.06%
Portfolio turnover rate 1.03% 11.08% 12.91% 15.25% 14.97% 16.42%
Average commission rate paid (per share) $ .0176 $ .0210
</TABLE>
+ PER SHARE AMOUNTS FOR ALL PERIODS PRIOR TO AUGUST 31, 1996 HAVE BEEN RESTATED
TO REFLECT 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.
9
<PAGE> 10
TEMPLETON CAPITAL ACCUMULATOR FUND, INC.
Investment Portfolio, February 28, 1997 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
- --------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS: 88.7%
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
APPLIANCES & HOUSEHOLD
DURABLES: 2.4%
Electrolux AB, B Swe. 22,250 $ 1,392,211
Fisher & Paykel Ltd. N.Z. 147,500 566,081
*Merloni Elettrodomestici SPA Itl. 147,100 326,541
Sony Corp. Jpn. 14,600 1,054,182
-----------
3,339,015
- --------------------------------------------------------------------------------------------------------------------------
AUTOMOBILES: 4.2%
*Ciadea Arg. 29,333 151,133
Fiat Spa Itl. 675,000 2,069,034
Ford Motor Co. U.S. 24,000 789,000
General Motors Corp. U.S. 20,000 1,157,500
Volvo AB, B Swe. 71,000 1,780,814
-----------
5,947,481
- --------------------------------------------------------------------------------------------------------------------------
BANKING: 11.3%
*ABN AMRO NV Neth. 15,000 1,077,243
Australia & New Zealand Banking Group Ltd. Aus. 200,000 1,249,010
Banco Bilbao Vizcaya Sp. 20,000 1,178,974
Bank of Montreal Can. 10,000 357,365
Bankinter SA Sp. 7,500 1,001,953
Banque Nationale de Paris Fr. 21,000 953,205
Barclays PLC U.K. 22,100 399,187
*BPI Socieda de Gestora de Participacoes
Socias SA Port. 18,240 271,605
BPI Socieda de Gestora de Participacoes
Socias, new Port. 6,931 99,119
Fokus Bank AS Nor. 100,000 773,418
HSBC Holdings PLC H.K. 55,200 1,347,263
Korea Long Term Credit Bank Kor. 5,513 82,743
*Merita Ltd., A Fin. 600,000 2,195,508
NationsBank Corp. U.S. 11,600 694,550
*Philippine National Bank Phil. 16,170 188,834
PT Bank Bali, fgn. Indo. 154,500 412,430
PT Panin Bank, fgn. Indo. 140,100 198,682
Sparbanken Sverige AB, A Swe. 85,000 1,678,352
Sparbanken Sverige AB, A, 144A Swe. 51,800 1,022,807
Thai Farmers Bank Public Co. Ltd., fgn. Thai. 100,000 590,848
-----------
15,773,096
- --------------------------------------------------------------------------------------------------------------------------
BROADCASTING &
PUBLISHING: 0.3%
News Corp. Ltd. Aus. 70,000 372,994
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
10
<PAGE> 11
TEMPLETON CAPITAL ACCUMULATOR FUND, INC.
Investment Portfolio, February 28, 1997 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
- --------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS (CONT.)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
BUILDING MATERIALS &
COMPONENTS: 3.1%
Pioneer International, Ltd. Aus. 500,815 $ 1,489,896
Siam City Cement, fgn. Thai. 65,300 358,085
Svedala Industri, A Swe. 100,000 1,961,190
*Unione Cementi Marchino Emiliane (Unicem) Itl. 80,000 482,729
-----------
4,291,900
- --------------------------------------------------------------------------------------------------------------------------
BUSINESS & PUBLIC
SERVICES: 3.3%
Esselte AB, B Swe. 40,000 971,256
Lex Service PLC U.K. 165,000 936,569
Societe Generale de Surveillance Holdings
Ltd., br. Swtz. 460 1,045,384
Wheelabrator Technologies Inc. U.S. 76,000 1,083,000
WMX Technologies Inc. U.S. 18,000 569,250
-----------
4,605,459
- --------------------------------------------------------------------------------------------------------------------------
CHEMICALS: 3.8%
Akzo Nobel NV Neth. 7,500 1,080,800
Courtaulds PLC U.K. 75,000 446,479
Great Lakes Chemical Corp. U.S. 22,000 1,020,250
Rhone-Poulenc SA, A Fr. 46,000 1,615,452
Solvay SA Bel. 2,000 1,228,095
-----------
5,391,076
- --------------------------------------------------------------------------------------------------------------------------
CONSTRUCTION & HOUSING: 0.3%
*Redland PLC U.K. 82,000 467,449
- --------------------------------------------------------------------------------------------------------------------------
DATA PROCESSING &
REPRODUCTION: 0.8%
*Bay Networks Inc U.S. 59,000 1,121,000
- --------------------------------------------------------------------------------------------------------------------------
ELECTRICAL & ELECTRONICS: 5.3%
ABB AG, br. Swtz. 652 741,301
Alcatel Alsthom SA Fr. 6,661 684,229
Exide Corp. U.S. 27,000 529,875
G.P. Batteries International Ltd. Sing. 56,000 166,880
*GP Batteries International Ltd., wts. Sing. 14,000 15,120
Hitachi Ltd. Jpn. 165,000 1,422,532
Matsushita Electric Industrial Co. Ltd. Jpn. 99,000 1,526,486
Motorola Inc. U.S. 10,000 558,750
Philips Electronics NV Neth. 37,940 1,713,187
-----------
7,358,360
- --------------------------------------------------------------------------------------------------------------------------
ELECTRONIC COMPONENTS &
INSTRUMENTS: 0.8%
Intel Corp. U.S. 8,000 1,135,000
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
11
<PAGE> 12
TEMPLETON CAPITAL ACCUMULATOR FUND, INC.
Investment Portfolio, February 28, 1997 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
- --------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS (CONT.)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ENERGY SOURCES: 4.8%
*Barrett Resources Corp. U.S. 26,000 $ 854,750
Norsk Hydro AS Nor. 20,000 1,003,956
Royal Dutch Petroleum Co. Neth. 800 138,400
Saga Petroleum AS, B Nor. 49,070 755,383
Societe Elf Aquitane SA Fr. 20,000 1,913,960
Total SA, B Fr. 13,000 1,037,489
YPF Sociedad Anonima, ADR Arg. 37,500 1,003,125
-----------
6,707,063
- --------------------------------------------------------------------------------------------------------------------------
FINANCIAL SERVICES: 1.7%
American Express Co. U.S. 6,050 395,519
Axa-UAP SA Fr. 17,757 1,182,657
Onbancorp Inc. U.S. 18,000 803,250
-----------
2,381,426
- --------------------------------------------------------------------------------------------------------------------------
FOOD & HOUSEHOLD
PRODUCTS: 0.9%
Burns Philp & Co. Ltd. Aus. 438,800 681,673
IBP Inc. U.S. 23,000 534,750
Melco International Development Ltd. H.K. 29,900 10,811
-----------
1,227,234
- --------------------------------------------------------------------------------------------------------------------------
FOREST PRODUCTS & PAPER: 5.8%
*Asia Pulp & Paper Co. Ltd., ADR Indo. 45,000 517,500
Boise Cascade Corp. U.S. 14,000 460,250
*Enso OY, R Fin. 70,400 609,015
Georgia-Pacific Corp. U.S. 16,000 1,248,000
Hansol Paper Co. Ltd., GDS Kor. 21,723 260,681
International Paper Co. U.S. 26,000 1,085,500
Maderas Y Sinteticos SA, ADR Chil. 16,000 266,000
*Mayr-Melnhof Karton AG Aust. 11,000 563,271
*Mo Och Domsjoe AB, B Swe. 17,000 539,794
Portucel Industrial Empresa Product Celulose,
ADR, 144A Port. 49,100 293,899
PT Inti Indorayon Utama, fgn. Indo. 450,000 314,390
*Shorewood Packaging Corp. U.S. 27,500 481,250
Stora Kopparbergs Bergslags AB, B Swe. 90,000 1,218,739
Unipapel SA Sp. 12,000 234,400
-----------
8,092,689
- --------------------------------------------------------------------------------------------------------------------------
HEALTH & PERSONAL CARE: 3.5%
Astra AB, B Swe. 20,000 936,568
Internatio-Mueller NV Neth. 28,000 846,831
*Novartis A.G. Swtz. 853 975,618
</TABLE>
12
<PAGE> 13
TEMPLETON CAPITAL ACCUMULATOR FUND, INC.
Investment Portfolio, February 28, 1997 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
- --------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS (CONT.)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
HEALTH & PERSONAL CARE (cont.)
*Nycomed ASA, B Nor. 72,000 $ 1,070,887
Windmere-Durable Holdings Inc. U.S. 90,000 1,125,000
-----------
4,954,904
- --------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL COMPONENTS: 2.5%
BW/IP Inc. U.S. 56,000 896,000
Goodyear Tire & Rubber Co. U.S. 23,000 1,213,250
SKF AB, B Swe. 55,000 1,313,463
-----------
3,422,713
- --------------------------------------------------------------------------------------------------------------------------
INSURANCE: 3.9%
Aegon NV Neth. 17,500 1,160,888
American International Group Inc. U.S. 10,250 1,240,250
Ing Groep NV Neth. 32,500 1,258,628
Progressive Corp. Ohio U.S. 2,000 132,250
Skandia Foersaekrings AB, free Swe. 35,000 1,064,646
Swiss Reinsurance Co. Swtz. 605 619,324
-----------
5,475,986
- --------------------------------------------------------------------------------------------------------------------------
MACHINERY & ENGINEERING: 1.0%
Sasib SPA, di Risp Itl. 391,802 768,989
VA Technologie AG, br., 144A Aust. 4,000 603,731
-----------
1,372,720
- --------------------------------------------------------------------------------------------------------------------------
MERCHANDISING: 3.0%
Burton Group PLC U.K. 375,000 952,815
Dairy Farm International Holdings Ltd. H.K. 450,000 348,750
Dayton-Hudson Corp. U.S. 42,000 1,764,000
*K Mart Corp. U.S. 60,000 750,000
Robinson Department Store Public Co. Ltd.,
fgn. Thai. 124,800 110,848
*Sa des Galeries Lafayette Fr. 898 331,133
-----------
4,257,546
- --------------------------------------------------------------------------------------------------------------------------
METALS & MINING: 1.9%
Pechiney SA, A Fr. 34,000 1,438,209
SIG Schweizerische Industrie-Gesell Swtz. 500 1,268,571
-----------
2,706,780
- --------------------------------------------------------------------------------------------------------------------------
MISCELLANEOUS MATERIALS &
COMMODITIES: 0.6%
Golden Hope Plantations BHD, fgn. Mal. 452,000 815,530
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
13
<PAGE> 14
TEMPLETON CAPITAL ACCUMULATOR FUND, INC.
Investment Portfolio, February 28, 1997 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
- --------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS (CONT.)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MULTI-INDUSTRY: 3.3%
BTR PLC U.K. 293,000 $ 1,138,174
Cheung Kong Holdings Ltd. H.K. 160,000 1,528,985
Hutchison Whampoa Ltd. H.K. 101,500 773,338
Jardine Matheson Holdings Ltd. H.K. 62,336 377,133
Swire Pacific Ltd., A H.K. 85,000 729,948
Swire Pacific Ltd., B H.K. 100,000 136,240
-----------
4,683,818
- --------------------------------------------------------------------------------------------------------------------------
REAL ESTATE: 2.1%
Beacon Properties Corp. U.S. 24,000 855,000
Carramerica Realty Corp. U.S. 26,000 789,750
*Catellus Development Corp. U.S. 50,000 768,750
*Fastighets AB Tornet, A Swe. 13,680 166,085
PT Jaya Properties, fgn. Indo. 250,000 357,143
-----------
2,936,728
- --------------------------------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS: 7.1%
Compania De Telecomunicaciones De Chile
S.A., Spons. ADR Chil. 19,125 559,406
Jasmine International Public Co. Ltd., fgn. Thai. 400,000 521,336
Nokia AB, A Fin. 34,500 2,072,010
Philippine Long Distance Telephone Co. Phil. 3,000 176,025
*Seat SPA Itl. 297,100 107,297
STET (Sta Finanziaria Telefonica Torino) SPA Itl. 297,100 1,259,147
Telecom Argentina Stet France SA, ADR Arg. 24,600 1,183,875
Telefonica de Argentina SA, B, ADR Arg. 26,600 841,225
Telefonica de Espana SA Sp. 95,500 2,198,542
Telmex-Telefonos de Mexico SA, L, ADR Mex. 25,000 971,875
-----------
9,890,738
- --------------------------------------------------------------------------------------------------------------------------
TEXTILES & APPAREL: 1.9%
Dawson International PLC U.K. 265,000 302,132
Kellwood Co. U.S. 30,500 720,562
PT Indorama Synthetics, fgn. Indo. 793,440 694,984
Shaw Industries Inc. U.S. 73,000 949,000
-----------
2,666,678
- --------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION: 4.6%
APL Ltd. U.S. 20,000 460,000
Brambles Industries Ltd. Aus. 70,000 1,179,879
Cathay Pacific Airways Ltd. H.K. 150,000 233,416
*Guangshen Railway Co. Ltd., ADR Chn. 37,000 892,625
Kvaerner Industrier AS, A Nor. 24,000 1,181,545
</TABLE>
14
<PAGE> 15
TEMPLETON CAPITAL ACCUMULATOR FUND, INC.
Investment Portfolio, February 28, 1997 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
- --------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS (CONT.)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TRANSPORTATION (cont.)
Qantas Airways Ltd., ADR, 144A Aus. 65,000 $ 1,190,313
Shun Tak Holdings H.K. 598,000 420,871
*Unitor AS Nor. 70,000 905,792
-----------
6,464,441
- --------------------------------------------------------------------------------------------------------------------------
UTILITIES ELECTRICAL &
GAS: 3.6%
British Energy Ltd. U.K. 325,000 751,665
Endesa-Empresa Nacional de Electricidad SA Sp. 4,800 292,999
Evn Energie-Versorgung Niederoesterreich AG Aust. 4,800 707,053
Iberdrola SA Sp. 135,000 1,473,892
Nova Corp. Can. 36,200 332,353
VEBA AG Ger. 26,000 1,500,074
-----------
5,058,036
- --------------------------------------------------------------------------------------------------------------------------
WHOLESALE & INTERNATIONAL
TRADE: 0.9%
Brierley Investments Ltd. N.Z. 1,200,000 1,155,509
Sime Darby Hongkong Ltd. H.K. 90,000 104,020
-----------
1,259,529
-----------
TOTAL COMMON STOCKS
(cost $93,357,300) 124,177,389
- --------------------------------------------------------------------------------------------------------------------------
PREFERRED STOCKS: 2.3%
- --------------------------------------------------------------------------------------------------------------------------
ABN Amro NV, conv., pfd. Neth. 333 22,809
Concessioni e Costruzioni Autostrade SPA,
B, pfd. Itl. 490,000 1,012,704
News Corp. Ltd., pfd. Aus. 312,000 1,410,449
Telebras-Telecomunicacoes Brasileiras SA,
pfd., ADR Braz. 8,200 795,400
Telecomunicacoes Brasileiras SA, pfd., ADR,
144A Braz. 227 22,019
-----------
TOTAL PREFERRED STOCKS
(cost $2,321,870) 3,263,381
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
15
<PAGE> 16
TEMPLETON CAPITAL ACCUMULATOR FUND, INC.
Investment Portfolio, February 28, 1997 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL IN
LOCAL CURRENCY** VALUE
- -------------------------------------------------------------------------------------------------------------------------
SHORT TERM OBLIGATIONS: 10.8% (cost $15,179,902)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Treasury Bills, 4.82% to 5.02%, with
maturities to 5/15/97 U.S. 15,287,000 $ 15,182,078
- -------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS: 101.8% (cost $110,859,072) 142,622,848
OTHER ASSETS, LESS LIABILITIES: (1.8)% (2,550,722)
------------
TOTAL NET ASSETS: 100.0% $140,072,126
============
</TABLE>
* NON-INCOME PRODUCING.
** CURRENCY OF COUNTRY INDICATED.
SEE NOTES TO FINANCIAL STATEMENTS.
16
<PAGE> 17
TEMPLETON CAPITAL ACCUMULATOR FUND, INC.
Financial Statements
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
STATEMENT OF ASSETS AND LIABILITIES
February 28, 1997 (unaudited)
Assets:
Investments in securities, at value
(identified cost $110,859,072) $142,622,848
Cash 7,981
Receivables:
Investment securities sold 54,363
Fund shares sold 18,256
Dividends and interest 193,063
Other assets 56,174
------------
Total assets 142,952,685
------------
Liabilities:
Payables:
Investment securities purchased 2,655,899
Capital shares redeemed 51,944
Accrued expenses 172,716
------------
Total liabilities 2,880,559
------------
Net assets, at value $140,072,126
============
Net assets consists of:
Undistributed net investment income $ 157,605
Net unrealized appreciation 31,763,776
Accumulated net realized gain 277,036
Net capital paid in on shares of
capital stock 107,873,709
------------
Net assets, at value $140,072,126
============
Shares outstanding (Note 2) 14,033,629
============
Net asset value per share (Note 2)
($140,072,126 + 14,033,629) $ 9.98
</TABLE>
<TABLE> ============
<CAPTION>
<S> <C> <C>
STATEMENT OF OPERATIONS
for the six months ended
February 28, 1997
(unaudited)
Investment income:
(net of $53,456 foreign
taxes withheld)
Dividends $ 694,858
Interest 437,708
-----------
Total income $ 1,132,566
Expenses:
Management fees (Note 3) 466,598
Administrative fees (Note 3) 93,321
Custodian fees 29,702
Reports to shareholders 76,500
Audit fees 8,000
Legal fees 5,500
Registration and filing fees 10,000
Directors' fees and expenses 6,887
-----------
Total expenses 696,508
Less expenses reimbursed
(Note 3) (75,961)
-----------
Total expenses less
reimbursement 620,547
-----------
Net investment income 512,019
Realized and unrealized gain:
Net realized gain on:
Investments 329,616
Foreign currency
transactions 9,586
-----------
339,202
Net unrealized
appreciation on
investments 15,287,950
-----------
Net realized and
unrealized gain 15,627,152
-----------
Net increase in net assets
resulting from operations $16,139,171
===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
17
<PAGE> 18
TEMPLETON CAPITAL ACCUMULATOR FUND, INC.
Financial Statements (cont.)
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
FEBRUARY 28, 1997 YEAR ENDED
(UNAUDITED) AUGUST 31, 1996
----------------- ---------------
<S> <C> <C>
Increase in net assets:
Operations:
Net investment income $ 512,019 $ 2,240,768
Net realized gain on investment and foreign currency transactions 339,202 1,998,603
Net unrealized appreciation 15,287,950 8,686,029
-------------- --------------
Net increase in net assets resulting from operations 16,139,171 12,925,400
Distributions to shareholders:
From net investment income (2,272,093) (1,315,933)
From net realized gain (1,748,572) (285,372)
Capital share transactions (Note 2) 19,935,056 31,156,843
-------------- --------------
Net increase in net assets 32,053,562 42,480,938
Net assets:
Beginning of period 108,018,564 65,537,626
-------------- --------------
End of period $ 140,072,126 $ 108,018,564
============== ==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
18
<PAGE> 19
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, diversified
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 nations
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 exchange
on which the securities are traded. Over-the-counter securities and listed
securities for which no sale is reported are valued at the mean between the last
current bid and asked prices. Securities for which market quotations are not
readily available are valued at fair value as determined in good faith by
management and approved 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 currencies
are translated into U.S. dollar amounts on the respective dates of such
transactions. When the Fund purchases or sells foreign securities it customarily
enters into 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 Revenue
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
securities is recorded as soon as information is available to the Fund. Interest
income and estimated expenses are accrued daily. Distributions to shareholders,
which are determined in accordance with income tax regulations, are recorded on
the ex-dividend date.
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 reporting
period. Actual results could differ from those estimates.
19
<PAGE> 20
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 basis.
Accordingly all per share amounts have been restated to reflect the split. At
February 28, 1997, there were 100 million shares of capital stock authorized
($0.01 par value). Transactions in the Fund's shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
FEBRUARY 28, 1997 AUGUST 31, 1996
---------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
--------- ----------- --------- ----------
<S> <C> <C> <C> <C>
Shares sold 2,047,962 $19,302,919 2,871,022 $34,173,284
Shares issued on reinvestment of
distributions 438,866 4,009,431 101,200 1,600,666
Shares issued on 2-for-1 split -- -- 5,209,444 --
Shares redeemed (352,223) (3,377,294) (393,813) (4,617,107)
--------- ----------- --------- ----------
Net increase 2,134,605 $19,935,056 7,787,853 $31,156,843
========= =========== ========= ==========
</TABLE>
3. INVESTMENT MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Certain officers of the Fund are also directors or officers of Templeton
Investment Counsel, Inc. (TICI) and Franklin Templeton Services Inc. (FTSI), 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 FTSI monthly a
fee of 0.15% per annum, on the first $200 million of the Fund's average daily
net assets, 0.135% of the next $500 million, 0.10% of the next $500 million and
0.075% per annum of such average net assets in excess of $1.2 billion. FTSI 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 28, 1997 is set forth in the Statement of Operations.
An officer of the Company is a partner of Dechert Price & Rhoads, legal counsel
for the Fund, which firm received fees for the six months ended February 28,
1997.
4. PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities (excluding short-term securities) for the six
months ended February 28, 1997, aggregated $19,571,110 and $1,120,239,
respectively. The cost of securities for federal income tax purposes is the same
as that shown in the investment portfolio. Realized gains and losses are
reported on an identified cost basis.
At February 28, 1997, the aggregate gross unrealized appreciation and
depreciation of portfolio securities, based on cost for federal income tax
purposes, was as follows:
<TABLE>
<S> <C>
Unrealized appreciation $34,384,700
Unrealized depreciation (2,620,924)
-----------
Net unrealized appreciation $31,763,776
===========
</TABLE>
20
<PAGE> 21
NOTES
--------
<PAGE> 22
NOTES
--------
<PAGE> 23
FRANKLIN TEMPLETON GROUP OF FUNDS
LITERATURE REQUEST - Call 1-800/DIAL BEN (1-800/342-5236) 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.
<TABLE>
<S> <C> <C> <C>
GLOBAL GROWTH GROWTH INCOME FRANKLIN STATE-
SPECIFIC
Franklin Global Health Care Fund Franklin Blue Chip Fund Franklin Adjustable Rate FUNDS SEEKING
Securities Fund TAX-FREE INCOME
Franklin Templeton Japan Fund Franklin California Growth Fund
Franklin Adjustable U.S. Alabama
Templeton Developing Markets Trust Franklin DynaTech Fund Government Securities Fund
Arizona*
Templeton Foreign Fund Franklin Equity Fund Franklin's AGE High Income Fund
Arkansas**
Templeton Foreign Smaller Franklin Gold Fund Franklin Investment
Companies Fund Grade Income Fund California*
Franklin Growth Fund
Templeton Global Infrastructure Fund Franklin Short-Intermediate U.S. Colorado
Franklin MidCap Growth Fund Government Securities Fund
Templeton Global Connecticut
Opportunities Trust Franklin Small Cap Growth Fund Franklin U.S. Government
Securities Fund Florida*
Templeton Global Real Estate Fund Mutual Discovery Fund
Franklin Money Fund Georgia
Templeton Global Smaller
Companies Fund GROWTH AND INCOME Franklin Federal Money Fund Hawaii**
Templeton Greater European Fund Franklin Asset Allocation Fund Indiana
FOR NON-U.S. INVESTORS:
Templeton Growth Fund Franklin Balance Sheet Kentucky
Investment Fund Franklin Tax-Advantaged
Templeton Latin America Fund High Yield Securities Fund Louisiana
Franklin Convertible Securities Fund
Templeton Pacific Growth Fund Franklin Tax-Advantaged Maryland
Franklin Equity Income Fund International Bond Fund
Templeton World Fund Massachusetts***
Franklin Income Fund Franklin Tax-Advantaged U.S.
Government Securities Fund Michigan*
GLOBAL GROWTH AND INCOME Franklin MicroCap Value Fund
Minnesota***
Franklin Global Utilities Fund Franklin Natural Resources Fund FOR CORPORATIONS:
Missouri
Franklin Templeton German Franklin Real Estate Securities Fund Franklin Corporate Qualified
Government Bond Fund Dividend Fund New Jersey
Franklin Rising Dividends Fund
Franklin Templeton New York*
Global Currency Fund Franklin Strategic Income Fund FRANKLIN FUNDS SEEKING
TAX-FREE INCOME North Carolina
Mutual European Fund Franklin Utilities Fund
Federal Intermediate-Term Ohio***
Templeton Global Bond Fund Franklin Value Fund Tax-Free Income Fund
Oregon
Templeton Growth and Income Fund Mutual Beacon Fund Federal Tax-Free Income Fund
Pennsylvania
Mutual Qualified Fund High Yield Tax-Free Income Fund
GLOBAL INCOME Tennessee**
Mutual Shares Fund Insured Tax-Free Income Fund
Franklin Global Government Texas
Income Fund Templeton American Trust, Inc. Puerto Rico Tax-Free Income Fund
Virginia
Franklin Templeton Hard Tax-Exempt Money Fund
Currency Fund FUND ALLOCATOR SERIES: Washington**
Franklin Templeton High Franklin Templeton
Income Currency Fund Conservative Target Fund VARIABLE
ANNUITIES+
Templeton Americas Franklin Templeton
Government Securities Fund Moderate Target Fund Franklin
Valuemark(R)
Franklin Templeton
Growth Target Fund Franklin
Templeton
Valuemark Income
Plus
(an immediate
annuity)
</TABLE>
*TWO OR MORE FUND OPTIONS AVAILABLE: LONG-TERM PORTFOLIO, INTERMEDIATE-TERM
PORTFOLIO, A PORTFOLIO OF INSURED MUNICIPAL SECURITIES,
AND/OR A HIGH YIELD PORTFOLIO (CA) AND A MONEY MARKET PORTFOLIO (CA AND NY).
**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.
+FRANKLIN VALUEMARK AND FRANKLIN TEMPLETON VALUEMARK INCOME PLUS ARE ISSUED BY
ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA OR BY ITS WHOLLY OWNED
SUBSIDIARY, PREFERRED LIFE INSURANCE COMPANY OF NEW YORK, AND DISTRIBUTED BY
NALAC FINANCIAL PLANS, LLC.
FGF 02/97
<PAGE> 24
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.
[Recycle Logo] TL450 597 4/97
TEMPLETON
CAPITAL
ACCUMULATOR
FUND, INC.
SEMI-ANNUAL REPORT
FEBRUARY 28, 1997
[Graphic]
[FRANKLIN TEMPLETON LOGO]