o FSS2 *P
SUPPLEMENT DATED MAY 11, 1999
TO THE PROSPECTUS OF
FRANKLIN STRATEGIC SERIES
(FSS2- FRANKLIN GLOBAL UTILITIES FUND, FRANKLIN GLOBAL HEALTH CARE FUND,
FRANKLIN BIOTECHNOLOGY DISCOVERY FUND AND FRANKLIN NATURAL RESOURCES FUND)
DATED SEPTEMBER 1, 1998, AS AMENDED JANUARY 1, 1999
The prospectus is amended as follows:
Under "Who Manages the Funds? - Management Teams":
(a) the section "Utilities Fund" is replaced with the following:
UTILITIES FUND: Ian Link since 1995 and Alex Peters since May 1998.
Ian Link
Vice President Of Franklin Advisers, Inc.
Mr. Link is a Chartered Financial Analyst and holds a Master of Business
Administration degree from the Haas School at the University of California,
Berkeley and a Bachelor of Arts degree in Economics from the University of
California, Davis. He joined the Franklin Templeton Group in 1989.
Alex W. Peters
Portfolio Manager Of Franklin Advisers, Inc.
Mr. Peters holds a Master of Business Administration degree from the
University of San Francisco and a Bachelor's degree from the University of
Washington. He joined the Franklin Templeton Group in 1992.
(b) and the section "Natural Resources Fund" is replaced with the following:
NATURAL RESOURCES FUND: Michael R. Ward and Steve Land since April 1999.
Michael R. Ward
Portfolio Manager Of Franklin Advisers, Inc.
Mr. Ward holds a Bachelor of Science degree in Engineering from Kansas State
University. He joined the Franklin Templeton Group in 1992.
Steve Land
Portfolio Manager Of Franklin Advisers, Inc.
Mr. Land holds a Bachelor of Science degree in Managerial Economics from the
University of California, Davis. He joined the Franklin Templeton Group in
1997.
Please keep this supplement for future reference.
o 403 *PA3
SUPPLEMENT DATED MAY 11, 1999
TO THE PROSPECTUS OF
FRANKLIN NATURAL RESOURCES FUND - ADVISOR CLASS
DATED SEPTEMBER 1, 1998
The prospectus is amended as follows:
I. The following is added under "What Are the Risks of Investing in the
Fund?":
EURO RISK. On January 1, 1999, the European Monetary Union (EMU)
introduced a new single currency, the euro, which will replace the
national currency for participating member countries.
Because this change to a single currency is new and untested, it is not
possible to predict the impact of the euro on the business or financial
condition of European issuers which the fund may hold in its portfolio,
and their impact on fund performance. To the extent the fund holds
non-U.S. dollar (euro or other) denominated securities, it will still be
exposed to currency risk due to fluctuations in those currencies versus
the U.S. dollar.
YEAR 2000. When evaluating current and potential portfolio positions,
Year 2000 is one of the factors Advisers considers.
Advisers will rely upon public filings and other statements made by
companies about their Year 2000 readiness. Issuers in countries outside
the U.S., particularly in emerging markets, may not be required to make
the same level of disclosure about Year 2000 readiness as is required in
the U.S. Advisers, of course, cannot audit each company and its major
suppliers to verify their Year 2000 readiness.
If a company in which the fund is invested is adversely affected by Year
2000 problems, it is likely that the price of its securities will also
be adversely affected. A decrease in the value of one or more of the
fund's portfolio holdings will have a similar impact on the fund's
performance. Please see "Year 2000 Problem" under "Who Manages the
Fund?" for more information.
II. The section "Who Manages the Fund? - Management Team" is replaced
with the following:
The team responsible for the day-to-day management of the fund's
portfolio is: Michael R. Ward and Steve Land since April 1999.
Michael R. Ward
Portfolio Manager Of Franklin Advisers, Inc.
Mr. Ward holds a Bachelor of Science degree in Engineering from Kansas
State University. He joined the Franklin Templeton Group in 1992.
Steve Land
Portfolio Manager Of Franklin Advisers, Inc.
Mr. Land holds a Bachelor of Science degree in Managerial Economics from
the University of California, Davis. He joined the Franklin Templeton
Group in 1997.
III. The following replaces the section "Year 2000 Issue" under "Who Manages
the Fund?":
YEAR 2000 PROBLEM. The fund's business operations depend on a worldwide
network of computer systems that contain date fields, including
securities trading systems, securities transfer agent operations and
stock market links. Many of the systems currently use a two digit date
field to represent the date, and unless these systems are changed or
modified, they may not be able to distinguish the Year 1900 from the
Year 2000 (commonly referred to as the Year 2000 problem). In addition,
the fact that the Year 2000 is a leap year may create difficulties for
some systems.
When the Year 2000 arrives, the fund's operations could be adversely
affected if the computer systems used by Advisers, its service providers
and other third parties it does business with are not Year 2000 ready.
For example, the fund's portfolio and operational areas could be
impacted, including securities trade processing, interest and dividend
payments, securities pricing, shareholder account services, reporting,
custody functions and others. The fund could experience difficulties in
effecting transactions if any of its foreign subcustodians, or if
foreign broker-dealers or foreign markets are not ready for Year 2000.
Advisers and its affiliated service providers are making a concerted
effort to take steps they believe are reasonably designed to address
their Year 2000 problems. Of course, the fund's ability to reduce the
effects of the Year 2000 problem is also very much dependent upon the
efforts of third parties over which the fund and Advisers may have no
control.
IV. Under "How Is the Trust Organized?", the fourth sentence in the first
paragraph is replaced with the following:
All shares outstanding before the offering of Advisor Class shares have
been designated Franklin Natural Resources Fund - Class A.
All references in the prospectus to Class I shares are replaced with
Class A.
V. In step 2 under "How Do I Buy Shares? - Opening Your Account," the
minimum investment to add to your account is changed from $25 to $50.
VI. The section "How Do I Buy Shares in Connection with Retirement Plans?",
found under "How Do I Buy Shares?", is replaced with the following:
HOW DO I BUY SHARES IN CONNECTION WITH RETIREMENT PLANS?
Your individual or employer-sponsored retirement plan may invest in the
fund. Plan documents are required for all retirement plans. Trust
Company can provide the plan documents for you and serve as custodian or
trustee.
Trust Company can provide you with brochures containing important
information about its plans. These plans require separate applications
and their policies and procedures may be different than those described
in this prospectus. For more information, including a free retirement
plan brochure or application, please call Retirement Plan Services.
Please consult your legal, tax or retirement plan specialist before
choosing a retirement plan. Your investment representative or advisor
can help you make investment decisions within your plan.
VII. Under "May I Exchange Shares for Shares of Another Fund? - Exchange
Restrictions," the third item is replaced with the following:
o Generally exchanges may only be made between identically registered
accounts, unless you send written instructions with a signature
guarantee. You may, however, exchange shares from a Fund account
requiring two or more signatures into an identically registered money
fund account requiring only one signature for all transactions. PLEASE
NOTIFY US IN WRITING IF YOU DO NOT WANT THIS OPTION TO BE AVAILABLE ON
YOUR ACCOUNT. Additional procedures may apply. Please see "Transaction
Procedures and Special Requirements."
VIII. In the "By Phone" section of the chart under "How Do I Sell Shares?",
(a) the first bulleted item is replaced with the following:
o If the request is $100,000 or less. Institutional accounts may exceed
$100,000 by completing a separate agreement. Call Institutional
Services to receive a copy.
(b) and the third bulleted item is deleted.
IX. Distribution option 3 in the section "What Distributions Might I Receive
From the Fund? - Distribution Options" is replaced with the following:
3. RECEIVE DISTRIBUTIONS IN CASH - You may receive dividends, or both
dividend and capital gain distributions in cash. If you have the money
sent to another person or to a checking or savings account, you may
need a signature guarantee. If you send the money to a checking or
savings account, please see "Electronic Fund Transfers" under "Services
to Help You Manage Your Account."
X. Under "Transaction Procedures and Special Requirements,"
(a) the section "Joint Accounts" is replaced with the following:
JOINT ACCOUNTS. For accounts with more than one registered owner, the
fund accepts written instructions signed by only one owner for
transactions and account changes that could otherwise be made by phone.
For all other transactions and changes, all registered owners must sign
the instructions.
Please keep in mind that if you have previously told us that you do not
want telephone exchange or redemption privileges on your account, then
we can only accept written instructions to exchange or redeem shares if
they are signed by all registered owners on the account.
(b) the reference to $50,000 in the section "Signature Guarantees" is
replaced with $100,000.
(c) and the section "Trust Company Retirement Plan Accounts," found
under "Telephone Transactions," is deleted.
XI. Under "Services to Help You Manage Your Account,"
(a) the second sentence in the section "Automatic Investment Plan" is
replaced with the following:
Under the plan, you can have money transferred automatically from your
checking or savings account to the fund each month to buy additional
shares.
(b) the second paragraph under "Systematic Withdrawal Plan" is replaced
with the following:
If you would like to establish a systematic withdrawal plan, please
complete the systematic withdrawal plan section of the account
application included with this prospectus and indicate how you would
like to receive your payments. You may choose to direct your payments
to buy the same class of shares of another Franklin Templeton Fund or
have the money sent directly to you, to another person, or to a
checking or savings account. If you choose to have the money sent to a
checking or savings account, please see "Electronic Fund Transfers"
below. Once your plan is established, any distributions paid by the
fund will be automatically reinvested in your account.
(c) and the following new section is added after the section "Systematic
Withdrawal Plan":
ELECTRONIC FUND TRANSFERS
You may choose to have dividend and capital gain distributions or
payments under a systematic withdrawal plan sent directly to a checking
or savings account. If the account is with a bank that is a member of
the Automated Clearing House, the payments may be made automatically by
electronic funds transfer. If you choose this option, please allow at
least fifteen days for initial processing. We will send any payments
made during that time to the address of record on your account.
XII. In the "Useful Terms and Definitions" section, the definition of "Class
I and Advisor Class" is replaced with the following:
CLASS A AND ADVISOR CLASS - The fund offers two classes of shares,
designated "Class A" and "Advisor Class." The two classes have
proportionate interests in the fund's portfolio. They differ, however,
primarily in their sales charge and expense structures.
Please keep this supplement for future reference.
