o 403 SAA-1
SUPPLEMENT DATED MAY 17, 1999
TO THE STATEMENT OF ADDITIONAL INFORMATION OF
FRANKLIN NATURAL RESOURCES FUND - ADVISOR CLASS
DATED SEPTEMBER 1, 1998
The Statement of Additional Information is amended as follows:
I. The fund offers two classes of shares: Class A and Advisor Class. Before
January 1, 1999, Class A shares were designated Class I. All references in
the Statement of Additional Information to Class I shares are replaced
with Class A.
II. In the section, "Investment Restrictions," the first sentence of the
first paragraph following the numbered investment restrictions is replaced
with the following:
In addition to these fundamental policies, it is the present policy of the
fund (which may be changed without shareholder approval) not to engage in
joint or joint and several trading accounts in securities, except that it
may: (i) participate in joint repurchase arrangements; (ii) invest in
shares of one or more money market funds managed by Advisers or its
affiliates, to the extent permitted by exemptions granted under the 1940
Act; or (iii) combine orders to buy or sell with orders from other persons
to obtain lower brokerage commissions.
III.The first sentence in the section "Additional Information on Exchanging
Shares," found under "How Do I Buy, Sell and Exchange Shares?", is
replaced with the following:
If you request the exchange of the total value of your account, declared
but unpaid income dividends and capital gain distributions will be
reinvested in the fund and exchanged into the new fund at Net Asset Value
when paid.
IV. The following paragraph is added under "Miscellaneous Information":
The Information Services & Technology division of Resources established a
Year 2000 Project Team in 1996. This team has already begun making
necessary software changes to help the computer systems that service the
fund and its shareholders to be Year 2000 compliant. After completing
these modifications, comprehensive tests are conducted in one of
Resources' U.S. test labs to verify their effectiveness. Resources
continues to seek reasonable assurances from all major hardware, software
or data-services suppliers that they will be Year 2000 compliant on a
timely basis. Resources is also beginning to develop a contingency plan,
including identification of those mission critical systems for which it is
practical to develop a contingency plan. However, in an operation as
complex and geographically distributed as Resources' business, the
alternatives to use of normal systems, especially mission critical
systems, or supplies of electricity or long distance voice and data lines
are limited.
Please keep this supplement for future reference.
