<PAGE> PAGE 1
000 B000000 10/31/94
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000 J000000 A
001 A000000 ADJUSTABLE RATE SECURITIES PORTFOLIOS
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001 C000000 4153122000
002 A000000 777 MARINERS ISLAND BOULEVARD
002 B000000 SAN MATEO
002 C000000 CA
002 D010000 94404
002 D020000 1585
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007 C010700 7
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008 A00AA01 FRANKLIN ADVISERS, INC.
008 B00AA01 A
008 C00AA01 801-26292
008 D01AA01 SAN MATEO
008 D02AA01 CA
008 D03AA01 94403
008 D04AA01 7777
012 A00AA01 FRANKLIN/TEMPLETON INVESTOR SERVICES, INC.
012 B00AA01 84-1036
012 C01AA01 SAN MATEO
012 C02AA01 CA
012 C03AA01 94403
012 C04AA01 7777
013 A00AA01 COOPERS & LYBRAND L.L.P.
<PAGE> PAGE 2
013 B01AA01 SAN FRANCISCO
013 B02AA01 CA
013 B03AA01 94105
013 B04AA01 2119
015 A00AA01 BANK OF AMERICA NT & SA
015 B00AA01 C
015 C01AA01 SAN FRANCISCO
015 C02AA01 CA
015 C03AA01 94104
015 C04AA01 1502
015 E01AA01 X
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022 B000001 13-2638166
022 C000001 485665
022 D000001 748177
022 A000002 LEHMAN BROTHERS SECS
022 B000002 13-2518466
022 C000002 518449
022 D000002 487511
022 A000003 SALOMON BROTHERS INC
022 B000003 13-3082694
022 C000003 0
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022 A000004 PRUDENTIAL BACHE SECURITIES
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022 C000004 30818
022 D000004 197404
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022 B000005 13-2655998
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022 A000006 FUJI SECURITIES INC
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022 C000006 119693
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022 A000007 MORGAN (J P) SECURITIES INC
<PAGE> PAGE 3
022 B000007 13-3224016
022 C000007 29859
022 D000007 96915
022 A000008 KIDDER PEABODY & CO INC
022 B000008 13-5650440
022 C000008 67445
022 D000008 31019
022 A000009 GOLDMAN SACHS & CO
022 B000009 13-5108880
022 C000009 6607
022 D000009 59404
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022 B000010 37-0975072
022 C000010 48312
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<PAGE> PAGE 4
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<PAGE> PAGE 5
080 C00AA00 130000
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<PAGE> PAGE 6
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<PAGE> PAGE 7
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<PAGE> PAGE 8
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<PAGE> PAGE 9
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<PAGE> PAGE 10
070 M010200 N
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<PAGE> PAGE 11
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SIGNATURE KENNETH V. DOMINGUES
TITLE VP, TREAS, CFO & CAO
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
ADJUSTABLE RATE SECURITIES PORTFOLIOS OCTOBER 31, 1994 ANNUAL REPORT AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 1
<NAME> U.S. GOVERNMENT ADJUSTABLE RATE MORTGAGE PORTFOLIO
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1994
<PERIOD-END> OCT-31-1994
<INVESTMENTS-AT-COST> 770,001,056
<INVESTMENTS-AT-VALUE> 751,038,133
<RECEIVABLES> 8,552,084
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 759,590,217
<PAYABLE-FOR-SECURITIES> 9,992,778
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,126,325
<TOTAL-LIABILITIES> 12,119,103
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 896,162,632
<SHARES-COMMON-STOCK> 81,367,809
<SHARES-COMMON-PRIOR> 217,034,422
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (129,728,595)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (18,962,923)
<NET-ASSETS> 747,471,114
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 48,150,402
<OTHER-INCOME> 0
<EXPENSES-NET> (186,296)
<NET-INVESTMENT-INCOME> 47,964,106
<REALIZED-GAINS-CURRENT> (67,057,492)
<APPREC-INCREASE-CURRENT> (12,751,845)
<NET-CHANGE-FROM-OPS> (31,845,231)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (47,964,106)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,234,621
<NUMBER-OF-SHARES-REDEEMED> 143,954,457
<SHARES-REINVESTED> 5,053,223
<NET-CHANGE-IN-ASSETS> (1,382,757,898)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (62,671,103)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (186,296)
<AVERAGE-NET-ASSETS> 1,197,253,983
<PER-SHARE-NAV-BEGIN> 9.820
<PER-SHARE-NII> .415
<PER-SHARE-GAIN-APPREC> (.630)
<PER-SHARE-DIVIDEND> (.415)
<PER-SHARE-DISTRIBUTIONS> .000
<RETURNS-OF-CAPITAL> .000
<PER-SHARE-NAV-END> 9.190
<EXPENSE-RATIO> .020
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> .000
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
ADJUSTABLE RATE SECURITIES PORTFOLIOS OCTOBER 31, 1994 ANNUAL REPORT AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 2
<NAME> ADJUSTABLE RATE SECURITIES PORTFOLIO
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1994
<PERIOD-END> OCT-31-1994
<INVESTMENTS-AT-COST> 42,844,097
<INVESTMENTS-AT-VALUE> 41,386,783
<RECEIVABLES> 377,505
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 4,941
<TOTAL-ASSETS> 41,769,229
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 150,476
<TOTAL-LIABILITIES> 150,476
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 45,179,173
<SHARES-COMMON-STOCK> 4,297,010
<SHARES-COMMON-PRIOR> 12,396,739
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (2,103,106)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (1,457,314)
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<DIVIDEND-INCOME> 0
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<OTHER-INCOME> 0
<EXPENSES-NET> (232,552)
<NET-INVESTMENT-INCOME> 4,221,967
<REALIZED-GAINS-CURRENT> (1,993,495)
<APPREC-INCREASE-CURRENT> (1,410,266)
<NET-CHANGE-FROM-OPS> 818,206
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (4,221,967)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 9,103,489
<NUMBER-OF-SHARES-REDEEMED> 17,629,907
<SHARES-REINVESTED> 426,689
<NET-CHANGE-IN-ASSETS> (82,690,486)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (109,611)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (205,735)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (232,552)
<AVERAGE-NET-ASSETS> 92,788,480
<PER-SHARE-NAV-BEGIN> 10.03
<PER-SHARE-NII> .469
<PER-SHARE-GAIN-APPREC> (.340)
<PER-SHARE-DIVIDEND> (.469)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.69
<EXPENSE-RATIO> .25
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
REPORT OF INDEPENDENT AUDITORS
To the Shareholders and Board of Trustees
of the Adjustable Rate Securities Portfolios:
In planning and performing our audit of the financial statements and financial
highlights of the Adjustable Rate Securities Portfolios for the year ended
October 31, 1994, we considered its internal control structure, including
procedures for safeguarding securities, in order to determine our auditing
procedures for the purpose of expressing our opinion on the financial
statement and financial highlights and to comply with the requirements of
Form N-SAR, not to provide assurance on the internal control structure.
The management of the Adjustable Rate Securities Portfolios is responsible for
establishing and maintaining an internal control structure. In fulfilling this
responsibility, estimates and judgements by management are required to assess
the expected benefits and related costs of internal control structure policies
and procedures. Two of the objectives of an internal control structure are to
provide management with reasonable, but not absolute, assurance that assets are
safeguarded against loss from unauthorized use or disposition and that
transactions are executed in accordance with management's authorization and
recorded properly to permit preparation of financial statements in conformity
with generally accepted accounting principles.
Because of inherent limitations in any internal control structure, errors or
irregularities may occur and not be detected. Also, projection of any
evaluation of the structure to future periods is subject to the risk that it
may become inadequate because of changes in conditions or that the
effectiveness of the design and operation may deteriorate.
Our consideration of the internal control structure would not necessarily
disclose all matters in the internal control structure that might be material
weaknesses under standards established by the American Institute of Certified
Public Accountants. A material weakness is a condition in which the design or
operation of the specific internal control structure elements does not reduce
to a relatively low level the risk that errors or irregularities in amounts
that would be material in relation to the financial statements and financial
highlights being audited may occur and not be detected within a timely period
by employees in the normal course of performing their assigned functions.
However, we noted no matters involving the internal control structure, including
procedures for safeguarding securities, that we consider to be material
weaknesses, as defined above, as of October 31, 1994.
This report is intended solely for the information and use of management of
the Adjustable Rate Securities Portfolios and the Securities and Exchange
Commission.
S\COOPERS AND LYBRAND L.L.P.
Coopers and Lybrand L.L.P.
San Francisco, California
December 7, 1994
