191 STKR
SUPPLEMENT DATED AUGUST 30, 1996
TO THE PROSPECTUS OF
FRANKLIN INTERNATIONAL EQUITY FUND
(Franklin Templeton International Trust)
Dated March 1, 1996, As Supplemented May 24, 1996 and July 1, 1996,
As May Be Further Amended and Supplemented From Time To Time
The Board of Trustees of Franklin Templeton International Trust has approved a
change in the name and focus of the Franklin International Equity Fund (the
"Fund").
Effective October 1, 1996, the Fund will be called the Templeton Foreign Smaller
Companies Fund. The Fund, which currently invests predominantly in larger
capitalization foreign equity securities, will shift its emphasis to smaller
capitalization foreign equity securities, i.e., securities with a market
capitalization of $1 billion or less at the time of purchase of issuers located
in, or deriving a significant portion of their revenues from, or for which the
principal securities trading market is in any foreign country, including
developing market countries ("foreign smaller capitalization equity
securities"). The Fund's portfolio will be adjusted gradually, in an orderly
fashion consistent with market and investment considerations, including the
Fund's investment objective which will remain the same, i.e., to seek long-term
growth of capital. It is anticipated that the shift in portfolio emphasis will
be completed by January 1, 1997, so that by that time, the Fund will have at
least 65% of its portfolio in foreign smaller capitalization equity securities.
As the Fund purchases an increasing amount of foreign smaller capitalization
equity securities, shareholders should consider some of the additional risks
associated with such securities. For example, smaller capitalization issuers
include relatively new or unseasoned companies which are in their early stages
of development, or small companies positioned in new and emerging industries
where the opportunity for rapid growth is expected to be above average.
Historically, smaller capitalization stocks have been more volatile in price
than larger capitalization stocks. Among the reasons for the greater price
volatility of these securities are the less certain growth prospects of smaller
firms, the lower degree of liquidity in the markets for these stocks, and the
greater sensitivity of small companies to changing economic conditions. Besides
exhibiting greater volatility, small company stocks may, to a degree, fluctuate
independently of larger company stocks. Small company stocks may decline in
price as large company stocks rise, or rise in price as large company stocks
decline. You should therefore expect the shares of a fund that invests a
substantial portion of its net assets in small company stocks to be more
volatile than the shares of a fund that invests solely in larger capitalization
stocks.
