Semi
Annual
Report
April 30, 1997
Franklin Templeton
International Trust
Templeton Pacific Growth Fund
Templeton Foreign Smaller Companies Fund
CELEBRATING 50 YEARS
This year marks 50 years of business for Franklin Templeton. Over these years,
the mutual fund industry has experienced profound changes in technology,
regulations and customer expectations. 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 around the globe. We thank you for your past
support and look forward to serving your investment needs in the years ahead.
(PICTURE OMITTED)
Rupert H. Johnson, Jr.
President
Franklin Templeton
International Trust
CONTENTS
Shareholder Letter 1
Fund Reports
Templeton Pacific
Growth Fund 3
Templeton Foreign
Smaller Companies Fund 10
Statement
of Investments 17
Financial Statements 28
Notes to Financial
Statements 32
SHAREHOLDER LETTER
Dear Shareholder:
We are pleased to bring you this semi-annual report for the Franklin Templeton
International Trust, which covers the six months ended April 30, 1997. The Trust
consists of the Templeton Pacific Growth Fund and the Templeton Foreign Smaller
Companies Fund.
Although some global equity markets delivered positive results during the period
under review, others did not. The Morgan Stanley Capital International(R)
Europe, Australasia, Far East (MSCI EAFE) Index, which tracks the equity markets
of 18 nations, reported a total return of +1.72% for the six-month period, while
the MSCI Pacific Index, representative of equity markets in six countries in the
region, returned -32.08%.* Of course, markets have always experienced ups and
downs, often not in tandem, and volatility is a normal part of investing. Many
stocks, however, have historically provided impressive long-term results. We
therefore urge you to focus on the achievement of your long-term investment
goals, rather than concentrating on short-term market cycles.
On the following pages, you will find detailed discussions about the Templeton
Pacific Growth Fund and the Templeton Foreign Smaller Companies Fund. Although
the Funds have different investment objectives and strategies, their managers
share a dedication to the principles of careful stock selection, broad
diversification, and constant professional supervision. For specific information
about the Funds, including how market conditions and management strategies have
affected their performance, please refer to the Funds' reports following this
letter.
We thank you for your support, welcome your questions, and look forward to
serving your investment needs in the years to come.
Sincerely,
Rupert H. Johnson, Jr.
President
Franklin Templeton International Trust
*Source: Micropal. Indices are unmanaged and include price appreciation and
reinvestment of dividends.
TEMPLETON PACIFIC GROWTH FUND
Your Fund's Objective: The Templeton Pacific Growth Fund seeks to provide
long-term growth of capital by investing in equity securities of which at least
65% trade on markets in the Pacific Rim.
The six months under review were especially challenging for investors in Pacific
Rim equity markets. Singapore's stock market declined 5.7%, Japan's suffered a
loss of 15.6%, and Thailand's plummeted 27.4%. However, Hong Kong's market
gained 4.6%, and Australia's rose 7.3%.1 Within this environment, the Templeton
Pacific Growth Fund's Class I shares delivered a six-month cumulative total
return of -1.03%, as discussed in the Performance Summary on page 6. Although
this result disappointed us, we are pleased to report that the Fund
significantly outperformed its benchmark, the Morgan Stanley Capital
International(R) (MSCI) Pacific Index, which provided a total return of -32.08%
for the same period.2
GRAPHIC MATERIAL 1 OMITTED - SEE APPENDIX AT END OF DOCUMENT
1. Source: Bloomberg. Price depreciation and appreciation is measured in U.S.
dollars, and includes reinvested dividends.
2. The MSCI Pacific Index is an unmanaged composite of approximately 525
companies in Australia, Hong Kong, Japan, New Zealand, Singapore, and Malaysia.
This is a total return index in U.S. dollars, with gross dividends reinvested.
As you can see in the chart to the right, Hong Kong was the Fund's largest
geographic exposure (29.2% of total net assets) on April 30, 1997. During the
reporting period, a recovery in Hong Kong's retail and property sectors helped
to buoy its stock market, and the Fund benefited from the rising share prices of
Cheung Kong Holdings Ltd. and Hon Kwok Land Investment Co. Ltd., two companies
with real estate holdings in Hong Kong.
Japan's economy continued to falter, as its banking system faced huge amounts of
uncollectable loans secured by land or stock worth less than the amount of the
loans. Although our holdings of Sony Corp. performed well, the yen's decline
during the period adversely affected the Fund's total return, and we decreased
our Japanese exposure from 20.3% of total net assets on October 31, 1996 to
13.8% on April 30, 1997.
In Singapore, the government announced measures aimed at dampening the soaring
residential property market in an attempt to control inflation. Since many
companies listed on Singapore's stock exchange have high real estate exposure,
this contributed to generally poor corporate earnings, and hurt the Fund's
Singapore holdings.
Indonesia was plagued by political problems, as President Suharto's
administration suppressed key opposition figures, causing riots in Jakarta. Its
stock market experienced severe volatility, and we took this opportunity to
purchase shares of PT Bank Bali and PT Panin Bank, two financial institutions
that we believe have growth potential. Seeking to capitalize on volatility in
stock markets of Thailand and India, we purchased shares of Thai Farmers Bank
Public Co. Ltd. and Bangkok Bank Public Co. Ltd., and initiated a position in
Industrial Credit & Investment Corp. of India.
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.
In our opinion, the Pacific Rim continues to offer a variety of investment
opportunities. There are, of course, special risks involved with investing in a
portfolio of securities concentrated in a single geographic region that also
contains developing markets. These risks include currency fluctuations, market
volatility, economic, social, and political uncertainty, and in some cases the
relatively small size and lesser liquidity of these markets. While short-term
volatility can be disconcerting, declines of as much as 40% to 50% are not
unusual in emerging markets. For example, Hong Kong's equity market has
increased 975% in the last 15 years, but has suffered five declines of more than
20% during that time.3
3. Source: Bloomberg. Based on quarterly percentage price change over the 15
years ended March 31, 1997.
Templeton Pacific Growth Fund
Top 10 Holdings on April 30, 1997
Based on Total Net Assets
Company % of Total
Industry, Country Net Assets
New World Development
Co. Ltd. 3.4%
Real Estate, Hong Kong
Cheung Kong Holdings Ltd. 3.2%
Multi-Industry, Hong Kong
Sun Hung Kai Properties Ltd. 3.1%
Real Estate, Hong Kong
HSBC Holdings PLC 3.0%
Banking, Hong Kong
Parkway Holdings Ltd., foreign 2.5%
Real Estate, Singapore
Development Bank of
Singapore Ltd., foreign 2.2%
Banking, Singapore
City Development Ltd., foreign 2.1%
Construction & Housing,
Singapore
Hong Kong
Telecommunications Ltd. 1.9%
Telecommunications,
Hong Kong
Wheelock & Co. Ltd. 1.8%
Multi-Industry, Hong Kong
Sime Darby Bhd., foreign 1.8%
Multi-Industry, Malaysia
For a complete list of portfolio holdings, please see page 17 of this report.
Templeton Pacific Growth Fund
Top 10 Industries on April 30, 1997
Based on Total Net Assets
% of Total
Industry Net Assets
Banking 12.5%
Real Estate 10.5%
Transportation 10.5%
Multi-Industry 9.1%
Electrical & Electronics 7.0%
Telecommunications 4.5%
Chemicals 3.3%
Construction & Housing 3.3%
Forest Products & Paper 3.0%
Insurance 3.0%
PERFORMANCE SUMMARY
CLASS I
The Templeton Pacific Growth Fund Class I shares produced a cumulative total
return of -1.03% for the six-month period ended April 30, 1997. Cumulative total
return measures the change in value of an investment, assuming reinvestment of
dividends and capital gains, and does not include the 5.75% maximum initial
sales charge.
We have always maintained a long-term perspective when managing the Fund, and we
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 72% since its inception on September 20, 1991.
The price of the Fund's shares decreased $0.22, from $14.50 on October 31, 1996,
to $14.28 on April 30, 1997. During this reporting period, Class I shareholders
received distributions totaling 7.5 cents ($0.075) per share in dividend income.
Distributions will vary depending on income earned by the Fund and any profits
realized from the sale of securities in the portfolio, as well as the level of
the Fund's operating expenses.
Templeton Pacific Growth Fund
Class I
Periods ended April 30, 1997
Since
Inception
One-Year Three-Year Five-Year (9/20/91)
Cumulative Total Return1-5.08% 9.10% 63.13% 72.52%
Average Annual
Total Return2 -9.35% 0.94% 8.99% 9.05%
Value of
$10,000 Investment3 $9,065 $10,285 $15,376 $16,261
4/30/93 4/30/94 4/30/95 4/30/96 4/30/97
One-Year
Total Return4 14.96% 30.07% -2.91% 18.39% -5.08%
1. Cumulative total return represents the change in value of an investment over
the indicated periods and does not include the initial sales charge.
2. Average annual total return represents the average annual change in value of
an investment over the indicated periods and includes the 5.75% maximum initial
sales charge.
3. These figures represent the value of a hypothetical $10,000 investment in the
Fund over the indicated periods and include the 5.75% maximum initial sales
charge.
4. One-year total return represents the change in value of an investment over
the periods ended on the indicated dates and does not include the initial sales
charge.
All calculations assume reinvestment of dividends and capital gains at net asset
value. Voluntary expense limitations in the past increased the Fund's total
returns. Investment return and principal value will fluctuate with market
conditions, currencies and the economic, social, and political climates of
countries where investments are made. Emerging markets involve heightened risks
related to the same factors, in addition to those associated with the relatively
small size and lesser liquidity of these markets. You may have a gain or loss
when you sell your shares.
Past performance is not predictive of future results.
PERFORMANCE SUMMARY
CLASS II
The Templeton Pacific Growth Fund Class II shares produced an aggregate total
return of -5.74% for the period from inception on January 1, 1997 through April
30, 1997. Aggregate total return measures the change in value of an investment,
assuming reinvestment of dividends and capital gains, and does not include sales
charges.
The price of the Fund's shares decreased $0.87, from $15.10 on January 2, 1997
(day of commencement of sales) to $14.23 on April 30, 1997. During the reporting
period, Class II shares did not pay distributions.
Templeton Pacific Growth Fund
Class II
Period ended April 30, 1997
Since
Inception
(1/1/97)
Aggregate Total Return* -5.74%
*Aggregate total return represents the change in value of an investment over the
indicated period. Since Class II shares have been in existence for less than one
year, average annual total returns are not provided.
Note: Investment return and principal value will fluctuate with market
conditions, currencies and the economic, social, and political climates of
countries where investments are made. Emerging markets involve heightened risks
related to the same factors, in addition to those associated with the relatively
small size and lesser liquidity of these markets. You may have a gain or loss
when you sell your shares.
Past performance is not predictive of future results.
PERFORMANCE SUMMARY
ADVISOR CLASS
The Templeton Pacific Growth Fund Advisor Class shares produced an aggregate
total return of -5.36% from inception on January 1, 1997 through April 30, 1997.
Aggregate total return measures the change in value of an investment, assuming
reinvestment of dividends and capital gains.
The price of the Fund's shares decreased $0.81, from $15.10 on January 2, 1997
(day of commencement of sales), to $14.29 on April 30, 1997. During the
reporting period, Advisor Class shares did not pay distributions.
Templeton Pacific Growth Fund
Advisor Class
Period ended April 30, 1997
Since
Inception
(1/1/97)
Aggregate Total Return* -5.36%
*Aggregate total return represents the change in value of an investment over the
indicated period. Since Advisor Class shares have been in existence for less
than one year, average annual total returns are not provided.
Note: Investment return and principal value will fluctuate with market
conditions, currencies and the economic, social, and political climates of
countries where investments are made. Emerging markets involve heightened risks
related to the same factors, in addition to those associated with the relatively
small size and lesser liquidity of these markets. You may have a gain or loss
when you sell your shares.
Past performance is not predictive of future results.
TEMPLETON FOREIGN
SMALLER COMPANIES FUND
Your Fund's Objective: The Templeton Foreign Smaller Companies Fund seeks to
provide long-term growth of capital by investing primarily in equity securities
of small capitalization companies -- those with a market capitalization of $1
billion or less at the time of investment outside the United States.
We are pleased to bring you this semi-annual report for the Templeton Foreign
Smaller Companies Fund, which covers the six months ended April 30, 1997. During
this period, some international equity markets provided strong performance,
while others posted mixed results. As discussed in the Performance Summary on
page 14, the Fund's Class I shares delivered a six-month cumulative total return
of +8.38%, significantly outperforming the Morgan Stanley Capital
International(R) Europe, Australasia, Far East (MSCI EAFE) Index return of
+1.72%.1
1. Source: Micropal. Index is unmanaged and includes price appreciation and
reinvestment of dividends.
Throughout the reporting period, we continued our search for undervalued stocks
of smaller companies located outside the United States, using a "bottom up" and
"value" approach. Bottom up investing means that we do a detailed analysis of
individual companies rather than focusing on certain countries, industries, or
currencies. Value investing describes our strict discipline of investing in
stocks selling below what we believe to be their intrinsic or underlying values.
During the six months under review, strong performance of many European markets
contributed significantly to the performance of the Fund. The Dutch, French,
German, Italian, Spanish, Swedish, and Swiss markets each provided returns in
excess of 20%, as measured in local currencies. However, this was tempered by
relatively weak European currencies, many of which lost value relative to the
U.S. dollar amidst uncertainty surrounding the European Union's proposed single
currency. For example, in Switzerland, stocks rose over 34% in local currency
terms, but appreciated only about 13% in dollar terms as the Swiss franc
weakened against the U.S. dollar.
Latin American markets posted strong returns during the reporting period. Many
governments there implemented fiscal and monetary policies aimed at creating
strong, sustainable, non-inflationary growth. As a result, Latin American equity
markets in general advanced, and the Fund benefited from its holdings in
Argentina, Brazil, Colombia, and Peru. In 1996, Brazil's economy experienced
robust growth of 4% (following a 5% growth rate in 1995) and Argentina's grew
5%. Interestingly, the performance of Latin American stocks was relatively
unaffected by politics in the region, normally a cause of volatility in Latin
America. There have been no significant elections, so the period has been one of
political stability rather than change. This has allowed economic reform
policies to progress uninterrupted by the interference of domestic politics and
has generally been a factor in supporting equity markets in the region.
In Asia, the Hong Kong stock market was volatile throughout the reporting
period. Initially, it performed well, but fell as many investors appeared to be
concerned about rising interest rates, the death of Chinese leader Deng
Xiaoping, and the reversion of Hong Kong to Chinese control. The Hang Seng Index
ended the period up 3.41%, as measured in U.S. dollars.2 Other Asian markets
provided mixed results. Although the Chinese and Indonesian markets posted
strong returns, the performances of the Korean and Thai markets were
disappointing. Japan's Nikkei 225 Index fell 16.1% in U.S. dollar terms, and was
down more than 28% from April of last year. Despite this weakness, we found it
difficult to discover bargain stocks there, and during the six months under
review, the Fund owned no Japanese securities.
GRAPHIC MATERIAL 2 OMITTED - SEE APPENDIX AT END OF DOCUMENT
2. Source: Bloomberg.
Looking forward, our optimism about equity securities of small capitalization
companies is tempered by their relatively high market valuation levels, which
make identifying undervalued securities in this sector a particular challenge.
However, the recent weakness of many Asian markets such as Korea's and
Thailand's may present us with the opportunity to discover investment bargains
in the region. Although no one can reliably predict the direction of markets in
the near term, we believe that our disciplined approach to uncovering
undervalued small capitalization stocks has the potential to reward investors
over the long term.
Of course, there are risks involved in investing in a fund seeking long-term
capital growth from small or relatively new or unseasoned companies, such as
relatively small revenues, limited production lines and small market share. In
addition, investing in international markets involves special risks related to
market and currency volatility, and adverse economic, social, and political
developments. Emerging markets are subject to heightened risks, as well as those
associated with the relatively small size and lesser liquidity of these markets.
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 equity
market has increased 975% in the last 15 years, but has suffered five declines
of more than 20% during that time.3
3. Source: Bloomberg. Based on quarterly percentage price change over the 15
years ended March 31, 1997.
This discussion reflects the strategies we employed for the Fund during the
reporting period, 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.
Templeton Foreign Smaller
Companies Fund
Top 10 Holdings on April 30, 1997
Based on Total Net Assets
Company % of Total
Industry, Country Net Assets
Howden Group Plc. 2.0%
Machinery & Engineering,
United Kingdom
Apv Plc. 1.9%
Machinery & Engineering,
United Kingdom
De Boer Winkelbedrjven NV 1.5%
Merchandising, Netherlands
Hazlewood Foods Plc. 1.4%
Food & Household Products,
United Kingdom
Li & Fung Ltd. 1.4%
Merchandising, Hong Kong
Lex Service Plc. 1.3%
Business & Public Services,
United Kingdom
PT Tambang Timah (Persero),
foreign 1.3%
Metals & Mining, Indonesia
Union Bank of Norway 1.2%
Banking, Norway
Boehler-Uddeholm AG 1.2%
Metals & Mining, Austria
Sinocan Holdings Ltd. 1.2%
Beverages & Tobacco,
Hong Kong
For a complete list of portfolio holdings, please see page 21 of this report.
Templeton Foreign Smaller
Companies Fund
Top 10 Industries on April 30, 1997
Based on Total Net Assets
% of Total
Industry Net Assets
Merchandising 7.1%
Metals & Mining 5.9%
Banking 5.7%
Food & Household Products 5.4%
Multi-Industry 5.0%
Machinery & Engineering 5.0%
Transportation 4.0%
Broadcasting & Publishing 3.8%
Business & Public Services 3.7%
Building Materials
& Components 3.1%
PERFORMANCE SUMMARY
CLASS I
The Templeton Foreign Smaller Companies Fund's Class I shares provided a
cumulative total return of +8.38% for the six-month period ended April 30, 1997.
Cumulative total return measures the change in value of an investment, assuming
reinvestment of dividends and capital gains, and does not include the 5.75%
maximum initial sales charge.
We have always maintained a long-term perspective when managing the Fund, and we
encourage shareholders to view their investments in a similar manner. As you can
see from the table on page 15, the Fund has delivered a cumulative total return
of more than 94% since its inception on September 20, 1991.
The price of the Fund's shares increased 18 cents ($0.18), from $14.18 on
October 31, 1996, to $14.36 on April 30, 1997. During this reporting period,
Class I shareholders received distributions totaling 24 cents ($0.24) per share
in dividend income and 71 cents ($0.71) per share in capital gains, of which 14
cents ($0.14) represented short-term gains and 57 cents ($0.57) represented
long-term gains. Distributions will vary depending on income earned by the Fund
and any profits realized from the sale of securities in the portfolio, as well
as the level of the Fund's operating expenses.
Templeton Foreign Smaller Companies Fund
Class I
Periods ended April 30, 1997
Since
Inception
One-Year Three-Year Five-Year (9/20/91)
Cumulative Total
Return 113.60% 36.11% 86.96% 94.61%
Average Annual
Total Return2 7.07% 8.66% 12.00% 11.42%
Value of
$10,000 Investment3 $10,707 $12,828 $17,622 $18,343
4/30/93 4/30/94 4/30/95 4/30/96 4/30/97
One-Year
Total Return4 6.99% 28.39% 0.46% 19.26% 13.60%
1. Cumulative total return represents the change in value of an investment over
the indicated periods, and does not include the initial sales charge.
2. Average annual total return represents the average annual change in value of
an investment over the indicated periods, and includes the 5.75% maximum initial
sales charge.
3. These figures represent the value of a hypothetical $10,000 investment in the
Fund over the indicated periods, and include the 5.75% maximum initial sales
charge.
4. One-year total return represents the change in value of an investment over
the periods ended on the dates indicated, and does not include the initial sales
charge.
All calculations assume reinvestment of dividends and capital gains at net asset
value. Voluntary expense limitations in the past increased the Fund's total
return. Investment return and principal value will fluctuate with market
conditions, currencies and the economic, social, and political climates of
countries where investments are made. Of course, there are risks involved in
investing in a fund seeking long-term capital growth from small or relatively
new or unseasoned companies, such as relatively small revenues, limited
production lines and small market share. Emerging markets involve heightened
risks related to the same factors, in addition to those associated with the
relatively small size and lesser liquidity of these markets. You may have a gain
or loss when you sell your shares.
Past performance is not predictive of future results.
PERFORMANCE SUMMARY
ADVISOR CLASS
The Templeton Foreign Smaller Companies Fund Advisor Class shares provided an
aggregate total return of +2.64% from inception on January 1, 1997 through April
30, 1997. Aggregate total return measures the change in value of an investment
assuming reinvestment of dividends and capital gains.
The price of the Fund's shares increased $0.36, from $14.00 on January 2, 1997
(day of commencement of sales) to $14.36 on April 30, 1997. During the reporting
period, Advisor Class shares did not pay distributions.
Templeton Foreign Smaller Companies Fund
Advisor Class
Period ended April 30, 1997
Since
Inception
(1/1/97)
Aggregate Total Return* 2.64%
*Aggregate total return represents the change in value of an investment over the
indicated period. Since Advisor Class shares have been in existence for less
than one year, average annual total returns are not provided.
Note: Investment return and principal value will fluctuate with market
conditions, currencies and the economic, social, and political climates where
investments are made. Of course, there are risks involved in investing in a fund
seeking long-term capital growth from small or relatively new or unseasoned
companies, such as relatively small revenues, limited production lines and small
market share. Emerging markets involve heightened risks related to the same
factors, in addition to those associated with the relatively small size and
lesser liquidity of these markets. You may have a gain or loss when you sell
your shares.
Past performance is not predictive of future results.
FRANKLIN TEMPLETON INTERNATIONAL TRUST
Statement of Investments in Securities and Net Assets, April 30, 1997
(unaudited)
<TABLE>
<CAPTION>
SHARES/ VALUE
COUNTRY* WARRANTS Templeton Pacific Growth Fund (NOTE1)
Common Stocks & Warrants86.2%
<S> <C> <C> <C>
Australia 6.1%
AU 50,000 Brambles Industries Ltd. $ 904,625
AU 187,000 Coles Myer Ltd., A 908,532
AU 277,869 GIO Australia Holdings Ltd. 823,443
US 35,800 bQantas Airways Ltd., ADR 751,800
---------------
3,388,400
---------------
China 5.4%
CN 1,784,000 aDongfang Electrical Machinery Co. Ltd., H 587,259
US 31,400 aGuangshen Railway Co. Ltd., ADR 745,750
US 174,000 a,bGZI Transport Ltd. 104,447
US 34,800 a,bGZI Transport Ltd., wts. 5,571
CN 600,000 Maanshan Iron & Steel Co. Ltd., H 131,672
CN 59,500 Shandong Huaneng Power 691,688
CN 2,899,000 Shanghai Pechemical Co. Ltd., H 718,528
---------------
2,984,915
---------------
Hong Kong 29.2%
HK 630,000 Cathay Pacific Airways Ltd. 979,991
HK 200,000 Cheung Kong Holdings Ltd. 1,755,632
HK 69,000 China Light & Power Co. Ltd. 310,863
HK 700,000 Gold Peak Industries (Holdings) Ltd. 469,890
HK 508,000 Grand Hotel Holdings Ltd. 211,489
HK 2,430,000 Great Wall Electronic International Ltd. 301,142
HK 1,553,059 Hon Kwok Land Investment Co. Ltd. . 521,262
HK 130,000 Hong Kong Ferry Holdings Co. Ltd. 226,554
HK 625,869 Hong Kong Telecommunications Ltd. 1,074,557
HK 65,840 HSBC Holdings PLC 1,665,867
HK 137,924 Jardine Matheson Holdings Ltd. (Singapore) 758,582
HK 19,687 aJardine Strategic Holdings Ltd., wts. 6,890
HK 325,000 Johnson Electric Holdings Ltd. . 881,043
HK 100,000 LI & Fung Ltd. 100,691
HK 800,000 National Mutual Asia Ltd. 826,180
HK 325,664 New World Development Co. Ltd. 1,879,194
HK 10,000 aPeregrine Investments Holdings Ltd., wts. 1,497
HK 550,000 Shun Tak Holdings 362,099
HK 798,000 South China Morning Post Ltd. 685,045
HK 160,000 Sun Hung Kai Properties Ltd. 1,734,977
HK 62,500 Swire Pacific Ltd., A 482,073
HK 490,000 Wheelock & Co. Ltd. 1,018,395
---------------
16,253,913
---------------
India .9%
IN 24,100 Great Eastern Shipping Co. Ltd., GDR 133,153
US 36,800 a,bIndustrial Credit & Inv. Corp. of India, GDR 370,760
---------------
503,913
---------------
Indonesia 4.4%
ID 53,300 aAsia Pacific Resources International, A 239,850
ID 247,000 PT Bank Bali, foreign 594,630
ID 200,000 PT Barito Pacific Timber, foreign $ 189,300
ID 733,862 PT Indorama Synthetics, foreign 566,252
ID 227,061 PT Pabrik Kertas Tjiwi Kimia, foreign 233,602
ID 315,000 PT Panasia Indosyntec, foreign 77,778
ID 379,500 PT Panin Bank, foreign 530,988
---------------
2,432,400
---------------
Japan 13.8%
JP 149,000 Daicel Chemical Industries Ltd. 561,157
JP 61,500 Daito Trust Construction Co. Ltd. 620,233
JP 200 East Japan Railway 865,112
JP 90,200 Hitachi Ltd. 817,286
JP 49,000 Matsushita Electric Industrial Co. Ltd. 783,722
JP 132,000 Mitsubishi Heavy Industries Ltd. 871,541
JP 3,000 Nintendo Co. Ltd. 217,696
JP 120 Nippon Telegraph & Telephone Corp. 846,202
JP 120,000 Nisshinbo Industries Inc. 796,092
JP 105,000 Nittetsu Mining Co. Ltd. 676,725
JP 8,900 Sony Corp. 647,936
---------------
7,703,702
---------------
Malaysia 6.3%
MY 118,000 Commerce Asset-Holding Bhd., foreign 705,039
MY 451,000 Golden Hope Plantations BHD, foreign 714,989
MY 317,333 Malaysian International Shipping Corp. Bhd., foreign 714,173
MY 255,000 Public Finance Bhd., foreign 390,042
MY 327,600 Sime Darby Bhd., foreign 1,011,312
---------------
3,535,555
---------------
New Zealand 1.9%
NZ 400,900 Carter Holt Harvey Ltd. 889,357
NZ 21,550 Fletcher Challenge Building Ltd. 60,505
NZ 43,100 Fletcher Challenge Paper Ltd. 95,613
---------------
1,045,475
---------------
Pakistan 2.7%
PK 267,100 Fauji Fertilizer Co. Ltd. 556,461
PK 16,000 aHub Power Co. Ltd., GDR, reg.S 380,000
PK 940,000 aPakistan Telecom Corp. PTC 578,734
---------------
1,515,195
---------------
Philippines 1.8%
PH 930,000 Filinvest Land Inc. 218,658
PH 124,383 Philippine National Bank 816,010
---------------
1,034,668
---------------
Singapore 7.6%
SG 140,200 City Developments Ltd., foreign 1,133,614
SG 100,000 Development Bank of Singapore Ltd., foreign 1,188,666
SG 9,000 G.P. Batteries International Ltd. $ 26,550
SG 340,000 Parkway Holdings Ltd., foreign 1,386,317
SG 167,000 Van Der Horst Ltd. 480,111
---------------
4,215,258
---------------
South Korea 1.5%
SK 31,500 Pacific Chemical Co. Ltd. 854,596
---------------
Thailand 4.6%
TH 88,800 Bangkok Bank Public Co. Ltd., foreign 822,647
TH 151,500 Chareon Pokphand Feedmill Public Co. Ltd., foreign 440,769
TH 203,833 Industrial Finance Corp. of Thailand, foreign 546,208
TH 11,350 Oriental Hotel (Thailand) Public Co. Ltd., foreign 51,270
TH 37,140 Thai Farmers Bank Public Co. Ltd. 162,081
TH 90,860 Thai Farmers Bank Public Co. Ltd., foreign 549,560
TH 11,357 aThai Farmers Bank Public Co. Ltd., foreign, wts. 8,260
---------------
2,580,795
---------------
Total Common Stocks & Warrants (Cost $44,435,437) 48,048,785
---------------
FACE
AMOUNT
Convertible Bonds .1%
US 192,000 dMDX Public Co. Ltd., 4.75%, conv., 9/17/03 (Cost $221,564) 61,440
---------------
Short Term Investments 1.0%
US 538,000 U. S. Treasury Bill, 5.31%, 8/21/97 (Cost $529,033) 529,313
---------------
Total Investments before Repurchase Agreements (Cost $45,186,034) 48,639,538
---------------
cReceivables from Repurchase Agreements 7.2% (Cost $4,022,000)
Swiss Bank Corp., 5.35%, 5/01/97 (Maturity Value $4,022,597.71)
US 4,042,000 Collateral: U.S. Treasury Notes, 5.5%, 7/31/97 4,022,000
---------------
Total Investments (Cost $49,208,034) 94.5% 52,661,538
Other Assets and Liabilities, Net 5.5% 3,075,301
---------------
Net Assets 100.0% $55,736,839
===============
At April 30, 1997, the unrealized appreciation based on the
cost of investments for income tax
purposes of $49,208,034 was as follows:
Aggregate gross unrealized appreciation for all investments
in which there was an excess of
value over tax cost $ 8,400,120
Aggregate gross unrealized depreciation for all
investments which there was an excess of
tax cost over value (4,946,616)
---------------
Net unrealized appreciation $ 3,453,504
===============
</TABLE>
CURRENCY LEGEND:
AU - Australia
CN - China
HK - Hong Kong
ID - Indonesia
IN - India
JP - Japan
MY - Malaysia
NZ - New Zealand
PH - Philippine
PK - Pakistan
SG - Singapore
SK - South Korea
TH - Thailand
US - United States
*Securities traded in currency of country indicated and valued in U.S. dollars.
aNon-income producing. bPurchased in a private placement transaction; resale may
only be to qualified institutional buyers. cFace amount for repurchase agreement
is for the underlying collateral. dFace amount is stated in foreign currency.
The accompanying notes are an integral part of these financial statements.
FRANKLIN TEMPLETON INTERNATIONAL TRUST
Statement of Investments in Securities and Net Assets, April 30, 1997
(unaudited)
<TABLE>
<CAPTION>
SHARES/ VALUE
COUNTRY* WARRANTS Templeton Foreign Smaller Companies Fund (NOTE1)
Common Stocks & Warrants80.2%
<S> <C> <C> <C>
Argentina .4%
AR 52,763 aCiadea SA $ 211,082
US 14,300 Transportadora de Gas del Sur SA, ADR B 178,750
---------------
389,832
---------------
Australia 3.4%
AU 96,000 David Jones Ltd. 125,774
AU 610,000 Davids Ltd. 589,878
AU 183,625 Email Ltd. 614,327
AU 89,237 GIO Australia Holdings Ltd. 264,447
AU 108,900 National Foods Ltd. 138,429
AU 151,486 News Corp. Ltd. 577,686
AU 241,300 Pioneer International Ltd. 794,109
---------------
3,104,650
---------------
Austria 1.3%
AT 11,600 Boehler Uddeholm AG 836,696
US 3,390 bBoehler Uddeholm AG 244,517
AT 2,300 aMayr-Melnhof Karton AG 108,899
---------------
1,190,112
---------------
Belgium .5%
BE 2,200 Arbed SA 215,385
BE 400 Solvay SA 239,441
---------------
454,826
---------------
Bermuda .6%
US 8,800 ACE Ltd. 528,000
---------------
Brazi l.9%
BR 33,364,000 Bombril SA 486,287
US 8,500 Companhia Siderurgica Nacional ADR 303,648
---------------
789,935
---------------
Canada 1.4%
CA 8,600 Bank of Montreal 312,123
CA 21,500 Hudsons Bay Co. 437,095
CA 18,200 London Insurance Group Inc. 247,539
CA 20,100 Oshawa Group Ltd. (The) 315,108
---------------
1,311,865
---------------
China 2.0%
CN 80,000 China International Marine Containers, B 127,025
US 216,600 bGuangdong Electric Power Development Co Ltd, B 243,540
US 440,000 bGuangdong Kelon Electrical Hldgs Ltd., H 425,999
CN 70,000 Guangdong Kelon Electrical Hldgs. Ltd., H 67,772
CN 560,000 Inner Mongolia Erdos Cashmere Products, B 530,880
US 16,500 Shandong Huaneng Power, ADR 191,812
CN 1,269,000 Yizheng Chemical Fibre Co. Ltd., H 249,000
---------------
1,836,028
---------------
Colombia .3%
CO 8,500 Banco Ganadero SA, ADR C $ 234,812
---------------
Denmark 1.7%
DK 6,800 Det Danske Traelastkompagni AS 634,530
DK 31,200 aISS International Service System AS, B 923,119
---------------
1,557,649
---------------
Ecuador .5%
US 200 La Cemento Nacional CA, GDR 42,000
US 2,150 b La Cemento Nacional CA, GDR 451,500
---------------
493,500
---------------
Finland 1.4%
FI 18,000 Amer Group Ltd., A . 308,106
FI 49,700 Enso OY, R 411,020
FI 4,300 Nokia AB, A 265,881
FI 15,000 Outokumpu OY, A . 278,392
---------------
1,263,399
---------------
France 3.5%
FR 1,786 Alcatel Alsthom SA 198,546
FR 1,723 aBertrand Faure 82,490
FR 3,107 Eramet SA . 157,000
FR 3,576 Marine Wendel 370,586
FR 16,392 Pechiney SA, A 612,103
FR 1,750 aSa des Galeries Lafayette 701,439
FR 3,738 Societe Elf Aquitane SA 362,403
FR 4,577 aSylea SA 391,217
FR 5,857 Vallourec 343,113
---------------
3,218,897
---------------
Germany .2%
DD 2,800 Moebel Walther AG 138,262
---------------
Greece .7%
GR 6,850 Ergo Bank SA 451,503
GR 2,622 aErgo Bank, new 165,102
---------------
616,605
---------------
Hong Kong 10.2%
HK 197,000 Baltrans Holdings Ltd. 33,569
HK 2,608,100 C.P. Pokphand Co. Ltd. 816,452
HK 53,000 Cheung Kong Holdings Ltd. 465,242
HK 433,000 Giordano International Ltd. 234,764
HK 88,000 Hang Lung Development Co. Ltd. 162,448
HK 67,900 Hong Kong Aircraft Engineering Co. Ltd. 196,342
HK 31,200 Jardine Matheson Holdings Ltd. 171,600
HK 122,000 Jardine Strategic Holdings Ltd. 414,800
HK 22,500 aJardine Strategic Holdings Ltd., warrants 7,312
HK 393,000 Kumagai Gumi Hong Kong Ltd. 426,154
HK 1,223,100 LI & Fung Ltd. $ 1,231,547
HK 512,250 Melco International Development Ltd. 191,767
HK 550,000 Orient Overseas International Ltd. 337,249
HK 8,300 aOriental Press Group Ltd., warrants 321
HK 663,000 Peregrine Investments Holdings Ltd. 1,018,486
HK 66,300 aPeregrine Investments Holdings Ltd., warrants 9,928
HK 470,000 aPioneer Industries International Holdings Ltd. 242,690
HK 1,045,000 Shun Tak Holdings 687,988
HK 200 aSing Tao Holdings Ltd. 85
HK 2,709,000 Sinocan Holdings Ltd. 1,075,347
HK 1,978,000 Techtronic Industries Co. Ltd. 334,497
HK 429,000 VTech Holdings Ltd. 719,938
HK 935,000 Wai Kee Holdings Ltd. 208,810
HK 91,200 Wing Hang Bank 333,178
---------------
9,320,514
---------------
Hungary .1%
US 6,945 a,bTiszai Vegyi Kombinat RT, GDR, 112,440
---------------
India0.0%
US 7,800 bGujarat Narmada Valley Fertilizers Co. Ltd., GDR, 21,450
---------------
Indonesia 1.9%
ID 584,500 PT Steady Safe, foreign 571,271
ID 709,000 PT Tambang Timah (Persero), foreign 1,167,078
---------------
1,738,349
---------------
Italy 1.1%
IT 23,300 Banco di Sardegna SPA, di Risp 197,187
IT 58,788 Cartiere Burgo SPA 324,349
IT 63,700 Sirti SPA 386,397
IT 20,000 Unione Cementi Marchino Emiliane (Unicem), di Risp 60,700
---------------
968,633
---------------
Netherlands 9.0%
NL 2,380 Akzo Nobel NV 306,671
NL 18,200 aDe Boer Winkelbedrijven NV 1,401,473
NL 2,900 DSM NV 288,816
NL 16,800 Gamma Holdings NV 871,070
NL 18,640 aHeidemij NV 184,682
NL 3,800 Hollandsche Beton Groep NV 825,175
NL 8,377 Ing Groep NV 328,982
NL 11,900 Koninklijke Bijenkorf Beheer NV 785,005
NL 7,600 Nagron Nationaal Grondbezit NV 784,209
NL 23,520 NV Holdingsmij De Telegraaf 482,969
NL 23,000 Otra NV 366,026
NL 13,200 Philips Electronics NV 689,155
NL 20,300 aSchuttersveld Holding 901,435
---------------
8,215,668
---------------
New Zealand 1.2%
NZ 31,710 Fisher & Paykel Ltd. $ 113,872
NZ 329,000 Fletcher Challenge Ltd. Forestry Division 453,878
NZ 297,000 Tourism Holdings Ltd. 479,736
US 3,445 Tranz Rail Holdings Ltd., Sponsored ADR 61,149
---------------
1,108,635
---------------
Norway 3.5%
NO 1,100 Elkem AS 21,092
US 7,400 bFokus Bank AS, A 72,246
NO 13,500 Fokus Bank AS 131,800
NO 21,132 Hafslund ASA, B 116,662
NO 59,400 Helikopter Services Group ASA 784,351
NO 2,600 Norske Skogindustrier AS, A 86,378
NO 43,132 aNycomed ASA, B 621,040
NO 38,700 Union Bank of Norway, Primary Capital Cert. 1,114,451
NO 17,000 Unitor AS 207,761
---------------
3,155,781
---------------
Peru .3%
PE 114,000 Cpt-Telefonica del Peru SA, B 274,627
---------------
Portugal .5%
PT 12,012 BPI Socieda de Gestora de Participacoes Socias SA 181,324
US 15,000 bPortucel Industrial Empresa Product Celulose, ADR 98,286
PT 20,800 Sociedade Construcoes Soares da Costa SA 165,725
---------------
445,335
---------------
Singapore .3%
SG 47,000 Singapore Bus Service Ltd., foreign 227,367
SG 20,000 aSingapore Finance Ltd., foreign 29,855
---------------
257,222
---------------
South Africa 1.0%
ZA 82,700 Impala Platinum Holdings Ltd. 929,945
---------------
South Korea 1.0%
KR 5,659 Byucksan Development Co. Ltd. 54,623
KR 3,717 Daegu Bank Co. Ltd. 32,303
KR 4,280 Daehan Synthetic Fiber Co. Ltd. 352,668
KR 1,150 Korea Chemical Co Ltd. 96,835
KR 1,700 Korea Long Term Credit Bank 22,550
KR 4,230 Pohang Iron & Steel Co. Ltd. 320,584
---------------
879,563
---------------
Spain 4.9%
ES 2,500 Banco de Andalucia 328,306
ES 11,066 Banco de Valencia SA 204,358
ES 11,500 Banco Pastor SA 675,661
ES 20,391 Compania Sevillana de Electricidad 180,612
ES 215 Cubiertas Y Mzov SA 21,617
ES 25,600 Dragados y Construcciones SA $ 413,228
ES 13,300 Electricas Reunidas de Zaragoza 454,841
ES 129,000 Energia e Industrias Aragonesas Eia S 785,267
ES 16,099 Gesa-Gas y Electricidad SA 792,810
ES 16,800 Iberdrola SA 189,597
ES 12,400 Telefonica de Espana SA 317,623
ES 16,606 Uralita SA 138,000
---------------
4,501,920
---------------
Sweden 8.3%
SE 67,000 Catena, A 811,215
SE 53,600 aCelsius AB, B 956,380
SE 49,420 Dahl International AB 1,026,664
SE 9,200 Electrolux AB, B 527,641
SE 22,600 aEnator AB, B 455,096
SE 13,100 Esselte AB, B 298,856
SE 13,400 Foreningsbanken AB, A 74,632
SE 44,100 Marieberg Tidnings AB, A 1,028,555
SE 15,000 Munksjo AB 138,601
SE 2,765 Naeckebro AB, A 33,302
SE 19,500 Scribona AB, B 242,313
SE 5,400 SKF AG, A 111,837
SE 56,000 aStena Line AB, B free 244,091
SE 44,500 Stora Kopparbergs Bergslags AB, B 609,686
SE 22,650 Svenska Handelsbanken, A 623,534
SE 13,900 Volvo AB, B 349,881
---------------
7,532,284
---------------
Switzerland 3.6%
CH 1,855 aAdecco SA 619,287
CH 180 Baloise-Holding 380,118
CH 740 Bucher Holding AG 685,883
CH 100 Kardex AG, br. 34,291
CH 200 Kuoni Reisen Holding AG, B 575,813
CH 330 Sarna Kunststoff Holding AG 321,552
CH 1,100 Swisslog Holding AG 405,582
CH 780 Zehnder Holding AG 304,543
---------------
3,327,069
---------------
Thailand .5%
TH 62,500 aAlphatec Electronics Pub. Co. Ltd., foreign 236,865
TH 1,600 Chareon Pokphand Feedmill Public Co. Ltd., foreign 4,655
TH 29,700 Robinson Depart. Store Public Co. Ltd., foreign 28,424
TH 4,000 Saha Union Public Co. Ltd., foreign 3,216
TH 37,000 Siam City Cement, foreign 176,696
TH 12,500 Thai Glass Industries Public Co. Ltd., foreign 35,889
---------------
485,745
---------------
Turkey .2%
TR 848,400 aTofas Turk Otomobil Fabrikasi AS, GDR $ 190,890
---------------
United Kingdom 13.8%
GB 693,111 Albert Fisher Group Plc. 443,661
GB 91,700 Anglian Group Plc. 364,072
GB 1,249,298 Apv Plc. 1,761,314
GB 469,200 aCordiant Plc. 988,446
GB 717,000 Hazlewood Foods Plc. 1,266,476
GB 198,900 Hillsdown Holdings Plc. 585,009
GB 880,000 Howden Group Plc. 1,811,081
GB 45,400 Kwik Save Group Plc. 222,553
GB 208,000 Lex Service Plc. 1,188,157
GB 154,800 London Pacific Group Ltd. 536,829
GB 314,100 McBride Plc. 646,432
GB 184,049 Meggitt Plc. 354,921
GB 21,500 Perkins Foods Plc. 27,524
GB 80,000 aRaine Plc. 24,632
GB 79,848 Safeway Plc. 440,588
GB 36,400 Somerfield Plc. 106,471
GB 31,939 Thames Water Group Plc. 350,657
GB 305,800 Wace Group Plc. 374,142
GB 175,000 Wagon Industrial Holdings Plc. 794,049
GB 86,100 aWeir Group Plc. 330,676
---------------
12,617,690
---------------
Total Common Stocks and Warrants (Cost $65,203,763) 73,212,132
---------------
Preferred Stocks 2.4%
NL 7,015 Ballast Nedam NV, ctf., conv., pfd. 324,110
BR 5,380,000 CIA Brasileira de Petroleo Ipiranga, pfd. 83,727
BR 2,006,000 Coteminas CIA Tecidos Norte de Minas, pfd. 841,296
BR 60,800,000 aElectrolux DO Brasil SA, pfd. 116,632
US 10,000 dJardine Strategic Holdings Ltd., 7.50%, conv. pfd. 11,787
BR 1,755,900 Weg SA, pfd. 767,778
---------------
Total Preferred Stocks (Cost $2,029,747) 2,145,330
---------------
Total Common Stocks, Warrants and Preferred Stocks (Cost $67,223,310) 75,357,462
---------------
FACE
AMOUNT
Convertible Bond .3%
US 250,000 aAmer Group Ltd., 6.25%, conv., 6/15/03 (Cost $246,250) 232,500
---------------
Total Investment before Repurchase Agreement (Cost $67,479,760) 75,589,962
---------------
cReceivables from Repurchase Agreements 17.0%
US 14,955,000 SBC Capital Markets Inc., 5.35%, 5/01/97 (Maturity Value
$15,470,298.72) (Cost $15,468,000)
Collateral: U.S. Treasury Notes, 7.75%, 2/15/01 $15,468,000
---------------
Total Investments (Cost $82,947,760) 99.9% 91,057,962
Other Assets and Liabilities, Net 0.1% 127,505
---------------
Net Assets 100.0% $91,185,467
===============
At April 30, 1997, the net unrealized appreciation based
on the cost of investments for
income tax purposes of $82,947,760 was as follows:
Aggregate gross unrealized appreciation for all investments
in which there was an excess of
value over tax cost $12,735,307
Aggregate gross unrealized depreciation for all
investments in which there was an excess of
tax cost over value (4,625,105)
---------------
Net unrealized appreciation $ 8,110,202
===============
</TABLE>
CURRENCY LEGEND:
AR - Argentina
AT - Austria
AU - Australia
BE - Belgium
BR - Brazil
CA - Canada
CH - Switzerland
CN - China
DD - Germany
DK - Denmark
ES - Spain
FI - Finland
FR - France
GB - United Kingdom
GR - Greece
HK - Hong Kong
ID - Indonesia
IT - Italy
KR - South Korea
NL - Netherlands
NO - Norway
NZ - New Zealand
PE - Peru
PT - Portugal
SE - Sweden
SG - Singapore
TH - Thailand
TR - Turkey
US - United States
ZA - South Africa
*Securities traded in currency of country indicated and valued in U.S. dollars.
aNon-income producing. bPurchased in a private placement transaction; resale may
only be to qualified institutional buyers.
cFace amount for repurchase agreement is for the underlying collateral.
dFace amount is stated in foreign currency.
The accompanying notes are an integral part of these financial statements.
FRANKLIN TEMPLETON INTERNATIONAL TRUST
Financial Statements
Statements of Assets and Liabilities
April 30, 1997 (unaudited)
<TABLE>
<CAPTION>
Templeton Templeton
Pacific Foreign Smaller
Growth Fund Companies Fund
<S> <C> <C>
Assets:
Investments in securities:
At identified cost $45,186,034 $67,479,760
==========================
At value 48,639,538 75,589,962
Receivables from repurchase agreements, at value and cost 4,022,000 15,468,000
Cash 12,169 --
Receivables:
Dividends and interest 263,024 445,797
Capital shares sold 1,398,470 769,539
Investments securities sold 1,693,196 28,363
Fee reimbursement -- 30,448
--------------------------
Total assets 56,028,397 92,332,109
--------------------------
Liabilities:
Payables:
Investment securities purchased -- 469,803
Capital shares repurchased 144,795 495,557
Distribution fees 22,819 53,899
Management fees 42,467 57,866
Other payables to shareholders 27,784 26,031
U.S. bank overdraft -- 11,439
Accrued expenses and other liabilities 53,693 32,047
--------------------------
Total liabilities 291,558 1,146,642
--------------------------
Net assets, at value $55,736,839 $91,185,467
==========================
Net assets consist of:
Undistributed net investment income $-- $ 330,770
Distributions in excess of net investment income (66,300) --
Unrealized appreciation on investments
and translation of assets and liabilities
denominated in foreign currencies 3,453,504 8,110,203
Accumulated net realized gain (loss)
from investments and foreign currency transactions (1,374,501) 1,210,238
Class I capital shares 52,076,032 80,737,243
Class II capital shares 527,685 --
Advisor Class capital shares 1,120,419 797,013
--------------------------
Net assets, at value $55,736,839 $91,185,467
</TABLE>
<TABLE>
<CAPTION>
==========================
Templeton Templeton
Pacific Foreign Smaller
Growth Fund Companies Fund
<S> <C> <C>
Class 1
Net assets, at value $54,143,822 $90,386,436
==========================
Shares outstanding 3,791,296 6,293,288
==========================
Net asset value per share $ 14.28 $ 14.36
==========================
Maximum offering price per share
(100/95.5 of net asset value per share) $ 14.95 $ 15.04
==========================
Class 2
Net assets, at value $ 519,820
===============
Shares outstanding 36,521
===============
Net asset value per share $ 14.23
===============
Maximum offering price per share
(100/99.0 of net asset value per share) $ 14.37
===============
Advisor Class
Net assets, at value $ 1,073,197 $ 799,031
==========================
Shares outstanding 75,109 55,609
Net asset value per share ==========================
$ 14.29 $ 14.37
==========================
</TABLE>
The accompanying notes are an integral part of these financial statements.
FRANKLIN TEMPLETON INTERNATIONAL TRUST
Financial Statements (continued)
Statements of Operations
for the six months ended April 30, 1997 (unaudited)
<TABLE>
<CAPTION>
Templeton Templeton
Pacific Foreign Smaller
Growth FundCompanies Fund
<S> <C> <C>
Investment Income:
Dividends, net of foreign taxes withheld of
$45,592 and $133,488, respectively $ 655,398 $ 923,194
Interest 34,837 242,924
-------------------------
Total income 690,235 1,166,118
-------------------------
Expenses:
Management fees (Note 4) 290,024 391,889
Distribution fees (Note 4)
Class 1 49,800 97,527
Shareholder servicing costs (Note 4) 60,000 66,000
Registration fees . 36,740 9,575
Custodian fees 12,400 38,500
Reports to shareholders 24,600 12,000
Professional fees 11,100 10,500
Other 716 879
-------------------------
Total expenses 485,380 626,870
Less expenses waived (Note 4) -- (59,084)
-------------------------
Total expenses less expenses waived 485,380 567,786
-------------------------
Net investment income . 204,855 598,332
-------------------------
Realized and unrealized gain
(loss) from investments and foreign currency:
Net realized gain (loss) from:
Investments (1,286,650) 1,257,397
Foreign currency transactions (52,781) (11,689)
Net unrealized appreciation on:
Investments 869,905 4,098,837
-------------------------
Net realized and unrealized gain on
investments and foreign currency (469,526) 5,344,545
-------------------------
Net increase in net assets resulting from operations . $ (264,671) $ 5,942,877
=========================
</TABLE>
The accompanying notes are an integral part of these financial statements.
FRANKLIN TEMPLETON INTERNATIONAL TRUST
Financial Statements (continued)
Statements of Changes in Net Assets
for the six months ended April 30, 1997 (unaudited)
and the year ended October 31, 1996
<TABLE>
<CAPTION>
Templeton Templeton Foreign
Pacific Growth Fund Smaller Companies Fund
Six Months Year Six Months Year
Ended Ended Ended Ended
April 30, 1997 October 31, 1996 April 30, 1997October 31, 1996
<S> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income . $ 204,855 $ 663,108 $ 598,332 $ 1,490,418
Net realized gain (loss) from investments and
foreign currency transactions (1,339,431) (55,680) 1,245,708 4,922,724
Net unrealized appreciation (depreciation) on
investments and translation of assets and liabilities
denominated in foreign currencies 869,905 5,378,013 4,098,837 3,514,247
----------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations (264,671) 5,985,441 5,942,877 9,927,389
Distributions to shareholders:
From net investment income
Class I (239,231) (809,330) (1,167,772) (991,682)
In excess of Net Investment Income
Class I (66,300) -- -- --
From net realized capital gains
Class I -- (3,513,636) (3,465,593) (4,004,586)
Increase (decrease)
in net assets from capital share
transactions (Note 3) (3,432,802) 7,830,484 21,909,320 12,088,092
----------------------------------------------------------
Net increase (decrease)
in net assets (4,003,004) 9,492,959 23,218,832 17,019,213
Net assets:
Beginning of year. 59,739,843 50,246,884 67,966,635 50,947,422
----------------------------------------------------------
End of year $55,736,839 $59,739,843 $91,185,467 $67,966,635
==========================================================
Undistributed net investment
income included in net assets:
Beginning of year $ 34,376 $ 203,161 $ 900,210 $ 432,957
==========================================================
End of year $ (66,300) $ 34,376 $ 330,770 $ 900,210
==========================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
FRANKLIN TEMPLETON INTERNATIONAL TRUST
Notes to Financial Statements
1. SIGNIFICANT ACCOUNTING POLICIES
Franklin Templeton International Trust (the Trust) is an open-end management
investment company (mutual fund) registered under the Investment Company Act of
1940, as amended. The Trust currently has two separate diversified Funds (the
Funds) consisting of the Templeton Pacific Growth Fund (the Pacific Fund) and
the Templeton Foreign Smaller Companies Fund (the International Fund). Each of
the Funds issues a separate series of shares and maintains a totally separate
investment portfolio.
The Pacific Growth Fund seeks to provide long-term growth of capital by
investing in equity securities of which at least 65% trade on markets in the
Pacific Rim. The Foreign Smaller Companies Fund seeks to provide long-term
growth of capital by investing in an internationally diversified portfolio of
equity securities, of which at least 65% trade on markets in countries other
than the United States.
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. The
policies are in conformity with generally accepted accounting principles for
investment companies.
a. Securities Valuations:
Portfolio securities listed on a securities exchange or on the NASDAQ National
Market System for which market quotations are readily available are valued at
the last quoted sale price of the day or, if there is no such reported sale,
within the range of the most recent quoted bid and ask prices. Other securities
for which market quotations are readily available are valued at current market
values, obtained from pricing services, which are based on a variety of factors,
including recent trades, institutional size trading in similar types of
securities (considering yield, risk and maturity) and/or developments related to
specific securities. Portfolio securities which are traded both on the
over-the-counter market and on a securities exchange are valued according to the
broadest and most representative market as determined by the investment adviser.
Other securities for which market quotations are not available, if any, are
valued in accordance with procedures established by the Board of Trustees.
The value of a foreign security is determined as of the close of trading on the
foreign exchange on which it is traded or as of the close of trading on the New
York Stock Exchange, if that is earlier, and that value is then converted into
its U.S. dollar equivalent at the foreign exchange rate in effect at noon, New
York time, on the day the value of the foreign security is determined. If no
sale is reported at that time, the mean between the current bid and asked price
is used. Occasionally, events which affect the values of foreign securities and
foreign exchange rates may occur between the times at which they are determined
and the close of the exchange and will, therefore, not be reflected in the
computation of the Fund's net asset value, unless material. If events which
materially affect the value of these foreign securities occur during such
period, then these securities will be valued in accordance with procedures
established by the Board of Trustees.
b. Income Taxes:
The Trust intends to continue to qualify for the tax treatment applicable to
regulated investment companies under the Internal Revenue Code and to make the
requisite distributions to its shareholders which will be sufficient to relieve
it from federal income and excise taxes. Each Fund is treated as a separate
entity in the determination of compliance with the Internal Revenue Code.
1. SIGNIFICANT ACCOUNTING POLICIES (cont.)
c. Security Transactions:
Security transactions are accounted for on the date the securities are purchased
or sold (trade date). Realized gains and losses on security transactions are
determined on the basis of specific identification.
d. Investment Income, Expenses and Distributions:
Dividend income and distributions to shareholders are recorded on the
ex-dividend date. Interest income and estimated expenses are accrued daily. Bond
discount, if any, is amortized as required by the Internal Revenue Code.
Net investment income differs for financial statement and tax purposes primarily
due to differing treatments of foreign currency transactions.
e. Expense Allocation:
Common expenses incurred by the Trust are allocated among the Funds based on the
ratio of net assets of each Fund to the combined net assets. In all other
respects, expenses are charged to each Fund as incurred on a specific
identification basis.
f. Foreign Currency Translation:
The accounting records of the Trust are maintained in U.S. dollars. All assets
and liabilities denominated in foreign currencies are translated into U.S.
dollars at the rate of exchange of such currencies against U.S. dollars on the
date of the valuation. Purchases and sales of securities, income and expenses
are translated at the rate of exchange quoted on the respective date that such
transactions are recorded. Differences between income and expense amounts
recorded and collected or paid are recognized when reported by the custodian
bank.
The Trust does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from fluctuations arising
from changes in market prices of securities held. Such fluctuations are included
with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, sales of foreign currencies, currency gains
or losses realized between the trade date and settlement dates on securities
transactions, the difference between the amounts of dividends, interest, and
foreign withholding taxes recorded on the Trust's books, and the U.S. dollar
equivalent of the amounts actually received or paid. Net unrealized appreciation
(depreciation) on translation of assets and liabilities denominated in foreign
currencies, if material, arise from changes in the value of assets and
liabilities other than investments in securities at the end of the period,
resulting from changes in exchange rates.
g. Repurchase Agreements:
The Trust, through its custodians, receives delivery of the underlying
securities, whose market is required to be at least 102% of the resale price at
the time of purchase. The Trust's investment advisor, Franklin Advisers, Inc.,
is responsible for determining that the value of these underlying securities
remains at least equal to the resale price.
1. SIGNIFICANT ACCOUNTING POLICIES (cont.)
h. 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.
2. TRUST SHARES
Effective January 2, 1997, the Pacific Growth Fund offers three classes of
shares: Class I, Class II and Advisor Class shares, and the Foreign Smaller
Companies Fund offers two classes of shares: Class I and Advisor Class shares.
Prior to this date, only Class I shares were offered for each fund. Shares of
each class are identical except for their initial sales load, a contingent
deferred sales charge on Class II shares, distribution fees, and voting rights
on matters affecting a single class. At April 30, 1997, there were an unlimited
number of $.01 par value shares of beneficial interest authorized. Transactions
in each of the Fund's shares for the six months ended April 30, 1997 and the
year ended October 31, 1996 were as follows:
<TABLE>
<CAPTION>
Templeton Templeton Foreign
Pacific Growth Fund Smaller Companies Fund
Shares Amount Shares Amount
<S> <C> <C> <C> <C>
Class I
Six months ended April 30, 1997
Shares sold 2,558,798 $37,898,618 2,620,453 $37,297,355
Shares issued in reinvestment of distributions 17,378 261,706 296,505 4,021,052
Shares redeemed (2,905,070) (43,241,230) (1,416,601) (20,206,101)
--------------------------------------------------------
Net increase (decrease) (328,894) $ (5,080,906) 1,500,357 $21,112,306
========================================================
Year ended October 31, 1996
Shares sold 6,244,033 $91,529,496 2,851,402 $38,019,671
Shares issued in reinvestment of distributions 273,824 3,846,596 362,506 4,445,701
Shares redeemed (5,957,749) (87,545,608) (2,273,240) (30,377,280)
--------------------------------------------------------
Net increase 560,108 $ 7,830,484 940,668 $12,088,092
========================================================
Class II
Six months ended April 30, 1997
Shares sold 116,223 $ 1,689,926
Shares redeemed (79,702) (1,162,241)
-----------------------
Net increase 36,521 $ 527,685
=======================
2. TRUST SHARES (cont.)
Templeton Templeton Foreign
Pacific Growth Fund Smaller Companies Fund
Shares Amount Shares Amount
Advisor Class
For the period January 2, 1997 through April 30, 1997
Shares sold 75,879 $1,131,824 56,577 $810,831
Shares redeemed (770) (11,405) (968) (13,817)
----------------------------------------------------
Net increase 75,109 $1,120,419 55,609 $797,014
====================================================
</TABLE>
3. PURCHASES AND SALES OF SECURITIES
Aggregate purchases and sales of securities (excluding purchases and sales of
short-term securities) for the six months ended April 30, 1997 were as follows:
Templeton Templeton
Pacific Foreign Smaller
Growth Fund Companies Fund
Purchases $ 2,062,295 $16,350,029
Sales $13,604,448 $11,164,898
4. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Under the terms of a management agreement, Franklin Advisers, Inc. (Advisers),
provides investment advice, office space and facilities to each Fund and
receives fees computed monthly on the average daily net assets of each Fund at
an annualized rate of 1% of the first $100 million of net assets; 9/10 of 1% of
net assets in excess of $100 million up to and including $250 million; 8/10 of
1% of net assets in excess of $250 million up to and including $500 million; and
3/4 of 1% of net assets in excess of $500 million. Under a subadvisory
agreement, Templeton Investment Counsel, Inc. (TICI ), an indirect subsidiary of
Templeton Worldwide, Inc. (Worldwide), which is a direct, wholly-owned
subsidiary of Franklin Resources, Inc. (Resources) receives from the Advisers a
fee equal to an annual rate of 1/2 of 1% of the value of each Fund's net assets
up to and including $100 million; 2/5 of 1% of net assets in excess of $100
million up to and including $250 million; 3/10 of 1% of net assets in excess of
$250 million up to and including $500 million; and 1/4 of 1% of net assets in
excess of $500 million. Effective March 1, 1997, Advisers has voluntarily agreed
to reduce its respective fee to the extent necessary to limit total expenses to
an annual rate of 1.45% and 1.20% of average net assets of Class I and Advisor
Class shares, respectively. The amount of the reduction for the six months ended
April 30, 1997, is set forth in the Statement of Operations.
Pursuant to a shareholder service agreement with Franklin Templeton Investor
Services, Inc. (Investor Services), the Funds pay costs on a per shareholder
account basis. Such costs incurred for the six months ended April 30, 1997
aggregated $126,000.
4. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (cont.)
Under the terms of distribution plans pursuant to Rule 12b-1 of the Investment
Company Act of 1940 (the Plans), the Funds will reimburse Distributors, in an
amount up to 0.25% and 1.00% per annum of the Funds' average daily net assets of
Class I and Class II shares, respectively, for cost incurred in the promotion,
offering, and marketing of the Funds' shares. Fees incurred by the Pacific
Growth Fund and Foreign Smaller Companies Fund under the Plan aggregated $49,800
and $97,527, respectively, for the six months ended April 30, 1997.
In its capacity as underwriter for the shares of the Trust, Franklin Templeton
Distributors, Inc. (Distributors) receives commissions on sales of the Trust's
shares. Commissions are deducted from the gross proceeds received from the sale
of the shares of the Trust and as such are not expenses of the Funds.
Commissions received by Franklin Templeton Distributors, Inc. and the amounts
which were subsequently paid to other dealers for the six months ended April 30,
1997 were as follows:
Templeton Templeton
Pacific Foreign Smaller
Growth Fund Companies Fund
Total commissions received $215,319.67 $415,951
===========================
Paid to other dealers $186,627.33 $357,260
---------------------------
Certain officers and trustees of the Trust are also officers and/or directors of
Distributors, Advisers, Worldwide, TICI and Investor Services, all wholly-owned
subsidiaries of Resources.
5. DISTRIBUTIONS AND CAPITAL LOSS CARRYOVERS
At October 31, 1996, for tax purposes, the Funds had capital loss carryovers as
follows:
Templeton Templeton
Pacific Foreign Smaller
Growth Fund Companies Fund
Capital loss carryovers expiring in: 2004 $33,117 --
6. FINANCIAL HIGHLIGHTS
Select data for each share of beneficial interest outstanding throughout each
period, by Fund, are as follows:
<TABLE>
<CAPTION>
Per Share Operating Performance Ratio/Supplemental Data
Ratio
Distri- of Net
Net Total butions Invest-
Net Asset Realized & From From Distri- Net Net Ratio of ment
Value at Net Unrealized Invest- Net butions Asset Assets Expenses Income to
Year Begin- Invest- Gain ment Invest- From Total Value at End to Aver- Average Portfolio Average
Ended ning ment (Loss) on Opera- ment Capital Distri- at End Total of Year age Net Net Turnover Commission
Oct. 31 of Year Income Securities tions Income Gains butions of Year Return+(in 000's)Assets Assets Rate Rate
Templeton Pacific Growth Fund
Class I Shares:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1992 $10.07 $.14 $ .836 $ .976 $(.146) $-- $ (.146)$10.90 9.77% $ 5,724 .29%** 1.80% 62.96%
1993 10.90 .19 3.825 4.015 (.193) (.282) (.475) 14.44 38.46 22,619 0.50** 2.03 47.52
1994 14.44 .21 1.008 1.218 (.198) (.060) (.258) 15.40 8.46 58,241 1.22** 1.54 9.16
1995 15.40 .15 (1.013) (.863) (.156) (.271) (.427) 14.11 (5.54) 50,247 1.72 1.04 36.21
1996 14.11 .12 1.410 1.530 (.213) (.927)(1.140) 14.50 11.27 59,740 1.52 1.06 13.48 $.0092
1997++ 14.50 .05 (.195) (.145) (.075)+++ .000 (.075) 14.28 (1.03) 54,144 1.67* 0.70 3.64 $.0100
Class II Shares (from January 2, 1997):
1997++ 15.10 .02 (.890) (.870) .000 .000 .000 14.23 (5.74) 520 2.56* 1.03 3.64 $.0100
Advisor Shares (from January 2, 1997):
1997++ 15.10 .06 (.870) (.810) .000 .000 .000 14.29 (5.37) 1,073 1.56* 1.87 3.64 $.0100
Templeton Foreign Smaller Companies Fund
1992 10.07 .19 (.038) .152 (.202) -- (.202) 10.02 1.46 6,944 0.29** 2.36 48.78
1993 10.02 .42 2.253 2.673 (.413) -- (.413) 12.28 27.40 19,217 0.50** 4.22 52.99
1994 12.28 .23 1.540 1.770 (.220) -- (.220) 13.83 14.56 57,854 1.22** 1.99 21.80
1995 13.83 .25 (.077) .173 (.190) (.588) (.778) 13.23 1.75 50,947 1.63 1.86 9.12
1996 13.23 .35 1.880 2.230 (.254) (1.026)(1.280) 14.18 18.49 67,967 1.53 2.50 40.46 $.0026
1997++ 14.18 .10 1.030 1.130 (.240) (.710) (.950) 14.36 8.38 90,386 1.60* 1.52 16.51 $.0010
Advisor Shares (from January 2, 1997):
1997++ 14.00 .10 .270 .370 .000 .000 .000 14.37 2.26 799 1.46* 3.25 16.51 $.0010
</TABLE>
+Total return measures the changes in value of an investment over the periods
indicated. It does not include the maximum initial sales charge and assumes
reinvestment of dividends and capital gains, if any, at net asset value.
++For the six months ended April 30, 1997.
+++Includes distribution in excess of net investment income in the amount of
$.001.
*Annualized
**During the periods indicated below, Franklin Advisers, Inc., the investment
manager, agreed to waive in advance a portion of its management fees. Had such
action not been taken, ratios of expenses to average net assets would have been
as follows:
Ratio of expenses to
average net assets
Templeton Pacific Growth Fund
1992 2.50%
1993 2.31
1994 1.72
Templeton Foreign Smaller Companies Fund
1992 2.50%
1993 2.27
1994 1.76
Franklin Templeton International Trust Semi-Annual Report April 30, 1997
APPENDIX
DESCRIPTION OF GRAPHIC MATERIAL OMITTED FROM EDGAR FILING (PURSUANT TO ITEM
304 (a) OF REGULATION S-T)
GRAPHIC MATERIAL (1)
This chart shows in pie format the Geographic Distribution of the fund's
securities on April 30, 1997, based on total net assets.
Geographic Distribution on April 30, 1997
Hong Kong 29.2%
Japan 13.8%
Singapore 7.6%
Malaysia 6.3%
Australia 6.1%
China 5.4%
Other Countries 17.8%
Short-Term Obligations & Other Net Assets 13.8%
GRAPHIC MATERIAL (2)
This chart shows in pie format the Geographic Distribution of the fund's
securities on April 30, 1997, based on total net assets.
Geographic Distribution on April 30, 1997
Europe 54.8%
Asia 16.1%
Australia & New Zealand 4.6%
Latin America 4.4%
North America 2.0%
Mid-East & Africa 1.0%
Short-Term Obligations & Other Net Assets 17.1%
