oFTIT STKP1
SUPPLEMENT DATED JULY 1, 1998
TO THE PROSPECTUS OF
FRANKLIN TEMPLETON INTERNATIONAL TRUST
DATED MARCH 1, 1998
The prospectus is amended as follows:
I. The first sentence of the first paragraph on the front cover is replaced with
the following:
This prospectus describes Class I and Class II shares of the Templeton Foreign
Smaller Companies Fund (the "Smaller Companies Fund") and the Templeton Pacific
Growth Fund (the "Pacific Fund").
II. The section "Expense Summary" is replaced with the following:
EXPENSE SUMMARY
This table is designed to help you understand the costs of investing in the
Fund. It is based on the historical expenses of each class for the fiscal year
ended October 31, 1997, except that for Smaller Companies Fund - Class II it is
based on the historical expenses of Smaller Companies Fund - Class I shares for
the same period. Pacific Fund - Class II expenses are annualized.
The Fund's actual expenses may vary.
SMALLER SMALLER
COMPANIES COMPANIES PACIFIC PACIFIC
FUND FUND FUND FUND
CLASS I CLASS II CLASS I CLASS II
- ------------------------------------------------------------------------------
A. SHAREHOLDER TRANSACTION EXPENSES+
Maximum Sales Charge
(as a percentage
of Offering Price) 5.75% 1.99% 5.75% 1.99%
Paid at time
of purchase 5.75%++ 1.00%+++ 5.75%++ 1.00%+++
Paid at
redemption++++ None 0.99% None 0.99%
Exchange Fee
(per transaction) $5.00* $5.00* None None
B. ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fees 1.00%** 1.00%** 1.00% 1.00%
Rule 12b-1 Fees*** 0.25% 1.00% 0.17% 1.00%
Other Expenses 0.33% 0.33% 0.46% 0.48%
Total Fund
Operating Expenses 1.58%** 2.33%** 1.63% 2.48%
C. EXAMPLE
Assume the annual return for each class is 5%, operating expenses are as
described above, and you sell your shares after the number of years shown. These
are the projected expenses for each $1,000 that you invest in the Fund.
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------
Smaller Companies Fund
- Class I $73**** $105 $139 $235
Smaller Companies Fund
- Class II $43 $ 82 $133 $274
Pacific Fund
- Class I $73**** $106 $141 $240
Pacific Fund
- Class II $45 $ 86 $141 $289
For the same Class II investment, you would pay projected expenses of $33
(Smaller Companies Fund) or $35 (Pacific Fund) if you did not sell your shares
at the end of the first year. Your projected expenses for the remaining periods
would be the same.
THIS IS JUST AN EXAMPLE. IT DOES NOT REPRESENT PAST OR FUTURE EXPENSES OR
RETURNS. ACTUAL EXPENSES AND RETURNS MAY BE MORE OR LESS THAN THOSE SHOWN. The
Fund pays its operating expenses. The effects of these expenses are reflected in
the Net Asset Value or dividends of each class and are not directly charged to
your account.
+If your transaction is processed through your Securities Dealer, you may be
charged a fee by your Securities Dealer for this service.
++There is no front-end sales charge if you invest $1 million or more in Class I
shares.
+++Although Class II has a lower front-end sales charge than Class I, its Rule
12b-1 fees are higher. Over time you may pay more for Class II shares. Please
see "How Do I Buy Shares? - Choosing a Share Class."
++++A Contingent Deferred Sales Charge may apply to any Class II purchase if you
sell the shares within 18 months and to Class I purchases of $1 million or more
if you sell the shares within one year. A Contingent Deferred Sales Charge may
also apply to purchases by certain retirement plans that qualify to buy Class I
shares without a front-end sales charge. The charge is 1% of the value of the
shares sold or the Net Asset Value at the time of purchase, whichever is less.
The number in the table shows the charge as a percentage of Offering Price.
While the percentage is different depending on whether the charge is shown based
on the Net Asset Value or the Offering Price, the dollar amount you would pay is
the same. See "How Do I Sell Shares? Contingent Deferred Sales Charge" for
details.
*$5.00 fee is only for Market Timers. We process all other exchanges without a
fee.
**For the period shown, Advisers had agreed in advance to limit its management
fees. With this reduction, management fees were 0.90% and total operating
expenses were 1.48% for Class I and would have been 2.23% for Class II.
***These fees may not exceed 0.25% for Class I and 1.00% for Class II. The
combination of front-end sales charges and Rule 12b-1 fees could cause long-term
shareholders to pay more than the economic equivalent of the maximum front-end
sales charge permitted under the NASD's rules.
****Assumes a Contingent Deferred Sales Charge will not apply.
III. The section "Management Team" found under "Who Manages the Fund?" is
revised to add Juan J. Benito to the Smaller Companies Fund management team,
effective July 1997, and to add the following:
Juan J. Benito
Portfolio Manager of Investment Counsel
Mr. Benito is currently a portfolio manager and research analyst with Templeton
Investment Counsel, Inc. He holds an MBA from the Harvard Business School and a
BS/MS in engineering from the Polytechnical University of Valencia, Spain. Prior
to joining the Templeton organization in 1996, Mr. Benito was a management
consultant and case team leader with Monitor Company, a leading global strategy
consulting firm in Cambridge, Massachusetts (1994-1996). His previous experience
includes being an internal planning consultant with Duke Power (1993-1994), a
business development consultant with IBM Consulting Group (1992), and a regional
manager with Iberdrola, a large power utility company in Spain (1987-1991). Mr.
Benito's research responsibilities include coverage of European small cap
companies.
IV. The third, fourth and fifth paragraphs in the section "The Rule 12b-1 Plan"
found under "Who Manages the Fund?" are replaced with the following:
Under the Class II plan, the Fund may pay Distributors up to 0.75% per year
of Class II's average daily net assets to pay Distributors or others for
providing distribution and related services and bearing certain Class II
expenses. All distribution expenses over this amount will be borne by those
who have incurred them. During the first year after a purchase of Class II
shares, Securities Dealers may not be eligible to receive this portion of the
Rule 12b-1 fees associated with the purchase.
The Fund may also pay a servicing fee of up to 0.25% per year of Class II's
average daily net assets under the Class II plan. This fee may be used to pay
Securities Dealers or others for, among other things, helping to establish
and maintain customer accounts and records, helping with requests to buy and
sell shares, receiving and answering correspondence, monitoring dividend
payments from the Fund on behalf of customers, and similar servicing and
account maintenance activities.
The Rule 12b-1 fees charged to each class are based only on the fees
attributable to that particular class. For more information, please see "The
Fund's Underwriter" in the SAI.
V. The first paragraph under "How Is the Trust Organized?" is replaced with the
following paragraph:
Each Fund is a diversified series of Franklin Templeton International Trust
(the "Trust"), an open-end management investment company, commonly called a
mutual fund. It was organized as a Delaware business trust on March 22, 1991,
and is registered with the SEC. As of January 1, 1997, the Smaller Companies
Fund began offering a new class of shares designated Templeton Foreign
Smaller Companies Fund - Advisor Class. All shares outstanding before the
offering of Advisor Class shares have been designated Templeton Foreign
Smaller Companies Fund - Class I. As of July 1, 1998, the Smaller Companies
Fund began offering a new class of shares designated Templeton Foreign
Smaller Companies Fund - Class II. As of January 1, 1997, the Pacific Fund
began offering two new classes of shares designated Templeton Pacific Fund -
Class II and Templeton Pacific Growth Fund - Advisor Class. All shares
outstanding before the offering of Class II and Advisor Class shares have
been designated Templeton Pacific Growth Fund - Class I.
VI.The last paragraph under "How Is the Trust Organized?" is replaced with the
following paragraph:
As of June 2, 1998, Franklin Templeton Trust Company as trustee for
ValuSelect - Resources Profit Sharing Plan owned of record and beneficially
more than 25% of the outstanding shares of Pacific Fund's Advisor Class.
VII. The last sentence in the section "TeleFACTS(R)" under "Services to Help You
Manage Your Account" is replaced with the following:
You will need the code number for each class to use TeleFACTS(R). The code
number for the Smaller Companies Fund is 191 for Class I and 291 for Class
II. The code number for the Pacific Fund is 190 for Class I and 290 for Class
II.
VIII. The following terms and definitions are revised in the section "Useful
Terms and Definitions":
CLASS I, CLASS II AND ADVISOR CLASS - The Fund offers three classes of
shares, designated "Class I," "Class II," and "Advisor Class." The three
classes have proportionate interests in the Fund's portfolio. They differ,
however, primarily in their sales charge and expense structures.
CONTINGENCY PERIOD - For Class I shares, the 12 month period during which a
Contingent Deferred Sales Charge may apply. For Class II shares, the
contingency period is 18 months. The holding period for Class I begins on the
first day of the month in which you buy shares. Regardless of when during the
month you buy Class I shares, they will age one month on the last day of that
month and each following month. The holding period for Class II begins on the
day you buy your shares. For example, if you buy Class II shares on the 18th
of the month, they will age one month on the 18th day of the next month and
each following month.
