<PAGE> PAGE 1
000 A000000 03/31/1999
000 C000000 0000893226
000 D000000 N
000 E000000 NF
000 F000000 Y
000 G000000 N
000 H000000 N
000 I000000 6.1
000 J000000 A
001 A000000 FRANKLIN STRATEGIC MORTGAGE PORTFOLIO
001 B000000 811-7288
001 C000000 6503122000
002 A000000 777 MARINERS ISLAND BOULEVARD
002 B000000 SAN MATEO
002 C000000 CA
002 D010000 94404
002 D020000 1585
003 000000 N
004 000000 N
005 000000 N
006 000000 N
007 A000000 Y
007 B000000 1
007 C010100 1
007 C020100 FRANKLIN STRATEGIC MORTGAGE PORTFOLIO
007 C030100 N
007 C010200 2
007 C010300 3
007 C010400 4
007 C010500 5
007 C010600 6
007 C010700 7
007 C010800 8
007 C010900 9
007 C011000 10
008 A00AA01 FRANKLIN ADVISERS, INC.
008 B00AA01 A
008 C00AA01 801-26292
008 D01AA01 SAN MATEO
008 D02AA01 CA
008 D03AA01 94404
008 D04AA01 1585
010 A00AA01 FRANKLIN TEMPLETON SERVICES, INC.
010 C01AA01 SAN MATEO
010 C02AA01 CA
010 C03AA01 94404
010 C04AA01 1585
011 A00AA01 FRANKLIN/TEMPLETON DISTRIBUTORS, INC.
011 B00AA01 8-5889
011 C01AA01 SAN MATEO
011 C02AA01 CA
<PAGE> PAGE 2
011 C03AA01 94404
011 C04AA01 1585
012 A00AA01 FRANKLIN/TEMPLETON INVESTOR SERVICES, INC.
012 B00AA01 84-1036
012 C01AA01 SAN MATEO
012 C02AA01 CA
012 C03AA01 94404
012 C04AA01 1585
013 A00AA01 PRICEWATERHOUSECOOPERS LLP
013 B01AA01 SAN FRANCISCO
013 B02AA01 CA
013 B03AA01 94105
013 B04AA01 2119
014 A00AA01 FRANKLIN/TEMPLETON DISTRIBUTORS, INC.
014 B00AA01 8-5889
015 A00AA01 THE BANK OF NEW YORK
015 B00AA01 C
015 C01AA01 NEW YORK
015 C02AA01 NY
015 C03AA01 10286
015 E01AA01 X
015 A00AA02 EUROCLEAR
015 B00AA02 S
015 C01AA02 BRUSSELS
015 D01AA02 BELGIUM
015 E04AA02 X
015 A00AA03 CEDEL BANK, S.A.
015 B00AA03 S
015 C01AA03 LUXEMBOURG CITY
015 D01AA03 LUXEMBOURG
015 E04AA03 X
015 A00AA04 BANKBOSTON
015 B00AA04 S
015 C01AA04 BUENOS AIRES
015 D01AA04 ARGENTINA
015 E04AA04 X
015 A00AA05 NATIONAL AUSTRALIA BANK
015 B00AA05 S
015 C01AA05 MELBOURNE
015 D01AA05 AUSTRALIA
015 E04AA05 X
015 A00AA06 BANK AUSTRIA AG
015 B00AA06 S
015 C01AA06 VIENNA
015 D01AA06 AUSTRIA
015 E04AA06 X
015 A00AA07 DELETE
015 A00AA08 BANQUE BRUXELLES LAMBERT
015 B00AA08 S
015 C01AA08 BRUSSELS
015 D01AA08 BELGIUM
<PAGE> PAGE 3
015 E04AA08 X
015 A00AA09 DELETE
015 A00AA10 ROYAL BANK OF CANADA
015 B00AA10 S
015 C01AA10 TORONTO
015 D01AA10 CANADA
015 E04AA10 X
015 A00AA11 DELETE
015 A00AA12 DELETE
015 A00AA13 DELETE
015 A00AA14 DELETE
015 A00AA15 DEN DANSKE BANK
015 B00AA15 S
015 C01AA15 COPENHAGEN
015 D01AA15 DENMARK
015 E04AA15 X
015 A00AA16 BANQUE ET CAISSE D'EPARGNE DE L'ETAT LUXEMBOU
015 B00AA16 S
015 C01AA16 LUXEMBOURG CITY
015 D01AA16 LUXEMBOURG
015 E04AA16 X
015 A00AA17 THE BANK OF NEW YORK
015 B00AA17 S
015 C01AA17 LONDON
015 D01AA17 UNITED KINGDOM
015 E04AA17 X
015 A00AA18 MERITA BANK PLC
015 B00AA18 S
015 C01AA18 HELSINKI
015 D01AA18 FINLAND
015 E04AA18 X
015 A00AA19 BANQUE PARIBAS
015 B00AA19 S
015 C01AA19 PARIS
015 D01AA19 FRANCE
015 E04AA19 X
015 A00AA20 DRESDNER BANK AG
015 B00AA20 S
015 C01AA20 FRANKFURT
015 D01AA20 GERMANY
015 E04AA20 X
015 A00AA21 DELETE
015 A00AA22 HONGKONG & SHANGHAI BANKING CORP. LTD.
015 B00AA22 S
015 C01AA22 HONG KONG
015 D01AA22 HONG KONG
015 E04AA22 X
015 A00AA23 DELETE
015 A00AA24 DELETE
015 A00AA25 HONGKONG & SHANGHAI BANKING CORP. LTD.
015 B00AA25 S
<PAGE> PAGE 4
015 C01AA25 JAKARTA
015 D01AA25 INDONESIA
015 E04AA25 X
015 A00AA26 ALLIED IRISH BANKS, PLC
015 B00AA26 S
015 C01AA26 DUBLIN
015 D01AA26 IRELAND
015 E04AA26 X
015 A00AA27 DELETE
015 A00AA28 DELETE
015 A00AA29 BANK OF TOKYO - MITSUBISHI LTD.
015 B00AA29 S
015 C01AA29 TOKYO
015 D01AA29 JAPAN
015 E04AA29 X
015 A00AA30 HSBC BANK MALAYSIA BERHAD
015 B00AA30 S
015 C01AA30 KUALA LUMPUR
015 D01AA30 MALAYSIA
015 E04AA30 X
015 A00AA31 BANCO NACIONAL DE MEXICO, S.A. (BANAMEX)
015 B00AA31 S
015 C01AA31 MEXICO CITY
015 D01AA31 MEXICO
015 E04AA31 X
015 A00AA32 MEES PIERSON N.V.
015 B00AA32 S
015 C01AA32 AMSTERDAM
015 D01AA32 NETHERLANDS
015 E04AA32 X
015 A00AA33 AUSTRALIA & NEW ZEALAND BANKING GROUP LTD.
015 B00AA33 S
015 C01AA33 WELLINGTON
015 D01AA33 NEW ZEALAND
015 E04AA33 X
015 A00AA34 DELETE
015 A00AA35 STANDARD CHARTERED BANK
015 B00AA35 S
015 C01AA35 KARACHI
015 D01AA35 PAKISTAN
015 E04AA35 X
015 A00AA36 DELETE
015 A00AA37 HONGKONG & SHANGHAI BANKING CORP.
015 B00AA37 S
015 C01AA37 MANILA
015 D01AA37 PHILIPPINES
015 E04AA37 X
015 A00AA38 DELETE
015 A00AA39 BANCO COMERCIAL PORTUGUES
015 B00AA39 S
015 C01AA39 LISBON
<PAGE> PAGE 5
015 D01AA39 PORTUGAL
015 E04AA39 X
015 A00AA40 UNITED OVERSEAS BANK LTD.
015 B00AA40 S
015 C01AA40 SINGAPORE
015 D01AA40 SINGAPORE
015 E04AA40 X
015 A00AA41 STANDARD BANK OF SOUTH AFRICA LTD.
015 B00AA41 S
015 C01AA41 JOHANNESBURG
015 D01AA41 SOUTH AFRICA
015 E04AA41 X
015 A00AA42 DELETE
015 A00AA43 BANCO BILBAO VIZCAYA
015 B00AA43 S
015 C01AA43 MADRID
015 D01AA43 SPAIN
015 E04AA43 X
015 A00AA44 STANDARD CHARTERED BANK
015 B00AA44 S
015 C01AA44 COLOMBO
015 D01AA44 SRI LANKA
015 E04AA44 X
015 A00AA45 SKANDINAVISKA ENSKILDA BANKEN
015 B00AA45 S
015 C01AA45 STOCKHOLM
015 D01AA45 SWEDEN
015 E04AA45 X
015 A00AA46 UNION BANK OF SWITZERLAND
015 B00AA46 S
015 C01AA46 ZURICH
015 D01AA46 SWITZERLAND
015 E04AA46 X
015 A00AA47 DELETE
015 A00AA48 STANDARD CHARTERED BANK
015 B00AA48 S
015 C01AA48 BANGKOK
015 D01AA48 THAILAND
015 E04AA48 X
015 A00AA49 OSMANLI BANKASI A.S. (OTTOMAN BANK)
015 B00AA49 S
015 C01AA49 ISTANBUL
015 D01AA49 TURKEY
015 E04AA49 X
015 A00AA50 FIRST CHICAGO
015 B00AA50 S
015 C01AA50 LONDON
015 D01AA50 UNITED KINGDOM
015 E04AA50 X
015 A00AA51 DELETE
015 A00AA52 DELETE
<PAGE> PAGE 6
015 A00AA53 DELETE
015 A00AA54 DELETE
015 A00AA55 DELETE
015 A00AA56 DELETE
015 A00AA57 DELETE
015 A00AA58 DELETE
015 A00AA59 DELETE
015 A00AA60 DELETE
015 A00AA61 DELETE
015 A00AA62 DELETE
015 A00AA63 DELETE
015 A00AA64 DELETE
015 A00AA65 DELETE
015 A00AA66 DELETE
015 A00AA67 STANBIC BANK ZAMBIA LTD.
015 B00AA67 S
015 C01AA67 LUSAKA
015 D01AA67 ZAMBIA
015 E04AA67 X
015 A00AA68 STANBIC BANK ZIMBABWE LTD.
015 B00AA68 S
015 C01AA68 HARARE
015 D01AA68 ZIMBABWE
015 E04AA68 X
015 A00AA69 DELETE
015 A00AA70 DELETE
015 A00AA71 DELETE
015 A00AA72 DELETE
015 A00AA73 DELETE
015 A00AA74 DELETE
018 00AA00 Y
019 A00AA00 Y
019 B00AA00 197
019 C00AA00 FRNKTEMGRP
020 C000001 0
020 C000002 0
020 C000003 0
020 C000004 0
020 C000005 0
020 C000006 0
020 C000007 0
020 C000008 0
020 C000009 0
020 C000010 0
021 000000 0
022 A000001 DONALDSON LUFKIN & JENRETTE SECURITIES CORP.
022 B000001 13-2741729
022 C000001 41471
022 D000001 0
022 A000002 WARBURG DILLON READ LLC
022 B000002 13-3873456
<PAGE> PAGE 7
022 C000002 40209
022 D000002 0
022 A000003 BARCLAYS CAPITAL INC.
022 B000003 13-3551367
022 C000003 40142
022 D000003 0
022 A000004 PARIBAS CORP.
022 B000004 13-3235334
022 C000004 39816
022 D000004 0
022 A000005 CIBC OPPENHEIMER CORP.
022 B000005 13-3639028
022 C000005 38752
022 D000005 0
022 A000006 NATIONSBANC MONTGOMERY SECURITIES LLC
022 B000006 94-1687665
022 C000006 38395
022 D000006 0
022 A000007 DRESDNER KLEINWORT BENSON, NORTH AMERICA LLC
022 B000007 04-2442748
022 C000007 35062
022 D000007 0
022 A000008 GREENWICH CAPITAL MARKETS INC.
022 B000008 13-3122275
022 C000008 30407
022 D000008 0
022 A000009 PAINE WEBBER INC.
022 B000009 13-2638166
022 C000009 28260
022 D000009 757
022 A000010 DEUTSCHE BANK SECURITIES INC.
022 B000010 13-6124068
022 C000010 25420
022 D000010 0
023 C000000 417392
023 D000000 1734
024 00AA00 N
025 D00AA01 0
025 D00AA02 0
025 D00AA03 0
025 D00AA04 0
025 D00AA05 0
025 D00AA06 0
025 D00AA07 0
025 D00AA08 0
025 D00AA09 0
025 D00AA10 0
025 D00AA11 0
025 D00AA12 0
025 D00AA13 0
025 D00AA14 0
<PAGE> PAGE 8
025 D00AA15 0
025 D00AA16 0
025 D00AA17 0
025 D00AA18 0
025 D00AA19 0
025 D00AA20 0
025 D00AA21 0
025 D00AA22 0
025 D00AA23 0
025 D00AA24 0
026 A000000 Y
026 B000000 Y
026 C000000 Y
026 D000000 Y
026 E000000 N
026 F000000 N
026 G010000 N
026 G020000 N
026 H000000 N
027 000000 Y
028 A01AA00 925
028 A02AA00 66
028 A03AA00 0
028 A04AA00 215
028 B01AA00 519
028 B02AA00 31
028 B03AA00 0
028 B04AA00 169
028 C01AA00 580
028 C02AA00 34
028 C03AA00 0
028 C04AA00 134
028 D01AA00 886
028 D02AA00 32
028 D03AA00 0
028 D04AA00 175
028 E01AA00 2326
028 E02AA00 37
028 E03AA00 0
028 E04AA00 223
028 F01AA00 2676
028 F02AA00 52
028 F03AA00 0
028 F04AA00 686
028 G01AA00 7912
028 G02AA00 252
028 G03AA00 0
028 G04AA00 1602
028 H00AA00 2043
029 00AA00 Y
030 A00AA00 81
<PAGE> PAGE 9
030 B00AA00 4.25
030 C00AA00 0.00
031 A00AA00 5
031 B00AA00 0
032 00AA00 76
033 00AA00 0
034 00AA00 N
035 00AA00 0
036 B00AA00 0
037 00AA00 N
038 00AA00 0
039 00AA00 N
040 00AA00 N
041 00AA00 N
042 A00AA00 0
042 B00AA00 0
042 C00AA00 0
042 D00AA00 0
042 E00AA00 0
042 F00AA00 0
042 G00AA00 0
042 H00AA00 0
043 00AA00 0
044 00AA00 0
045 00AA00 Y
046 00AA00 N
047 00AA00 Y
048 00AA00 0.000
048 A01AA00 250000
048 A02AA00 0.400
048 B01AA00 250000
048 B02AA00 0.380
048 C01AA00 0
048 C02AA00 0.000
048 D01AA00 0
048 D02AA00 0.000
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048 E02AA00 0.000
048 F01AA00 0
048 F02AA00 0.000
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048 G02AA00 0.000
048 H01AA00 0
048 H02AA00 0.000
048 I01AA00 0
048 I02AA00 0.000
048 J01AA00 0
048 J02AA00 0.000
048 K01AA00 500000
048 K02AA00 0.360
049 00AA00 N
<PAGE> PAGE 10
050 00AA00 N
051 00AA00 N
052 00AA00 N
053 A00AA00 Y
053 B00AA00 Y
053 C00AA00 N
054 A00AA00 Y
054 B00AA00 Y
054 C00AA00 Y
054 D00AA00 Y
054 E00AA00 Y
054 F00AA00 Y
054 G00AA00 Y
054 H00AA00 Y
054 I00AA00 N
054 J00AA00 Y
054 K00AA00 Y
054 L00AA00 Y
054 M00AA00 Y
054 N00AA00 Y
054 O00AA00 Y
055 A00AA00 N
055 B00AA00 N
056 00AA00 N
057 00AA00 N
058 A00AA00 N
059 00AA00 Y
060 A00AA00 Y
060 B00AA00 Y
061 00AA00 1000
062 A00AA00 Y
062 B00AA00 0.0
062 C00AA00 0.0
062 D00AA00 11.5
062 E00AA00 0.0
062 F00AA00 0.0
062 G00AA00 0.0
062 H00AA00 0.0
062 I00AA00 0.0
062 J00AA00 0.0
062 K00AA00 0.0
062 L00AA00 0.0
062 M00AA00 3.2
062 N00AA00 85.3
062 O00AA00 0.0
062 P00AA00 0.0
062 Q00AA00 0.0
062 R00AA00 0.0
063 A00AA00 0
063 B00AA00 22.6
064 A00AA00 N
<PAGE> PAGE 11
064 B00AA00 N
066 A00AA00 N
067 00AA00 N
068 A00AA00 N
068 B00AA00 N
069 00AA00 N
070 A01AA00 Y
070 A02AA00 Y
070 B01AA00 N
070 B02AA00 N
070 C01AA00 N
070 C02AA00 N
070 D01AA00 N
070 D02AA00 N
070 E01AA00 N
070 E02AA00 N
070 F01AA00 N
070 F02AA00 N
070 G01AA00 Y
070 G02AA00 N
070 H01AA00 N
070 H02AA00 N
070 I01AA00 N
070 I02AA00 N
070 J01AA00 Y
070 J02AA00 N
070 K01AA00 Y
070 K02AA00 N
070 L01AA00 N
070 L02AA00 N
070 M01AA00 N
070 M02AA00 N
070 N01AA00 Y
070 N02AA00 N
070 O01AA00 Y
070 O02AA00 N
070 P01AA00 Y
070 P02AA00 N
070 Q01AA00 N
070 Q02AA00 N
070 R01AA00 N
070 R02AA00 N
071 A00AA00 11266
071 B00AA00 3286
071 C00AA00 14373
071 D00AA00 23
072 A00AA00 6
072 B00AA00 523
072 C00AA00 0
072 D00AA00 0
072 E00AA00 0
<PAGE> PAGE 12
072 F00AA00 33
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072 L00AA00 2
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072 S00AA00 2
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072 U00AA00 0
072 V00AA00 0
072 W00AA00 0
072 X00AA00 58
072 Y00AA00 58
072 Z00AA00 523
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072BB00AA00 0
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072CC02AA00 254
072DD01AA00 520
072DD02AA00 0
072EE00AA00 0
073 A01AA00 0.3150
073 A02AA00 0.0000
073 B00AA00 0.0000
073 C00AA00 0.0000
074 A00AA00 0
074 B00AA00 2406
074 C00AA00 0
074 D00AA00 18481
074 E00AA00 0
074 F00AA00 0
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074 M00AA00 0
074 N00AA00 21455
074 O00AA00 499
074 P00AA00 0
074 Q00AA00 0
074 R01AA00 0
074 R02AA00 0
<PAGE> PAGE 13
074 R03AA00 0
074 R04AA00 73
074 S00AA00 0
074 T00AA00 20883
074 U01AA00 2089
074 U02AA00 0
074 V01AA00 10.00
074 V02AA00 0.00
074 W00AA00 0.0000
074 X00AA00 569
074 Y00AA00 1927
075 A00AA00 0
075 B00AA00 16667
076 00AA00 0.00
077 A000000 Y
077 Q010000 Y
078 000000 N
080 C00AA00 0
081 B00AA00 0
082 B00AA00 0
083 B00AA00 0
084 B00AA00 0
086 A010000 0
086 A020000 0
086 B010000 0
086 B020000 0
086 C010000 0
086 C020000 0
086 D010000 0
086 D020000 0
086 E010000 0
086 E020000 0
086 F010000 0
086 F020000 0
086 A01AA00 0
086 A02AA00 0
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086 B02AA00 0
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SIGNATURE LAURA FERGERSON
TITLE ASSISTANT TREASURER
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE FRANKLIN STRATEGIC MORTGAGE PORTFOLIO MARCH 31, 1999
SEMI-ANNUAL REPORT AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 571
<NAME> FRANKLIN STRATEGIC MORTGAGE PORTFOLIO
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-END> MAR-31-1999
<INVESTMENTS-AT-COST> 18,309,931
<INVESTMENTS-AT-VALUE> 18,480,500
<RECEIVABLES> 2,974,402
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 21,454,902
<PAYABLE-FOR-SECURITIES> 499,220
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 72,266
<TOTAL-LIABILITIES> 571,486
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 20,843,532
<SHARES-COMMON-STOCK> 2,088,748
<SHARES-COMMON-PRIOR> 1,435,175
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (130,685)
<ACCUM-APPREC-OR-DEPREC> 170,569
<NET-ASSETS> 20,883,416
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 522,826
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 522,826
<REALIZED-GAINS-CURRENT> 21,883
<APPREC-INCREASE-CURRENT> (253,820)
<NET-CHANGE-FROM-OPS> 290,889
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (519,811)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 788,051
<NUMBER-OF-SHARES-REDEEMED> (159,548)
<SHARES-REINVESTED> 25,070
<NET-CHANGE-IN-ASSETS> 6,332,599
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (155,583)
<GROSS-ADVISORY-FEES> (33,241)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (57,871)
<AVERAGE-NET-ASSETS> 16,666,613
<PER-SHARE-NAV-BEGIN> 10.140
<PER-SHARE-NII> 0.316
<PER-SHARE-GAIN-APPREC> (0.141)
<PER-SHARE-DIVIDEND> (0.315)
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 10.000
<EXPENSE-RATIO> 0.000<F1>
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0.000
<FN>
<F1>ANNUALIZED; RATIO OF EXPENSES EXCLUDING WAIVER AND PAYMENTS
BY AFFILIATE AMOUNTED TO 0.70%.
</FN>
</TABLE>
