NAME OF REGISTRANT:
Franklin Strategic Mortgage Portfolio
File No. 811-7288
EXHIBIT ITEM No. 77D: Policies with respect to security investments
At a meeting held on May 16, 2000, the Board of Trustees of the
Registrant approved the following resolutions:
RESOLVED, that the definition of "higher
income-producing mortgage securities" in which the
Franklin Strategic Mortgage Portfolio (the "Trust") may
invest up to 35% of its total assets, to be used in the
prospectus of the Trust, be amended to specifically
mention commercial mortgage-backed securities ("CMBS"),
home equity loan asset-backed securities ("HELs") and
manufactured housing asset-backed securities ("MH");
and
FURTHER RESOLVED, that the definition of "mortgage
securities issued or guaranteed by the U.S. government,
its agencies or instrumentalities" in which the Trust
may invest up to 65% of its total assets, to be used in
the prospectus of the Trust, be amended to specifically
mention that these mortgage securities may include both
fixed-rate and adjustable rate mortgage securities
("ARMS"); and
FURTHER RESOLVED, that the current prospectus of the
Trust be amended to reflect such clarifications, and
that the appropriate officers of the Trust take all
steps necessary to accomplish this.
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