<PAGE> 1
TEMPLETON GREATER
EUROPEAN FUND
YOUR FUND'S OBJECTIVE:
The Templeton Greater European Fund seeks to achieve long-term capital
appreciation by investing primarily in equity securities of companies in Greater
Europe (Western, Central and Eastern Europe and Russia).
November 15, 1996
Dear Shareholder:
We are pleased to bring you this semi-annual report, which covers the six months
ended September 30, 1996. During this time, moderate growth and low interest
rates characterized most European economies, which helped to strengthen the
region's stock markets. Within this environment, the Fund's Class I shares
delivered a six-month total return of 6.66%, as discussed in the Performance
Summary on page 5.
In attempting to fulfill European Monetary Union (EMU) requirements, many
countries continued their efforts to reduce their budget deficits to no more
than 3% of gross domestic product by 1999. Spain, Italy, and Sweden have made
solid progress since 1994. In September, Spain and Italy announced government
spending reductions that should enable the two countries to meet the EMU
criteria by 1999. By the end of the year,
1
<PAGE> 2
TEMPLETON GREATER EUROPEAN FUND
Geographic Distribution on 9/30/96
Based on Total Net Assets
[Graphic]
<TABLE>
<S> <C>
United Kingdom 12.4%
France 10.1%
Sweden 8.7%
Germany 8.0%
Hungary 7.5%
Spain 6.1%
Finland 5.8%
Poland 4.7%
Other Countries 17.7%
Short-Term Obligations &
Other Net Assets 19.0%
</TABLE>
Italy's budget deficit could be less than 6%, and Sweden's around 4%, compared
to around 10% in 1994 for both countries.
Investor confidence appeared to increase in Eastern Europe, as many countries in
this area continued to privatize state-owned companies. However, most of these
nations' currencies were significantly weaker than those of their Western
counterparts, and inflation remained relatively high. In our view, Eastern bloc
countries can expect full integration into Europe's economy only after these
conditions improve.
Purchasing stocks we considered undervalued, we reduced our cash position from
30.8% of total net assets on March 31, 1996, to 19.0% on September 30, 1996. We
initiated positions in three telecommunications companies, which, in our
opinion, have strong earnings potential. An improving regulatory environment in
the United Kingdom prompted us to purchase shares of British Telecommunications
PLC, which could emerge as one of the major players in global
telecommunications. We also added Telecom Italia Spa, a company offering one of
Europe's least expensive telephone services, and Nokia AB, the world's
second-largest supplier of cellular telephones.
TEMPLETON GREATER EUROPEAN FUND
Top 10 Industries on 9/30/96
Based on Total Net Assets
<TABLE>
<CAPTION>
% of Total
Industry Net Assets
<S> <C>
Banking 12.7%
Utilities-Electric & Gas 8.4%
Telecommunications 5.9%
Health & Personal Care 5.6%
Energy Sources 5.5%
Metals & Mining 5.1%
Automobiles 5.0%
Building Materials & Components 4.0%
Insurance 4.0%
Business & Public Services 3.2%
</TABLE>
2
<PAGE> 3
Finding valuations that we viewed attractive in the banking sector, we
established a position in Stadshypotek AB, a Swedish bank which, on September
30, 1996, controlled one-third of the country's mortgage market. Believing that
Poland's economic restructuring would benefit its financial sector, we purchased
shares of Bank Slaski SA W Katowicach. As a result, our exposure to the banking
industry increased from 7.7% of total net assets on March 31, 1996, to 12.7% at
the end of the reporting period.
During the reporting period, we realized profits in several holdings including
Peugeot SA, the French automobile manufacturer. In our opinion, increased
competition from U.S. and Japanese automobile manufacturers could hinder this
company in the future. We also sold our shares of Amer Group Ltd. for a profit
after its share price moved higher.
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,
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 GREATER EUROPEAN FUND
Top Ten Holdings on 9/30/96
Based on Total Net Assets
<TABLE>
<CAPTION>
Company, % of Total
Industry, Country Net Assets
<S> <C>
Pliva DD, GDR, 144A
Health & Personal Care, Croatia 3.0%
Bank Slaski SA W Katowicach
Banking, Poland 2.9%
Mosenergo, ADR, 144A
Utilities - Electrical & Gas, Russia 2.7%
Gideon Richter Ltd., ADR, 144A
Health & Personal Care, Hungary 2.6%
Anglian Group PLC
Building Materials & Components,
United Kingdom 2.4%
Nokia AB, A
Multi-Industry, Finland 2.2%
Tiszai Vegyi Kombinat RT, GDR, 144A
Chemicals, Hungary 2.1%
Bank of Ireland
Banking, Irish Republic 2.1%
Skandia Foersaekrings AB, free
Insurance, Sweden 2.1%
MOL Magyar Olay-ES Gazipari RT, GDS 144A
Energy Sources, Hungary 2.0%
</TABLE>
For a complete list of portfolio holdings, please see page 9 of this report.
3
<PAGE> 4
Looking forward, we will continue to implement our rigorous investment
techniques as we search for bargain-priced stocks across all countries and
industries in Greater Europe. In our opinion, your Fund should benefit over the
long term from greater European economic unity and the spread of capitalism into
Eastern Europe.
Of course, investing in foreign securities involves special risks, such as
market and currency volatility and adverse economic, social and political
developments in the countries where investments are made. Developing markets
involve heightened risks related to the same factors, in addition to risks
associated with the relatively small size and lesser liquidity of these markets.
For example, Russia's system of share registration and custody creates certain
risks of loss not normally associated with other markets. These risks and other
considerations are discussed in the Fund's prospectus.
We thank you for your participation in the Templeton Greater European Fund and
look forward to serving your investment needs in the months and years to come.
Sincerely,
/s/ Mark Holowesko
- ------------------------
Mark Holowesko, CFA
President
Templeton Global Investment Trust
4
<PAGE> 5
PERFORMANCE SUMMARY
CLASS I
The Templeton Greater European Fund Class I shares provided a total return of
6.66% for the six-month period ended September 30, 1996. Total return represents
the change in value of an investment, assuming reinvestment of dividend and
capital gains distributions, and does not include the initial sales charge.
The price of the Fund's shares, as measured by net asset value, increased 65
cents ($0.65), from $10.39 on March 31, 1996, to $11.04 on September 30, 1996.
During the reporting period, shareholders received distributions of 4 cents
($0.04) per share in dividend income.
We believe it is important to maintain a long-term investment perspective when
managing the Fund, and we encourage our shareholders to view their investments
in a similar manner. Past performance is not predictive of future results, and
distributions will vary depending on income earned by the Fund, as well as any
profits realized from the sale of securities in the portfolio.
TEMPLETON GREATER EUROPEAN FUND
CLASS I
Periods Ended September 30, 1996
<TABLE>
<CAPTION>
Since
Inception
One-Year (5/8/95)
<S> <C> <C>
Cumulative Total Return(1) 12.16% 10.82%
Average Annual Total Return(2) 5.74% 3.15%
Value of $10,000 Investment(3) $10,574 $10,445
</TABLE>
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 maximum 5.75% 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 maximum 5.75% initial sales
charge.
All calculations reflect the deduction of a proportional share of Fund expenses
on an annual basis, and assume reinvestment of all dividends and capital gains
when paid. The Fund's Investment Manager and Business Manager have agreed in
advance to reduce their respective fees, and in the case of the Business
Manager, to make certain payments to reduce expenses, which increases total
return to shareholders. If the Managers had not taken this action, the Fund's
total returns would have been lower. After December 31, 1996, the fee reduction
may be discontinued at any time.
Investment return and principal value will fluctuate with market conditions,
currencies, and the economic, social and political climates of the countries
where investments are made. Developing markets involve heightened risks related
to the same factors, in addition to those associated with the relatively small
size and lesser liquidity of those markets. Therefore, your shares, when
redeemed, may be worth more or less than their initial cost. Past performance is
not predictive of future results.
5
<PAGE> 6
PERFORMANCE SUMMARY
CLASS II
The Templeton Greater European Fund Class II shares provided a total return of
6.16% for the six-month period ended September 30, 1996. Total return represents
the change in value of an investment, assuming reinvestment of dividend and
capital gain distributions, and does not include sales charges.
The price of the Fund's shares, as measured by net asset value, increased 63
cents ($0.63), from $10.32 on March 31, 1996, to $10.95 on September 30, 1996.
During the reporting period, shareholders received distributions of 0.51 cents
($0.0051) per share in dividend income.
We believe it is important to maintain a long-term investment perspective when
managing the Fund, and we encourage our shareholders to view their investments
in a similar manner. Past performance is not predictive of future results, and
distributions will vary depending on income earned by the Fund, as well as any
profits realized from the sale of securities in the portfolio.
TEMPLETON GREATER EUROPEAN FUND
CLASS II
Periods Ended September 30, 1996
<TABLE>
<CAPTION>
Since
Inception
One-Year (5/8/95)
<S> <C> <C>
Cumulative Total Return(1) 11.11% 9.55%
Average Annual Total Return(2) 9.00% 5.28%
Value of $10,000 Investment(3) $10,900 $10,748
</TABLE>
1. Cumulative total return represents the change in value of an investment over
the indicated periods and does not include sales charges.
2. Average annual total return represents the average annual change in value of
an investment over the indicated periods. It includes the 1.0% initial sales
charge and the 1.0% contingent deferred sales charge, applicable to shares
redeemed within the first 18 months of investment.
3. These figures represent the value of a hypothetical $10,000 investment in the
Fund over the indicated periods and include all sales charges.
All calculations reflect the deduction of a proportional share of Fund expenses
on an annual basis, and assume reinvestment of all dividends and capital gains
when paid. The Fund's Investment Manager and Business Manager have agreed in
advance to reduce their respective fees and, in the case of the Business
Manager, to make certain payments to reduce expenses, which increases total
return to shareholders. If the Managers had not taken this action, the Fund's
total returns would have been lower. After December 31, 1996, the fee reduction
may be discontinued at any time.
Investment return and principal value will fluctuate with market conditions,
currencies, and the economic, social and political climates of the countries
where investments are made. Developing markets involve heightened risks related
to the same factors, in addition to those associated with the relatively small
size and lesser liquidity of those markets. Therefore, your shares, when
redeemed, may be worth more or less than their initial cost. Past performance is
not predictive of future results.
6
<PAGE> 7
TEMPLETON GREATER EUROPEAN FUND
Financial Highlights
- --------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE -- CLASS I
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
SIX MONTHS MAY 8, 1995
ENDED (COMMENCEMENT OF
SEPTEMBER 30, 1996 OPERATIONS) TO
(UNAUDITED) MARCH 31, 1996
------------------ ----------------
<S> <C> <C>
Net asset value, beginning of period $ 10.39 $10.00
------- ------
Income from investment operations:
Net investment income .10 .08
Net realized and unrealized gain .59 .31
------- ------
Total from investment operations .69 .39
Distributions from net investment income (.04) --
------- ------
Change in net asset value .65 .39
------- ------
Net asset value, end of period $ 11.04 $10.39
======= ======
TOTAL RETURN* 6.66% 3.90%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000) $ 5,812 $4,308
Ratio of expenses to average net assets 3.09%** 3.56%**
Ratio of expenses, net of reimbursement, to average net assets 1.85%** 1.85%**
Ratio of net investment income to average net assets 2.41%** 1.39%**
Portfolio turnover rate 15.36% 9.86%
Average commission rate paid (per share) $ .0445 $.0205
</TABLE>
* TOTAL RETURN DOES NOT REFLECT SALES COMMISSIONS. NOT ANNUALIZED FOR
PERIODS OF LESS THAN ONE YEAR.
** ANNUALIZED.
7
<PAGE> 8
TEMPLETON GREATER EUROPEAN FUND
Financial Highlights (cont.)
- --------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE -- CLASS II
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
SIX MONTHS MAY 8, 1995
ENDED (COMMENCEMENT OF
SEPTEMBER 30, 1996 OPERATIONS) TO
(UNAUDITED) MARCH 31, 1996
------------------ ----------------
<S> <C> <C>
Net asset value, beginning of period $10.32 $10.00
------- ------
Income from investment operations:
Net investment income .15 .07
Net realized and unrealized gain .49 .25
------- ------
Total from investment operations .64 .32
Distributions from net investment income (.01) --
------- ------
Change in net asset value .63 .32
------- ------
Net asset value, end of period $10.95 $10.32
======= ======
TOTAL RETURN* 6.16% 3.20%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000) $1,366 $1,431
Ratio of expenses to average net assets 3.74%** 4.21%**
Ratio of expenses, net of reimbursement, to average net assets 2.50%** 2.50%**
Ratio of net investment income to average net assets 2.28%** 1.06%**
Portfolio turnover rate 15.36% 9.86%
Average commission rate paid (per share) $.0445 $.0205
</TABLE>
* TOTAL RETURN DOES NOT REFLECT SALES COMMISSIONS OR THE CONTINGENT DEFERRED
SALES CHARGE. NOT ANNUALIZED FOR PERIODS OF LESS THAN ONE YEAR.
** ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE> 9
TEMPLETON GREATER EUROPEAN FUND
Investment Portfolio, September 30, 1996 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
COMMON STOCKS: 78.7%
- ---------------------------------------------------------------------------------------------------------------------
AUTOMOBILES: 5.0%
* Debica SA, A Pol. 5,800 $ 123,843
Volkswagen AG Ger. 322 119,814
Volvo AB, B Swe. 5,342 114,863
----------
358,520
- ---------------------------------------------------------------------------------------------------------------------
BANKING: 12.7%
Bank of Ireland Irl. 18,900 148,962
Bank Slaski SA W Katowicach Pol. 2,160 211,388
Deutsche Bank AG Ger. 2,089 98,189
* Merita Ltd., A Fin. 59,800 129,903
National Westminster Bank PLC U.K. 9,600 102,037
Stadshypotek AB, A Swe. 4,400 111,870
Unidanmark AS, A Den. 2,225 106,338
----------
908,687
- ---------------------------------------------------------------------------------------------------------------------
BUILDING MATERIALS & COMPONENTS: 4.0%
Anglian Group PLC U.K. 53,400 175,122
Cristaleria Espanola SA Sp. 1,830 113,271
----------
288,393
- ---------------------------------------------------------------------------------------------------------------------
BUSINESS & PUBLIC SERVICES: 3.2%
* Adecco SA Swtz. 366 98,457
Lex Service PLC U.K. 22,600 129,304
----------
227,761
- ---------------------------------------------------------------------------------------------------------------------
CHEMICALS: 2.1%
* Tiszai Vegyi Kombinat RT, GDR, 144A Hun. 16,840 149,876
- ---------------------------------------------------------------------------------------------------------------------
CONSTRUCTION & HOUSING: 2.1%
Dragados y Construcciones SA Sp. 7,800 100,506
European Techniki Gr. 14,200 53,138
----------
153,644
- ---------------------------------------------------------------------------------------------------------------------
ELECTRICAL & ELECTRONICS: 2.9%
ABB AB, B Swe. 1,190 125,691
Alcatel Alsthom SA Fr. 960 80,911
----------
206,602
- ---------------------------------------------------------------------------------------------------------------------
ELECTRONIC COMPONENTS & INSTRUMENTS: 1.5%
BICC U.K. 23,710 109,488
* BICC, rights U.K. 4,310 1,282
----------
110,770
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
9
<PAGE> 10
TEMPLETON GREATER EUROPEAN FUND
Investment Portfolio, September 30, 1996 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
COMMON STOCKS (CONT.)
- ---------------------------------------------------------------------------------------------------------------------
ENERGY SOURCES: 5.5%
MOL Magyar Olay-Es Gazipari RT, GDS 144A Hun. 14,547 $ 140,379
Societe Elf Aquitane SA Fr. 1,520 118,814
Total SA, B Fr. 1,680 132,166
----------
391,359
- ---------------------------------------------------------------------------------------------------------------------
FINANCIAL SERVICES: 0.5%
Banca Fideuram Spa Itl. 14,000 33,197
- ---------------------------------------------------------------------------------------------------------------------
FOOD & HOUSEHOLD PRODUCTS: 0.8%
Pick Szeged RT Hun. 1,300 60,005
- ---------------------------------------------------------------------------------------------------------------------
FOREST PRODUCTS & PAPER: 3.1%
Assidomaen AB Swe. 5,200 125,933
* Enso OY, R Fin. 12,200 95,546
----------
221,479
- ---------------------------------------------------------------------------------------------------------------------
HEALTH & PERSONAL CARE: 5.6%
Gedeon Richter Ltd., GDR 144A Hun. 3,550 184,600
* Pliva DD, GDR, 144A Hrv. 4,300 213,925
----------
398,525
- ---------------------------------------------------------------------------------------------------------------------
INSURANCE: 4.0%
Muenchener Rueckversicherungs-Gesellschaft Ger. 41 72,519
Skandia Foersaekrings AB, free Swe. 5,350 148,132
* Ste Centrale du Groupe des Asurances Nationales Fr. 2,990 67,124
----------
287,775
- ---------------------------------------------------------------------------------------------------------------------
MERCHANDISING: 2.0%
Macintosh NV Neth. 240 5,664
W.H. Smith Group U.K. 19,000 140,084
----------
145,748
- ---------------------------------------------------------------------------------------------------------------------
METALS & MINING: 5.1%
Boehler Uddeholm AG Aut. 488 38,985
Eramet SA Fr. 1,580 94,210
Pechiney SA, A Fr. 2,723 115,673
Vallourec Fr. 2,500 117,037
----------
365,905
- ---------------------------------------------------------------------------------------------------------------------
MULTI-INDUSTRY: 2.6%
Amer Group Ltd., A Fin. 1,507 35,275
Nokia AB, A Fin. 3,460 154,789
----------
190,064
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
10
<PAGE> 11
TEMPLETON GREATER EUROPEAN FUND
Investment Portfolio, September 30, 1996 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
COMMON STOCKS (CONT.)
- ---------------------------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS: 5.9%
British Telecommunications PLC U.K. 17,430 $ 97,268
* SPT Telecom AS Csk. 1,010 124,620
Telecom Italia Spa, di Risp Itl. 57,000 104,926
Tele Danmark AS, B Den. 2,050 97,274
----------
424,088
- ---------------------------------------------------------------------------------------------------------------------
TEXTILES & APPAREL: 1.0%
Dawson International PLC U.K. 72,800 72,933
- ---------------------------------------------------------------------------------------------------------------------
UTILITIES-ELECTRICAL & GAS: 8.4%
Empresa Nacional Hidroelectrica del Ribagorzana SA,
B Sp. 5,500 97,205
Iberdrola SA Sp. 13,200 127,951
* Mosenergo, ADR, 144A Sun. 7,100 190,813
Thames Water Group PLC U.K. 7,600 64,064
VEBA AG Ger. 2,394 125,338
----------
605,371
- ---------------------------------------------------------------------------------------------------------------------
WHOLESALE & INTERNATIONAL TRADE: 0.7%
Computer 2000 AG Ger. 310 52,902
----------
TOTAL COMMON STOCKS (cost $5,242,631) 5,653,604
- ---------------------------------------------------------------------------------------------------------------------
PREFERRED STOCKS: 2.3%
- ---------------------------------------------------------------------------------------------------------------------
Baumax AG, pfd. Aut. 1,860 59,749
Krones AG Herman Kronseder Maschinen Fabrik, pfd. Ger. 274 104,107
----------
TOTAL PREFERRED STOCKS (cost $196,448) 163,856
- ---------------------------------------------------------------------------------------------------------------------
<CAPTION>
PRINCIPAL IN
LOCAL CURRENCY**
- ---------------------------------------------------------------------------------------------------------------------
SHORT TERM OBLIGATIONS: 15.9% (cost $1,139,226)
- ---------------------------------------------------------------------------------------------------------------------
U.S. Treasury Bills, 4.90% to 5.19% with
maturities to 12/12/96 U.S. 1,147,000 1,139,513
- ---------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS: 96.9% (cost $6,578,305) 6,956,973
OTHER ASSETS, LESS LIABILITIES: 3.1% 221,264
----------
TOTAL NET ASSETS: 100.0% $7,178,237
----------
----------
</TABLE>
* NON-INCOME PRODUCING.
** CURRENCY OF COUNTRY INDICATED.
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE> 12
TEMPLETON GREATER EUROPEAN FUND
Financial Statements
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1996 (unaudited)
<TABLE>
<S> <C>
Assets:
Investments in securities, at value
(identified cost $6,578,305) $6,956,973
Cash 309
Receivables:
Fund shares sold 189,517
Dividends and interest 15,940
Unamortized organization costs 47,685
----------
Total assets 7,210,424
----------
Liabilities:
Payables for investment securities
purchased 5,964
Accrued expenses 26,223
----------
Total liabilities 32,187
----------
Net assets, at value $7,178,237
==========
Net assets consist of:
Undistributed net investment income $ 101,967
Net unrealized appreciation 378,668
Accumulated net realized gain 61,711
Net capital paid in on shares of
beneficial interest 6,635,891
----------
Net assets, at value $7,178,237
==========
Class I
Net asset value per share
($5,812,126 / 526,568 shares
outstanding) $ 11.04
==========
Maximum offering price
($11.04 / 94.25%) $ 11.71
==========
Class II
Net asset value per share
($1,366,111 / 124,742 shares
outstanding) $ 10.95
==========
Maximum offering price
($10.95 / 99.00%) $ 11.06
==========
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended
September 30, 1996 (unaudited)
<TABLE>
<S> <C> <C>
Investment income:
(net of $12,973 foreign
taxes withheld)
Dividends $110,537
Interest 31,905
--------
Total income $142,442
Expenses:
Management fees (Note 3) 24,310
Administrative fees (Note 3) 4,865
Distribution fees (Note 3)
Class I 8,591
Class II 7,852
Transfer agent fees (Note 3) 6,600
Custodian fees 2,600
Reports to shareholders 3,500
Audit fees 6,500
Legal fees (Note 3) 1,500
Registration and filing fees 30,000
Trustees' fees and expenses 1,200
Amortization of organization costs 6,639
Other 1,211
--------
Total expenses 105,368
Less expenses reimbursed
(Note 3) (40,201)
--------
Total expenses less
reimbursement 65,167
--------
Net investment income 77,275
Realized and unrealized gain (loss):
Net realized gain (loss) on:
Investments 171,658
Foreign currency
transactions (3,866)
--------
167,792
Net unrealized appreciation on
investments 150,794
--------
Net realized and unrealized
gain 318,586
--------
Net increase in net assets resulting
from operations $395,861
--------
--------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE> 13
TEMPLETON GREATER EUROPEAN FUND
Financial Statements (cont.)
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS MAY 8, 1995
ENDED (COMMENCEMENT OF
SEPTEMBER 30, 1996 OPERATIONS) TO
(UNAUDITED) MARCH 31, 1996
------------------ ----------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income $ 77,275 $ 42,720
Net realized gain (loss) on investment and foreign currency
transactions 167,792 (106,081)
Net unrealized appreciation 150,794 227,874
---------- ----------
Net increase in net assets resulting from operations 395,861 164,513
Distributions to shareholders:
From net investment income
Class I (17,165) --
Class II (863) --
Fund share transactions (Note 2)
Class I 1,203,101 4,185,581
Class II (140,972) 1,388,181
---------- ----------
Net increase in net assets 1,439,962 5,738,275
Net assets:
Beginning of period 5,738,275 --
---------- ----------
End of period $7,178,237 $5,738,275
========== ==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
13
<PAGE> 14
TEMPLETON GREATER EUROPEAN FUND
Notes to Financial Statements (unaudited)
- --------------------------------------------------------------------------------
1. SUMMARY OF ACCOUNTING POLICIES
Templeton Greater European Fund (the Fund) is a separate diversified series of
Templeton Global Investment Trust (the Trust), a Delaware business trust, which
is an open-end management investment company registered under the Investment
Company Act of 1940. The Fund seeks to achieve long-term capital appreciation by
investing primarily in equity securities of companies in Greater Europe
(Western, Central and Eastern Europe and Russia). The following summarizes the
Fund's significant accounting policies.
A. SECURITIES VALUATIONS:
Securities listed or traded on a recognized national or foreign exchange or
NASDAQ are valued at the last reported sales prices on the principal exchange on
which the securities are traded. Over-the-counter securities and listed
securities for which no sale is reported are valued at the mean between the last
current bid and asked prices. Securities for which market quotations are not
readily available are valued at fair value as determined by management and
approved in good faith by the Board of Trustees.
B. FOREIGN CURRENCY TRANSACTIONS:
Portfolio securities and other assets and liabilities denominated in foreign
currencies are translated into U.S. dollars based on the rate of exchange of
such currencies against U.S. dollars on the date of valuation. Purchases and
sales of portfolio securities and income items denominated in foreign currencies
are translated into U.S. dollar amounts on the respective dates of such
transactions. When the Fund purchases or sells foreign securities it customarily
enters into a foreign exchange contract to minimize foreign exchange risk
between the trade date and the settlement date of such transactions.
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the 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 of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, the differences between the amounts
of dividends, interest, and foreign withholding taxes recorded on the Fund's
books, and the U.S. dollar equivalent of the amounts actually received or paid.
Net unrealized foreign exchange gains and losses arise from changes in the value
of assets and liabilities other than investments in securities at the end of the
fiscal period, resulting from changes in the exchange rates.
C. INCOME TAXES:
It is the Fund's policy to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
taxable income to its shareholders. Therefore, no provision has been made for
income taxes.
D. UNAMORTIZED ORGANIZATION COSTS:
Organization costs are being amortized on a straight line basis over five years.
E. SECURITY TRANSACTIONS, INVESTMENT INCOME, DISTRIBUTIONS, AND EXPENSES:
Security transactions are accounted for on a trade date basis. Dividend income
is recorded on the ex-dividend date. Certain dividend income on foreign
securities is recorded as soon as information is available to the Fund. Interest
income and estimated expenses are accrued daily. Distributions to shareholders,
which are determined in accordance with income tax regulations, are recorded on
the ex-dividend date.
14
<PAGE> 15
TEMPLETON GREATER EUROPEAN FUND
Notes to Financial Statements (unaudited) (cont.)
- --------------------------------------------------------------------------------
F. 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. TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
The Fund offers two classes of shares: Class I shares and Class II shares.
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 September 30, 1996 there
was an unlimited number of shares of beneficial interest authorized ($.01 par
value). Transactions in the Fund's shares were as follows:
<TABLE>
<CAPTION>
CLASS I
-----------------------------------------
FOR THE PERIOD
MAY 8, 1995
(COMMENCEMENT OF
SIX MONTHS ENDED OPERATIONS) THROUGH
SEPTEMBER 30, 1996 MARCH 31, 1996
------------------- -------------------
SHARES AMOUNT SHARES AMOUNT
------ ---------- ------ ----------
<S> <C> <C> <C> <C>
Shares sold 162,555 $1,745,583 507,085 $5,118,526
Shares issued on reinvestment of distributions 1,540 16,248 -- --
Shares redeemed (52,182) (558,730) (92,430) (932,945)
-------- ---------- -------- ----------
Net increase 111,913 $1,203,101 414,655 $4,185,581
======== ========== ======== ==========
</TABLE>
<TABLE>
<CAPTION>
CLASS II
-----------------------------------------
FOR THE PERIOD
MAY 8, 1995
(COMMENCEMENT OF
SIX MONTHS ENDED OPERATIONS) THROUGH
SEPTEMBER 30, 1996 MARCH 31, 1996
------------------- -------------------
SHARES AMOUNT SHARES AMOUNT
------ ---------- ------ ----------
<S> <C> <C> <C> <C>
Shares sold 61,709 $ 652,665 139,004 $1,392,136
Shares issued on reinvestment of distributions 82 862 -- --
Shares redeemed (75,665) (794,499) (388) (3,955)
-------- ---------- -------- ----------
Net increase (decrease) (13,874) $ (140,972) 138,616 $1,388,181
======== ========== ======== ==========
</TABLE>
Templeton Global Investors, Inc., the Fund's administrative manager, is the
record owner of 50,144 Class I shares and 49,979 Class II shares as of September
30, 1996.
3. INVESTMENT MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Certain officers of the Fund are also directors or officers of Templeton Global
Advisors Ltd. (TGAL), Templeton Global Investors, Inc. (TGII), Franklin
Templeton Distributors, Inc. (FTD), and Franklin Templeton Investor Services,
Inc. (FTIS), the Fund's investment manager, administrative manager, principal
underwriter, and transfer agent, respectively.
The Fund pays monthly an investment management fee to TGAL equal, on an annual
basis, to 0.75% of the Fund's average daily net assets. The Fund pays TGII
monthly its allocated share of an administrative fee of 0.15% per annum of the
first
15
<PAGE> 16
TEMPLETON GREATER EUROPEAN FUND
Notes to Financial Statements (unaudited) (cont.)
- --------------------------------------------------------------------------------
$200 million of the Trust's aggregate average daily net assets, 0.135% of the
next $500 million, 0.10% of the next $500 million, and 0.075% per annum of
average net assets in excess of $1.2 billion. TGAL and TGII have voluntarily
agreed to reduce their respective fees to the extent necessary to limit total
expenses to an annual rate of 1.85% and 2.50% of average net assets of Class I
and II shares, respectively, through December 31, 1996. The amount of the
reimbursement for the six months ended September 30, 1996 is set forth in the
Statement of Operations. For the six months ended September 30, 1996, FTD
received net commissions of $5,586 from the sale of the Fund's shares and FTIS
received fees of $6,600.
Under the distribution plans for Class I and Class II shares, the Fund
reimburses FTD quarterly for FTD's costs and expenses in connection with any
activity that is primarily intended to result in a sale of Fund shares, subject
to a maximum of 0.35% and 1.00% per annum of the average daily net assets of
Class I and Class II shares, respectively. Under the Class I distribution plan,
costs and expenses exceeding the maximum may be reimbursed in subsequent
periods. At September 30, 1996, unreimbursed expenses amounted to $132,711.
Class II shares redeemed within 18 months are subject to a contingent deferred
sales charge. Contingent deferred sales charges of $5.728 were paid to FTD for
the six months ended September 30, 1996.
An officer of the Fund is a partner of Dechert Price & Rhoads, legal counsel for
the Fund, which firm received fees of $1,500 for the six months ended September
30, 1996.
4. PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities (excluding short-term securities) for the six
months ended September 30, 1996 aggregated $2,303,224 and $778,080,
respectively. The cost of securities for federal income tax purposes is the same
as that shown in the investment portfolio. Realized gains and losses are
reported on an identified cost basis.
At September 30, 1996, the aggregate gross unrealized appreciation and
depreciation of portfolio securities, based on cost for federal income tax
purposes, was as follows:
<TABLE>
<S> <C>
Unrealized appreciation $ 675,607
Unrealized depreciation (296,939)
---------
Net unrealized appreciation $ 378,668
=========
</TABLE>
16
<PAGE> 17
NOTES
<PAGE> 18
NOTES
<PAGE> 19
LITERATURE REQUEST
- --------------------------------------------------------------------------------
For a free brochure and prospectus, which contain more complete information,
including charges and expenses, call Franklin Fund Information, toll free, at
1-800/DIAL BEN (1-800/342-5236). Please read the prospectus carefully before you
invest or send money. To ensure the highest quality of service, telephone calls
to or from our service departments may be monitored, recorded and accessed.
These calls can be determined by the presence of a regular beeping tone.
FRANKLIN TEMPLETON GROUP
GLOBAL GROWTH
Franklin Global Health
Care Fund
Franklin Templeton
Japan Fund
Templeton Developing
Markets Trust
Templeton Foreign Fund
Templeton Foreign Smaller
Companies Fund
Templeton Global
Infrastructure Fund
Templeton Global
Opportunities Trust
Templeton Global
Real Estate Fund
Templeton Global Smaller
Companies Fund
Templeton Greater
European Fund
Templeton Growth Fund
Templeton Latin America
Fund
Templeton Pacific
Growth Fund
Templeton World Fund
GLOBAL GROWTH AND INCOME
Franklin Global Utilities Fund
Franklin Templeton German
Government Bond Fund
Franklin Templeton
Global Currency Fund
Mutual European Fund
Templeton Global Bond Fund
Templeton Growth and
Income Fund
GLOBAL INCOME
Franklin Global Government
Income Fund
Franklin Templeton Hard
Currency Fund
Franklin Templeton High
Income Currency Fund
Templeton Americas
Government Securities Fund
GROWTH
Franklin Blue Chip Fund
Franklin California Growth Fund
Franklin DynaTech Fund
Franklin Equity Fund
Franklin Gold Fund
Franklin Growth Fund
Franklin MidCap Growth Fund
Franklin Small Cap Growth Fund
Mutual Discovery Fund
GROWTH AND INCOME
Franklin Asset Allocation Fund
Franklin Balance Sheet
Investment Fund
Franklin Convertible
Securities Fund
Franklin Equity Income Fund
Franklin Income Fund
Franklin MicroCap Value Fund
Franklin Natural Resources Fund
Franklin Real Estate
Securities Fund
Franklin Rising Dividends Fund
Franklin Strategic Income Fund
Franklin Utilities Fund
Franklin Value Fund
Mutual Beacon Fund
Mutual Qualified Fund
Mutual Shares Fund
Templeton American Trust, Inc.
INCOME
Franklin Adjustable Rate
Securities Fund
Franklin Adjustable U.S.
Government Securities Fund
Franklin's AGE High
Income Fund
Franklin Investment Grade
Income Fund
Franklin Short-Intermediate U.S.
Government Securities Fund
Franklin U.S. Government
Securites Fund
Franklin Money Fund
Franklin Federal Money Fund
FOR NON-U.S. INVESTORS:
Franklin Tax-Advantaged
High Yield Securities Fund
Franklin Tax-Advantaged
International Bond Fund
Franklin Tax-Advantaged U.S.
Government Securities Fund
FOR CORPORATIONS:
Franklin Corporate Qualified
Dividend Fund
FRANKLIN FUNDS SEEKING
TAX-FREE INCOME
Federal Intermediate-Term
Tax-Free Income Fund
Federal Tax-Free Income Fund
High Yield Tax-Free
Income Fund
Insured Tax-Free Income Fund
Puerto Rico Tax-Free
Income Fund
Tax-Exempt Money Fund
FRANKLIN STATE-SPECIFIC
FUNDS SEEKING
TAX-FREE INCOME
Alabama
Arizona*
Arkansas**
California*
Colorado
Connecticut
Florida*
Georgia
Hawaii*
Indiana
Kentucky
Louisiana
Maryland
Massachusetts***
Michigan*
Minnesota***
Missouri
New Jersey
New York*
North Carolina
Ohio***
Oregon
Pennsylvania
Tennessee**
Texas
Virginia
Washington**
VARIABLE ANNUITIES
Franklin Valuemark(R)
Franklin Templeton
Valuemark Income Plus
(an immediate annuity)
*Two or more fund options available: long-term portfolio, intermediate-term
portfolio, a portfolio of insured municipal securities, and/or a high yield
portfolio (CA) and a money market portfolio (CA and NY).
**The fund may invest up to 100% of its assets in bonds that pay interest
subject to the federal alternative minimum tax.
***Portfolio of insured municipal securities. 11/96.1
<PAGE> 20
TEMPLETON GREATER EUROPEAN FUND TEMPLETON
PRINCIPAL UNDERWRITER: GREATER
Franklin Templeton EUROPEN
Distributors, Inc.
700 Central Avenue FUND
St. Petersburg,
Florida 33701-3628
Shareholder Services Semi-Annual Report
1-800-632-2301 September 30, 1996
Fund Information
1-800-342-5236
This report must be preceded or accompanied
by a current prospectus of the Templeton
Greater European Fund, which contains
more complete information, including
charges and expenses. Like any investment in
securities, the value of the Fund's portfolio
will be subject to the risk of loss from market,
currency, economic, political and other factors,
as well as investment decisions by the
investment manager, which will not always
be profitable or wise. The Fund and its
investors are not protected from such losses
by the investment manager. Therefore,
investors who cannot accept this risk should
not invest in shares of the Fund.
TO ENSURE THE HIGHEST QUALITY OF SERVICE,
TELEPHONE CALLS TO OR FROM OUR SERVICE
DEPARTMENTS MAY BE MONITORED,
RECORDED AND ACCESSED. THESE CALLS
CAN BE DETERMINED BY THE PRESENCE OF
A REGULAR BEEPING TONE.
[Franklin Templeton
[Recycled Logo] TL419 S96 11/96 Logo]
