<PAGE> 1
TEMPLETON GROWTH
AND INCOME FUND
YOUR FUND'S OBJECTIVE:
The Templeton Growth and Income Fund seeks high total return through a flexible
policy of investing primarily in equity and debt securities of domestic and
foreign companies.
November 15, 1996
Dear Shareholder:
We are pleased to bring you this semi-annual report of the Templeton Growth and
Income Fund, which covers the six months ended September 30, 1996.
During the period under review, the U.S. economy experienced moderate economic
growth, stable interest rates, and low inflation. Following a sharp correction
earlier this summer, the U.S. stock market recovered and rose to record levels
due largely to this favorable economic environment and continued heavy inflows
into mutual funds.
While the U.S. equity market rose to new highs, European stock markets turned in
mixed performances. Swedish, Norwegian, and Dutch stocks performed relatively
well as a group, with large gains in the chemical, pharmaceutical, and banking
sectors. However, the financial markets of Germany and the United Kingdom posted
1
<PAGE> 2
TEMPLETON GROWTH AND INCOME FUND
Geographic Distribution on 9/30/96
Based on Total Net Assets
<TABLE>
<CAPTION>
<S> <C>
European Stocks 33.8%
United States Stocks 22.8%
Asian Stocks 7.8%
Latin American Stocks 7.3%
Australian Stocks 4.0%
Middle Eastern & African
Stocks 0.8%
Fixed-Income Securities 3.4%
Short-Term Obligations &
Other Net Assets 20.1%
</TABLE>
relatively lackluster returns. In general, the countdown toward European
monetary and economic union continues, but progress has been slower than hoped
for. In our view, Europe desperately needs a sustained economic expansion to
meet the strict Maastricht criteria for deficits and gross domestic product.
Spending restraints and tax increases alone may not accomplish this. We believe
a pick up in the European economy would be positive for equities, as it would
unlikely be strong enough to rekindle inflation.
Many emerging market equities performed well as investors appeared to re-focus
attention on the attractive valuation levels that exist in many of these
countries. Latin American equity markets rebounded strongly, with Brazil and
Mexico among the top performers. The performance of the Asian countries has been
mixed in part because of slowed export growth and
currency concerns.
Within this environment, the Fund's Class I shares delivered a six-month total
return of 4.26%, as discussed in the Performance Summary on page 5,
significantly outperforming the 0.83% return of the unmanaged Morgan Stanley
Capital International (MSCI) World Index which tracks 22 equity markets
worldwide.*
In applying our long-term, value oriented approach, we searched worldwide for
new, bargain securities. Seeking to take advantage of
* Please remember that the Fund's performance differs from that of the index
because, among other things, the index does not contain cash (the Fund generally
carries a certain percentage of cash at any given time), is not managed
according to any investment strategy and includes no sales charges or management
expenses. Of course, one cannot invest directly in an index.
2
<PAGE> 3
TEMPLETON GROWTH
AND INCOME FUND
Top 10 Holdings on 9/30/96
Based on Total Net Assets
<TABLE>
<CAPTION>
Company % of Total
Industry, Country Net Assets
<S> <C>
Gedeon Richter Ltd. GDR 144A
Health & Personal Care, Hungary 2.2%
Thames Water Group PLC
Utilities - Electrical & Gas, U.K. 2.1%
HiH Winterthur International Holdings Ltd.
Insurance, Australia 2.0%
Pacific BBA Ltd.
Machinery & Engineering, Australia 1.9%
Government of New Zealand, 10.00%, 7/15/97
Government Bonds, New Zealand 1.8%
Anglian Group PLC
Building Materials & Components, U.K. 1.6%
Government of Sweden, 10.75%, 1/23/97
Government Bond, Sweden 1.6%
Telebras-Telecomunicacoes Brasileiras SA,
pfd., ADR Telecommunications, Brazil 1.5%
Telecom Italia SPA, di Risp
Telecommunications, Italy 1.5%
Bay Networks, Inc.
Data Processing & Reproduction, U.S. 1.5%
</TABLE>
For a complete list of portfolio holdings, please see page 10 of this report.
several opportunities in the global markets, we increased our equity holdings,
from 56.8% of total net assets on March 31, 1996 to 76.5% on September 30, 1996.
We also increased the number of countries where we invest, from 18 to 25,
initiating new positions in Latin America, Europe, the Middle East and the
United States.
Although the ratio of U.S. equities to total equities owned by the Fund remained
relatively unchanged over the period, we added several new positions. For
example, we purchased shares of Georgia-Pacific Corp. and Shorewood Packaging
Corp., two companies in the paper and forest products industry. Both appeared
undervalued relative to what our analysis indicated was the true normalized
earnings potential. We also initiated a position in Ford Motor Co., which was
trading at a significant discount to the market despite what we viewed as the
dramatic improvements the company has made to its cost base and its balance
sheet.
In Europe, we initiated new positions by purchasing shares of Telecom Italia
SPA, a company that installs and operates Italy's National Telecommunications
Network. We are also excited about our position in Thames Water Group, the
supplier of water and wastewater treatment for the city of London. In our
opinion, political concerns in the U.K. have excessively driven down
3
<PAGE> 4
many utilities' share prices and Thames Water's improved management focus and
attractive yield make it a good value.
We also discovered what we believed to be undervalued companies in Brazil,
Mexico, Russia and Israel. One of our top holdings is Telebras-Telecomunicacoes
Brasileiras SA, the largest telephone company in Brazil. We think it has
significant growth potential and should benefit from the restructuring of the
Brazilian telephone industry over the next few years.
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.
There are, of course, special risks involved with global investing, related to
market and currency volatility, and adverse economic, social and political
developments in the countries where the Fund is invested. Developing markets are
represented in the Fund's portfolio, and they 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 that are not
normally associated with other markets. These risks and other considerations are
discussed in the Fund's prospectus.
Looking forward, we are optimistic about the potential for long-term global
investing. In our opinion, the Fund's portfolio is well-positioned in a diverse
group of attractively valued securities, which we believe have the potential to
increase in
4
<PAGE> 5
value over the long term if the global economy continues to grow. Our global
research staff deserves special mention because of its importance to your Fund's
performance. More than 30 analysts in our offices in the Bahamas, the United
States, Canada and the United Kingdom work diligently to provide the Fund with
stock ideas. We are proud of their contribution and will continue to pursue a
disciplined, value-driven investment strategy.
As always, we thank you for your participation in the Fund and look forward to
serving your investment needs in the years to come.
Sincerely,
/s/ Mark Holowesko
- -----------------------------
Mark Holowesko, CFA
President
Templeton Global Investment Trust
/s/ Richard Farrington
- -----------------------------
Richard Sean Farrington, CFA
Portfolio Manager
Templeton Growth and Income Fund
5
<PAGE> 6
PERFORMANCE SUMMARY
CLASS I
Templeton Growth and Income Fund Class I shares provided a cumulative total
return of 4.26% for the six-month period ended September 30, 1996. Cumulative
total return represents the change in value of an investment, assuming
reinvestment of dividends and capital gains distributions, and does not include
the maximum 5.75% initial sales charge.
The price of the Fund's shares, as measured by net asset value, increased 45
cents ($0.45), from $11.39 on March 31, 1996 to $11.84 on September 30, 1996.
During this time, shareholders received distributions totaling 3.5 cents
($0.035) per share in dividend income. Of course, 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 GROWTH AND INCOME FUND - CLASS I
Periods Ended September 30, 1996
<TABLE>
<CAPTION>
Since
Inception
One-Year (3/14/94)
<S> <C> <C>
Cumulative Total Return(1) 12.36% 25.74%
Average Annual Total Return(2) 5.89% 6.88%
Value of $10,000 Investment(3) $10,589 $11,851
</TABLE>
1. Cumulative total return represents the change in value of an investment over
the indicated periods and does not include the maximum 5.75% 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 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 initial sales charge.
All total return calculations assume reinvestment of dividends and capital gains
distributions at net asset value when paid. 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. Thus, your shares, when redeemed, may be worth more or less than their
original cost. Past performance is not predictive of future results.
All total return calculations reflect the deduction of a proportional share of
Fund expenses on an annual basis. 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 return would have been lower. After December 31, 1996,
the fee reduction may be discontinued at any time.
6
<PAGE> 7
PERFORMANCE SUMMARY
CLASS II
Templeton Growth and Income Fund Class II shares provided a cumulative total
return of 3.87% for the six-month period ended September 30, 1996. Cumulative
total return represents the change in value of an investment, assuming
reinvestment of dividends and capital gains distributions, and does not include
sales charges.
The price of the Fund's shares, as measured by net asset value, increased 41
cents ($0.41), from $11.33 on March 31, 1996 to $11.74 on September 30, 1996.
During this time, shareholders received distributions totaling 2.85 cents
($0.0285) per share in dividend income. Of course, 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 GROWTH AND INCOME FUND - CLASS II
Periods Ended September 30, 1996
<TABLE>
<CAPTION>
Since
Inception
One-Year (5/1/95)
<S> <C> <C>
CUMULATIVE TOTAL RETURN(1) 11.55% 21.38%
Average Annual Total Return(2) 9.43% 13.16%
Value of $10,000 Investment(3) $10,943 $11,920
</TABLE>
1. Cumulative total return represents the change in value of an investment over
the indicated periods and does not include the 1.0% initial sales charge or the
1.0% contingent deferred sales charge (CDSC), applicable to shares redeemed
within the first 18 months of investment.
2. Average annual total return represents the average annual change in value of
an investment over the indicated periods and includes all sales charges.
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 total return calculations assume reinvestment of dividends and capital gains
distributions at net asset value when paid. 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. Thus, your shares, when redeemed, may be worth more or less than their
original cost. Past performance is not predictive of future results.
All total return calculations reflect the deduction of a proportional share of
Fund expenses on an annual basis. The Fund's Investment Manager and Business
Manager have agreed in advance to reduce their respective fees and 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 return
would have been lower. After December 31, 1996, the fee reduction may be
discontinued at any time.
7
<PAGE> 8
TEMPLETON GROWTH AND INCOME FUND
Financial Highlights
- --------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE -- CLASS I
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
SIX MONTHS MARCH 14, 1994
ENDED YEAR ENDED MARCH 31 (COMMENCEMENT
SEPTEMBER 30, 1996 -------------------- OF OPERATIONS) TO
(UNAUDITED) 1996 1995 MARCH 31, 1994
------------------ ------- ------- ----------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 11.39 $ 10.05 $ 10.01 $ 10.00
------- ------- ------- ------
Income from investment operations:
Net investment income .15 .29 .16 .009
Net realized and unrealized gain (loss) .34 1.54 (.02) .001
------- ------- ------- ------
Total from investment operations .49 1.83 .14 .01
------- ------- ------- ------
Distributions:
Dividends from net investment income (.04) (.29) (.10) --
Distributions from net realized gains -- (.20) -- --
------- ------- ------- ------
Total distributions (.04) (.49) (.10) --
------- ------- ------- ------
Change in net asset value .45 1.34 .04 .01
------- ------- ------- ------
Net asset value, end of period $ 11.84 $ 11.39 $ 10.05 $ 10.01
======= ======= ======= ======
TOTAL RETURN* 4.26% 18.78% 1.43% .10%
RATIOS /SUPPLEMENTAL DATA
Net assets, end of period (000) $ 16,101 $11,732 $ 5,953 $ 100
Ratio of expenses to average net assets 2.52%** 2.71% 6.11% 32.15%**
Ratio of expenses, net of reimbursement, to average
net assets 1.25%** 1.25% 1.25% 1.25%**
Ratio of net investment income to average net assets 3.07%** 2.98% 2.51% 1.89%**
Portfolio turnover rate 12.22% 10.21% 19.33% --
Average commission rate paid (per share) $ .0045 $ .0250
</TABLE>
* TOTAL RETURN DOES NOT REFLECT SALES COMMISSIONS. NOT ANNUALIZED FOR PERIODS
OF LESS THAN ONE YEAR.
** ANNUALIZED.
8
<PAGE> 9
TEMPLETON GROWTH AND INCOME FUND
Financial Highlights (cont.)
- --------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE -- CLASS II
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
SIX MONTHS FOR THE PERIOD
ENDED MAY 1, 1995+
SEPTEMBER 30, 1996 THROUGH
(UNAUDITED) MARCH 31, 1996
------------------ --------------
<S> <C> <C>
Net asset value, beginning of period $ 11.33 $ 10.19
------ ------
Income from investment operations:
Net investment income .15 .22
Net realized and unrealized gain .29 1.41
------ ------
Total from investment operations .44 1.63
------ ------
Distributions:
Dividends from net investment income (.03) (.29)
Distributions from net realized gains -- (.20)
------ ------
Total distributions (.03) (.49)
------ ------
Change in net asset value .41 1.14
------ ------
Net asset value, end of period $ 11.74 $ 11.33
====== ======
TOTAL RETURN* 3.87% 16.51%
RATIOS /SUPPLEMENTAL DATA
Net assets, end of period (000) $ 3,747 $ 2,205
Ratio of expenses to average net assets 3.17%** 3.31%**
Ratio of expenses, net of reimbursement, to average net assets 1.90%** 1.90%**
Ratio of net investment income to average net assets 2.33%** 1.59%**
Portfolio turnover rate 12.22% 10.21%
Average commission rate paid (per share) $ .0045 $ .0250
</TABLE>
* TOTAL RETURN DOES NOT REFLECT SALES COMMISSIONS OR THE CONTINGENT
DEFERRED SALES CHARGE. NOT ANNUALIZED FOR PERIODS OF LESS THAN ONE YEAR.
** ANNUALIZED.
+ COMMENCEMENT OF SALES.
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE> 10
TEMPLETON GROWTH AND INCOME FUND
Investment Portfolio, September 30, 1996 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS: 72.2%
- ------------------------------------------------------------------------------------------------------------------------
AEROSPACE & MILITARY TECHNICAL SYSTEMS: 1.1%
General Motors Corp., H U.S. 3,761 $ 217,198
- ------------------------------------------------------------------------------------------------------------------------
APPLIANCES & HOUSEHOLD DURABLES: 0.7%
Guangdong Kelon Electrical Holdings Ltd., H, 144A Chn. 350,000 147,097
- ------------------------------------------------------------------------------------------------------------------------
AUTOMOBILES: 2.2%
Ford Motor Co. U.S. 6,000 187,500
Volvo AB, B Swe. 11,276 242,454
-----------
429,954
- ------------------------------------------------------------------------------------------------------------------------
BANKING: 7.8%
Banco Popular Espanol SA Sp. 1,160 213,142
Banque Nationale de Paris Fr. 5,100 193,058
* Merita Ltd., A Fin. 123,100 267,410
National Westminster Bank PLC U.K. 25,300 268,909
PT Bank Bali, fgn. Indo. 47,500 99,171
Stadshypotek AB, A Swe. 10,700 272,047
Unidanmark AS, A Den. 4,883 233,369
-----------
1,547,106
- ------------------------------------------------------------------------------------------------------------------------
BROADCASTING & PUBLISHING: 0.6%
Oriental Press Group Limited H.K. 250,000 121,234
* Oriental Press Group Limited, wts. H.K. 25,000 --
-----------
121,234
- ------------------------------------------------------------------------------------------------------------------------
BUILDING MATERIALS & COMPONENTS: 2.0%
Anglian Group PLC U.K. 98,500 323,024
* Mirgor SA Comercial Industrial Financiera
Inmobiliari, ADR, 144A Arg. 34,520 72,492
-----------
395,516
- ------------------------------------------------------------------------------------------------------------------------
CONSTRUCTION & HOUSING: 0.6%
Dragados y Construcciones SA Sp. 9,800 126,277
- ------------------------------------------------------------------------------------------------------------------------
DATA PROCESSING & REPRODUCTION: 4.6%
* Bay Networks Inc. U.S. 10,800 294,300
International Business Machines Corp. U.S. 1,852 230,574
* Optical Data Systems Inc. U.S. 11,074 188,258
* Quantum Corp. U.S. 11,400 200,213
-----------
913,345
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
10
<PAGE> 11
TEMPLETON GROWTH AND INCOME FUND
Investment Portfolio, September 30, 1996 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS (CONT.)
- ------------------------------------------------------------------------------------------------------------------------
ELECTRICAL & ELECTRONICS: 4.3%
ABB AB, B Swe. 2,180 $ 230,258
Alcatel Alsthom SA Fr. 2,250 189,635
Motorola Inc. U.S. 5,031 259,725
Stanilite Pacific Ltd. Aus. 48,954 10,075
Tadiran Ltd., ADR Isr. 6,300 159,863
-----------
849,556
- ------------------------------------------------------------------------------------------------------------------------
ENERGY SOURCES: 1.7%
MOL Magyar Olay-Es Gazipari RT, GDS 144A Hun. 22,456 216,700
Valero Energy Corp. U.S. 5,910 129,281
-----------
345,981
- ------------------------------------------------------------------------------------------------------------------------
FINANCIAL SERVICES: 1.5%
Banca Fideuram Spa Itl. 33,000 78,251
Dean Witter Discover & Co. U.S. 3,900 214,500
-----------
292,751
- ------------------------------------------------------------------------------------------------------------------------
FOOD & HOUSEHOLD PRODUCTS: 1.2%
Archer Daniels Midland Co. U.S. 12,075 232,444
- ------------------------------------------------------------------------------------------------------------------------
FOREST PRODUCTS & PAPER: 4.9%
Assidomaen AB Swe. 9,600 232,491
Boise Cascade Corp. U.S. 4,203 142,902
Georgia-Pacific Corp. U.S. 3,000 237,375
Portucel Industrial Empresa Product Celulose,
ADR, 144A Port. 18,900 123,200
* Shorewood Packaging Corp. U.S. 13,400 226,963
-----------
962,931
- ------------------------------------------------------------------------------------------------------------------------
HEALTH & PERSONAL CARE: 4.8%
Ciba-Geigy AG Swtz. 54 69,017
Gedeon Richter Ltd., GDR 144A Hun. 8,540 444,080
Medeva PLC U.K. 43,300 173,178
Pharmacia & Upjohn Inc. U.S. 6,630 273,488
-----------
959,763
- ------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL COMPONENTS: 2.7%
Gencorp Inc. U.S. 15,700 221,763
Madeco Manufacturera de Cobre SA, ADR Chil. 5,800 134,125
Walbro Corp. U.S. 10,000 190,000
-----------
545,888
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
11
<PAGE> 12
TEMPLETON GROWTH AND INCOME FUND
Investment Portfolio, September 30, 1996 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS (CONT.)
- ------------------------------------------------------------------------------------------------------------------------
INSURANCE: 9.3%
HIH Winterthur International Holdings Ltd. Aus. 184,513 $ 398,721
Providian Corp. U.S. 4,860 208,980
Reliastar Financial Corp. U.S. 5,193 246,668
Skandia Foersaekrings AB, free Swe. 9,820 271,899
* Ste Centrale du Groupe des Asurances Nationales Fr. 10,900 244,700
Torchmark Corp. U.S. 2,209 101,338
UNUM Corp. U.S. 2,119 135,881
Western National Corp. U.S. 12,400 230,950
-----------
1,839,137
- ------------------------------------------------------------------------------------------------------------------------
MACHINERY & ENGINEERING: 3.3%
IHC Caland NV Neth. 5,100 268,421
Pacific BBA Ltd. Aus. 116,425 382,449
-----------
650,870
- ------------------------------------------------------------------------------------------------------------------------
MERCHANDISING: 2.1%
Koninklijke Bijenkorf Beheer NV (KBB) Neth. 1,280 98,697
Kwik Save Group PLC U.K. 4,420 21,379
Lojas Americanas SA Braz. 1,819,000 25,477
Macintosh NV Neth. 550 12,980
Safeway PLC U.K. 22,000 113,817
Tesco PLC U.K. 29,446 139,894
-----------
412,244
- ------------------------------------------------------------------------------------------------------------------------
METALS & MINING: 1.0%
Pechiney SA, A Fr. 4,675 198,594
- ------------------------------------------------------------------------------------------------------------------------
MULTI-INDUSTRY: 2.4%
Alfa SA de CV, A Mex. 16,793 74,492
* Alfa SA de CV, A 144A Mex. 36,000 159,693
Amer Group Ltd., A Fin. 1,098 25,701
Cheung Kong Holdings Ltd. H.K. 28,000 215,440
-----------
475,326
- ------------------------------------------------------------------------------------------------------------------------
REAL ESTATE: 3.0%
Hang Lung Development Co. Ltd. H.K. 68,000 130,144
Hong Kong Land H.K. 68,500 159,605
New World Development Co. Ltd. H.K. 34,784 182,624
PT Jaya Properties, fgn. Indo. 100,000 126,991
-----------
599,364
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
12
<PAGE> 13
TEMPLETON GROWTH AND INCOME FUND
Investment Portfolio, September 30, 1996 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS (CONT.)
- ------------------------------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS: 4.8%
British Telecommunications PLC U.K. 45,790 $ 255,532
Cpt-Telefonica del Peru SA, ADR B Per. 6,630 151,661
Telecom Italia Spa, di Risp Itl. 163,000 300,051
Telefonica de Argentina SA, B, ADR Arg. 8,000 199,000
Telefonos de Mexico SA, L, ADR Mex. 1,520 48,830
-----------
955,074
- ------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION: 0.2%
Stena Line AB, B free Swe. 7,100 32,782
- ------------------------------------------------------------------------------------------------------------------------
UTILITIES-ELECTRICAL & GAS: 5.4%
China Light & Power Co. Ltd. H.K. 5,500 25,605
Endesa-Empresa Nacional de Electricidad SA Sp. 2,200 129,492
Hongkong Electric Holdings Ltd. H.K. 26,000 84,055
* Mosenergo, ADR 144A Sun. 10,200 274,125
Texas Utilities Electric Co. U.S. 3,850 152,556
Thames Water Group PLC U.K. 49,140 414,224
-----------
1,080,057
-----------
TOTAL COMMON STOCKS (cost $13,069,121) 14,330,489
- ------------------------------------------------------------------------------------------------------------------------
PREFERRED STOCKS: 4.3%
- ------------------------------------------------------------------------------------------------------------------------
Cia de Inversiones en Telecomunicaciones SA,
7.00%, conv., pfd. Arg. 4,148 214,659
Jardine Strategic Holdings Ltd., 7.50%, conv.,
pfd. H.K. 78,000 85,410
Lojas Americanas SA, pfd. Braz. 3,017,000 51,121
Lojas Americanas SA, pfd., ADR Braz. 866 14,674
Philippine Long Distance Telephone Co., 7.00%,
conv., pfd., Series 3 Phil. 3,140 182,513
Telebras-Telecomunicacoes Brasileiras SA, pfd.,
ADR Braz. 3,900 306,150
-----------
TOTAL PREFERRED STOCKS (cost $779,826) 854,527
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
13
<PAGE> 14
TEMPLETON GROWTH AND INCOME FUND
Investment Portfolio, September 30, 1996 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL IN
INDUSTRY ISSUE COUNTRY LOCAL CURRENCY** VALUE
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
BONDS: 3.4%
- ------------------------------------------------------------------------------------------------------------------------
Government of New Zealand, 10.00%, 7/15/97 N.Z. 510,000 $ 359,789
Government of Sweden, 10.75%, 1/23/97 Swe. 2,100,000 322,827
-----------
TOTAL BONDS (cost $664,995) 682,616
- ------------------------------------------------------------------------------------------------------------------------
SHORT TERM OBLIGATIONS: 18.9% (cost $3,741,596)
- ------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Bills, 4.90% to 5.145% with
maturities to 12/12/96 U.S. 3,768,000 3,742,570
- ---------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS: 98.8% (cost $18,255,538) 19,610,202
OTHER ASSETS, LESS LIABILITIES: 1.2% 237,706
-----------
TOTAL NET ASSETS: 100.0% $19,847,908
===========
</TABLE>
* NON-INCOME PRODUCING.
** CURRENCY OF COUNTRIES INDICATED.
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE> 15
TEMPLETON GROWTH AND INCOME FUND
Financial Statements
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1996 (unaudited)
<TABLE>
<S> <C>
Assets:
Investments in securities, at value
(identified cost $18,255,538) $19,610,202
Receivables:
Investment securities sold 24,375
Fund shares sold 172,292
Dividends and interest 63,419
Fee reimbursement 27,545
Unamortized organization costs 36,038
-----------
Total assets 19,933,871
-----------
Liabilities:
Payables for investment securities
purchased 15,257
Accrued expenses 70,706
-----------
Total liabilities 85,963
-----------
Net assets, at value $19,847,908
===========
Net assets consist of:
Undistributed net investment income $ 257,506
Net unrealized appreciation 1,354,664
Accumulated net realized gain 83,796
Net capital paid in on shares of
beneficial interest 18,151,942
-----------
Net assets, at value $19,847,908
===========
Class I
Net asset value per share
($16,100,900 / 1,360,143 shares
outstanding) $ 11.84
===========
Maximum offering price
($11.84 / 94.25%) $ 12.56
===========
Class II
Net asset value per share
($3,747,008 / 319,189 shares
outstanding) $ 11.74
===========
Maximum offering price
($11.74 / 99.00%) $ 11.86
===========
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended
September 30, 1996 (unaudited)
<TABLE>
<S> <C> <C>
Investment income:
(net of $18,757 foreign
taxes withheld)
Dividends $ 227,129
Interest 143,270
----------
Total income $370,399
Expenses:
Management fees (Note 3) 64,523
Administrative fees (Note 3) 12,902
Distribution fees (Note 3)
Class I 24,574
Class II 15,721
Transfer agent fees (Note 3) 17,100
Custodian fees 3,950
Reports to shareholders 26,750
Audit fees 7,500
Legal fees (Note 3) 13,500
Registration and filing fees 30,500
Trustees' fees and expenses 250
Amortization of organization
costs 7,071
Other 2,483
----------
Total expenses 226,824
Less expenses reimbursed
(Note 3) (109,081)
----------
Total expenses less
reimbursement 117,743
--------
Net investment income 252,656
Realized and unrealized gain:
Net realized gain on:
Investments 126,451
Foreign currency transactions 4,839
----------
131,290
Net unrealized appreciation on
investments 293,270
----------
Net realized and unrealized
gain 424,560
--------
Net increase in net assets
resulting from operations $677,216
========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
15
<PAGE> 16
TEMPLETON GROWTH AND INCOME FUND
Financial Statements (cont.)
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
SEPTEMBER 30, 1996 YEAR ENDED
(UNAUDITED) MARCH 31, 1995
------------------ ---------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income $ 252,656 $ 246,356
Net realized gain (loss) on investment and foreign currency transactions 131,290 (47,494)
Net unrealized appreciation 293,270 1,213,077
----------- -----------
Net increase in net assets resulting from operations 677,216 1,411,939
Distributions to shareholders:
From net investment income
Class I (40,302) (208,786)
Class II (7,410) (23,185)
From net realized gain
Class I -- (124,139)
Class II -- (399)
Fund share transactions (Note 2)
Class I 3,841,368 4,802,908
Class II 1,439,869 2,125,470
----------- -----------
Net increase in net assets 5,910,741 7,983,808
Net assets:
Beginning of period 13,937,167 5,953,359
----------- -----------
End of period $ 19,847,908 $13,937,167
=========== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
16
<PAGE> 17
TEMPLETON GROWTH AND INCOME FUND
Notes to Financial Statements (unaudited)
- --------------------------------------------------------------------------------
1. SUMMARY OF ACCOUNTING POLICIES
Templeton Growth and Income Fund (the Fund), formerly the Templeton Global
Rising Dividends 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 high total return through a flexible policy of investing
primarily in equity and debt securities of domestic and foreign companies. 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. 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.
E. UNAMORTIZED ORGANIZATION COSTS:
Organization costs are being amortized on a straight line basis over five years.
17
<PAGE> 18
TEMPLETON GROWTH AND INCOME 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
were 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
--------------------------------------------
SIX MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 1996 MARCH 31, 1996
-------------------- ---------------------
SHARES AMOUNT SHARES AMOUNT
------ ----------- -------- ----------
<S> <C> <C> <C> <C>
Shares sold 425,280 $ 4,950,218 618,177 $ 6,754,453
Shares issued on reinvestment of distributions 3,066 36,222 29,106 300,763
Shares redeemed (98,661) (1,145,072) (208,997) (2,252,308)
-------- ----------- -------- -----------
Net increase 329,685 $ 3,841,368 438,286 $ 4,802,908
======== =========== ======== ===========
</TABLE>
<TABLE>
<CAPTION>
CLASS II
--------------------------------------------
FOR THE PERIOD
MAY 1, 1995
SIX MONTHS ENDED THROUGH
SEPTEMBER 30, 1996 MARCH 31, 1996
-------------------- ---------------------
SHARES AMOUNT SHARES AMOUNT
------ ----------- -------- ----------
<S> <C> <C> <C> <C>
Shares sold 131,478 $ 1,519,988 199,693 $ 2,184,545
Shares issued on reinvestment of distributions 553 6,500 1,785 18,660
Shares redeemed (7,462) (86,619) (6,858) (77,735)
-------- ----------- -------- -----------
Net increase 124,569 $ 1,439,869 194,620 $ 2,125,470
======== =========== ======== ===========
</TABLE>
Templeton Global Investors, Inc., the Fund's administrative manager, is the
record owner of 106,102 Class I shares and 10 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 $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 1.25% and 1.90% 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
18
<PAGE> 19
TEMPLETON GROWTH AND INCOME FUND
Notes to Financial Statements (unaudited) (cont.)
- --------------------------------------------------------------------------------
September 30, 1996 is set forth in the Statement of Operations. For the six
months ended September 30, 1996, FTD received net commissions of $19,898 from
the sale of the Fund's shares and FTIS received fees of $17,100.
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, these unreimbursed expenses were $886,617. Class
II shares redeemed within 18 months are subject to a contingent deferred sales
charge. Contingent deferred sales charges of $762 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 $13,500 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 $7,973,159 and $1,456,539,
respectively. The cost of securities for 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 $2,196,531
Unrealized depreciation (841,867)
----------
Net unrealized appreciation $1,354,664
==========
</TABLE>
5. TAX LOSS CARRYOVERS
At March 31, 1996, the Fund had tax basis capital losses of $39,000 which may be
carried over to offset future capital gains. Such losses expire in 2004.
19
<PAGE> 20
TEMPLETON
GROWTH
AND
INCOME
FUND
SEMI-ANNUAL REPORT
SEPTEMBER 30, 1996
TEMPLETON GROWTH AND
INCOME FUND
Principal Underwriter:
Franklin Templeton
Distributors, Inc.
700 Central Avenue
St. Petersburg,
Florida 33701-3628
Shareholder Services
1-800-632-2301
Fund Information
1-800-342-5236
This report must be preceded or accompanied by the current prospectus of the
Templeton Growth and Income 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.
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TL 414 S96 11/96
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