<PAGE> 1
TEMPLETON AMERICAS
GOVERNMENT SECURITIES FUND
YOUR FUND'S OBJECTIVE:
The Templeton Americas Government Securities Fund seeks a high level of current
income with total return as a secondary objective. It seeks to achieve these
objectives by investing at least 65% of its total net assets in debt securities
issued or guaranteed by governments, government agencies, political subdivisions
and other government entities of countries located in the Western Hemisphere,
defined as countries located in North, South, and Central America and the
surrounding waters.
MARCH 31, 1997
Dear Shareholder:
We are pleased to bring you the annual report of the Templeton Americas
Government Securities Fund for the period ended March 31, 1997.
During the 12 months under review, the 10-year Treasury bond yield rose, from
6.34% to 6.92%, and long-term bond prices, as measured by 30-year U.S.
Treasuries, dropped 6.3%. At the beginning of the reporting period, many
investors believed that the Federal Reserve Board (the Fed) might raise interest
rates to slow down the U.S. economy. Although gross domestic product increased
at an annualized rate of 4.7% from April through June 1996, economic growth
slowed substantially during the summer, and the Fed declined to raise interest
rates at its September meeting. However, the economy began to improve in the
fourth quarter, fears of strong economic growth surfaced again in early 1997,
and on March 25th, the Fed increased the federal funds rate from 5.25% to 5.50%.
1
<PAGE> 2
During the fiscal year, Latin American bonds stopped moving in concert with the
U.S. Treasury market, and rallied significantly in the context of improved
fiscal and monetary policies, rising corporate earnings, and increased demand
for high-yielding Latin American debt securities denominated in U.S. dollars.
Panama's fixed-income market strengthened appreciably in January 1997, after the
Panamanian government restructured its non-performing foreign debt and these
securities received strong credit ratings from Standard & Poor's and Moody's,
two leading rating agencies. However, the Panamanian bond market corrected in
February when the potential return of these instruments fell below that of
securities issued by more creditworthy countries.
Within this environment, the Fund provided a one-year cumulative total return of
16.23%, as shown in the Performance Summary on page 7. This was significantly
higher than the total returns of its indices, such as the J.P. Morgan U.S.
Government Bond Index and J.P. Morgan U.S. Government Bond/Latin Eurobond Index,
which delivered a total return of 4.21% and 9.40%, respectively, for the period.
- --------------------------------------------------------------------------------
TEMPLETON AMERICAS GOVERNMENT SECURITIES FUND
[PIE CHART]
Geographic Distribution on 3/31/97
Based on Total Net Assets
<TABLE>
<S> <C>
United States 30.1%
Brazil 18.5%
Guatemala 0.5%
Colombia 1.1%
Ecuador 2.0%
Mexico 17.4%
Venezuela 3.7%
Panama 1.2%
Trinidad & Tobago 0.6%
Argentina 18.8%
Short-Term Obligations & Other Net Assets 6.1%
</TABLE>
Responding to investment opportunities in Latin America, we made substantial
adjustments to the Fund's portfolio during the fiscal year. At the beginning of
the period, 48.6% of the Fund's total net assets were invested in Latin America,
46.6% in the U.S., and 4.8% in short-term obligations and other net assets. By
March 31, 1997, our position in Latin America had increased to 63.8% of total
net assets, with 30.1% in the U.S., and 6.1% in short-term obligations and other
net assets.
As you can see in the chart above, Brazil, Argentina, and Mexico were our
largest Latin
2
<PAGE> 3
American allocations at the end of the fiscal year. During the period, Brazil
stabilized its currency, and we increased our Brazilian holdings, from 15.1% of
total net assets to 18.5%. Reduced government spending, higher bond yields than
in the U.S., and improved economic conditions helped to attract foreign capital
to Argentina and Mexico. Anticipating continued economic growth in these
countries, we increased our Argentinean position, from 13.6% of total net assets
to 18.8%, and our Mexican holdings, from 7.3% to 17.4%, during the fiscal year.
Most of our Latin American additions were funded with proceeds from sales of our
U.S. holdings.
Looking forward, we are cautiously optimistic about the investment potential of
government securities in the Western Hemisphere. In Latin America, many
countries that have expressed a commitment to market-friendly reforms have
successfully restructured their economies. However, other Latin American nations
may find it difficult to restructure because of the social costs involved. The
resulting political risk is that specific interest groups may exploit social
discontent to resist reform. We will continue to watch these developments, as we
seek a balanced portfolio offering attractive risk/reward values.
TEMPLETON AMERICAS GOVERNMENT
SECURITIES FUND
Portfolio Breakdown on 3/31/97
Based on Total Net Assets
<TABLE>
<S> <C>
Government Bonds (U.S. and Foreign) 85.0%
Corporate Bonds (U.S. and Foreign) 8.9%
Short-Term Obligations & Other Net Assets 6.1%
</TABLE>
FOR A COMPLETE LIST OF PORTFOLIO HOLDINGS, PLEASE SEE PAGE 10 OF THIS REPORT.
Of course, investments in foreign securities concentrated in a single region
involve special risks, such as market and currency volatility, and adverse
economic, social, and political developments in the countries where the Fund is
invested. Emerging markets involve heightened risks related to the same factors,
in addition to risks associated with political instability, higher rates of
inflation, controls on foreign investment, and the relatively small size and
lesser liquidity of these markets. The Fund may also invest in lower-rated or
unrated debt securities that have high credit risk and may be predominantly
3
<PAGE> 4
speculative. These risks and other considerations are discussed in the Fund's
prospectus.
This discussion reflects the strategies we employed for the Fund during the 12
months under review, and includes our opinions as of the close of the period.
Since economic and market conditions are constantly changing, our strategies,
and our 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.
We thank you for your participation in the Templeton Americas Government
Securities Fund, and welcome any comments or suggestions you may have.
Sincerely,
/s/ Thomas J. Dickson
Thomas J. Dickson
/s/ Alexander C. Calvo
Alexander C. Calvo
/s/ Cynthia A. New
Cindy A. New
Portfolio Management Team
Templeton Americas Government Securities Fund
- --------------------------------------------------------------------------------
CELEBRATING 50 YEARS
This year marks 50 years of business for Franklin Templeton. Over these years,
we have experienced profound changes in technology, regulations and customer
expectations within the mutual fund industry. As one of the largest mutual fund
families, we're proud to be an innovative industry leader, providing people like
you with an opportunity to invest in companies and governments around the globe.
In addition, we want to stress that all securities markets move both up and
down. Mixed in with the good years can be some bad years. Accordingly, mutual
fund share prices also move up and down. Every investor should expect such
fluctuations, which can be wide. When markets are going down, as well as up, we
encourage investors to maintain a long-term perspective. We thank you for your
past support and look forward to serving your investment needs in the years
ahead.
- --------------------------------------------------------------------------------
4
<PAGE> 5
PERFORMANCE SUMMARY
The Templeton Americas Government Securities Fund provided a cumulative total
return of 16.23% for the one-year period ended March 31, 1997. Cumulative total
return represents the change in value of an investment, assuming reinvestment of
dividends and capital gains, and does not include the initial sales charge.
The Fund's share price, as measured by net asset value, increased 44 cents
($0.44), from $10.20 on March 31, 1996, to $10.64 on March 31, 1997. During this
time, shareholders received distributions of 77 cents ($0.77) per share in
dividend income and 38 cents ($0.38) per share in capital gains, of which 15.5
cents ($0.155) represented long-term gains and 22.5 cents ($0.225) represented
short-term gains. Of course, past performance is not predictive of future
results. Distributions will vary depending on income earned by the Fund, and any
profits realized from the sale of securities in the portfolio, as well as the
level of the Fund's operating expenses.
The graph on page 7 compares the Fund's performance since its inception with
that of the Lehman Brothers U.S. Treasury Index, J.P. Morgan U.S. Government
Bond Index, J.P. Morgan U.S. Government Bond/Emerging Markets Bond Plus (EMBI+)
Latin Index, and J.P. Morgan U.S. Government Bond/Latin Eurobond Index.*
*THE LEHMAN BROTHERS U.S. TREASURY INDEX INCLUDES FIXED-RATE DEBT ISSUES RATED
INVESTMENT GRADE OR HIGHER BY MOODY'S, STANDARD & POOR'S, OR FITCH, WHICH HAVE
AT LEAST ONE YEAR TO MATURITY. RETURNS ARE MARKET VALUE WEIGHTED AND INCLUDE
ACCRUED INTEREST.
THE J.P. MORGAN U.S. GOVERNMENT BOND INDEX IS A TOTAL RETURN INDEX THAT TRACKS
THE U.S. TREASURIES MARKET. EACH ISSUE IS WEIGHTED ACCORDING TO ITS TRADED
MARKET CAPITALIZATION IN U.S. DOLLAR TERMS. ALL ISSUES INCLUDED IN THE INDEX
HAVE REMAINING MATURITIES OF ONE YEAR OR LONGER.
THE J.P. MORGAN U.S. GOVERNMENT BOND/EMERGING MARKETS BOND PLUS LATIN INDEX
COMBINES 60% OF THE J.P. MORGAN U.S. GOVERNMENT BOND INDEX AND 40% OF THE
EMERGING MARKET BOND PLUS LATIN INDEX. THE EMERGING MARKETS BOND PLUS LATIN
INDEX TRACKS TOTAL RETURNS FOR TRADED DEBT INSTRUMENTS IN ARGENTINA, BRAZIL,
ECUADOR, MEXICO, PANAMA, PERU, AND VENEZUELA, REFLECTING THE SIZE AND LIQUIDITY
OF LATIN EXTERNAL DEBT MARKETS. INCLUDED IN THE INDEX ARE U.S. DOLLAR- AND OTHER
EXTERNAL-CURRENCY-DENOMINATED BRADY BONDS, LOANS, EUROBONDS, AND LOCAL MARKETS
INSTRUMENTS.
THE J.P. MORGAN U.S. GOVERNMENT BOND/LATIN EUROBOND INDEX COMBINES 60% OF THE
J.P. MORGAN U.S. GOVERNMENT BOND INDEX AND 40% OF THE LATIN EUROBOND INDEX. THE
LATIN EUROBOND INDEX COVERS EUROBONDS OF OVER U.S.$100 MILLION IN SIZE, BUT ONLY
FROM LATIN AMERICA.
5
<PAGE> 6
Given the Fund's holdings, management has added the J.P. Morgan U.S. Government
Bond/Latin Eurobond Index this year because we believe the composition of this
index provides for a more appropriate comparison to the Fund's current and past
portfolio. The portfolio invests in both corporate and sovereign debt in Latin
America, and in this regard, the J.P. Morgan U.S. Government Bond/Latin Eurobond
Index provides a more suitable comparison. The J.P. Morgan U.S. Government
Bond/Emerging Markets Bond Plus (EMBI+) Latin Index and Lehman Brothers U.S.
Treasury Index may be excluded in next year's report. Please remember that the
Fund's performance differs from that of an index because an index is not managed
according to any investment strategy, does not contain cash (the Fund generally
carries a certain percentage of cash at any given time), and includes no sales
charges or management expenses. Of course, one cannot invest directly in an
index, and an index is not representative of the Fund's portfolio.
6
<PAGE> 7
TEMPLETON AMERICAS GOVERNMENT SECURITIES FUND
Total Return Index Comparison
$10,000 Investment (6/27/94-3/31/97)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
TAGS FUND LB TSY JPM GOV BOND
- -------------------------------------------------------------------------------------------------------
Hypo Monthly Hypo. Monthly Hypo.
Investment Total Ret. Investment Total Ret. Investment
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
6/27/94 $ 9,579 $ 10,000 10,000
Jun-94 $ 9,579 -0.02% $ 9,998 -0.66% 9,934
Jul-94 $ 9,607 1.82% $ 10,180 1.64% 10,096
Aug-94 $ 9,636 0.02% $ 10,182 0.13% 10,109
Sep-94 $ 9,655 -1.40% $ 10,039 -1.19% 9,989
Oct-94 $ 9,665 -0.06% $ 10,033 -0.06% 9,983
Nov-94 $ 9,670 -0.20% $ 10,013 -0.30% 9,953
Dec-94 $ 9,553 0.61% $ 10,074 0.57% 10,010
Jan-95 $ 9,476 1.85% $ 10,261 1.74% 10,184
Feb-95 $ 9,451 2.13% $ 10,479 2.11% 10,399
Mar-95 $ 9,451 0.63% $ 10,545 0.66% 10,468
Apr-95 $ 9,678 1.31% $ 10,683 1.22% 10,596
May-95 $ 9,955 4.04% $ 11,115 3.72% 10,989
Jun-95 $ 9,956 0.79% $ 11,203 0.80% 11,077
Jul-95 $10,015 -0.37% $ 11,161 -0.27% 11,047
Aug-95 $10,186 1.16% $ 11,291 1.07% 11,165
Sep-95 $10,347 0.96% $ 11,399 0.89% 11,264
Oct-95 $10,407 1.55% $ 11,576 1.41% 11,423
Nov-95 $10,632 1.55% $ 11,755 1.48% 11,592
Dec-95 $10,907 1.43% $ 11,923 1.32% 11,746
Jan-96 $11,307 0.63% $ 11,998 0.69% 11,827
Feb-96 $10,904 -2.05% $ 11,753 -1.83% 11,611
Mar-96 $10,914 -0.87% $ 11,650 -0.75% 11,523
Apr-96 $11,107 -0.64% $ 11,576 -0.55% 11,460
May-96 $11,149 -0.16% $ 11,557 -0.13% 11,445
Jun-96 $11,358 1.27% $ 11,704 1.16% 11,577
Jul-96 $11,391 0.24% $ 11,732 0.25% 11,606
Aug-96 $11,568 -0.21% $ 11,707 -0.10% 11,594
Sep-96 $11,980 1.64% $ 11,899 1.49% 11,767
Oct-96 $12,093 2.20% $ 12,161 2.02% 12,005
Nov-96 $12,476 1.73% $ 12,372 1.63% 12,201
Dec-96 $12,556 -1.03% $ 12,244 -0.90% 12,091
Jan-97 $12,756 0.10% $ 12,256 0.18% 12,113
Feb-97 $12,826 0.12% $ 12,271 0.12% 12,128
Mar-97 -1.21% $12,671 -1.08% $ 12,139 -0.99% 12,008
- -------------------------------------------------------------------------------------------------------
CUM. TR 26.71% 21.39% 20.08%
- -------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
JPM GOV/EMBI+LATIN JPMGOV/LEI COMP.
COMP. 60/40 60/40
- -----------------------------------------------------------------------------------------------
Monthly Hypo. Monthly Hypo.
Total Ret. Investment Total Ret. Investment
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
6/27/94 10,000 10,000
Jun-94 -0.62% 9,938 -0.30% 9,970
Jul-94 2.14% 10,151 1.38% 10,107
Aug-94 3.47% 10,503 1.21% 10,229
Sep-94 -0.30% 10,472 -1.05% 10,122
Oct-94 -1.08% 10,359 -0.42% 10,080
Nov-94 0.10% 10,369 -0.29% 10,050
Dec-94 -2.44% 10,116 -2.75% 9,774
Jan-95 -0.56% 10,059 -2.14% 9,565
Feb-95 -1.10% 9,949 0.36% 9,599
Mar-95 -0.48% 9,901 0.08% 9,607
Apr-95 5.16% 10,412 6.36% 10,218
May-95 5.71% 11,006 4.32% 10,659
Jun-95 0.74% 11,088 1.04% 10,770
Jul-95 0.09% 11,098 2.40% 11,029
Aug-95 1.60% 11,275 1.16% 11,157
Sep-95 2.04% 11,505 1.01% 11,269
Oct-95 0.28% 11,537 0.37% 11,311
Nov-95 2.34% 11,807 2.16% 11,555
Dec-95 3.79% 12,255 2.24% 11,814
Jan-96 3.67% 12,705 1.92% 12,041
Feb-96 -3.64% 12,242 -1.73% 11,833
Mar-96 0.59% 12,314 0.08% 11,842
Apr-96 1.68% 12,521 0.63% 11,917
May-96 0.45% 12,578 0.08% 11,926
Jun-96 1.81% 12,805 1.16% 12,065
Jul-96 0.45% 12,863 0.18% 12,086
Aug-96 1.27% 13,026 0.97% 12,203
Sep-96 3.38% 13,467 1.81% 12,424
Oct-96 1.33% 13,646 1.36% 12,593
Nov-96 2.92% 14,044 2.58% 12,918
Dec-96 -0.07% 14,034 0.01% 12,920
Jan-97 1.63% 14,263 0.88% 13,033
Feb-97 0.62% 14,352 0.68% 13,122
Mar-97 -1.21% -1.94% 14,073 -1.27% 12,955
- -----------------------------------------------------------------------------------------------
CUM. TR 40.73% 29.55%
- -----------------------------------------------------------------------------------------------
</TABLE>
1. INCLUDES ALL SALES CHARGES AND REPRESENTS THE CHANGE IN VALUE OF AN
INVESTMENT OVER THE PERIOD SHOWN, ASSUMING REINVESTMENT OF DIVIDENDS AND
CAPITAL GAINS AT NET ASSET VALUE. PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE
RESULTS.
2. INDEX IS UNMANAGED AND INCLUDES REINVESTED INTEREST.
TEMPLETON AMERICAS GOVERNMENT SECURITIES FUND
Periods ended 3/31/97
<TABLE>
<CAPTION>
Since
Inception
One-Year (6/27/94)
<S> <C> <C>
Cumulative
Total Return(1) 16.23% 32.45%
Average Annual
Total Return(2) 11.29% 8.98%
</TABLE>
1. CUMULATIVE TOTAL RETURN REPRESENTS THE CHANGE IN VALUE OF AN INVESTMENT OVER
THE SPECIFIED 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 SPECIFIED PERIODS AND INCLUDES THE MAXIMUM 4.25% INITIAL
SALES CHARGE.
ALL TOTAL RETURN CALCULATIONS ASSUME REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS
AT NET ASSET VALUE. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE WITH
MARKET CONDITIONS, CURRENCIES, AND THE ECONOMIC, SOCIAL, AND POLITICAL CLIMATES
OF COUNTRIES WHERE INVESTMENTS ARE MADE. EMERGING MARKETS INVOLVE HEIGHTENED
RISKS RELATED TO THE SAME FACTORS, IN ADDITION TO THOSE ASSOCIATED WITH THE
RELATIVELY SMALL SIZE AND LESSER LIQUIDITY OF THESE MARKETS. YOU MAY HAVE A GAIN
OR LOSS WHEN YOU SELL YOUR SHARES. PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE
RESULTS.
THE FUND'S INVESTMENT MANAGER AND FUND ADMINISTRATOR HAVE AGREED IN ADVANCE TO
REDUCE A PORTION OF THEIR RESPECTIVE FEES AND, IN THE CASE OF THE FUND
ADMINISTRATOR, TO MAKE CERTAIN PAYMENTS TO REDUCE EXPENSES, WHICH INCREASES
TOTAL RETURN TO SHAREHOLDERS. IF THEY HAD NOT TAKEN THIS ACTION, THE FUND'S
TOTAL RETURNS WOULD HAVE BEEN LOWER. AFTER AUGUST 1, 1997, THE FEE REDUCTION AND
EXPENSE REIMBURSEMENTS MAY BE DISCONTINUED AT ANY TIME UPON NOTICE TO THE FUND'S
BOARD OF DIRECTORS.
7
<PAGE> 8
Many investors have asked us about the activities of Sir John Templeton, since
his retirement from the funds. We asked Professor Robert Herrmann to update us
on Sir John's current activities and his comments follow.
THE NEW CAREER OF
SIR JOHN TEMPLETON
[PICTURE OF SIR JOHN TEMPLETON]
BY PROFESSOR ROBERT HERRMANN
In 1992, Sir John Templeton retired after a 50-year career of helping investors
manage their money. Currently, he devotes all of his time and efforts to the
John Templeton Foundation. A major portion of his assets remain invested in
Templeton funds, managed by many of the investment professionals he selected and
trained. For sentimental reasons, he allows his name to be associated with the
funds, although he knows no more about their management and holdings than any
other investor.
Sir John Templeton established the Templeton Foundation in 1987, to foster the
acquisition of spiritual information through scientific research. Working with
scientists, theologians and others, he strives toward a new science that uses
empirical and statistical scientific methods to discover and test spiritual
knowledge. A crucial ingredient in his research is what Sir John calls "humility
theology," an attitude of humility toward the Creator, combined with
receptiveness to the theological significance of current scientific discoveries.
Universal spiritual laws, or "laws of life," are among the areas of
investigation. In his recent book, Worldwide Laws of Life, Sir John compiles 200
laws and proverbs from nearly all religions, and deeply embedded in human
history. For example, the Golden Rule taught by Jesus in the Sermon on the
Mount, states "Do unto others as you would have others do unto you," and is
affirmed by all major religions as an acceptable, universal law of life. Other
books which Sir John has authored or co-authored during the past few years
include: The Humble Approach, Is God the Only Reality, Evidence of Purpose,
Who's Who in Theology and Science and The God Who Would Be Known.
With an annual budget of more than $30 million, the Templeton Foundation
sponsors 60 programs focusing on spiritual progress and the benefits of freedom.
Sir John's first sizable investment in the programs was the Templeton Prize for
Progress in Religion. A panel of nine judges gives the annual award which now
exceeds $1.2 million to individuals who have shown extraordinary originality in
furthering the world's understanding of God or spirituality.
Recipients of the prize include Professor Paul Davies, author of The Mind of
God; the Right Honorable Lord Jacobovits, former Chief Rabbi of Great Britain
and The Commonwealth; the Reverend Dr. Billy Graham, world-renowned preacher and
presidential inauguration speaker; Mr. Nikkyo Nimano, founder of the World
Conference on Religion and Peace; and Sir Sarepalli Radhakrishnan, former
President of India, and Oxford professor of Eastern Religions and Ethics.
To encourage young people's and their parents' appreciation of spiritual laws of
life, Sir John established an essay contest for teenagers in his home county of
Franklin, Tennessee. Students submit essays about the spiritual life principles
they plan to follow, and prizes are offered semiannually. In 1996, more than 800
youth participated. Twenty-six similar programs have been launched in various
locations, with the support of generous local donors.
The Foundation also sponsors a worldwide program that awards college-level
faculty who teach courses integrating science and religion. During the program's
first two years, more than 200 courses were created. The Foundation maintains an
extensive program of research and education on the health benefits of
spirituality, including prizes for medical schools providing courses on
spirituality in medicine. Lastly, the Foundation publishes a newsletter with
over 2,000 subscribers. Free subscriptions are available to Templeton
shareholders by writing to the Foundation.
To contact Sir John Templeton or receive the free newsletter subscription,
please write to:
The John Templeton Foundation
2 Radnor Corporate Center #320
100 Matsonford Road
Radnor, PA 19087
8
<PAGE> 9
TEMPLETON AMERICAS GOVERNMENT SECURITIES FUND
Financial Highlights
- --------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
JUNE 27, 1994
YEAR ENDED MARCH 31 (COMMENCEMENT
-------------------------- OF OPERATIONS) TO
1997 1996 MARCH 31, 1995
-------- -------- ----------------
<S> <C> <C> <C>
Net asset value, beginning of period $ 10.20 $ 9.59 $ 10.00
-------- -------- --------
Income from investment operations:
Net investment income .74 .75 .30
Net realized and unrealized gain (loss) .85 .71 (.43)
-------- -------- --------
Total from investment operations 1.59 1.46 (.13)
-------- -------- --------
Distributions:
Dividends from net investment income (.77) (.69) (.28)
Distributions from net realized gains (.38) (.16) --
-------- -------- --------
Total distributions (1.15) (.85) (.28)
-------- -------- --------
Change in net asset value .44 .61 (.41)
-------- -------- --------
Net asset value, end of period $ 10.64 $ 10.20 $ 9.59
======== ======== ========
TOTAL RETURN* 16.23% 15.49% (1.33)%
RATIOS /SUPPLEMENTAL DATA
Net assets, end of period (000) $ 5,627 $ 3,540 $ 2,826
Ratio of expenses to average net assets 2.79% 4.98% 6.49%**
Ratio of expenses, net of reimbursement, to average net assets 1.25% 1.25% 1.25%**
Ratio of net investment income to average net assets 7.16% 7.47% 5.07%**
Portfolio turnover rate 275.02% 163.57% --
</TABLE>
* TOTAL RETURN DOES NOT REFLECT SALES COMMISSIONS. NOT ANNUALIZED FOR PERIODS
OF LESS THAN ONE YEAR.
** ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE> 10
TEMPLETON AMERICAS GOVERNMENT SECURITIES FUND
Investment Portfolio, March 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL* VALUE
---------------------------------------------------------------------------------------------------------------------
<C> <C> <S> <C>
BONDS --
CORPORATE: 8.9%
---------------------------------------------------------------------------------------------------------------------
60,000 U.S. Banco Ganadero SA, 9.75%, 8/26/99, 144A $ 62,550
70,000 U.S. Bancomer S.A., 8.00%, 7/07/98 70,131
50,000 U.S. Bridas Corp., Yankee, 12.50%, 11/18/99 54,188
60,000 U.S. Centrais Electricas Brasileiras SA, 61,950
65,000 U.S. Cemex SA, 10.75%, 7/15/00, 144A 67,438
100,000 U.S. Industrias Metalurgicas Pescarmona, 11.75%, 3/27/98 102,750
30,000 U.S. Sei Holdings IX Inc., 11%, 11/30/00, 144A 31,800
50,000 U.S. Tevecap SA, 12.625%, 11/26/04, 144A 51,750
----------
TOTAL BONDS --
CORPORATE (cost
$477,710) 502,557
---------------------------------------------------------------------------------------------------------------------
BONDS --
GOVERNMENT &
GOVERNMENT
AGENCIES: 85.0%
---------------------------------------------------------------------------------------------------------------------
30,000 U.S. Associacion Nacional del Cafe, 11.00%, 8/31/98 30,562
Government of Brazil:
625,000 U.S. 8.875%, 11/15/01 622,656
385,000 U.S. L, 6.5625%, FRN, 4/15/12 303,669
Republic of Argentina: 6.8125% FRN, 3/31/05
305,000 U.S. 9.25%, 2/23/01 309,192
175,000 U.S. 11.00%, 10/09/06 179,594
400,000 U.S. 11.375%, 1/30/17 410,000
175,000 U.S. Republic of Ecuador, DISC, FRN, 6.50%, 2/28/25 113,969
67,692 U.S. Republic of Panama, 6.54688%, FRN, 5/10/02 65,746
210,000 U.S. U.S. Treasury Bond, 6.375%, 8/15/02 206,194
U.S. Treasury Notes:
520,000 U.S. 6.125%, 7/31/00 512,038
525,000 U.S. 6.25%, 8/31/00 518,766
225,000 U.S. 6.25%, 4/30/01 221,274
225,000 U.S. 8.00%, 5/15/01 235,195
United Mexican States:
60,000 U.S. 9.75%, 2/06/01 62,250
275,000 U.S. 9.875%, 1/15/07 286,344
370,000 U.S. 11.375%, 9/15/16 386,188
100,000 U.S. 11.50%, 5/12/26, GLOB BD 105,250
250,000 U.S. Venezuela DCB, 6.50%, FRN, 12/18/07 215,625
----------
TOTAL BONDS --
GOVERNMENT &
GOVERNMENT
AGENCIES (cost
$4,801,761) 4,784,512
---------------------------------------------------------------------------------------------------------------------
SHORT TERM
OBLIGATIONS: 8.3%
---------------------------------------------------------------------------------------------------------------------
350,000 U.S. Federal Home Loan Mortgage Corp., 5.30%, 4/17/97 349,154
115,000 U.S. U.S. Treasury Bill, 5.03%, 4/17/97 114,730
----------
TOTAL SHORT TERM
OBLIGATIONS (cost
$463,851) 463,884
---------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS:
102.2% (cost
$5,743,322) 5,750,953
OTHER ASSETS,
LESS LIABILITIES:
(2.2%) (123,874)
----------
TOTAL NET ASSETS:
100.0% $5,627,079
==========
</TABLE>
* Denominated in currency of country indicated.
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE> 11
TEMPLETON AMERICAS GOVERNMENT SECURITIES FUND
Financial Statements
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1997
<TABLE>
<S> <C>
Assets:
Investments in securities, at value
(identified cost $5,743,322) $5,750,953
Cash 50,400
Receivables:
Expense reimbursement 32,525
Interest 108,082
Fund shares sold 161,236
Unamortized organization costs 31,182
----------
Total assets 6,134,378
----------
Liabilities:
Investment securities purchased 456,446
Accrued expenses 50,853
----------
Total liabilities 507,299
----------
Net assets, at value $5,627,079
==========
Net assets consist of:
Net unrealized appreciation $ 7,631
Accumulated net realized gain 216,541
Net capital paid in on shares of
beneficial interest 5,402,907
----------
Net assets, at value $5,627,079
==========
Shares outstanding 529,005
==========
Net asset value per share
($5,627,079 divided by 529,005 shares
outstanding) $ 10.64
==========
Maximum offering price
($10.64 divided by 95.75%) $ 11.11
==========
</TABLE>
STATEMENT OF OPERATIONS
for the year ended March 31, 1997
<TABLE>
<S> <C> <C>
Interest income $382,575
Expenses:
Management fees (Note 3) $ 27,267
Administrative fees (Note 3) 6,819
Distribution fees (Note 3) 17,428
Transfer agent fees (Note 3) 3,050
Custodian fees 100
Reports to shareholders 20,412
Audit fees 8,100
Legal fees 100
Registration and filing fees 30,100
Amortization of organization costs 13,375
Other 129
--------
Total expenses 126,880
Less expenses reimbursed (Note 3) (70,028)
--------
Total expenses less
reimbursement 56,852
--------
Net investment income 325,723
Realized and unrealized gain (loss):
Net realized gain (loss) on:
Investments 338,412
Foreign currency transactions (20)
--------
338,392
Net unrealized depreciation on
investments (12,040)
--------
Net realized and unrealized gain 326,352
--------
Net increase in net assets resulting
from operations $652,075
========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE> 12
TEMPLETON AMERICAS GOVERNMENT SECURITIES FUND
Financial Statements (cont.)
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
for the years ended March 31, 1997 and 1996
<TABLE>
<CAPTION>
1997 1996
---------- ----------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income $ 325,723 $ 240,060
Net realized gain on investment and foreign currency transactions 338,392 82,947
Net unrealized appreciation (depreciation) (12,040) 123,691
---------- ----------
Net increase in net assets resulting from operations 652,075 446,698
Distributions to shareholders:
From net investment income (333,384) (219,418)
From net realized gain (157,434) (48,915)
Fund share transactions (Note 2) 1,925,649 535,747
---------- ----------
Net increase in net assets 2,086,906 714,112
Net assets:
Beginning of year 3,540,173 2,826,061
---------- ----------
End of year $5,627,079 $3,540,173
========== ==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE> 13
TEMPLETON AMERICAS GOVERNMENT SECURITIES FUND
Notes to Financial Statements
- --------------------------------------------------------------------------------
1. SUMMARY OF ACCOUNTING POLICIES
Templeton Americas Government Securities Fund (the Fund) is a separate series of
Templeton Global Investment Trust (the Trust) which is an open-end,
non-diversified management investment company registered under the Investment
Company Act of 1940. The Fund seeks a high level of current income with total
return as a secondary objective by investing at least 65% of its total net
assets in debt securities issued or guaranteed by governments, government
agencies, political subdivisions and other government entities of countries
located in the Western Hemisphere, defined as countries located in North, South,
or Central America or the surrounding waters. 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 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 in good faith by management and approved 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.
13
<PAGE> 14
TEMPLETON AMERICAS GOVERNMENT SECURITIES FUND
Notes to Financial Statements (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
At March 31, 1997, there were an unlimited number of shares of beneficial
interest authorized ($0.01 par value). Transactions in the Fund's shares were as
follows:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
MARCH 31, 1997 MARCH 31, 1996
--------------------- ------------------
SHARES AMOUNT SHARES AMOUNT
-------- ---------- ------ ---------
<S> <C> <C> <C> <C>
Shares sold 265,772 $ 2,816,965 80,107 $ 825,694
Shares issued on reinvestment of distributions 42,982 454,556 25,304 258,089
Shares redeemed (126,942) (1,345,872) (52,953) (548,036)
-------- ----------- ------- ---------
Net increase 181,812 $ 1,925,649 52,458 $ 535,747
======== =========== ======= =========
</TABLE>
Templeton Global Investors, Inc., an affiliate of the Fund, is the record owner
of 308,798 shares as of March 31, 1997.
3. INVESTMENT MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Certain officers of the Fund are also directors or officers of Templeton
Investment Counsel, Inc. (TICI), Franklin Templeton Services, Inc. (FTSI),
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 TICI equal, on an annual
basis, to 0.60% of the average daily net assets of the Fund. The Fund pays FTSI
monthly its allocated share of an administrative fee of 0.15% per annum on the
first $200 million of the Trust's aggregate average daily 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. TICI and FTSI have voluntarily
agreed to reduce their respective fees to the extent necessary to limit total
expenses to an annual rate of 1.25% of average net assets through August 1,
1997. The amount of the reimbursement for the year ended March 31, 1997 is set
forth in the Statement of Operations. For the year ended March 31, 1997, FTD
received net commissions of $5,018 from the sale of the Fund's shares and FTIS
received fees of $3,050.
Pursuant to a distribution plan, the Fund reimburses FTD monthly (subject to a
limit of 0.35% per annum of the Fund's average daily net assets) for FTD's cost
and expenses in connection with any activity that is primarily intended to
result in a sale of Fund shares. Such distribution fees are set forth in the
Statement of Operations. Under the distribution plan, costs and expenses
exceeding the maximum may be reimbursed in subsequent periods. At March 31,
1997, unreimbursed expenses amounted to $4,901.
An officer of the Fund is a partner of Dechert Price & Rhoads, legal counsel for
the Fund, which firm received legal fees for the year ended March 31, 1997.
14
<PAGE> 15
TEMPLETON AMERICAS GOVERNMENT SECURITIES FUND
Notes to Financial Statements (cont.)
- --------------------------------------------------------------------------------
4. PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities (excluding short-term securities) for the year
ended March 31, 1997 aggregated $12,671,497 and $11,120,324, respectively. The
cost of securities for federal income tax purposes is 5,762,514. Realized gains
and losses are reported on an identified cost basis.
At March 31, 1997, 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 $ 41,172
Unrealized depreciation (52,733)
--------
Net unrealized depreciation $(11,561)
========
</TABLE>
15
<PAGE> 16
TEMPLETON AMERICAS GOVERNMENT SECURITIES FUND
Independent Auditor's Report
- --------------------------------------------------------------------------------
The Board of Trustees and Shareholders
Templeton Americas Government Securities Fund
We have audited the accompanying statement of assets and liabilities, including
the investment portfolio, of Templeton Americas Government Securities Fund as of
March 31, 1997, and the related statement of operations for the year then ended,
the statements of changes in net assets for each of the two years in the period
then ended, and the financial highlights for the periods indicated in the
accompanying financial statements. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of March
31, 1997, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Templeton Americas Government Securities Fund as of March 31, 1997, the results
of its operations, the changes in its net assets and the financial highlights
for the periods indicated, in conformity with generally accepted accounting
principles.
/s/ McGladrey & Pullen, LLP
New York, New York
April 25, 1997
16
<PAGE> 17
NOTES
<PAGE> 18
NOTES
<PAGE> 19
FRANKLIN TEMPLETON GROUP OF FUNDS
LITERATURE REQUEST - Call 1-800/DIAL BEN (1-800/342-5236) today for a free
descriptive brochure and prospectus on any of the funds listed below. The
prospectus contains more complete information, including fees, charges and
expenses, and should be read carefully before investing or sending money.
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.
FUND ALLOCATOR SERIES:
Franklin Templeton Conservative Target Fund
Franklin Templeton Moderate Target Fund
Franklin Templeton Growth Target Fund
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 Securities 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.
+FRANKLIN VALUEMARK AND FRANKLIN TEMPLETON VALUEMARK INCOME PLUS ARE ISSUED BY
ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA OR BY ITS WHOLLY OWNED
SUBSIDIARY, PREFERRED LIFE INSURANCE COMPANY OF NEW YORK, AND DISTRIBUTED BY
NALAC FINANCIAL PLANS, LLC.
FGF 02/97
<PAGE> 20
FGF 02/97
<PAGE> 21
[MAP OF WORLD]
Templeton Americas
Government Securities Fund
Auditors
McGladrey & Pullen, LLP
555 Fifth Avenue
New York, New York 10017-2416
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 Americas Government Securities Fund, which contains more complete
information including risk factors, 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.
[RECYCLE LOGO]
[TL416 A97 5/97]
TEMPLETON
AMERICAS
GOVERNMENT
SECURITIES
FUND
ANNUAL REPORT
MARCH 31, 1997
[FRANKLIN TEMPLETON 50 YEARS LOGO]
[FRANKLIN TEMPLETON LOGO]
