SEMI ANNUAL REPORT
[PICTURE OF GLOBE]
September 30, 1997
TEMPLETON
GROWTH AND
INCOME FUND
[FRANKLIN TEMPLETON LOGO]
<PAGE>
[FRANKLIN TEMPLETON CELEBRATING OVER 50 YEARS LOGO]
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.
[PHOTO OF MARK HOLOWESKO]
Mark Holowesko, CFA
President
Templeton Global Investment Trust
<PAGE>
SHAREHOLDER LETTER
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.
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, 1997. During this
time, the U.S. and European stock markets generally performed well, but those of
several Asian countries fell. Within this environment, the Fund's Class I shares
provided a six-month cumulative total return of 15.58%, as discussed in the
Performance Summary on page 5.
With the U.S. economy in its seventh year of expansion, unemployment hit a
23-year low and consumer confidence a 27-year high. Inflation remained benign,
however, and the Dow Jones(R) Industrial Average soared to record highs during
the period. Although we had difficulty uncovering bargains in the U.S. equity
market, we purchased shares of AT&T Corp.*, which had suffered from competition
in its long-distance business, but which we believed had not yet fully exploited
its potential in the local, wireless, and overseas markets. We also added to our
holdings of IBP Inc., a large, meat producer with 24 sites across North America;
and Pharmacia & Upjohn Inc., a global
*A complete listing of all stocks in the portfolio as of September 30, 1997
begins on page 11.
CONTENTS
Shareholder Letter........... 1
Performance Summary.......... 5
Financial Highlights and
Statement of Investments..... 9
Financial Statements.........16
Notes to Financial
Statements...................19
[GRAPHIC OF PYRAMID]
<PAGE>
[PIE CHART]
ASSET ALLOCATION
Based on Total Net Assets
9/39/97
Europe 34.0%
United States 21.2%
Asia 10.8%
Latin America 6.9%
Australia 2.1%
Middle East & Africa 1.5%
Canada 1.2%
Fixed-Income Securities 9.0%
Short-Term Obligations & Other Net Assets 13.3%
pharmaceutical company created through the merger of Sweden's Pharmacia and
Upjohn Co., a U.S.-based drug company.
During the reporting period, Europe's economic expansion gained strength as
domestic sales in many European countries improved and their exports increased.
We found reasonable value in the United Kingdom, nearly doubling our holdings
there by initiating positions in Caradon Plc. and Hepworth Plc., two building
material companies that we considered undervalued. And we initiated a position
in Laird Group Plc., a motor component manufacturer with divisions in computer
components and building supplies, which we also considered undervalued.
As equity markets in developed countries rose, currency crises caused the Thai,
Malaysian, Philippine, and Indonesian stock markets to suffer significant price
declines. Taking advantage of this situation, our research team discovered
stocks we believed to be undervalued in these countries and we broadened our
Asian exposure. We initiated positions in PT Lippo Bank, one of the largest
Indonesian private banks; Thai Glass Industries Public Co. Ltd., a large
independent bottle maker for the beverage industry in Thailand; and Metro
Pacific Corp., a Philippine investment holding company. We also focused on the
Hong Kong and Chinese markets, purchasing shares of Swire Pacific Ltd., a large
Hong Kong holding company, and Yizheng Chemical Fibre Co. Ltd., a large producer
of polyester in China.
Although many countries have experienced bull markets recently, we believe it is
worth remembering that bear markets generally occur once every five years. At
the end of the reporting period, the U.S. bull market was in its seventh year,
and no one knows how long it will last. However, bear markets typically result
in the share prices of many companies being oversold, which could provide us the
opportunity to add to our
2
<PAGE>
portfolio. And shareholders should take heart knowing that we usually buy stocks
of companies that are already out of favor with investors but pay solid
dividends. Looking forward, we will continue to focus on value, applying our
bottom-up investment approach to determine which stocks to purchase. Our
objective remains to uncover those stocks selling at the lowest valuations
relative to their long-term earnings prospects, regardless of their industries
or location.
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.
Because economic and market conditions are constantly changing, our strategies,
and our evaluations, conclusions, and decisions regarding portfolio holdings may
change as new circumstances arise. All figures shown are as of September 30,
1997, and the Fund's holdings can be expected to change with market developments
and management of the portfolio. Although past performance of a specific
investment or sector cannot guarantee future performance, such information can
be useful in analyzing the 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. Emerging markets are
represented in the Fund's portfolio, and they involve heightened risks related
to the same factors, in addition to risks associated with their relatively small
size and lesser liquidity. 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.
TOP 10 HOLDINGS
9/30/97
<TABLE>
<CAPTION>
COMPANY, % OF TOTAL
INDUSTRY, COUNTRY NET ASSETS
- ----------------------------------------------
<S> <C>
Thames Water Group Plc.,
Utilities - Electrical & Gas,
United Kingdom 1.6%
Nycomed ASA, A,
Health & Personal Care,
Norway 1.5%
Northern Foods Plc.,
Food & Household Products,
United Kingdom 1.5%
Telecom Italia SpA, di Risp,
Telecommunications, Italy 1.5%
AT&T Corp.,
Telecommunications, U.S. 1.4%
Zuerich Versicherungs,
Insurance, Switzerland 1.4%
National Grid Holdings Plc.,
Utilities Electrical & Gas,
United Kingdom 1.3%
Merita Ltd., A,
Banking, Finland 1.3%
Pharmacia & Upjohn Inc.,
Health & Personal Care, U.S. 1.3%
China Light & Power Co., Ltd.,
Utilities Electrical & Gas,
Hong Kong 1.2%
</TABLE>
For a complete list of portfolio holdings, please see page 11 of this report.
3
<PAGE>
We appreciate your participation in the Templeton Growth and Income Fund, and
welcome any comments or suggestions you may have.
Sincerely,
/s/ Mark Holowesko
- ------------------
Mark Holowesko, CFA
President
Templeton Global Investment Trust
/s/ Richard Sean Farrington
- ---------------------------
Richard Sean Farrington, CFA
Portfolio Manager
Templeton Growth and Income Fund
4
<PAGE>
PERFORMANCE SUMMARY
CLASS I
Templeton Growth and Income Fund - Class I provided a 15.58% cumulative total
return for the six-month period ended September 30, 1997. Cumulative 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 increased $1.84, from $12.95 on March 31, 1997,
to $14.79 on September 30, 1997. During this time, shareholders received
distributions totaling 16.0 cents ($0.16) per share, including 9.5 cents
($0.095) in long-term capital gains, 1.5 cents ($0.015) in short-term capital
gains, and 5.0 cents ($0.05) in dividend income. 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.
Past performance is not predictive of future results.
5
<PAGE>
CLASS I
Periods ended 9/30/97
<TABLE>
<CAPTION>
SINCE
INCEPTION
1-YEAR 3-YEAR (3/14/94)
------ ------ ---------
<S> <C> <C> <C>
Cumulative Total Return (1) 28.80% 59.55% 61.95%
Average Annual Total Return(2) 21.42% 14.57% 12.65%
Value of $10,000 Investment(3) $ 12,142 $ 15,037 $ 15,264
</TABLE>
1. Cumulative total returns represent the change in value of an investment over
the indicated periods and do not include the sales charge.
2. Average annual total returns represent the average annual change in value of
an investment over the indicated periods and include 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 assume reinvestment of dividend and capital gains distributions
at net asset value. Investment return and principal value will fluctuate with
market conditions, currency volatility, and the economic, social, and political
climates of the 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.
The Fund's Investment Manager and Fund Administrator have agreed in advance to
waive 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, total returns
for Class I shares would have been lower. After August 1, 1998, the fee waiver
and expense reimbursements may be discontinued at any time upon notice to the
Fund's Board of Trustees.
Past performance is not predictive of future results.
6
<PAGE>
CLASS II
Templeton Growth and Income Fund - Class II provided a 15.17% cumulative total
return for the six-month period ended September 30, 1997. Cumulative total
return represents the change in value of an investment, assuming reinvestment of
dividend and capital gains distributions, and does not include sales charges.
The price of the Fund's shares increased $1.79, from $12.84 on March 31, 1997,
to $14.63 on September 30, 1997. During this time, shareholders received
distributions totaling 14.34 cents ($0.1434) per share, including 9.5 cents
($0.095) in long-term capital gains, 1.5 cents ($0.015) in short-term capital
gains, and 3.34 cents ($0.0334) in dividend income. 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.
Past performance is not predictive of future results.
7
<PAGE>
CLASS II
Periods ended 9/30/97
<TABLE>
<CAPTION>
SINCE
INCEPTION
1-YEAR (5/1/95)
------ --------
<S> <C> <C>
Cumulative Total Return(1) 27.90% 54.78%
Average Annual Total Return(2) 25.64% 19.29%
Value of $10,000 Investment(3) $ 12,564 $ 15,323
</TABLE>
1. Cumulative total returns represent the change in value of an investment over
the indicated periods and do not include sales charges.
2. Average annual total returns represent the average annual change in value of
an investment over the indicated periods. These figures include the deduction of
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 assume reinvestment of dividend and capital gains distributions
at net asset value. Investment return and principal value will fluctuate with
market conditions, currency volatility, 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 small size and lesser liquidity of these markets. You may have a gain
or loss when you sell your shares.
The Fund's Investment Manager and Fund Administrator have agreed in advance to
waive 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, total returns
for Class II shares would have been lower. After August 1, 1998, the fee waiver
and expense reimbursements may be discontinued at any time upon notice to the
Fund's Board of Trustees.
Past performance is not predictive of future results.
8
<PAGE>
TEMPLETON GROWTH AND INCOME FUND
Financial Highlights
<TABLE>
<CAPTION>
CLASS I
-----------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED MARCH 31,
SEPTEMBER 30, 1997 -------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994+
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the
period)
Net asset value, beginning of period.... $12.95 $11.39 $10.05 $10.01 $10.00
------------------------------------------------------------------------------
Income from investment operations:
Net investment income.................. .19 .22 .29 .16 .009
Net realized and unrealized gains
(losses)............................. 1.81 1.60 1.54 (.02) .001
------------------------------------------------------------------------------
Total from investment operations........ 2.00 1.82 1.83 .14 .01
------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income... (.05) (.22) (.29) (.10) --
Distributions from net realized
gains................................ (.11) (.04) (.20) -- --
------------------------------------------------------------------------------
Total distributions..................... (.16) (.26) (.49) (.10) --
------------------------------------------------------------------------------
Net asset value, end of period.......... $14.79 $12.95 $11.39 $10.05 $10.01
==============================================================================
Total return*........................... 15.58% 16.19% 18.78% 1.43% .10%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's)....... $34,987 $25,020 $11,732 $5,953 $100
Ratios to average net assets:
Expenses............................... 1.78%** 2.24% 2.71% 6.11% 32.15%**
Expenses, including waiver............. 1.25%** 1.25% 1.25% 1.25% 1.25%**
Net investment income.................. 2.97%** 2.21% 2.98% 2.51% 1.89%**
Portfolio turnover rate................. 10.49% 20.72% 10.21% 19.33% --
Average commission rate paid***......... $.0009 $.0050 $.0250 -- --
</TABLE>
*Total return does not reflect sales commissions and is not annualized.
**Annualized.
***Relates to purchases and sales of equity securities. Prior to fiscal year end
1996 disclosure of average commission rate was not required.
+For the period March 14, 1994 (commencement of operations) to March 31,1994.
See notes to financial statements.
9
<PAGE>
TEMPLETON GROWTH AND INCOME FUND
Financial Highlights (continued)
<TABLE>
<CAPTION>
CLASS II
--------------------------------------------
SIX MONTHS ENDED YEAR ENDED MARCH 31,
SEPTEMBER 30, 1997 ---------------------
(UNAUDITED) 1997 1996+
-----------------------------------------------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)
Net asset value, beginning of period.......................... $12.84 $11.33 $10.19
-----------------------------------------------------
Income from investment operations:
Net investment income........................................ .15 .21 .22
Net realized and unrealized gains............................ 1.78 1.52 1.41
-----------------------------------------------------
Total from investment operations.............................. 1.93 1.73 1.63
-----------------------------------------------------
Less distributions:
Dividends from net investment income......................... (.03) (.18) (.29)
Distributions from net realized gains........................ (.11) (.04) (.20)
-----------------------------------------------------
Total distributions........................................... (.14) (.22) (.49)
-----------------------------------------------------
Net asset value, end of period................................ $14.63 $12.84 $11.33
=====================================================
Total return*................................................. 15.17% 15.35% 16.51%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's)............................. $9,960 $6,017 $2,205
Ratios to average net assets:
Expenses..................................................... 2.43%** 2.89% 3.31%**
Expenses, including waiver................................... 1.90%** 1.90% 1.90%**
Net investment income........................................ 2.29%** 1.51% 1.59%**
Portfolio turnover rate....................................... 10.49% 20.72% 10.21%
Average commission rate paid***............................... $.0009 $.0050 $.0250
</TABLE>
*Total return does not reflect sales commissions or the contingent deferred
sales charge and is not annualized.
**Annualized.
***Relates to purchases and sales of equity securities.
+For the period May 1, 1995 (effective date) to March 31,1996.
See notes to financial statements.
10
<PAGE>
TEMPLETON GROWTH AND INCOME FUND
STATEMENT OF INVESTMENTS, SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS 73.6%
AEROSPACE & MILITARY TECHNICAL SYSTEMS 0.5%
General Motors Corp., H......................................... United States 3,761 $ 248,696
-----------
APPLIANCES & HOUSEHOLD DURABLES 1.9%
Guangdong Kelon Electrical Holdings Ltd., H, 144A............... China 350,000 452,313
Thorn Plc....................................................... United Kingdom 179,900 405,997
-----------
858,310
-----------
AUTOMOBILES 1.8%
Fiat SpA, di Risp............................................... Italy 105,710 205,890
Ford Motor Co................................................... United States 6,000 271,500
Volvo AB, B..................................................... Sweden 11,276 323,344
-----------
800,734
-----------
BANKING 8.3%
Banco Popular Espanol SA........................................ Spain 4,640 298,411
*Bank Handlowy W Warszawie SA, GDR, 144A........................ Poland 16,400 238,620
Banque Nationale de Paris BNP................................... France 5,209 262,441
Credit Commercial de France CCF................................. France 4,500 263,963
Korea Long Term Credit Bank..................................... South Korea 12,600 137,705
Krung Thai Bank................................................. Thailand 124,300 83,894
Merita Ltd., A.................................................. Finland 123,100 584,168
National Australia Cap Sec Plc.................................. Australia 14,850 436,219
National Westminster Bank Plc................................... United Kingdom 25,962 391,931
PT Bank Bali, fgn............................................... Indonesia 72,000 104,498
PT Lippo Bank, fgn.............................................. Indonesia 176,500 60,353
Shinhan Bank Co. Ltd............................................ South Korea 12,500 104,918
Singapore Finance Ltd., fgn..................................... Singapore 141,000 170,546
*Unibanco Uniao de Bancos Brasileiros SA, GDR................... Brazil 7,500 274,688
Unidanmark AS, A................................................ Denmark 4,883 315,669
-----------
3,728,024
-----------
BROADCASTING & PUBLISHING 0.2%
Hollinger International Inc., A................................. United States 1,800 24,075
Oriental Press Group Limited.................................... Hong Kong 250,000 80,770
-----------
104,845
-----------
BUILDING MATERIALS & COMPONENTS 2.5%
Anglian Group Plc............................................... United Kingdom 98,500 372,341
Caradon Plc..................................................... United Kingdom 61,300 189,231
*Mirgor SA Comercial Ind. Fin. Inmobiliari Agropecuaria, ADR,
144A.......................................................... Argentina 34,520 133,765
Hepworth Plc.................................................... United Kingdom 129,400 433,871
-----------
1,129,208
-----------
CHEMICALS 1.3%
Courtaulds Plc.................................................. United Kingdom 87,500 479,568
Shanghai Petrochemical Co. Ltd., H.............................. China 262,000 83,801
-----------
563,369
-----------
CONSTRUCTION & HOUSING 1.0%
Dragados y Construcciones SA.................................... Spain 19,200 428,968
-----------
</TABLE>
11
<PAGE>
TEMPLETON GROWTH AND INCOME FUND
STATEMENT OF INVESTMENTS, SEPTEMBER 30, 1997 (UNAUDITED) (continued)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS (CONT.)
DATA PROCESSING & REPRODUCTION 2.9%
*Bay Networks Inc............................................... United States 10,800 $ 417,150
International Business Machines Corp............................ United States 3,704 392,393
*Quantum Corp................................................... United States 12,600 482,738
-----------
1,292,281
-----------
ELECTRICAL & ELECTRONICS 2.9%
ABB AB, B....................................................... Sweden 21,800 307,531
Hitachi Ltd..................................................... Japan 44,000 382,862
Motorola Inc.................................................... United States 5,031 361,603
Tadiran Ltd., ADR............................................... Israel 6,300 233,100
-----------
1,285,096
-----------
ELECTRONIC COMPONENTS & INSTRUMENTS 0.5%
BICC Plc........................................................ United Kingdom 90,926 243,310
-----------
ENERGY EQUIPMENT & SERVICES 1.1%
Sun Co. Inc..................................................... United States 10,800 473,175
-----------
ENERGY SOURCES 1.5%
MOL Magyar Olay -- Es Gazipari RT, GDS 144A..................... Hungary 22,456 488,979
Valero Energy Corp., new........................................ United States 5,910 193,922
-----------
682,901
-----------
FINANCIAL SERVICES 1.2%
Banca Fideuram SpA.............................................. Italy 33,000 136,309
Morgan Stanley Dean Witter Discover & Co........................ United States 7,800 421,688
-----------
557,997
-----------
FOOD & HOUSEHOLD PRODUCTS 5.9%
Archer Daniels Midland Co....................................... United States 20,659 494,519
IBP Inc......................................................... United States 20,000 472,500
Northern Foods Plc.............................................. United Kingdom 168,800 659,853
Oshawa Group Ltd. (The)......................................... Canada 30,200 522,367
Tate & Lyle Plc................................................. United Kingdom 70,500 500,609
-----------
2,649,848
-----------
FOREST PRODUCTS & PAPER 3.7%
Assidomaen AB................................................... Sweden 9,600 327,809
Boise Cascade Corp.............................................. United States 8,603 361,864
Georgia-Pacific Corp............................................ United States 4,800 501,000
Portucel Industrial Empresa Product Celulose, ADR, 144A......... Portugal 18,900 153,351
*Shorewood Packaging Corp....................................... United States 13,400 319,925
-----------
1,663,949
-----------
HEALTH & PERSONAL CARE 3.7%
China Pharmaceutical Enterprise & Invt. Corp. Ltd............... China 118,000 27,296
China Pharmaceutical Enterprise & Invt. Corp. Ltd., 144A........ China 60,000 13,880
Medeva Plc...................................................... United Kingdom 71,550 241,057
</TABLE>
12
<PAGE>
TEMPLETON GROWTH AND INCOME FUND
STATEMENT OF INVESTMENTS, SEPTEMBER 30, 1997 (UNAUDITED) (continued)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS (CONT.)
HEALTH & PERSONAL CARE (CONT.)
Nycomed ASA, A.................................................. Norway 30,001 $ 680,549
Pharmacia & Upjohn.............................................. United States 15,930 581,445
PT Kalbe Farma, fgn............................................. Indonesia 149,500 112,466
-----------
1,656,693
-----------
INDUSTRIAL COMPONENTS 2.8%
Gencorp Inc..................................................... United States 15,700 446,469
Madeco Manufacturera de Cobre SA, ADR........................... Chile 18,700 458,150
Walbro Corp..................................................... United States 16,100 352,188
-----------
1,256,807
-----------
INSURANCE 6.7%
HIH Winterthur International Holdings Ltd....................... Australia 194,578 485,845
Reliastar Financial Corp........................................ United States 10,386 413,493
Scor............................................................ France 12,300 531,380
STE Centrale Du Groupe Des Asurances Nationales................. France 10,900 257,956
Torchmark Corp.................................................. United States 4,418 173,407
UNUM Corp....................................................... United States 4,238 193,359
Western National Corp........................................... United States 12,400 355,725
Zuerich Versicherung, new....................................... Switzerland 1,400 609,323
-----------
3,020,488
-----------
MACHINERY & ENGINEERING 0.1%
Laird Group Plc................................................. United Kingdom 6,300 47,426
-----------
MERCHANDISING 1.1%
Koninklijke Bijenkorf Beheer NV (KBB)........................... Netherlands 1,307 83,547
Lojas Americanas SA BRL......................................... Brazil 1,819,000 22,415
Safeway Plc..................................................... United Kingdom 22,255 144,397
Tesco Plc....................................................... United Kingdom 29,446 223,331
-----------
473,690
-----------
METALS & MINING 1.8%
Anglo American Platinum Corp. Ltd............................... South Africa 25,100 434,893
Pechiney SA, A.................................................. France 8,075 387,917
-----------
822,810
-----------
MISCELLANEOUS MATERIALS & COMMODITIES 0.4%
Thai Glass Industries Public Co. Ltd., fgn...................... Thailand 83,900 171,036
-----------
MULTI-INDUSTRY 2.8%
Alfa SA de CV, A 144A........................................... Mexico 4,428 41,602
Cheung Kong Holdings Ltd........................................ Hong Kong 28,000 314,810
Harrisons & Crosfield Plc....................................... United Kingdom 214,300 424,904
Metro Pacific Corp. MDI......................................... Philippines 697,000 84,282
PT Modern Photo Film Co., fgn................................... Indonesia 45,000 58,131
Swire Pacific Ltd., B........................................... Hong Kong 216,500 320,357
-----------
1,244,086
-----------
</TABLE>
13
<PAGE>
TEMPLETON GROWTH AND INCOME FUND
STATEMENT OF INVESTMENTS, SEPTEMBER 30, 1997 (UNAUDITED) (continued)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS (CONT.)
REAL ESTATE 1.2%
Hong Kong Land.................................................. Hong Kong 68,500 $ 232,900
PT Jaya Properties, fgn......................................... Indonesia 100,000 33,435
Summit Properties Inc., REIT.................................... United States 13,200 288,750
-----------
555,085
-----------
TELECOMMUNICATIONS 5.5%
AT&T Corp....................................................... United States 14,500 642,531
British Telecommunications Plc.................................. United Kingdom 67,690 446,829
Cpt-Telefonica Del Peru SA, B, ADR.............................. Peru 6,630 156,633
Cpt-Telefonica del Peru SA, B................................... Peru 84,800 198,608
PT Indosat TBK, ADR............................................. Indonesia 400 10,500
Telecom Italia SpA, di Risp..................................... Italy 168,894 657,904
Telefonica de Argentina SA, B, ADR.............................. Argentina 8,000 293,000
Telmex-Telefonos de Mexico SA, L, ADR........................... Mexico 1,520 78,660
-----------
2,484,665
-----------
TEXTILES & APPAREL 0.7%
Yizheng Chemical Fibre Co. Ltd., H.............................. China 720,000 314,035
-----------
TRANSPORTATION 1.3%
Precious Shipping Public Co. Ltd., fgn.......................... Thailand 61,100 75,744
Stena Line AB, B................................................ Sweden 7,100 31,546
Transport Development Group Plc................................. United Kingdom 159,100 494,983
-----------
602,273
-----------
UTILITIES ELECTRICAL & GAS 8.3%
China Light & Power Co. Ltd..................................... Hong Kong 101,500 558,788
Endesa SA, br................................................... Spain 8,800 187,767
Hong Kong Electric Holdings Ltd................................. Hong Kong 111,000 413,130
Illinova CP Holdings Co......................................... United States 9,200 198,375
Korea Electric Power Corp....................................... South Korea 5,600 124,240
Mosenergo, ADR, 144A............................................ Russia 10,200 494,700
National Grid Holdings Plc...................................... United Kingdom 131,200 598,527
Public Service Co. of New Mexico................................ United States 17,000 328,313
Texas Utilties Holding Co....................................... United States 3,850 138,600
Thames Water Group Plc.......................................... United Kingdom 50,143 705,647
-----------
3,748,087
-----------
TOTAL COMMON STOCKS (COST $26,384,173).......................... 33,107,892
-----------
</TABLE>
14
<PAGE>
TEMPLETON GROWTH AND INCOME FUND
STATEMENT OF INVESTMENTS, SEPTEMBER 30, 1997 (UNAUDITED) (continued)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PREFERRED STOCKS 4.1%
Banco Bradesco SA, pfd.......................................... Brazil 40,750,000 $ 429,613
Cia de Inversiones en Telecomunicaciones SA, 7.00%, 3/03/98,
conv. pfd..................................................... Argentina 4,148 294,508
Lojas Americanas SA, pfd........................................ Brazil 3,017,000 37,453
Lojas Americanas SA, pfd., Sponsored ADR........................ Brazil 866 10,750
Nacional Financiera SA, 11.25%, 5/15/98, conv., pfd............. Mexico 4,200 214,200
Philippine Long Distance Telephone Co., 7.00%, conv., pfd.
series 3...................................................... Philippines 6,440 332,465
Telebras-Telecomunicacoes Brasileiras SA, pfd., ADR............. Brazil 3,900 502,125
-----------
TOTAL PREFERRED STOCKS (COST $639,277).......................... 1,821,114
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT**
----------
<S> <C> <C> <C>
BONDS 9.0%
Alfa SA:
8.00%, 9/15/00, conv........................................... Mexico 60,000MEX 120,300
8.00%, 9/15/00, conv. 144A..................................... Mexico 180,000MEX 360,900
Jardine Strategic Holdings Ltd., 7.50%, 5/07/49, conv............ Hong Kong 78,000HKD 97,890
U.S. Treasury Note, 6.375%, 5/15/00.............................. United States 3,420,000 3,462,753
-----------
TOTAL BONDS (COST $4,714,626).................................... 4,041,843
-----------
SHORT TERM OBLIGATIONS (COST $5,720,469) 12.7%
U.S. GOVERNMENT AND GOVERNMENT AGENCIES
U.S. Treasury Bills, 4.80% to 5.16% with maturities to
12/26/97................................................... United States 5,720,000 5,722,742
-----------
TOTAL INVESTMENTS (COST $37,458,545) 99.4%....................... 44,693,591
OTHER ASSETS, LESS LIABILITIES: 0.6%............................. 253,651
-----------
TOTAL NET ASSETS 100.0%.......................................... $44,947,242
===========
</TABLE>
CURRENCY ABBREVIATIONS:
HKD-Hong Kong
MEX-Mexico
*Non-income producing.
**Securities traded in U.S. dollars unless otherwise indicated.
See notes to financial statements.
15
<PAGE>
TEMPLETON GROWTH AND INCOME FUND
Financial Statements
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<S> <C>
Assets:
Investments in securities, at value (cost $37,458,545).............................. $44,693,591
Cash................................................................................ 340
Receivables:
Investment securities sold......................................................... 104,310
Fund shares sold................................................................... 176,092
Dividends and interest............................................................. 222,772
Fee reimbursement.................................................................. 123,525
Unamortized organization costs...................................................... 22,051
-----------
Total assets.................................................................... 45,342,681
-----------
Liabilities:
Payables:
Investment securities purchased.................................................... 50,700
Fund shares redeemed............................................................... 35,354
Dividends.......................................................................... 917
Affiliates......................................................................... 235,679
Accrued expenses.................................................................... 72,789
-----------
Total liabilities............................................................... 395,439
-----------
Net assets, at value........................................................... $44,947,242
===========
Net assets consist of:
Undistributed net investment income................................................. $ 528,721
Net unrealized appreciation......................................................... 7,235,046
Accumulated net realized gain....................................................... 1,010,455
Beneficial shares................................................................... 36,173,020
-----------
Net assets, at value............................................................ $44,947,242
===========
CLASS I:
Net asset value per share ($34,987,359 divided by 2,365,766 shares outstanding)..... $14.79
===========
Maximum offering price per share ($14.79 divided by 94.25%)......................... $15.69
===========
CLASS II:
Net asset value per share ($9,959,883 divided by 680,802 shares outstanding)........ $14.63
===========
Maximum offering price per share ($14.63 divided by 99.00%)......................... $14.78
===========
</TABLE>
See notes to financial statements.
16
<PAGE>
TEMPLETON GROWTH AND INCOME FUND
Financial Statements (continued)
STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<S> <C> <C>
Investment income:
(net of foreign taxes of $57,442)
Dividends................................................................ $ 515,270
Interest................................................................. 287,376
----------
Total investment income.............................................. $ 802,646
Expenses:
Management fees (Note 3)................................................. 142,678
Administrative fees (Note 3)............................................. 28,536
Distribution fees (Note 3)
Class I................................................................. 52,902
Class II................................................................ 38,959
Transfer agent fees (Note 3)............................................. 31,000
Custodian fees........................................................... 3,000
Reports to shareholders.................................................. 22,050
Registration and filing fees............................................. 24,000
Professional fees (Note 3)............................................... 11,100
Trustees' fees and expenses.............................................. 1,700
Amortization of organization costs....................................... 6,955
Other.................................................................... 552
----------
Total expenses....................................................... 363,432
Less expenses waived (Note 3)............................................ 99,923
----------
Total expenses including waiver...................................... 263,509
----------
Net investment income............................................... 539,137
----------
Realized and unrealized gains:
Net realized gain from:
Investments............................................................. 1,053,258
Foreign currency transactions........................................... 16,933
----------
Net realized gain........................................................ 1,070,191
Net unrealized appreciation on investments............................... 3,846,136
----------
Net realized and unrealized gain.......................................... 4,916,327
----------
Net increase in net assets resulting from operations...................... $5,455,464
==========
</TABLE>
See notes to financial statements.
17
<PAGE>
TEMPLETON GROWTH AND INCOME FUND
Financial Statements (continued)
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
SEPTEMBER 30, 1997 YEAR ENDED
(UNAUDITED) MARCH 31, 1997
--------------------------------------------
<S> <C> <C>
Increase in net assets:
Operations:
Net investment income........................................ $ 539,137 $ 438,587
Net realized gain from investments and foreign currency
transactions............................................... 1,070,191 343,441
Net unrealized appreciation on investments................... 3,846,136 2,327,516
-------------------------------------------
Net increase in net assets resulting from operations..... 5,455,464 3,109,544
Distributions to shareholders from:
Net investment income
Class I..................................................... (100,874) (316,069)
Class II.................................................... (16,231) (59,789)
Net realized gain
Class I..................................................... (224,663) (66,904)
Class II.................................................... (55,990) (16,728)
Fund share transactions (Note 2)
Class I..................................................... 5,931,349 11,132,253
Class II.................................................... 2,921,039 3,317,674
-------------------------------------------
Net increase in net assets............................... 13,910,094 17,099,981
Net assets:
Beginning of period........................................... 31,037,148 13,937,167
-------------------------------------------
End of period................................................. $ 44,947,242 $ 31,037,148
===========================================
Undistributed net investment income included in net assets:
Beginning of period........................................... $ 106,689 $ 52,562
===========================================
End of period................................................. $ 528,721 $ 106,689
===========================================
</TABLE>
See notes to financial statements.
18
<PAGE>
TEMPLETON GROWTH AND INCOME FUND
Notes to Financial Statements (unaudited)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Templeton Growth and Income Fund (the Fund), is a separate diversified series of
Templeton Global Investment Trust (the Trust), which is an open-end 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. SECURITY VALUATION:
Securities listed or traded on a recognized national exchange or NASDAQ are
valued at the latest reported sales price. Over-the-counter securities and
listed securities for which no sale is reported are valued within the range of
the latest quoted bid and asked prices. Securities for which market quotations
are not readily available are valued at fair value as determined by management
in accordance with procedures established by the Board of Trustees.
b. FOREIGN CURRENCY TRANSLATION:
Portfolio securities and other assets and liabilities denominated in foreign
currencies are translated into U.S. dollars based on the exchange rate of such
currencies against U.S. dollars on the date of valuation. Purchases and sales of
securities and income items denominated in foreign currencies are translated
into U.S. dollars at the exchange rate in effect on the transaction date. When
the Fund purchases or sells foreign securities it will customarily enter into a
foreign exchange contract to minimize foreign exchange risk from the trade date
to the settlement date of such transactions.
The Fund does not separately report the effect of changes in foreign exchange
rates from changes in market prices on securities held. Such changes are
included in net realized and unrealized gain or loss from investments.
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 and the difference between the recorded amounts
of dividends, interest, and foreign withholding taxes, and the U.S. dollar
equivalent of the amounts actually received or paid. Net unrealized foreign
exchange gains and losses arise from changes in foreign exchange rates on
foreign currency denominated assets and liabilities other than investments in
securities held at the end of the reporting period.
c. INCOME TAXES:
No provision has been made for income taxes because the Fund's policy is to
qualify as a regulated investment company under the Internal Revenue Code and to
distribute all of its taxable income.
d. SECURITY TRANSACTIONS, INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS:
Security transactions are accounted for on trade date. Realized gains and losses
on security transactions are determined on a specific identification basis.
Certain income from foreign securities is recorded as soon as information is
available to the Fund. Interest income and estimated expenses are accrued daily.
Dividend income and distributions to shareholders are recorded on the
ex-dividend date.
Realized and unrealized gains and losses and net investment income, other than
class specific expenses, are allocated daily to each class of shares based upon
the relative proportion of net assets of each class.
19
<PAGE>
TEMPLETON GROWTH AND INCOME FUND
Notes to Financial Statements (unaudited) (continued)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONT.)
e. ORGANIZATION COSTS:
Organization costs are being amortized on a straight line basis over five years.
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. BENEFICIAL SHARES
The Fund offers two classes of shares: Class I and Class II. The shares differ
by their initial sales load, distribution fees, voting rights on matters
affecting a single class and the exchange privilege of each class.
At September 30, 1997, there were an unlimited number of shares authorized ($.01
par value). Transactions in the Fund's shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 1997 MARCH 31, 1997
--------------------------------------------------------
CLASS I SHARES: SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold.................................................. 651,972 $ 8,993,339 1,122,620 $13,843,589
Shares issued on reinvestment of distributions............... 20,463 273,389 28,601 346,726
Shares redeemed.............................................. (238,554) (3,335,379) (249,794) (3,058,062)
--------------------------------------------------------
Net increase................................................. 433,881 $ 5,931,349 901,427 $11,132,253
========================================================
</TABLE>
<TABLE>
<CAPTION>
CLASS II SHARES: SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold.................................................. 256,407 $ 3,540,839 291,798 $ 3,539,571
Shares issued on reinvestment of distributions............... 4,834 64,047 5,525 66,562
Shares redeemed.............................................. (48,922) (683,847) (23,460) (288,459)
--------------------------------------------------------
Net increase................................................. 212,319 $ 2,921,039 273,863 $ 3,317,674
========================================================
</TABLE>
3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Certain officers of the Fund are also directors or officers of Templeton Global
Advisors Ltd. (TGAL), Franklin Templeton Services, Inc. (FT Services),
Franklin/Templeton Distributors, Inc. (Distributors), and Franklin/Templeton
Investor Services, Inc. (Investor Services) the Fund's investment manager,
administrative manager, principal underwriter, and transfer agent, respectively.
20
<PAGE>
TEMPLETON GROWTH AND INCOME FUND
Notes to Financial Statements (unaudited) (continued)
3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (CONT.)
The Fund pays an investment management fee to TGAL of 0.75% per year of the
average daily net assets of the Fund. The Fund pays its allocated share of an
administrative fee to FT Services based on the Trust's aggregate average daily
net assets as follows:
<TABLE>
<CAPTION>
ANNUALIZED
FEE RATE AVERAGE DAILY NET ASSETS
------------------------------------------------------------------
<C> <S>
0.15% First $200 million
0.135% Over $200 million, up to and including $700 million
0.10% Over $700 million, up to and including $1.2 billion
0.075% Over $1.2 billion
</TABLE>
The Fund reimburses Distributors up to 0.35% and 1.00% per year of the average
daily net assets of Class I and Class II, respectively, for costs incurred in
marketing the Fund's shares. Under the Class I distribution plan, costs
exceeding the maximum may be reimbursed in subsequent periods. At September 30,
1997, the unreimbursed costs were $951,468. Distributors received net
commissions from sales of Fund shares, and received contingent deferred sales
charges for the period of $31,514 and $1,344, respectively.
During the period ended September 30, 1997 legal fees of $5,000 were paid to a
law firm in which an officer of the Fund is a partner.
4. INVESTMENT TRANSACTIONS
Purchases and sales of securities (excluding short-term securities) for the
period ended September 30, 1997 aggregated $21,640,570 and $2,874,343,
respectively.
5. INCOME TAXES
The cost of securities for federal income tax purposes is the same as that shown
in the investment portfolio. At September 30, 1997, the net unrealized
appreciation based on the cost of investments for income tax purposes was as
follows:
<TABLE>
<S> <C>
Unrealized appreciation........... $ 8,237,379
Unrealized depreciation........... (1,002,333)
--------------
Net unrealized appreciation....... $ 7,235,046
==============
</TABLE>
At March 31, 1997, the Fund has deferred currency losses occurring subsequent to
October 31, 1996 of $45,000. For tax purposes, such losses will be reflected in
the year ending March 31, 1998.
21
<PAGE>
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<PAGE>
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<PAGE>
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<PAGE>
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 Biotechnology
Discovery Fund
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 Financial Services 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 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)
*These funds are now closed to new accounts, with the exception of retirement
accounts.
**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.
10/97.1
<PAGE>
TEMPLETON GROWTH AND
INCOME FUND
PRINCIPAL UNDERWRITER
Franklin/Templeton Distributors, Inc.
777 Mariners Island Blvd.
San Mateo, CA 94404-1585
SHAREHOLDER SERVICES
1-800-632-2301
FUND INFORMATION
1-800-342-5236
This report must be preceded or accompanied by a 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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